Commercial landlords and electricity suppliers have received important clarification on responsibility for energy supplied to multi-occupied buildings through a single bulk meter. The Court of Appeal’s decision confirms that the owner, rather than the individual tenants, may be responsible for the full supply under the statutory deemed-contract regime where the property is occupied by several separate occupiers.
What was the dispute about?
In SmartestEnergy Business Limited v Odeon Arcade Limited [2026] EWCA Civ 1412, the Court of Appeal considered the meaning of paragraph 3(1) of the Electricity Code in Schedule 6 to the Electricity Act 1989.
SmartestEnergy Business Limited, a licensed electricity supplier, presented a winding-up petition against Odeon Arcade Limited on 2 April 2024. It claimed £106,914.25 for electricity supplied to three retail units at Odeon Arcade in Leicester between 13 July 2021 and 30 April 2023, together with continuing standing charges.
The Arcade had been acquired by Odeon in June 2021 and contained separately tenanted retail units. Electricity was supplied through one bulk meter in a basement beneath the Arcade. The supply served Units 8a, 9a and 12, as well as the basement and communal areas, including lighting, shutters and fire alarms. Sub-meters were also found downstream of the bulk meter, apparently recording electricity used by the individual units and communal areas.
Odeon disputed liability. It argued that the three retail units were occupied by tenants throughout the relevant period and that no deemed contract could therefore arise between the supplier and the property owner.
What did the lower courts decide?
The dispute first came before the Deputy Insolvency and Companies Judge Agnello KC in January 2025. The judge accepted that the relevant units were occupied by commercial tenants and concluded that no deemed contract had arisen between SmartestEnergy and Odeon.
The judge treated the relevant “premises” as the individual units occupied by the tenants. Because those units were not unoccupied, the owner was not liable under paragraph 3(1) of the Electricity Code. The winding-up petition was restrained from advertisement and dismissed.
SmartestEnergy appealed, but its appeal was dismissed by Mr Justice Cawson in the High Court on 14 November 2025. The supplier then appealed to the Court of Appeal, arguing that the statutory provision should apply where a building is divided between multiple, unrelated occupiers and no one person occupies the whole property.
How did the Court of Appeal interpret “premises”?
Giving the leading judgment, Lord Justice Newey said the relevant “premises” should be understood as the whole land, building or structure receiving electricity through the bulk meter. The location of the meter does not determine the boundaries of the premises supplied. A meter may be positioned in a basement, a common area, outside the building or elsewhere, while the electricity is supplied to the building or complex as a whole.
The court considered that treating each individual unit as separate premises would not fit the statutory metering framework. Where there is only one approved meter, the licensed supplier can measure the total electricity used but cannot identify the precise consumption of each tenant.
The court also rejected the possibility that all tenants should be treated as parties to one deemed contract and made jointly and severally liable for the entire supply. That could leave an individual tenant responsible for electricity consumed by every other occupier in the building, despite the absence of clear statutory wording imposing such a liability.
“Premises” refers to the whole of the land, building or structure receiving electricity via a bulk meter.
— Lord Justice Newey, summarising the court’s interpretation
Instead, the court concluded that premises are “unoccupied” within paragraph 3(1) where there is no single occupier of the entirety. This interpretation was reached by considering the wording in its statutory context and the purpose of the deemed-contract regime.
Who is liable under a deemed contract?
Paragraph 3(1) of the Electricity Code provides that where an electricity supplier supplies electricity to premises otherwise than under a contract, the supplier is deemed to have contracted with the occupier, or with the owner if the premises are unoccupied.
The Court of Appeal considered the practical operation of this provision in buildings supplied through one bulk meter. The owner will generally know how the building is configured, which parts are occupied, who the tenants are and how electricity costs can be allocated. The owner may also arrange sub-metering and recover the relevant costs through tenancy arrangements or service charges.
Lord Justice Newey observed that placing the deemed liability on the owner provides a workable approach. By contrast, making multiple tenants jointly and severally liable for the whole supply would produce an outcome that tenants could reasonably regard as unfair and that the legislation had not clearly established.
The judgment also discussed the purpose of deemed contracts: to maintain continuity of electricity supply and provide suppliers with a basis for recovering payment where supply continues without an express contract. In multi-occupied buildings, the landlord or owner is the party most naturally positioned to arrange a replacement supply contract for the premises as a whole.
Why does the ruling matter for landlords and suppliers?
The decision has practical consequences for owners, landlords, managing agents and licensed electricity suppliers dealing with multi-occupied properties. It clarifies that the statutory deemed-contract analysis is not necessarily determined by the occupation of individual flats, shops or units. The court will consider the whole premises receiving electricity through the bulk meter and whether that entirety has a single occupier.
For property owners, the ruling underlines the importance of understanding the electricity arrangements serving a building. Owners may need to ensure that supply contracts, sub-metering arrangements and tenant recharge mechanisms clearly address who is responsible for the cost of electricity used across the property, including communal areas.
For suppliers, the judgment provides guidance on identifying the party liable where a single bulk meter supplies a building occupied by multiple tenants. It also demonstrates why the physical location of a meter should not automatically be treated as defining the premises to which electricity is supplied.
The court allowed SmartestEnergy’s appeal and set aside the orders made by both the High Court and the insolvency judge. Lady Justice Falk and Lord Justice Fancourt agreed with Lord Justice Newey’s conclusion.
Frequently asked questions
What is a deemed electricity contract?
A deemed contract arises under paragraph 3(1) of the Electricity Code where a licensed supplier provides electricity to premises without an express contract. The statute treats the supplier as having contracted with the occupier or, if the premises are unoccupied, the owner.
Who pays for electricity supplied through a bulk meter in a multi-occupied building?
Under this Court of Appeal decision, where the whole building or complex is supplied through one bulk meter and there is no single occupier of the entirety, the premises are treated as unoccupied for paragraph 3(1). The owner is therefore the party liable under the deemed contract.
Does the judgment make individual tenants jointly liable for the building’s electricity bill?
No. The court rejected that interpretation. It considered that making tenants jointly and severally liable for all electricity recorded by a single bulk meter would be an unsatisfactory consequence not clearly intended by Parliament.
Does the location of the bulk meter determine what counts as the premises?
No. The court held that the relevant premises are the whole land, building or structure receiving electricity through the bulk meter. The meter may be located in a basement, communal area or elsewhere.
What was the outcome in SmartestEnergy v Odeon Arcade?
The Court of Appeal allowed SmartestEnergy’s appeal and set aside the orders made by the High Court and the insolvency judge. The court held that Odeon was liable under the deemed-contract provision for the electricity supplied to the Arcade through the bulk meter.