clr/1987/1987_3_2047.pdf

(1987)Constitutional Law — Right to make a contract — Constitution. Art 26 — The Agricultural Insurance Law 19/77. sections15, 16.17—Not contrary toArt 26 Constitutional Law'— Right to have access to Courts — Constitution. Art 30 — TheAgncultural InsuranceLaw 19/77.sections 15.16andl7—Notcoufrary toArt 30 5 TheAgncultural Insurance Law 19/77 — The premiums payable thereunder — Theyare in thenature oflax The applicantswho areengagedintheproduction forsafeoftablegrapes. challenge in effect the imposition on them of the obligation to pay «insurance premiums» in respect of table grapesof the 1981 crop atthe rate of 2 5m.!s per o^e {or of 2milsper kilo) 10 Thesubjudice decisionsweretakenmvirtueofAgnculturalInsuranceLaw. (Law 19/77) asamended TheAgncultural InsuranceRegulations 1977and theOrder of theCouncilof Ministersdated5 5 78 Counsel(ortheapplicants 15 have contended that sections 15 16 and 17 of Law 19/77 are unconstitutional as contravening Articles 23 24 25 26 28 and 30 of the Constitution They havesubmitted furtherthatthe/aforesaidinsurancepremiumof2mils perkiloisarbitrary andunreasonable,andthatthedecisionbymeansofwhich 2 0 it was fixed isnot duly reasoned Held dismissing the recourse

(1)The contnbufions inquestion are in the nature of a tax. in the senseofArticle 24

(2)of the Constitution,and the feet that such tax isnot of auniversal naturedoes not offendagainst the pnnciple of equality which issafeguarded by Articles 24

(1)and28of theConstitution. 2 5 because its imposition is based on a reasonable in the light of all relevant considerations classification

(2)When atax duty or rate isnot otherwise unconstitutional it cannot be treatedascontraveningtheprovisionsofArticle23oftheConstitution merely because itresultsindepnvation ofmoney forthepurpose ofsuchtax,duty or 3 0 rate '3)Article 25 protectsagainstdirect andnot alsoindrect interference with the nghtssafeguarded by it

(4)The application of the relevant legislative provisrons does nol. in iftct entailentenngintoacontract inthesenseinwhichthenotionofentennginto 3 5 acontract issafeguardedby Article 26 1of the Constitution

(5)The contention that thelawinquestion deniesapplicants nght tohave access to the Court in order to challenge the obligation to be an insured 2048 3 C.L.R. Phassouri Plantationsv. Agric. Insurance person is wholly unfounded because the applicants have filed under Article 146 of the Constitution their present recourse by means of which all their contentionsare beingdetermined (Ν Πκ ^[iptimiiN on whom the burden lay ha», e failed to persuade the Court thai the lixin^ of such premiums at 25 mils per oke (or 2 mils pei kilo) i*.iirbitraryand unreasonable 5 Recourses dismissed No order asto costs Cast's referred to I Lamtis harm Ltd and another ν The Repubhr π QQ?i^ C I R 124 Cont.tanhmdcsν TheElectncityAuthontyol«. Ι / Ί Ι Ι Μ ' '", , l L R 798 Re HjiKynakos ansSonsLtd 5 R S C C 22 The Republic ν Demetnades

(1977)3 C L R 213 loAnnidesv The Republic

(1979)3 C L R 295 15 Antoniadesv The Republic

(1979)3 C L R 641 PASYDYv The Municipality of Nicosia

(1978)3 C L R 117 Ambrosia Oilsν The Republic

(1984)3 C L R 943 Psarasv The Republic

(1968)3 C L R 353 Antoniadesv 77je/?epub/ir{1979)3C L R 641 20 Apostolou ν The Republic

(1984)3 C L R 509 Frangou ν The Greek Communal Chamber

(1966)3 C L R 201 Chimonides ν Mangiis

(1967)1 C L R 125 Saba Kypns&Co ν The Republic {\980) 3 C L R 149 77ieRepublic ν Menelaou

(1982)3 C L R 419 25 Aloupas ν National Bank of Greece

(1983)1C L R 55 Decision 1457/55 of Greek Council of State Recourses. Recoursesagainstmedecisionof fhe respondentstoimposeon applicantstheobligationtopay insurancepremiumsinrespectof 30 tablegrapesof the 1981 cropat therateof 2 5milsper oke G Cacoytannis, forapplicants in Case No 276/81 G Tnantafylhdes, forapplicant in CaseNo 370/81 S Matsas, fortherespondents Cur. adv vuit AW) P h u s o u r i Plantations v.Agric.Insurance

(1987)TRIANTAFYLLIDESP.readthefollowingjudgment.Bymeans of the present recourses, which were heard together in viewof theirnature,theapplicantschallenge,ineffect, theimpositionon them oftheobligationtopay«insurancepremiums»inrespectof tablegrapesofthe 1981crop,attherateof2.5milsperoke(orof 5 2milsperkilo). The applicants are companies engaged in agriculture and amongst their activities is the production for sale at the local market and for export abroad of table grapes and of grapes suitableforwinemaking. 10 Bymeansofsection4oftheAgriculturalInsuranceLaw,1977 {Law 19/77), there wasset up the Organization of Agricultural Insurancewhichfunctions underthesupervision oftheStateand exercisesthepowersentrustedtoitbythesaidLaw. By virtue of section 15 of Law 19/77 all persons in Cyprus 15 engagedinagricultureareconsideredas«insuredpersons»forthe purposesofthisLawandareboundtopaytotheOrganization,as providedinsection 17oftheLaw,monetarycontributionsbv « ^ ofinsurancepremiumsinrespectoftheiragriculturalcrops Bya provisotosection21ofLaw19/77,whichwasadded by 20 section2oftheAgriculturalInsurance(Amendment)(No.2)Law, 1980 (Law 26/80), the export by any person of any insured agricultural crop isprohibited unlessthe appropriate authorityis satisfied, byacertificate oftherespondent Organization,thatthe insurancepremiumshavebeen paid. 25 The premiums payable by the applicants in respect of their crops were fixed in accordance with the Agricultural Insurance Regulations1977,whichweremadeundersection33ofLaw19/ 77 (see No. 167 inthe ThirdSupplement, Part I,tothe Official Gazetteof29July 1977). TheCouncilofMinisters,actingundersection16ofLaw19/77, hasspecified byanOrdermadeon5May1978(seeNo.80inthe Third Supplement to the Official Gazette) the agricultural crops whicharecompulsorily insurableforthepurposesofLaw 19/77 andinsuchcropsareincludedtablegrapesandgrapessuitablefor 35 winemaking. The validity of the aforementioned Order of the Council of MinisterswaschallengedbymeansofrecoursesNos.276/78and 2050 30 3C.L.R. Phassouri Plantationsv.Agrlc.Insurance Triantafyllldes P. 5 Γ7'78 which were dismissed by a judgment delivered by my hi..i«.. ;Judge A. Loizou J. (see LanitisFarmand another v. The R.'imblic,

(1982)3C.L.R. 124) ontheground thatsuch Orderisof a regulatory natureandlegislativecontentand,therefore, itcould notbe madedirectly thesubject-matter ofa recourse under Article 146.1 of theConstitution. Counsel for the applicants have contendedthatsections 15,16 and 17 of Law 19/77 are unconstitutionalas contravening Articles 23, 24,25, 26, 28 and30 of theConstitution. 10 They have submitted further that the aforesaid insurance premium of 2 mils per kilo is arbitrary and unreasonable andthat the decision by means of which itwas fixed isnot duly reasoned. Before proceeding further it may be noted that the object of agricultural insuranceis,insection3of Law 19/77, stated tobethe 15 promotion of the national economy and the welfare of those occupied in agriculture; and by section 2 of Law 19/77 the insurance premiums are defined as being the monetary contributionspayable by those insured tothe Organization. As regards the nature of such contributions I have duly 20 considered thesubmissions of counsel for theparties and, bearing inmindtheapproachadoptedby ourSupremeCourtin,interalia, Constantinides v. The ElectricityAuthority of Cyprus,

(1982)3 C.L.R. 798,805-807,1 have reached theconclusion thatthey are contributions inthe natureof atax, inthesense of Article 24

(2)of 25 the Constitution; and the fact that such tax is not of a universal nature does not, in my opinion, offend against the principle of equality which is safeguarded by Articles 24

(1)and 28 of the Constitution because its imposition is based on a reasonable, in thelightofall relevant considerations,classification (see,interalia, 30 inthisrespect. InreHjiKyriakos andSons Ltd., 5 R.S.C.C.22, The Republic v. Demetriades,

(1977)3 C.L.R. 213, loannides v. The Republic,

(1979)3 C.L.R. 295, andAntoniades v. The Republic,

(1979)3 C.L.R. 641, as well as the Decision 1457/1955 of the Council of State in Greece). 35 ithas been further submitted by counsel for the applicants that the imposition of the sub judice compulsory insurance scheme, which involves the compulsory payment of money by way of insurance premiums contravenes Article 23 of the Constitutionin thattheapplicantsare deprived of thismoney which they have to 40 pay as insurance premiums: 2051 Triantafyllides P. Phassouri Plantations v.Agric. Insurance

(1987)InPASYDYv. TheMunicipalityof"Nicosia.

(1978)3C.L.R. 117. 138.there wasstated thatwhen atax.dutyorrateisnot otherwise unconstitutional it cannot be treated as contravening the provisions of Article 23 of the Constitution merely because it resultsindeprivation ofmoneyfor thepurpose ofsuchtax.dutyor 5 rate, because otherwise Article 23 of the Constitution would render Art. 24.1 of the Constitution devoid of any effect whatsoever. The same approach was adopted in Ambrosia Oils v. The Republic,

(1984)3 C.L.R. 943. 948, where it was stated thai 10 Article23does not come intoplayincasesconcerning imposition oftaxes,duties,or ratesofanykind, when such imposition comes within the provisions of Article24 of the Constitution. AsIhavealready found thattheprovisionsofLaw 19/77donot offend against Article 24 of the Constitution I have tofind that the 15 payment of money by the applicants by way of insurance premiumsdoes not offend againstArticle23 of the Constitution. Another submission put forward by counsel for the applicants was that the compulsory insurance scheme in question interferes with the right to practice any profession or to carry on any 20 occupation, tradeorbusinesswhichissafeguarded byArticle25of the Constitution: It has been held on a number of occasions that Article 25 protectsagainst direct and not, also, indirect interference with the rightssafeguarded byit(see,interalia,inthisrespect, Psarasv.The 25 Republic,

(1968)3 C.L.R. 353,364,Antoniades v. The Republic,

(1979)3 C.L.R. 641, 659 Apostolou v. The Republic,

(1984)3 C.L.R. 509, 524 and the Ambrosia, case, supra 948). Consequently, Iam of the opinion thatsincethe imposition on the applicants of the duty to paythe insurance premiums inquestion 30 does not interfere directly with their rights under Article25 of the Constitution such Article is not contravened by the sub judice insurance scheme. Icome, nexttotheapplicants' contention thattheir compulsory participation in the agricultural insurance schemes in question 35 constitutes an imposed obligation to enter into a contract of insurance,inamannerviolatingtheirrightwhichissafeguarded bv Article26 of the Constitution: 2052 K l R Phassouri Plantations v. Agric. Insurance TrlantafylHde· Ρ the IK case law such as Fmngou ν The Greek munaichdtnber (i966) 3 C LR 201, 209, Chimontdes ν Manghs

(1967)1 C LR 125. Psaras ν The Republic

(1968)3 C LR 353 364. Saba. Kypns & Co ν The Republic,

(1980)3 5 C LR 149 \60\The Republic ν Menelaou,

(1982)3 C LR 419 andAloupas ν National Bank of Greece,

(1983)1C LR 55,1am ot theopinion thatthe nght safeguarded underArticle 26 1of the Constitution as explained in the said case-law, has not been tnfnnged by thesubjudice compulsory insurancescheme because 10 the application of the lelevant legislative provisions does not.in fact entailentenngintoacontract,inthesense inwhich thenotion of entering into a contract is safeguarded by Article 26 1 of the Constitution Inmyviewfor thepurposes ofthisinsurancescheme the applicants are not forced to enter into any contract at all 15 because they are made to participate in a scheme which is of statutory and notof a contractual nature J0 Counsel for theapplicantscomplained,also, thatneitherin Law 19/77 nor in the relevant Regulations is there any provision enabling an insured person tochallenge by Courtproceedings his obligation to be an insured person under such Law or hi? obligation topayaparticularinsurancepremiumandtherefore the applicants,as insured persons,are being deniedaccess toCourtΉ a mannercontrary toArticle 30 of theConstitution I find this contention of counsel to be wholly unfoundt \ 25 because the applicants have filed under Article 146 of The Constitution their present recourse by means of which all their contentions regarding the alleged unconstitutionality, or otherwise invalidity, of Law 19/77 and the Regulations made thereunder, as well as any complaints about the validity of the 30 mode of the application of such Law and Regulations, are being determined 35 4Q Lastly, as regards the complaint of the applicants about the particular insurance premium:,which they have topay I amof the view that the applicants on whom the burden lay, have failed to persuade me thatthe fixing of such premiums at2 5 mils per oke for 2 mils per kilo)isar Ml.dryand unreasonableso thatthey might succeed in theirrecourses on this ground In the result these recourses fail and are dismissed accordingly, butwithout any order as to costs. Recourses dismissed No order as to costs. 2053