clr/1975/1975_3_175.pdf

(1970)3 C.L.R. 35 118, at pp. 121-122). Application dismissed. 176 Cases referred to: 1975 May 15 Zavrosv. The Council for Registration of Architects and Civil Engineers

(1969)3 C.L.R. 310; ANDREAS PERNAROS Korai andAnotherv. C.B.C.

(1973)3 C.L.R. 546, at pp. 555556; v. REPUBLIC (COUNCIL O F Rallis and The Greek Communal Chamber,5 R.S.C.C. II at p. 18; Metalock(NearEast)Ltd. v. TheRepublic

(1969)3 C.L.R. 351 * at p. 359; 10 HadjiSavva v. The Republic

(1972)3 C.L.R. 174, at p. 205; Sofocleous v. The Republic

(1972)3 C.L.R. 56, at pp. 60-61; Myrtiotisv. Republic, (reported in this Part at p. 58,ante); Savvidou v. TheRepublic

(1970)3 C.L.R. 118, atpp. 121-122.; Decisionsof theGreek CouncilofState:Nos.948/37and 1535/50. 15 Recourse. Recourse against the decision of the respondents whereby applicants' request for .the grant of a loan in the sum of £300,000.-for the erection ofa hotel on the beach of Famagusta was turned down. 20 J. Kaniklides, for the applicant. L. Loucaides, Senior Counsel of the Republic, for the respondents. Cur. adv. vult. The facts sufficiently appear in the judgment which was 25 delivered by: HADJIANASTASSIOU, J.: In these proceedings under Article 146 of the Constitution, the applicant, Andreas Pernaros of Famagusta, seeks the following relief:— 30 " A declaration of the Court that the refusal of the respondents or either of them (and/or decision) embodied in a letter dated the 15th April, 1971, addressed to the applicant, and in another letter dated the 10th June, 1971, addressed to applicant's counsel whereby the application of the applicant dated the 7th April, 1970, for the grant 177 MINISTERS A N D OTHERS) 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) of a loan in the sum of £300,000- for the erection of a hotel on the beach of Famagusta was turned down and/or whereby respondents failed to recommend to the loan trustees or commissioners the granting of the said loan, is in excess or abuse of powers, unconstitutional and/or against the provisions of the Hotels and Tourists Accommodation Law, (Law 40/69), and Cyprus Tourism Organization Law (Law 54'/69) and/or ultra vires of the Hotels and Tourists Accommodation Regulations of 1970, and illegal". 10 The facts so far as relevant are these:On July 16, 1969, the applicant who is the registered owner of a piece of land situated at Famagusta and abutting on the beach, Plot No. 267, sheet/plan XXX 111/29.3.IV, plot E, at the locality of Ayios Memnon of an extent of 28,256 sq. ft. submitted an application to the Hotels Committee, established under the provisions of section 6 of the Hotels and Tourists Accommodation Law, 1969 (No. 40/69) for the erection of a hotel on the said land." He also attached to his application the required plans and invited the said Committee to approve them. (See the covering letter marked *A'). It appears that the said plans which were submitted on July 16, 1969, were altered by the applicant's architect substantially with a view to satisfying all the requirements of the said Committee which comes under the Ministry of Commerce and Industry. On January 10, 1970, the plans were finally approved by the said Committee, and in their final form, the plans provided for the erection of 112 rooms (a four star hotel) in addition to all other amenities. (See letter of approval marked 'B'). In view of the said approval, the applicant on April 7, 1970, in accordance with the provisions of section 16 of Law 40/69, applied to the Ministry of Commerce and Industry for the grant to him of a loan of £300,000.- because the estimated amount for building the said hotel was £430,140- (See the application marked exhibit 4, and estimated costs marked C.2). I think I should have added that the making of loans takes place always with the prior approval of the Board of Directors because under section 16 "the making of loans by the State or by such agencies under its control for the erection of new hotels or for the extension and improvement of the existing ones shall take place always with the prior approval of the Board 178 15 20 25 30 35 40 of Directors. Such approval shall be granted on the written application of the interested parsons and shall relate to the usefulness of granting the loan". 1975 May 15 ANDREAS On June 6, 1970, the applicant feeling uneasy because there 5 was no reply to his letter, wrote once again to the Ministry in question reminding them; and on November 2, 1970, he gave further details of the scheduled time-table of the construction of his hotel. On April 15, 1971, the General Manager of the Cyprus 10 Tourism Organization, established under Law 59/69, addressed a letter to the applicant informing him that the Organization regretfully could not suggest to the lending agency of the Government the granting of the said loan because the proposed hotel does not fulfil the terms and pre-requisites which are 15 included in the planning of the Government policy for the lending of money to the hotel industry, from the point of view of proportion of beds to side area. (See letter exhibit 1). I am sure that the applicant must have felt very unhappy about the whole situation particularly in view of the fact that 20 his plans had been approved, and consequently he must have thought that would have opened the door for obtaining· the loan required for the erection of his hotel. In the light of his uneasiness, counsel on his behalf addressed a new letter to the Organization (K.O.T.) dated May 1, 1971, (exhibit 3), and as 25 there was no reply, his counsel sent a new letter dated June 4, 1971, complaining that until that time he did not receive a reply to his previous letter (see letter marked G. 2). On June 10, 1971,the General Manager of the Organization in reply to the applicant expressed his sorrow for the long 30 delay in taking a definite decision adding that the taking of a decision was overdue regarding all new applications; and that was due to the fact that the Government had to take a definite stand on the matter. The General Manager went on to state that it was not possible to satisfy all the applicants, and that 35 the Organization could not ignore the said regulating decision of the Government with regard to the highest number of beds per donum and according to the class of the hotel. There is no doubt that there has been a long delay indeed for the purpose of making up their minds and the applicant 40 feeling aggrieved because of the said refusal, filed the present 179 PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) 1975 May 15 recourse, and the application was based on these grounds of law:- ANDREAS " (

1. a)The decision complained of is in excess or in abuse of the respondents or either of them. PERNAROS v. REPUBLIC (
2. b)The decision complained of is discriminatory, unconstitutional, null and void and illegal. (COUNCIL O F MINISTERS A N D OTHERS) 5 (
3. c)The decision complained of is against the provisions of the Hotels and Tourists Accommodation Law (Law 40/69), and the Cyprus Tourism Organization Law (Law 54/69), and/or ultra vires of the Hotels and 10 Tourists Accommodation Regulations of 1970". Counsel on behalf of the respondents filed the opposition, which was based on two grounds of law *'(
4. a)that the said decision was taken lawfully in accordance with the provisions of section 16 of Law 40/69 and in accordance with the substantial 15 facts of the case; and (
5. b)that the decision attacked refers to the expediency for the grant of the loan to the applicant, a matter which is outside the control of the Supreme Court in its Revisional Jurisdiction in accordance with Article 146 of the Constitution". In support of the opposition counsel relied on 20 two decisions of the Greek Council of State Nos. 733/33 and 11/35. The facts in support of the opposition are (paragraph 4) that the Council of Ministers by its decision No.9424 dated February 12, 1970, introduced a new policy for the granting of loans to 25 the hotel industry and I propose quoting an extract from the minutes of that meeting: * " To'Συμβούλιον άπεφάσισεν όπως Ιγκρίνη την άκόλουθον ττολιτικήν παραχωρήσεως δανείων προς την Ξενοδοχειακήν Βιομηχανίαν:(α) όπως δι' άνέγερσιν νέων Ξενοδοχείων χορηγώνται δάνεια μέχρι ποσοστού 70% επί τοϋ συνολικού ύψους της Ξενοδοχειακής επενδύσεως ως τοιαύτης θεωρούμενης της δαπάνης δια κτίρια, εγκαταστά­ σεις, εττίπλωσιν, καΐ εξοπλισμού. 'Εντός τοΟ περί- 35 θωρίου τούτου δι' αποφάσεων κατά καιρούς εκδι­ δομένων ύπό τού Υπουργού Οικονομικών καί τού * An English translation of this text appears at p. 186 post. 180 30 5 10 Υπουργείου Εμπορίου και Βιομηχανίας θα ρυθμίζωνται τά ποσοστά δανειοδοτήσεως κατά προτε­ ραιότητα περιοχών καΐ τάϋεων και έπι τη βάσει προγραμματικού διαγράμματος άναπροσαρμοζομένου αναλόγως των κρατουσών έν τη τουριστική βιομηχανία της Νήσου συνθηκών. Το Ύπουργεΐον 'Εμπορίου και Βιομηχανίας δέονόπως ΰποβάληπρος τό Υπουργείου Οικονομικών, προς έϋέτασιυ, περιοχάς προτεραιοτήτων καθώς και τάζεις Ξενοδοχείων ως προς τάςοποίαςθάΙσχύουν αντίστοιχα ποσοστά δανειοδοτήσεως εντός τοΰ ανωτάτουορίου τοΰ 70%. (β) διάρκεια δανείου καΐ επιτοκίου ώς μέχρι τοΰδε προ­ βλέπεται, ήτοι ί­ δια περίοδον μέχρι 5 15 20 " " ετών έπιτόκιον 5% από 5-12 ετών " 12-15 ετών " 15-20 ετών " " " 573% 5£% 6% (γ) έναρΕις καταβολής τοκοχρεωλυτικών δόσεων μετά τήν συμπλήρωσιν διετίας άπό της ολοκληρώσεως της καταβολής τού δανείου". In the light of this policy view, on .April 2, 1971, an extract of the minutes of the Cyprus Tourism Organization shows under the heading " Loans for Hotels", the following:- 25 30 35 " The President announced that the subject matter was discussed with the Minister of Finance and the Minister of Commerce and Industry. The Minister of Finance will consider ways of finding the necessary sum within the next years and he requested a list of the applications which are pending. The Council after examining all the applications for the erection of new hotels, decided to reject some of them, and regarding the rest fulfilling the pre-requisites for the gran­ ting of the loan from every aspect, to arrange a list and submit it to the Minister of Commerce and Industry and to the Minister of Finance. 1. The following applications are considered as re­ jected :- 40 (
6. a)St. Barbara Tourist Development Co. Ltd. in the area 'Kyma' in Limassol, because of the small area of the site. 181 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) (
7. b)Andrea Pernarou, for the erection of a 4 star hotel, 224 beds in the area of 'Golden Beach' in Famagusta upon a site of an area of about 2 acres, because it does not fulfil the conditions regarding the proportion of beds to the site area". 5 In paragraph 10it is alleged that the application of the applicant has been examined by the Organization and itwas refused for the reasons given in the letter of April 15, 1971. I should have added that counsel on behalf of the applicant in accordance with Rule 10

(2)of the Supreme Constitutional 10 Court Rules applied to the Court for further directions, that the Municipality of Famagusta was the proper authority to issue to the applicant a building permit for the erection of the hotel in question, but because the other side during the hearing of this case conceded this point I need not deal any further 15 with it. Counsel on behalf of the applicant contended that the decision of the respondents was not duly reasoned in accordance with the provisions of administrative law. With regard to the principle of due reasoning it has been said time after time in a 20 number of cases before the Supreme Court that the object of the rule requiring reasons to be given for administrative decisions is to enable the person concerned as well as the Court on a review to ascertain in each case whether the decision is well founded in fact and in law. The reasons therefore must be 25 stated clearly and unambiguously; must be expressed in the sense in which reasonable persons affected thereby would understand them; and must be stated in teims fulfilling the object of the rule. The mere fact therefore that some doubt that is not merely fanciful exists as to the meaning of the reason behind 30 an administrative decision, is sufficient to vitiate such decision. (Zavros v. The Councilfor the Registration of Architects and Civil Engineers

(1969)3 C.L.R. p. 310; Korai and Another v. The C.B.C.

(1973)3 C.L.R. 546, at pp. 555-556). (Also see Conclusions from the Jurisprudence of the Greek Council of 35 State 1929-59 at p. 183). Although in Greece the need for due reasoning is necessitated by the principles of legality of administrative acts (Stassinopoulos on the Law of Administrative Acts 1951 at p. 337) it appears that such reasoning isrequired in order tomake possible 40 the ascertainment of the proper application of the law and to 182 enable the carrying out of judicial control. (Kyriacopoulos on the Greek Administrative Law, 4th ed., vol. 2, at p. 386). According to Professor Forsthoff, the giving of reasons must, as a rule, be deemed to be required by the law today. This is 5 a consequence of the guarantee of access to administrative Courts as provided by law. Usually and certainly in the case of decisions made in the exercise of discretion, the person concerned is only able to pursue his rights if he knows the reasons for an administrative act. (The Administrative Act 10 1963 at p. 38). Reverting now to our own case law it appears that the first case that laid down the requirement of due reasoning is that of Rallis and The Greek Communal Chamber, 5 R.S.C.C. 11 at p. 18. According to the principle laid down in this case, absence 15 of due reasoning isnot necessarily in itself a ground of invalidity, but in later Cyprus decisions the view has prevailed, that absence of due reasoning is by itself a ground of invalidating the particular decision. (Metalock (Near East) Ltd. v. The Republic

(1969)3 C.L.R. 351 at p. 359, and HadjiSavva v. The Republic 20

(1972)3 C.L.R. 174, at p. 205). There is no doubt that as in the case of insufficient reasoning, vague reasoning tantamounts to absence of reasoning and renders the sub judice act or omission nulland void. (Decisions of the Greek Council of State Nos. 948/37 and 1535/50). A 25 vague reasoning, judicial review of which is impossible, or does not state the facts on which the administrative determination is based, or is so vague and general as not to admit on its supplementation from other material in the relevant files, will not be considered as due reasoning. (See Conclusions from the 30 Jurisprudence of the Greek Council of State 1929-1959at pp. 186-7; and Sofocleous v. The Republic

(1972)3 C.L.R. 56, at pp. 60-61; and a recent authority of this Court in Panayiotis loannou Myrtiotis v. The Republic of Cyprus throughthe EducationalService Commission(reported in this Part at p. 58, ante). 35 In the light of the authorities and having considered carefully the contentions of both counsel I have reached the conclusion that in view of the material before me, I have no doubt that the decision of the respondents is duly reasoned and 1am confident that the applicant knew, after reading such material, the reasons 40 why the administration turned down his application for granting him a loan. I therefore dismiss this contention of counsel 183 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) because I would reiterate that even if there was no sufficient reasoning, that reasoning can be supplemented from the material in the file and the facts before me. The next contention of counsel was (

1. a)that the Government policy adopted by the respondent was contrary to s. 16 of J5 Law 40/69, and the Regulations made thereunder; and their decision to turn down the application for a loan was taken in abuse and in excess of their discretionary power; and (
2. b)that because before adopting such a policy oral promises were given to both the architect who prepared the necessary plans and to 10 the applicant himself by the officials. Lam afraid that although an allegation of promises was put forward, unfortunately no evidence was adduced before me in order to substantiate such ground of complaint. It may perhaps be true that during this long delay one could not exclude 15 the possibility that one or more officials encouraged the applicant or his architect to believe that a loan would be finally granted to him, but, as I said earlier, nothing concrete was placed before me to warrant the inference that such binding promises were actually given by responsible officials, and that 20 such promises could in any way bind either the Ministry of Commerce and Industry or the Board of Directors or, indeed, any other responsible agency. In any event, irrespective of whether or not the applicant was left with that impression, it appears that there were too many applicants running after 25 loans, but, regretfully, there were very few funds, and it was impossible to satisfy them at that time. Turning now to the first leg of the contention, 1 think that once it is accepted that the respondents were given the power to grant loans, in exercising their discretion, certainly they were 30 entitled to apply a certain policy; and in my view, they had to consider seriously before making up their mind to grant such loans, whether it was within the general economic framework of helping more profitably the hotels industry. Once, therefore, the respondents acted within their statutory discretion and not 35 in abuse or in excess of their power, this Court cannot entertain the question as to whether or not the "policy view" is a proper one. In Savvidou v. The Republic

(1970)3 C.L.R. 118, the Court, dealing with the policy view taken by the Council of Ministers, 40 said at pp. 121-

1. 184 5
2. 15 " What the Council of Ministers did, in effect, was to deal with the said request on the basis of a policy regarding the exercise of its powers under section 58;and I cannot accept the view that the Council of Ministers disregarded the ' merits of the case; it had before it all relevant material; apparently, it did not find such merits in the casein question as would justify a course contrary to that adopted by it, which was quite reasonably open to it. Once I am satisfied that the Council of Ministers acted in this matter within the limits of its statutory discretion and not in abuse or excess of powers I cannot enter into the question as to whether or not the policy view taken by the Council of Ministers was a proper one; to do this would be beyond the limits of a jurisdiction such as the one under Article 146 of the Constitution (see Kyriacopoullos on Greek Administrative Law, 4th ed., vol. I p. 209 and the decisions of the Greek Council of State in Cases 733/33 and 11/35)". In the light of the Greek and Cyprus authorities, and having 20 regard to the circumstances of this case, I am confident that the respondents exercised their discretionary power properly and have not acted in abuse or in excess of power. Therefore, I think that I cannot really touch the question as to whether or not the "policy view" taken by the respondents was the proper 25 one; particularly so, because by doing so I would have gone beyond the limits of the jurisdiction provided by Article 146 of the Constitution. For the reasons I have endeavoured to explain, I would dismiss the recourse, but having regard to the long delay, and 30 in view of the various adjournments, I propose making an order for costs of the amount of £30 in favour of the applicant. Application, therefore, dismissed with £30 towards the costs of the applicant. Application dismissed. Orderfor costs as above. 35 185 1975 May 15 ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) 1975 y 15 Ma ANDREAS PERNAROS v. REPUBLIC (COUNCIL O F MINISTERS A N D OTHERS) This is an English translation of the Greek text appearing at pp. 180-181 ante. "The Council decided to approve the following policy for the grant of loans to the Hotel Industry:(a) That for the erection of new hotels there should be 5 granted loans up to 70% of the total amount of the hotel investment and as such is considered the cost of buildings, installations, furniture and equipment. Within this margin by decisions issued from time to time by the Minister of Finance and the Minister of Com- 10 merce and Industry the percentages of loans to be granted will be regulated in order of priority of areas and classes and on the basis of a programmed diagram re-adapted according to the conditions prevailing in the tourist industry of the Island. The Ministry of 15 Commerce and Industry should submit to the Ministry of Finance, for examination, priority areas as well as hotel classes in respect of which there would operate respective percentages of loans to be granted within the highest limit of 70%. 20 (b) The duration of the loan and rate of interest will be as at present provided, that is: For a period up to 5 years at the rate of 5% For a period from 5-12 years at the rate of 5i% For a period from 12-15 years at the rate of 5$% For a period from 15-20 years at the rate of 6%. (c) The instalments of capital and interest will commence being paid after the lapse of two years from the completion of the grant of the loan". 186 25