Pacific Power v Jay

In *Pacific Power v Jay* [1995] NSWCA 347, the New South Wales Court of Appeal considered a dispute between Pacific Power and Jay concerning the interpretation of a contract for the supply of electricity. The core of the disagreement lay in whether Pacific Power was entitled to charge Jay for electricity supplied during a period when the electricity meter was found to be faulty.

The primary legal issue before the Court of Appeal was whether the contract's terms, particularly those relating to the measurement and billing of electricity consumption, could be interpreted to allow Pacific Power to recover payment for electricity that could not be precisely measured due to a malfunctioning meter. This involved considering the implications of a mutual mistake regarding the accuracy of the meter and the principles of contract law governing the performance of obligations where measurement is a key component.

The Court of Appeal held that the contract implicitly required the electricity to be measured accurately for billing purposes. Given that the meter was faulty, the quantity of electricity supplied could not be definitively ascertained, and therefore, Pacific Power could not establish a contractual entitlement to payment for the unmeasured electricity. The Court applied principles of contract interpretation, emphasizing that where a contract relies on a specific method of measurement for performance, and that method fails, the obligation to pay for the unmeasured quantity may not arise. The appeal was dismissed.