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Carpenters Fiji Ltd v Fiji Electricity Authority [1994] FJHC 172; Hbc0612.93s (14 November 1994)

IN THE HIGH COURT OF FIJI
(AT SUVA)
Civil Jurisdiction

CIVIL ACTION NO.612 OF 1993

BETWEEN:

CARPENTERS FIJI LIMITED
Plaintiff
and

FIJI ELECTRICITY AUTHORITY
Defendant

H. Lateef for the Plaintiff
A. Patel for the Defendant

JUDGMENT

The Plaintiff is a property developer and the Defendant is a statutory body established by the Electricity Act (Cap. 180) (the Act) and vested with the powers and duties conferred by the Act. This action is concerned with the meaning and effect of aspects of sections 13, 14, and 15 of the Act.

The Originating Summons dated 23 November 1993 sought two declarations but only the first is now being pursued, the second matter in dispute having been settled.

The Plaintiff seeks the following declaration:

"That the Defendant is not entitled to restrict payment of refundable costs to 5 years from the date of commissioning of the power supplied".

There is one affidavit in support made by Joseph Sukendra Singh, the Plaintiff's Chief Property Manager and filed on 23 November 1993 (the first affidavit). In view of the settlement above referred to, only the first five paragraphs of the affidavit are now relevant. There are two affidavits in answer, the first by Jagendra Singh, General Manager, Carpenters Services filed on 12 January 1994 (the second affidavit) and the second, also by Mr. Jagendra Singh filed on 1 July 1994 (the third affidavit).

The evidence was followed by written submissions filed by both Counsel and dated 27 September 1994 and 1 November 1994.

From the evidence and submissions the following facts emerge: During 1984 the Plaintiffs were developing a residential subdivision known as stage 5, Morris Hedstrom, Nailuva Road/Rewa Street, Suva. They wished to have an electricity supply to the subdivision. Sometime before June 1984 Harrison Grierson Consultants Limited, consulting engineers retained by the Plaintiffs, had received from the Defendants a document entitled "Consumer Extensions and Increased Maximum Demand Policy" (first affidavit, Exhibit A).

On 28 June 1984 Harrison Grierson wrote to the Defendants (third affidavit, Exhibit A) referring (paragraph 4) to a proposal by the Defendant that the Plaintiff make a 100% contribution to the cost of the provision of reticulation. Reticulation in electrical parlance is a network of electrical power cables. The letter contained the following paragraphs on page 2:

"We understand that the proposal under item 4 (a) can be accepted by the Authority in accordance with the consumer extension and increased maximum demand policy document: i.e.

- that the 100% contribution (reticulation/transformer) will be on an interest free advance

- the client providing this contribution "will acquire from the Authority, at the end of 12 months from date of commissioning a refund equal to 50% of the gross electricity revenue obtained from the extension provided that the total amount so advanced shall not exceed the amount of the initial advance and no further refunds will be made after the end of the 5th year from the date of commissioning".

Please confirm whether or not the 5 year refund scheme is acceptable in order that we may finalise matters with our client as soon as possible so that work can commence".

On 1 October 1984 the Defendant wrote back (3rd affidavit Exhibit C). Extracts from the letter are as follows:

"This is to confirm that the Authority has accepted your proposal of providing a 100% refundable contribution for the reticulation works on the above subdivision ....... please be informed that the developers will qualify for a refund as described in paragraph 2 (g) of our General Extension Policy".

By end of the 5 year period only $13,029 of the $61,277 paid by the Plaintiff had been refunded. This was because electricity consumption on the development was less than had been anticipated (see 3rd affidavit, Exhibit A, page 3).

As has been seen the Plaintiffs now say that the Defendants have and had no power to restrict payments to a maximum 5 year period as provided by the General Extension Policy (see first affidavit A, paragraph (g)).

The Plaintiff's case is fully and carefully set out in Mr. Lateef's written submission and need not now be repeated in full. The core of the Plaintiff's submission is that the powers conferred on the Defendant by section 15 (1) under which the policy was purportedly adopted do not extend to the adoption of such a policy. Mr. Lateef says that section 15 (1) only extends to the supply of electricity and does not extend to the supply of installations such as reticulation required to supply the energy. As Mr. Lateef points out the effect of the policy in the present case was that the Defendants acquired reticulation and other infrastructure worth $61,000 for a total cost of $13,000. That he says amounts to unjust enrichment.

Mr. Lateef also refers to section 13(1)(c) of the Act and says that this imposes on the Defendants a general statutory duty to provide electricity to those who want it at a reasonable price. He says that the price negotiated by the Defendant for the Electricity supplied was in all the circumstances most unreasonable and that the contract was inequitable.

In answer, Mr. Patel whose careful and comprehensive written submission also sets out the Defendant's case in full made three basic points:

First, he says (page 4 of the submission) that the provision of electricity to the Plaintiff's subdivision was made at the request of the Plaintiffs and involved an extension to existing reticulation which had not been planned by the Defendants. It would have been better if this "evidence" had been contained in one of the two affidavits filed by the Defendant but no objection was taken by Mr. Lateef and I therefore propose to accept Mr. Patel's assertion as being a statement of fact.

Secondly, he says that under section 13(2)(d) of the Act the Defendant may acquire any property deemed necessary for extending its installation (and see the definition of "installation" contained in section 2).

Thirdly he says that section 15(1) properly construed gives the Defendant full powers to negotiate contracts for the supply of electricity "upon such terms and conditions as the Authority may determine" to any person, including the Plaintiff.

Taking these points together Mr. Patel says that the Plaintiffs, who wished to have electricity supplied to their property freely entered into a contract with the Defendant for the supply of their electricity, which contract plainly involved as one of its terms and conditions substantial disbursements in respect of reticulation. He says that the contract was a contract which the Defendant had power to enter into and which is binding on the Parties.

In my view the most helpful Authority cited was Chertsey Urban District Council v. Mixnam Properties Limited [1964] 2 All ER 627, 637 (Mr. Patel's written submission, page 9) in which Lord Guest said:

"There should however in my view be a benevolent interpretation given to the discretion exercised by a public representative body such as the Appellant in complying with the functions entrusted to them by Parliament. Courts should not be astute to find that they have acted outside the scope of those powers".

Perhaps section 15(1) might have been drafted in such a way to contain express references to installations such as reticulation or transformers rather than referring only to the supply of energy upon "terms and conditions". But surely "terms and conditions" must in some, if not in most, circumstances include the provision of such equipment. Under section 13(1) the Defendant has no absolute duty to supply electricity to all those who want it whenever they want it. That is why not all homes in Fiji are connected to the mains. Doubtless the Defendant wishes, in accordance with the general duty imposed upon it by section 13(1)(c) to see the supply of electricity extended as far into Fiji as possible. However such extensions must obviously form part of their corporate development plan.

In the present case the Plaintiffs wished electricity to be available to a property owned by them which they were developing for profit. The Defendant agreed to depart from its development plan by extending the supply as requested. Presumably the fact that the new properties would be connected to the mains was one of the advantages offered to the purchasers by the developers and one of the factors which affected the price demanded for the lots put up for sale.

The effect of Mr. Lateef's submission, by removing the 5 year limitation period and by removing the right to charge for installations, would be to force the Defendant to supply electricity to private developers at a loss, such loss to be borne by other consumers. Given that that loss would be directly related to the profit being made by the developers such a conclusion seems to me to be entirely unreasonable.

In my view, shared quite clearly by the Plaintiff at the time it entered into the contract with the Defendant, the Defendant had full powers within the Act to enter into the contract which the Plaintiff now seeks to set aside. I can find nothing either in the Act or in the law or of contract or in equity to support the Plaintiff's case which accordingly fails and is dismissed.

M.D. SCOTT
JUDGE

14 November, 1994

HBC0612.93S