Barbados Telephone Company Ltd v A.G. et Al

• Jurisdiction: Barbados
• Judge: Hanschell, J.
• Judgment Date: 01 January 1973
• Neutral Citation: BB 1973 HC 18
• Date: 01 January 1973
• Court: High Court (Barbados)

High Court

Hanschell, J..

Barbados Telephone Co. Ltd.

and

A.G. Etal

Public utility - Revenue deficiency between date proposed by utility as date from which new rate to become effective and date on which rate became effective — Temporary increase in rates to permit utility to recover deficiency and obtain fair return upon fair value of its property used and useful in public service.

No Appearances

Hanschell, J.

1 In pursuance of section 43 of the Public Utilities Act, 1951 and of the rates made there under Mr. John Clark of Bonny Banks, Wildey, St. Michael has been appointed to assist in the hearing and determination of this appeal, and has made the prescribed declaration. Mr. Clark has sat with the judge during the hearing of this appeal and has advised the judge in the determination of the questions arising therein.

2 On August 8, 1972 the Barbados Telephone Company Limited (hereinafter referred to as the Company) gave notice by letter to the Public Utilities Board (hereinafter referred to as the Board) of proposed increased rates appearing at page 15 of the record. The said letter gave notice to the Board that the said proposed rates were to take effect on November 1, 1972.

3 Subsequently the Board postponed the coming into operation of these proposed rates and on December 8, 1972 by its Order of that date made new rates to be effective from January 1, 1973 which would yield less revenue than would have been obtained by the rates proposed by the Company on August 8, 1972.

4 That the Company would undergo a substantial loss of subscriber revenue in 1972 if no increased rates were made effective from the beginning of November of that year was clearly in evidence before the Board. It was argued on behalf of the Company that the new rates should be made effective from November 1, 1972 in order that the Company should recoup from such rates at least part of this anticipated revenue deficiency. Based upon the knowledge available to the Company at the time when this rate case was before the Board, the Company had proposed rates which would have earned, on the evidence of Mr. Michael Evelyn, an increase of approximately $100,000.00 per month for November and December and would have enabled them to recoup that amount of the deficiency of revenue then anticipated in 1972.

5 Before the Board, learned counsel for the Company requested that the new rates be made effective from November 1, 1972. The Board dealt with this question and request in the final paragraph of their decision, which is as follows: -

“The Board has considered the Company's request that the new rates should become effective from the 1st November, 1972. After due deliberation the Board is unable to accede to this request and orders that these rates become effective on 1st January, 1973.”

6 The present appeal arises from and is based upon the effect of the decision of the Board as contained in that paragraph of their decision above quoted. The failure or refusal of the Board to grant this request is the only aspect of the Board's decision against which there is an appeal.

7 The purpose of this appeal is to obtain a temporary rate structure, which would enable the Company to recoup the 1972 revenue deficiency.

8 The three grounds of appeal are set out in the notice of motion.

9 The Public Utilities Act, 1951 provides for a temporary increase in the rates to permit a public utility to amortize and recover a revenue deficiency experienced during the period between the date proposed by the utility from which the new rate should be effective and the date on which the rate finally determined became effective.

10 The court is of the opinion that the purpose of this provision is to ensure that a public utility should not be precluded from obtaining, even as a result of the fixing of the effective date for a new rate by a decision of the Board, a fair return upon the fair value of its property, used and useful in its public service.

11 At the hearing of this appeal neither the existence nor the extent of this deficiency have been disputed. Indeed learned counsel for the Attorney General accepted the contention that in its decision the Board did not appear to have given due consideration to the 1971 deficiency and he was not in dispute...