148 Brunswick Street Pty Ltd (148) and Pipe Networks Pty Ltd (Pipe) entered in to a lease whereby 148 was entitled to charge Pipe for the supply of electricity at the rate which Origin Energy Limited would have charged Pipe had those parties entered into a contestable contract for the supply of electricity. A number of issues concerning breach of contract arose between the two parties. The issue addressed in this matter was a contract clause regulating the amount which 148, as Lessor, might charge Pipe, as Lessee for various utility and other services supplied.
As Derrington J summarised, “In general terms, Pipe propounds an interpretation of the clause which is likely to restrict the amount by which 148 might profit on the re-sale of electricity to it. Conversely, on 148’s interpretation, it would be entitled to purchase electricity at the lower end of the market and sell to Pipe at a significantly higher price. From one point of view, the essential question may be whether the clause permits 148 to sell electricity to Pipe at the highest rate which Pipe “could” have been charged had it purchased electricity directly from the relevant supplier or whether the rate to be charged is that which Pipe “would” have paid had it entered into a direct supply agreement.”
A further issue considered was the effect of enforceability of the Services Charges clause where 148 was selling electricity contrary to s 88 of the National Energy Retail Law (Queensland), which required those selling electricity in Queensland to hold an authorisation or exemption, and whether such authorisation or exemption could be granted retrospectively by the regulator.
Paul McQuade QC (with A O’Brien) appeared on behalf of the Applicant/Cross-Respondent, instructed by RBG Lawyers.
Shane Monks (with M Stewart QC) appeared on behalf of the Respondent/Cross-Claimant, instructed by Lillas & Loel.
The judgment can be read here.