(1984)1984 June Π [A. Loizou, J.] ΓΝ THE MATTER OF ARTICLE 146 OF THE CONSTITUTION CHRISTODOULIDES BROTHERS LTD., Applicants, THE REPUBLIC OF CYPRUS, THROUGH THE DIRECTOR OF THE DISTRICT LANDS OFFICE, Respondent. (Case No. 548/83). Department of Lands and Surveys (Fees and Charges) Law, Cap. 219 (as amended by Law 31/76)—Transfer by a general or limited partnership to a successor to it company—Refund of transfer fees—Prerequisites—Section 9
(1)of the Law and its proviso. On the 27th January, 1978 the Partnership Christodoulides 5 Bros., which was dissolved on the 1st May, 1974, transferred to the applicants,a limited company registered undertheCompanies Law, Cap. 113, two pieces of immovable property by a declara tion of transfer made at the District Lands Office Nicosia; and an amount of C£2,500 was paid as transfer fees. On the 13th 10 July, 1983 the applicant Company invoking the provisions of rection 9* of the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, as amended by Law No. 31/76, applied to the respondent District Lands Officer, Nicosia for the refund to them of the aforesaid fees. The respondent refused** to 15 make the refund applied for on the ground that the prerequisites laid down by the said section 9 were not satisfied because on the date of the transfer the only shareholders of the transferee company were not the partners of the transferor partnership. Hence this recourse in which the sole issuewas theconstruction of s. 9
(1)of Cap. 319 and the proviso thereto. • Section 9 is quoted at pp. 619-620 post. •* The refusal is quoted at p. 618 post. 616 20 3 C.L.R. 5 10 15 20 25 30 35 Christodoulides Bros. v. Republic Held, that the stand of the respondent >s the correct one; that the two basic prerequisites of the proviso are conjunctive and not disjunctive and the expression "close relatives" refers exclusively to the second prerequisite and not to tie first; that the proviso applies to the ca^e of a transfer of immovable pro perty fiom a partnership to a company whineverfirst, the only shareholders of the transfeae company art the partners of the transferor partnership and secondly when proof satisfying the Director is produced thatduring a period offiveyears following the date of the transfer, no person other than those who at the time of the Declaration of transfer were shareholders of the company and their close relatives acquired any share in thecom pany; that the only permissible exception to the acquisition of shares during thosefiveyears, apart from close relatives, is in the case of acquisition by reason of death; accordingly the recourse must fail. Application dismissed. Recourse. Recouise against the refusal of the respondent to refund to applicants ihe transfei fees collected on the day of transfer of applicants' properties. P. Sarris, for the applicants. A. Vladimirou, for the respondent. Cur. adv. vult. A. Loizou J. read the following judgment. By the present recourse the applicant Company claims: "(a) A Declaiation of the Court that the decision of the respondent dated 18.10.1983 by which he refused to refund the transfer fees which were collected on the day οι the transfei of properties F.697 and F.698 in the village of Latsia, as per the Declaration of Regi stration D.566/78, is null and void and/or contrary to law and/or without legal effect and/or same has been taken in abuse and/or in excess of power, and/or, (b) A Declaration and/or judgment of the Court that the applicants are entitled to the refund of the transfer offees which they paid tothe respondentfor theproper ties F. 697 and F. 698 in the village of Latsia as per Declaration of Sale D.566/78". 617 Λ. Loizou J. Christodoulides Bros. v. Republic
(1984)The facts of the case are not in dispute The applicants are a limited company registered under the Companies Law, Cap.
- On the 27th January, 1978, by a Declaration of Transfer made at the District Lands Office, Nicosia, two pieces of immo vable property were transferred by the partnership Christodoulides Bros., the partners of which were Solis Christodoulides and Theoclis Christodoulides, and which was dissolved on the 1st May, 1974, to the applicant Company. An amount of C£2,500.- was paid as transfer fees. 5 On the 13th July, 1983, the applicant Company invoking the 10 provisions of section 9 of the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, as amended by Law No. 31/76, applied to the District Lands Officer, Nicosia, for the refund to them of the aforesaid fees. The decision of the res pondent by which such refund was refused was communicated 15 to the applicant Company by letter dated the 18th Octobci, 1983, which reads as follows:"With reference to your application dated 13th July, 1983, for the refund of thetransfei fees which were collected on the day of the transfer of properties F.697 and F.698 20 in the villagj of Latsia in accoidance wilh the Declaration D 566/78, I inform you that one of the necessary prere quisites which are mentioned in the proviso to subsection 1 cf section 9 of Cap. 219 for the refund of fees, is that on the date of the transfer the only shareholders of the trans- 25 feree company must be the partners of the transferor part nership or company. In your case this prerequisite is not satisfied and so there is no question of the refund of fees". As against this decision, thepresent recourse was filed, but 30 the admitted facts of the case have to be completed. On the date of the transfer the shareholders of the transferee applicantcompany were:
- Theoclis Christodoulides
- Solon Christodoulides
- Irene Christodoulidou
- loannis Christodoulides
- Marianna Christodoulidou. 618 35 3 CX.R. 5 10 Christodoulides Bros. \. Republic Λ. Loizou J. Irene Christodoulidou is the wife of Solon Christodoulides and loannis and Marianna are his children. Partners of the transferor partnership "Christodoulides Bros", were only the first two, as it appears from the Certificates of the Official Receiver and Registrar of Companies attached to the opposition, Moreover, the relevant file of the respondent has been pioproduced as exhibit
- In it there is a certificate to the effect that Solon and Theoclis are brothers from the same father and mother, in addition to a statement as to the relationship of the rest of the shareholders among themselves and the other two shareholders. Section 9
(1)of Cap. 219, as added by Law No. 31 of 1976, reads as follows: 15 20 25 30 35 " 'Οσάκις ακίνητος Ιδιοκτησία μεταβιβάζηται ΰττό ομορρύθμου η ετερορρύθμου εταιρείας (partnership) είς διαδεχομένην ταυτην έταιρείαν (company) επιβάλλονται και εισπράτ τονται τά κατάλληλα δικαιώματα χωρίς νά ληφθη ύ π ' όψιν το γεγονός ότι ή προς ήν ή μεταβίβασις δικαιοδόχος εταιρεία διαδέχεται τήν μεταβιβάζουσαν δικαιοπάροχον όμόρρυθμού ή ετερόρρυθμου έταιρείαν, είτε καθολικώς είτε άλλως: Νοείται ότι οσάκις μόνοι μέτοχοι της δικαιοδόχου εταιρείας είναι οι εταίροι της δικαιοπαρόχου ομορρύθμου ή ετερορρύθ μου εταιρείας και καθ' οΙονδήποτε χρόνου προσάγεται εις τον Διευθυυτήν ικανοποιητική, κατά τήν κρίσιν αΰτοΰ, άπόδειξις τοΰ γεγονότος ότι, κατά τήν διάρκειανπ=νταετίας άπό της ημερομηνίας της δηλώσεως μεταβιβάσεως, ή, έαν τοιαύτη είναι ή περίπτωσις, μέχρι της εντός της προα ναφερθείσης περιόδου τυχόν διαλύσεως ή εκκαθαρίσεως της εταιρείας, ουδέν πρόσωπον άλλο τών κατά τον χρόνου της προαναφερθείσης δηλώσεως μεταβιβάσεως μετόχων της εται ρείας καΐ στενών συγγενών αυτών άπέκτησεν οιανδήποτε μετοχήυ τής εταιρείας άλλως ή αΙτία θανάτου, ό Διευθυντής επιστρέφει είς τήν έταιρείαν το ποσόν τών κατά τόν χρόνον της δηλώσεως μεταβιβάσεως επιβληθέντων καΐ είσπραχθέντων τελών και δικαιωμάτων, μειωμένον κατά ποσόν ίσον προς 4 έττΐ τοις εκατόν της κατά τήν ήμερομηνίαν της προα ναφερθείσης δηλώσεως μεταβιβάσεως έκτετιμημένης αξίας της μεταβιβασθείσης ακινήτου Ιδιοκτησίας". 619 V Loizou J. Chrtstadoulides Bros. v. Republic (1 984) In English it reads: "Whenever immovable property istransferred by a general or limited partnership to a successor to it company, thi appropriate fees are imposed and collected without taking into consideration the fact that the transferee company to 5 which the tiansfer is madi, succeeds tht tiansferor general or limited partnership, either wholly or otherwise: Provided that whenever the only shareholders of the transferee companyaiethe partnersof thetiansferor general or limited par»neiship and at any time is pioduced to the 10 Director, satisfactory, in his opinion, proof of the fact that, during thefive-yearperiod from the date ofthedeclaration of transfer or, if such is the case, until the within the aforesaid period dissolution or liquidation of the company, no person other than the at the time of the aforesaid 15 declaration of transfer shareholders of the company and their close relatives acquired any share in the company other than by reason of death, the Director refunds to the company the amount of at the time of the declaration of transfer imposed and collected fees and charges, reduced 20 by an amount equal to 4% on the assessed value of the transferred immovableproperty asonthedate ofthe aforesaid declaration of transfer". It has been argued on behalf of the applicant company that they were entitled to the refund of the transfer fees because its 25 shareholders during the five years following the date of the Declaration of transfer did not change otherwise than by one ofitsshareholders transferring shares byway of gift to hiswife ind children who, no doubt, come within the notion of close •elatives to be found in the proviso to the aforesaid section. 30 On the other hand, counsel for the respondent has uiged that the said proviso contains two prerequisites, in so far as chiscase is concerned. Thefirstone is that on the date of the :ransfer the only shareholders of the transferee company are :he partners of the transferor partnership. And the second 35 Prerequisite is that within a perior offiveyears following such late—or inthecaseofdissolution or liquidation ofthecompany, withinthat perioduntilthen--no personorpersonshavebecome 620 3 C.L.H. Christodoulides Bros. \. Republic Λ. Loizou .1. shareholders of the transferee company except close relatives of the shareholders of the company who were such at the time of the Declaration of the transfer. He further pointed out that the argument of counsel foi the applicant Company refened to 5 the second prerequisite of the said proviso. The aforesaid text, trimmed of the various provisions that are not relevant to our case and which are included to cover certain eventualities, with which we are not concerned now and ascribing to the words used theii ordinaiyand natural meaning, 10 has led me to the conclusion that the stand of therespondent is the correct one. To my mind the two basic prerequisites of theproviso aieconjunctive and notdisjunctive andthe expression "close relatives" refers exclusively to the second prerequisite and not tothe first. Theproviso applies to theCPSCof a transfer 15 of immovable property from a partnership to a company when ever first, the only shareholders of the transferee company are the partners of the transferor partnership and secondly, when proof satisfying the Director is produced that during a period of five years following thf date of the transfer, no person other 20 than those who at the time of the Declaration of transfer were shareholders of the company and their close relatives acquired any share in the company. The only permissible exception to theacquisition cf shares during thosefiveyears, apart from close lelatives, is in the case of acquisition by reason of death. 25 30 35 In othei words, the shareholders of the transferee company who must be the same as those of the transferor partnership. must remain the same except if changed by a transfer of shares to close relatives, a term defined by subsection 3 of the law a meaning the husband or wife of the shareholder and his relative up to the third degree of relationship, or shares devolved ο \ a person during thosefiveyears by reason of death of an evistin shareholder. It is when boththese prerequisites are satisfied thata compai • is entitled to a refund of the fees and charges paid at the tinc of the transfer less 4 % of theassessed on the date of the transf value of the transferred immovable property. Any other inter pretation would defeat the intention of the legislator as it ema nates from the words used. 621 Λ. Loizou J. Christodoulides Bros. v. Republic
(1984)For all the above reasons, this recourse is dismissed, but in the circumstances thcie will be no order as to costs. Recoursedismissedwithnoorder as to costs. 622