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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1988) 3 CLR 585
1988 March 19
[LORIS, J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
SUN INSURANCE OFFICE LTD.,
Applicants,
v.
THE MUNICIPALITY OF LIMASSOI,
Respondent.
(Case No. 639/86).
Misconception of fact-Probability that it led to the sub judice decision- Ground of annulment.
The respondent mistook an application dated 29.10.86 submitted by FEDERATED AGENCIES LTD. as having been submitted by applicants (who are an overseas company with permit to act as an insurer in Cyprus and have their central offices in Nicosia), and imposed on the applicants professional tax for carrying on business for profit within the Municipal limits of Limassol.
Notwithstanding the mistake, the respondents submitted that the decision should be upheld on the authority of the decision in The American Export Lines Inc. v. The Mayor, Deputy Mayor, Councillors and Townsmen of Larnaca, 19 C.L.R. 206. The mistake, they suggested, was not a material one.
Held, annulling the sub judice decision:
(1) The aforesaid mistake manifests the material misconception under which the respondent was labouring when reaching at the sub judice decision; to say the least there is a probability that the aforesaid error led to the material misconception that the applicant was carrying on business for profit within the Municipal limits of Limassol Town.
(2) It is settled that a probability that the misconception has led to the making of the decision complained of is sufficient to vitiate an administrative act.
Sub judice decision annulled.
No order as to costs.
Cases referred to:
The American Export Lines Inc. v. The Mayor, Deputy Mayor, Councilllors and Townsmen of Larnaca, 19 C.L.R. 206;
Skaros v.The Republic (1986) 3 C.L.R. 2109.
Recourse.
Recourse against the decision of the respondent to impose on applicants the sum of £350.- as professional tax.
A. Drakos, for the applicants.
Y. Potamitis, for the respondent.
Cur.adv. vult.
LORIS J. read the following judgment. The present recourse is directed against the decision of the respondent Municipality dated 5.8.86, whereby professional tax amounting to £350.- was imposed on the applicant, for carrying on business for profit within the Municipal limits of the respondent Municipality.
The applicant is an overseas insurance company registered in the United Kingdom, which was granted leave pursuant to the provisions of s8 (as amended) of the Insurance Companies law 1967 (Law No. 27/67 as amended by Laws 85/69,21/76 and 32/80) to act as insurer in Cyprus (vide the relevant certificate Exhibit 3 attached to the written address of the applicant).
Thus the applicant became a foreign insurer (αλλοδαπός ασφαλιστής) within the meaning of s. 2 of Law 27/67 as amended.
The applicant is also keeping central offices in Nicosia under the supervision of one of its high ranking officials as envisaged by s.28 of Law 27/67 as amended, and paid Professional Tax for 1986 to the Municipality of Nicosia, within the limits of which it was carrying its business for profit.
It is the stand of the applicant that it carries on its business at Nicosia where they "accept offers for contracting insurance policies through brokers". The applicant denies ever having offices in Limassol or acting in anyway through employees residing in Limassol either permanently or for any period of time whatever.
The applicant further flatly denies ever having submitted to the respondent, as per the allegation of the latter in his letter dated 29.10.86, an application pursuant to the provisions of section 105(1) of Law 111/85, as amended, praying for professional licence with a view to carrying its profession, for 1986 or for any year, within the Municipal limits of the respondent Municipality.
Applicant complains that the respondent reached at the subjudice decision without due inquiry and has acted under a misconception of law and fact.
The Respondent maintains in his written address that the applicant is carrying on business in Limassol through a certain katerina M. Papa whom "FEDERATED AGENCIES LTD declared to the Municipality of Limassol as their employee."
The written address proceeds to mention
(a) the names of two more persons through whom the applicant allegedly carried on business in Limassol without giving any other particulars except the names therein mentioned.
(b) the address allegedly appearing on letter heads of applicant company which is the address of 'FEDERATED AGENCIES LTD', another company engaged in travel, tourist and insurance agency business duly registered in Cyprus which carries on business at Nicosia and admittedly keeps a permanent sub-office in Limassol Town employing more than 12 employees.
The respondent Municipality in they written address filed on its behalf admits, having addressed to the applicant the letter of 29.10.86 (vide Exhibit 2 attached to the written address of the applicant) and maintains that the aforesaid fact was not material for the imposition of professional tax or the fixing of the amount of the tax.
At the clarification stage the applicant company submitted, relying on the facts set out in its recourse, the written address and the documents appended thereto, that the respondent wrongly imposed the sub-judice professional tax relying on misconception as to material facts.
The respondent at the same stage supported his stand throughout these proceedings and invited the Court on the authority of The American Export Lines Inc. v. The Mayor, Deputy Mayor, Councillors and Townsmen of Larnaca, 19 C.L.R. 206, to uphold the sub-judice decision of the Respondent Municipality.
Before going into the merits of the case under consideration I consider it necessary to deal as briefly as possible, with the case of the American Export Lines Inc. (supra) cited on behalf of the respondent in support of his case.
The facts of the aforesaid case which was decided on appeal by the then Supreme Court of Cyprus on 24.2.53 were the following:
"In an action by the Municipal Authorities, Larnaca, against an American Shipping Company whose ships call at irregular intervals at Larnaca, the District Court held that the American Company was "carrying on or exercising a trade or business for profit within the municipal limits of the town of Larnaca" and had thereby rendered itself liable to the trade or professional tax set out in section 159 of the Municipal Corporations law, (Cap. 252)."
The Shipping company in question filed an appeal against the judgment of the District Court (pursuant to the provisions of the law applicable at the time).
For the appellants it was argued (1) that the Company had no regular office in Larnaca and that all their business was done through agents who were agents for other lines as well and themselves paid the trade and professional tax; (2) that their ships did not call regularly at Larnaca; and (3) that the words "carry on business" should not be interpreted in accordance with English Income Tax cases and should not be understood to apply to the mere calling of ships at a port for loading and unloading.
It is true that on appeal the then Supreme Court of Cyprus had to interpret and apply the provisions of s. 159 of the Municipal Corporations Law in force at the time i.e. Cap.252 of the 1949 codification of the Laws of Cyprus. The aforesaid Law (which was enacted on 10.6.1930) appears as well in the codification of 1959 the relevant chapter bearing a different number (Cap. 240) and the relevant section renumbered as s. 156; it may as well be added that sJ159 of Cap. 252 in the 1949 codification of the Cyprus Laws is identical to s. 156 of Cap. 240 in the 1959 codification.
The material parts of section 159 of Cap. 252 read as follows:
"159. No person shall, within any municipal limits, carry on, exercise or practice any business, trade, calling or profession for profit unless he has obtained a licence so to do in accordance with the provisions of this Law:
Provided that: -
(a) ......................
(b) any person who has taken out a licence in any municipal limits shall not be required to take out another licence in any other municipal limits unless he has a permanent place of business therein or remains therein for the purpose of carrying on his business, trade, calling or profession at any one time for a period exceeding seven days;
(c) ......................
(d) ......................"
It may be noted here that the portions of section 159 set out above are identical with the provisions of s. 104(1)(b) of Law 111/85 and the only difference is confined to the number of days envisaged by proviso (b) which have now been increased to 15 days in virtue of the provisions of s. 104(1)(b) of Law 111/85.
The then Supreme Court of Cyprus in the American Shipping Company (supra) held that:
"The only exemption is under section 159(b) for those non-residents who have no place of business within the municipal limits and have taken out a licence to carry on their business within the municipal limits of some other town of Cyprus. This exemption however does not extend to permit such per sons to remain for the purposes of their business for more than seven days at any one time; but no other persons are entitled to any exemption." (vide p. 209).
Although it may be argued that the then Supreme Court of Court of Cyprus had to consider and interpret provisions of the law in force at the time, which are almost identical to the provisions of s. 104(1)(b) of Law 111/85, yet they had to apply the law as they found it, to a completely different set of facts from those pertaining to the case under consideration.
In the instant case the gist of the recourse is that the respondent failed to carry out due inquiry in reaching at the sub-judice decision; and that as a result he acted under a misconception as to material facts.
Having carefully gone through the material before me I hold the view that the imposition of professional tax on the applicant was due to the obvious mistake of the respondent to consider the application of an altogether different company, notably "FEDERATED AGENCIES LTD", as an application emanating from the applicant: the aforesaid application dated 28.1.1986 (attached to the written address of the respondent) clearly emanates from FEDERATED AGENCIES Ltd., a company registered in Cyprus who has by virtue of the said application, under the provisions of s. 105(1) of Law 111/85, applied for the issue of a professional licence to it, as it was carrying on business for profit within the limits of Limassol town as well.
The respondent erroneously mistook the aforesaid application as emanating from the applicant in the present recourse and proceeded to impose professional tax on the applicant company which is an oversea company registered in the U.K., and is in no way connected with the former company.
As stated on in the present judgment the respondent Municipality admits having addressed to the applicant the letter of 29.10.86 (Exhibit 2) wherein it is stated that the applicant in this case addressed a letter to the Municipality inviting the latter under s. 105 (1) of Law 111/85 to impose professional tax on it; the respondent maintains that the aforesaid fact did not play any material role "for the imposition of professional tax or the fixing of the amount of the tax".
With respect I feel unable to agree with the submission of learned counsel for the respondent in this connection. I have no doubt that the aforesaid mistake of the respondent manifests thematerial misconception under which the respondent was labouring when reaching at the sub-judice decision; to say the least there is a probability that the aforesaid error led to the material misconception that the applicant was carrying on business for profit within the Municipal limits of Limassol Town. And it is well settled that "a probability that the misconception has led to the taking of the decision complained of is sufficient to vitiate an administrative act" (vide Skaros v. The Republic (1986) 3 C.L.R. 2109 at p. 2115 - 'The Law of Administrative Acts' by Stassinopoulos 1951 ed. at 305 - "The Judicial Control of Discretionary Powers" by Economou 1965 ed. p. 250).
In the result present recourse succeeds and the sub-judice decision is hereby annulled.
Let there be no order as to costs.
Sub judice decision annulled.
No order as to costs.