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Norweb plc v Dixon (1995) Queen's Bench Division Court
Mr. Dixon relocated to a flat and requested Norweb to provide power, which they fulfilled by installing a meter that necessitated the use of electricity payment cards. One year later, Norweb informed Mr. Dixon that he had a debt of £677.86 for energy delivered to the business at 25 Lownorth Road. Mr. Dixon had never resided at 25 Lownorth Road and bore no responsibility for the obligations. Norweb subsequently scheduled an inspection of Mr. Dixon's meter by one of its inspectors. Unbeknownst to Mr. Dixon, the inspector adjusted his meter to necessitate higher payments for reduced electricity consumption in order to recover the 'debt' of £677.86. Due to the heightened electricity charges and multiple correspondences from Norweb, Mr. Dixon experienced significant anxiety and occasionally abstained from food. Upon the revelation of these events, Norweb was accused of the offense of harassing an individual with the intent of coercing payment of a debt purportedly owed under a contract, in violation of section 40 of the Administration of Justice Act 1970. After being sentenced by the magistrates for this offense, Norweb appealed to the Divisional Court, contending that the amount of £677.86 was never asserted 'as a debt owed under a contract' since the agreements for power delivery did not constitute a contract. 26 Proposal and Acceptance The court determined that no contract existed, resulting in the success of Norweb's appeal. In the absence of extraordinary circumstances, Norweb was mandated to provide power under terms predominantly governed by the power Act 1989.
Per Dyson J:
There are many examples of cases where the law to some extent restricts
the freedom of parties to enter into a relationship, but where the
relationship that results is a contract… But, there are other cases in which
a relationship created by legal compulsion is clearly not contractual. Thus,
a person whose property is compulsorily acquired against his will does
not make a contract with the acquiring authority, even though he receives
compensation: see Sovmots Investments Ltd v Secretary of State for the
Environment (1977). In Pfizer Corporation v Ministry of Health (1965), the
House of Lords held that a patient to whom medicines are supplied under
the National Health Service does not make a contract to buy them either
from the chemist or the Minister of Health even if he pays a subscription
charge. The transaction is sui generis, the creation of statute and not a sale
pursuant to a contract… The issue in this case is: which side of the line
does the relationship between a tariff customer and a public electricity
supplier fall? In my judgment, the legal compulsion both as to the creation
of the relationship and the fixing of its terms is inconsistent with the
existence of a contract.
Mr. Dixon relocated to a flat and requested Norweb to provide power, which they fulfilled by installing a meter that necessitated the use of electricity payment cards. One year later, Norweb informed Mr. Dixon that he had a debt of £677.86 for energy delivered to the business at 25 Lownorth Road. Mr. Dixon had never resided at 25 Lownorth Road and bore no responsibility for the obligations. Norweb subsequently scheduled an inspection of Mr. Dixon's meter by one of its inspectors. Unbeknownst to Mr. Dixon, the inspector adjusted his meter to necessitate higher payments for reduced electricity consumption in order to recover the 'debt' of £677.86. Due to the heightened electricity charges and multiple correspondences from Norweb, Mr. Dixon experienced significant anxiety and occasionally abstained from food. Upon the revelation of these events, Norweb was accused of the offense of harassing an individual with the intent of coercing payment of a debt purportedly owed under a contract, in violation of section 40 of the Administration of Justice Act 1970. After being sentenced by the magistrates for this offense, Norweb appealed to the Divisional Court, contending that the amount of £677.86 was never asserted 'as a debt owed under a contract' since the agreements for power delivery did not constitute a contract. 26 Proposal and Acceptance The court determined that no contract existed, resulting in the success of Norweb's appeal. In the absence of extraordinary circumstances, Norweb was mandated to provide power under terms predominantly governed by the power Act 1989.
Per Dyson J:
There are many examples of cases where the law to some extent restricts
the freedom of parties to enter into a relationship, but where the
relationship that results is a contract… But, there are other cases in which
a relationship created by legal compulsion is clearly not contractual. Thus,
a person whose property is compulsorily acquired against his will does
not make a contract with the acquiring authority, even though he receives
compensation: see Sovmots Investments Ltd v Secretary of State for the
Environment (1977). In Pfizer Corporation v Ministry of Health (1965), the
House of Lords held that a patient to whom medicines are supplied under
the National Health Service does not make a contract to buy them either
from the chemist or the Minister of Health even if he pays a subscription
charge. The transaction is sui generis, the creation of statute and not a sale
pursuant to a contract… The issue in this case is: which side of the line
does the relationship between a tariff customer and a public electricity
supplier fall? In my judgment, the legal compulsion both as to the creation
of the relationship and the fixing of its terms is inconsistent with the
existence of a contract.
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