On 14 November 2025, Mr Justice Cawson handed down his judgment in Smartestenergy Business Ltd v Odeon Arcade Ltd [2025] EWHC 2975 (Ch), an appeal from the order of Deputy ICC Judge Agnello KC (as she then was) on 19 March 2025, which dismissed an electricity supplier’s winding up petition against the landlord of commercial premises in respect of sums said to be owing under a deemed contract.
The supplier appealed on a single ground, namely that DICCJ Agnello KC’s interpretation of paragraph 3(1) of Schedule 6 to the Electricity Act 1989 was wrong. That paragraph reads:
“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…”
The Appellant contended that where premises are supplied with electricity and there are multiple unrelated occupiers of the premises, it is “unoccupied” for the purposes of the Act, so that it is the owner who is liable to the supplier under a deemed contract.
Cawson J rejected this argument, which was supported by examples of unworkability said to justify departing from the ordinary meaning of the word “unoccupied”. He held that this construction strained the language of the statute, if it did not contradict it, and that it was difficult to say that three units each occupied by a tenant was unoccupied.
Cawson J further considered that the scenarios described by the Appellant might give rise to potentially difficult apportionment exercises, but that did not produce an absurd or unworkable result, and that the practical considerations were overstated. He was supported in his conclusion as to interpretation by considering provisions of the Act that use the same phraseology as paragraph 3(1), but would produce unusual outcomes if read in accordance with the Appellant’s interpretation. For example, if the electricity supplier wished to disconnect premises, then on the Appellant’s argument it would only need to give notice to the landlord and not those in actual occupation.
Accordingly, the landlord was not liable to pay for the electricity supply which was the subject of the petition, and DICCJ Agnello KC had been correct to restrain advertisement of and dismiss it.
Although the decision will have an effect in the insolvency context, limiting the situations where a supplier can invoke the insolvency jurisdiction to recover a debt arising from a deemed contract, it will perhaps be of more significance to landlords seeking certainty as to their potential liabilities on acquiring property or on a change of tenants.
Andrew Shipley acted for the successful Respondent, instructed by Whitmore Law Solicitors.
A link to to the judgement can be found here.
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