Bennett & Fisher Ltd v Electricity Trust

High Court of Australia|1962-07-01|Before: Owen JJ, Brazel J

High Court of Australia Dixon C.J. McTiernan, Kitto, Menzies and Owen JJ. Bennett & Fisher Ltd v Electricity Trust (SA) [1962] HCA 11

This is an appeal from a judgment of the late Brazel J. by which he dismissed an action against the Electricity Trust of South Australia by a company requiring a supply of electricity to a new building the company is erecting in Adelaide. In the action the company sought relief against a condition upon which the Trust insisted. The condition is that the company should provide space in the new building for a transformer to which the Trust would deliver electricity at a very high voltage, e.g. 32,000 volts to be transformed for distribution for consumption into 415-240 volts.

The company says that the Trust has not adopted the proposal under the pressure of present practical necessities; the Trust answers that if the necessities are not present they soon will be as the city's development proceeds.

The company's case in point of law is that the Trust is bound to supply its consumers with electricity at a voltage they can use and the proposed supply by the Trust to the consumer would be from the transformer in the company's building and not to the building, that the Trust is a public utility enjoying a monopoly and by consequence is bound to supply, that is subject to the well recognized excuses, and cannot stipulate for such an added advantage to itself as the provision by the consumer in his own premises of space for a transformer, and lastly that the Trust's own statutes expressly provide against discrimination and entitle a consumer to a supply of electricity on the same terms as those on which other consumers are entitled, a provision which, as the company claims, would be contravened by insistence on the proposal. The case for the Trust is simply a denial of the correctness of all the propositions upon which the company's case depends.

The Trust was established by the Electricity Trust of South Australia Act, 1946-1954 to take over the undertaking of the Adelaide Electric Supply Co. Ltd. which in its day, by means of The Adelaide Electric Supply Company's Act, 1922, took over the undertaking of the South Australian Electric Light and Motive Power Co. Ltd. The last-mentioned company carried on under a statute called The South Australian Electric Light and Motive Power Company's Act, 1897. The Trust inherits the provisions of those various statutes: they are incorporated by reference, so to speak, by ss. 36 and 37 of the Trust's own Act of 1946-1954. About the provisions of that Act little need be said except that s. 40 (e) confers upon the Trust power to do any act or thing and enter into and carry out any transaction which it is necessary or convenient to do, enter into or carry out for the purpose of generating, transmitting and supplying electricity. Apart from the provisions dealing with "undue preference" and with the right to supply on the same terms as those upon which any other consumer is entitled to supply, provisions contained in ss. 15 and 16 of the original company's Act of 1897, nothing can be found in the legislation which expressly imposes upon the Trust a duty to supply electricity either generally, to a locality or to consumers under a given description or particularity. On behalf of the Trust it is not denied that when it supplies consumers with electricity it must be at a voltage fit for the purpose of consumption nor is it denied that the delivery of electricity by the Trust at a voltage fit for consumption would be from and not to the transformer, but the Trust maintains that that is of no relevance if it may stipulate, as one of the terms of supply, for the provision by the proposed consumer of space for a transformer.

From a logical point of view the first proposition upon which the company rests its case is that the Trust in effect holds a monopoly of the supply of electrical energy in Adelaide and is therefore bound to furnish it to those who properly demand a supply, that is of course subject to all lawful excuses, justifications and exceptions. The statutes do not confer a monopoly in terms upon the Trust and indeed quite consistently with the statutory terms anybody might supply electrical energy, but it is quite apparent that in point of fact there can only be one undertaker and that, without parliamentary authority which no one would be expected to seek or to obtain, the Trust is the sole public supplier of electrical energy in Adelaide or the relevant part of Adelaide. Beginning with this fact, the company claims that a principle of law exists that when a public utility or other body or person exercises an exclusive franchise, the body or person is under a duty to provide the service or give the supply covered by the franchise. For this supposed principle counsel for the company had some difficulty in finding authority in English law. Resort was had to the law relating to ancient exclusive franchises and, in particular, rights of ferry whether by grant or prescription. The duties in the case of ferriage are explained as follows in Simpson v. Attorney-General [1] by Lord Macnaghten: "All ancient ferries have their origin in Royal grant or in prescription, which presumes a Royal grant. A right of ferry is in derogation of common right, for by common right any person entitled to cross a river in a boat is entitled to carry passengers too. Within the limits of an ancient ferry no one is permitted to convey passengers across but the owner of the ferry. No one may disturb the ferry. The ferry carries with it an exclusive right or monopoly. In consideration of that monopoly the owner of the ferry is bound to have his ferry always ready". [2] . It is impossible to reason from such analogies to the effect of a modern statutory authority granted to a public utility supplying electrical power and energy. But counsel for the Trust turned to American precedents, the effect of which may be summarized by the following quotation which he made from American Jurisprudence vol. 43, p. 584: "In every grant of a public utility franchise there is implied an agreement on the part of the grantee that it will be exercised and that all duties and conditions prescribed in or inferred from the grant will be performed and discharged." The source of this doctrine in America, which depends upon implication, is suggested by the authorities which deal with the parallel doctrine that the 14th Amendment was consistent with some regulation of businesses "affected by or clothed with a public interest". For example, when the doctrine was in full operation, Taft C.J., in classifying such cases, gave the first two classes as follows: "(1) Those which are carried on under the authority of a public grant of privileges which either expressly or impliedly imposes the affirmative duty of rendering a public service demanded by any member of the public. Such are the railroads, other common carriers and public utilities. (2) Certain occupations, regarded as exceptional, the public interest attaching to which, recognized from earliest times, has survived the period of arbitrary laws by Parliament or colonial legislatures for regulating all trades and callings. Such are those of the keepers of inns, cabs, and gristmills": Chas. Wolff Packing Co. v. Kansas Court of Industrial Relations [1] . In Munn v. Illinois [2] where the doctrine was first established, Waite C.J. took the phrase "affected by a public interest" from Lord Hale's De Portibus Maris in Hargraves' Law Tracts and proceeded through the English authorities such as Allnutt v. Inglis [3] which will be found in the judgment of Stirling L.J. in Simpson's Case [4] , that was reversed in the House of Lords: cf. United Fuel Gas Co. v. Railroad Commission of Kentucky [5] . The American doctrine, which is a deduction from what is implied in the grant of an exclusive right to a public utility, has not been established in English law and certainly has no place in the application of a statutory authority granted by the South Australian enactments which govern this case. Under those enactments the Trust has regarded itself as free to formulate a standard form of contract or standard conditions for those who were prepared to contract for a supply of electrical power and energy. Presumably there are many consumers who, without entering into any contract, are supplied from month to month or as the case may be. But the standard conditions of contract or agreement have been published in the Gazette and it is into a form of contract accepting those conditions that the Trust insists the company must enter, that is to say in the absence of any special provisions upon which the parties are able to agree. For the purposes of deciding this appeal it is enough to set out the clause in dispute. It is cl. 2 and reads as follows: "When, in the opinion of the Trust, the supply of electric energy can most conveniently be effected by placing transformers and/or other equipment on the premises of the consumer, the consumer shall provide free of cost to the Trust, suitable accommodation for such equipment, in a position satisfactory to the Trust, in such manner as to allow free access to the equipment at any time by the Trust's representative(s). The Trust reserves the right to supply other consumers from the said equipment. Any such equipment erected by the Trust shall be under its sole control, and shall remain its property, and shall be removed by it on the termination of the agreement for the supply of electric energy to the consumer." An objection taken to this clause is that, considered apart from s. 15 and s. 16, it is ultra vires of the Trust. Apart from those provisions the power of the Trust to impose conditions in supplying electrical power and energy cannot be denied in view of what has already been said; and there appears to be no tenable ground upon which this objection can be supported. It is therefore necessary to turn to ss. 15 and 16. Section 15 confers a power to contract with a local authority, person or company for the supply of electricity and for providing descriptions of electrical equipment enumerated in detail and for the supply of motive power. The supply may be in such manner and upon such terms as shall be agreed upon between the company and the said local authority, person, or other company: provided that the company, in making any agreement for a supply of electricity, shall not show any undue preference to any local authority, person, or other company. The "terms" referred to appear to cover not only the tariff but all conditions of supply. That too is the meaning of the word in s. 16 which is as follows: "Where a supply of electricity is provided in any part of an area (or part of a town) for private purposes, every company or person within that part of an area (part of a town) shall, on application, be entitled to a supply of electricity on the same terms on which any other company or person in such part of an area (part of a town) is entitled under similar circumstances to a corresponding supply." The strength of the company's case is no doubt to be found in these provisions. Indeed it is not going too far to say that, when stripped of accessories which perhaps have intruded because of the evident competition between the parties to justify the respective stands they take, by a claim of merit, there is little else in the case but the effect of s. 16. It is difficult to see that s. 15 adds anything, for there seems to be a full enough power to contract and the proviso has not yet been violated. It is said that because cl. 2 of the Conditions leaves a discretion to the Trust to require the instalment of a transformer it purports to enable the Trust to prefer one company by abstaining from making such a requirement in that company's case. The answer is that the clause gives a discretion which must be controlled by the obligation not to give an undue preference, and if this be a purported preference by the Trust it may be dealt with under s. 15. That perhaps would mean the intervention of the Attorney-General or the grant of his fiat. The real point in the case is whether s. 16 is violated by cl. 2 and perhaps whether cl. 2 purports to authorize a violation of s. 16. Much may be said upon some aspects of this question. But, as it seems on a fair and literal reading of s. 16, there must be two limbs or ends of the comparison which is to be instituted under s. 16. You must begin with "terms on which (some) other company or person in such part of an area is entitled under similar circumstances to a corresponding supply". When you have found that company or person you may turn to the company or person seeking a supply and say to him or it "You are entitled to a supply on the same terms". The conditions, however, that have been gazetted have been offered to all concerned: indeed they have been accepted by proprietors of a number of large and important buildings, and there is no one in similar circumstances who is "entitled" to a supply on terms which exclude the obligation to provide space for a transformer. The first limb of the comparison therefore appears to be wanting. True it is that cl. 2 allows the Trust a discretion not to require the provision by the party agreeing to it of space for a transformer, but it cannot be said that a person or company who has agreed to the condition but has not been so required is "entitled to a supply" on different terms. One simple though additional answer is that the proofs do not show that there is any company or person receiving under similar circumstances a corresponding supply who is in that situation. Accordingly the plaintiff company's case fails and the appeal should be dismissed.

[1904] A.C. 476. 2. [1904] A.C., at p. 490. 3. (1922) 262 U.S. 522, at p. 535 [67 Law Ed. 1103, at p. 1108]. 4. (1876) 94 U.S. 113 [24 Law Ed. 77]. 5. (1810) 12 East 527 [104 E.R. 206]. 6. [1901] 2 Ch., at p. 715 et seq. 7. (1928) 278 U.S. 300, at p. 309 [73 Law Ed. 390, at p. 396, col. 2]. McTiernan J.

The statutory provisions which are relevant in considering this case are the sections of The Adelaide Electric Supply Company's Acts, 1897-1931 made applicable to the respondent Trust by ss. 36 and 37 of the Electricity Trust of South Australia Act, 1946-1954. In declining to enter into a contract with the appellant company to supply its new building with electric energy, unless the company agrees to the Trust placing a transformer in the basement, the Trust relies upon the statutory power to enter into contracts with consumers which was originally granted to the South Australian Electric Light and Motive Power Company Limited by s. 15 of the abovementioned Act, and the concluding provision of s. 4. This is a statutory power to enter into any such contract in such manner and upon such terms as shall be agreed upon between the Trust and the consumer. The power is subject to the condition that the Trust shall not in making a contract for a supply of electricity show any undue preference to any consumer. The Trust is also subject to s. 16 of the Act of 1897. This says: "Where a supply of electricity is provided in any part of an area (or part of a town) for private purposes, every company or person within that part of an area (part of a town) shall, on application, be entitled to a supply of electricity on the same terms on which any other company or person in such part of an area (part of a town) is entitled under similar circumstances to a corresponding supply". It seems to me that it follows from the provisions of these sections that the Trust has no legal obligation to supply electric current to anyone with whom the Trust has not entered into a contract for the supply of electric current and that the Trust has legal freedom to stipulate the terms of the contract, qualified only by the duty not to show undue preference in the making of the contract and to observe s. 16. The stipulation on which the Trust insists, and to which the appellant objects, was in accordance with cl. 2 of the Trust's Standard Conditions under which it supplies electric energy to all consumers. These conditions were published in 1952. However the Trust has not exercised its rights under cl. 2 except in the case of certain buildings which were constructed after 1957 if expected to use a load exceeding a certain measure of kilo volt amperes. The appellant's building satisfies these conditions. At the planning stage the Trust, on the advice of its engineers, formed the opinion that the supply of electricity to the building could most conveniently be effected by placing transformers in the basement and the appellant was informed of the Trust's intention to act on that opinion. However the appellant was aggrieved by the loss of valuable space which accommodation for transformers would entail and objected to the Trust's proposed manner of supplying electric energy to the building. The Trust informed the appellant that it would limit its demand to space sufficient for a single transformer and that its intention was to supply only the appellant's building from this transformer. But the appellant was not content.

The Trust provides a printed form on which it requires any application for a supply of electricity to be made. The form contains words which would incorporate all the Trust's standard conditions in the agreement for a supply of electricity arising from acceptance of the application. The appellant made an application for a supply of electricity to its new building without using the Trust's form.

The statutory basis on which the appellant rests its claim that its application be accepted is s. 16 of the 1897 Act. The contention is that the appellant can lawfully demand a supply of electric energy for the building on the same terms as other consumers to whose buildings the current is supplied from transformers outside their premises. The supply in all these cases corresponds to the supply for which the appellant applied. The appellant desires that it be a term of its arrangement with the Trust that the supply of electric energy should come from a substation of the Trust in the vicinity. The appellant was concerned only to exclude cl. 2 of the standard conditions. It therefore desired that the Trust should supply the building with electricity from the substation external to the building. It would appear that the appellant's application needed to depend on cls. 1 and 6 of the Trust's usual conditions. The first is a stipulation that the Trust will put its service line between its distributing main and the service point for the consumer's installation and there fix and connect its service fuses, the Trust reserving the right to decide the most suitable position for the service point. It is perhaps important to quote part of cl. 6: "The nature of the supply in any particular area from time to time shall be at the discretion of the Trust. The supply in most cases is at present alternating current 50 cycles single phase 240 volts and/or 415 volts or 3 phase 415 volts as set out in the Trust's service rules". Apparently, the appellant applied for a supply of alternating current three phase 240/415 volt electricity: this, I think, can be deduced from the evidence.

A point is made by the appellant that cl. 2 is not within the scope of the Trust's power of contract. By s. 4 of the Act of 1897, the Trust is intended to have power to supply electricity upon such terms as shall be agreed upon: and by s. 15, it has power to enter into agreements for a supply of electricity in such manner and such terms as shall be agreed upon. It is argued that supply only takes place after the electric current is recorded by the meter on the consumer's premises. Upon its face, cl. 2 is a condition under which electric energy is supplied and the placing of a transformer on the consumer's premises is referred to as a manner of "effecting the supply". The clause reserves the right to "supply" other consumers "from" the transformer. The transformer to which cl. 2 refers is one that would convert from high tension to lower voltage the supply of electricity being distributed to the building. The current is used in the building at the lower voltage. The technical evidence regarding the relation to the Trust's distributing system of the transformer which would be placed in the appellant's building shows, in my opinion, that it would be a means of supplying the building with electricity and that the operation of supply is not one confined to the post-meter stage. I am therefore prepared to hold that the Trust's power of making contracts with consumers, which it derives from ss. 4 and 15 of the Act of 1897, extends to stipulating that the supply should be from a step-down transformer placed by the Trust in the building to which supply is made.

The second part of cl. 2 purports to reserve to the Trust a right to supply other consumers than the owner or occupier of the building and is attacked on the ground that it is not relevant to the application for a supply of electricity to the building and cannot therefore be insisted upon by the Trust, if the applicant objects to it. However, the Trust has informed the appellant that it would not resort to the right which this part of cl. 2 purports to reserve and the question of its legal rightness is therefore purely academic in this case.

Section 15 forbids the Trust to show any undue preference "in making any agreement for a supply of electricity". It cannot be held against the Trust that by insisting on cl. 2 it is disregarding the prohibition in s. 15. In fact, the Trust is merely insisting on the appellant's acceptance of a condition which is embodied in all existing contracts for a supply of electricity.

Turning to s. 16 of the Act of 1897: the appellant contends that the Trust is obliged by this section to grant the appellant's application for a supply of electricity without stipulating that the Trust should have the right to place a transformer in the basement because other buildings in the city, having comparable electric needs, are supplied from established transformer substations of the Trust. These buildings were erected before 1957 and, as stated above, the Trust adopted the policy of applying cl. 2 only to buildings erected after 1957 drawing a load exceeding a certain measure of kilo volt amperes. The Trust led evidence to prove why it adopted the policy. This evidence is reviewed by the late Brazel J. in his reasons for judgment. It proves that because of an increase in large buildings in the city, the problem of the distribution of electric current was being accentuated, a tendency which became noticeable from 1957. The statistics in evidence show that demands on the Trust's established transformer stations were growing. However, it does not seem to me to be necessary to differentiate between the circumstances before and after 1957 to deal with the appellant's allegation of discrimination contrary to s. 16. This section forbids discrimination only in respect of the "terms" of the agreement of supply. In my opinion, the word "terms" means the provisions of the contract and does not extend to the implementation of the contract and the relations between the Trust and a consumer under any term of the contract. If the appellant enters into a contract of supply with the Trust it would be supplied upon the same terms as other consumers. This position would not be altered by the Trust exercising its rights under cl. 2. The Trust has similar rights given it by all current contracts of supply made with consumers. In my opinion, the appellant's complaint is not supported by s. 16. That section does not entitle anyone to a supply of electricity who has not entered into a contract with the Trust. The section prevents the Trust from picking and choosing with whom it will enter into a contract of supply and it requires similar contracts where the circumstances and the supply required are similar. In my opinion, the Trust is not exceeding its lawful authority in declining to enter into a contract with the appellant to supply its new building with electricity, so long as the appellant rejects the Trust's offer to supply electricity under its standard conditions.

In my opinion, there is no substance in the appellant's claim that the Trust has a common law obligation to grant the appellant's application for a supply of electricity to the building. As regards this question, I take the same view as the Chief Justice and have nothing to add to his reasons.

Under the provisions of The Adelaide Electric Supply Company's Acts 1897 to 1931 as now applying in relation to the respondent Trust, the Trust has power to supply electricity upon such terms as shall be agreed upon between it and the persons supplied therewith (s. 4), and it has power to enter into any contract for supplying electricity upon such terms as shall be agreed upon between them (s. 15). The generality of these powers is qualified by two provisions only, one enacted by a proviso to s. 15 and the other enacted by s. 16. The proviso to s. 15 forbids the Trust, in making any agreement for a supply of electricity, to show any undue preference to any local authority, person, or company. It is not a provision against discrimination in the exercise of statutory or contractual powers or discretions generally, for its application is limited to the process of the making of agreements for supply. Section 16, however, is not limited in the same manner. It confers a right upon every company and person, within a given part of an area or town where a supply of electricity is provided, to have a supply of electricity on application, on the same terms on which any other company or person in such part of an area (or part of a town) is entitled under similar circumstances to a corresponding supply. As in s. 15, the terms referred to extend beyond the tariff of charges, and include all contractual terms. The section operates, however, not only in the making of a contract, but continuously; so that at any given time anyone who can point to a consumer entitled, in circumstances similar to his, to a supply of electricity corresponding to his but upon terms more favourable than those which are being insisted upon as against him, is given a right to have his supply upon those more favourable terms.

In the case before us, the appellant has requested a supply of electricity, and the Trust is willing to give it upon certain terms. The terms are those provided for in a form of application which the Trust requires all applicants for electricity to execute. They include a set of conditions by which a person completing the application form thereby agrees to be bound. But although the terms, including the conditions, are identical with those which are in force between the Trust and all other consumers of electricity in the same area as the appellant, they contain a provision, in cl. 2, to which the appellant objects. It objects on a number of grounds, but I have not been able to see any substance in any of them except, perhaps, a ground depending upon s. 16. Obviously the proviso to s. 15 has no application, for the identity of the proffered terms with those in force in relation to every other consumer in the area makes impossible any suggestion of discrimination in the making of the proposed agreement.

The appellant's submission on s. 16 may be stated shortly. In the relevant area there may be at a future time, even if there is not now, a consumer other than the appellant receiving, under circumstances similar to those of the appellant, a supply of electricity corresponding to that which the appellant wishes to have, and receiving it without being required by the Trust to provide free accommodation for any transformer or other equipment of the Trust. Wherever that situation arises, s. 16 will entitle the appellant, so it says, to like treatment, and therefore the Trust is not justified in insisting that the appellant bind itself by a term of supply which means that in such a situation it will not receive like treatment.

The argument is expressed in various ways; but always the comparison invited is between, on the one hand, that which in fact another consumer is being, or may be at some future time, required by the Trust to do in order to get a supply of electricity and, on the other hand, that which the appellant is asked to bind itself to do in the event of the Trust forming the opinion mentioned in cl. 2. This, however, is not a comparison which is relevant under s. 16. We are concerned here with a dry question of statutory construction, and the precise words of the section must be carefully observed. They do not set up, as the standard of comparison, the terms which at a given time a consumer is being required to perform or observe. They refer only to the terms on which he "is entitled" to his supply; that is to say the terms subject to fulfilment of which he has a legal right to a supply. Now, if his agreement with the Trust contains a provision in the words of cl. 2, it is clear that he has no legal right at any point of time to receive a supply without providing free accommodation for a transformer or other equipment of the Trust, unless the Trust is not at that time of opinion that the supply can most conveniently be effected by placing a transformer or other equipment on his premises. If the Trust is of that opinion, it cannot matter whether he is in fact being required to provide the accommodation, for the Trust may stand upon its contract at a moment's notice: he is not "entitled" to his supply without providing the accommodation. If, on the other hand, the Trust is not of that opinion, he is entitled to his supply in circumstances which are dissimilar in an obviously relevant respect from those of a person in whose case the Trust holds the opinion. Of course, a genuine state of opinion on the part of the Trust is postulated in each case; and it cannot be that in two contrasted cases the Trust genuinely holds opposite opinions as to the most convenient way of effecting a supply of electricity, unless the circumstances of the one case are different from the circumstances of the other.

In my opinion the appellant has shown no case for relief, and the appeal should be dismissed.

The appellant company was the plaintiff in an action against the respondent Trust seeking declaratory orders to establish that it was entitled to have electricity supplied to a building in the course of erection in Adelaide without having to submit to the requirement of the Trust that the contract for supply should include the following, which I will call Condition 2: "When, in the opinion of the Trust, the supply of electric energy can most conveniently be effected by placing transformers and/or other equipment on the premises of the consumer, the consumer shall provide free of cost to the Trust, suitable accommodation for such equipment, in a position satisfactory to the Trust, in such manner as to allow free access to the equipment at any time by the Trust's representative(s). The Trust reserves the right to supply other consumers from the said equipment. Any such equipment erected by the Trust shall be under its sole control, and shall remain its property, and shall be removed by it on the termination of the agreement for the supply of electric energy to the consumer."

The Trust, although insisting upon the inclusion of Condition 2, had indicated that it would not take advantage of it beyond the installation of one transformer in the company's building for the supply of electricity to that building.

The company's action was dismissed by the Supreme Court of South Australia (Brazel J.) and special leave to appeal from that decision was granted by this Court.

For the appellant it was contended in the first place that over and above any statutory obligations that might lie upon the Trust to supply its building with electricity, there was a common law obligation to supply electricity upon reasonable terms to any person who might require it to do so which arose because the Trust and its predecessors, in taking advantage of enabling statutes, had established and maintained an undertaking which was in fact a monopoly in the area of its operations and in particular in the City of Adelaide. That there is such a doctrine in the United States of America in relation to public utilities appeared from the authorities Mr. Bright cited, but the legal basis for that doctrine has not been explained. To take but one instance, in United Fuel Gas Co. v. Railroad Commission of Kentucky [1] it was stated without any elaboration that the primary duty of a public utility is to serve on reasonable terms all those who desire the service it renders. No such doctrine is to be found in English or Australian decisions and the English cases relating to the grants of franchises in derogation of common rights, upon which Mr. Bright relied, are clearly distinguishable. Many of these cases relate to ferries and they show that the holder of an exclusive franchise of ferry may prevent competition and is bound to provide proper services at reasonable rates: see Letton v. Goodden [2] ; Hammerton v. Dysart [3] and The Bournemouth-Swanage Motor Road and Ferry Co. v. Harvey & Sons [4] . In the last of these cases an injunction against competition was refused because it was held that the Act did not confer on the ferry company an exclusive right of ferry, and after quoting the relevant section Lord Macmillan, with whom the other members of the House concurred, said: "Now this section does not purport to grant a franchise of ferry. It merely empowers the company to establish a ferry service. It imposes no obligation on the company whatever; it does not require the company to provide any service. The terms of the section are permissive not obligatory, enabling not mandatory. If the company chose not to provide a ferry service no member of the public could compel it to do so. In short the position of the company is comparable to that of a railway company which has obtained power to construct and work a new line but is under no obligation to the public either to construct it or to work it when constructed" [1] . The same kind of thing could be said here. Furthermore in this case the Act which originally authorized the undertaking which the Trust now operates (i.e. The South Australian Electric Light and Motive Power Company's Act, 1897) expressly provides as follows: "S. 36. Nothing in this Act contained shall be deemed to imply any agreement or undertaking on the part of the Parliament not to grant powers similar to those granted by this Act to any other person or Corporation".

(1928) 278 U.S. 300 [73 Law Ed. 390]. 2. [1866] L.R. 2 Eq. 123, at p. 131. 3. [1916] 1 A.C. 57. 4. [1930] A.C. 549. 5. [1930] A.C., at p. 554.

In any event, this Act and the amending Acts under which the Trust carries on its undertaking do deal expressly with its obligations concerning the supply of electricity to those who apply for it in the area of the Trust's operation, and I consider that unless those provisions justify granting declaratory relief of the kind sought, the company is not entitled to relief. I turn, therefore, to the statutory provisions that are applicable.

These are ss. 15 and 16 of The South Australian Electric Light and Motive Power Company's Act, 1897. As its name indicates, this Act authorized a company called The South Australian Electric Light and Motive Power Co. Ltd. to carry on an electrical undertaking. In 1946 The Electricity Trust of South Australia was established and had vested in it the undertaking of The Adelaide Electric Supply Co. Ltd., the transferee from The South Australian Electric Light and Motive Power Co. and provisions of the original Act were made applicable to it: Electricity Trust of South Australia Act, 1946. Section 15 authorizes the Trust to enter into any contract with any other company for supplying a building with electricity "in such manner and upon such terms as shall be agreed upon", subject to the following proviso: "Provided that the Company" (i.e., since 1946, the Trust) "in making any agreement for a supply of electricity, shall not show any undue preference to any local authority, person, or other company". Section 16 is as follows: "Where a supply of electricity is provided in any part of an area (or part of a town) for private purposes, every company or person within that part of an area (part of a town) shall, on application, be entitled to a supply of electricity on the same terms on which any other company or person in such part of an area (part of a town) is entitled under similar circumstances to a corresponding supply."

The first question is whether Condition 2 entitling the Trust to install transformers on the premises of the would-be consumer is a term for the supply of electricity to a building. The company argued that it was not and sought to confine the word "terms", where it appears in ss. 15 and 16, to provisions relating to tariff. I see no reason for restricting the word in this way. Notwithstanding that a transformer installed upon a consumer's premises into which the Trust transmits electricity at high voltage for the purposes of the voltage being reduced would be situated upon the Trust's side of the service point for the consumer's installation, I consider, subject to one possible reservation, that the provision does relate to the supply of electricity to the building and, if there were no other objection to it, is one which could be included in an agreement to be made by the Trust pursuant to s. 15. I do not find in any of the cases cited to us by Mr. Bright any warrant for reading the word "terms" as the equivalent of "tariff", even if the latter word were to be given a wide meaning.

Furthermore, I read the proviso to s. 15 as confined to the making of an agreement and where, as here, the Trust offers all would-be consumers a contract upon the same terms, there is no departure from the proviso. In making this observation I have in mind the evidence that every contract made between the Trust and a consumer contains Condition 2, which is the only term to which the company objects.

The reservation which I made earlier is concerned with the part of the proposed condition whereby "the Trust reserves the right to supply other consumers from the said equipment". I am doubtful whether this really related to supplying with electricity the building in which the transformer is to be installed. To say to a would-be consumer "I will supply you with electricity only if you give me the right to install in your building a transformer to supply other buildings" could go beyond the conception of a term of supply to that building. However this may be, I think that s. 40 (e) of the Electricity Trust of South Australia Act, 1946-1954 is sufficiently wide, when read with s. 15 of the Act of 1897, to authorize the Trust to make a contract of supply containing Condition 2. The question is whether it can insist upon such a term.

This brings me to s. 16. Although all agreements for supply made with the Trust do contain Condition 2, it is only in a few cases that the Trust has exercised the authority so conferred and has installed transformers in consumers' buildings. To elaborate this a little, it appears from the evidence that: (1) all consumers' contracts do include Condition 2; (2) in some cases the Trust has exercised the authority conferred upon it by Condition 2 and required the installation of a transformer upon the consumer's premises. All cases in which this has been done have occurred since 1957 and a new building has been erected with a loading in excess of 250 k.v.a.; and (3) in most cases the authority given by Condition 2 has not been exercised, and there is one case in particular where a building substantially altered since 1957 and requiring a loading in excess of 250 k.v.a. has not been required to take a transformer.

The question is whether in this state of affairs the Trust is offering the company "the same terms on which any other company or person is entitled under similar circumstances to a corresponding supply". The contention of the Trust is that it is. It takes (1) above as decisive and affirms that a person who is offered the same contract as everybody else for the supply of electricity is offered "a supply of electricity on the same terms" as everybody else and it matters not that it is only in particular cases that the Trust in accordance with a general policy insists upon installing transformers in the premises of consumers. Thus, according to this argument, the emphasis is upon the terms of the contract and, as an extreme example to show that inequalities in the carrying out of contracts are without significance for the purposes of s. 16, Mr. Sangster necessarily went so far as to argue that if every consumer's contract were to give the Trust authority to fix the price for electricity supplied, the Trust could insist upon one consumer paying twice as much as another for the same supply in similar circumstances without any departure from s. 16. It was this view of s. 16 that the learned trial judge accepted. Although I was originally disposed to think that s. 16 directs reference not merely to the terms of the agreement for supply but also to the terms upon which a consumer is obtaining supply from the Trust fixed under authority given by a uniform agreement with consumers, I have eventually reached the conclusion that the reference is to the terms of the agreement only and that a person seeking supply is entitled to it, not upon the same terms as another consumer is then obtaining supply, but upon the terms which, according to his contract, that other consumer is entitled to supply. The evidence that the Trust has in every case the contractual right to do what it insists upon doing in this case concludes the matter, notwithstanding that up to the present it has not in other cases exercised the right that it has under Condition 2.

I agree, therefore, that this appeal should be dismissed.

The appellant company appeals by special leave against an order made by Brazel J. dismissing with costs a suit brought by it against the respondent Trust in the following circumstances. The Trust is, in fact, the sole supplier of electricity in Adelaide where the appellant is erecting a building consisting of a basement and seven floors. The appellant wishes to be supplied with electricity for its new building and the Trust is prepared to supply it provided the appellant enters into the standard form of contract which all consumers of electricity are required to sign. That form contains a condition (Cl. 2) in the following terms: "When, in the opinion of the Trust, the supply of electric energy can most conveniently be effected by placing transformers and/or other equipment on the premises of the consumer, the consumer shall provide free of cost to the Trust, suitable accommodation for such equipment, in a position satisfactory to the Trust, in such manner as to allow free access to the equipment at any time by the Trust's representative(s)." The Trust has made it clear to the appellant that if it enters into such a contract it will be required to supply a substantial area of space in the basement of its building, free of cost to the Trust, for the accommodation of a transformer in order to break down the high voltage current carried over the Trust's lines to a voltage suitable for supply to the consumer. The evidence shows that it has been the policy of the Trust to insist upon this requirement in the case of buildings erected since 1957 whenever the estimated load to the building exceeds 250 kilo volt amps and the estimated load in the case of the appellant's building exceeds that figure. The appellant has refused to sign a contract containing cl. 2 of the standard form and seeks declarations to the effect that the Trust has no lawful right to include such a term in its contracts with consumers and has no right to insist on the provision of space to house a transformer as a condition precedent to supplying electricity. Whether or not this is so depends upon the meaning and effect of the statutes under which the Trust operates. It was set up under the Electricity Trust of South Australia Act, 1946 and by s. 36 of that Act was required to manage maintain and operate the undertaking of the Adelaide Electric Supply Co. Ltd. (that undertaking having become vested in the Trust by Pt III of the Act) subject to and in accordance with the provisions of The Adelaide Electric Supply Company's Acts 1897 to 1931 which Acts were to be construed as if every reference therein to the Company was a reference to the Trust. In addition to the powers conferred by those Acts, it was given power, by s. 40 (e) of the 1946 Act "to do any act or thing and enter into and carry out any transaction which it is necessary or convenient to do, enter into or carry out for the purpose of developing, transmitting and supplying electricity". The other relevant powers and obligations of the Company, which are now the powers and obligations of the Trust, are to be found in ss. 4, 15 and 16 of The Adelaide Electric Supply Company's Act, 1897. Section 4 empowered the Company "to supply" electricity "upon such terms as shall be agreed upon between the Company and the persons supplied therewith". Section 15 authorized it to enter into any contract with any person for supplying electricity "in such manner and upon such terms as shall be agreed upon between the Company and the said person: Provided that the Company in making any agreement for the supply of electricity shall not show any undue preference to any person". Section 16 provided that "Where a supply of electricity is provided in any part of an area for private purposes every person within that part of an area shall, on application, be entitled to a supply of electricity on the same terms on which any other person in such part of an area is entitled under similar circumstances to a corresponding supply." When these sections are read together they appear to me to restrict to a considerable extent the wide powers which would otherwise have been given by the words in ss. 4 and 15 which authorized the Company and now authorize the Trust to enter into contracts to supply electricity "upon such terms as shall be agreed upon" between it and the prospective consumer. The first limitation in making such a contract is that one consumer must not be unduly preferred to another. The second limitation is that every consumer in part of an area is to be entitled to be supplied on the same terms as those on which any other consumer in the same part of an area is entitled under similar circumstances to a corresponding supply. The contention of the Trust is that the contract which it requires the appellant to sign is in a standard form. Every consumer has to sign a contract in those terms and becomes entitled to be supplied in accordance with its terms. The requirements not only of s. 15 but also of s. 16 are fulfilled, so it is said, when it appears that all other consumers who are supplied in similar circumstances sign contracts containing cl. 2. But that argument does not, I think, provide an answer to the appellant's objection. Clause 2 would enable the Trust, if it thought fit, to impose a burden on one consumer and not on others. Under it the Trust could require A to provide free space to house a transformer as a condition precedent to being supplied. If such a requirement were made A would be bound by the contract to comply with it. If B, the occupier of a neighbouring building, who is not required by the Trust to provide space in his building, receives a supply of electricity corresponding to that supplied to A and in similar circumstances, A could surely say that he is not being supplied on the same terms as is B. The two contracts of supply are in similar terms but under one of them the Trust is insisting on the provision of space and the consumer must provide it. Under the other the consumer is not obliged to do so. Section 16 seems to me to be designed to prevent discrimination of this kind and, if this is so, I think it follows that the Trust has not, under its statutory powers, any lawful right to insert in its contracts with consumers a provision such as cl. 2 which, if valid, would enable it thus to differentiate between one consumer and another. If so, it is not to the point to inquire whether the Trust in fact requires or proposes to require some consumers to supply free space while no such requirement is made of other consumers in similar circumstances. A contract containing cl. 2 is not one which the Trust may lawfully make and it cannot therefore insist that the appellant sign such a contract as a condition precedent to being supplied with electricity.

At a glance

Court

Decision date

Before

Source

Judgment (35 paragraphs)

Parties