Thomas Thomas v Tenaga Nasional Bhd [2017] 4 CLJ 340

A registered consumer remains solely liable to Tenaga Nasional Bhd (TNB) for loss of revenue resulting from meter tampering notwithstanding that the premises were rented out to a third-party tenant who actually occupied the property and consumed the electricity.

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Facts of the Case

The Appellant is Thomas Thomas (a registered owner of the premises and registered consumer with TNB).

The Respondent is Tenaga Nasional Bhd (“TNB”) (a licensee under the Electricity Supply Act 1990).

The subject matter is the property located at Bukit Bintang, Kuala Lumpur. When the Appellant purchased the property, it was already rented out to a tenant and he had never occupied the premises. At all material times, the Appellant was the TNB's registered consumer for the property. On 16 January 2008, TNB conducted an inspection on its electricity meter at the premises and discovered that the meter had been tampered with. TNB subsequently lodged a police report.

TNB calculated its loss of revenue resulting from the meter tampering to be RM77,318.67, covering the period between 22 September 2004 and 21 December 2007. TNB issued two notices of demand to the Appellant to recover the lost revenue. The Appellant refused to pay, contending that he was not the actual consumer or occupier and was not responsible for meter tampering or charges incurred by his tenant. Hence, TNB commenced civil proceedings against the Appellant in the Sessions Court.

The Appellant had separately obtained a court judgment against the tenant for breach of the tenancy agreement and failure to pay utility charges, but this judgment sum remained wholly unsatisfied. The Sessions Court ruled in favour of TNB. The Appellant then appealed to the High Court, which affirmed the Sessions Court decision. The Appellant subsequently appealed to the Court of Appeal.

Issue of the Case

Whether a registered consumer is liable to TNB under Sections 38(3) to (5) of the Electricity Supply Act 1990 for loss of revenue caused by meter tampering when the premises were rented out to and occupied by a third-party tenant?

Whether TNB is required to prove that the registered consumer personally committed or was involved in the offense of meter tampering before recovering loss of revenue in a civil action?

Judgment of the Court

Issue 1: Whether a registered consumer is liable to TNB under Sections 38(3) to (5) of the Electricity Supply Act 1990 for loss of revenue caused by meter tampering when the premises were rented out to and occupied by a third-party tenant?

The Court of Appeal dismissed the appeal and affirmed the decisions of the High Court and Sessions Court, holding that the Appellant, as the registered consumer, remains solely responsible under the supply agreement to pay all outstanding electricity charges and loss of revenue to TNB.

Section 38(3), (4) & (5) of the Electricity Supply Act 1990 (“ESA”) states:

"(3) The licensee may require the consumer to pay him the loss of revenue due to the offence committed under section 37(1), (3) and (14) and any expenses incurred by the licensee under this section including expenses incurred in respect of the reconnection of electricity supply.

(4) A written statement by an employee of the licensee duly certified by the licensee or any person authorized by the licensee specifying:

(a) the amount of loss of revenue or the expenses incurred by the licensee; and

(b) the person liable for the payment thereof,

shall be prima facie evidence of the payment that has to be made by the consumer under subsection (3).

(5) The amount stated in the written statement shall, within the period specified in the statement, be due and payable to the licensee and in default of payment such amount shall be recoverable by civil action in court."

Section 71 of the Contracts Act 1950 states:

"71. Obligation of person enjoying benefit of non-gratuitous act

Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."

The Court followed Tenaga Nasional Berhad v. Empayar Canggih Sdn Bhd [2013] 1 LNS 637; [2014] 8 MLJ 280, where it was established that a registered consumer remains liable for electricity supply under a valid and subsisting power supply agreement regardless of whether the premises was rented out to a third party.

The appellant argued that he was not the consumer of electricity during the tenancy period and did not benefit from it. The Court rejected this argument, noting that the electricity agreement was exclusively between TNB and the appellant. Furthermore, the Court held that a separate judgment obtained by the appellant against his tenant does not relieve the appellant of his direct contractual liability to TNB.

The Court reasoned that because the electricity supply agreement existed strictly between TNB and the appellant without involving any third party, paying outstanding charges was the appellant's sole responsibility as the "consumer". The Court emphasized that the appellant owned the premises and was the registered account holder; thus, Section 71 of the Contracts Act 1950 applied because electricity was consumed at the premises during the relevant period.

The Court determined that it is irrelevant who actually consumed the electricity. As the registered consumer, the appellant had a continuing responsibility to ensure the meter was not tampered with throughout the agreement, and any assignment of responsibility via a tenancy agreement does not bind TNB, which is not a party to it. Shifting the loss to TNB would be grossly unfair. The appellant's proper recourse was to bring in the tenant as a third party rather than deny TNB its revenue.

Issue 2: Whether TNB is required to prove that the registered consumer personally committed or was involved in the offense of meter tampering before recovering loss of revenue in a civil action?

The Court held that TNB is not required to identify or prove who actually tampered with or damaged the meter to succeed in a civil action for loss of revenue under Sections 38(3) to (5) of the ESA. Proof of who committed the offense is necessary only if a party is criminally charged under Section 37. In civil proceedings for revenue recovery, TNB's cause of action is strictly based on financial loss caused by meter tampering.

Section 38(1) conditions recovery on the factual occurrence of an offense ("an offence has been committed"), not on establishing the identity or criminal culpability of the perpetrator. Requiring TNB to prove that the registered consumer personally tampered with the meter would lead to an "absolute absurdity" whereby an ingenious consumer could simply hire a third party to tamper with the meter and escape all civil liability for lost revenue. A registered consumer can only be absolved if they prove that no electricity was consumed at all during the tampered period.

Hence, TNB only needs to prove four factual elements on the balance of probabilities:

1. TNB is a licensee under the ESA.

2. The defendant was TNB's registered consumer for the premises.

3. The meter was tampered with, preventing accurate recording of electricity supplied during the specified period.

4. The tampering caused TNB to suffer a specific loss of revenue (supported by a certified written statement acting as prima facie evidence under Section 38(4)).

Principle of the Case

Under Sections 38(3) to (5) of the Electricity Supply Act 1990, a registered electricity consumer is strictly liable in civil proceedings to compensate TNB for loss of revenue resulting from meter tampering, regardless of whether the premises were occupied by a third-party tenant or whether the consumer personally committed or had knowledge of the tampering.