Wenzel And Wenzel and ACTEW Water Pty Ltd; And T &M Savvoudiou; (Energy and Water)

Case •

[2013] ACAT 22

•

19 April 2013

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

WENZEL AND WENZEL & ACTEW WATER PTY LTD

AND T &M SAVVOUDIOU

(Energy and Water) [2013] ACAT 22

EW 12/178

Catchwords:             ENERGY AND WATER - water connection and consumption charges- charges run with land- debt from previous owners – transfer of outstanding balance from previous owners’ account to buyers’ account – whether sellers were released from liability for charges for water they consumed before transfer of property - solicitors not carrying out timely inquiry about outstanding charges before settlement of property – delayed notification from Land Titles Office to ACTEW about change of property ownership – apportion of  consumption charge: avoidance of unfairness

List of Legislation: Utilities Act 2000, ss. 58, 59, 77, 83, 84, 87, 89 & 94

List or Regulation:    Utilities (Consumer Protection Code) Determination 2010, (No2) [DI 12010 -178]

Tribunal:   Mr A. Anforth – Senior Member

Date of Orders:    19 April 2013

Date of Reasons for Decision: 19 April 2013

AUSTRALIAN CAPITAL TERRITORY )

CIVIL & ADMINISTRATIVE TRIBUNAL )   EW 178/12

BETWEEN:

DAVID WENZEL

1st Applicant

RONALD ROBERT WENZEL

2nd Applicant

AND:

ACTEW WATER PTY LTD

1stRespondent

T & M SAVVOUDIOU

2nd Respondent

TRIBUNAL:         Mr A. Anforth – Senior Member

DATE:                   19 April 2013

ORDER

1.The Applicants are to jointly pay the whole of the outstanding account for the premises at Harrison to ACTEW.

2.The Second Respondents are to pay the Applicants the sum of $150.00 within 14 days of service upon them of these orders.

………………………………..

Mr A. Anforth

Senior Member

REASONS FOR DECISION

  1. This application concerns two complaints; the first is about responsibility for water consumption charges incurred by a vendor of property prior to the sale and whether those charges pass with the sale of the land to the purchaser. The second complaint is about the amount of water said to be used by the Applicants in a particular quarter.

Facts

  1. The material facts in this matter are not in dispute.

  1. The Second Respondents were the owners of a property in Harrison in the ACT. They entered a contract with the Applicants to sell the property to them. Settlement of the sale occurred on 1 October 2010.

  1. On 6 September 2010, following the exchange of the contracts for sale the solicitor for the Applicants requested a special water meter reading from ACTEW. The reading occurred the next day. The amount owing for consumption was said to be $64.88.

  1. On 8 September 2010, ACTEW informed the solicitor for the Applicants of the $64.88 consumption charge. ACTEW also stated that the water connection charges had been paid to 30 September 2010 and that there was no amount owing for connection at the time of the ACTEW notice of charge.

  1. The settlement of the conveyance did not occur until 1 October 2010, some three weeks after the special reading had been taken.

  1. The solicitor for the Applicants paid the $64.88 consumption charge on 5 November 2010, some five weeks after settlement.

  1. On 11 November 2010, the next cyclic water reading occurred. This bill included the connection charges from 1 October to 31 December 2010 and the supply (or consumption) charges from 13 August 2010 to 10 November 2010. The bill was in the amount of $442.44. It was sent to the vendors (the Second Respondents) who did not pay the account.

  1. It is noted that the whole of the connection charge pertained to the period after settlement and was therefore rightly charged to the Applicants; but the supply charge spanned the date of settlement.

  1. On 15 November 2010, the Land Titles Office advised ACTEW of the change in ownership. ACTEW then opened an account in the Applicants’ names and transferred the outstanding balance of $442.44 to that account.

  1. On 18 March 2011, a further account in the sum of $1167 was raised and sent to the Applicants for water and sewerage connection for the period 1 January 2011-31 March 2011 and supply (or consumption) for the period 10 November 2010- 24 February 2011.

The issues

  1. The Applicants complain that ACTEW had no right to transfer the outstanding balance from the previous owner to their account.

  1. The Applicants further complain that the water consumption component of the account of 18 March 2011 was excessive and that this amount of water was not in fact consumed.

Legislative background

  1. 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. The relevant Code is the Utilities (Consumer Protection Code) Determination2010, (No2) [DI 12010 -178] (the Code) in force from 31 July 2010.

  1. Section 87 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 and Consumer Commission (ICRC) under section 89 of the Act. Clause 16.3 of the Code deems the standard contract to apply once the utility accepts an application for utility services.

  1. Section 83 provides that water supply must be connected to premises on the application of a 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.

  1. The standard contract for both the connection and supply (or consumption) of water is the ‘Water and Sewerage Connection and Supply Standard Customer Contract’.

  1. 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. 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.

  1. The connection charge is a fixed charge made by the Respondent for the cost of maintaining connection of a water supply to premises. It is a cost imposed on the owner of the premises.

  1. The supply charge is a charge levied on the amount of water consumed as measured by meters at the premises.

  1. The Respondent issues water bills quarterly which contain both the supply and connection charges.

  1. For the purpose of supply charges, the Respondent relies upon advice from the ACT Land Titles Office (LTO) concerning the registration of ownership.

  1. 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.

  1. Section 94 the Act provides:

(1)     The owner of land where water is supplied under a standard customer contract is liable for an amount payable by the customer under the contract.

(2)     The owner of land where sewerage services are provided under a standard customer contract is liable for an amount payable by the customer under the contract.

(3)     Subsections (1) and (2) do not apply to an amount paid by the customer.

(4)     Joint owners of land are jointly and severally liable under subsections (1) and (2).

(5)     The owner's liability under subsection (1) or (2) includes any undercharged liability of a former owner of the land for an amount payable under that subsection.

(6)     In this section:

"Owner" means—

(a) For land held in fee simple—the person in whom the fee simple is vested for the time being; or

(b) For land held under a lease—the lessee for the time being; or
(c) For land occupied under a tenancy granted by the Territory—the tenant for the time being; or
(d) For other land occupied by a person with the consent of the Territory—that person.

  1. In the present matter the Applicants became the joint owners of the land at settlement on 1 October 2010.

Process before ACAT

  1. The Applicants lodged their application with ACAT on 16 February 2012. The First Respondent filed its Response on 28 February 2012.

  1. Procedural orders were made on 8 August 2012 for the filing of evidence and submissions. The Applicants filed their submissions on 27 August 2012 and the Respondent filed its on 13 September 2012.

  1. On 27 September 2012, following a directions hearing, orders was made to join the Second Respondents. The order was made on the basis that it appeared that the Second Respondents had left the water consumption charges unpaid after settlement. The charges werethen transferred to the Applicants. This raised the issue of any liability in contract or tort that may exist between the Applicants and the Second Respondents.

  1. On 2 October 2012, the Second Respondents were served with all documents that had been filed in the proceedings by the Registrar who explained in writing the relevance of the claim to the Second Respondents. On 19 November 2012, the Second Respondents contacted the Registrar. They advised that they had read the documents and that they did not intend to take any part in the proceedings. The Second Respondents denied any liability for the outstanding water consumption and said the fault was on the part of the Applicants’ solicitors. The Registrar advised the Second Respondents that if they did not appear, the hearing of the application may proceed in their absence.

  1. The Second Respondents did not file submissions and did not appear at the hearing.

  1. The final hearing took place on 11 February 2013 with the First Applicant appearing for both applicants and Mr Male appearing for ACTEW.

Consideration of the issues

  1. The terms of section 94(5) of the Act are clear. There is a statutory intention that a water and sewerage charge is a charge on the land that runs with the land through changing ownership.

  1. This is the reason why solicitors are expected to obtain details of these charges close to settlement and adjust for the charges in the settlement figures.

  1. In this matter, the Applicants’ solicitors sought the details of the charges some three weeks before to settlement. They received an accurate answer from ACTEW concerning the charges that existed at that time.

  1. The Tribunal does not know why settlement occurred some 3 weeks later. It would generally be expected that a purchaser’s solicitor would request a notice of charge a day or so before settlement. This did not happen and so no adjustment was made at settlement for the water consumed by the Second Respondents in the three weeks before settlement.

  1. ACTEW was not advised by the LTO that the settlement had occurred on 1 October 2010 until 15 November 2010.

  1. Before notification by the LTO, ACTEW issued an account to the Second Respondents on 11 November 2010 for connection and supply charges which the Second Respondents did not pay. It was this account that was then transferred to the Applicant’s account after notification from the Land Titles Office.

  1. The action of ACTEW in transferring the debt to the Applicants’ account was lawful, but this does not mean that the outcome was fair to the Applicants. The outcome is plainly unfair to the Applicants in that they are being billed for water that they did not consume. On the other hand, the Second Respondents have obtained a windfall gain. They have escaped paying an account for water that they did consume.

  1. There seems to have been three defective actions that contributed to this unfair result:

    (a)     The solicitors for the Applicants failed to carry out a timely inquiry into outstanding charges from ACTEW. A notice of charge that is three weeks old at the date of settlement has the obvious potential to give rise to the circumstances that in fact occurred;

    (b)     The LTO took about 5 weeks to notify ACTEW of the change of ownership. This delay also has the potential to cause the kind of problem which did in fact occur;

    (c)     The Second Respondents had the account for the consumption that occurred prior to the settlement and did not pay it. The Second Respondents have the constructive knowledge of their solicitors. They did, or should have known that the adjustment of $64.00 for water at settlement did not accord with the outstanding bill that was in their possession.

  1. None of the above implies criticism of ACTEW by reason of its implementation of section 94(5) of the Act, although ACTEW should review its arrangements with the LTO to ensure that notifications are received in a timely manner.

  1. As between the Applicants and ACTEW, the amount of $442.44 credited to the Applicants account is payable by the Applicants.

  1. Not all of the attribution to the Applicants’ account for $442.00 was unfair. The connection component of that account of $152 was for the period starting 1 October 2010, which was the date of settlement. It is correctly charged to the present Applicants.

  1. It is only that part of the consumption charge for the period 13 August 2010 - 1 October 2010 that is unfair. The total consumption charge in the account was $355 from which credit has to be given for the $64 paid at settlement leaving a total of $299. The settlement occurred about half way through the consumption period and so adopting a pro-rata approach, the unfairness is to the extent of about $150.00.

  1. This $150.00 should be paid by the Second Respondents who consumed the water. There may be an issue of law as to whether settlement of the conveyance has expunged any right the Applicants now have to look to the Second Respondents. This was not argued before the Tribunal because the Second Respondents declined to appear.

  1. There may also be a case for the Applicants’ solicitor to make good this loss to the Applicants, although the solicitor was not a party to these proceedings and the matter was not argued before the Tribunal.

  1. Notwithstanding the reservation at paragraph 44 above, the Tribunal is adopting a practical and just approach to the issue. The Tribunal will order that the Second Respondents reimburse the Applicants the sum of $150 for the water the Second Respondents consumed.

  1. The second issue raised by the Applicants concerns the high consumption reading in the account of 18 March 2011. The period of this reading falls wholly after settlement and thus there is no issue of apportionment with the former owner.

  1. The reading does appear to be anomalous relative to the levels of consumption by the Applicants since that time; but there is no evidence of a defective meter and no evidence of leakage. In these circumstances there is no evidence that could lead the Tribunal to set aside this charge.

………………………………..

Mr A. Anforth

Senior Member

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A



FILE NUMBER:

EW 178/12

PARTIES, 1st APPLICANT:

DAVID WENZEL

PARTIES, 2nd APPLICANT

RONALD ROBERT WENZEL

PARTIES, 1ST RESPONDENT:

ACTEW CORPORATION P/L

PARTIES, 2ND RESPONDENT

T &M SAVVOUDIOU

COUNSEL APPEARING, APPLICANT

COUNSEL APPEARING, RESPONDENT

SOLICITORS FOR APPLICANT

SOLICITORS FOR RESPONDENT

TRIBUNAL MEMBERS:

Mr A. Anforth – Senior Member

DATES OF HEARING:

PLACE OF HEARING:

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS:

Key Legal Topics

Areas of Law

  • Civil Litigation & Procedure

Legal Concepts

  • Costs

  • Injunction

  • Specific Performance

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