clr/1987/1987_3_2081.pdf

(1987)The Freeshops Ltd. disputed the validity of the act of termination of the agreement andfiledanactionbeforeaDistrictCourt fordamages for breach of contract. The present proceedings are solely directed against the said decision of the Director of Customs. Held, dismissing the recourse.

(1)The first issue iswhether the subjudice decision can be extncated fromthecontractual relationshipof theparties.In other words we must determine whether it isanact sounding in the domain of public or pnvate law.ThetestappliedinCyprusfortheclassificationofacts forthepurposesofthejurisdictionoftheSupremeCourt underArticle 146.1 issubstantive, not formal. 5 10

(2)The principles underlyingtheclassificationofactsof the Administration withaviewtodeterminingthedomaintowhichtheybelongarethefollowing· Acts of the Administration onginatmg from and incidental to the exercise of theprivate law nghts of theStatelack theelement of unilateral expression of thewillof theAdministrationasthedeterminingforceforthegenesisof rights 1 5 andobligationscognizable inlaw

(3)Tested in another way the non-justiciability of the subjudice decision becomes more apparent still. Supposing we assumed junsdiction to review thesubjudicedecision,totestitslegality;wewouldinevitablybednvenback to examination of the nghts andobligations of the parties flowing from their 20 contractual arrangement. Recoursedismissed. No order astocosts. Casesreferredto• Frangos v.Medical Disciplinary Board

(1983)1C L.R. 258; 25 Decisions ofGreek Council ofStateNos 335/49.320/31,1139/57,70/36 399/

1. Recourse. Recourseagainstthedecisionoftherespondenttowithdrawthe licencegrantedtotheapplicantstousethepremisesoftheairports 30 asbonded warehouses. T.Papadopoulos, for the applicants. A. Evangelou, Senior Counsel of the Republic, for the respondent. Cur. adv. vult. 35 PIKIS J. read the following judgment. In virtue of a written agreement dated 16thJanuary, 1984,theGovernmentof Cyprus 2082 3 C.L.R. Freeshops Ltd.v.Republic P i k i · J. agreed tolettotheFreeshops Ltd., theapplicants, theduty free shopsattheLamaca and Paphos airportsforthestorage and sale of duty free goodstopassengers travellingabroad. Forthe useof the premises and the facilities afforded thereby the applicants 5 would pay by way of rent the moneys stipulated for inthe agreement. Counsel fortheRepublic acknowledged great care wastaken toavoid the useoftermsordinarily employed to signify an agreement oflease inorder toavoid theimplications ofRent Control legislation, if at allrelevant to this type of agreement. 10 Consequently theleaseofthepremiseswasdescribed asalicence whereasthemonetary consideration provided fortherein wasnot termed rent. Theagreementwouldbeforthedurationofthreeyearsexpiring on31stJanuary, 1987,unlesstheairportsoreitherofthem ceased 15 tooperate prior tothat date orthe agreement wasterminatedby the Government inexerciseoftherightsvested inthem by clause 15 ofthe contract. That term permitted theowners to terminate the agreement if the licencees defaulted in their financial obligations under the agreement and failed toremedy the default 20 after 30 days notice addressed tothat end. Following theexecution oftheagreement andasan incident thereto the Director of Customs authorized* on 27th January, 1984, theuse of the premises asa bonded warehouse forthe storage therein ofduty free goods.The authorization was tiedto 25 the duration ofthe agreement between the parties and subject to its expiration by the effluxion of time or its termination in accordance with theterms ofthe agreement. Sequentially to the execution oftheaforementioned agreementandthe authorization of the Directorforthe use ofthe premisesasabonded warehouse 30 the applicant moved in possession of the premises and began trading thereof induty free goods. A dispute arose between thecontracting parties affecting the financial obligationsoftheapplicantsundertheagreementof 16th January,
2. Inthecontention ofthe Government ofCyprus, 35 the applicants became indebted to them for an amount of £676,314.00 that they omitted orrefused topay. The applicants were invited toremedy the default anda notice tothat endwas addressed to them on 15thSeptember, 1986, inviting them to *Pursuanttotheprovisionsofs. 71oftheCustomsandExciseLaw,1967 (82/67) 2083 PtkU J. Freeshop· U d . v. Republic

(1987)meettheiroutstandingobligationsundertheagreementwithin14 days. The applicants denied they were indebted to the Government of Cyprus for any amount. Their response wasset out ina letteroftheircounselof26thSeptember, 1986 refuting liabilityanddenyingindebtednessforanyamountwhatever. 5 In exercise of therightsvested in them by clause 15 of the contract of 16th January, 1984, the Government of Cyprus terminatedtheagreementbynoticedated30thSeptember,

1. AwhilelatertheDirectorofCustomswithdrewthelicenceearlier granted for the use of thepremisesasabonded warehouse. He 10 founded hisdecision onthefactoftermination oftheagreement andthetermsunderwhichtheapplicantswereauthorized touse the premises as a bonded warehouse*. The Freeshops Ltd. disputedthevalidityoftheactofterminationoftheagreementand raised an action before the District Court of Nicosia against the 15 Government of Cyprus for damages for breach of contract. The presentproceedingsaresolelydirectedagainstthedecisionofthe Director of Customs of 10th October, 1986 taken, as explained above, sequentially to the termination ofthe agreement of 16th January,1984.Inthesubmissionofapplicantsthedecisionof10th 20 October, 1986, constitutes an act of the administration separate anddistinctfromthetermination oftheagreementreferable tothe exerciseofthestatutorypowersvestedintheDirectorofCustoms. As such it amounted to an act in the domain of public law reviewable under the provisions of Article 146.1 of the 25 Constitution. CounselfortheRepublicwhileacknowledgingthat thesubject decision oftheDirectorofCustomsisonthefaceofit an act in the domain of public law, he argued it is not of itself justiciableinviewofwhathadprecededit,notablythetermination oftheagreementandconsequentlyforfeiture ofeveryrightonthe 30 part of the applicants to make any use of the property. The decision of the Director of Customs was merely infomnatory formalizing a situation that hadcrystallised bytheterminationof theagreement.Itwas,hepointedout,atermofthelicencethatit would expire coincidentally with the termination of the 35 agreement. Thecompetence oftheCourttotakecognizanceofarecourse isalwaysatissue.Itaffects thejusticiabilityofthedecision under *Seesection81 ofLaw82/
2. 2084 3 C.t R. Freeshop· Ltd. v. Republic P i U s J. review and as such must be resolved before any other question The first issue I must determine is whether the decision of the Directorof Customs of 10th October, 1986 canbe extricated from the contractualrelationship of theparties Inotherwords we must 5 determine whether itisan actsounding inthedomainof public or pnvate law Intheformer case itcanbe madethesubject of review provided the decision is executory, creative of nghts in law The test applied inCyprus for theclassification ofactsfor the purposes of the junsdictionn of the Supreme Court under Article 146 1 is 10 substantive, not formal* The intrinsic nature and complexion of the act must be examined in order to determine its justiciability, not merely thesource of its ongin Asenes of decisions of theGreekCouncilof State establish the acts of the Administration incidental to its relationship in the field 15 of pnvate law and inseparable therefrom are solely amenable to the junsdichon of Civil Courts Hence the withdrawal of licences sequentially to the termination of a contractual relationship has been held tobe exclusivelyjusticiable before Civil Courts Thusin the decision of the Greek Council of State under 335/49** the 20 withdrawal of a licence following the termination of acontractual agreement was found tobe anincidentof thatrelationship and as such subject tothejunsdichon of aCivil Court Tothesame effect isthedecision of the GreekCouncil of state in case 320/31*** .t was decided thatadispute basicallyreferable totheinterpretatao 25 of the terms of an agreement including matters incidentaltheretc was referable to the junsdiction of a civil court Of grea-<r importance stall is the decision of the Greek Council of State in case 1139/57**** in which the point is made that action of the Administration signifying its position as a contracting party is 30 exclusively amenable to the junsdichon of the Civil Courts To classify junstically the domain of acts of theAdministration, it was pointedoutby theGreekCouncilofState inCase 70/36*****, we must look at the substance of the act,an exercise entailing, tomy understanding, identification of the substantive cause generating 35 theactionof theAdministration Similarpnnciplesdenve from the •Frangosv MedicalDisciplinaryBoard

(1983)1C LR 258(FB) ·· Decisionsof the CreekCouncilof State 1949A, ρ 554 "•Decisions of the GreekCouncilof State 1931,ρ 954 ••"Decisionsofthe Creek CouncilofState 1957B.ρ 437 " * · * Decisionso/tfw GreekCounal of State. 1936A 1 172 2085 Pikls J. Freeshops Ltd. v. Republic

(1987)decision of the Greek Council of State in Case 399/54*. A synopsis of the principles emerging from relevant Greek caselaw appears in Conclusions of the Greek Council of State

(19291959)**. The principles underlying the classification of the 5 Administration with a view to determining the domain to which they belong are, as I perceive them, the following: Acts of the administration originating from and incidental to the exercise of the private law rights of the State lack the element of unilateral expression of the will of the Administration as the determining 10 force for the genesis of rights and obligations cognizable in law. (The nature of acts of the Administration in the domain of public iaw is the subject of discussion in "The Administrative Act" by Professor Forsthoff, pages 3-13). Suchunilateralactiononthepart of the Administration isanexpression of the imperium of theState 15 in the exercise of the powers vested by law inthe Administration for the promotion and fulfilment of the ends of the law. Tested in another way the ηon-justiciability of the sub judice decision becomes more apparentstill. Supposing we assumed jurisdiction to review the sub judice decision, to test its legality; we would 20 inevitably be driven back to examination of the rights and obligations of the parties flowing from their contractual arrangement; an examination thatwould unavoidably require the Court to pronounce on their private law rights, atask beyond the jurisdiction of this Court. 25 The applicants need not fear suffering any loss on account of lack of jurisdiction on the part of this Court toreview the subjectmatter of the recourse because any damage to which they might be entitled to in case of wrongful withdrawal of the licence would necessarily be recoverable in the civil action presently pending before the District Court of Nicosia. Such damage would be a direct incident of the breach of contract, assuming such breach is proven before thecivilCourt. • Decisionsof the Creek Councilof Slate 1954B. 1136 " Decisionsof the Greek Councilof Slate 1954B.PP 232-233 2086 30 3 C.L.R. Freeshops Ltd.v.Republic Pikl*J. MyconclusionisthatIhavenojurisdictiontotakecognizanceof and review the sub judice decision. That being the case it is unnecessarytodebateandresolvethepointmadebycounselfor theRepublicthatthesubjudicedecisionisnotexecutory.Though 5 itmaybearguedihat thedecisionoftheDirectortowithdrawthe licencehadnoimpactontherightsoftheapplicantsbecausethey hadforfeited, inviewoftheterminationoftheagreement,the right to make any use of the premises.The withdrawal of the licence wasmerelyincidentaltothedemiseoftheagreement.However,I 10 did not probe the matter to the depth necessary to express a concluded opinion and on that account Irefrain from makinga formal declaration on that aspect of the case. The recourse is dismissed for lackofjurisdiction on the partoftheCourttotake cognizance of the subjudicedecision. Letthere be noorder for 15 costs. Recoursedismissed. Noorderastocosts. 2087