clr/1986/1986_3_1845.pdf

(9)—The law does not import any specific economic policy with regard to the exercise of its powers—Nor does it suggest that a balance should be struck between hit: and smaller Z-car businesses— The assertion that tinobject of the law would not be served by granting licences to a large number of persons because of objective difficulties in establishing small viable businesses doesnot reflect policy of the law. Administrative Law—Discretionary powers—Whether the ad­ ministrative authority has power to adopt a policy decision affecting tfie exercise of such powers—An admini­ strative authority cannot neutralize its discretion to repond to the merits of the individual case—Λnd cannot override the law by the evolution of criteria unknown to it. Reasoning filled of an administrative act—Absence of. cannot In­ by reference to a policy directive—Administration 1845 Kyriacou v. Republic

(1986)siwuld reason why the provisions of such directive apply in the particular case. Applicant; a resident of the U.K., applied to ihe Permits Authority for the grant to him of 25 Z-cars licences in order to start a car hire business in Cyprus. The Per5 mits Authority approved the application in part licensing the applicant to acquire 7 Z-cars, provided that he would secure appropriate business premises for the management of the business. The interested' parties felt aggrieved by the said deci- 10 sion and filed a hierarchical recourse before the Permit Review Authority, which held a fresh inquiry into the matter. Respondents adjourned after completing their factual inquiry. At their resumed session they did not concern themselves with the details of the case, but 15 addressed themselves to the evolution of guidelines that would guide them in the resolution of the case in hand and other" cases that would come before them in the future. In- effect- their guidelines amounted to policy di : rectives. As may be presumed in evolving their said 20 policy decision' they· derived authority from s. 5

(9)of Law 9/82 as amended by Law 84/84. At their next meeting"held on 20.4.85 the respondents refused the- application, allowing the hierarchical appeal for two reasons:

(1)Failure of the applicant to satisfy 25 them that he intended to make the hire of Z-cars his main- occupation and fb) the better claims of other applicants who should have been preferred in accordance with the said policy decision. Why they should have been preferred is not spelled out. 30 As a result the applicant filed the present recourse. Held, annulling the sub judice decision:

(1)Section 5

(9)of the said law does not empower the respondents to lay down" general- criteria" for the resolution of individual applications. The amenity of' administrative- authorities to adopt a policy decision affecting the exercise of their' discretionary, powers was debated in Vassiliou. v. The' Republic

(1982)3- C.L.R. 220. Ah administrative authority cannot in the' exercise of its" powers override 1846- 35 - 3 C.L.R. Kyriacou v. Republic the law by the evolution of criteria other than those -laid down in the relevant statute. It cannot neutralize its discretion to respond to the merits of the individual case. 5 10 15 20 25 30 35

(2)The sweeping nature of the directives-laid down in this case are designed to intoduce a body.-of -rules-outside the context of the law and in some areas in opposition to it. In particular the assertion that the objects -of the law would not be _served by granting licences, to a large number of persons because there are objective difficulties in the establishment of small viable businesses does not reflect the policy -of the law. Furthermore the law does not suggest that a balance should be struck between small, and big Z-car businesses. More important still the _ law does not import any specific economic policy -with regard to the exercise of the powers of the respondents. The relevant to the above matters guidelines laid down by the respondents are apt to deprive them of the necessary freedom to determine applications according to the-fact1; of individual, cases. "

(3)The conclusion that applicant -was not minded : t o carry on Z-car business as his main occupation .is not borne out by the material before the respondents. Their conclusion is contradicted by the material in the file. It follows that the respondents could not .invoke the provisions of s. 5

(9)of the said law as justification of the , sub judice decision.

(4)The second ground on which the application was refused is defective because it rests on a policy decision evolved in excess of power. Moreover, it does not spell out why the other applications should have been pre. ferred. The absence of reasoning cannot be filled by reference to a policy directive. The administration should - r e a s o n , why and in what way· the provisions of such directive apply to-the particular case. Sub .judice decision .annulled. •No, order <as*tosCOsts. ,1847 Kyriacou v. Republic

(1986)Cases referred to: Tsoulloftas v. The Republic

(1983)3 C.L.R. 426: Vassiliou v. The Republic

(1982)3 C.L.R 220; Korakides v. Vine Products

(1985)3 C.L.R. 2690. Recourse. 5 Recourse against the decision of the respondents allow­ ing the appeal of the interested parties against the deci­ sion of the Permits Authority grantmg applicant a licence to acquire seven Z-cars and refusing applicant's applica­ tion for the grant to him of 25 Z-car licences. 10 G. Yiangou with Chr. Hudjiyiangott, for the applicant. G. Erotokiitou (Mrs.), Senior Counsel of the Republic, for the respondent. Cur. adv. vtn't. PIKIS J. read the following judgment. Appl'cant. a 15 resident of the U.K. applied to the Permits Authority for the grant to him of 25 Z-car licences in order to start a car hire business in Cyprus. The application was made, as he informed the authorities, in furtherance of his plans to settle with his family in Cyprus, his native land. He env- 20 grated to the U.K. some 22 years ago managing over the years to establish a successful business, trading in new and second-hand cars; also he ran a garage. He planned to resettle with his wife and two children in Cyprus. Ap­ proval of the application would facilitate his plans as it 25 : would give him a chance to organ ze a business in Cyprus. The Permits Authority held an inquiry into his appli­ cation in the context of which the views of competrng applicants for Z-car licences were heard. There was, as may be gathered from the material before the Court, fierce 30 opposition to his application coming from persons who had π foothold in the business of hire of Z-cars. Even­ tually the application was approved in part, licensing the applicant to acquire seven Z-cars. The permit was condi­ tional making its activation dependent on the applicant 35 1848 3 C.L.R- Kyriacou v. Republic Pikis J. securing appropriate business premises 'or the management of the business. As well as imposing the above cond:tion the Permits Authority informed the applicant the licences were not transferable as plainly !a:d down in the law. 5 The competitors of the applicant felt aggrieved by the decision and took the matter further rais:ng cm appeal be­ fore the Permits Review Authority by way of hierarchical appeal against the decision of the Permits Authority. A hierarchical appeal is by way of rehearing, the respondents 10 being free to hold an inquiry into the application anew and take any decision that might be taken by the Pemrts Authority. Their Uisk is not confined to examination of the soimdp.L;"..'", of the decision of the hierarchically subordinate body but extends to every aspect of the application as if 15 the matter had been raised before them afresh. As much was clarified in the case of TsouUofias v. The Republic^). The respondents held, as may be gathered from the procedure before them, a fresh inqu:ry into the propriety of the application includ:ng the grounds upon 20 which the interested parties rested their objections and the \,:ews of the applicant voiced through his counsel in support of his application.- in particular the iustfication of the decision of the Permits Authority. In the course of this inquiry the Chairman of the respondents aueried the viabi25 lity of a Z-car business in view of the smallness of the number of the cars that would be available for hire. The Chairman appears to have overlooked that the app'icant planned a much larger business and that limitation of the licences to only seven cars was the decision of the hierar30 chical'v subordinate body. As counsel for the applicant in­ : formed the Cha rman and his fellow members app'icant had large sums of money available to fund a much bigger business. Disclosure of details of his assets in Cyprus, α house in Nicosia, flats at Paphos and deposits in a foreign 35 account lent support to his professed intention that it was in his contemplation to be repatriated. Respondents adjourned after completing their factual inquiry. At their resumed session they did not concern themselves with the details of the case but addressed them<!>

(1983)3 C.L.R. 426. 4 3 1 . 1849 Pikis J. Kyriacou v. Republic

(1986)selves to the evolution of guidelines that would guide them in the resolution of the particular case and other cases that would come'up before them in the future. In effect their guidelines amounted to policy directives reflecting the respondents' appreciation of the needs of the trade and 'the principles that should govern the exercise of their dis­ cretionary powers. Apparently they felt pretty certain about the validity of their factual assumptions as to proclaim their policy decision as founded on generally acknowledged reality (γενικέο. διαπιστώσεις). 5 In evolving their policy decision they derived authority as may be presumed from the content of the directive from the provisions of sub-section

(9)of s. 5 of the l a w Law 9/82

(1). Now s. 5

(9)does not in terms confer power on the respondents to improvise criteria other than those 15 laid down in the law in the exercise of their duties. What it provides is that no one should be licensed to carry on a Z-car hire business unless he exercises or intends to carry on the business as his main occupation. It is a matter of fact whether this factual requirement is satisfied 20 in anyone case. Certainly the aforementioned provision of the law does not empower the respondents to lay down general criteria for the resolution of individual applications. Counsel for the respondents supported the validity of the policy decision of the respondents contending they had 25 power in administrative law to evolve relevant criteria for the exercise of their discretion. In support of this proposi­ tion she cited a passage from Wade on Administrative Law

(2)suggesting that it is open to administrative bodies to establish general limitative criteria for the exercise of 30 their discretion in the interest of consistency provided relevant to"the exercise of their discretion and further pro­ vided they do riot neutralize their amenity to do as justice and reason require "in individual cases. The passage is founded on acknowledgment* of amenity to justices-of the '35 peace to adopt 'certain -general ^criteria limiting their -dis­ cretion in the exercise of their licensing powers. : <') Amended-by Law '84/84.

(2)' 4th ed., p. 318. -1850 10 3 C.L.R. 5 10 Kyriacou v. Republic Pikis J. The amenity of administrative authorities to adopt a policy decision affecting the exercise of their discretionary powers was debated in Vassiliou v. The Republic

(1982)3 C.L.R. 220, 227, 228. The passage that follows below is pertinent to the problem and sums up, I believe, the law on the subject. "If public interest warrants formulation cf settled factors to guide the administration in its task, it is pernvssibe for the administration to evolve a general policy, provided the. discretion of the organ vested with power under the law is not neutralized to the extent of depriving it of discretion to have regard to the merits of the individual case...." An administrative authority cannot in the exercise of 15 its administrative powers override the law by the evolution of criteria other than those laid down in the relevant statute. The one thing they cannot do is to neutralize their discretion to respond to the merits of the individual case. The sweeping nature of the directives laid down in this 20 case are des:gned to introduce a body of rules outside the context of the law and in some areas in opposition to it. They are not confined to laying down the procedural means of eliciting the-factual background to the. application particularly the genuiness of the intention of the pursuer to 25 start a Z-car business as his main occupation. Rules (

1. c)and (
2. d)in particular seem to !ay down criteria unknown to the law and establish principles that may lead the Administration to decide without reference to the ind:vidual merits of the case. In particular the assertion that the ob30 jects of the law would not be served by granting licences to a large number of persons because there are objective difficulties in the establishment of small viable businesses does not reflect ; n any way the policy of the law. Furthermore the law does-not in any way suggest that a balance 35 should be struck between big and smaller Z-car businesses. More important still the. law does not import any specific economic policy with regard to the exercise of the powers of the respondents. The law puts in their discretion the application of the law. They may certa:nly take stock of 40 the number, of. Z-cars available in the.market,and the extent 1-85 l·. Pikis J Kyriacou ν Republic

(1986)to which such numbeis satisfy existing demand Conse­ quently the first factual statement made m these d'rectives that there was need for very many more Z-cars to satisfy demand was relevant and permissible Euually relevant was paragraph (b) reminding the respondents of the provisions 5 of s. 5

(9)of the ]aw The rules evolved by paras, (

1. c)and (
2. d)on the other hand were not warranted by the law and as earl er explained they were in conflict with its provi­ sions They are apt to deprive the respondents of the necessary freedom to determine applications accord-ng to 10 the facts of individual cases. The efficiency of a business does not solely depend on its size It depends just as much on the profic encv of the businessman involved In essence the policy d;rective purported to limit as well as streamline the exercise of the discretion of the respondents in a 15 manner unwarranted by the law, introducing criteria un­ known to the law in the exercise of their discretionary nowers At their next meeting held on 20th ApnI. 1985, the resoondents refused the application, allow ng the appeal 20 before them, for two reasons (
3. a)Failure of the applicant to satisfy them that he intended to make the hire of Z-cars his main occupation and (
4. b)the better claims cf other ap­ plicants for Z-car licences who should have been preferred in accordance with the pol'cy decision of 17th Apr'l, 1985 25 Why they should have been preferred is not snelled out As explained in Kotaktdes ν Vine Products^) the gap of absence of reasonmg cannot be filled by general reference to a policy directive, a circular in that case The admini­ stration must reason whv and in what way its provisions 30 apply in the Darticular case The conclusion of the respondents that applicant was not truly minded to carry on Z-car business as his main occu­ pation is not borne out by the material before the res­ pondents On the contrary such information as there was on the subject tended to support the opposite view If the respondents wanted to query the professed intentions of the applicant on the subiect they should have inqu-red further into the matter As it is their conclusions are con(I)

(1985)3 C L R 2690 1852 35 3 C.L.R. Kynaeou v. Republic Pikis J. tradicted by the material in the file. Consequently they could not properly invoke the provisions of s. 5

(9)of the law as proper justification for refusing the application. The second ground on which the decision was refused is equally 5 vulnerable to be set aside as defective because it rests on a policy decision evolved in excess of the powers of the respondents; moreover it wholly fails to reason how the decision has application in the circumstances of this case. From the material before the respondents they could pro10 perly conclude that applicant had a keen business sense and, therefore the prospects of organizing a successful business were not bleak. The availability of the necessary funds of financing the business was one other consideration that foreshadowed the establishment of a successful bu15 siness. For these reasons the decision cannot but be set as;de. Attention should be drawn before concluding to the undesirability of evolving policy directives in the context of particular cases. Such directives must be evolved from 20 a broader perspective in order to guide the administration impersonally in the exercise of its functions. A general policy directive is not a substitute for reasoning a decision in the particular case. In the result pursuant to the provisions of Article 146.4 25 (b) the sub judice decision is in whole declared null and void. Let there be no order as to costs. Sub judice decision annulled. No order as to costs. 1853