clr/1984/1984_3_509.pdf

(1)of the Law—Rebuttable presumption created by the Law which permits the ascertainment of the actualincome oj the insured—And therefore excludes unequal treatment 15 Constitutional Law—Equality—Article 28 of the Constitution— Taxation legislation attacked as infringing the principle oj equality—Test applicable—Social Insurance Law, 1980 (Law 41/1980 as amended) and the Social Insurance(Contributions) Regulations, 1980-1982 not contrary to the above Article 5 Constitutional Law—Right to a deitnl existence and to social security —Article 9 oj the Constitution—Social Inswana Law, 1980 (Law41/1980asamended)andtheSoctalInsurante (Contributions) Regulations, 1980-1982 not contrary to the above Article 20 Constitutional Law—Right to piacttse any piojession οι to idiry onanyoceupation, tradeor business—Artu le25of the Constitution —Protects theaboie nglitfiom duett andnot indued lestiuttons or inttrfeiem<—Soclal Insurantt Lav, 1980 {Law 41/1980 509 Aposlolou and Others v. Republic

(1984)as amended) and theSocialInsurance{Contributions) Regulations, 1980-1982 not. contrary to the above Article. Insurance—Double insurance—Social insurance—No legal or constitutional principle that it is impi-rmissihlc to require somebody to be doubly insured. 5 The applicants challenged the validity of llie decisions of the respondents to impose on them a contribution as self-employed persons for the purposes of the Social Insurance Scheme which came into operation by virtue of the Social Insurance Law, 1980 (Law No. 41 of 1980as amended by Laws Nos. 48 of 1982 lit and 11 of 1983). Some of the applicants were practising lawyersand as such, self-employed persons who byvirtue of sections 3 and 12 of the Law they were obliged to be insured and pay contributions to the Social Insurance Fund established under section 69 of the Law. 15 Under section 13 "The amount of contribution payable in respect of the employment of a self-employed person shall be 15.5% of insurable earnings of which an amount equal to 12% of insurable earnings shall bepayableby himand an amount equalto 3.5% ofsuchearnings shall bepayableout ofthe General 2o Revenue of the Republic"; and under section 2 "insurable earnings*' means "the amount of the:earnings of the insured person on which contributions are payable, under the Law'" and the "earnings" in relation to a self-employed person means "the prescribed amount of income", that is, the amount of income 25 prescribed by the Social insurance (Contributions) Regulations of 1980-1982. By virtue of the provisions of section 73

(1)(d), (e)and (f) of the Law and regulation 18ofthe above Regulations, all the self-employed persons were classified in occupation categories. For every occupational category there was specified 30 a lowest amount of income on which contributions were paid and a maximum amount of income which could be chosen. In accordance with regulation 18

(5)every self-employed person who believed that his real income was lower than the lower income specified for his occupational category was entitled to 35 submit an application for the payment of contributions on the basis of his real income. On the. questions: (

1. a)Whether the imposition for payment of contributions 510 3 C.L.U. 5 10 15 Apostolouand Others v. Republic under the Law and the Regulations is a "συνεισφορά διά καταβολήςφόρου, τέλους ή εισφοράςοιασδή­ ποτε φύσεως", (contribution by way of tax, duty, or rate of any kind whatsoever), that comes witliin the provisions of Article 24* of the Constitutionin which case it has to satisfy the criteria set outtherein, that is it must be a contribution according to ones means towards public burdens and of course imposed by or under the authority of a law, or it is merely, as argued by the Deputy Attorney-General of the Republic onbehalf of therespondents, "ασφάλιστρο" (insurance premium) and as such not coming within the ambit of Article 24 of the Constitution. (
2. h)Whether the relevant provisions of the Law and the Regulations offend Article 28 of the Constitution which safeguards the principle of equality in taxation. (
3. c)Whether the Law as it is creates unequal treatment between the self-employed and non-self-employed persons. 20 25 30 (d)- Whether the Law as amended by Law No.48 of 1982 which was enacted on the 15th October of that year and which in accordance with section 3 thereof came intoforce asfrom the4thOctober,wasunconstitutional. (
4. e)Whether the Regulations offend Article 25 of theConstitution which safeguards the right to practise' any profession or to carry on any occupation, trade or business. (
5. f)Whether the Law and the Regulations interfere with the rights safeguarded by Article 9of the Constitution, namely the right to a decent existence and to social Article 24 of the Constitution provides as follows: " 1 . Every,person is bound to contribute according to his meanstowards the public burdens. 2. No such contribution by way of tax, duty or rale of any kind what­ soever shall be imposed save by or under the authority of a law. 3. No tax, duty or rate of any kind whatsoever shall be imposed with retrospective effect: Provided that any import duty may be imposed as from the date of the introduction of the relevant Bill. 4. No lax, duty or rate ofany kind whatsovcverother thancustoms duties shall be of a destructive or prohibitive nature". 511 Apostolou and Others v. Republic (19W) security, inasmuch as the legislator failed, by making arbitrary provisions and unreasonable interferences in this field by the accumulation of burdens and obligations to the citizen, to give effect to these rights. (
6. g)Whether the Law offends the principle that it is imper- 5 missible to require somebody to be doubly insured asit is the case ofadvocates who have their own special pension fund and they are also required to be contributories to the social insurance scheme as being selfemployed. (
7. h)Whether the Regulations are ultra vires section 73

(1)* of the Law. Held,per A. Loizou, Hadjianastassiou. Malachtos, Demetriades. Stylianides, JJ. concurring and Triantafyllides P. concurring with the outcome,

(1)that Article 9** of the Constitution, which 15 contains specific constitutional rules and a command to the legislature, and the International commitments undertaken by the Republic in furtherance thereof and for the public benefit have cast an obligation on the State to promote the welfare of the individual and, as in this instance, by an embracing 20 Social Insurance System providing benefits for the people in their time of need, such ensuring public burden being met by contributions as prescribed by the law; tliat these contributions are a form of "tax" in the sense of Article 24of the Constitution and fulfil the characteristics of a tax (see Constantinidesv. Ele- 25 ctricity Authority of Cyprus

(1982)3 C.L.R. 798); that this tax satisfies the prerequisites laid down in Article 24 of the Constitution because they are contributions towards a public burden and contributions according to one's means and by no stretch of imagination can be considered either of a destructive or 30 prohibitive nature.

(2)After stating the principles governing the constitutionality of a law imposing taxation on the ground that it infringes the principle of equality—vide pp. 522-523 post: That with the Law as amended an opportunity is afforded Section 73 is quoted at pp. 525-527 post. Article 9 is quoted at p. 519 post. 512 35 lu 3 C.L.R. 5 10 15 Apostolou and Others v. Republic to the insured person to prove his real income which satisfies not only Article 24.1 of the Constitution, but also Article 28, in the sense that there is no levelling of incomes or of classes, and that,consequently, the Law as itnow stands creates a rebuttable presumption that permits the accertamment of the actual income of the insured and therefore excludes unequal treatment

(3)That because of the very nature of a social insurance scheme and thevariety of benefits paid, which incertain instances are very peculiar to the one or the other class, the differentiation is a reasonable one and it appears that it is an internationally and at all times accepted differentiation, that there is, therefore, no discrimination created by the Law and the Regulations offending Article 28 of the Constitution

(4)That the Law as amended by Law 48/1982 is notunconstitutional as it did not impose any tax but merely brought in the rebuttable character of the presumptionwhich was of a beneficial character to the insured who could seek the ascertainment of their actual income as from the date this amending Law came into force 20

(5)That Article 25 of the Constitution protects the right to exercise a profession or to carry on any occupation, trade or business, from direct and not indirect restrictions or inter­ ference, and that the Law and Regulations do not offend the said Article 25 25

(6)That not only there is nointerference with the rights safe­ guarded by Article 9 of the Constitution but on the contrary a promotion of them within the economic potentialities of the Republic 30 35

(7)That there is no legal or constitutional principle to the effect that it is impermissible to require somebody to be doubly insured.

(8)That the Regulations m question are not ultra vires section 73

(1)of the Law. Recourses dismissed. Cases referred to Antomades v. Republic

(1979)3 C L.R 641 at p. 660; United States Railroad Retirement Board ν Futz, 66 L. Ed 2d 368 at pp. 378, 379, 513 Apostolou and Others v. Republic

(1984)Sehweiker v. Wilson, 67 L. Ed. 2d 186 at pp. 195, 197, 198,200; Western and Southern Life Insurance Co. v. State Board of Equalization of California, 68 L. Ed. 2d 514 at pp. 523, 530, 531, 534; Constantinides v. Electricity Authority of Cyprus

(1982)3 C.L.R. 5 798: Papaphilippou v. Republic, I R.S.C.C. 62; Police v. Liveras, 3 R.S.C.C. 65; Psoras v. Republic

(1968)3 C.L.R. 363 at p. 364; Voyias v. Republic

(1974)3 C.L.R. 390 at p. 413; 10 Impalex Agencies Ltd. v. Republic

(1970)3 C.L.R. 361; Papaxenophontos and Others v. Republic

(1982)3 C.L.R. 1037 at p.

1. Recourses. Recourses against the decision of the respondent to impose on 15 applicants a contribution as self-employed persons for the purposes of the Social Insurance Scheme. Chr. Sozos, for applicants in Cases Nos. 116/83 and 144/
2. K. Michaelides with E. Markidou (Mrs.), M. Vassiliou, A. S. Angelides, A. Haviaras and A. Mappourides, for 20 applicants in Case No. 193/
3. E. Vrahimi (Mrs.), for applicants in Case No. 226/
4. L. Loucaides, DeputyAttorney-General of the Republic with A. Papasavvas, Senior Counsel of the Republic and CI. Theodoulou, Counsel of the Republic,for therespondent. 25 Cur. adv. vult. TRIANTAFYLLIDES P.: The first judgment will be delivered by Mr. Justice A. Loizou. A. Loizou J.: By these recourses which have been heard together, the applicants challenge the validity of the decisions of 30 the respondents to impose on them a contribution as self-employed persons for the purposes of the Social Insurance Scheme which came into operation by virtue of the Social Insuiance Law 1980, (Law No. 41 of 1980), as amended by Laws Nos. 48 of 1982 and 11 of 1983, hereinafter to be referred to as "the Law". 35 The facts of these cases are not in dispute. Some of the applicants are practising lawyers and as such, self-employed persons 514 3 C.L.R. Apostolou and Others v. Republic A. Loizou J. who by virtue of sections 3 and 12of the Law they are obliged tobeinsured and pay contributionsto theSocial Insurance Fund established under section 69 of the Law. Under section 13 "The amouat of contribution payable in 5 respect of the employment of a self-employed person shall be 15.5% of insurable earnings of which an amount equal to 12% of insurable earnings shall be payable by him and an amount equal to 3.5%of such earnings shall be payable out ofthe General Revenue of the Republic."' 10 Under section 2 of the Law "insurable earnings" means "the amount of the earnings of the insured person on which contributions are payable under the Law" and the "earnings" in relation to a self-employed person means "the prescribed amount of income", that is, the amount of income prescribed by the 15 Social Insurance (Contributions) Regulations of 1980-
5. Byvirtue oftheprovisions of section 73(l)(d),(e)and (f) ofthe Law and regulation 18of the Regulations, all the self-employed persons are classified in occupational categories. For every occupational category there is specified a lowest amount of in20 come on which contributions are paid and a maximum amount of income which can be chosen. The said categories were established under regulation 18 of the Regulations and are set out in the Schedule to such Regulations. The applicants were classified to the appropriate 25 occupational categories. When the Scheme first came into force a recourse under Article 146of the Constitution was filed by a number of self-employed persons and the judgment of the Full Bench of this Court is reported as Pavlos Angelides and Others v. The Republic

(1982)3 C.L.R., 774. Bythe said judg30 ment it was he!d: (p. 776): 35 "

(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 bye-laws may be ultra vires, on the ground that they are unreasonable and 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. 515 Λ. Loizou J. Apostolou and Others v. Republic

(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 safe­ guards therighttoequality (seeFekkas v. ElectricityAutho- 5 rity of Cyprus,

(1968)1C.L.R. 173 at pp. 183-184); that, moreover,to the extenttowhich contributionstothesche­ meof social insuranceconcerned maybe regarded as con­ tributions accordingto means towards apublic burden, in the sense of Article 24 of the Constitution, the two re- 10 gulations in question result in a contravention of such Article, too; accordingly the administrative acts and decisions complained of have to be annulled". As a result of these judicial pronouncements which were delivered on the 25th June, 1982, and obviously for the purpose 15 of bringing these Regulations within the constitutional principles enunciated therein the said Regulations were amended by the repeal of reg. 18, 19, 20 and their replacement by the new Re­ gulation 18 and 19, published in supplement No. 3tothe Official Gazette of the Republic No. 1808 of the 15.10.82 under Not. 20 No. 259 which read as follows: "18.

(1)For the purposes of payment contributions, the occupational categories of the self-employed shall be as specified in column (a) of the Schedule.

(2)The minimum and maximum weekly amount of income 25 for each occupationalcategory shall betheweeklyamount of basic insurable earnings for the time being in force multiplied by the factor specified in columns (b) and (c), respectively, of the Schedule for each occupational ca­ tegory. 30

(3)Subject to the provisions of paragraphs

(5)and

(6), every self-employed person shall pay contributions on the minimum weekly amount which is specified in paragraph

(2)for the respective occupalional category.

(4)The self-employed may elect to pay contributions on a 35 weekly income up to the maximum amount of income specified in paragraph

(2)for the respective occupational category. 516 3 C.L.R. Apostolou and Others v. Republic A. Loizou J.

(5)If, after an application, a self-employed satisfies the Director that he has a weekly income lower than that specified in paragraph

(2), he shall pay contributions on the amount of his actual income: 5 10 Provided that ifit is proved that the actual income of any self-employed who hasapplied as aforesaid, ishigher than that specified in paragraph

(2), he shall pay contributions on his actual income, but in no case he shall pay contributions on an income which exceedsthe weekly amount of the maximum insurable earnings of the respective occupational category. 20

(6)For the purposes of paragraph

(5), the weekly amount of income of the self-employed person for any contribution year shall be the average weekly amount of his actual income for the actual period of his employment in the calendar year precedingthe contribution yearin which the contributions are payable, and where the self-employed person has not been employed as such in the preceding calendar year, the weekly income which he is reasonably expected to earn out of his employment. 25 19. Any decision of the Director under paragraph

(4)of regulation 18 shall be valid as from the beginning of the quarterly period, as this is defined in paragraph

(2)of regulation 22, for which the relevant application has been made". 15 So in accordance with regulation 18

(5)every self-employed person who beheves that his real income is lower than the lower income specified for his occupational category is entitled to submit an application for the payment of contributions on the 30 basis of his real income. Some of the recourses that have been chosen to be heard together as representative of several others,challengethe validity of the Law and the Regulations as they wereunder Notification No. 259. Regulation 18, however, has been further amended, 35 along with other amendments made by the amending Regulations published under Notification No. 73, in Supplement No. 3, to the Official Gazette of the Republic No. 1853 of the 2nd April, 1983, and the Schedule has also been replaced by a 517 A. Loizou J. Apostolou and Others >. Republic

(1984)new one. These Regulations came into force on the 4th April. 1983, except regulation 3 whose force commenced on the 4th January, 1982. As in one of the recourses before us the sub judice acts were taken on the basis of these latest Regulations my approach to the case will cover both situations as in force 5 prior to and since the 4th April. The new amendments in so far as they affect regulation 18 of the principal regulations, are as follows: "(a) By the deletion from paragraph

(2)of the words 'the weekly amount of basic insurable earnings for the time being in force multiplied by the factor' (second and third lines); and 10 (b) by the insertion immediately after the word 'applica­ tion* in paragraph

(5)(first line), of the words 'in the form prescribed by the Director'". 15 The first point for determination is whether the imposition for payment of contributions under the Law andthe Regulations is a "συνεισφορά δια καταβολής φόρου, τέλους, ή είσφορας οίασδήποτε φύσεως", (contribution by way of tax, duty, or rate of any kind whatsoever), thatcomes within the provisions 20 of Article 24 of the Constitution in which case it has to satisfy the criteria set out therein, that is it must be a contribution according to ones means towards public burdens and of course imposed by or under the authority of a law. or it is merely as argued by the Deputy Attorney-General of the Republic 25 on behalf of the respondents "ασφάλιστρο" (insurance premium) and as such not coming within the ambit of Article 24 of the Constitution. The nature of taxation, and I use this term in its wide sense. falling within Article 24 has been considered in the case οΐ Con- 30 stantinides v. Electricity Authority of Cyprus,

(1982)3 C.L.R. p. 798, where it was found: "that an imposition is a tax if it is found to fulfil certain characteristics, namely, (

1. a)it is compulsory and not optio­ nal,(b)itis imposed or executed by thecompetentauthority, 35 (
2. c)it must be enforceable by law, (
3. d)it is imposed for the public benefit and for public purposes, and (
4. e)it must not 518 3 C.L.R. Apostolou and Others v. Republic A. Loizou J. be for a service for specific individuals but for a service to the public as a whole, a service in the public interest. 5 It does not matter that those who pay the tax do not receive the benefit which others paying the same tax receive, the purpose of the imposition being to help or finance an essential public service which constitutes in the words of Article 24.1 of our Constitution a public burden". Article 9 of the Constitution provides that: 10 "Every person has the right to a decent existence and to social security. A law shall provide for the protection of the workers, assistance to the poor and for a system of social insurance." This Article guarantees two rights - a right todecent existence and a right to social security with which weareconcerned in uii.·, 15 case. This right aims at protecting the individual from unemployment, sickness, disability, widowhood, old age, or the loss of livelihood in circumstances beyond his control. This provision of the Constitution has to be read in conjunction with Article 35 by which "the legislative executive and 20 judicial Authorities of the Republic shall be bound to secure within the limits of their respective competence theefficient provisions of this Part" and when it speaks "of this Part", it means ofcourse Part II ofthe Constitution of which it isthe last Article and whichcontainstheprovision under theheading Fundamental 25 Rights and Liberties. The nature of the contents of Article 9 came under judicial review by the then Supreme Constitutional Court in Papaphilippou v. The Republic, 1R.S.C.C. p.62 in whichit was decided that Article 9 contains specific constitutional rules and a com30 mand to the legislature, but a person cannot by an Administrative Recourse under Article 146.1 of the Constitution seek to remedy an omission of the legislature to enact within a reasonabletime a Law as provided in the second sentence of this Article. Our Constitution infact includes a seriesofArticles guarantee35 ing to the individual certain Social and Economic Rights, and I would like to take advantage of this opportunity and refer briefly to the evolution of such Rights during the last century or so. 519 A. Loizou J. Apostolou and Others v. Republic

(1984)At the end of the 18th century it was generally agreed that all menare free and equal by nature and born possessing inalienable Rights - The Human Rights -. This is to be found in the Declaration of Human Rights of the American and French Revolutions. The Question of Social Rights developed in effect 5 with the industrialization in the 19th century and they can be generally divided into three different groups. The Right to Work, the Right to Social Security, the Right to Social and Cultural Development, whereas the traditional Human Rights can be classified as Liberty Rights. Their basic difference can 10 be seen in the fact that in contrast to the traditional Human Rights the Social Rights do not expect the State to abstain but to interfere in order to changecertain situations or economic and social processes on behalf of persons that need protection. Social Security in various aspects became an important part 15 of legislation of the late 19th century in European countries. After World War I, Social Rights were promoted by the International Labour Organization and they found a place in several Constitutions. There have been further developments and the period after World War II, seemsto show the general acceptance 20 of Social Rights as Human Rights. Articles22-28 ofthe United Nations Universal Declaration on Human Rights of 1948 and the International Covenants on Economic, Social and Cultural Rights of 1966—ratified by Cyprus by Law 14 of 1967 —prove this on the International level, the European Social 25 Charter signed in Tourin in 1961 and ratified by Cyprus, by Law 64 of 1967on the European level. Infact one of its provisions that Cyprus accepted isArticle 12which covers the Right to Social Security, which provides inter alia as follows:"With a view to ensuring the effective exercise of the right 30 to social security, the Contracting Parties undertake:

1. to establish or maintain a system of social security;
2. to maintain the social security system at a satisfactory level at least equal to that required for ratification of international Labour Convention (No. 102) Concerning 35 Minimum Standards of Social Security;
3. to endeavour to raise progressively the system of social security to a higher level;
4. to take steps, by the conclusion of appropriate bilateral 520 3 C.L.R. Apostolou and Others v. Republic A. Loizou J. and multilateral agreements, or by other means, and subject to the conditions laid down in such agreements. in order to ensure: An international commitment has thereby been undertaken 5 and the standards set thereby have to be respected. It is not enough to establish or maintain a system of social security. A State has to raise progressively the system of social security to a higher level. It is pointed out by the Attorney-General of the Republic. 10 Cr. Tornaritis in his study entitled the Social and Economic Rights under the Law of the Republic of Cyprus at p. 10 that: 15 20 "Without adhering to a particular economic or social system a fair balance >s maintained between the individualistic liberal theories of the laisser-faire state of the last century and the social trends of the twentieth century. Thus though the private initiative and free economy arc declared and adhered to nevertheless the private enterprise is checked by state intervention when public interest and benefit so require. The functions and the role of the state contemplated by the constitution are those of the 'welfare state' ". As regards the notion of a "welfare state" Ifindit very useful to refer tothe Iternational Encyclopedia of the Social Sciences, Volume 16 at p. 512 where it is stated: 25 30 35 "The wolfare state isthe institutional outcome of the assumption by a society of legal and therefore formal and explicit responsibility for the basic well-being of all of its members. Such a state emerges when a society or its decision-making groups become convinced that the welfare of the individual (beyond such provisions as may be made 'to preserve order and provide for the common defence') is too important to be left to custom or to informal arrangements and private understandings and is therefore a concern of government. In a complex society such assistance may be given to the individual directly or,just as often, to the economic interest most immediately affecting his welfare. The rubric is a relatively recent one not to be found in the traditional political lexicons, so that the point at which a state, in 521 A. Loizou J. Apostolou and Others v. Republic

(1984)expanding social services to its citizens, earns this label is imprecise and controversial". There is no doubt that this constitutional command and the International commitments undertaken by the Republic in furtherance thereof and for the public benefit, have cast an 5 obligation on theStateto promote the welfare of theindividual and, as in this instance, by an all embracing Social Insurance System providing benefits for the people in their time of need, such ensuing public burden being met by contributions as prescribed bythelaw. Thesecontributions area form of "tax" 10 in the sense of Article 24 of the Constitution, that satisfy the test laid down in the Constantinides case(supra) and which has already been set out in this judgment. As such it has to be examined if it satisfies the prerequisites laid down in the said Article and in particular whether every 15 person is required to contribute according to his means and that suchcontributionsareneitherofadestructive or prohibitive nature. That they are contributions towards a public burden there is no doubt in the light of the obligations of the State to care for the welfare and well being of its citizens. There is 20 also no doubt to my mind that an amount equal to 12%of a person's insurable earnings is but a contribution according to ones means and by nostretch of imagination can beconsidered either of a destructive or prohibitive nature. Social and economic rights cost money and the necessary funds for their 25 maintenance have to come from the citizens who, by so contributingaccordingtotheir meansandwhentheyenjoy the benefit of employment are likea sensible person who saves for a rainy day. Moreovertheprincipleofproportionality isdulyobserved by the provisions of the Law under examination. 30 Thenextpointfor consideration iswhethertherelevantprovisions of the Law and the Regulation offend Article 28 of the Constitution which safeguards the principle of equality in taxation. The principles governing the application of Article 28 of the Constitution in matters of taxation have come under 35 judicial consideration in a number of cases. It is enough for the purposes ofthisjudgment if Irefer to what washeld bythis Court in the case of Serghios Antoniades and others v. The Republic

(1979)3 C.L.R. p. 641 at p. 645: 522 3 C.L.R. 5 10 Apostolou and Others v. Republic A. Loizou J. "That whentheconstitutionality ofalawimposingtaxation is attacked on theground that it infringes the principle of equality, thelegislativediscretionisallowed a great latitude in view of the complexity offiscaladjustment and that in taxation matters there is a broader power of classification by the legislation than in the exercise of legislative power inotherfields;that, moreover, absoluteequalityintaxation cannot be obtained, and it is not really required by the principle of equality; that in matters of taxation the state is allowed to pick and choose districts, objects, persons, methods and even rates of taxation; that a state does not have to tax everything in order to tax something;" In the present case with the amendments effected after the Angelidescase(supra),anopportunity isafforded totheinsured 15 person to prove his real income which satisfies not only Article 24.1 of the Constitution, but also Article 28,in the sense that there is no levelling of incomes or of classes. It may be mentioned here that according to the affidavit sworn by the Director of Social Insurance Services andfiled 20 on behalf of the respondents, about two-thousand applications by self-employed persons were submitted since the amendment of the Regulations, under regulation 18 paragraph 5, thereof for the purpose of ascertaining their actual income and that at least 80%ofthem havebeenaccepted. Consequently theLaw 25 as it now stands creates a rebuttable presumption that permits theascertainment oftheactualincomeoftheinsured andtherefore excludes unequal treatment. Connected with this ground isthe argument that the Law as it is creates unequal treatment between the self-employed and non-self-employed insured 30 persons. InthecaseofAntoniades(supra)itwasheldthatthere wasasound basisfor differentiation betweenself-employed and salaried persons. Inthepresentcasebecauseoftheverynature of a social insurance scheme and the variety of benefits paid, which in certain instances are very peculiar to the one or the 35 otherclass,thedifferentiation isareasonable oneand itappears that it is an internationally and at all times accepted differentiation. Thereistherefore nodiscrimination created bytheLaw and the Regulations offending Article 28 of the Constitution. The next point is that the Law as amended by Law No.48 40 of 1982, which was enacted on the 15th October of that year 523 A. Loizou J. Apostolou and Others v. Republic

(1984)and which in accordance with section 3thereof came into force as from the 4th October, is unconstitutional. Thispoint can be briefly disposed of by pointing out that that amendment did not impose any tax but merely brought in the rebuttable character of the presumption which was of a beneficial character to the insured who could seek the ascertainment of their actual income as from the date this amending Law came into force. 5 The applicants withdrew their contention that the relevant provisions of the Law and the Regulations offended Article 23 of the Constitution, but argued that same offend Article 25 !0 of the Constitution which safeguards the right to practise any profession or to carry on any occupation, trade or business. It has been urged that the burden imposed on the selfemployed by the Law andthe Regulations bythe payment of the contributions set out therein is such that it reaches the limits 15 of a prohibition or a restriction impermissible and contrary to Article 25 of the Constitution. It is a well settled principle that Article 25 of the Constitution protects the right to exercise a profession or to carry on any occupation, trade or business, from direct and not indirect restrictions or interference. Ample 20 authority can be found inter alia in the following cases, The PoliceandLiveras, 3 R.S.C.C. pp. 65-57; Psorasv. TheRepublic,

(1968)3 C.L.R. 363, 364; Antoniadesandothersv. The Republic

(1979)3 C.L.R. 641,659; loannis Voyiasv. The Republic

(1974)3 C.L.R. p. 390, 413; Jmpalex Agencies Ltd. v. The Republic 25

(1970)3 C.L.R. 361; and Antoniades case (supra) at p. 655. Without accepting that the said impositions are of a nature that could be considered as restrictive to or prohibitive of the exercise of the applicants' profession or trade, yet I have no difficulty in arriving at the conclusion, in the light of the afore- 30 mentioned authorities that this ground should also fail. Brief reference may be made also to the ground of Law relied upon on behalf of the applicants that the Law and Regulations in question interfere with the rights safeguarded by Article 9 of the Constitution. Namely the right to a decent existence 35 and to social security, inasmuch asthelegislator failed by making arbitrary provisions and unreasonable interferences in this field by the accumulation of burdens and obligations to the citizen to give effect to these rights. 524 3 C.L.R. 5 Apostolou and Others v. Republic A. Loizou J. I have already dealt at length with the meaning and effect of Article 9and inthelight of the remainingconclusionsreached regarding the nature and extent of the burdens imposed by the Law and the Regulations, it can be clearly said that not only there is no interference with the rights safeguarded thereundei but on the contrary a promotionsof them within theeconomic potentialities of the Republic. Another point which is raised in recourse No. 144/83 by Mr. Sozos to the effect that it offends the principle that it is imper10 missible to require somebody to be doubly insured as it is the case of advocates who have their own special pension fund and they are also required to be contributories to the social insu­ rance schemeas being self-employed. The brief answer isthat the decisions of the Greek Councilof Staterelied upon turn on 15 theinterpretation of particular legislative provisions in existence in Greeceand not applicable to our case and in any event there is no such legal or constitutionalprinciple that I know of. This ground therefore should fail. The last ground relied uponis that the regulations in question are ultravirestheLaw. Thelegal principlesgoverning questions relating to regulations alleged to be ultra vires, the empowering enactments have been summed up by Stylianides, J., in the case of Papaxenophontosand others v. The Republic

(1982)3 C.L.R. 1037 at p. 1044, and I need not refer to them. Suffice 25 it to say that the gist is that when subsidiary legislation is examined with a view to determining whether it is intra or ultra vires, the answer to the question depends in every case on the true construction of the enabling enactment. 20 30 35 In the present case theenabling enactmentis section 73 which in so far as relevant reads as follows: "73.—

(1)The Council of Ministers shall have power to make Regulations generally for the belter carrying into effect of the provisions of this Law and, without prejudice to this generality, may by such Regulations prescribe οι regulate any matter required to be prescribed or regulated; and in particular prescribe or regulate the following: (a) the rate below which earnings constitute negligible earnings; 525 A. Loizou J. Apostolou and Others τ. Republic

(1984)(

1. b)the rate of basic insurable earnings and the ceiling of the insurable earnings; (
2. c)the amount of insurable earnings of any category of employed persons; (
3. d)the classification of self-employed by occupational 5 category; (
4. e)the minimum and maximum amount of income for each occupational category of self-employed persons; (
5. f)theconditionsandtermsunderwhicheach self-employ­ ed person may opt for an amount of income between 10 the lower and the maximum amount of income; (
6. g)the registration of insured persons and employers; (
7. h)any matters incidentalto the payment and collection of contributions including:(
8. i)the manner of calculating or estimating the in- 15 surable earnings of particular classes or categories of employed persons; (
9. ii)the co-ordination thereof with the payment and collection of contributions payable under any other law; (iii) the time of payment of contributions; (
10. iv)the circumstances in which contributions paid without liability may be refunded; (
11. v)theconditionsfor therefund of contributionspaid by an insured person for any contribution year 25 on insurable earnings exceeding theannual ceiling of insurable earnings; (
12. i)the payment of additional charge not exceeding one hundred per cent of the amount of contributionsdue in case of failure to pay contributions contrary to the 30 provisions of this Law; (
13. j)for requiring a qualified medical practitionerattending on or called in to visit a patient, whom he believes to be suffering from a diseasecontractedin thecourse of his employment to send a notice containing such 35 particulars as may be prescribed; 526 20 3 C.L.R. Apostolou and Others τ. Republic A. Loizou J. (
14. k)for thecircumstancesinwhich a personshall bedeemed not to be gainfully occupied". It is clear from the aforesaid provision that the regulations in question are intra vires as leaving aside any other of the 5 particular provisions to be found in the various paragraphs of subsection 1. There is authority in the text of the opening of the said section which enables the Councilof Ministers to make regulations generally for thebettercarrying intoeffect of thepro­ visions of the law and thatthepoints set out in theensuing sub10 paragraphs are without prejudice to the generaUty of the said empowering provision. I have no difficulty in concluding that the regulations in question are intra vires the Law and therefore valid. For all the above reasons these recourses are dismissed but 15 in the circumstances I make no order as to costs. HADJIANASTASSIOU J.: I agree with the judgment of my brother Judge Mr. Justice A. Loizou and I have nothing to add. 20 25 MALACHTOS J.: I also agree with thejudgmentjust delivered by my brother Judge Mr. Justice A. Loizou that these recourses should be dismissed for the reasons given in the said judgment and I have nothing useful to add. DEMETRIADES J.: I have had the opportunity to discuss with my brother Judge Mr. Justice A. Loizou these cases and consider his judgment and I agree fully with it. STYLIANIDES J.: I have had the opportunity to discuss and consider in advance thejudgment of Mr. Justice A. Loizou and I agree with the dismissal of these recourses for the reasons stated in his judgment. 30 35 TRIANTAFYLLIDES P.: I am in agreement with the outcomeof these cases as it is stated in the judgment of my brother Judge A. Loizou. In the case of Antoniades v. The Republic,

(1979)3 C.L.R. 641, 660, Iexpressed the view that the exemption from the obligation to pay special contribution, under the Special Contri­ bution (Temporary Provisions) Law, 1976 (Law 15/76), as amended by the Special Contribution (Temporary Provisions) 527 Triantafyllides P. Apostolou and Others v. Republic

(1984)(Amendment) Law, 1977 (Law 22/77), of any person to the extent to which his income consisted of emoluments was an unwarranted infringement of the principle of the universality of taxation resulting in unequal treatment contrary to Articles 24 and 28 of the Constitution. The present cases are, however, 5 distinguishable from the Antoniades case, supra, inasmuch as all persons, irrespective oftheir sources of income and including employees and self-employed persons, are obliged to contribute for the purposes of the Social Insurance scheme which was estabUshed, and is being operated, under the provisions of the 10 Social Insurance Law, 1980 (Law 41/80), as amended by the Social Insurance (Amendment) Law, 1982 (Law 48/82), and the Social Insurance (Amendment) Law, 1983 (Law 11/83), as well as under the provisions of the relevant Regulations. Itiscorrect that the treatment ofemployeesandself-«mployed 15 persons under the Social Insurance scheme in question, both as regards the nature and the extent of their contributions as well as their entitlement to benefits, isnot thesame but 1 am satisfied that any differentiations which exist, in this respect, are, in the light of all pertinent considerations, reasonable and, conse- 20 quently,theydo not resultinunequaltreatment offending against Articles 24 and 28 of the Constitution. Such differentiations are an expression of social policy of the State, as it has been adopted by the Legislature, and this Court cannot substitute its own views in the place of those of the Legislature as regards 25 the advisability of the said policy. It is useful, at this stage, to refer to, inter alia, the case of United States Railroad Retirement Board v. Fritz, 66 L. Ed. 2d 368, where Justice Relinquish in delivering the majority opinion of the Supreme Court of the United States of America said 30 (at pp. 378, 379): "Where, as here, there are plausible reasons for Congress* action, our inquiry is at an end. It is, of course, 'constitutionally irrelevant whether this reasoning in fact underlay the legislative decision*, Flemmingv. Nestor, 363 US, at 35 612, 4 L Ed 2d 1435, 80 S Ct 1367,because this Court has never insistedthat a legislativebodyarticulate itsreasonsfor enactinga statute. Thisisparticularlytruewherethelegislature must necessarily engage in a process of line-drawing. 528 3 C.L.R. 5 Apostolou and Others v. Republic Triantafyllides P. The'task of classifying persons foi benefits inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line'. Mathews v. Diaz, 426 US 67, 83-84. 48 Led 2d478,96SCt 1883

(1976).and the fact the linemight have been drawn differently at some points is a matter for legislative, rather than judicial, consideration". Also, in Schweikerv. Wilson, 67 L. Ed. 2d 186,Justice Blackmun, in delivering the majority opinion of the U.S.A. Supreme 10 Court, stated the following (at pp. 195, 197, 198, 200): 15 20 25 30 35 "The equal protection obligation imposed by the Due Process Clause of the Fifth Amendment is not an obligation to provide the best governance possible. This is a necessary result of different institutional competences, and its reasons are obvious. Unless a statute employs a classification that is inherently invidious or that impinges on fundamental rights, areas in which the judiciary then has a duty to intervene in the democratic process, this Court properly exercises only a limited review power over Congress, the appropriate representative body through which the public makes democratic choices among alternative solutions to social and economic problems. See San Antonio School District v. Rodriguez, 411 US 1, 36 L Ed 2d 16, 93 S Ct 1278

(1973). At the minimum level, this Court consistently has required that legislation classify the persons it affects in a manner rationally related to legitimate governmental objectives. See, e.g., Dandridgc v. Williams, 397 US471, 25 L Ed 2d 491, 90SCt 1153

(1970); Mathews v. De Castro, 429 US 181, 50 L Ed 2d 389. 97 S Ct 431

(1976). Thus, the pertinent inquiry is whether the classification employed in s. 1611(e)

(1)(B) advances legitimate legislative goals in a rational fashion. The Court has said that. although this rational-basis standard is 'not a toothless one,' Mathews v. Lucas, ATI US 495, 510. 49 L Ed 2d 651, 96 SCt 2755

(1976), it does not allow us to substitute our personal notions of good public policy for those of Congress: 'In the area of economics and social welfare, a State 529 rriantafyllides P. Apostolou and Others v. Republic

(1984)does not violate the Equal Protection Clause (and correspondingly the Federal Government does not violate the equal protection component of the Fifth Amendment) merely because the classifications made by its laws are imperfect. If the classification has 5 some 'reasonable basis', it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequity. Lindsley v. Natural Carbonic Gas Co., 220 US. 61, 78 (55 L Ed 369, 31 S Ct 337)*. 10 Dandridgev. Williams, 397 US, at 485, 25 L Ed 2491, 90 S Ct 1153. The Court also has said: 'This inquiry employs a relatively relaxed standard reflecting the Court's awareness that thedrawing of linesthat createdistinctions ispeculiarly 15 a legislative task and an unavoidable one. Perfection in t making the necessary classifications is neither possible nor necessary*. Massachusetts Bd. of Retirement v. Murgia, 427 US 307, 314, 49 L Ed 2d 520, 96 S Ct 2562

(1976). See also United States Railroad Retirement Bd. v. Fritz, 20 449 US 166, 66 L Ed 2d 368, 101 S Ct 453

(1980). As long as the classificatory scheme chosen by Congress rationally advances a reasonable and identifiable governmental objective, we must disregard the existence of other methods of allocation that we, as individuals, perhaps 25 would have preferred. This Court has granted a 'strong presumption of constitutionality* to legislation conferring monetary benefits, Mathews v. De Castro, 429 US, at 185,50L Ed 2d 389,97 S Ct 431, because it believes that Congress should have 30 discretion in deciding how to expend necessarily limited resources. Awarding this type of benefits inevitably involves the kind of line-drawing that will leave some comparably needy person outside the favored circle" Lastly, in Western and Southern Life Insurance Company 35 v. State Board of Equalizationof California,68 L. Ed. 2d 514, 530 3 CX.R. Apostolou and Others v. Republic Triantafyllides P. Justice Brennan in delivering the majority opinion of the U.S.A. Supreme Court said (at pp. 523, 530, 531 and 534): 5 It» i5 20 25 30 35 "The Fourteenth Amendment forbids the States to deny "toany person within (their)jurisdiction the equal protection of the laws' but docs not prevent the States from making reasonable classifications among such persons. See Lehnhausen v. Lake Shore Auto Parts Co., 410 US 356, 359-360, 33 L Ed 2d 351, 93 S Ct 1001

(1973); Allied Stores of Ohio v. Bowers, 358 US 522, 526-527, 3 L Ed 2d 480, 79 S Ct 437, 9 Ohio Ops 2d 321, 82 Ohio L Abs 312

(1959). In determining whether a challenged classification is rationally related to achievement of a legitimate state purpose, we must- answer two questions:

(1)Does the challenged legislation have a legitimate purpose?, and

(2)Was it reasonable for the lawmakers to believe that use of the challenged classification would promote that pur­ pose? See Minnesota v. Clover Leaj Creamery Co., 449 US, at 4 6 1 ^ 6 3 , 66 L Ed 2d 659, 101 S Ct 715; Vance v. Bradley, 440 US 93, 97-98, 59 L Ed 2d 171 v 99 S Ct 939

(1979). Parties challenging legislation under the Equal Protection Clauses cannot prevail so long as 'it is evident from all the considerations presented to (the legislature), and those of which we may take judicial notice, that the question is at least debatable'. United States v.. Carolene Products Co., supra, at 154, 82 L Ed.1234', 58 S Ct 778*'. The above case-law has strengthened considerably my view that it has not been shown to my satisfaction that thelegislative provisionsνwhich are challenged in the present proceedings arc unconstitutional. Before concluding this judgment I must stress emphatically that what has weighed very much with me in deciding that, in the present intsance, there,does not exist unequal' treatment, as complained of by the applicants, is the express and unqualified statement of counsel for the respondent, during the hearing of these cases, that the basis for the compulation of the amouni 53 l· Triantafyllides P. Apostolou and Others v. Republic

(1984)payable bywayof contribution to the Social Insurance scheme concerned, by every self-employed person, is taken to be his net income after deduction oftheexpenses incurred forthepurpose of practising his profession or carrying on his occupation, trade or business. TRIANTAFYLLIDESP.: Thepresent recourses areunanimously dismissed, but with no order as to their costs. Recourses dismissedwith no order as to costs. 532 5