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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1988) 3 CLR 1040
1988 May 26
[A. LOIZOU, P.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
CHRYSTALLENI A. KALLIMACHOU AND OTHERS,
Applicants,
v.
THE MUNICIPALITY OF POLIS CHRYSOCHOUS,
Respondents.
(Cases Nos. 396/87, 397/87, 398/87).
Misconception of fact-Objective non existence of facts taken into consideration inreaching the sub judice decision-Amounts to a misconception of fact.
Misconception of fact-Acting in ignorance of essential and material facts-Amounts to a misconception of fact.
Reasoning by an administrative act-Facts stated in the opposition not supported by actual facts of the case.
In this case the Court reached the conclusion that in imposing the subjudice professional taxes the respondents took into consideration nonexistentincome from leases of premises and building sites (Cases 396/87and 398/87) and from cultivation of land (Case 397/87).As a result the subjudice decisions were annulled on the grounds of misconception of factsand lack of due reasoning.
Sub judice decisions annulled.
No order as to costs.
Cases referred to:
Fournia v. The Republic (1983) 3 C.L.R. 262;
Mallouros and Another v. The Electricity Authority of Cyprus and Another(1974) 3 CL.R.220;
Christodoulou v. C.Y.T A. (1978) 3 C.L.R. 61;
Skaros v. The Republic (1986) 3 C.L.R. 2109;
Christofides v. The Republic (1966) 3 C.L.R. 732;
Iordanou v. The Republic (1967) 3 C.L.R. 245;
Ioannides v. The Republic (1972) 3 C.L.R. 318;
Mikellidou v. The Republic (1981) 3 C.L.R. 461;
Skapoullis v. The Republic (1984) 3 C.L.R. 554;
Economides v.The Republic (1985) 3 C.L.R. 222.
Recourses.
Recourses against the decision of the respondents to imposeprofesional tax upon applicants for the year 1976.
M. Kyriakides, for the applicants.
K. Chrysostomides, for the respondents.
Cur.adv.vult.
A. LOIZOU P. read the following judgment. These three re-courses were heard together as they deal with common questions of law and fact.
By means of the prayer for relief the respective applicants prayfor:-
"A declaration of the Court that the imposition of professional tax of £70 upon the applicant by the respondent municipalityin respect of the year 1986 is contrary to Law in excessor abuse of power, null and void, and of no legal effect whatsoever."
There is no agreement between the parties with regard to the facts that gave rise to the sub judice acts. They agree only on thepoint that they have emanated from the fact of ownership of immovable property by the applicants within the municipal limits of Polis Chrysochous It is therefore necessary to deal with the respective factual background as set out in each party's case. It wasthe contention of the applicants in the facts given in support oftheir recourses that they do not reside and they do not carry onany business within the said municipal limits.
On the other hand the facts stated in support of the opposition in each of the above recourses are:
"(1) The applicant is not a resident of Polis Chrysochous but she is the owner or co-owner of a house at GrivasDhigenis Street at Polis, in which she stays during the summermonths and during her visits at Polis for the carrying out of her various trades.
(2) The applicant is the owner and/or co-owner of building sites and/or premises which she leases to other persons and/or the owner and/or co-owner and/or occupier of various lands situated within the municipal limits of Polis Chrysochous, many of which she cultivates on a partnership basis and they yield income to her."
In reply to the above statement of facts in the opposition, each of the applicants in recourses 396/87 and 398/87 contended the folowing:
"(1) Regarding paragraph 1 of the opposition the applicant alleges that she is not the owner or co-owner of a house, butshe is offered hospitality by her mother for aperiod of ten to fifteen days during the summer months for holiday purposes with her family.
(2) Regarding paragraph 2 of the opposition the applicant denies that she is the owner of any building-site or premises, but she is the owner of agricultural land within the municipal limits of Polis Chrysochous which she cedes to third persons in return of one half of the income without participating in the losses and she is collecting seventy to one-hundred and fifty pounds annually during the recent years."
The reply of the applicant in Recourse No. 397/87 was as follows:
"(1) With regard to paragraph 1 of the opposition the applicant admitsthat she is the owner of a house in which she however, stays for a few days in the summer only but she denies that she is doing any work at Polis
(2) Out of paragraph 2 of the opposition the applicant admits only that she is the owner of shops which are leased to statutory tenants since many years and in. any case she is not carrying on business or trade within the municipal limits Polis."
In the written address of the respondents under the heading "Facts" we read the following which are identical in so far as Recourses 396/87 and 398/87 are concerned:-
"(1)Though the applicant is not a resident she stays at thehouse of her mother at GrivasDhigenis Street at. Polis Chrysochous whenever this is necessary for the carrying out of their professional and other trades as well as during the summer vacation.
(2) The applicant is together with her sister Dora M. Kyriakides (applicant in Recourse No. 398/87), co-owner of the following immovable properties which she exploits and/or leases to third persons against a rent which corresponds to a percentage of the profits.
(a) Veris, 49 donums, one evlek.
(b) Veris, 43 donums, three evleks.
(c) Latsi, 8 donums.
(d) Kambos - Latsi, 16 donums.
(e) Sikari - Poli, 6 donums.
(f) Kokkina - Poli, 6 donums.
(g) Gonia, 22 donums.
(h) Kilades, 10 donums.
(3) In view of the amount of the income which was reasonablyexpected to be derived by the applicant by the exploitationand/or lease of her lands, the respondents, i.e. the MunicipalCorporation of Polis Chrysochous, imposed on the applicant by means of a notice dated 23rd October 1986, professional tax of seventy pounds in respect of 1988."
The applicants in their written addresses in reply to the written address of the respondent and in dealing with the aforequortedparagraph 2, contended that they do not own the whole share ofthe lands under (a), (b), (c), and (d) of the said paragraph 2, but each one of them owns 1/4, 1/2, 1/4 and 1/2, respectively of thesaid lands. They also added "that they have never collected anyamount from the lands under (e), (f), (g), and (h) above and theydo not know where they are exactly situated', and if they havebeen cultivated they have been cultivated unlawfully without theirconsent and without any benefit for them. They are not the ownersof any premises."
At the clarification stage, learned counsel for the respondentsmade the following statement:
"I would like to make a correction to our written address inRecourses Nos. 396/87 and 398/87, third page, third paragraph. The words 'it is admitted in the reply of the applicant, that she is the owner of premises which are leased to statutory tenants since many years' to be substituted by the words 'that applicant is the owner of agricultural land which she disposesfor production of cereals and she gets a share of the income.'"
I have set out hereinabove details of the various versions of therespondent regarding the facts, wherefrom it clearly appears thatrespondents have put up the following three versions:
(a) One in the opposition.
(b) One in their written address.
(c) One in the clarification stage.
The version of the applicants is the one appearing in paragraph2 of their aforequoted reply to the opposition which more or lesstallies with respondents' version, as ultimately formulated at theclarifications stage, subject to the difference regarding the extentof ownership of the various plots of land.
There was no dispute that the sub judice professional tax wasimposed in exercise of the powers given to the respondents byvirtue of section 104, 105, and 106 of the Municipal CorporationsLaw, 1986 (Law No. 111 of 85). Under the aforesaid section 105, any person exercising for profit within any municipal limits, any business, trade, calling or profession shall obtain a licence therefor upon an application for the grant of such a licence and the Municipal Corporation shall determine the fees payablefor the issue of such a licence which should not exceed the fees inthe Third Schedule.
The case of the applicants comes under paragraph (i) of thesaid Third Schedule whereby the fee payable is "not exceedingone-hundred and fifty pounds".
The main contentions on behalf of the applicants were that (a)they were not carrying on any business within the meaning ofsections 104-106 of Law 111/85 (b) that the reasoning of thesubjudice act was nonexistent and/or misconceived, and (c) that respondentsacted under misconception of fact and law.
As already stated the respondents allege in the opposition thatthe applicants in Recourses Nos. 396/87 and 398/87, are ownersof building-sites and/or premises which they lease to other persons, andthe applicant in Recourse No. 397/87, owner of agriculturalland which yields income to her. It is clear from such astatement that in taking the decision to impose seventy poundsprofessional tax, on the applicants, out of the maximum of one hundred and fifty pounds provided by the Law, the respondentsmust have taken into consideration also, the income derived fromthe lease. of their premises and building sites in the case of the applicants in Recourses Nos. 396/87 and 398/87, and in the case ofthe applicant in Recourse 398/87 from the cultivation of theirlands. It is, also, clear that at the clarifications stage the respondents resigned fromthe allegations that the applicants in Recourse Nos.396/87 and 398/87 derived income from the lease of premises and building sites and that the applicant in Recourse No. 397/87 derived income from the cultivation of land. So the true position is that the applicants in recourses Nos.396/87 and 398/87 donot derive income from the lease of premises or building sites andapplicant in Recourse No.397/87 does not derive income fromthe cultivation of land. It is, therefore; clear, that in taking the subjudice decision, the applicants took into consideration nonexistentfacts namely income from lease of premises and building sites, inthe case of the applicants in Recourses No.396/87 and 398/87,and income from cultivation of land in the case of the applicant inRecourse No. 397/87
It has therefore to be examined what is in law the effect of such a situation According to Spiliotopoullos Manual on AdministrativeLaw 2nd Edition p. 409:
"452. Κατά την κρατούσαν ορολογίαν, συντρέχει 'πλάνη περί τα πράγματα' οσάκις αποδεικνύεται η αντικειμενική (ήτοι άνευ ουσιαστικής κρίσεως) ανυπαρξία των πραγματικών ή νομικών καταστάσεων, αι οποίαι ελήφθησαν υπ' όψιν υπό του διοικητικού οργάνου δια την εφαρμογήν του προβλέποντος την έκδοσιν της πράξεως απροσώπου κανόνος δικαίου, δηλαδή όταν αποδεικνύεται ότι το διοικητικόν όργανον πεπλανημένως εξέλαβεν ότι υφίστανται αι νόμιμοι προϋποθέσεις (ΣΕ 143/1954)."
"According to the prevailing terminology, there exists misconceptionof fact when there is proved the objective nonexistence of the factual or legal situations, which were taken into consideration by the administrative organ for the application of the impersonal rule of law providing for the issue of,the act, that is to say when it is proved that the administrativeorgan mistakenly took it that there exists the lawful prerequisites."
In Fournia v. The Republic (1983) 3 C.L.R. 262, SavvidesJ., said at p. 279:
"The fact that the respondent took into consideration matterswhich were not in existence, renders the sub judice decisionbad, on the ground of misconception of facts. Even mereprobability of such misconception is enough to vitiate the administrativedecision involved"
And the learned judge went on to cite in support of this statement of the law a paragraph from the judgment delivered in Mallouros and Another v. The Electricity Authority of Cyprus andAnother(1974) 3 C.L.R. 220 at p. 224.
In the cases in hand there has been clearly proved the objectivenon-existence of the factual situation which was taken into consideration by the respondents, namely, objective non-existence of income from lease .of premises and building-sites in the case of the applicants in Recourses Nos. 396/87 and 398/87 and income from cultivation of land in the case of applicant in Recourse No.397/87. Therefore this is a clear case of the sub judice decisionhaving been taken under a misconception of fact. It is a settledprinciple of administrative law that "material misconception offact or even the probability of its existence justifies the annulmentof an administrative act. (See, inter alia, Christodoulou v.C.Y.T.A. (1978) 3 C.L.R. 61.).
In view of the aforesaid misconception of fact which is a materialone the sub judice decision must be annulled as taken undersuch a misconception which makes it a decision contrary to thewell settled principles of Administrative Law and as such a decisioncontrary to law, and in excess of powers in the sense of Article146.1 of the Constitution. (See Ioannides v. The Republic.(1972) 3 C.L.R. 318.)
The sub judice decisions must also be annulled for another reasonwhich again amounts to misconception of fact, the following:-
In these cases we are faced with the situation whereby the respondentorgan failed to make a due inquiry with the result that itacted in ignorance of the essential and material facts; and such .asituation amounts to a misconception of fact. (See Skaros v.TheRepublic (1986) 3 C.L.R. 2109; Christofides v.The Republic(1966) 3 C.L.R. 732;Iordanou v. The Republic(1967) 3 C.L.R.245; Ioannides v. The Republic (1972) 3C.L.R.318; Mikellidouv .The Republic (1981) 3 C.L.R. 461; Skapoullis v.The Republic(1984) 3 C.L.R. 554.)
It should be stressed that my conclusion about misconceptionis not of theoretical or academic interest, but it has a material bearing on the case. This is so because the amount of the fee is determinedby reference to the income derived from the particular businessor trade, which is carried on. Consequently the taking into consideration of a species of income which was non-existent inevitablymust have affected the amount of the fee and as such,amounts to material misconception.
Further the sub judice decisions must be annulled for lack ofdue reasoning in that the facts stated in the opposition are not supportedby the actual facts of the case. (See Economides v.TheRepublic (1985) 3 C.L.R. 222.)
Having dismissed the recourse as above, I need not deal withthe remaining grounds of law.
In the result the sub judice decisions are annulled, but in thecircumstances there will be no order as to costs.
Sub judice decisions annulled.
No order as to costs.