SLATTERY & ACTEW CORPORATION PTY LTD (Energy and Water)
[2013] ACAT 13
•11 February 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
SLATTERY & ACTEW CORPORATION PTY LTD
(Energy and Water) [2013] ACAT 13
Revised for publication
E & W 12/585
Catchwords: Energy and Water - water consumption charges - charges run with land- debt from previous owners- consumption and connection charges in unit title complexes - unit owners liable for water supply charges - Owners Corporation liable to utility for water consumption charges – Owners Corporation responsible for recovery of consumption charges from unit owners
List of legislation: Utilities Act 2000; sections 58, 59, 77, 83, 84, 87, 89, 94(5);
Unit Titles Act 2001; sections 75, 78(3)
Unit Titles (Management) Act 2011; 122(3)
Subordinate documents: Consumer Protection Code 2009, 2010, 2010 (No. 2); clauses 5.1, 16.3, 17, 17.4,
Water and Sewerage Connection and Supply Standard Customer Contract; clauses 2.5, 5.3, 6
Tribunal: Mr. A Anforth – Senior Member
Mr A. Morris – Registrar[1]
[1] sitting as a member pursuant to s. 111(1) ACT Civil and Administrative Tribunal Act 2008
Date of Orders & Oral Reasons: 30 November 2012
Date of Written Statement of Reasons: 11 February 2013
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL
E&W 585 of 2012
BETWEEN:
LUKE SLATTERY
Applicant
AND:
ACTEW CORPORATION PTY LTD
Respondent
Tribunal: Mr. A Anforth – Senior Member
Mr A. Morris - Registrar
Date: 30 November 2012
ORDER
The Owners Corporation is to pay the Respondent $1072.00 within 3 months;
The members of the Owners Corporation may relist for resolution of any internal dispute between them within 3 months.
Sgd.
………………………………..
Athol Morris
REASONS FOR DECISION
On 30 November 2012 the Tribunal gave an ex tempore decision in this matter with its reasons. The Respondent has since sought written reasons for the decision. The written reasons which follow are a summary only of the oral reasons given at the hearing.
This matter concerns the issue of responsibility for water consumption charges in strata units.
Legislative background:
The supply of water services in the ACT by the Respondent is regulated by the Utilities Act 2000 (the Act).
Section 77 of the Act provides that the right to access utilities, including water connection and supply, is subject to the Act and is subject to any relevant industry code made under sections 58 and 59 of the Act. Throughout the period relevant to the present matter the following versions of the relevant industry code (the Code) have been in force:
(a)The Consumer Protection Code 2009 (DI 12009-75) in force from 1 July 2009
(b)The Consumer Protection Code 2010 (DI 12010-108) in force until 31 July 2010
(c)The Consumer Protection Code 2010 (No. 2) (DI 12010-178) in force from 31 July 2010.
The changes in these successive versions of the Code have no present relevance.
Section 87 of the Act provides that utilities are to be provided on the terms set out in the standard customer contract. The standard customer contract is the contract approved by the Independent Competition & Regulatory Commission under section 89 of the Act. Clause 16.3 of the Code deems the standard contract to apply once the Respondent accepts an application for utility services.
Under the Act water services fall into two categories; connection services and supply services. The Act, Code and standard contract differentiate between these two kinds of services. Section 83 provides that water supply must be connected to premises on the application of person in the terms of the standard customer contract. Section 84 of the Act provides that water supply must be supplied on application by a person who is the owner or occupier of premises in accordance with the standard customer contract.
The standard contract for both the connection and supply of water is the ‘Water and Sewerage Connection and Supply Standard Customer Contract’.
Clause 6 of the standard contract provides that the Schedule of Charges forms part of the contract. The Schedule of Charges contains the different charges for connection and supply.
The connection charge is a fixed charge set by the Respondent for the cost of maintaining the connection of the water supply to premises. It is a cost imposed on the owner of the premises. In the case of a strata complex a separate connection charge is imposed on the owner of each unit in the strata complex.
The supply (or consumption) charge is levied on the basis of the amount of water consumed as measured by a meter installed at the premises. In the case of a strata complex there is generally only one water meter for the whole of the complex and the consumption account is therefore in the name of the Owners Corporation (OC) for the complex. The OC has its own standard customer contract with the Respondent for consumption under which the OC is required to notify any changes in its address for service (clause 2.5). The OC then levies the individual unit owners to cover the total consumption charge.
The Respondent issues water bills quarterly. In the case of strata complexes the account for the connection charge is sent to the owner of the individual unit and the account for the supply charge is sent to the OC.
The Respondent relies upon individual unit owners to notify their existence and their address for service of the connection charge accounts. Each individual unit owner has a separate standard customer contract with the Respondent for connection. There is no contract for consumption charges between the individual owners and the Respondent and so no consumption account is sent to individual owners.
For the purpose of supply or consumption charges the Respondent relies upon advice from the Land Titles Office (LTO) concerning the registration of a Unit Plan to obtain the address for service of the OC. Any change in the address of the OC is required to be notified to the LTO by the OC (section 78(3), Unit Titles Act 2001; now s122(3) Unit Titles (Management) Act 2011). Independently of this responsibility, the OC has it owns standard customer contract with the Respondent for supply under which the OC is also required to notify any change in its address for service (clause 2.5).
An OC is a body with perpetual succession and as such does not cease to exist or change its character only because of a change in the composition of the OC. Hence, the standard customer contract with the OC for supply or consumption continues in existence notwithstanding changes in the composition of the OC.
Clause 17 of the Code prohibits the disconnection of water connection and supply to residential premises. The supply can be restricted in accordance with clause 17.4.
Basic facts
The Applicant is the owner of one unit in a two unit strata complex (Units Plan 3212) in the ACT. As such he is one of two members of the Owners Corporation. The Applicant bought his unit in February 2010.
When the Applicant purchased his unit he contacted the Respondent for the purpose of having the water, electricity and gas accounts connected in his name.
At the time of registering his electricity and gas accounts the Applicant asked an employee of the Respondent whether there was anything else he needed to do as the new owner of his unit and received a negative reply. The Applicant took this to mean that all utility accounts would be sent to him at this unit address. He understood that this would include the water consumption accounts..
In mid 2011 the ownership of the second unit changed hands to the present owners (Mr and Mrs Hughes) who jointly form the other member of the Owners Corporation.
The Applicant and Mr and Mrs Hughes together form the OC and have an agreement to split all OC bills in a 32/68 ratio.
Up to October 2009 the accounts for the water supply charge, the electricity and gas were regularly received by the Applicant at his unit and have been paid. Unbeknown to the Applicant the account for the water consumption charges was sent to the OC and not to the Applicant and had not been paid.re were no problems with any of the utility accounts.
Following the purchase of his unit in February 2010 and unbeknown to the Applicant, the address for service of the OC was not changed with the LTO as required under the unit titles legislation. The address remained the address of the former unit owner - an address in McKellar, ACT. Nor did the OC itself notify the Respondent of any change in its address for service as it was required to do under its own contract for the supply of water.
The Respondent forwarded each of the quarterly water consumption charges to the McKellar address. The occupiers of that address did not return the accounts to the Respondent and did nothing until October 2011 to notify the new unit owners of the accounts. Accordingly, a consumption debt arose from February 2010 to October 2011.
During the period of this debt accumulation it seems that the Respondent did not contact the OC or its members to find out what was happening.
The debt claimed by the Respondent for consumption charges from February 2010 was not the whole of the amount claimed by the Respondent. It seems that the vendor who sold the unit to the Applicant in February 2010, had not paid the water consumption account for the previous quarter of some $849. This outstanding consumption debt was a debt of the OC.
The Respondent relies upon section 94(5) of the Act to the effect that water consumption charges run with the land and so, on a change of ownership of premises, any debt becomes a debt of the new owner. This is the case if section 94(5) applies, but the section has no operation in the present case because there has been no relevant change in ownership. The OC is a body with perpetual succession. It does not change its character simply because there is a change in its composition. The water meter is on the common property owned at law by the OC and the contract for water consumption is between the OC and the Respondent.
Thus the OC remained liable for the unpaid water consumption at all times. The issue was simply that the accounts were being sent to the LTO registered address for the OC in McKellar because no one changed that address after the vendors sold to the Applicant.
The duty to notify the LTO under section 78(3) of the former Unit Titles Act 2001 and to notify the Respondent under the standard consumer contract, of a change of address for the OC, lay with the OC. It was the failure of the OC to discharge these duties in February 2010 that was the initial cause of the current problem.
The same reasoning applies to that part of the consumption debt that relates to the period prior to the Applicant’s purchase. The Applicant did have a right to require the outgoing vendors to pay the OC for their share of the consumption debt prior to settlement. This is an issue entirely between the Applicant, the vendors and the OC. It is not a matter that the Respondent needs to concern itself with. The Respondent is only concerned with whether the OC pays its debt to the Respondent. How the OC raises the funds to pay its debts is entirely a matter for OC members, past and present.
As part of his purchase the Applicant had a right to inquire of both the Respondent (clause 5.3, standard contract) and of the OC (section 75, Unit Titles Act 2001) about outstanding bills of the OC, including water consumption bills. The Applicant was entitled to require the OC as constituted prior to his purchase, to pay for those accounts that had accrued prior to his purchase. Generally this is done by an adjustment between the purchaser and vendor at settlement with the purchaser then remaining responsible to the OC for the set-off amount. If there were any debts attaching directly to his unit, the Applicant also had a right to require the vendor to discharge those debts prior to purchase. As it transpired, there were no such debts of the latter kind.
For reasons not apparent to the Tribunal the solicitors acting for the Applicant in his purchase of the unit had not obtained a report from the Respondent or the OC about outstanding charges and so had not factored this adjustment into the settlement of the purchase.
Conclusion
The bottom line is that the OC remains liable for the whole of its debt to the Respondent. The OC has a right of action against present and past OC members for unpaid contributions. Thus the OC could look to the vendor that sold to the Applicant for any outstanding OC contribution for water consumption. Again this is not an issue for the Respondent to become involved in.
The Applicant complained that the actions of the Respondent in not taking effective steps to contact the Applicant for over 2 years were a breach of the Respondent’s duty to act ‘fairly’ under clause 5.1 of the Code. It is certainly not to the Respondent’s credit that it took so long to take action to remedy the ongoing default on the consumption accounts.
The Respondent acknowledged this fact and waived all interest payments on the overdue amounts. The waiver of all interest charges means that the Applicant, or rather the OC, has not suffered any financial detriment. It has had the free use of the money that should have been paid for consumption charges over that period.
The Applicant argued that the Respondent should have cut off the water to the OC when the original consumptions accounts were not paid. Clause 17.4 of the Code limits the Respondent’s power to restricting, but not terminating, supply and then only after various notices have been serviced. It is true that the Respondent could and should have acted earlier by issuing these notices.
It is novel argument by a consumer of water that they should not have to pay for their consumption because the supplier should have cut off or restricted their supply when their account was not paid.
There is no dispute that the OC and its members consumed the water in question. When it was put to the Applicant that he should have realised that no water consumption accounts were being received by the OC, he said that he thought the connection charge sent direct to him was also the consumption charge. The account itself shows its limited purpose and a perusal of the account should have alerted the Applicant that no consumption accounts were being received by the OC and paid during the period of default.
The Tribunal understands that sometimes people are busy and pay, but do not read, accounts. There is no criticism of the Applicant for this but it does not follow that he should be rewarded for not reading his accounts by setting aside all the consumption charges for a period of over 2 years.
The water was consumed by the OC and its members and it is a matter for the OC to chase those of its existing and former members who are responsible for the charges. The OC remains liable to the Respondent for the charges.
………………………………..
Mr A. Anforth – Senior Member
For and on behalf of the Tribunal
PUBLICATION DETAILS
TO BE PUBLISHED
FILE NUMBER: | EW 585/12 |
PARTIES, APPLICANT: | Luke Slattery |
PARTIES, RESPONDENT: | ACTEW Corporation Pty Ltd |
COUNSEL APPEARING, APPLICANT | N/A |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | N/A |
SOLICITORS FOR RESPONDENT | Ms Trusdale and Mr Male |
TRIBUNAL MEMBERS: | Mr A. Anforth – Senior Member Mr A. Morris - Registrar |
DATES OF HEARING: | 30 November 2012 |
PLACE OF HEARING: | Canberra |
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