(1987)1987July29 [SAWIDES J ] INTHE MATTER OFARTICLE 146OFTHE CONSTITUTION PARASKEVOU STAVRINIDES, Applicant, ν THE REPUBLIC OFCYPRUS, THROUGH THEMINISTRY OFFINANCE AND/OR THE COMMISSIONER OF ESTATE DUTY, Respondent (CaseNo 95/86) Administration of Estates —Renunciationofan estate — TheAdministration of Estate Law, Cap 189,section 51 and TheAdministrationofEstates Rules, 1955, Rule 17andForm 18ofAppendix A—Document not in compliance with Forni 18 — Nora validrenunciation — Document made afterthe expiration of the time limit specified in section 51
(1)— Not a valid renunciation—Heir,purporting torenounce theestate,received abenefitm cash therefrom — Inview ofsection 51
(4)therenunciationisnotvalid 5 Gifts—Perfection/Completion of— Pnnctples applicable Taxation—Approach of thisCourttotaxingmatters— Principlesapplicable The applicant, whois thesister of the deceased Sawas Koupatos, i Q complains that therespondent wrongly treated the property, which the deceased had inhentedfromhispredeceased brother(whodiedin 1977),but whichwasregisteredinthenameoftheapplicantin 1983(withinthreeyears pnor tothedeath ofthe deceased, whodiedin1984), asformingpartofthe taxableby estateduty estateofthedeceased 15 Counsel forthe applicantputforwardtwosubmissions,namely that (a)On 132 79thedeceased renouncedhisnghtin thepropertyothispredeceased brother, and, inthe alternative, (b) The said renunciation amounts to an irrevocable andunreserved gift ofthe aforesaidproperty by thedeceasedto the applicant The Court,after reviewing thepnnctples governing the approach ofthis Court, asanadministrativeCourt, totaxingmatters, Held, dismissing therecourse
(1)Renunciation byanheirofan estate ofa 1228 20 3C.L.R. Stavrinldesv. Republic deceasedisgovemedbysectton51*ofCap 189 Therelevant formalities are prescnbed m rule 17** of the Administration of Estate Rules 1955 which refers toForm 18 of Appendix A 5 10 As thedocumentof 13 2 79 isnotincompliancewith Form18,thealleged renunciationwas nota validrenunciation
(2)Underthedocumentof 13 2 79 thedeceased received abenefit incash from the estate of his predeceased brother and, therefore in view of sub section
(4)of section 51 of Cap 189, which provides that• shall receive no benefit from theestate of such deceased eitherby operation of law orunder thewillof thedeceased», thisisanotherreason why theallegedrenunciation was notvalid
(3)Inany event, thealleged renunciationwas made after the expiration of the time limit of three months specified in sub-section
(1)of the aforesaid section,and thisisyet anotherreason of its invalidity 15 ^" 25
(4)As regards thesecond submission of counsel for applicant itiscommon ground in this case thatthe allegedgift was completed by thetransfer of the property in the name of the applicant in 1983, that is, within the penod of threeyearsfrom thedeath of thedonor. The question iswhen thegift was infact completed Fromwhat emanates from theauthorities,thetest iswhetherthedonorhasdone everything onhis part or whether any act remains to be done by him, and not the donee or trustee, in order to perfect the titleto theproperty concerned Atitle in real propertyinCyprus isperfected, accordingtoourLaws,onlybythetransfer of the property effected intheappropnateDistrictLands Office
(5)It follows that the sub judice decision was reasonably open to the respondent Recoursedismissed No orderas tocosts Casesreferredto 30 Georghiadesν Republic
(1982)3 C L R 659, Re Rose,MidlandBankExecutorand Trustee Co Ltd ν Rose [1949]Ch 78, Re Rose,Rose ν IRC[1952) Ch 499, 'Quotedat pp 1232-1233post •'Quotedatp 1233post 1229 Stavrinldea v.Republic
(1987)Re Fry, Chase National Executors and Trustees Corporation v. Fry [1946J Ch. 312; PapaGeorghiou v.Komodromou
(1963)2C L.R.
- Recourse. Recourse againstthedecision oftherespondentswherebythe 5 property which the deceased Sawas Koupatos, late of Paphos inherited from his predeceased brother Costas Koupatos and whichwasregistered inthenameofapplicant, anheirof Sawas Koupatos, within three years prior to Koupatos' death was assessed at £23,877 and estate duty amounting to £9,654 was 10 demanded from applicant. A. $.Angelides, fortheapplicant. A. Evangehu, Senior Counsel of the Republic, for the respondents. Cur. adv. vult. 15 SAWIDESJ.readthefollowingjudgment.Theapplicant,inthe present recourse, is one of the heirs of the deceased Sawas Koupatos,lateofPaphos,whodiedonthe1stJuly,
- Letters of administration of the estate of the deceased were granted to Elisavet Sawa Koupatou of Paphos under Probate 20 ApplicationNo.114/84.TheCommissionerassessedthevalueof the deceased's estate at £410,
- In his assessment the Commissioner included the property which the deceased inherited from his predeceased brother, Costas Koupatos, who diedin1977andwhichwasregisteredinthenameoftheapplicant 25 in 1983, that is, within three years prior to the death of the deceased. This property, which forms the subject matter of this recourse,wasassessedat£23,877andestateduty,amountingto £9,654 was demanded from the applicant. The administrator objected totheinclusionofthesaidpropertytothetaxableestate 30 ofthedeceased,onthegroundthatthedeceasedhadrenounced his inheritance infavour of hissister (whoisthe applicant inthe presentcase).Theobjection wasdismissedbytheCommissioner, who communicated his decision to the administrator by letter dated2.12.1985,treatingthepropertyinquestionashavingbeen 35 giftedtotheapplicantbythedeceasedandthegiftashavingbeen completed and perfected withinthreeyearspriortothedeathof the deceased. The applicant filed the present recourse against the above decision,raisingthefollowinglegalgrounds:- 1230 40 3 C.L.R. Stavrinidesv.Republic Saw i d e * J. 1.Thatthe subjudicedecision wastaken under misconception of lawand fact.
- Itisthe resultof abuse and/or excessof power.
- There islackof due inquiry. 5 4.Itlacksdue reasoning.
- Itisthe resultof wrong interpretation and/or procedure. The applicant's case, according to the arguments advanced by hercounsel, is twofold. The first submission isthat the deceased Sawas Koupatos had 10 renounced on 13.2.1979 his right in the property which he had inherited from hisbrother and asaresult such property ceased to form part of hisestate and is,therefore, exempt from estate duty. The second submission, in the alternative, is that if such renunciation is considered null and void, the property could not 15 be treated as part of the estate because it amounts to an unreserved and irrevocable «gift» effected in writing by the deceased on 13.2.1979, that is,morethan threeyearspriortohis death, and the document embodying such renunciation was filed in the Probate file of the administration of the estate of Ariadni 20 Koupatou who predeceased her husband Costas Koupatos from whomthedeceasedSawasKoupatosinheritedthe subject-matter property. Counsel for the respondent in dealing with the first contention of counsel for applicant argued that the alleged renunciation was 25 not made in accordance with the provisions of section 51 of the Administration of Estates Law, Cap. 189, that is, within three months from the date that the deceased became aware of the death ofhisbrother but more than a yearfrom such dateanditis, therefore, void. 30 Inansweringthealternativesubmissionofcounsel for applicant thatthesubject matterproperty wasgifted bythedeceasedtothe applicant more than threeyearspriortohisdeath, counsel forthe respondent contended that such gift was an imperfect gift which was perfected by transfer of the property in the name of the 35 applicantin1983,thatis,withinaperiodlessthanthreeyearsfrom the death of the deceased and as such itcould not be exempted from estate duty. 1231 S a w i d e s J. Stavrinidesv.Republic
(1987)The principles governing the approach of the Court to the validityof a taxing decision are wellsettled and I need notgo into considerable length indealingwith them. The position may be summarised in the judgment of the Full Bench in Georghiades v. Republic
(1982)3 C.L.R. 659, at pp. 668,669asfollows:- 5 «Unlike the powers vested in the District Court before independence to adjudicate upon a taxation by s. 43 -Cap. 233 - and earlier by virtue of s. 39 of Cap. 297 (of the old edition oftheStatuteLawsofCyprus),theSupremeCourthas 10 no jurisdiction to go into the merits of the taxation and substitute, where necessary, its own decision. The power of the Supreme Court islimited, as indicated, to the scrutinyof the legality of the action, and to ascertain whether the administration has exceeded the outer limits of its powers. 15 Provided they confine their action within the ambit of their power, an organ of public administration remains the arbiter of thedecision necessarytogiveeffect tothe law;andsolong as they make a correct assessment of the factual background and act in accordance with the notions of sound 20 administration, their decision will not be faulted. In the end, the courtsmustsustaintheirdecision ifitwasreasonably open to them.» It should also be borne in mind that the initial burden of satisfying theCourtthatitshould interfere withthedecision ofthe 25 Commissioner intaxation matters lieson the applicant. Iam coming nowto considerthe firstsubmission of counsel for applicant. Section 51 of the Administration of Estates Law, Cap. 189, provides asfollows: «51.
(1)Whereanestatevestsinand devolvesupon anheir, under the provisions of this Law, such heir may unconditionally renounce the estate at any time within three months from the time when he first became aware of the death of the deceased and of the fact of his being an heir to 35 such deceased.
(2)Renunciationunderthissectionmaybeeffected byfiling withtf*eregistryoftheCourtadeclarationinsuchformasmay be prescribed by Rulesof Court. 1232 30 3C.L.R. Stavrinldesv.Republic S a w i d e s J.
(3)Any renunciation which is made by an heir with the object ofdefeatingtherightsofanyofhiscreditorsmaybe set asidebytheCourtontheapplicationofanycreditorand upon proof ofsuch object. 5
(4)An heir who has renounced the estate shall incur no liability in respect of the debts of the deceased and shall received nobenefit from theestateofsuchdeceased eitherby operation of laworunder the willof the deceased.» Theformalitiesforaneffective renunciationofestateundersub10 section
(2)of section 51 have been prescribed by the Administration of Estates Rules, 1955, and in particular rule 17 which providesthat:- 15 20 25 «The form of declaration of renunciation of an estate shall be in Form 18ofAppendixA.» From 18AppendixAisas follows: «Inthe District Court Probate Jurisdiction. Inthe matterof late of ,deceased. whereas late ot , deceased, died on the day of 19 at having at the time of his death his fixed place of abode at , within the jurisdiction ofthisCourt; And whereas I of , am his lawful child/next ofkin; Now, I,the said ,do hereby expressly renounce myrighttoinheritfrom thesaid deceased. Inwitness whereof I have hereunto set myhand this day of ,19 (Signature) 30 Signed inthe presence of » Aperusal oftheallegeddocument ofrenunciation disclosesthe following:(a)The alleged document isnot described asa renunciation of inheritance but a «written consent», embodying an agreement of 35 distribution of the property between the heirs, signed by all of them and stamped asan agreement. (b) It is not in compliance with Form 18 and no witness is 1233 SawldeaJ. Stavrinldesv.Republic
(1987)mentioned inthe presence ofwhom the document wassigned. It isapparent that the drafting of the said document does not satisfy the provisionsofsub-section
(2)ofsection51. Assuming, however, that such non-compliance does not amount toan irregularitywhich mayrenderanyrenunciation null 5 and void, the alleged renunciation is not a valid renunciation under sub-section
(4)ofsection 51and inparticularinthatan heir « shall receive no benefit from the estate of such deceased either by operation of law or under the will of the deceased». Underparagraph (e)of theagreement of 13.2.1979thedeceased 10 Sawas Koupatos derived a benefit in cash from the estate of CostasKoupatos, which he didnot renounce. Furthermore, under the provisions of sub-section
(1)of section 51 an heir may unconditionally renounce the estate at any time within three months. It is an undisputed fact that the deceased 15 Sawas Koupatos came to know of the death of his deceased brotherthe latestsometime in1978ashewastheadministratorof suchestateunderProbateApplication5/78oftheDistrictCourtof Paphos.Neverthelessifhisintentionwastorenouncetheestateto whichhewasentitledhehadtodosowithinthenextthreemonths 20 from the time he first came toknow of the death, asprovided by section 51
(1).An alleged renunciation effected more than a year later isnot a valid renunciation within the ambit of section 51 of Cap.
- Inthe result the contention of counsel for applicant that there 25 wasavalid renunciation fails. I shall now proceed to examine the alternative contention of counsel for applicant that the property in question could not be treated as forming part of the estate of the deceased Sawas Koupatos because itwas gifted to the applicant more than three 30 yearsprior to hisdeath. It is common ground in this case that the alleged gift was completed by the transfer of the property in the name of the applicant in 1983,thatis,withintheperiod ofthreeyearsfrom the death ofthe donor. In Halsbury's Laws of England, 4th Ed. Vol.20, the following are stated atp.36,para.62:«
- Court wiltnot complete incomplete gift. Where a gift 1234 35 3C.L.R. 5 10 15 Stavrinldesv.Republic SawidesJ. rests merely in promise, whether written or verbal, or in unfulfilled intention, itisincomplete and imperfect, and the courtwillnotcompeltheintendingdonor, orthoseclaiming under him, to complete and perfect it. Apromise madeby deed is, however, binding even though it is made without consideration.Ifagiftistobevalidthedonormusthavedone everything which, according to the nature of the property comprised in the gift, was necessary to be done by himin ordertotransferthepropertyandwhich itwasinhispowerto do If a gift isintended tobe effectuated by one mode, for examplebyactualtransfertothedonee,thecourtwillnotgive effect toitbyapplyingoneoftheothermodes. Anincomplete gift can be revoked atany time;thereisa power to draw back so long as the gift is incomplete. No question ofconscience entersintothematter, forthereisno considerationandthereisnothingdishonestonthepartofan intendingdonorwhochoosestochangehismindatanytime beforethegiftiscomplete». A number of authorities were cited by counsel for the 20 respondentstowhichIneednotreferhere,astheyaretobefound inthe Halsbury's Lawsof England (supra). Ineed only saythat fromwhatemanatesfromthoseauthorities,thetestiswhetherthe donorhasdoneeverythingonhispartorwhetheranyactremains tobedonebyhim,andnotthedoneeortrustee,inordertoperfect 25 thetitletothepropertyconcerned. (SeeReRose, MidlandBank ExecutorandTrusteeCo.Ltd.v.Rose11949] Ch. 78;ReRose, Rosev.IRC[1952]Ch. 499;Re Fry, Chase NationalExecutors and Trustees Corporation v.Fry[1946] Ch. 312).Atitleinreal property inCyprusisperfected, accordingto our Laws,onlyby 30 the transfer of the property effected in the proper forms inthe appropriate District Lands Office (see the case of Rodothea PapaGeorghiouv. Komodromou
(1963)2C.L.R.221). In the present case there was undoubtedly an intention or promiseonthedeceased'sparttodonatehisshareintheproperty 35 inherited from his brother, to the applicant. This intention or promise, however, did not materialise until 1983, when the 1235 SawJdesJ. Stavrinldesv.Republic
(1987)property wasactually transferred tothe applicant. Applyingthe Law,asexpounded above, tothefacts ofthepresentcase,I find thatitwasreasonablyopentotheCommissionertoreachthesub judicedecision. Intheresultthisrecourse failsand isherebydismissed withno 5 orderforcosts. Recoursedismissed. Noorderastocosts. 1236