Australia: NSW Supreme Court clarifies carriers' powers regarding use of electricity

Clayton Utz Insights
Last Updated: 17 May 2015
Article by Damien Gardiner

Key Points:

Owners and occupiers of premises in which telecommunications facilities are installed will have limited scope to resist a carrier that wishes to connect a facility to their power supply, and to subsequently draw electricity to ensure the proper functioning of those facilities.

The Supreme Court of New South Wales has given an expansive interpretation to the powers of carriers under Schedule 3 of the Telecommunications Act 1997 (Cth) by holding that carriers can lawfully plug equipment into a power socket and draw electricity on an ongoing basis without obtaining the consent of the owner or occupier of the premises.

The decision means that carriers can rely on the maintenance power under Schedule 3 to draw from the electricity supply within a building in which their telecommunications facilities are installed. It represents an important clarification of the law in this area, and will be of direct relevance to carriers, building owners, managers and occupiers alike.

An overview of NBN Co v Pipe Networks [2015] NSWSC 475 (28 April 2015) is provided below.

Facts

NBN Co Limited (NBN Co) brought its action in relation to Pipe Networks Pty Limited's (Pipe) proposed installation of certain facilities in the basement of apartment or office blocks as part of its "fibre to basement" program.

NBN Co alleged that Pipe engaged in misleading and deceptive conduct by representing that Schedule 3 allowed Pipe to plug certain facilities into a power socket and draw power from the premises' power supply without first obtaining the consent of the owner or occupier. NBN Co argued that connecting a facility to a power socket and subsequently drawing electricity on an ongoing basis did not constitute "installation" or "maintenance" of the facility under clauses 6 and 7 of Schedule 3.

Justice Kunc dealt with the question in two parts: (1) plugging telecommunications facilities into a power socket; and (2) drawing power on an ongoing basis.

Plugging equipment into a power socket: a step in the installation process

Justice Kunc placed particular emphasis on the natural and ordinary meaning of the term "install", in addition to the statutory meaning given in clauses 2 and 6 of Schedule 3. Clause 6 empowers a carrier to carry out installation activities for purposes connected with the supply of a carriage service. This allows a carrier to do anything necessary or desirable for the purpose of installation, including constructing, erecting and placing any plant, machinery, equipment and goods on, over or under land. Clause 2 defines "installation" as including the construction of a facility, the attaching of a facility to any building, and any activity that is ancillary or incidental to a facility's installation.

Justice Kunc held that plugging telecommunications facilities into a power socket falls within the meaning of "installation". His Honour further held that plugging a facility into a power socket constitutes the "attach[ing] of the facility to any building", and could be "ancillary or incidental to the installation of the facility" provided the placing of the facility itself in position constitutes an installation activity for the purposes of Schedule 3.

Drawing power on an ongoing basis: an act of maintenance

Justice Kunc found that the installation power does not authorise electricity to be drawn from a premises. However, the drawing of electricity is an incident of the operation of equipment, and it was for this reason His Honour held that electricity can be drawn in reliance on the maintenance power under clause 7 of Schedule 3.

Clause 7 provides that a carrier may maintain a facility by doing anything necessary or desirable for the purpose of maintaining a facility. The concept of "maintenance" includes, amongst other things, ensuring the proper functioning of a facility (clause 7(3)(c)).

In determining whether or not the drawing of electricity falls within the concept of the maintenance of a facility, Justice Kunc analysed the structure of Schedule 3, which expressly refers to the inspection, installation and maintenance of facilities, but not their operation. Despite this, Justice Kunc held that the statutory definition of "maintenance" in clause 7(3)(c) of Schedule 3, which provides that the maintenance of a facility includes ensuring the proper functioning of a facility, authorises activities that are necessary to ensure that it will operate or function correctly.

On this basis, His Honour concluded that the maintenance power under clause 7 of Schedule 3 authorises a carrier to draw electricity from a premises without obtaining the consent of the owner or occupier, provided the electricity is drawn to ensure the proper functioning of a telecommunications facility. Using power is necessary to 'make certain the proper functioning or operation' of a facility, and therefore falls within a carrier's power to 'maintain' facilities under clause 7.

Compensation for power drawn by carrier

Clause 42 of Schedule 3 requires carriers to compensate persons who have suffered financial loss or damage because of a carrier's actions in relation to property owned by the person or property in which the person has an interest. Both parties agreed that once electricity is drawn, it constitutes property or goods.

Justice Kunc held that a carrier which has drawn electricity for maintenance purposes would need to compensate the owner or occupier of the premises. This is because use of the electricity by the carrier would create a corresponding obligation on the owner or occupier to pay the electricity supplier.

Implications for carriers and owner/occupiers

This decision means that carriers can rely on their maintenance power under Schedule 3 to draw electricity from the electricity supply within a building to power telecommunications facilities, subject to their obligation to pay compensation under clause 42 of Schedule 3. Assuming it is not appealed or overturned, it provides some clarity in relation to the extent of carrier powers.

Owners and occupiers of premises in which telecommunications facilities are installed will have limited scope to resist a carrier that wishes to connect a facility to their power supply, and to subsequently draw electricity to ensure the proper functioning of those facilities. However, owners and occupiers will have the ability to seek compensation for the costs associated with such electricity.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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