deemed contract - is a landlord liable for tenant's business utility bills?

tifo

I'm trying to help a friend with a case.

He has been taken to court by the electricity company who supplied his property. They are suing him personally and at his home address. The property they supplied is a shop which he tenanted out.

The tenant did a runner and left rent and bills to pay, one of which was for the electricity. He has supplied the tenancy agreement to the power company but they don't care.

The balance they're suing for is around £5,500 plus interest plus fixed sum, all at business rates.

Their particulars of claim stated that the defendant (my friend) had an agreement with them for the supply of the electricity. We asked for documentation of this in our defence plus other paperwork but they seem unable to supply this (obviously because there is nothing).

They've now asked for permission to amend the particulars and their case is now based on a "deemed" contract with my friend, as owner of the property. We haven't yet given this permission and are thinking of denying. If they do change it, we will have to submit a new defence as well.

They've provided a planning application as proof that my friend owns the property and all the invoices are now in his name. I'm assuming all invoices were previously in the tenant's name and have been changed for this case.

Having looked at the terms and conditions, they seem unfair in that the deemed contract can be used even when the defendant has not received the services or agreed to them or anything else that they choose.

I'm assuming there will be a good defence to this case because otherwise it would mean all landlords are liable for their tenant's bills and this cannot be fair. Also, we're not sure if they're suing him as a consumer (which he is) or a business but they seem to be using business terminology as if this was a business to business contract.

My friend has a main job and this is just a property he owns and rented out. Being a landlord is not his main job and he cannot afford to pay for bills like these.

Any advice?

Quentin

tifo wrote: »

Any advice?

See a solicitor.

macman

Surely the crucial factor here is: did the tenant ever register for an account with the utility co? Or did he have an account, then just do a runner having been billed and not paid? If the latter, then the LL cannot be held responsible. Ownership of the property is completely irrelevant.

tifo

macman wrote: »

Surely the crucial factor here is: did the tenant ever register for an account with the utility co? Or did he have an account, then just do a runner having been billed and not paid? If the latter, then the LL cannot be held responsible. Ownership of the property is completely irrelevant.

I think the tenant was being billed by the utility company, the invoices have been changed to the landlord's name for the case. The utility company is aware of this.

It's this "deemed" contract that seems to give free reign to the utility company to sue who they want. They're now saying the landlord is "deemed" to have had a contract for supply to his premises where previously they'd said my friend had signed an agreement with them, which they were unable to supply. This is why they now want to amend the POC.

The law says (from what I've seen) that a landlord is only liable for "unoccupied" premises and this has had a tenant during the invoice period.

macman

Once the tenant gives notice to both the LL and the utility co and vacates, the LL would be in a deemed contract. This does not seem to be the case though.

jalexa

tifo wrote: »

...all the invoices are now in his name. I'm assuming all invoices were previously in the tenant's name and have been changed for this case...

Is that part of your defence? As serious allegation unless you can make it stick.

As a previous poster advises, this is serious enough that you require proper legal advice, in particular the tactics of whether to allow a change of defence if that is (legally) something you have veto over.

My non-legal view would be that it is better that the plaintiff makes an *rse of themselves in court by having "changed their story". Or to withdraw. Make them withdraw (with costs) and start again if they so wish.

I also have a non-legal view that it will not be a good defence to challenge the "fairness" of "deemed contract". That is a much bigger issue and correctly managed and documented is unlikely to be "unfair". I think the operation of the "deemed contract" is indivisable from the timing of the tenancy events, starting with a meter reading at the start of the last tenancy, except the consumption should have largely ceased with the early departure of the last tenant.

Can you elaborate on your comment "he has supplied the tenancy agreement to the power company but they don't care".

tifo

macman wrote: »

Once the tenant gives notice to both the LL and the utility co and vacates, the LL would be in a deemed contract. This does not seem to be the case though.

No, the tenant did a runner without paying the bills. But for the period claimed, a tenancy agreement was in place and it may be shown that the tenant did pay some previous bills, thereby showing an express contract existed between them and the supplier. A deemed contract is formed when there is no other contract.

jalexa

tifo wrote: »

for the period claimed, a tenancy agreement was in place and it may be shown that the tenant did pay some previous bills

Just being pedantic. What do you mean by "may be shown"?

tifo

jalexa wrote: »

Is that part of your defence? As serious allegation unless you can make it stick.

As a previous poster advises, this is serious enough that you require proper legal advice, in particular the tactics of whether to allow a change of defence if that is (legally) something you have veto over.

My non-legal view would be that it is better that the plaintiff makes an *rse of themselves in court by having "changed their story". Or to withdraw. Make them withdraw (at cost) and start again if they so wish.

I also have a non-legal view that it will not be a good defence to challenge the "fairness" of "deemed contract". That is a much bigger issue and correctly managed and documented is unlikely to be "unfair".

Can you elaborate on your comment "he has supplied the tenancy agreement to the power company but they don't care".

The invoices would have originally been in the tenant's name and they are a "replacement invoice" now reprinted with my friend's name and address as part of their amended claim under a "deemed" contract.

They are asking to change their particulars of claim to a "deemed" contract. This is very different to saying "the defendant signed an agreement" the first time, which we challenged. We will now have to submit an amended defence as well because they've changed their claim.

My friend has shown the tenancy agreement to the supplier to show that a tenant was responsible for their bills and the supplier knows this as they've spoken with the tenant. But because the tenant did a runner, the supplier is now suing my friend under a "deemed" contract, not the contract they had with their tenant.

The law under which they're now doing this is:

The Electricity Act 1986 Schedule 6 paragraph 3

(1) Where an electricity supplier supplies electricity to any premises otherwise than in pursuance of a contract, the supplier shall be deemed to have contracted with the occupier (or the owner if the premises are unoccupied) for the supply of electricity as from the time (“the relevant time”) when he began so to supply electricity.

But the supplier is ignoring the fact that:

1. A contract existed between them and the tenant.
2. The property was occupied during the claim period.

Therefore the "deemed" contract is not applicable to the landlord.

tifo

jalexa wrote: »

Just being pedantic. What do you mean by "may be shown"?

We need to request true copies of all invoices before and after the claim period to show that the tenant was paying some of these and that the invoices were in tenant's name. This would also prove that the claimant has now changed the name and address on the 'replacement invoice' just for their case under a deemed contract.

Our request will be made under CPR disclosure so that we can defend properly.

jalexa

tifo wrote: »

The invoices would have originally been in the tenant's name and they are a "replacement invoice" now reprinted with my friend's name and address as part of their amended claim under a "deemed" contract.

Your quotation from the Electricity Act is exactly my understanding of "deemed contract", well certainly "domestic", not *certain* about "micro-business". Though I am not a lawyer, the plaintiff's case should surely fail that clause if the tenant commenced the occupancy. They are not prosecuting this without a lawyer, so do they have a better argument they haven't disclosed?

Still being pedantic, can you elaborate on "the invoices would have originally been in the tenant's name". Is that fact or supposition?