(1982)1982 April 29, June 25 [TRIANTAFYLLIDES, P., HADJIANASTASSIOU, MALACHTOS, DEMETRIADES, SAVVIDES, JJ.] IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION PAVLOS ANGELIDES AND OTHERS, Applicants, v. THE REPUBLIC OF CYPRUS THROUGH THE DIRECTOR OF SOCIAL INSURANCE SERVICES, Respondent. (CasesNos. 370/80, 436/80, 476/80, 501/80, 14/81, 15/81, 16/81, 17/81, 53/81, 58/81, 63/81, 77/81, 136/81, 154/81).· Social Insurance—Self-employed persons—Professional categories of contributors—Lowest and highest insurable income in respect of each category—Established through the joint application of regulations 9 and 18 of the Social Insurance Regulations, 1980 —Which when applied together are unreasonable and therefore invalid—And entail such arbitrary results and unequal treatment even among persons is one and the same profession that they infringe Article 28 of the Constitution which safeguards the right to equality—-And, also, result in contravention of Article 24 of the Constitution. Constitutional Law—Constitutionality of legislation—Social Insurance Regulations, 1980, regulations 9 and 18—When applied together they infringe Articles 24 and 28 of the Constitution. Delegated Legislation—Bye-laws—Jurisdiction of testing their validity by their reasonableness—Principles applicable. Provisional order—Practice—Recourses against validity of acts taken under the Social Insurance Law, 1980 (Law 41/80)— Provisional order made ex proprio motu by the Court, after conclusion of hearing of recourses, suspending effect of sub judice 774 3 CUR. Angelides and Others \. Republic acts tilldelivery ofjudgment—Rule 13 of the Supreme Constitutional Court Rules of Court. The applicants in theserecourses challenged the decisions and acts of the respondent Director of Social Insurance Services 5 in the Ministry of Labour and Social Insurance, by means of whicheach oneof themwasclassified, asaself-employed person in one of the categories of contributors for the puiposes of theSocialInsurance Schemewhichcameinto operation byvirtue of the Social Insurance Law, 1980(Law 41/80). The said cate10 gories were established under regulation 18 of the Social Insurance (Contributions) Regulations of 1980 which for the purposes of payment of contributions, made provisions about professional categories of self-employed persons and, also, provision as to how the lowest and highest insurable income, 15 in respect of each professional categoiy, is computed. Regulation 9 of the above Regulations provided that the basic weekly insurable emoluments were C£14 weekly and C£728 annually. Sections 12 and 13 of Law 41/80 provided about the obligation of self-«mployed persons to contribute for the 20 purposes of the aforementioned scheme and about the extent of their contributions. Many of the applicants in the present recourses were advocates; and by virtue of the above provisions a self-employed advocate, from the very first moment when he commences his career, was, by the operation of the above 25 Law, and without having to prove the contrary, presumed to have weekly insurable emoluments amounting at least to C£56 and he was required to pay contributions amounting to 12 per cent of such emoluments, that is C£6.720 mils per week. Moreover a professional person's contribution was not - 30 - - obligatorily increased when, with the passage-of time-and in the normal course of events, he started earning more than at the beginning of his career. Unless he himself opted to pay a contribution based on a higher amount of insuiable emoluments, which in any event could not be treated as exceeding, 35 inthecasefor example of aself-employed advocate,the amount of C£84 per week, he would continue paying a contribution based, for the whole of the time when he was a contributor, on his lowest presumed insurable emoluments, that is C£56 per week. 40 In the course of the hearing of the above recourses Counsel 775 Angelides and Others v. Republic
(1982)for the respondents applied for an adjournment of the hearing for a period of at least two months and stated that during these two months no criminal proceedings will commence or proceed against the applicants. Held, (I) on the application for adjournment: 5 These cases will be adjourned for judgment to June 25, 1982; that in view of the nature of these cases, including the consequences entailed under the relevant Law in case of non-compliance of the applicants with the administrative acts or decisions, which are challenged in thesecases,and inviewoftheconclusions 10 which this Court reached till now in considering these cases, it has decided to take the rather exceptional course of making at this stage, ex proprio motu, under rule 13 of the Supreme Constitutional Court Rules of Court, a provisional order suspending, till the date of the delivery of the judgment, the 15 effect of all the sub judice acts or decisions, because it feels that this is a course required in the interests of justice. Held, (II) on the merits of the recourses:
(1)That regulations 9 and 18 of the Social Insurance (Contributions) Regulations of 1980, are delegated legislation in the same way as bye-laws; that buy-laws may be ultra vires, on the ground that they are unreasonableand therefore invalid; that the joint application of regulations 9 and 18 of the above Regulations produce unjust and unreasonable results and are, therefore, when applied together unreasonable. 20 25
(2)That regulations 9 and 18 when applied together entail such arbitrary results and unequal treatment, inter alia, even among persons in one and the same profession, that they infringe Article 28 of the Constitution which safeguards the right to equality (see Fekkas v. Electricity Authority of Cyprus
(1968)30 1 C.L.R. 173 at pp. 183-184); that, moreover, to the extent to which contributions to the scheme of social insurance concerned may be regarded as contributions according to means towards a public burden, in the sense of Article 24 of the Constitution, the two regulations in question result in a contravention of 35 such Article, too; accordingly the administrative acts and decisions complained of have to be annulled. Sub judice decisions annulled. 776 3 C.L.R. Angelides and Others v. Republic J • 5 10 15 20 25 30 35 Cases referred to: Slattery v. Naylor [1888] 13 A.C. 446 at p. 452; Krusev. Johnson [1898] 2 K.B. 91 at pp. 96, 99-100; Arlidge v. Mayor,Aldermen, andCouncillors of the Metropolitan Boroughof Islington[1909] 2 K.B. 127 at pp. 134-135; ReptonSchool Governors v. Repton RuralDistrictCouncil [1918] 2 K.B. 133 at pp. 137-138; Townsend(Builders) Ltd. v. Cinema NewsandProperty Management Ltd. [1959] 1 W.L.R. 119; Fekkasv. The ElectricityAuthority of Cyprus
(1968)1 C.L.R 173 at pp. 183-184; Republicv. Georghiades
(1972)3 C.L.R.
- Recourses. Recourses against the decisions of the respondent Director of Social Insurance Services whereby each one of the applicants wasclassified, as aself-employed person,in one ofthe categories of contributors for the purposes of the social insurance scheme which came into operation by virtue of the Social Insurance Law, 1980 (Law 41/80). P. Angelides appears in person as the applicant in case 370/80 and for the applicants in case 136/
- E. Vrahimi(Mrs.), for the applicants in case 436/
- A. Koumis appears in person as an applicant and for the other applicants in case 476/
- C. Mavrantonis appears in person as the applicant in case 501/
- L. Georghiadou(Mrs.) appears in person as an_applicant and for the other applicant in case 14/
- A. S. Angelides appears in person as an applicant and for the other applicants in case 15/
- E. Markidou (Mrs.) appears in person as an applicant and for the other applicants in case 16/81 and for the applicants in case 17/
- Chr. Demetriou (Mrs.), for the applicant in case 53/
- A. Haviaras, for the applicants in case 58/
- C. Loizou, for the applicants in case 63/
- »G. Karapatakis, for the applicants in case 77/
- Chr.Sozosappears in person astheapplicant incase 154/
- 777 Angelides and Others v. Republic
(1982)R. Gavrielides, Senior Counsel of the Republic, for the respondent. Cur. adv. vult. April 29, 1982 Mr. Gavrielides: Your Honours, at this stage I wish to 5 applyfor anadjournment ofthehearingofthepresentrecourses for a period of at least two months. I am authorized by the respondent to state that duringthe period of thesetwo months he is prepared to examine the possibility of effecting some changes to the "system of presumed income" and of amending 10 the relevant Regulations accordingly. Furthermore, I am authorized by the respondent to state that during these two months no criminal proceedings will commence or proceed against the affected applicants. AH Counsel for the applicants object to the adjournment. 15 Court: We do not think that weneed to hear counsel for the applicants in reply to counsel for the respondent. We shall adjourn these cases for judgment to June 25, 1982, at 9.30 a.m. In view of the nature of these cases, including the conse- 20 quences entailed under the relevant Law in case of non-compliance of the applicants with the administrative acts or decisions, which are challenged in these cases, and in view of the conclusions which we have reached till now in considering these cases, we have decided to take the rather exceptional 25 course of making at this stage, exproprio motu, under rule 13 of the Supreme Constitutional Court Rules of Court, a provisional order suspending, till the date of the delivery of our judgment, the effect of all the sub judice acts or decisions, becausewe feel that this is a course required inthe interests of 30 justice. June 25,1982 TUANTAFYLUDES P. read the following judgment of the Court. The several applicants in these cases,which have been heard together in view of their nature, challenge, in effect, 35 decisions and acts of the respondent Director of Social Insurance Services, in the Ministry of Labour and Social Insurance, by means of which each one of them was classified, as a self-employed person, in one of the categories of contri- 778 3 C.L.R. Angelides and Others v. Republic Trlantafyllides P. butors for the purposes of the social insurance scheme which came into operation by virtue of the Social Insurance Law, 1980 (Law 41/80). The said categories were established under regulation 18of 5 the Social Insurance (Contributions) Regulations of 1980(No. 240in the Third Supplement, Part I, to the Official Gazette of August 29, 1980) and are set out in the Schedule to such Regulations. Sections 12 and 13 of Law 41/80 provide about the obli10 gation of self-employed persons to contribute for the purposes of the aforementioned scheme and about the extent of their contributions. Section 73
(1)of the same Law empowers the Council of Ministers to make Regulations regarding, inter alia, the clas15 sification of self-employed persons in professional categories and other related matters (sec, in particular, paragraphs (d) and (c) of sub-section
(1)of section 73). Regulation .9 of the aforementioned Regulations provides that the basic weekly insurable emoluments are C£14 weekly 20 and C£728 annually; and regulation 18 of the same Regulationsstatesthat, for thepurposes ofpayment ofcontributions, thereatespecified in columns (
- a)(b)and-(
- c)ofthe Scheduleto the Regulations professional categories ofself-employed persons and provision is, also, made as to how'the lowest and highest 25 insurable income, in respect of each professional category, is computed. . - It is useful .to illustrate the operation of the aforesaid legislative provisions by taking, as an example, the case of an advocate, especially as many of the applicants in the present 30 recourses are advocates. By virtue of such provisions a selfemployed advocate, from the very fiist moment when he commences his career, is, by operation of law, and without having the right to prove the contrary, presumed to have weekly insurable emoluments amounting at least to C£56 and he is re35 quired to pay contributions amounting to 12 per cent of such emoluments, that is GE6.720 mils per week. It is noteworthy that a professional person's contribution isnot obligatorily increased when,with the passage oftime and 779 Triantafyllides P. Angelides and Others v. Republic
(1982)in the normal course of events, he starts earning more than at the beginning of his career. Unless he himself opts to pay a contribution basedonahigheramount ofinsurableemoluments, which in any event cannot be treated as exceeding, in the case for example of a self-employed advocate, the amount of C£84 5 per week, he will continue paying a contribution based, for the whole ofthetimewhenheisa contributor, onhislowest presumed insurable emoluments, that is C£56 per week. Itisuseful to point out, too,that incase476/80,which isone of the casesnow before us,all theapplicanlii aredisplaced self- 10 employed advocates and each one of them isreceiving by way of refugee allowance from the Advocates' Pension Fund C£20 monthly. Yet, by the operation of the aforementioned Regulations,theyareboundtopayapproximatelyC£l perworking day as contribution to the social insurance scheme in question. 15 In the light of the foregoing wehave reached the conclusion that thejoint application ofregulations 9and 18ofthe relevant Regulations produce unjust and unreasonable results. The said regulations 9 and 18 are delegated legislation, in the same way as bye-laws. 20 As regards thejurisdiction of testing the validity of bye-laws bytheir reasonableness it waspointed out bythe Privy Council, in England, in Slattery v. Naylor, [1888] 13 A.C. 446, 452, that it was originally applied in such cases as those of manorial bodies, towns, or corporations having inherent powers or 25 general powers conferred bycharter of making such legislation and that as new corporations or local administrative bodies have arisen the samejurisdiction has been exercised over them. In Kruse v. Jolmson [1898] 2 K.B. 91, Lord Russell of Killowen C.J. said the following (at pp. 96, 99-100): 30 "It is objected that the by-lawis ultra vires,on the ground that it is unreasonable and therefore bad. It is necessary, therefore, to see what is the authority under which the by-law in question has been made, and what are the relations between its framers and those affected by it. 35 But first it seems necessary to consider what is a bylaw. A by-law, of the class we are here considering, I 780 3 CX.R. 5 10 15 20 25 30 35 Angelides and Others v. Republic TriantafyMdes P. take to be an ordinance affecting the public, or some portion of the public, imposed by some authority clothed with statutory powers ordering something to be done or not to be done, and accompanied by some sanction or penalty for its non-observance. It necessarily involves restriction of liberty of action bypersons who come under itsoperationastoactswhich,butfor theby-law,theywould be free to do or not do as they pleased. Further, it involves this consequence - that, if validly made, it has the force of law within the sphere of its legitimate operation: Edmonds v.Master &c. of theCompany of Watermen and Lightermen.(\) But, when the Court is called upon to consider the bylawsofpublic representative bodies clothedwith theample authority which I have described, and exercising that authority accompanied by the checks and safeguards which have been mentioned, I think the consideration of such by-laws ought to be approached from a different standpoint. They ought to be supported if possible. They ought to be, as has been said, 'benevolently' interpreted, and credit ought to begiven to those who have to administer themthat they will bereasonably administered. This involves the introduction of no new canon of construction. But, further, looking to the character of the body legislating under the delegated authority of Parliament, to the subject-matter of such legislation, and to the natute and extent of the authority given to deal with - matters which concern them, and in the manner which to themshall seem meet, I think courts ofjustice ought to be slow to condemn as invalid any by-law, so made under such conditions, on the ground of supposed unreasonabltncss. Notwithstanding what Cockburn C.J. said in Baileyv. Williamson
(2),an analogous case, I do not mean to say that there may not be cases in which it would be the duty of the Court to condemn by-laws, made under such authority as these were made, as invalid because unreasonable. But unreasonable in what sense? If, for
(1)[1855] 24 LJ. (M.C.) 124.
(2)[1873] L.R. 8 Q.B. 118, at p. 124. 781 IriantafjHides P. Angelides and Others v. Republic
(1982)instance, they were found to be partial and unequal in their opeiation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justi- 5 fication in the minds of reasonable men, the Court might well say, 'Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires.' But it is inthissense, and in this sense only, as Iconceive, that the question of unreasonableness can properly be 10 regarded. A by-law is not unreasonable merely because particular judges may think that it goes further thanIG prudent or necessary or convenient, or because it is not accompanied by a qualification or an exception which somejudges may think ought to bethere. Surelyit is not 15 too much to say that in matters which directly and mainly concern the people of the country, who have the right to choosethosewhomtheythink best fitted to represent them in their local government bodies, such representatives may be trusted to understand their own requirements rxttcr 20 than judges. Indeed, if the question of the validity of by-laws were to be determined by the opinion of judge asto whatwasreasonableinthenarrowsenseofthat word, the cases in the books on this subject are no guide; for they leveal, as indeed one would expect, a wide diveisity 25 of judicial opinion, and they lay down no principle or definite standard by which reasonableness or unreasonableness may be tested." In Arlidge v.Mayor,Aldermen andCouncillors of the Metropolitan Borough of Islington, [1909]2K.B. 127,Lord Alverstone 30 C.J. stated the following (at pp. 134-135): "By-law 17 provides that 'subject to the provisions of these by-laws the landlord of a lodging-house shall, in the month of April, May or June in every year, cause every part of the premises to be cleansed.' That is the material 35 part of the by-law. The rest of the by-law prescribes the method of cleansing certain parts of the premises. By-law 21 imposes a penalty for breach of any of the by-laws. If by-law 17had used somesuch wordsas 'take reasonable steps' or 'take reasonable means'to causeevery part of the 40 782 3 C.L.R. 5 10 15 20 25 Angelides and Others *. Republic Triantafyllldes P. premises to be"cleansed, or if the by-law had first imposed the duty upon the tenant with a right to proceed against the landlord where the latter was in a position to enforce performance ofthe duty, Ido not saythat it might not have been valid, tt seems to me that there are not a few forms in which this by-law would be valid, but for the reasons which have been urged upon us on behalf of the appellant I think that this by-law goes too far. It imposes an imperative obligation upon every landlord to cause the premisesto becleansed without regard to the position in which the landlord may be. I do not rest myjudgment upon the fact that the landlord may be an agent employed by an absent owner to collect the rents and look after the property, because I recognize that it may be necessary for the enforcement of the sanitary provisions of the Act to fasten the liability on the agent of the owner, though apart from the Act there may be no duty upon him personally to cause the work to be done. But this by-law seems to mc to go beyond anything which the necessity of the case demands. An absolute duty is imposed on eveiy landlord to cause the premises to be cleansed, and a penally is imposed for breach of that duty, when the landlord may be quite unable to carry out the work without breaking a contract or committing a trespass. The by-law is therefore unreasonable and bad." Darling J., also, in the same case, said (at p. 135): "It is always difficult to say in any particular case whether - - or not a by-law oversteps the-limits of reasonableness; but in this case I have come to the conclusion that the bylaw is unreasonable and goes beyond theauthority intended 30 to be conferred by the Act under which it purports to be made." In Repton School Governorsv. Repton RuralDistrict Council, [1918] 2 K.B. 133, Pickford L.J. said the following (at pp. 137-138): 35 "It is an important case, because it affects a very great number of by-laws throughout the country. I quite agree that by-laws, especially those of public bodies, should be approached from the point of view of upholding them, if 783 TrianUifyllides P. Angelides and Others v. Republic
(1982)possible, and should be, as it has been described, bene volently interpreted; but still they must be reasonable. Γthink Bailhache J. has stated the considerations to be applied quite accurately as follows
(4): 'Onemaycertain ly add this -that if theeffect in a given case, which might 5 be of frequent occurrence, of construing a by-law in a particular way would lead to a result quiteunnecessary for the protection of the public health, and would impose a serious restriction upon the ordinary rights of propsrty owner with no good object, I think onewould be entitled 10 tosay thattheby-lawwasvoid because itwasunreasonable. One must of course becareful to sec thattheresult issuch as no onewould desire,and would in itself be absurd, but it is found to be so, than Ithink oneis entitled,andindeed bound, to say that such a by-law is bad for unreasonable- 15 ness.' The question is not whether it is possible in some particular cases to find a use of the by-lawwhich is reason able, but whether the by-law itself looked at in the light of all the cases to which it applies is so vague or so un- 20 leasonablc as to be invalid." It is useful to point out that the aforequoted dicta of Lord Russell of Killowen in Krusev. Johnson, supra, were applied, many years later, as being still correct, in Townsend (Builders) Ltd. v. CinemaNews and PropertyManagement Ltd., [1959] 25 1 W.L.R. 119. For the same reasons for which we have already held that regulations 9 and 18 of the Regulations in question are, when applied together, unreasonable, we, also, find that they entail arbitrary results and unequal treatment,inter alia even among 30 persons in one and the same profession, that they infringe Article 28 of the Constitution which safeguards the right to equality. In this respect we draw attention to the following passage from thejudgment in Fekkas v. TheElectricity Autho rity of Cyprus
(1968)1 C.L.R. 173 (at pp. 183-184): 35 "In applying a constitutionalprovision, such as Article 28, a Court can only interfere with the validity of legislation if the legislative enactmentconcernedis clearly unreason able or arbitrary; the Court cannot substitute its own 784 3 CX.R. Angelides and Others v. Republic Triantafyllides P. discretion, in the place of the discretion of the Legislature, once there do exist circumstances which could reasonably lead to the distinction or differentiation introduced by an enactment. 5 As Mr. Justice Brewer has put it in Bachtel v. Wilson, (204 U.S. 36; 51 Law. ed. 357):Ί η short, the selection, in order to become obnoxious to the 14th Amcndment'- ]0 of the U.S.A. Constitution which safeguards equal protection of the laws 'must be arbitrary and unreasonable; not merely possibly, but clearly and actually so'." Furthermore, to the extent to which contributions to the scheme of social insurance concerned may be regarded as 15 contributions according to means towards a pubhc burden, in thesense of Article 24 of the Constitution, we are of the view, for the reasons already stated in this judgment, that the two regulations in question result in a contravention of such Article, too. 20 25 For all the above reasons the administrative decisions and acts which are complained of in thepresent recourses have to be annulled; and, once we have reached this conclusion, it will be of no use for the purposes of these proceedings to decide on any other issues (see, also, in this connection, The Republic v. Georghiades
(1972)3 C.L.R. 594). Sub judice decisions annulled. 785