Philip Nam is a legal consultant, advocate, costs draftsman and mediator dealing with civil and commercial litigation and disputes. He can be contacted on 0151 230 8931 or [email protected]
I was instructed recently by a debtor that had been served with Statutory Demand from a gas supplier for unpaid gas charges.
The client was the freehold owner of property that he had leased out to a tenant who had disappeared from the premises. The gas company were pursuing my client for the supply of gas and service charges in relation to the gas meter at the property. My client knew nothing of the tenant leaving the property and did not know that bills were being produced in his name and were being delivered to the property address.
Upon receipt of instructions, I raised a dispute with the gas company and made an application to set aside the statutory demand on the basis that my client was not liable for the gas charges and liability rested with the tenant. The application to set aside was successful however as part of the dispute, an interesting point of law arose which I have never heard of before. This was in relation to The Gas Act 1986.
The gas company claimed that my client had a contract with them in relation to the supply of gas to the property. Typically, in order to have a contract, parties must agree terms and so there must be some sort of offer, acceptance, consideration and the intention to create legal relations. However, the normal rules of contract do not apply where it relates to the supply of gas from a gas supplier to a consumer. In relation to The Gas Act, a consumer is defined as a person who is supplied with gas to a particular premises. Schedule 2B, paragraph 8(1) provides for a deemed contract to exist between a gas supplier and a consumer where a gas supplier supplies gas to a consumer where there is no other contract in place. This means that if you don’t have a contract with a gas supplier to supply gas to a property and you then use mains gas at that property, you will still be held liable for the payment of the gas and service charges that come with it.
In these circumstances, it is important for Landlords to ensure they conduct regular inspections of their properties to ensure that the tenants are still present. This is also important for people who acquire new property to check the status of the gas supply and to ensure they enter into favourable terms with the gas supplier as soon as possible. As there are many gas tariffs out there, if when moving into a new property, you do not set up a favourable tariff, you will have one thrust upon you which will likely be more expensive.