South Australian Cold Stores Ltd v Electricity Trust

South Australian Cold Stores Ltd v Electricity Trust - [1957] HCA 69 - HCA 1957 case summary — Zoe

[9]

The relevant facts may be stated very briefly. It appears that at the end of 1951 the trust was supplying electrical energy to the company at rates the limits of which were fixed by prices orders. The supply was made under conditions which had long governed the obligations of the respective parties. The condition immediately material provided that the rates for electrical energy supplied and for meter charges should be such as from time to time were fixed by the supplier. In other words there were, so far as the conditions went, no charges fixed by agreement; they might be fixed from time to time by the trust. But the trust, of course, could not by reason of the Prices Act increase the rates without an order of the commissioner. The trust accordingly sought from the commissioner an approval of an increase in rates. On 10th January 1952 the trust prepared and submitted to the commissioner certain tariff schedules, four in number, setting out in parallel columns the then existing rates and proposed rates, that is the increased rates proposed by the trust. Apparently these met with the approval of the commissioner who then addressed to the trust a notice which is the document upon which the case turns. It begins with a reference to the Prices Act 1948-1951 by way of heading and is directed "To Electricity Trust of S.A.". The body of the notice is as follows: "Take notice that in pursuance of the powers delegated to me by the Minister pursuant to Section 5 (4) of the above Act, I hereby fix the maximum rates at which electricity may be supplied by your Trust to be as per Annexures "A", "B", "C", "D" and "E" attached. To operate on accounts rendered on and after 1st February 1952. Dated this fourteenth day of January 1952." Then follow the signature of the commissioner and the title of his office. The annexures are the four tariff schedules of the trust with the two vertical columns side by side still headed respectively "Present Rate" "Proposed Rate". It may, indeed, be doubted whether one is justified in going outside the document consisting of the notice and the schedules for the purpose of discovering that it was intended to fix the "proposed" and not the "existing" rates as maxima. Unless you do go outside the document it is a conclusion which you reach by conjecture, sophisticated by experience, rather than by means of any principle of construction.

[12]

But had it been brought into operation, e.g. by gazettal, a difficulty would remain. For the words "To operate on accounts rendered on and after 1st February 1952" would produce a retrospective effect. It would apply on its terms to electricity which had already been supplied before 14th January but was made the subject of an account rendered on or after 1st February 1952. The language of s. 24 (1) authorising the Minister by order to fix and declare the maximum rate at which any declared service may be supplied plainly refers to future supplies. The price for services already supplied before the order cannot be fixed under such a power. Possibly the future operation of the order might be severed by construction from its operation on past services but if so, not without some difficulty in determining on what accounts or how it first operated. However that may be, it is impossible to say that any date was specified for the coming into operation of the order and on that ground alone the order is inefficacious. It follows that the company was not liable to pay for electrical energy at the increased rates. The maximum rates which the trust might lawfully charge the company for the supply of energy remained fixed at the old levels just as if there had been no purported order increasing them. Unfortunately for the company however when the trust rendered accounts as for electricity supplied after 1st February 1952 until 1st December 1952, the company paid them without protest. With a view to recouping itself the overcharge the company refused to pay at all for the energy supplied during the next two months, that is to say, between 1st December 1952 and 2nd February 1953 and deducted a sum of £29 13s. 4d. from the payment which the company made for the ensuing month's supply, a payment made at the old rates and not at the new rates demanded by the trust. The amounts which the company thus refused to pay made up £4,763 18s. 8d. and it is for the recovery of this sum that the trust sued in the action. It is the sum for which Mayo A.C.J. entered judgment for the plaintiff trust against the defendant company. It will be seen that the total represents a charge at the new rates for the three months ended 2nd March 1953, less a payment at the old rates in respect of the third or last of those three months, reduced by £29 13s. 4d. in order to complete the recoupment of the past overpayments. The plaintiff trust denies that the defendant company can recoup itself for past overpayments by withholding payment for electrical energy subsequently supplied. The trust says that the company voluntarily made payments at the higher rates in satisfaction of the trust's claim or demand of amounts charged and that is the end of the matter so far as those amounts are concerned. They cannot be recovered by the company simply because it is afterwards discovered that the order of the prices commissioner was not validly made or effectively brought into force. But even if that be so it is not a consequence that the full amount of £4,763 18s. 8d. is recoverable by the trust. On the contrary it is a sum which, on the view adopted in this judgment, namely, that the order of 14th January 1952 was ineffective, contains an overcharge in respect of the period of three months to which it relates. The overcharge has been calculated at £1,537 14s. 9d. leaving a balance of £3,226 3s. 11d. This differs slightly from the figure given by the parties during the argument, viz. £3,211, and for the purposes of the Court's judgment it is better to adopt the latter.

[14]

It appears from the evidence that the manager and secretary of the defendant company was familiar with price control as it affected his company in the sale of their products or, perhaps the charging for the services they gave, but according to some evidence he gave he did not know that the trust as a government instrumentality needed an order to enable it to increase its rates. However, before it happened he heard that the rates were to be increased and in the newspaper he read that the prices commissioner had stated that the rates were to be raised. He agreed that he would have read what the newspaper contained and that it was a matter of considerable interest to his company. He said that he accepted the fact that a new prices order must be in existence when he received the accounts at the increased rates. He requested the trust to read the meters on 28th January 1952, because as he said, he wished to start another motor. It was, however, not done until 1st February and in respect of the energy consumed from January 1st to that date he received an account against his company calculated at the increased rates. The difference between the old and the new rates meant an amount of £575 10s. 8d. This he declined to pay, remitting only the amount which the old charges involved. He remarked in his accompanying letter that the company had requested the trust to read the meters on 28th January 1952 because they wished to start another motor and that it was significant that the trust had delayed until February 1st. This remark can hardly mean anything else but that the trust delayed so as to obtain the advantage of the new rates. A corresponding opposite suggestion, was made for the trust in the cross-examination of the witness, namely, that he had requested an earlier reading of the meters in order to avoid the operation of the increased charge on the account for January. This he denied. Whatever may be the justification for these rival accusations, it is clear enough that the company's objection to the charge of the increased rates for January was founded on its retrospective operation on the supply of energy for January 1952. In answer to the company's letter the trust replied on 6th March 1952 saying that the trust's engineer would call at an early date to discuss the matter. That however was not done. Accounts for the energy consumed during the respective months from February to November 1952 were rendered at the increased rate to the company at the beginning of each following month and the company paid the accounts promptly without protest. Then on 16th December 1952 the company received a letter from the trust's solicitors demanding payment of the amount of £575 10s. 8d. withheld by the company as representing the increase in the charges for energy supplied during January 1952. The letter said: "The account of which the above amount is the unpaid balance was rendered following tariff increases operative on all meter readings on and after 1st February 1952 pursuant to Prices Order No. 31547". This led the company to call for the production of the prices order, which as they said they had not seen. A copy was then supplied to the company on 22nd January 1953. That, as it appears, was the first occasion on which the company had received a copy of the order. By a letter of 9th February 1953 the company informed the trust that it had been advised that the authority of the trust to make the increased charges was of very doubtful validity and it set out the course the company would take to recoup itself for past overpayments and stated that subsequent accounts would be paid at the rates existing prior to 1st January 1952. The Prices Act 1948-1951 contains a provision that a court imposing a penalty for selling goods or supplying services at a price or rate higher than the maximum may order the person infringing the Act to repay the excess to the purchaser: s. 25 (2). But otherwise the Act does not provide for the recovery of the excess over the lawful maximum by a person who has paid it.

[16]

Substantially this view appears to be correct. The company was prepared to make the payments without investigating what had been done under the prices legislation. The lawfulness of the demand made by the trust for the higher rates depended upon a legal conclusion or consequence which the manager and secretary of the company was prepared to assume without inquiry or examination. He simply supposed that in some way or other the trust was lawfully entitled to charge the higher rate. It is not the sort of case Jessel M.R. describes in the passage in Eaglesfield v. Marquis of Londonderry [1] where he points out that many statements of legal conclusions may be treated as representations of fact. The manager did not know and he did not inquire whether the trust as a public utility or authority stood in a different position from ordinary suppliers of services and he did not know and did not inquire whether the prices commissioner had made any and what order. Had he seen the order he is unlikely to have been aware, at all events unless he took legal advice, that without gazettal it possessed no force. In a vague general way he may have supposed that if any conditions precedent existed upon which the trust's title to charge higher rates depended, those conditions had been fulfilled. As it turns out the question whether they were fulfilled or not depends upon a matter of law. Perhaps that does not matter, because if the document had been otherwise expressed, the conditions prescribed by law might have been fulfilled. And the manager was unaware of the need for the document or its existence, much less of its contents or terms. What does matter is that he entertained no belief as to the existence or non-existence of facts as such which turned out to be mistaken. It was a simple case of a bona fide assertion of right on the part of the trust which the company acceded to without inquiry or investigation. Had the company objected to paying and had the form and contents of the notice been brought under critical consideration, it is a reasonable conjecture that the defects would have been remedied by a new notice before all the overpayments which the company now seeks to recover had been made.

[18]

The present case may also be regarded as of the description which Lord Abinger C.B. had in mind when in Kelly v. Solari [3] he said: "There may also be cases in which, although he" (the payer) "might by investigation learn the state of facts more accurately, he declines to do so, and chooses to pay the money notwithstanding; in that case there can be no doubt that he is equally bound" [4] . In the present case the only reason why the higher rates were not chargeable was because the formal requirements of the law were not observed by a third party for expressing or giving effect to the decision at which he had actually arrived. Neither he nor the trust were aware of his failure lawfully to exercise his authority. They were unaware because they did not perceive what was required or the true effect of what the document contained. On the side of the company it was simply taken for granted that somehow or another the charges might be lawfully made. This seems to fall outside the reason of the rule under which an action of money had received lies in cases of payment by mistake. Under that rule the action is available when the payee cannot justly retain the money paid to him because it would not have come to his hands if it had not been for a false supposition of fact on the part of the payer causing the latter to believe that he was compellable to make the payment or at all events that he ought to make it. It is to be noticed that Parke B. in Kelly v. Solari [1] defines the requisite mistake as "the supposition that a specific fact is true, which would entitle the other to the money, but which fact is untrue" [2] . According to the decision of Pilcher J. in Turvey v. Dentons 1923 Ltd. [3] it is too restrictive to say that the fact would if true have entitled the payee to the money; and perhaps the word "specific" may also be too definite. But here there was nothing but an assumption that in some way or other the increased charge might lawfully be made and a readiness to comply with the payee's demand without more, a demand which but for formal defects in the authorisation would have been enforceable.

At a glance

Court

Decision date

Before

Source

Judgment (22 paragraphs)

Parties