(1987)1987 June 22 fTRIANTAFYLUDES Ρ DEMETRIADES SAW1DES JJ ] MARINA PANTAZi, Appellant-Plaintiff, ν ΒΑΤΑ (CYPRUS) LTD, Respondent-Defendant (CivilAppeal No 7083) Rent Control— TheRent ControlLaw, 23/83, section2 — Aliensand companies controlledby aliens—Do nothave theprotectionof thatLow —Any benefits that might have accrued underpre-existinglegislation to tenants in general, expressly taken away by section 2 of Law 23/83 m so far as aliens and companies controlledby them are concerned 5 Vestednghts — The Interpretation Law, Cap 1— Section W
(2)(c) — Repealing law presumed to leave unaffectednghts accruedunder repealedlaw — The presumption isrebuttable ConstitutionalLaw—Equality — Constitution,Art 28 1— TheRent ControlLaw 23/83, section 2 differentiating between citizensof the Republic on the one hand andaliensand companiescontrolledby alienson theother hand—Not contraryto Art 28 1of theConstitution \Q By a contract dated 21 480 the appellant let to the respondent, a shoe manufactunng company registered in Cyprus under the Companies Law, Cap 113 and wholly owned by foreign shareholders, her premises until 1 5 30 4 35 As upon expiration of the said contractualtenancytherespondent failed to vacate the premises, the appellant brought an action before the DistrictCourtof Nicosiafor recovery of possession andalso forarrearsofrent and mesne profits as from 1585 nilrecovery of the possession Thetnal Courtheld thattherespondent(defendant)was astatutorytenant 2 0 and, consequently, dismissed the actionfor lack of jurisdiction Hencethepresentappeal bytheplaintiff intheaction Held, allowing the appeal
(1)The provision of section 2 of Law 23/83 confining the benefits of the Law to citizens of the Republic, was inserted purposety withtheaimtoconfinethebenefits ofthelawtothedassofpersons 2 5 350 1 C.L.R. Pantazl v.Bata (Cyprus) Ltd. worsthitby thecatastrophicconsequences of theTurkish invasion. The Law was notintendedtoapply toforeign controlled companies oraliens (Vamasia EstatesLtd v.Sioger Sewing Machine Co.
(1985)1C LR 707 adopted)" 5 10 15 20
(2)Any benefits which might have accrued undertheRentControlLawsm force pnortotheenactmentof Law 23/83 totenantsin general, was expresely taken away by section 2 of Law 23/83 is so far as non-citizens and legal persjMscontrolled by aliens are concerned Theneed tosustain vested nghts found expression in the Interpretation Law. Cap. 1.section 10
(2)(c )in form of η presumption that subsequent laws are presumed to leave unaffected nghts. pnvileges, obligations orliabilities acquired, accrued orincurred under the repealed law. The presumption is. however, rebuttable. (Vamasia case. supra, and 77ieRepublic v.Menelaou
(1982)3 CLR.419 at p.429 adopted as regards theapproach on theconstruction of vested nghts) Inthis case the presumption has been rebutted
(3)Thenotionof equality depends upon therealities prevailing at anv one timeand theneed totreat equally those insubstantially thesame position In the light of the pnnciples enunciated in our case law and the case law of Greece and theUnitedStates as reviewed inTheRepublic v.Nishan Arakian and Others
(1972)3 C.L R 294. this Court reached the conclusion thatthe differentiation made by Law 23/83 between citizens of the Republic on the one hand and aliens and foreign controlled companies on the other hand does notcontravene Art 28 1of theConstitution. Appeal allowedwith costs Casesreferredto: VamasiaEstateLtd. v.SingerSewing Machine Co.
(1985)1C.L.R. 707. 25 Republicv.Menelaou
(1982)3 C.L.R. 419; Mikrommatisv. TheRepublic.2RS.C.C 125. Republic v.Arakianand Others
(1972)3 C.L R. 294. Appeal. Appeal byplaintiff againstthe judgmentof the DistrictCourtof 30 Nicosia(Hji Constantinou,S.D.J.)datedthe 2nd December,1985 (ActionNo.7076/85)wherebythepreliminaryobjectionraisedby respondent-defendant in anapplicationtosetasidethe serviceof thewritof summonsonthegroundthatthe DistrictCourthad no jurisdiction to adjudicate on the matter was accepted and 35 thereforejurisdictionvested in the RentControlCourt. * TheCourt,however,expressedreservationastothatpartofthejudgmentinthatcase,which referstoCyprtotswhoarenotresidinginCyprus. 351
(1987)Pantazl v.Bata (Cyprus) Ltd. Ν Neocleous withΜ Georghiou for the appellant-applicant Κ Talandes, for the respondent-defendant Cur adv vult TRIANTAFYLLIDES Ρ The judgment of the Court will be delivered by Mr Justice Sawides 5 SA WIDES J Thisisanappeal against the judgment of aSenior Judge of the Distnct Court of Nicosia whereby he accepted a preliminary objection raised by the respondent-defendant on an application to set aside theservice of the wnt of summons on the ground thatthe DistnctCourthad nojunsdiction toadjudicate on 10 the matter, as the respondent-defendant was a statutory tenant under the RentControlLawsand,therefore junsdiction vestedin the Rent Control Court established under the provisions of the Rent Control Laws Trie facts of the case are bnefly as follows 15 The respondent-defendant is a shoe manufactunng compamy registered in Cyprus underthe Companies Law since 1952 Itisa common ground that itis owned wholly by foreign shareholders Appellant s claim against therespondent before the DistnctCourt of Nicosia was for recovery of possession of premises let to the 20 respondentunderacontractdated21st Apnl, 1980, which expired on 30 4 1985 and also for anears of rentandmesneprofits as from 1st May, 1985, till the recovery of the premises The respondent entered aconditional appearance and applied for anordersetting aside theservice of thewnt of summonsonthe 25 ground that the DistnctCourtof Nicosia had nojunsdiction inthe matter The learned trialJudge after heanng lengthy argument onboth sidescame totheconclusion thattherespondent-defendantwas a statutory tenant under the Rent Control Laws and that he 30 continued to remain in occupation of the premises as such after the expiration of the contractual tenancy and, therefore, the Distnct Court had nojunsdiction to adjudicate on the matterand thatthecompetentcourtwas the RentControlCourtset outunder the relevant Laws 35 The grounds of appeal raised by appellant are the following
(1)The tnal Court in holding that defendant-respondent was a statutory tenantundertheprovisions of Law 23/83 misconceived 352 1 C.L.R Pantazl v. Bata (Cyprus) Ltd. S a w l d e s J. and wrongly applied the provisions of Law 23/83 and especially section 2thereof
(2)The tnal Court wrongly found that defendant-respondent was a statutory tenant and consequently wrongly decided thattt 5 had nojunsdiction to tryaction Inexpounding on hisgroundsof appeal, counsel for appellant contended that beanng in mind the fact that the contractual tenancy of the respondent expired on 30 4 1985, he could not become astatutory tenant inview of the provisionsofLaw 23/83 10 and in particular the definition of the word «tenant» in section 2 which excludes legal persons controlled by aliens ht contended that assuming that the respondent had became a statutory tenant under the provisions of Law 36/75, he did not acquire a vested nght which could not be suspended by express 15 provision inasubsequent repealing enactment In dealing with the constitutionality of section 2 of Law 23/83, he submitted that the exclusion of aliens or legal persons controlled by aliens from the protection of the Rent Control Law is not unconstitutional and that in the light of the pnnciples 20 emanating from ourcase law,such distinction isareasonable one and cannot in any way be treated as violating Article 28 of the Constitution Counsel for the respondent supported the decision of the tnal Judge and submitted that the respondent was a statutory tenant 25 before the enactment of Law23/83asaresultoftheprovisionsof the Rent Control Laws in force pnor to 1983 The defendant company was a company registered in Cyprus since 1952 operating in the same way as any company having Cypnot shareholders, it was not an offshore companry and itshould be 30 treated inallrespectsasanordinarycompanycarryingonbusiness in Cyprus, irrespective of the shareholding of such company He also submitted that the provisions of section 2 of Law 23/83 shouldbeinterpreted asapplyingonlytooffshore companies, but not to local companies resident and operating in Cyprus He 35 further submitted that ifthe Court reachesthe conclusion that the respondent-defendant cannot be considered asastatutory tenant by virtue of the provisions of section 2 of Law 23/83, such provision should be treated as operating in a discnminatory manner against the respondent, a Cypnot companu operating in 40 the^ame way asanycompany having Cypnot shareholders, and 353 S a w l d « · J. Pantazl v. Bata (Cyprus) Ltd.
(1987)assuch,violating Article28oftheConstitution. Thefirstquestionwhichposesforconsiderationarisesoutofthe definition of «tenant» appearing in the Rent Control Law 1983 (LawNo. 23/83).Thedefinition of«tenant»isgivenundersection 2 asfollows: 5 «'ενοικιαστής' σημαίνει παν φυσικόν ή νομικόν πρόσωποντοοποίονσυνήθωςδιαμένειήέχειτηνέδραν αυτού εν Κόπρω και το οποίον είναι ενοικιαστής ακινήτου, εν σχέσει προς το οποίον υφίσταται ενοικίασις αλλάδενπεριλαμβάνει μηπολίτηντης 10 Δημοκρατίας ή νομικόν πρόσωπον ελεγχόμενον υττό αλλοδαπών.» TheEnglish translationreads:(«'tenant'meanseverynaturalorlegalpersonwhich usually resides orhas hisprincipal place of operation inCyprus and 15 which is a tenantof premises, inrespect of which atenancy exists but it does not include a noncitizenoftheRepublicoralegalpersoncontrolledbyaliens.» The interpretation of this section came up for consideration before the Court of Appeal in Vamasia Estates Ltd. v. Singer 20 SewingMachine Co.
(1985)1C.L.R.707, inwhich atpage 711, we readthefollowing:«Nevertheless we areinvitedbycounselforrespondentsto upholdthedecision inviewof theabsurdity inherentingiving the definition of 'tenant', in particular the proviso thereto 25 purporting toexclude 'aliens', themeaning importedby the grammaticalconstructionofthewordsused. Inthesuggestion of counsel the proviso was inserted in the wrong place because of an obvious mistake in view of the definition of statutory tenant, encompassing statutory tenants under the 30 repealed legislation, supplied bythesamesectionofthetaw. Therefore, we were asked to ignore the proviso to the definition of tenant, allegedly wrongly inserted thereat because of a misarrangement, as so todowould lead toan absurdity. OnlyintheclearestofcaseswilltheCourtdisregard thegrammaticalimpUcationsofastatutoryprovisionorignore 35 the arrangement of sections of the law made by the legislature. Grammatical construction must be adhered to unless unavoidably absurd results will ensue therefrom. 354 1 C.L.R. 5 10 15 20 Pantazl v.Bata (Cyprus) Ltd. Savvlde· J . Anomalies as such resulting from the natural construction of an enactment are noreason either forlimitingthemeaningof the words chosen ordeparting from the willofthe legislature as expressed in the law -Stock v.FrankJones (Tripton) Ltd. (197811AllE.R. 948(H.L.). Itappears to me that onlywhere the provisions of the law makenosenseinthecontextofthelawasawholeand further conflict with the avowed objects of the law can the Court ignore a legislative provision or itsposition in the schemeof the law. Far from being persuaded that the proviso to the definition of tenant was inadvertently appended thereto, I regard its insertion at the particular part of s.2 purposeful, consistent with the aim of the legislature to confine the benefits of the lawtothe classof persons who were worsthit bythecatastrophicconsequencesoftheTurkishinvasion.Not only aliens and foreign controlled companies are excluded from the definition of 'tenant', but Cypriots too who are not ordinarily residinginCyprus.Consequently,thereisnoroom whatever fordeparting from thetenorofthelawasexpressed by the legislature respecting the classof persons who qualify astenants under s.2of Law 23/83.» We agree with the view expressed in the above case to the extent that the provision of section 2confining the benefits of the lawtocitizensoftheRepublicwasinsertedpurposelywiththeaim 25 toconfine thebenefits ofthelawtotheclassofpersonswhowere worsthitbythecatastrophicconsequencesoftheTurkishinvasion and that it was. not intended to apply to foreign con*rotled companiesoraliens.Wehaveourreservation astothepartofthe above judgment which refers to Cypriots who are not residingin 30 Cyprus,asthiswasnot inissueneitherinthe Vamasiacasenorin the present case. In the Vamasiacase (supra) the Court further dealt with the question as to whether vestedrightsby virtue of previouslegislation could be taken away. Itwasheldatp.710of theabove case that: 35 40 «Allthats. 10
(2)(c) aimsto achieve andinfact createsisa legalpresumptionthatrightsaccruedunderthelawinforceat anyparticularperiod oftimearenotliabletobe disturbedor takenawaybyasubsequentrepealoramendmentoftheLaw Intheabsence ofexpressprovisiontothatend No right accrues under section 10
(2)(c) for the indefinite enjoymentofrightsvestedbylaw.Theycanbetakenawayby 355 Sawldes J. Pantazl v. Bata (Cyprus) Ltd.
(1987)the statute, subject to constitutional constraints, in the same way that they are given inthe first place.» The concept of vested nghts was also considered by the Full Bench in the case of The Republic v.Menelaou
(1982)3 C.L.R. 419 inwhich at page 429, weread: 5 «The need to sustain vested rights found expression in the Interpretation Law in the form of a presumption that subsequent laws are presumed, but not deemed, to leave unaffected vestedrights.Section 10
(2)(c)ofthe Interpretation Law, Cap. 1, provides that it shall be presumed that the 10 repeal ofalawleavesunaffectedrights,privileges, obligations orliabilitiesthatwereacquired, accruedorincurred underthe repealed law. However, the presumption isa rebuttable one and may be displaced whenever a clear intention to the contrary isevinced by therepealing law.» 15 We agree with the above approach on the construction of the concept ofvested rights. Inthepresent caseanybenefit whichmighthaveaccrued under the provisions of the Rent Control Laws in force prior to the enactmentofLaw23/83totenantsingeneral,wasexpresslytaken 20 away bysection 2of Law23/83insofarasnon-citizens and legal persons controlled by aliensare concerned. Lastly, we come to consider the question of the unconstitutionality of section 2 of Law 23/83. Theapplication oftheprincipleofequalityhasbeen considered 25 inAfj7rrommar/'scase,2R.S.C.C. 125inwhichitisstated,atp.131, that: « 'equal before the law' in paragraph 1 of Article 28 does not convey the notion of exact arithmetical equalitybut it safeguards only against arbitrary differentiations and does 30 notexclude reasonable distinctionswhichhavetobemadein viewof the intrinsic nature of things». Mikrommatis case has been constantly followed by our Supreme Court and the principles underlying the notion of equalityhavebeenexplicitlyexpoundedinthecaseofRepublicv. 35 Nishan Arakian and Others
(1972)3 C.L.R. 294, where the President of the Supreme Courtmade alucid review of the case law on this matter both in Cyprus, as well as in Greece and the UnitedStates. The notion of equality depends upon the realities prevailing atany one time andthe need totreatequallythose in 40 356 t C.L.R. Pantazl v. Rata (Cyprus) Ltd. Sawides J . substantially the same position. The object of the Rent Control Law23/83was,asmentioned intheVamasia case,toconfine the benefits of the lawto citizensof the Republic and not to aliens or alien controlled companies, an entirely different class of persons 5 the first consisting of citizens of the Republic and the other consisting of non-citizens of the Republic or legal persons controlled byaliens. Bearing in mind allthe authorities before usand the principles enunciated in our case law and the case law in Greece and the 10 United States as reviewed in Arakiancase (supra) we have come to the conclusion that the differentiation does not in any way contravene the provisionsof Article28.1 of the Constitution. Intheresultthe appeal succeedsand isallowed with costs.The case willbe remitted back withdirectionstobedetermined onthe 15 remaining issuesinthe light of thisjudgment. Appeal allowed with costs. 357