'I Didn't Tamper with My Meter! My Tenant Did!': The Laws on Meter Tampering (Part 2)

Introduction

In the previous article “I didn’t tamper with the meter, it was my tenant!” (Part 1), we discussed what a landlord can do when his tenant tamper with the electricity meter.

One of the cases that dealt with this situation is Fun N Cheer World Sdn Bhd v LDP Promotion Fair Sdn Bhd [2020] MLJU 1012 (“Fun N Cheer World”).

Facts of the Case

Fun N Cheer World is a High Court case arising from the an appeal against the Session Court’s judgment. 

The Respondent (“LDP Promotion Fair Sdn Bhd”) was at all material times, the chief tenant of the showroom building who rented the premises to the Appellant (“Fun N Cheer World Sdn Bhd”). 

After inspecting the meters at the premises, TNB discovered that the meters had been tempered with. Consequently, TNB brought 3 suits against LDP Promotion Fair Sdn Bhd for the losses of revenue due to the tampering. LDP Promotion Fair Sdn Bhd brought Fun N Cheer World Sdn Bhd in as a third party. 

The Sessions Court Judge allowed TNB’s claims against LDP Promotion Fair Sdn Bhd. In the Third-Party proceedings, the Session Court ordered Fun N Cheer World Sdn Bhd to indemnify LDP Promotion Fair Sdn Bhd.

The arguments raised by the Fun N Cheer World Sdn Bhd (Third-Party)

Fun N Cheer World Sdn Bhd relied on the following main grounds of appeal: 

1. Fun N Cheer World Sdn Bhd was not the registered account holder;
2. The burden of proof was upon LDP Promotion Fair Sdn Bhd to prove that Fun N Cheer World Sdn Bhd had tampered with the meters;
3. Fun N Cheer World Sdn Bhd had limited control and access to the meters;
4. Fun N Cheer World Sdn Bhd had fulfilled its obligations under the Tenancy Agreement.

The findings of the High Court

a. Fun N Cheer World Sdn Bhd was not the registered account holder

The High Court agreed that the registered account holder with TNB, which is usually the landlord, is liable to pay the arrears to TNB. It was held that the defence that the electricity was consumed by a third party did not hold water. 

However, the Court went on to explain that the account holder can still be indemnified by a third party if one of the following situations arises:

• where there is an express term for indemnity in the contract between the account-holder and the third person;
• where the circumstances are such that equity imposes an obligation upon the third person to indemnity; or
• where the statute provides for such indemnity:

By looking at the terms of the Tenancy Agreement in the said appeal, since as Fun N Cheer World Sdn Bhd had agreed to pay all electricity charges; keep indemnified LDP Promotion Fair Sdn Bhd against all damages for the use of the premises; and not tamper with the meter connected to the premises, LDP Promotion Fair Sdn Bhd was therefore entitled to be indemnified by Fun N Cheer World Sdn Bhd. 

b. The burden of proof was upon LDP Promotion Fair Sdn Bhd to prove tampering

The Court considered the fact that Fun N Cheer World Sdn Bhd was solely responsible to pay the electricity bills, and was therefore the only party that had the incentive to tamper with the meters. 

As there were no extra charges for the rental imposed by LDP Promotion Fair Sdn Bhd, due to the savings in the electricity bills, the possibility of LDP Promotion Fair Sdn Bhd tampereding with the meters was excluded. 

Fun N Cheer World Sdn Bhd’s argument of the absence of eye-witnesses of the tampering was untenable because tampering is usually done secretively. 

c. Fun N Cheer World Sdn Bhd had limited control and access to the meters

As for the third argument, the Court assessed the risk of meter tampering and found it to be an act involving the danger of electrocution. Therefore, it would be the person who would benefit from such a dangerous act that would tamper with the electricity meters at the premises. 

d. Fun N Cheer World Sdn Bhd had fulfilled its obligations under the Tenancy Agreement

The Court found Fun N Cheer World Sdn Bhd liable to pay for all electricity charges incurred at the premises during the tenancy; it was Fun N Cheer World Sdn Bhd that had to pay the differential amount claimed by TNB; and Fun N Cheer World Sdn Bhd were under an implied obligation to reimburse the landlord for the differential amount paid by the landlord to TNB. 

In short, there was no merit in the appeal. The Sessions Court’s decisions was affirmed

Aftermath

Here are some key-takeaways. 

Firstly, in a meter tampering case, it is common that the account holder (landlord) will be held liable to pay for the losses of revenue and the landlord cannot rely on the argument that he did not tamper with the meter. 

However, the landlord may still resort to a third-party action against the tenant.

Be that as it may, it is better to be safe than sorry. 

Apart from executing a change of name of the registered consumer for of the electricity account, a landlord must also insert the following express terms in the Tenancy Agreement to safeguard his interests:

• That the tenant is prohibited from tampering with the electricity meter;
• That the tenant is liable for all the electricity charges consumed;
• That the tenant is liable to reimburse/indemnify the landlord against summonses, actions, proceedings, claims and demands, costs, damages, and expenses that are incurred due to the act or omission of the tenant for in the use of the premises