(1987)1987 August 26 IDEMETRIADES J 1 INTHEMATTER OF ARTICLE 146 O F T H E CONSTITUTION SUNSET BOULEVARD TOURISTAND ESTATES CO LTD , Applicant, ν THE REPUBLICOF CYPRUS, THROUGH THE MINISTER OF INTERIOR AND/OR, THE DISTRICT LANDS OFFICE OF PAPHOS, Respondents (Case No 526/82) Immovable property — Transferof — Transferfees — TheDepartmentof Lands and Surveys (Feesand Charges)Law, Cap 219, asamended by Laws 31/76 and 66/79, sections 8 and 3 and the Schedule to section3 (para3 of such schedule) — The Immovable Property (Transferand Mortgage) Law 1965, sections 13 and 50 — Powerof Directorto amend orrevoke aregistrationin caseof falsedeclaration— Meresuspicionthata declaration isfalsedoes not justifyadecision— Ifsuchsuspicion israised, theremust be due inquirywith the object of ascertainingthetruefacts 5 Theapplicants areacompany limited by shares, theshareholders of which are Mr and Mrs Chrysostomou and theirtwo children 10 On3 11 80 adeclarationoftransfer by way of gift from Mrs Chrysostomou to the applicants of certain immovable property, registered in the name of Mrs Chrysostomou, was lodged with the DistrictLandsOffice of Paphos The 15thFebruary 1975was givenastheday of theagreementtomakethe gift Attached to the declaration was a certified copy of the minutes of a Director's meeting of theapplicantstotheeffect thattheapplicantsaccepted thegift and thatthe transfer of theproperty was totake place indue time [5 The value of the property as on 15 2 75 was estimated at£8,000, and, as a result, theapplicants paid £400 250 milsby way of transfer fees On 18 9 82 theDistrictLandsOfficer of Paphos,relying ontheadvice ofthe auditorsthatthevalue of thepropertyontheday of thetransfer was £90,000, demanded£5,800, as being thebalance of thetransfer fees due 1028 20 3C.L.R. SunsetBoulevardv. Republic Hence thisrecourse Counsel for therespondentstated thatadoubt arose in the mind of the DistnctLandsOfficer as tothe genuiness of the aforesaid minutesof theDirector'smeetingasregards thetruedate of thegift Ο 10 15 Held, annullingthe sub judice decison
(1)The law governing the fees payable for thetransfer ofimmovable propertyisCap 219,asamended The fees payable in each case are containedin theschedule tosection 3 In the present case thefees payable are governed by para 3{b)(v) of theschedule Section 13 of the Immovable Property {Transfer and Mortgage) Law, 1965 gives power to the Directorto make inquines from thepersons makingthe declaration, before the exercise of his discretion, whereas section 50 of the same law gives to the Director power to amend or revoke a registration effected asa resultof, interalia,a falsedeclaration
(2)The powers of the Director in a case of false declaration have been hereinabove stated However, it has to be established that a declaration is false Meresuspicion isnotenough,butonceasuspicion israised,theremust beadueinquiryforascertaining thetruefacts Adecisioncannotbebasedon a mere suspicion Subjudice decision annulled Recourse. 20 Recourse against the decision of the respondents by which the applicants were required topay an additional amountof £5,800 as transfer fees for the transfer, in 1980, in their name of immovable property. A. S.Angelides, for the applicants 25 A. Vladimirou, for the respondents Cur adv vult DEMETRIADES J read the following judgment By their recourse the applicants challenge the decision of respondentNo 2, containedina letterdated the 18th September, 1982, by which 30 they wererequired topay anadditionalsum of£5,800.-as transfer fees for the transfer, in 1980, in their name, of immovable property. The applicants are a private company, the shareholders of which are Mr. Zenon Chrysostomou, his wife Afroula 35 Chrysostomou and theirtwo children. On the 3rd November, 1980, a declaration of transfer of the immovable property of Mrs.A Chrysostomou. under Registration 1029 DoMtrUdnJ. SunsetBoulevardv.Republic
(1987)No.2909,plot30ofSheetPlanLl/19 situatedatKatoPaphos, waslodged atthe UistnctLanu,Officer of Paphosbywhichthe saidMrs.AfroulaChrysostomoudeclaredthatshehadonthe15th February, 1975,agreedtotransferbywayofgift,intothenameof the applicants,her said property.Attachedto the declaration of 5 transfer, whichisan exhibitbefore me,isa certified copy ofthe minutes of a Directors' meeting of the applicants in which itis stated that the company had decided to accept the gift ofMrs. Afroula Chrysostomou which was made without any consideration andthatthetransfer ofthepropertyinthenameof 10 thecompanywastotakeplaceinduetime. Afterthelodgmentofthedeclarationoftransfer,thevalueofthe property,asonthe 15thFebruary, 1975-thatisthedateofthe acceptance of the gift - was assessed by the respondents at £8,000.- and the applicants were asked to pay the sum of 15 £400.250milsastransferfeeswhichtheydid. The property was officially registered in the name of the applicantsonthe10thNovember,1980. On the 18th September, 1982, the District Lands Officer of Paphos addressed a letter to the applicants by which he 20 demanded the payment of the sum of £5,800.- being, as he alleged,thebalanceofthefeesdueandpayableforthetransferof theproperty ofMrs.Afroula Chrysostomou intothenameofthe applicants.TheLandsOfficer basedhisdemandonadvicefrom the auditorsthatthe valueof the property asonthe date ofthe 25 transferwas£90,000.-andthatthefeesoughttobepaidonthe valueofthepropertyasonsuchdateandnotonitsvalueonthe date of the acceptance of the oift Ruhissaid letterthe Lands Officerinfomivuuieapplicantsthatu«:sumot15,800.-wasmade achargeontheirproperty. 30 Asaresultofthedecisionoftherespondents,whichiscontained in the said letter of the District Lands Officer of Paphos, the applicants filed the present recourse bywhich they pray forIts annulment. The application is based on the grounds mat the sub judice 35 decision offends against the principles of good and proper administration, that itwastaken without a due inquiry intothe matterandmatitlacksduereasoning. 1090 3C.L.R. SunsetBoulevardv.Republic Demetriade* 4. In para. 4 of the facts set out in support of the opposition, counsel for the respondents states that reasonable suspicion was raised in the minds of the officers of the Department that the minutes of the meeting of the applicants were invented at a later 5 date for the purpose of evading payment of transfer fees on the value theproperty had onthe date ofthetransfer. Thissuspicion, he further states,wassupported bythe following facts: (
- a)The purchase value of the property had increased considerably between the 15th February, 1975 and the 3rd 10 November, 1980{from £8,000.-to£90,000.-). (
- b)The donor was the registered owner of the immovable property on the 15th February, 1975. (
- c)There was no impediment over the property and no prohibition against the donor between the 15th February, 1975 15 and the 3rd November, 1980, which prevented the transfer and justified such a longdelay. Counsel forthe applicants, inexpounding on hislegal grounds argued that the respondents are bound by their own act of accepting the registration in 1980,whichwasperfectly lawful and 20 wasmadeunreservedly after thedeclaration wasexamined bythe responsible officer. He also argued that the failure ot the respondents to afford the applicants the right to be heard before they took theirdecision resulted toan insufficient inquiryon their part; thatthesubjudice decision lacksdue reasoningand thatthe 25 contentsof paragraoh 4 ofthe onnrwition constituted snhseouent reasoning ana cannot therefore, cure the defect of lack of due reasoning. Lastly,counsel contended thatthe subjudice decision hastobeannulled asitwasbased onameresuspicionand noton ascertained facts. 30 Counsel tortheresponaeir»ai^ueu tnatthesuujuaicedecision amounts, in effect to a revocation of the decision of the 3rd November, 1980,bywhichthedocument containing the giftwas accepted.Counselcontendedthatsuchdocumentwasillegal,that there can be no gift of property from a person toa company and 35 that the decision of 1980, which was based on an illegal document, wasitself illegaland could, therefore, be revoked. Therelevantlawunderwhichfeesforthetransferof immovable property are imposed is the Department of Lands and Survevs (Fees and Charges) Law, Cap. 21V, a» u..:~ided. Thus, by 1031 DemetrladesJ. SunsetBoulevardv.Republic
(1987)section 8 oftheLaw,which wasintroduced bysection 4ofLaw 31/76, certain clarifications are made for the sake of lifting any doubtsraisedintheapplicationofthelaw.Underpara,(c)ofthis section it is made clear that a shareholder of a company may transfer property tothecompany, inwhichcasetheappropriate 5 feesareimposed and collectedwithouttakingintoconsideration thefact that the transferor isashareholder. The fees payablein each caseoftransferarecontainedinthescheduletosection3of the Law,asthese aresetout insection 2ofLaw66/79. In the present case the fees payable were governed by the 10 provisionsofpara.3(b)(v)ofthescheduleandwere,inaccordance withtheprovisionsofthisparagraph,calculatedonthebasisofthe marketvalueofthepropertyonthedateoftheagreementforthe gift. Itispertinent tosayherethatprovision isalsomadethatin casesinwhichtheDirectorisnotsatisfiedwiththedeclaredvalue 15 oftheproperty, hecanimposeadditionalfeesprovisionallyand proceedtovaluethepropertywithinthenextthreemonths. Section13oftheImmovableProperty(TransferandMortgage) Law, 1965,asamended,givespowertotheDirector,before the exercise of his discretionary power, to make any inquiries he 20 considersnecessary,fromthepersonsmakingthedeclaration for transfer. Also, section 50 ot the same Law gives power to the Directortoamendorrevokeanyregistrationeffectedasaresultof a mistake, omission, false declaration or false pretences made eitheringoodfaithorfraudulently. ^ Asstatedbycounselfortherespondents,adoubtwasraisedin the mind of the respondents that the minutes of the applicants embodyingtheacceptanceofthegiftwerenotgenuineastothe date of the offer and acceptance of the gift but were made afterwardsforthepurpose of evadingthepaymentofadditional 30 fees.ThepowersoftheDirectorinthecaseoffalse declarations havebeen statedabove.However,ithastobeestablishedthata declarationisfalse.Meresuspicionisnotenough,butoncesuch suspicion israised, a due inquiry hasto be carried out intothe matter, for the purpose of establishing the true facts before 35 resorting to any decision.Adecision cannot be based on mere suspicions. Havingcarefullyconsideredthefactsandcircumstancesofthis case.Ifindthatnodueinquirywascarriedoutintothematterand 1032 3C.L.R. SunsetBoulevardv.Republic Demetrlades J. the sub judice decision must, therefore, be annulled on this ground. Intheresult,thjsrecoursesucceedsandthesubjudicedecision isherebyannulled. Subjudicedecision annulled. 1033