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(1980)1977 March 12 [STAVRINIDES, J.] IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION COSTAS HARAKIS AND OTHERS, Applicants, v. THE REPUBLIC OF CYPRUS, THROUGH THE MINISTER OF FINANCE AND ANOTHER, Respondents. (Case No. 41/70). PublicOfficers—Pensions andgratuities—Secondary educationteachers in grant-aided school—Members of pensions or gratuity fund established under regulation 14(/) of the Secondary Education Regulations, 1948—Contributions to the fund by employer and the teachers—Dissolution of the Fund in 1961 by distribution— 5 Teachers' pensions for service prior to dissolution undertaken by Government by virtue of section 6
(4)of the Secondary School Teachers' Pension Law, 1967 (Law 56/67)—Amount that has to be refunded by the said teachers so that their service, in respect of which they received a pecuniary amount from the fund, may 10 count as pensionable service. The applicants were in the employment of the Limassol Town School Committee as teachers at the Lanition Gymnasium. The school being grant-aided the Committee was required, under the Secondary Education Law, Cap. 169, to establish a pension or 15 gratuity scheme for the benefit of all permanent members of the teaching and clerical staff. Such scheme was established by virtue of regulation 14(
  1. f)of the Secondary Education Regulations, 1948 and the Committee used to contribute the amount of £800.—yearly into the gratuities fund. This fund was, by agree- 20 ment of all concerned, dissolved by distribution in 1961. On November 26, 1969 the applicants were informed by letter* The letter is quoted at pp. 81-83 post. •78 3 C.L.R. 5 10 15 20 25 30 Harakis & Others τ. Republic of the Ministry of Finance that since for their service at the above school the "Government undertook by the Secondary School Teachers' Pension Law, 1967* the obligation of paying an annual pension to them the amount of gratuity received by them should be returned to it because otherwise the axiom that no one may receive from his employer two retirement benefits in respect of the same period of service would be violated". Hence this recourse which aimed at establishing that only one half of the total amount received by each applicant in respect of payments into the fund was payable to the respondent as a condition of his being credited, for pension purposes, with the years of educational service in respect of which that part had been paid into the fund. Held, thattheamountsindispute did notfall within paragraph (
  2. ii)of section 6
(4)of Law 56/67; that to do so they must be moneys received (
  1. a)"in the form of a pension, compensation or gratuity" and (
  2. b)"by virtue of any Law, Regulation orGeneral Older"; thatthoughtheywere"gratuities" theywerenotreceived "by virtue of any Law, Regulation or General Order", if only because they were not paid consequent on dissolution of the fund, for which dissolution in fact no provision was made either in any Law, Regulation or General Order; that,therefore, paragraph (
  3. ii)is not applicable; that there is clear, reliable, and in fact uncontradicted, evidence clearly establishing that the moneys inquestion ineffect represented, as toonehalf, contribu­ tions by the applicants;that,therefore,it clearly follows that half of the amountreceived by eachapplicant represented, in effect, a refund of his or her contributions to the fund; that, hence,the "employer's contributions" which the applicants had to pay to the respondent amounted to only half of what each applicant had received out of the fund; and thai, accordingly, the sub judice decision must be annulled. Subjudice decision annulled. * The relevant provision appears in s. 6
(4)which runs as fullows: "Any period of service in respect of which any pecuniary amount was received by a teacher— (
  1. i)derived from contributions by the employer to any provident fund and interest on these contributions, or (
  2. ii)in the form of a pension, compensation or gratuity by virtue of any Law, Regulation or General Order, does not count as pensionable service unless the person interested elects to return the amount so received by him together with interest at 4% per annum beginning from the publication of this Law". η Harakb & Others τ. Republic
(1980)Recourse. Recourse against the decision of therespondents concerning the amount which, under the Secondary School Teachers' Pension Law, 1967 should be refunded by applicants out of the gratuity paid to them in
  1. 5 Chr. Demetriades, for the applicants.
  2. Nicolaides, Senior Counsel of the Republic, for the • respondents. Cur. adv. vult. STAVRINIDES J. read the following judgment. All the 10 applicants except Nos. 1, 16 and 17 are in the employ of the Limassol Town Committee (hereafter "the committee") as teachers at the Lanition Gymnasium. Applicant 1also served under thecommittee in that capacity, but he retired some time before the commencement of tliese proceedings. Applicants 15 16 and 17 are in the same employ as clerks. These two applicants having withdrawn from the proceedings before their conclusion, thisjudgment does notconcernthem,and hereafter "applicants" will be used with exclusive reference to the remaining applicants. 20 The school being grant-aided under theSecondaryEducation Law, Cap. 169, the committee was required by the Secondary Education Regulations, reg. 17(f), to establish a "pension or gratuity scheme approved by the Director" [sc. of Education] "for the benefit of all permanentmembers of the teaching and 25 clerical staff". On November 19, 1949, a scheme for the pay­ ment of lump sums to retiring teachers was established by a document which has been put in evidence (exhibit 2). Para. 14 of that document reads: " The governing body shall in every school-year charge 30 on and pay out of therevenue of the school, including the Government grant-in-aid, a sum of £800.0.
  3. into the Gratuities Fund: Provided that the governing body may withthesanctionoftheDirector,from timetotimeincrease, reduceor suspend theabove paymentas circumstancesmay 35 require." Hereafter the fund mentionedin the quotation will be referred to as "the fund". 80 3 C.L.R. Harabis & Others v. Republic Stavrinides J. In the heading of exhibit 2 reg. 17(f) of the Regulations referred to is stated to be the basis of the scheme, whereas in a paragraph immediately preceding the regulation numbered "Γ*itisstatedthatthecommittee"hereby establish thefollowing scheme" "in compliance with the provisions of reg. 14(f)" of those Regulations. "14(f)" is the number that the provision intended to be designated has been given in the revised edition of the subsidiary legislation published in 1954, i.e. several years after the making of the scheme; 17(f) its number on the text published in the 1948 Gazette. Nothing turns on the discre­ pancy; and this explanation is simply intended to save any unnecessary puzzlement that might be caused by it. .In 1961 thefund was, by agreement of allconcerned,dissolved by distribution. By s. 6
(4)of the Secondary School Teachers' Pensions Law, 1967, " Any period of service in respect of which any pecuniary amount was received by a teacher— (
  1. i)derived from contributions by the employer to any provident fund and interest on these contributions, or (
  2. ii)in the form of a pension, compensation or gratuity by virtue of any Law, Regulation or General Order, does not count as pensionable service unless the person interested elects to.return the amount so received by him together with interest at 4% per annumbeginning from the publication of this Law". All theapplicants elected inwriting to pay to the Government the sums received by them respectively out of the fund (exhs. 18-32). Inso doingall except applicant4 stated intheelection document that they were "reserving their rights" or used words to that effect. On November. 26, 1969, a letter was addressed on behalf of the Ministry of Financeto the applicants (exhibit1), which, so far as relevant, reads: " I revert to your memorandum dated November 20, 1968, on behalf of certain teachers of the Lanition Gymnasium to the Minister of Finance which relates to the amount 81 Stavrinides J. Harakis & Others v. Republic
(1980)that under the Secondary School Teachers' Pensions Law should be returned out of the gratuity paid to them in 1961and to inform you that this matter has been carefully considered and the Ministry has reached the following conclusions: (
  1. a)the amounts paid to the Lanition Gymnasium teachers in 1961 were paid out of the gratuities fund establishedbytheLimassolSchoolCommitteeonSeptember 1, 1948, by regulations made under reg. 14(
  2. f)of the Secondary Education Regulations, 1948, for the 10 provision of a retirement benefit to teachers retiring from the service of the committee. Into this fund the School Committee was paying annually £300, which wasapproximately equalto 10%oftheteachers' salaries. Under the regulations of the fund the 15 teachers were not contributing anything to it. Therefore thegratuitiespaid totheteachersconsistedexclusively of the employer's contribution. Since for the teachers'serviceinquestion theGovernment undertook by the Secondary School Teachers' Pensions Law the 20 obligation of paying an annual pension to them the amount ofgratuity receivedbythemshouldbereturned to it because otherwise the axiom that no one may receive from his employer two retirement benefits in respect ofthesameperiod ofservicewouldbeviolated. 25 (
  3. b)However, it is a fact that since September 1, 1957, the Limassol SchoolCommittee adopted the secondary school teachers' salary scales proposed by OELMEK but reduced them by 5% on the ground that the teacherswerenot obligedto contributeto thegratuities 30 fund. For this reason it may be considered that the amount of such reduction from September 1, 1957, till August 31, 1961, belongs to the teachers and it has been decided to deduct this from the amount that should be returned by the teachers to the Govern- 35 ment. Therelevantinstructionshavebeengiventothe Accountant-General and the Ministry of Education. (
  4. c)(
  5. d)Although the salaries of the Lanition Gymnasium teachers before 1957 may have been lower than those 82 5 3 C.L.R. 5 10 Harakis & Others v. Republic Stavrinides J. of other schools,this fact inno wayaffects the amount of their pensions in view of the fact that the pension iscalculated on the basis of the teacher's salary at the time of his retirement and his total service. As you surely understand the payment by the Government of an annual pension for the service of teachers for which they received a gratuity is an incomparably greater retirement benefit than the amount of gratuity which the teachers,are obliged to return in order to receive a pension for the said period." Thislettercontainsthedecisioncomplained of, and thisapplication isaimed, in substance, at establishing that only one half of the total amount received by each applicant in respect of paymentsintothefund waspayabletotherespondentasacondition 15 ofhis,orher,beingcredited,forpensionpurposes,withtheyears of educational service in respect of which that part had been paid into the fund—whether for service rendered on and after September 1, 1957, or before. •Elaborate legal argument has been put forward by counsel 20 ofeither side,thegistofwhichisasfollows: Fortheapplicants itwascontendedthattheamountsindisputerepresented"contributions" by the committee to a "provident fund" and therefore the matter was governed by para.
(1)of s. 6
(4)of the Law. On the other side, as to that part of the amount received by 25 each applicant whichwasderived from what had beenpaid into the fund in respect of service on or after September 1, 1957, • Counsel of the Republic agreed that only half was returnable to the respondent. But with regard to the amount received by eachapplicant inrespect ofwhathadbeenpaid intothefund on 30 account of service rendered by him or her before that date he contended that,it was "a gratuity" within para, (
  1. ii)of that subsection and hence the whole of it was so returnable. Inmyjudgment itisnotnecessary togointoadetaileddiscussion of the argument on either side. It seems to be clear that 35 the amounts in dispute did not fall within para, (ii): to do so they must be moneys received (
  2. a)"in the form of a pension, compensation or gratuity" and (
  3. b)"by virtue of any Law, Regulation or General Order". That they were "gratuities" cannot bedoubted. Butinmyjudgment theywerenotreceived 40 "by virtue of any Law, Regulation or General Order", if only 83 Stavrinides J. Harakis & Others v. Republic
(1980)because they were not paid consequent on dissolution of the fund, for whichdissolution infact no provision wasmadeeither inexhibit2orany Law,Regulation or General Order. Sopara. (ii) is not applicable. Now there is clear, reliable, and in fact uncontradicted,evidence(viz.thatofwitness3for theapplicants, 5 N. Dometakis, to say nothing of the newspaper cutting, exhibit 4), clearly establishing that the moneys in question in effect represented, as to one half, contributions by the applicants. Therefore it clearly follows that half oftheamount receivedby each applicant represented, in effect, a refund of his or her 10 contributions to the fund. Hence the "employer's contributions" which the applicants had to pay to the respondent amounted to only half of what each applicant had received out of the fund. ForthereasonsIhavegiventheapplicantssucceedand Imake 15 the following declaration: Itisherebydeclared that incalculatingtherespectivepensions of each one of applicants 1-15 inclusive the respective period of service on the basis of which he or shewas paid a share out of the "Gratuities Fund" established by the Limassol Town 20 School Committee by a document dated November 19, 1949 (exhibit2), should be accounted pensionable. Respondent to pay applicants £40 costs. Sub judice decision annulled. Declaration accordingly. Order 25 for costs as above. 84,

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