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(1980)1980 May 16 [HADJIANASTASSIOU, A. LOIZOU AND MALACHTOS, JJ.] ANDREAS TH. MICHAEL1DES, Appellant, v. GEORGHIOS GAVRIELIDES, Respondent. {Civil Appeal No. 6026). Landlord and tenant—Statutory tenancy—Business premises—Recovery of possession—Premises reasonably requiredfor the business of the landlord^ son—Section I6(\)(
  1. g)of the Rent Control law, 1975 (Law 36/75)—No orderfor recovery of possession can be made when the business will be carried on by a limited company of which the son and his wife are the two shareholders and of which they have complete control. The sole question in this appeal was whether the landlord was entitled to obtain an order of ejectment, under section I6(l)(g)* of the Rent Control Law, 1975 (Law 36/75), on the ground that the premises were required for the carrying on of a business by his son where in fact the business was to be carried on by a limited company of which the son and his wife were the two shareholders and of which they had complete control. Held, that a company and the individual or individuals forming a company are separate legal entities, however complete the control might be by one or more of those individuals over the * Section 16(l)(
  2. g)reads as follows: "16
(1)No judgment or order for the recovery of possession of any dwelling house or business premises to which this Law applies, or for the ejectment of a tenant therefrom, shall be given or made except in the following cases: (
  1. g)Where the dwelling house or business premises are reasonably required for occupation by the landlord, his spouse, his son, daughter, son-inlaw, daughter-in-law, brother or sister, who are over eighteen years of ageand in cither case the Court considers it reasonable to give such judgment or make such order: ". 244 1 CX.R. 5 10 Michaelides v. Gavrielides company; that the meaning of the words in section I6(l)(
  2. g)of Law 36/75isplain and unambiguous and that the law passed purported to protect theclassofpersonsreferred to in paragraph (
  3. g)and had nothing to do with private companies; and that once the son of the landlord and his company are entirely separate entities, and this is not a matter of form but a matter of substance and reality, the landlord or his son cannot bring themselves within the provisions of section 16(l)(
  4. g)by holding ' the premises through a company which the son and his wife control (principles laid down by Willmer L.J. in Tuntstallv. Steigmann[1962]2All417atpp.421,422and423and principles formulated in Gramophone and TypewriterLimited v. Stanley [1908]2 K.B.D. 89 at p. 98 adopted). Appeal allowed. 15 Percuriam: We take the opportunity to state that it is for the House of Representatives to decide whether the time has come to'amend the law as toinclude such-private companies, and to consider whether same should be afforded the opportunity ofhavingthe protection of thelaw regarding 20 business holdings. 25 30 35 Cases referred to: Tunstall v. Steigmann [1962] 2 All E.R. 417; Salomon & Co.v. Salomon [1897] A.C. 22; DuportSteelsLtd. v. Sirs[1980] 1AHE.R. 529 at pp.541,551, 552; Beswick v. Beswick [1967]2 All E.R. 1197 at p. 1202; Gramophone and Typewriter Limitedv. Stanley [1908] 2 K.B.D. 89 at p. 98. Appeal. Appeal by the tenant against the judgment of the District Court of Larnaca (Pikis, P.D.C.) dated the 8th November, 1979, (Rent Appl. No. 14/78) whereby he was ordered to vacate and deliver vacant possession of 3 shops situate at Iphestos Str., Larnaca. A. Poetis, for the appellant. G. Nicolaideswith A. Kramvis, for the respondent. Cur. adv. vult. HADJIANASTASSIOU J. read the following judgment of the Court. This appeal which is from the order of the President of 245 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)the District Court of Larnaca made on 8th November, 1979, raises a novel point on the construction of section 16(l)(g) of the Rent Control Law 1975 (Law N o 36/75). The President of the District Court decided that the landlord was in the circum­ stances entitled to obtain an order of ejectment. Section 16
(1)says t h a t : "Ούδεμία άπόφασις και ουδέν διάταγμα εκδίδεται δια την άνάκτησιν της κατοχής οιασδήποτε κατοικίας ή καταστή­ ματος, διά το όποιον Ισχύει 6 παρών Νόμος, ή διά τήν έκ τούτου είωσιν ενοικιαστού, πλήυ τών ακολούθων περιπτώσεων: 5 10 And (ζ) is in these terms:"Είς περίπτωσιν καθ* ην ή κατοικία ή το κατάστημα απαι­ τείται λογικώς προς κατοχήν ύπό τού Ιδιοκτήτου, της συζύ- 15 γου του, του υιού του, της Θυγατρός του, του γαμβρού του, της νύμφης του, τού αδελφού του ή της αδελφής του, οΐτινες εΐναι ηλικίας άνω τών δεκαοκτώ ετών καΐ είς οιανδήποτε τών περιπτώσεων τούτων το Δικαστήριον θεωρεί λογικήν τήν Ικδοσιυ τοιαύτης αποφάσεως ή τοιούτου διατάγματος: 20 Νοείται ότι ουδεμία άπόφασις και ουδέν διάταγμα θά έκδίδωνται δυνάμει τής παραγράφου αυτής, έάν ό ενοικιαστής πείση το Δικαστήριο^ ότι, λαμβανομένων υ π ' όψιν όλων τών περιστάσεων της υποθέσεως, θά έπροίενεΐτο μεγαλύτερα ταλαιπωρία διά της εκδόσεως τοϋ διατάγματος, ή της 25 αποφάσεως παρά διά τής αρνήσεως εκδόσεως τούτου. Διά τους σκοπούς της παραγράφου αυτής ό όρος 'περι­ στάσεις τής υποθέσεως* περιλαμβάνει τό ζήτημα κατά πόσον υπάρχει διαθέσιμον έτερον μέρος στεγάσεως διά τόν Ιδιοκτήτην ή τόν ένοικιαστήν, και τό ζήτημα κατά πόσον ό Ιδιοκτήτης 30 ήγόρασε τό άκίνητον μετά τήν ήμερομηνίαν καθ' ην ετέθη έν ίσχύι ό παρών Νόμος προς τόν σκοπόν αποκτήσεως κατοχής δυνάμει των διατάξεων της παρούσης παραγράφου." And in English section 16
(1)of the Rent Control Law says that;" N o judgment or order for the recovery of possession of any dwelling house or business premises to which this 246 35 1 C.L.R. Michaelides v. Gavrielides Hadjianastassiou J. Law applies, or for the ejectment of a tenant therefrom, shall be given or made except in the following cases: And (g) is in these terms:5 10 "Where the dwelling house or business premises are reasonably required for occupation by the landlord, his spouse, his son, daughter, son-in-law, daughter-in-law, brother or sister, who are over eighteen years of age, and in either case the Court considers it reasonable to givesuchjudgment or make such order: 15 Provided that no judgment or order shall be given or made under this paragraph if the tenant satisfies the Court that, having regard to all the circumstances of the case, greater hardship would be caused by granting-the order or judgment than by refusing to grant the same. 20 For the purposes of this paragraph, the expression 'circumstances ofthecase' shall include the question whether accommodation is available for the landlord or the tenant, and the question whether the landlord purchased the premises after the date of the coming into operation of this Law for the purpose of gaining possession under the provisions of this paragraph;". The necessary facts can be stated shortly as follows: The application was made by the owner Georghios Gavrielides for 25 an order for the recovery of possession of three adjoining shops, combined into one, by the demolition of the internal walls, retaining three entrance doors and situated at Ifestos street of Larnaca. The shops were occupied by the respondent Andreas Th. Michaelides over a number of years. The tenant is using 30 the shop for the storageand display as well as for the transaction or retail trade of glassware. The owner runs a grocery at a shop adjoining the premises let to the respondent. Part of this shop is used by his son Prokopis for his separate business, viz., the display and sale of hunting equipment, notably cartridges, 35 shot-guns and ancillary equipment. On 22nd September, 1977, the owner of the said shop sent a notice to the respondent to quit the premises in question, signifying the need of the premises for the use of his son, but the respondent refused to comply. 247 Hadjianastassion J. Michaelides v. Gavrielides
(1980)The respondent opposed the applicant's alleged need of the premises and maintained that the prerequisites for the making of an order were not present. The respondent isalso the tenant occupier of a number of shops in the area where the subject shops are situated. He is also the occupant of a fairly large 5 shop at Nicos Rossos Street and another large shop rented from Mr. Theodoulou, as well as a small shop situated nearby, used as a store. In addition, the respondent purchased in 1976 two large shops at an advantageous nearby location. The applicant and his son made it quite clear that the shop 10 ofwhich they makejoint use,isquite unsuitable to accommodate the business of both, as well as unsafe, for it is inadvisable to store inflammable substances like gun-powder with any other articles. It is also true to say that previously the father and his son were jointly in business, but subsequently his son blanched 15 off, and as from the year 1978, he formed a family limited company with his wife for the production of cartridges and pellets as well as the import of shot-guns and ancillary articles. Indeed, they set up a factory at Larnaca industrial estate since 1978. 20 The applicant maintained that the grocery shop was inadequate for both the storage and display of the products of this family company of the son and his wife and the business of the owner. They further alleged that only one third of their trade is conducted from the shop and the remaining two-thirds are 25 being conducted on a wholesale basis by deliveries made at the address of customers. There was a further allegation that the gun-powder factory of Prokopis Gavrielides is an unsuitable place for the transaction of business both on account of its location and the dangerous condition of the premises because 30 of the storage of inflammable substances. In addition, the son took over the business of hunting equipment from his father who has a long association with the area, and the two of them had been carrying on business for some time before they separated. 35 It has not been challenged that the whole of the shares of the company were held by the son of the landlord and his wife. The learned President, having considered the contentions of both counsel, and particularly the argument of counsel for the respondent that the premises were needed to be occupied by 40 248 1 C.L.R. Michaelides v. Gavrielides Hadjianastassioa J. the company as such and not by the son, and having addressed his mind to the further argument that a private company is a legal entity separate and distinct from that of its shareholders, had this to say: 5 10 15 20 "In the present case the reality of the matter is that the family company is the instrument through which the son of the owner transacts his business and can justifiably be described as his agent. Prokopis Gavrielides is the alter ego of the company as the one who pulls the strings for his subservient horse to move. Whereas I agree that the company itself, be it a family one, is not among the beneficiaries listed in section 16(l)(g), Law 36/75, nonetheless, the fact that a person named therein carries on his business through a family company does not mitigate the need of l e jl premises nor does it exclude, as in this case, the son of the owner from theumbit of the provisions of the law. In my judgment, the fact that the son of the owner, Mr. Prokopis Gavrielides, does business through a family company does not alter the situation nor does it lessen the need he may have of the premises. Hence I don't regard the existence of this company an insuperable obstacle in the way of the owner recovering possession." Then, having raised the question whether the premises were reasonably required by the landlord, the learned Judge reached 25 the conclusion that the said premises are reasonably required by the owner in order to offer his son business accommodation, and that the burden is on the landlord to satisfy the Court that the premises are required and the request is reasonable.Finally he made an order of ejectment against the tenant. 30 The present appeal is from this order and the question which was before the learned President comes now before this Court, and is whether the son of the landlord can be said to intend to occupy the premises for the purposes of carrying on a business in accordance with the terms of sub-section (g), when in fact 35 the business is to be carried on by a limited company of which the son and his wife are the two shareholders and of which they have complete control. Counsel for the appellant argued (a) that the premises in question would be used by the company which has been formed 249 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)and not by the son of the landlord, and that irrespective of whether or not the son would be carrying on the business, in accordance with the authorities and principles pertaining regarding a private company, the learned President was wrong in granting an order for ejectment once the son would not be 5 occupying the premises in question in his personal capacity; (
  1. b)that the learned President was also wrong in law, once he had agreed that the company itself, being a family one, is not among the beneficiaries listed in section 16(l)(
  2. g)of Law 36/75, and wrongly made the said order of ejectment; and 10 (
  3. c)that the learned President was wrong in interpreting the law that it does not exclude the son to carry on his business through a family company, and that it does not mitigate the need of the premises nor does it exclude, as in this case, the son of the owner from the ambit of the provisions of the law. 15 Finally, counsel very ably argued that only persons specifically named in our law can take advantage of the provisions of the Rent Control Acts, and that a family company cannot avail themselves of the provisions of section 16(l)(
  4. g)of Law 36/75. Counsel relies mainly on Tunstally. Steigmann [1962]2 All E.R. 20 417. On the contrary, counsel for the respondent argued at length that in effect the son of the landlord was carrying on business in his own name also, because he was licensed to sell guns personally; and taking that as a realistic view of the law, in effect the business is carried on by the son of the landlord, notwithstanding that it was being carried on by a limited company, and that paragraph (
  5. g)does not exclude the son of the owner from the ambit of the provisions of section 16(l)(
  6. g)of the Rent Control Law. We think that it is necessary to state that since the decision in Salomon & Co. v. Salomon [1897] A.C. 22, it has been said time and again that a company and the individual or individuals forming a company were separate legal entities, however complete the control might be by one or more of those indivi- 35 duals over the company. That is the whole principle of the formation of a limited liability company, and it would be contrary to the scheme of the Company Acts to depart from that principle. 250 25 30 1 C.L.R. Michaelides v. Gavrielides Hadjianastassiou J. The learned President, dealing with the corporate veil of a company, referred to a number of cases, indicating readiness on the part of the Court to pierce the corporate veil, if that was deemed necessary in the interests of justice. It is true that in 5 some instances modern company law disregarded the principle that the company is an independent legal entity, and generally speaking the Courts are more inclined, in appropriate circumstances, to lift the veil of the corporateness where question of control is in issue than when a question of ownership arises. 10 The veil of corporateness is lifted in the cases in Palmer's Company Law, Volume 1, 22nd Edition at pp. 160, 162. But with respect to the trial Court's decision, this is one of the cases where the lifting of the veil is not enumerated in cases connected with the Rent Acts. 15 With this in mind, we think it becomes necessary to consider section 16
(1)of the Rent Control Law, 1975.- Section 16 says quite clearly that no judgment and no order of ejectment can be granted for the recovery of possession of any house or business premises for which this law applies or for the ejectment of 20 a tenant except in the following circumstances: (
  1. g)where a house or business premises are reasonably required for occupation by the landlord, his spouse, his son, provided that no judgment and no order of ejectment shall be given if the tenant satisfies the Court that having regard to all the circum25 stances of the case,greater hardship would be caused by granting the order or judgment than by refusing to grant the same. There isno question, of course, of the premises being required here as a residence for the landlord, and the only question to be considered iswhether itwas the intention of the son of the land30 lord to occupy the said holding for the purposes of a business to be carried on by him therein. In the light of the facts of this case, we have formed the view that in all the circumstances before the trial Court, it cannot be said that it is the intention of the son of the landlord to carry on the busi35 ness, because such business clearly would be carried on by the company formed for that occasion. We think the answer is provided in the case of Timstall v. Steigmann, [1962] 2 All E.R. 417. Omerod, L.J., dealing with the question whether a landlord can successfully oppose the tenant's application for a new 40 tenancy on proof that she intends to occupy the holding for the purposes of a business within the meaning of s. 30(l)(
  2. g)of the 251 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)Landlord and Tenant Act, 1954, to be carried on by a company of which she holds all but two of the shares and over which she exercises complete control, said at pp. 420, 421:"I have formed the view that in these circumstances it cannot be said that it is the intention of the landlord to 5 carry on the business. It was decided in Salomon v. Salomon & Co.}, that a company and the individual or individuals forming a company were separate legal entities, however complete the control might be by one or more of those individuals over the company. That is the whole 10 principle of the formation of limited liability companies and it would be contrary to the scheme of the Companies Act to depart from that principle. It has been contended in this case that a realistic view should be taken of the circumstances. It is submitted 15 that any person in the street would say that the business was the landlord's business, notwithstanding that it was being carried on by a limited company, and that in those circumstances it should be held that the provisions of para. (g), to which I have referred, should be considered to be 20 satisfied. That, I think, is a dangerous doctrine. It may be that in practice the landlord will continue to carry on the business as it has been carried on in the past when she was undoubtedly the proprietor of it. It may be that she will derive a profit or otherwise from the business as she 25 has done in the past. But the fact remains that she has disposed of her business to a limited company. It is the limited company which will carry on the business in the future, and, if she acts as the manager of the business, it is for and on behalf of the limited company. In my judg- 30 ment the fact that she holds virtually the whole of the shares in the limited company and has complete control of its affairs makes no difference to this proposition. The object of a limited liability company, as I understand it, is that the shareholders shall have some protection and some limit 35 to the liability which they may incur in the event of the company being unsuccessful. It is to be assumed that the landlord in this case assigned her business to the limited company for some good reason which she considered to
  1. [1897J A.C.
  2. 252 1 C.L.R. - _ 5 10 15 20 25 30 35 Michaelides v. Gavrielides Hadjianastasslou J. be of an advantage to her. She cannot say that in a case of this kind sheis entitled to take the benefit of any advantages that the formation of a company gave her, without at the same time accepting the liabilities arising therefrom. She cannot say that she is carrying on the business or intends to carry on the business in the sense intended by para, (g) of the subsection and at the same time say that her liability islimited as provided by the Companies Act. It has been argued in the course of this case that there have been a number of departures from the principle of Salomon v. Salomon & Co.1 in order, that the Courts may give effect to what has been described as the reality of the situation, and it is submitted in these circumstances that the Court should look at the realities of the situation and that those realities are that the business will in future "be carried'on by the landlord as it has been carried on in the past. We were referred to Re Yenidje Tobacco Co., Ltd.2, where Lord Cozens-Hardy, M. R., dealt with a point in his judgment3, the effect of which was that the Court would look behind the fact of incorporation if the incorporation was in reality the incorporation of a partnership and would treat the matter for the purposes of winding-up as though it were a partnership In addition, it was submitted that, in applying the Rent Restrictions Acts, the Court has always'looked to the reality of the transaction and would not allow the purpose of the Acts to be defeated by the use of the Companies Acts. In support of this contention we were referred to Samrose Properties Ltd. v. Gibbard
  3. Whilst it may be argued that in the above circumstances the Courts have departed from a strict observance of the principle laid down in Salomon v. Salomon & Co.5, it is true to say that any departure, if indeed any of the instances given can be treated as a departure, has only been made to deal with special circumstances when a
  4. [1897] A.C.
  6. [1916-17] All E.R. Rep. 1050; [1916] 2 Ch.
  8. [1916-17] All E.R. Rep. at p. 1051;(1916] 2 Ch. at p.
  10. [1958] 1All E.R.
  12. [1897] A.C. 22 253 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)limited company might well be a facade concealing the real facts. Counsel was unable to point to any special circumstances in this case other than that the landlord has complete control of the company. In my judgment that is not enough. I see no reason to depart from well 5 established principles, and I would allow the appeal." Willmer, L.J., delivering the second judgment in dismissing also the appeal, said at pp. 421,422, and 423:"The problem which has arisen in this case is one of engaging simplicity, but I do not find it at all easy of solu- 10 tion. The question is whether under s. 30(l)(g) of the Landlord and Tenant Act, 1954,a landlord can successfully oppose the tenant's application for a new tenancy on proof ihat she intends to occupy the holding for the purposes of a business to be carried on by a company of which she 15 holds all but two of the shares and overwhich she exercises complete control. Can the landlord in such circumstances show that the business is to be carried on by him (or her) so as to come within the words of the subsection? ' The Judge decided that the landlord was entitled to 20 succeed. He took the view that in common sense where an individual is in such complete control of the company it can truthfully be said that the intention is to occupy for the purpose of his or her business, such business being the running of the company. In reaching this conclusion 25 he was clearly influenced by some observations made obiter by members of this Court in Pegler v. Craven*. The actual question at issue in that case was not quite the same as here. The matter arose under the Leasehold Property (Temporary Provisions) Act, 1951, and it was 30 the occupation of the tenant, and not that of the landlord, that was in question. These differences, however, do not affect the question how far, if at all, occupation by a company can be equated with occupation by the individual who controls the company. The significant difference 35 between Pegler v. Craven2 and the present case is that in the former case the tenant who was claiming had no
  1. [1952] 1 AH E.R. 685; [1952] Q.B.
  3. [1952] 1All E.R. 685; [1952] 2 Q.B.
  4. 254 1 C.L.R. 5 10 15 20 25 30 35 Michaelides v. Gavrielides Hadjianastassiou J. more than a majority shareholding, and had not the same measure of control over the company as the landlord in thepresentcase. ThisCourt heldthat inthecircumstances of that case the occupation by the company could not be saidtobeoccupation bythetenant soastobringthetenant within the Act. But the members of the Court expressly reserved for future consideration what would be the right ofa tenant (and equally, it would seem, of a landlord) who was in fact beneficial owner of all or substantially all the issued shares of such a company. It was suggested by Sir Raymond Evershed, M.R.1, that there might be some circumstances in which it could be said that the company in occupation would be but the alter ego of the individual concerned. The Judge here has based his decision on the view that the present is just such a case, . that the company is but the alter ego of the landlord and that, accordingly, occupation by the company for the purposes of its business would amount to the same as occupation bythelandlord for thepurposes ofherbusiness. Mr. Bramall, inanattractive and forceful argument, has soughtto support thejudge'sviewona number ofgrounds. First, he says that, construing the language ofthe subsection inaccordance withthe ordinarymeaningofthewords used, the landlord here did intend to occupy the holding for thepurposes of abusinesstobecarried onbyher. The business was in substance her business, the company being a merepieceofmechanism toenablethelandlord's business to be carried on. This, it is said, was the reality; and we were invited to look at the reality and substance of the ,proposed occupation rather than at its form. As relevant to this argument I ventured to direct attention to Lennard's Carrying Co.,Ltd. v. Asiatic Petroleum Co. Ltd.2, and some reliance was placed on what was said by Viscount Haldane, L.C., in that case. He described the managing director of the appellant company as one who was3 '...really thedirectingmindandwillofthe corporation, theveryegoandcentreofthepersonality ofthecorporation.'
  5. |1952] 1All E.R. at p. 690; [1952] 2 Q.B. at p.
  7. [1914-15] All E.R. Rep. 280; [1915] A.C.
  9. [1914-15] All E.R. Rep. at p. 283; [1915] A.C. at p.
  10. 255 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)In that case the question waswhether a casualty which had occurred to a ship was 'without the actual fault or privity' ofher owners,whowerealimited company;and theanswer given was that in such a case the fault or privity must, in the words of Lord Haldane, be that 5 *...of somebody who is not merely a servant or agent for whom the company is liable upon the footing respondeat superior, but somebody for whom the company is liable because his action is the very action of the company itself.' This phrase has been relied on as showing that in theview of Lord Haldane—with whom the other members of the House concurred—there are cases in which an individual may be so identified with the company he controls that he can, for some purposes at any rate, be regarded as the 15 alter ego of thecompany. It issuggested that thisconcept should be applied in relation to s. 30(l)(
  1. g)of the Landlord and Tenant Act, 1954,at least to any case in which it can truly be said that the landlord is the alter ego of the company. Next, we were referred to a number of cases in which the Court has thought itproper to look behind theoutward form of a transaction or of an organisation in order to ascertain the reality of the matter Similarly in the application of the Rent Acts the Court 25 has always looked to thereality of the matter, and has not allowed a transaction within the Acts to be dressed up in such a way as to evade them: Samrose Properties, Ltd. v. Gibbardxwas cited as an illustration ofthis. Thepresent case, it is said, is eminently one in which regard should be 30 had to the reality rather than the form of the business on which the landlord seeks to rely. Lastly, we were referred to Hill (Patents),Ltd. v.University College Hospital Board of Governors2, where the hospitalgovernors were held entitled to invoke s.30(l)(
  2. g)35 of the Landlord and Tenant Act, 1954, i.e. to rely on an intention to occupy the holding for the purposes of a 1. 11958] 1 All E.R. 502. 2. [1955] 3 All E.R. 365. 256 10 20 1 C.L.R. 5 10 15 20 25 30 35 Michaelides v. Gavrielides Hadjianastassiou J. business to be carried by them, notwithstanding that they were under a statutory duty to manage and control the hospital on behalf of the Minister of Health, and notwithstanding that the minister might also be in occupation through them. The facts of the case were very special, and, except in so far as it suggests that in some circumstances occupation may be shared between more than one legal entity, I do not find it very helpful or relevant to the problem of the present case. 1have certainly felt the force of the argument on behalf of the landlord; but in the end I am satisfied that it cannot prevail. There is no escape from the fact that a company is a legal entity entirely separate from its corporators— see Salomon v. Salomon & Co.1. Here the landlord and her company are entirely separate entities. This is no matter_ of form; it is ajrtatter of substance and reality. Each can sue and be sued in its own right; indeed, there" is nothing to prevent the one from suing the other. Even the holder of one hundred per cent of the shares in a company does not by such holding become so identified with the company that he or she can be said to carry on the business of the company. This clearly appears from Gramophone & Typewriter Ltd. v. Stanley2, a decision of this Court which seems to me, on due consideration, to be destructive of the argument for the landlord. As was pointed out by Fletcher Moulton, L.J. 3 , control of a company by a corporator is wholly different in fact" and law from carrying on the business himself: '...the individual corporator does not carry on the business of the corporation'. This being so, I do not see how it is possible for the landlord in the present case to assert that she intends to occupy the holding for the purpose of a business to be carried on by her. Her intention, as has been made plain, is that the company which she controls shall cany on its business on the holding. But that, unfortunately for her, is something for which the Act makes no provision. In this connexion it is not without significance that the Act does make provision (by s. 41) for the case where the landlord's interest is held in trust, in 1. [1897] A.C. 22. 2. [1908] 2 K.B. 89. 3. [1908] 2 K.B. at p. 98. 257 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)which case references in s. 30(l)(
  1. g)to the landlord are to be construed as including reference to the beneficiaries under the trust; special provision is also made (by s. 42) for thecasewherethelandlord'sinterestisheldbyamember of a group of companies, in which case the reference in 5 s. 30(l)(g), to intended occupation is to be construed as including intended occupation byanymember ofthegroup. No similar provision has been made to cover the case where an individual landlord intends that the occupation shall be by a company which he controls. 10 For these reasons I feel driven to theconclusion that the Judge's decision cannot be supported in law. I do not think that the landlord herebringsherselfwithin s. 30(l)(
  2. g)by proving an intention to occupy through the medium of the company which she controls. She cannot therefore 15 successfully oppose the grant of a new tenancy." With this principle in mind, and having considered very carefully the force of the argument on behalf of the landlord and tenant in the present case, we think we should confine ourselves in examining whether the meaning of the statutory 20 words of our law is plain and unambiguous. In the present appeal, there is no escape from the fact that the company is a legal entity entirely separate from its corporation. Here the company and the two individuals, the son and his wife, forming the company, are entirely separate entities, 25 however complete the control might be by the two individuals over the company. Each can sue and be sued in their own right. Even the holder of one hundred per cent of the shares in a company does not by that holding become so identified with the company that he can be said to carry on the business 30 ofthecompany. Thisbeingso,wedonot seehowit ispossible for the son of the landlord in the present case to assert that he intends to occupy theholdingfor thepurposes of a business to be carried on by him. His intention, as has been made plain, is that the company which he and his wife control shall carry 35 on its business on the said holding. It issaid timeand again regarding statute lawthat theJudge's duty is to interpret and to apply the law, not to change it to meet the Judge's idea of what justice requires. It is equally 258 1 C.L.R. Michaelides v. Gavrielides Hadjianastassiou J. true to say that interpretation does, of course, imply in the interpreter a power of choice when differing constructions are possible, but our law requires the Judge to choose the construction which in his judgment best meets the legislative 5 purpose oftheenactment. Aswesaidearlier, thetrial Judgein construing the provisions of section 16(l)(
  3. g)of our Law36/75, rightlycame to the conclusion that a family company is not among the beneficiaries listed in the aforesaid law. Nevertheless, wrongly in our view, he reached the conclusion that in 10 those circumstances, the son was not excluded from the ambit of the provisions of the law. In DuportSteels Ltd. v. Sirs, [1980] 1 All E.R. 529, Lord • Diplock, dealing with the construction of legislation which gives effect to policies said at p. 541:-15- . . ."My Lords,,at a time when more and morecases.involving the application of legislation which gives effect to policies that are the subject of bitter public and parliamentary controversy, it cannot be too strongly emphasised that the British Constitution, though largely unwritten, is firmly 20 based on the separation of powers: Parliament makes the laws, the judiciary interpret them. When Parliament legislates to remedy what the majority of its members at the time perceive to be a defect or a lacuna in the existing law (whether it be the written law enacted by existing 25 statutes or the unwritten common law as it has been expounded by the Judges in decided cases), the role of the judiciary is confined to ascertaining from the words that Parliament has approved as expressing its intention what that intention was, and to giving effect to it. Where the 30 meaning of the statutory words isplain and unambiguous, it is not for the Judges to invent fancied ambiguities as an excuse for failing to give effect to its plain meaning because they themselves consider that the consequences ofdoingsowouldbeinexpedient orevenunjust orimmoral. 35 In controversial matters such as are involved in industrial relations thereisroom for differences ofopinion as to what is expedient, what is just and what is morally justifiable. Under.our Constitution it is Parliament's opinion on these matters that is paramount. ~ 40 A statute passed to remedy what is perceived by Parlia259 Hadjianastassiou J. Michaelides v. Gavrielides
(1980)ment to bea defect in theexistinglawmayinactual operation turn out to have injurious consequences that Parliament did not anticipate at the time the statute waspassed; if it had, it would have made some provision in the Act inorder toprevent them. It isat leastpossiblethat Parlia- 5 ment, when the 1974 and 1976 Acts were passed, did not anticipate that so widespread and cripping use as has infact occurred wouldbemadeofsympatheticwithdrawals of labour and of secondary blacking and picketing in support of sectional interests able to exercise 'industrial 10 muscle'. But if this be the case it is for Parliament, not for the judiciary, to decide whether any changes should be made to the law as stated in the Acts, and if so, what ate the piecise limits that ought to be imposed on the immunity from liability for torts committed in the course 15 of taking industrial action. These are matters on which theie is a wide legislative choice, the exercise of which is likely to be influenced by the political complexion of the government and the state of public opinion at the time amending legislation is under consideration." 20 Lord Scarman, dealing with the same question, said at pp. 551, 552:"In our society the Judges have in some aspects of their work a discretionary power to dojustice so wide that they .may be regarded as lawmakers. The common law and 25 equity, both of them in essence systems of private law, are fields where, subject to the increasing intrusion of statute law, society has been content to allow theJudges to formulate and develop the law. The Judges, even in this, their very own field of creative endeavour, have accepted, in 30 interests of certainty, the self-denying ordinance of stare decisis, the doctrine of binding precedent; and no doubt this judicially imposed limitation on judicial lawmaking has helped to maintain confidence in the certainty and even-handedness of the law. 35 But in thefieldof statutelawtheJudge mustbe obedient to the will of Parliament as expressed in its enactments. In this field Parliament makes and unmakes the law the Judge's duty is to interpret and to apply the law, not to change it to meet the Judge's idea of whatjustice requires. 40 260 1 C.L.R. 5 10 15 20 25 30 35 Michaelides v. Gavrielides Hadjianastassiou J. Interpretation does, of course, imply in the interpreter a power of choice where differing constructions are possible. But our law requires the Judge to choose the construction which in his judgment best meets the legislative purpose of the enactment. If the result be unjust but inevitable, the Judge may say so and invite Parliament to reconsider its provision. But he must not deny the statute. Unpalatablestatute lawmaynot bedisregarded or rejected, merely because it is unpalatable. Only if a just result can be achieved without violating the legislative purposes of the statute may the Judge select the construction which best suits his idea of what justice requires. Further, in our system the stare decisis rule applies as firmly to statute law as it does to the formulation of common law and equitable principles. And the keystone of stare decisis is--loyalty-throughout-the -system to-the-decisions-of -theCourt of Appeal and this House. The Court of Appeal may not overrule a House of Lords decision; and only in the exceptional circumstances set out in the practice statement1 of 26th July, 1966, will this House refuse to follow its own previous decisions. Within theselimits,whichcannotbesaidina free society possessing elective legislative institutions to be narrow or constrained, Judges, as the remarkable judicial career of Lord Denning MR himself shows, have a genuine creative role. Great Judges are in their different ways judicial activists. But the Constitution's separation of powers, or more accurately functions, must be observed if judicial independence is not to be put at risk. For, if people and Parliament come to think that the judicial power is to be confined by nothing other than the Judge's sense of what isright (or, as Selden2 put it, by the length of the Chancellor's foot), confidence in the judicial system will be replaced by fear of it becoming uncertain and arbitrary in its application." In Beswickv. Beswick[1967] 2 All E.R. 1197, Lord Reid, dealingalso with the question of construction, said at p. 1202:"In construing any Act of Parliament, we are seeking the1. Note [1966] 3All E.R. 77,[1966] 1W.L.R. 1234. 2. Table Talk of John Selden (Pollock, ed.)
(1927)p. 43. 261 Hadjianastassiou J . Michaelides τ. Gavrielides intention of Parliament, and it is quite true that we must deduce that intention from the words of the Act. If the words of the Act are only capable of one meaningwemust give them that meaning nomatter how they got there. If, however, they are capable of having morethanonemeaning we are,in myview,wellentitledto seehow they gotthere."
(1980)5 We think with respect that the observations made by Lord Diplock and Lord Scarman are equally applicable in Cyprus with regard to interpretation of the laws, but in this country, because of its written Constitution, the Supreme Court has 10 said time and again that in considering the question of the constitutionality of a statuteithas to be guided by certainwellestablished principles governing the exercise of judicial control of legislative enactments. In doing so we have looked for guidance to cases decided by theSupremeCourtof theUnited 15 States of America and, although not bound by such cases, we have adopted the following principles applicable by American Courts, aswe areinagreementwiththereasoningbehindthem:(
  1. a)A rule of precautionary natureis thatnoact oflegisla­ tion will be declared void except in a very clear case, 20 or unless theact is unconstitutional beyond all reason­ able doubt. In other words a Law is presumed to be constitutional until proved otherwise "beyond reason­ able doubt". (
  2. b)Another maxim of constitutional interpretation is 25 that the Courts are concerned only with the constitu­ tionality of legislation and not with its motives, policy or wisdom, orwith its concurrence with naturaljustice, fundamental principles of government or spirit of the Constitution. 30 (
  3. c)Itis acardinalprinciplethatif atallpossiblethe Courts will construe the statute so as to bring it within the law of theConstitution. (
  4. d)Thejudicial power doesnotextendtothe determination of abstract questions, viz., the Courts will not decide 35 questions of a constitutional nature unless absolutely necessary to a decision of the case. (
  5. e)In cases involving statutes, portions of which are 262 1 C.L.R. Michaelides v. Gavrielides Hadlianaslassiou J . valid and other portions invalid, the Courts will separate the valid from the invalid and throw out only the latter unless such portions are inextricably connected. 5 With respect to the learned President, with this in mind, and applying the test to which we have referred earlier, the meaning of the words in paragraph 2, in our view, is plain and unambi­ guous and the law passed purported to protect the class of persons referred to specifically in the aforesaid paragiaph (
  6. g)and 10 had nothing to do with private companies. Once therefore the son of the landlord and his company are entirely separate entities, and this is"not a matter of form but a matter of sub­ stance and reality, we have decided to adopt and apply the weighty pronouncement of Willmer L.J. based on a similar 15 provision of the law to our section 16
(1)(ζ),as well as the prin­ ciples formulated in Gramophone qnd_ Typewriter, Limited v.. Stanley [1908] 2 K.B.D.
  1. In hisjudgment FletcherMoulton L.J. had this to say at p. 98:20 25 30 35 "This legal proposition that the legal corporator cannot be held to be wholly or partly carrying on the business of the corporation is not weakened by the fact that the extent of his interest in it entitles him to exercise a greater or less amount of control over the manner in which that business is carried on. Such control is inseparable from his position as a corporator and is a wholly different thing both in fact and in law from carrying on the business himself. The directors and employees of the corporation are not his-agents, and he has no power of giving directions to them which they must obey. It has been decided by this Court, in the case of Automatic Self-Cleansing Filter Syndicate Co., Ltd. v. Cunningham}, that in an English company, by whose articles of association certain powers are placed in the hands of the directors, shareholders cannot interfere with the exercise of those powers by the directors, even by a majority at a general meeting. Their course is to obtain the requisite majority to remove the directors and put persons in their place who agree to their policy. This shows that the control of individual corpo
  2. [1926] 2 Ch.
  3. 263 Hadjianastassioa J. Michaelides v. Gavrielides
(1980)rators is something wholly different from the management of the business itself." For the reasons we have given at length, we are driven to the conclusion that the Judge's decision cannot be supported by the law, as wedo not think that the landlord or his son can bring 5 themselves within the provisions of section 16(l)(g) by holding the premises through a company which he and his wife control. We, therefore, allow the appeal, but we take the opportunity to state that it is for the House of Representatives to decide whether the time has come to amend the law as to include such 10 private companies, and to consider whether same should be afforded the opportunity of having the protection of the law regarding business holdings. Appeal allowed. No order as to costs. Appeal allowed. No order as 15 to costs. 264

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