clr/1987/1987_3_1402.pdf

(1987)1987 October 16 ISAWIDES.J] IN THEMATTER OFARTICLE 146 OFTHECONSTITUTION THE ESTATEOFCOSTASPANAYIOTIDES,THROUGH THE ADMINISTRATORSGEORGHIOSLOIZOUAND YOULAFRANGOU, Applicants, v. THE REPUBLICOF CYPRUS, THROUGH

1. THE MINISTEROFFINANCE
2. T H E COMMISSIONER OF ESTATE DUTY, Respondents. (Case No. 248/85). Estate duty — Gifts— Whether immovable property gifted by the deceasedmore thanthreeyears beforehisdeath, butwhich wasnot registeredin thename of the donee, issubject to estate duty — Question answered m the affirmative. Immovable property — Gift of— When perfected. Immovable property — Subsistence, creation,acquisition or transferof anestate, interest or right whatsoever in any immovable property — The Immovable Property (Tenure Registration and Valuation)Law, Cap. 224, asamended by Law 3/60, Section 4 — Object and purpose of said section — Milington Ward ν Roubina

(1970)1 C.L.R. 88 adopted — Exclusion of relevant doctrines of common law and equity. 5 10 Reasoning of an administrative act — Principles governing the requirement and adequacy of. The issue inthisrecourse iswhether immovable property,which wasgifted bythe donorto his wife and childrenmorethanthreeyears priorto thedeath of the donor, but which was not transferred and registered in the donees' names, issubjectto estate duty Held, dismissing the recourse:

(1)From the material before the Court it emanates that there is sufficient reasoning of the decision of the respondent Commissioner. Such reasoning appears with sufficient clarity, though in a bnefform,inthenoticeofassessment,where thereasonisgiventhatforagift of immovable property to be valid the transfer shouldbe registeredwith the 2 0 Lands Office.Such reasoning,thoughsufficientby itself,issupplementedby the material in the relevant file of theadministration. 1402 15 3 C.L.R. Lolxou& Anotherv. Republic

(2)A title in immovable property is perfected only by the transfer of the propertyeffected intheproper forms intheappropnateDistrictLands Office (Stavnmdesv Republic (\987) 3 CLR 1228 adopted) Itfollows thatit was reasonably opentotherespondenttoreachthesubjudice decision 5 20

(3)Inadditiontotheabove, section 4 of theimmovable Property(Tenure, Registration and Valuation) Law Cap 224 which was onginally embodied in section 3 of Law 8 of 1953 and subsequently amended by Law 3 of 1960 provides that io estate, interest or nght whatsoever tn any immovable property «shall subsist or shall be created, acquired or transferred except undertheprovisions of thisLaw» Theobject of theintroductionof the above provision, itshistory and scope are very lucidly given inthejudgment of the Court of Appeal in the case of Aspasia Millmgton-Ward ν Chloi Roubina

(1970)1 CLR 88 As itwas held inthiscase theintentionof the legislature in enacting section 4 of Cap 224 was clearly to exclude expressly the provisions ofthecommonlaw andthedoctrinesof equity asfarasconcerning the creation, acquisition and transfer of any interest whatsoever in any immovable property Inthelight of theabove theAustralian case of Re Ward, Gilletν Ward

(1968)WAR 33 and the New Zealand case of Scoones ν Galvin and the Public Trustee

(1934)Ν ΖLR 1004 are differentiated from thepresent case both onthefacts and onthelaw applicable 25 Inthepresent case themere signingby thedeceased of the memorandaof gift does notby itself vestthe property inthe name of thedonees, as for the completion of such gifts and the vesting of any interest in the immovable property concerneda further step was required tobe takenby the deceased, thatof transfemng and having thesaid properties registered intheirnames 10 15 Recoursedismissed No orderastocosts Cases referred to Iomdesv TheRepublic tt9S2) 3 CLR 30 1136, Stavnmdesv TheRepublic

(1987)3 CLR 1228, Papageorghiou ν Komodromou

(1963)2C LR 221, Milhngton-Wardν Roubina

(1970)1CLR 88, Re Ward, Gilletν Ward

(1968)W AR 33, Scoonesv Galvin and ThePublic Trustee

(1934)NZLR ρ 1004, 35 Recourse. Recourse against the assesment raised on the estate of the deceased CostasPanayiotides. 1403 Loizou&Anotherv.Republic

(1987)A. Triantafyllides, for the applicants. A. Evangelou, Senior Counsel of the Republic, for the respondents. Cur.adv. vult. SAWIDES J. read the following judgment. The applicantsare the administrators of the estate of the deceased Costas Panayiotideswhodied on the27th September,

1. 5 The applicants on 6th June, 1972 delivered to the respondent Commissioner of Estate Duty, a simplified declaration of the deceased's property in which there were included gifts of 10 immovable property madebythedeceased morethanthree years priortohisdeath.Such giftsconsisted of(a) 15 building sites which had been gifted to hiswife Angeliki Panayiotidou; (b)8 buiidingsitesgifted tohisdaughter Youlla Frangou; 15 (c)7buildingsitesgifted tohisdaughter Sitsa Loizou. Thesaidbuiidingsitesoriginatedfrom apieceoflandpurchased bythedeceased in 1969whichhedividedintobuildingsites.The deceased retained 8 building sites for himself and donated the remaining tohis wife and twodaughters.Thedivision had notby 20 the time of hisdeath been completed bythe issueofseparate title deedsforeachsite.Such buildingsitesweresoldbythedoneesby virtue of contracts of sale executed in their names and the proceeds ofsale were collected by them. On the 20th June, 1973,theapplicantsthrough theiradvocate 25 delivered tothe respondent Commissioner a plan ofthe property whichhadbeen dividedintobuildingsitesandphoto-copiesofthe agreements whereby the above sites were gifted to the three persons concerned. On 25th February, 1981,therespondent Commissioner raised 30 an assessmentontheestateofthe deceasedat£115,917.-on the basisof whichthe estate duty payablewas£28,370.10 cent. On 2nd March, 1981, an objection was made to the above assessment by applicant George Loizou in respect of which an exchange of views took place between the Commissioner of 35 Estate Duty and applicant Youlla T.Frangou with a view to 1404 3 C.L.R. Loizou &Anotherv.Republic S a w l d e s J. reaching an agreement. As no agreement was reached the respondent Commissioner proceeded with the determination pf the objection and his decision was communicated to the applicants by notice dated 22nd December,
2. According to 5 such notice the estate dutyassessed onthe estate ofthe deceased was£28,370.10 centplusinterestat4%asfrom 27th September, 1973 till 28th January, 1980 less £1,000 paid on 29th January. 1980 making a total of £34,564.45 cent, plus interest at 4% on £28,370.10 centas from 29th January,
3. 10 On the said notice the following additional particulars were subscribed: «Foragiftof immovable property tobevalidthetransferof such property should be registered with the Lands' Office». As a result the applicants filed the present recourse whereby 15 they prayfor theannulment ofthesubjudice decision. The legalgroundsraisedbyapplicantsinsupport of theirpayer are:1.Therespondentswronglydecidedthatatthetimeofhisdeath the deceased was the owner of the plots of land which he had 20 gifted bycontractstohiswife and two daughters.
4. Intheabsence oftitledeeds fortheseparate plotsoflandthe only way that the gift could have been made was by means of a contractof gift. The issue in the present case boils down to whether the 25 immovable property which was gifted to the donees more than threeyearsprior tothe death of the deceased, but whichwasnot transferred andregisteredintheirnames,issubjecttoestateduty. Theargument of counsel forapplicants insupport of hisprayer forrelief may be briefly summarized as follows:30 Inthecircumstancesofthepresentcasethe donorhadmadean absolutegiftofthepropertiesinquestion and hedideverythingin his power to perfect such gift by signing the documents embodying the gift, whereby it was expressly stated that the donees had therightto sellanyone of the said buildingsites and 35 collect the proceeds of sale for their own account. Counsel submitted that the reason the deceased did not execute a proper transfer of the properties in question was because the land was covered byone registration titleand there were noseparate titles 1405 SawidesJ. Loizou&Anotherv.Republic

(1987)foreachplotandtherefore,itwasnotpossibletoeffectthetransfer of each building site separately. Consequently, the deceased applied tothe Lands Office for theissue of the variousseparate titledeedsandinthemeantimehemadeagiftofthevariousplots byvirtueofdocumentsofgiftexecuted byhim. 5 Counselfortherespondents,ontheotherhand,arguedthatfor a gift of immovable property to be completed and become effective,suchpropertyshouldbetransferredandregisteredinthe name of the donee in the manner provided by the Immovable Property(Tenure,RegistrationandValuation)Law,Cap.224(as 10 subsequently amended). Counsel further added that under the provisions of the Immovable Property (Transfer and Mortgage) Lawof 1965(Law9/65) notransfer ofimmovablepropertyshall bevalidunlessmadeinaccordancewiththeprovisionsofsuchlaw and that any attempt to transfer any immovable property 15 otherwise than inaccordancewiththeprovisionsofthelawshall notbeeffectual tocreate,vary,transfer, extinguish orinanyway affect anyrightsorinterestsinanyimmovableproperty.Counsel further contended thatundertheprovisionsofsection 4ofCap. 224(whichwasintroduced byLaw8of 1953)noestate,interest, 20 orrightwhatsoever, shallsubsistorshallbecreated,acquired or transferred except under the provisions of the said law. He concluded hisaddress bysubmittingthatthegiftsinthe present casehavingnotbeencompletedbytransferandregistrationofthe properties in the name of the donees were imperfect onesand 25 thereisnoequitytoperfectanimperfect gift. Before dealing with the above issue which isthe main issue beforeme,Ishallbrieflydealwithapreliminaryquestionraisedby counsel for applicants in that the subjudice decision has to be annulledontheground oflackofduereasoning. 30 Itiswell settled that administrative decisions have to be duly reasoned.Thereisalineofdecided casesbytheSupremeCourt reiteratingsuchprincipleandexplainingitsobjectaswellaswhat circumstancesmayamount toduereasoning. I need notreferin detailtosuchcasesasitsufficestomentiononlythecaseoflonides 35 v.TheRepublic

(1982)3C.L.R.1136inwhichatpp. 1149-1150 Loris,J. makesa brief analysisoftheprinciplewithreference to decided cases.Itreadsasfollows:1406 3 C.L.R. 5 10 15 Loizou&Anotherv.Republic S a w l d e · J. «It iswell settled that administrative decisions have to be dulyreasoned; what isdue reasoning isa question of degree dependent uponthenatureofthedecisionconcerned.(Athos Georghiades &Othersv. TheRepublic

(1967)3 C.L.R.653, atp. 666). The whole object of the rule requiring reasonstobe given for administrative decisions is to enable the person concerned, as well as the Court, on review, to ascertain in each particular case, whether the decision iswellfounded in factandinaccordancewiththelaw.(Kittidesv.The Republic,

(1973)3 C.L.R. 123,atp. 143). Reasoningbehindanadministrative decisionmaybe found either in the decision itself or in the official records related thereto. (Georghios^HjiSawa v. The Republic,

(1972)3 C.L.R. 174,atp. 205). Not all the reasons behind the decision need be explicitly stated, and omission to state subsidiary reasons does not render the reasoning inadequate. (ChristosP. Mouzouris v, TheRepublic,

(1972)3 C.L.R. 43).» 20 From the material before me I find that there is sufficient reasoningof thedecision oftherespondent Commissioner. Such reasoning appearswithsufficient clarity,though inabrief form, in thenoticeofassessmentwherethereasonisgiventhatforagiftof immovable property to be valid the transfer should be registered 25 withthe LandsOffice. Suchreasoning,thoughsufficient byitself, is supplemented by the material in the relevant file of the administration. Ihave,therefore, reachedtheconclusionthatthesubmissionof counsel for applicants that the sub judice decision is not duly 30 reasoned, isuntenable. Intherecent case of Paraskevou Stavrinides and the Republic (Case No. 95/86, in which judgment was delivered on the 29th July, 1987)*Ihad the opportunity of dealingwitha similarissue. The material part of my judgment, in this respect, which I fully 35 adopt forthe purposesof the present casewasasfollows:«Ishallnowproceed toexaminethealternative contention of counsel for applicant that the property in question could •Reportedin

(1987)3C.L.R. 1228 1407 SawtdeaJ. LoizouftAnotherv.Republic

(1987)not be treated asforming part oftheestateofthe deceased Sawas Koupatosbecause itwasgifted totheapplicantmore thanthreeyearspriortohisdeath. Itiscommon ground inthiscasethatthealleged giftwas completed bythetransfer ofthepropertyinthenameofthe 5 applicantin1983,thatis,withintheperiodofthreeyearsfrom thedeath ofthedonor. in Halsbury's Laws of England, 4th Ed. Vol. 20, the following arestatedatp.36,para. 62:'62. Courtwillnotcompleteincompletegift. Wherea 10 giftrestsmerelyinpromise,whetherwrittenorverbal,or inunfulfilled intention,itisincompleteandimperfect,and the court willnot compel the intendingdonor, orthose claimingunderhim,tocompleteandperfectit.Apromise made by deed is, however, binding even though it is 15 made without consideration. If a gift isto be valid the donor must have done everything which,according to the nature of the property comprised in-the gift, was necessary to be done by him in order to transfer the property and which itwasinhispowertodo.Ifagiftis 20 intended tobeeffectuated byonemode,forexampleby actualtransfer tothedonee,thecourtwillnotgiveeffect toitbyapplyingoneoftheothermodes. Anincompletegiftcanberevokedatanytime;thereis apowertodrawbacksolongasthegiftisincomplete.No 25 questionofconscienceentersintothematter,forthereis no consideration and there isnothing dishonest on the part of an intending donor who chooses to change his mindatanytimebeforethegiftiscomplete." A number of authorities were cited by counsel for the 30 respondentstowhich Ineednotreferhere,astheyaretobe found inHalsbury's LawsofEngland(supra).Ineedonlysay that from what emanates from those authorities, the testis whetherthedonorhasdoneeverythingonhispartorwhether any act remains to be done by him,and not the donee or 35 trustee,inordertoperfectthetitletothepropertyconcerned. (SeeReRose,MidlandBankExecutorandTrusteeCo.Ltd. v. Rose[1949]Ch.78;ReRose,Rosev.IRC[1952]Ch.499;Re Fry, Chase National Executors and Trustees Corporation v, Fry[1946] Ch. 312). A title in real property in Cyprus is 40 1408 3C.L.R. Loizou&Another«.Republic SavvtdeaJ. perfected, according to our Law, only by the transfer of the property, effected in the proper forms in the appropriate District Lands Office (see the case of Rodothea PapaGeorghiou v.Komodromou

(1963)2 C.L.R.221). 5 10 Inthe present casethere was undoubtedly an intention or promise on the deceased's part to donate his share in the property inherited from his brother, to the applicant. This intentionorpromise,however,didnotmaterialiseuntil1983, when the property was actually transferred to the applicant. Applying the Law, as expounded above, to the facts of the present case, I find that it was reasonably open to the Commissioner toreach thesubjudice decision.» Inaddition totheaboveIwishfurther torefertosection4ofthe Immovable Property (Tenure, Registration and Valuation) Law, 15 Cap.224whichwasoriginallyembodied insection3 ofLaw8of 1953 and subsequently amended by Law 3 of 1960, which provides that no estate, interest or right whatsoever in any immovable property «shallsubsistorshallbecreated, acquired or transferred exceptunderthe provisionsofthisLaw.» 20 Theobjectoftheintroductionoftheaboveprovision,itshistory and scope are very lucidly given inthejudgment of the Courtof Appeal in the case of AspasiaMillington-Wardv. Chhi Roubina

(1970)1C.L.R.88 in which at pp. 102 and 103,Josephides, J. had thistosay:- 25 «Thehistoryoftheeventswhichledtotheenactmentofthat section iswellknown andistobefound inthecaseof Kontou v.Parouti

(1953)19C.L.R. 172atpage 175.Thejudgmentin that casewasdelivered bythe Supreme Court ofthe Colony of Cyprus on the 6th February, 1953, and it was therein adumbrated that, with the abolition of the categories of immovable property, 'the combined effect ofthe Immovable Property Law (then Cap. 231 and now Cap. 224) and the CourtsofJusticeLaw(atthetimesection28(l)(c)ofCap. 11) might wellbe that, since the law of the Ottoman Land Code has ceased to apply, and as no other provision has been made,thepathisclearfortheapplicaponofthecommonlaw. At common law, any person holding an absolute interest in land is entitled to carve out and transfer to another limited estatessuchasaleaseholdchattelinterestoranestate forlife. However, it is not necessary in the present case to decide 30 35 40 1409 SawldesJ. Loizou&Anotherv.Republic

(1987)whether the document of the 17th September was an agreement tocreate a freehold estate'. The Land Registry Authorities, who were eager to have their Land Register watertight, were disturbed and, as a consequence, Law8 of 1953,embodyingthepresentsection 5 4, was speedily enacted by the legislative authority and published inthe Cyprus Gazette on the 4th March, 1953.We have no doubt whatsoever inourmindthattheonlyintention ofthe legislatureinenactingthepresentsection4ofCap.224 wasto exclude expressly the provisions of the Common law 10 and the doctrinesof equity asfar asimmovable property was concerned.» Learned counsel for applicants in support of his argument soughttorelyontwoCommonwealth casesinwhichthequestion ofgiftsofimmovablepropertycameunderconsideration.Thefirst 15 isan Australian case of the Supreme Court of Western Australia, Re Ward;Gilletv.Ward

(1968)W.A.R.33, and thesecond, acase oftheSupreme CourtofNewZealand, Scoones v.Galvinand the Public Trustee

(1934)N.Z.L.R.p.

1. Both theabove casesdealwiththesituation astowhen agiftof 20 immovable property may be deemed ashavingbeen completed. Inthe Australian case above,the facts were briefly as follows: Priorto hisdeath, a donor instructedhissolicitorstotransfer to his son by way of gift various properties.The transfer document was prepared and signed bythedonor and thedonee.Thedonor 25 gave authority for the titles to be delivered by his bank to his solicitorssothatthetransfer couldberegisteredand instructed his solicitorstohave the transfer stamped and registered and then to deliver the titles to the donee. Later, upon being advised of the assessment of stamp duty and gift duty on the transfer, the donor 30 instructed that these duties were to be paid by the donee. The donee agreed to pay them but was not then able to do so. The donor died before the duties had been paid and before the registration of thetransfer had been effected. On an application by the executor of the donor's estate for 35 directions, inter alia, as to whether the lands the subject of the intended gift were assets of the donor's estate it was held that although thedonor'ssolicitorswereactingforboth thedonor and the donee they were holding the documents on behalf of the doneefromthe datewhen thedoneeaccepted liabilitytopaythe 40 1410 3C.L.R. Loizou&Anotherv.Republic Savvlde*
2. assessedduties.Thedonorhadthendoneeverythingwhichitwas necessaryforhimtodotovestthelegalestateinthedoneeandthe solicitors were to look to the donee for everything else. The gift wascomplete before the donor's death. 5 Inthe second case the majority of the Court of Appeal in New Zealand concluded that although where a gift of land under the Transfer of Land Actsisintended, the delivery tothe donee of a memorandum of transfer is not sufficient, if both the memorandum of transfer and the relevant certificate of title are 10 delivered to the donee or to someone on his behalf there is a perfect gift of the land, for then there isnothing more-which itis necessary forthe donortodo tocomplete thegiftasthe payment of gift duty and the stamping and registration of the transfer can equally welt be done by the donee provided that he has the 15 documents. Fromwhatappearsfrom theabovecaseneitherinAustralianor in New Zealand is there anything in their legislation expressly requiringthatfor anytransfer ofimmovable propertyof whatever naturetobeeffective theownerorthedonorincaseofgift, should 20 attend the land registry office and take all necessary steps and make any necessary declarations for effecting such transfer. In both cases it was found that the provisions of their respective legislations were satisfied if a memorandum of transfer and the relevant certificate of title were both delivered to the donee orto 25 solicitorsactingon hisbehalf. Theabove casesaredifferentiated both on thefactsand onthe lawapplicable from the present case. Inthe present case besides thefactthatnotitledeedswerehandedwiththealleged document of transfer, there isno declaration of transfer in the proper form 30 effected before the Land Registry Office. Under our law, as explained above, for such gifts to have been perfected, further steps should have been taken by the donor, such step being actuallyandeffectually transferring thegifted propertyinthename ofthedoneesand haveitregisteredintheirown names. 35 The provisions in our legislation as to transfer of property acquired inwhatsoever manner are clearand unambiguous.Asit was held inAspasia Millington-Ward (supra) the intention of the legislatureinenactingsection4ofCap.224wasclearlytoexclude expresslythe provisions of the common lawand the doctrinesof 1411 S*wide·J. LoizouftAnotherv.Republic

(1987)equityas far as concerningthecreation,acquisition andtransfer of any interest whatsoever in any immovable property. In the present case the mere signing by the deceased of the memoranda of gift does not by itself vest the property in the name of the donees, as for the completion of such gifts and the 5 vesting of any interest in the immovable property concerned a further step was required to be taken by the deceased, that of transferring and having the said properties registered in their names. Applying the law, as expounded above, to the facts of the 10 present case, I have cometotheconclusion thatitwas reasonably open tothe Commissioner of Estate Dutyto reach thesub judice decision. Intheresultthisrecourse failsandishereby dismissed. Bearing in mindthe novelty of the pointraised, I make noorderfor costs. 15 Recourse dismissed. No orderas to costs. ι Airt