(1987) 1987 Fenruary 27 1STYLIAN1DES J | IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION HARA HOTELS LTD AND OTHERS Applicants, ν THEREPUBLICOFCYPRUS THROUGH 1 THE DIRECTOR OF THEDEPARTMENTOF WATERDE
the proviso to section-24
(2)of the said laws, (c) The fee is of a destructive or prohibitive nature and. therefore,
Art 24
4 of the Constitution and (d) The sub judice decisions amount to 1 0 discnmination and infringe the pnnciples of equality and are, therefore,
Art 24
1 and 28 of th'e Constitution It must be noted that the aforesaid Regulations were enacted in virtue of the powers of the Council of Ministers under Section 4(e)* and Section 24** of the Government Waterworks Law, Cap 341, as amended by Laws 129/68 51/72 and 1/77 CASE No 394/80 The applicants, who are the registered owners of a plot of land situated within the area of the Improvement Board of Amathus applied for a building permit for the erection of a hotel The permit was granted but on condition that the sum of £30,380 calculated In accordance with «the 1980 regulations» be paid as water supply fee The applicants paid the said sum under protest and when their request for the return of the money was turned down they filed the said recourse It must be noted that the decision to impose the said fee was taken before the publication of «the 1980 regulations» 15 20 «^5 CASE No 408/80 The appropnate Authority approved the grant of a building permit to the applicant for the erection of five multi-storey buildings The decision was communicated to the applicant by letter dated 13 2 80, whereby the applicant was requested to pay the fees under the Streets and Buildings Regulations The applicant paid the said fees on 30 14 2 80 By letter dated 29 4 80 the applicant was requested to pay £17,625 for water supply and£460forelectrification Hence the present recourse The applicant contendedthat on payment of the said feeson 14 2 80 the buildingpermitbecame afinal executoryactand therefore, it could not be completed or altered later Once again, the fee of 3 5 117,625 was calculated in accordance with «the 1980 regulations» before their publication CASE No 98^82 The applicant applied for a building permit with respect to extensions and additions to his house situated on land within the area of the Improvement Board of Amathus As the applicant was 4 0 'Quoiedatpp 629 630post "Quotedatp 630post 620 3 C.L.R. Hara Hotels v. Republic informed thai in connection with such permit he had to pay £3.960. as water connection fee. he filed the above recourse 5 10 Held.
(1)The legal pnnciples governing questions relating ίο regulations alleged to be ultra vires have been summed up in Papaxenophontos and Others v. The Republic
(1982)3 C L R . 1037 at ρ 1047 In modem statutes the practiceistoconfer rule-making power by one general prov ision empowenng the rule-making Authority to make rules «for carrying out the purposes of the law» followed by the enumeration of cenain particular matters regarding which rules may be made -without prejudice to the generality of the foregoing power- In such a case the specific enumeration does not circumscribethe general power Any regulationwhich comes within the scope ofthe generalpower would be valid 15 The Council of Ministers under Section 4 has the power to fi\ by regulations the fees and rates payable in consideration of the water supplied by the Republic or the benefit accruing from the water supplied or any waterwork and in general of the services tendered by the Republic relating to such supplies 2\J Subsection
(1)of Section 24 is cast in very general terms The provisions of subsection
(2)are not restrictive of subsection
(1). as indeed υ expressly stated by the words «without prendice to the generality of subsection
(1)» The challenged regulations are necessary for carrying into effect the law 25 30 Even assuming that the general ρυν-er foi rule-making given to the Council of Ministers by Subsection
(1)does not control the detailed provision in Subsection
(2), again «the 1980 Regulations» are intra vires Regulation 2(a) provides that the fees and rates and any other money consideration may be fixed ((.δυνομίνων να καθορισθίοοι») either by donum of land, or . rateably to the benefit which accrues or may accrue to any person or any ownership by the water or any waterwork Such «benefit» in a highly developed tourist area, such as the area in question. depends on the area and the zone in which the land is situated as well as the area of the building erected or proposed to be erected «Proposed» building in the regulations means building for purposes of connectionwith theWater Supply Itmakes nodifferencewhether itexists oritisproposedtobeerected 35
(2)The words «inter aha» m the proviso to section 24
(2)(a) must be given full effect In any event no matenal was placed before the Court to substantiate the allegation that the fees imposed are beyond the limitations of the proviso. 40
(3)The distinction between tax and fee is plain The reason for the payment in the case of fees is the special benefit accruing to the individual, in the case of tax. the particular advantage, if it exists at all. is 621 Hara Hotels v. Republic
(1987)an incidental result of state action The connection fees in case of waterworks do not merge with the general revenue but they are set apart for the particular purpose It follows that they are not taxation in the sense of Art 24 of the Constitution Even assuming that such fees constituted taxation the sub judice fees were not destructive or prohibitive
(4)The burden of proving the unconstitutionality of a law is upon him who raises it A taxation will be struck down as violative of Art 28 if there is no reasonable basis behind the classification made Dy it In matters of taxation the legislative is allowed greater latitude and has a broader power of classification than in other fields (Antomades and Others ν The Republic
(1977)3 C L R 641 at 655) The feei in question are based on objective reasonable cnteria the extent of the land the zone within which it is situated and the area of 'he building standing or proposed to be erected thereon β 10
(5)As regards case 394/80 (a) Under the Streets and Buildings Regulation Law Cap 96 as amended by Law 13/74 the appropnate authonty on granting a permit for the erection of a new building has power to impose a condition for the supply of adequate and suitable water (section 9(l)(b)(xi)) and shall not grant any permit under section 3 unless it is satisfied that the applicant has complied with the provisions relating to the supply and provision of water contained in this or any other Law or m any Regulations for the time being in force (Section 9
(3)(b)) Moreover section 4
(1)provides that «No permit shall be granted under Section 3 of this Law unless the appropnate authonty is satisfied that the contemplated work or other matter tn respect of which the permit is sought is in accordance with the provisions of this Law and the Regulations in force for the time being - (b) It follows that the connection fee was a condition imposed lawfully on granting the permit The rate, however was calculated in accordance with *the 1980 regulations» which were not in force at the time The sub 3 0 judice decision and the consequential collection of the amount of £30,380 was
law and, therefore, null and void
(6)As regards case 408/80 (
- a)The appropriate authority could not approve the issue or granting of a building permit unless satisfied about the compliance with the provisions of the relevant legislation for adequate 3 5 water supply and compliance with the provisions of the Law and Regulations Though in the pnnted letter of 13 2 80 the condition for the payment of the connection fees was not included, the applicant cannot validly assert that such a condition was not imposed at the time of the decision for the approval of the building permit -9 2 80 The pnnted letter 4 0 of 13 2 80 is not the decision The omission to request the applicant by this letter of 13 2 80 to pay the connection fees is not fatal for the 622 15 20 25 3 C.L.R. Hara Hotels v. Republic Administration (
- b)The sub judice decision however has to be annulled for the same redbon a* the sub judice decision in case 394/80 5
(7)As regards case 98/82 in view of what was said earlier about the statutory provisions in the Streets & Buldings Regulations Law and «the 1980 Regulations» in connectionwith other cases this recourse fails Sub judice decisions in cases 394/80 and 408/80 annulled Allother recoursesdismissed No order as to costs 10 Casesreferredto Chnstodoulou ν TheRepublic 1RS CC 1 Spyrou and Others ν The Republic
(1973)3 CLR 627 Papaxenophontos and Others ν The Republic
(1982)3 CLR 1037 .c Stavrou ν The Republic
(1976)3 CLR 66 Menicosv The Republic
(1983)3 CLR 1130 Ethmcosv KOA
(1984)3 C L R 1150 Leflcafis and Others ν The Republic
(1985)3 CLR 1372 Ross • Clunis ν Papadopoulos 23CLR 71 20 Cons/anrmidesν ΕAC
(1982)3 CLR 798 Apostolou and Others ν The Republic
(1984)3 CLR 509 Mathews ν Chirkory MarketingBoard 6 0 C L R 263 Shirur Mut Case Commissioner, Hindu Religious Endowments. Madrasν Sn LakshmindraThirtha Swamiar of SnSharurMutt
(1954)S C R 1005
(54)A C 282, The Board for Registration of Architects and Civil Engineers ν Kynakides
(1966)3 CLR 640 HadjiKynacou ν The Republic, 5 RS CC 22, Mafsis ν TheRepublic
(1969)3 C LR 245 30 Demetnades ν The Republic
(1977)3 CLR 213, loanmdes ν TheRepublic
(1987)3 CLR 297 623 Hara Hotels v. Republic
(1987)Antomades and Others ν The Republic 0977) 3 C LR. 641 Singer Sewing Machine Co v. The Director of the Department of inland Rei-enuet\97&) 3 CLR 71. Road Improvement Dt ν MissounRC 274 US 188 77iomas Walston ν Joseph Nevm (18o8f 128 US 578 5 AlliedStores ν Bowers
(1959)358 US 522 Recourses. Recourses against decisions of therespondentstoimpose a fee for the connectionof applicant's properties with the water supply ofAmathus Waterwork. 10 G. Cacoyannis. for applicants in Cases Nos. 394/80, 408/80 502/
- 91/82-100/
- 127/82 and 128/
- Ε Michaelides with Chr. Hadjianastassiou. for applicants in Cases Nos. 102/82 and 108/82 Ch. Kyriakides. respondents Counsel of the Republic, for the 15 Cur. adv. vult. STVLIANIDES J read the following judgment. In all these cases there are common points of facts and law. On the application of counsel and the approval of the Court at some 20 stage of the proceedings they were taken together. The factual situation and the points of law raised are identical in all cases except Case No. 394/80, 408/80 and 98/ 82 and, therefore, 1shall deal with these last three cases after the determination of the others. The applicants by means of these recourses seek the annulment of the decisions communicated to each one of them separately whereby a fee was imposed for the connection of their respective properties with the water supply of Amathus Waterwork. The applicants are the owners and/or possessors of houses and/or flats situated within the vicinity of Ayios Tychonas 25 30 3 C.L.R. Hara Hotels v. Republic Styllantdes J. village, now within the a r ea of the Improvement Board of Amathus, outside the area of the Water Board of Limassol The Water Board of Limassol has a duty to supply water only within its limits ^s Amathus Hotel was built in the area 5 Amathus Navigation Co pusruant to an agreement with the Water Board of Limassol laid pipes 4" in diameter from the boundanes of the area of the Water Board of Limassol upto Amathus Navigation Co pursuant to an agreement with Amathus Hotel Subsequent to this and consequential to this JQ the Limassol Water Board supplied water to the properties of the applicants particularly described in each case Due to the rapid tourist development of the area the formation of the Improvement Board of Amathus and the expanding needs inwater, theCouncil of Ministers by virtue of 15 its power under Sections 4 and 5 of the Government Waterworks Law,Cap
- as amended by Laws No 129/68 51/72 and 1/77 on 16279 by decision published in the Official Gazette under Notification No 26 Suosidieiry Legislation, Part I 1979 page 73 decided to construct 20 waterworks known as «Government Waterwork for the Supply of Water forthe Area of the Improvement Board ofAmathus» On 233 79 the Government Waterwork for the Supply of Water to the Area of the Improvement Board of Amathus (Control and Administration) Regulations 1979 made bythe 25 Council of Ministers invirtue of their power under sections 4(a) and 24 of thesame Law,were published intheOfficial Gazette under Notification No 51/79, Supplement No 3 pp 141-143 A Committee for the said waterwork was established by Regulation 3 thereof 30 On30th March of the same year the Government Waterwork for theSupply of Water totheArea of the Improvement Board of Amathus (Grant of Right of Connection with the Water Supply) Regulations, 1979, were published under Notification No 56/79intheOfficial Gazette,Supplement No3 Parti ρ153 35 Regulation No3 provided for the payment of £500 -per donum andrateably for part thereof as connection fee withthe water supply of this Waterwork by the owner or possessor of immovable property within thearea of the Improvement Board of Amathus Thisfeewaspayable onapproval ofthegrantof water 625 Styllanldes J . Hara Hotels v. Republic
(1987)Regulation No.3 was repealed and substituted by the Government Waterwork for the Water Supply of the Area of the Improvement Board of Amathus (Grant of Right for Connection with the Water Supply) (Amendment) Regulations, 1980, published in the Official Gazette on 16.5.80 (hereinafter 5 referred toas «the 1980 Regulations»). The new regulation No. 3 reads as follows:«
- Οσάκις εγκρίνεται υπό της Επιτροπείας, θα χορηγήται εις ιδιοκτήτην ή κάτοχον ακινήτου • ιδιοκτησίας κειμένης εντός της περιοχής τ ο υ 10 Συμβουλίου Βελτιώσεως Αμαθοόντος δικαίωμα διά σύνδεσιν μετά της υδατοπρομηθείας τ ο υ Υδατικού Έργου εν σχέσει προς την ακίνητον ιδιοκτησίαν της οποίας είναι ιδιοκτήτης ή κάτοχος επί τ η καταβολή: (ι) βασικού δικαιώματος συνδέσεως κατά σκάλαν 15 κτήματος αναλόγως της πολεοδομικής Ζώνης ειςτην οποίαν τ ο ύ τ ο ευρίσκεται ως ακολούθως: Ζώνη Δικαίωμα Συνδέσεως κατά σκάλα Β1 Β2 Β3 Β4 Γ Δ Ζ £175 £1000 £900 £650 £225 £225 £125 y\\) επιπρόσθετον δικαίωμα συνδέσεως εκ £100 ανά 100 τ ε τ ρ . μέτρα τ ο υ συνολικού εμβαδού των ορόφων των προτεινομένωνοικοδομών ή κατ' αναλογίαν διά μέρος τ ο υεμβαδού τούτου». 30 («
- Whenever it is approved by the Committee, there shall be granted to the owner or possessor of immovable property situated within the area of the Improvement Board of Amathusarightfor connection withthewater supply of the Waterworks inrelationtotheimmovable propertyofwhichhe 35 istheowner or possessor uponpayment: 626 3 C.L.R. Hara Hotels v. Republic Sryllanldes J. (i)of abasic connectionfee perdonumoflandaccording to the Town Planning Zone to which such property belongs as follows: 5 10 Zone Connectionfee perdonum Bl B2 B3 B4 C υ Ζ £175 £1000 £ 900 £ 650 £225 £ 225 £125 (ii) An additionalconnectionfee of £100 for 100 square meters of the total floor area of the storeys of the proposed building or rateably for part of such area»). 15 20 TheWater Board of Limassol by letterdated5.3.80handedon 28.4.80 and 29.4.80 to all the consumers of water of the Water Board in the area of Amathus. including the applicants, notified them that on completion of the works of the Government Waterwork for thearea of theImprovementBoard ofAmathusthe Water Board of Limassol would cease supplying water tothatarea and they were advised toapply totheDistrictOfficer asChairman of theComrfiittee of thenew waterwork for theconnectionoftheir property with the Amathus Waterwork. On completion of the above waterwork the Chairman of the 25 Committeeof the GovernmentWaterwork of Amathus informed each one of the applicants that the area was supplied with water from the new waterwork and they were requested to pay the connection fee. The amount of the fee imposed is mentionedin each of the letters addressed totheapplicants. 30 The connection fee imposed was in accordance with the provisions of «the 1980 Regulations». The applicants seek the annulment of the aforesaid decisions imposing the connectionfee on the following grounds:(a)«The 1980 Regulations» areultravirestheenabling Law; 35 (b)Theimposition of thesaid fees iscontrarytothe proviso tos.24
(2)of the Law; 627 Stylianldes J. Hara Hotels v. Republic
(1987)(c)The method ofimposition of thesaidfeeisrepugnant to the Constitution in that it is of a destructive or prohibitive nature and. therefore,
Article 24
.4 of the Constitution; (
- d)It amounts to invidious discrimination andinfringes the doctrine of equalityand.therefore,iscontrarytoArticles 24.1 and 28of the Constitution. .». (
- a)ULTRA VIRES: The decisions of the Administration hasto be annulled and be declaredto be null andvoid andof no effect whatsoever if it was 10 basedoninvalid enactment. Intheterm«enactment»itisincluded statuteandsubsidiarylegislation-(Christodoulou v.TheRepublic. 1R.S.C.C. liSpyrou andOthersv. TheRepublic.
(1973)3 C.L.R. 627). The legalprinciples governing questions relatingto regulations 15 alleged to be ultra vires have been summed up in the case of Papaxenophontos and Others v. The Republic.
(1982)3 C.L.R. 1037.at p. 1047,asfollows:«Asub-judice decision hasto be annulled and be declared to benullandvoid andof noeffectwhatsoever ifitwasbased 20 on an invalid enactment - (Christodoulou v. TheRepubic, 1 R.S.C.C. 1; Spyrou & Others v. The Republic.
(1973)3 C.L.R. 627). The legislature can, without impairing its sovereignty, authorise other bodiestolegislate.Delegatedlegislationmust 25 beintravirestheenablingstatute.Whensubsidiary legislation is examined with a view to determining whether it isintra or ultravires,theanswertothequestiondepends,ineverycase, on thetrueconstructionoftherelevantenablingenactment.If delegatedlegislation interfereswith afundamental right, such 30 asthe right to property, anydoubt arisingasto theambit and effect of the relevant enactment must be resolved in favour of the liberties of the citizen - (Fina (Cyprus) Ltd. v. The Republic, 4 R.S.C.C. 26; Chester v. Bateson, [1920] 1 K.B. 829, atp. 838; NewcastleBreweries. Ltd. v. TheKing, [1920] 35 1 K.B. 854). In examining whether or not delegated legislation is ultra vires the enabling enactment, the state of the law at the time whensuchenactmentwaspassedandthechangeswhichitwas 628 3 5 10 15 20 25 30 35 C.L.R Hara Hotels v. Republic Styllanldes J- passed to effect as well as the structure of such enactmentas a whole, have particularly to be borne in mind - (Utah Constructionand EngineeringPropertyLimited and Another ν Pataky [1965] 3All ΕR 650) Delegated legislation may be challenged for substantive ultra vires, that is. on the ground that it goes beyond the powers granted by the legislature (Commissioners of Customs and Excise ν Cure and Deeley Ltd [1962] 1Q ΒD 340)» (See, also, Stavrou ν The Republic,
(1976)3 C L R 66, Memcos ν The Republic.
(1983)3 C L R 1130, Ethmcos ν KOA,
(1984)3 C L R 1150. Lefkatis and Others ν The Republic,
(1985)3 C LR 1372) In most modem statutes, the practice is to confer rule-making power by one general provision empowenng the rule-making authontytomake rules «for carrying outthepurposes of thelaw» followed bytheenumerationofcertainparticularmattersregarding whichrulesmaybemade«withoutprejudicetothegeneralityofthe foregoing power» In such acase,ithasbeen heldthatthe specific enumerationdoesnotcircumscnbethegeneralpowerconferredto make any rules provided they are required for carrying out the purposes oftheLawandtheyareconsistentwiththeprovisionsof the Law Any rule which comes within the scope of the general power would be valid -(Ross-Clunis ν Papadopoulos, 23 C L R 71) The empowenng Law is the Government Waterworks Law, as amended by Laws No 129/68, 51/72 and 1/77 The powers of the Councilof Ministers,asset outinSection 4,include,interalia, thepower given by paragraph (e)«(ε) να καθορίζη διά κανονισμών τ α καταβλητέα δικαιώματα και τέλη εις αντάλλαγμα τ ο υ υπό της Δημοκρατίας παρεχομένου ύδατος, η της ωφελείας τ ο υ παρεχομένου ύδατος, ή οιασδήποτε άλλης ωφελείας προσγενομένης υπό τ ο υ ύδατος ή οιουδήποτε υδατικού έργου, και γενικώς των υπότης Δημοκρατίας παρεχομένων υπηρεσιών σχετικών με τας παροχάς ταύτας». («(e) To fix by regulations the fees and rates payable in consideration of the water supplied by the Republic or the benefit accruing from the water supply or any other benefit accruing from the water or any waterwork and in general of 629 Stylianldes J. Hara Hotels v. Republic
(1987)the services rendered by the Republic relating to such supplies») The material part of Section 24 as substituted by Section 15of Law No 129/68 reads«
(24)
(1)TheCouncilof MinistersmaymakeRegulations for carrying out the purposes of this Law 5
(2)In particular and without prejudice to the generality of Subsection
(1)such Regulations may include provisions (a) fixing the maximum fees rates and any other money consideration, which may be levied or collected on or from 10 any person by virtue of this Law such fees rates or other money considerations 'δυναμένων να καθορισθωσΓ, which may be fixed, eitherperdonumof land,oraccordingto kind of crop, or according tothevolume or timeof the water supplied or used or according to the benefit accruing or 15 capable of acrumg toany person oranyproperty by thewater or any waterworks Provided thatinsuch fixingregard shallalways interalia,be hadto il)interest on capital expended,
(11)adequate provision for a sinking fund and insurance of the works, (
- in)cost of repair and maintenanceand administration of the works, (
- b)establishing a fund wherein shall be deposited all fees, 25 rates and other monies and monetary penalties in respect of any waterwork, any manner of disposal of such sums and generally the mannerof operation and controlof such fund, (c)prescnbing thepowers andproceduretobe followed by the Water Commissioners in the preparation and revision of 3Q the Specification referred to intheprovisions of this Law, (
- d)prescnbing anything which under this Law may be prescnbed» Itis the contention of counsel for the applicants that«the 1980 Regulations» are ultravirestheenabling Law as they provide that 35 the fee payable for the connectionof any property with the water supply of Amathus Waterwork would be assessed «per donumof 630 20 3 C.L.R. Hara Hotels v. Republic Stylianldes j . property according to the Town Planning Zone to which such propertybelongs»andinadditionthe«additionalconnectionfeeof £100 for 100square metersof thetotal floor area ofthestoreysof the proposed building or rateably for part of such area». This contravenes theenablingstatute inthat- 5 (i)the Law does not give the right to differentiate between donumsof land; (ii)theLawdoesnotgivetherighttocalculatethefeeonthe basisofthefloor area of the buildingstobe erected; and/or, 10 (iii) the Law does not give the right to combine such methodswhichoughttohavebeenappliedinthealternative. Aswe have said earlier, the Council of Ministersunder Section 4 hasthe power tofixbyregulationsthe fees and ratespayablein consideration ofthewater suppliedbythe Republicorthe benefit 15 accruingfrom thewatersupplied oranywaterworkand ingeneral oftheservicesrenderedbytheRepublicrelatingtosuchsupplies. Subsection
(1)of Section 24 is cast in very general terms. It empowers the Council of Ministers to make regulations for carrying out the purposes of the present Law. The detailed 20 provision of Subsection
(2), which does not relate only to the fixingofthefeesordutiesbuttoothermattersaswell,arewithout prejudice to the generality of the enabling power given by Subsection
(1).Therefore, according to the decision of the Privy Councilinthe Papadopouhs case (supra),any rulewhich comes 25 within the scope of the general power is valid, provided it is required for carrying out the purposes of the Law and it is consistentwiththe provisions ofthe Law. The function of Subsection
(2)of Section 24 is merely an illustrativeone;therule-makingpowerisconferred bySubsection 30
(1)and the provisions of Subsection
(2)are not restrictive of Subsection
(1),asindeedisexpresslystatedbythewords«without prejudice tothe generality ofSubsection
(1)». The challenged Regulations are necessary for the carrying into effect ofthe Law. 35 WithregardtotheirconsistencywiththeLaw,Ishalldeal further when dealingwithpoint(b). Evenassumingthat thegeneral power forrule-makinggivento the Council of Ministers by Subsection
(1)does not control the 631 Stylianldes J- Hara Hotels v. Republic
(1987)detailed provisions in Subsection
(2)again «the 1980 Regulations» are intravires Regulation2(a)provides thatthe fees and rates and any other money consideration may be fixed («δυνάμενων να καθορισθώσι») eitherby donum of land,or rateably tothebenefit which accrues ormay accrue toany person 5 or any ownership by the water or any waterwork If this last cntenon - thecriterion of benefit - istaken intoconsideration,then theextent of the land and thezone inwhich itissituated aswell as the area of the building standing or proposed to be erected thereon have to be taken into consideration The benefit to the 10 person or ownership by the supply of water in the cases of land developed for building purposes in a highly developed tounst area, as thearea of the Improvement Board of Amathus depends on and isproportionatetothearea andthezoneinwhich theland issituated as wellas thearea ofbuilding erectedorproposed tobe 15 erected «Προτεινομένου» inthe Regulation means building for purposes of connectionwith thewater supply of thewaterwork It makes no difference if the building actually exists at the time of the approval of the connection or it is proposed to be erected thereon The Regulations are within the power delegated by the 20 Law tothe Council of Ministers,they are intra vires the Law (b)PROVISO TOSECTION 24
(2)According to the proviso to section 24
(2)(a), in fixing the maximum fees andratesregard shall alwaysbehad,interalia,to(ι)interest on capital expended, 25 (n)adequate provision for a sinking fund and insurance of the works, and, (
- in)cost of repair and maintenance and administration of the works No matenal whatsoever was placed before the Court to 30 substantiate the allegation that the fees imposed for connection are beyond the limitations imposed by the Law Itis further to be observed that the considerations enumerated in the proviso, as expressly stated therein, are not exhaustive The words «μεταξύ άλλων» «(inter aha») cannot be ignored and must be given full 35 effect Thisground fails Itfollows thatthebasisof thepower conferred by thestatutewas nottransgressed by therule-making authonty 632 Hara Hotels v. Republic Stylianldes J. (
- c)ARE THE FEES OF DESTRUCTIVE OR PROHIBITIVE NATURE
ARTICLE 24.4. OF THE CONSTITUTION; The next point that falls for determination is whether the. impositionforpaymentof«connectionfee»undertheLawandthe Regulation is «φόρος,τέλος ήεισφοράοιασδήποτε φύσεως» («tax, duty or rate of any kind whatsoever») thatcomes within the provision of Article 24 of the Constitution,and thenwhether this connection fee, ifwithintheambitof Article 24,isof destructive or 10 prohibitive nature. 5 The nature of taxation in itswide sense falling within Article 24 hasbeen considered in Constantinidesv. TheElectricityAuthority of Cyprus,
(1982)3 C.L.R.798, andApostolou andOthers v. The Republic,
(1984)3 C.L.R. 509. 15 20 The distinction between a fee for services and tax is plain. Latham,C.J.,inMathews v.ChickoryMarketing Board,60 C.L.R. 263, 276, said:«A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is nota payment for services rendered». In Shirur Mutt Case- Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra ThirthaSwamiar of Sri Shirur Mutt,
(1954)S.C.R. 1005,
(54)A.SC. 282, Mukherjea, J:, referring totaxation, said:- 25 30 ·** «The second characteristic is that it is a public impost without any reference to services rendered, which is expressed by saying that a tax is imposed for thepurpose of general revenue, and its object is not to confer any special benefit upon any particular individual and consequently thereisnoelementofquidproquobetween thetaxpayer and thepublic authority.Afee isgenerally defined tobe a charge for a special service rendered to individuals by some governmental agency and is supposed to be based on the expenses incurred in rendering the service, though in many cases, the costs are arbitrarily assessed». The reason for the payment in the case of fees is the special benefit accruing to theindividual; inthe case of tax,theparticular advantage, if itexists at all, is an incidental result of state action. Thecollections of the fees inthecase of waterworks donot merge 633 Stylianldes J. Hara Hotels v. Republic
(1987)with the general revenue but they are set apart for the particular purpose. Therefore, the connection fees are not taxation in the sense of Article 24 of the Constitution and the constitutional provisionsregarding taxation -Article24 - arenotapplicable. Assuming, however, thatthe connection fees were taxation, in 5 the circumstances of the present cases it cannot be said that the applicants have discharged the onus of satisfying the Court beyond anyreasonable doubtthatthe fees provided by«the 1980 Regulations» and which were imposed on each one of the applicants - connection fees - offend against Article 24.4 of the . „ Constitution which excludes the imposition of destructive or prohibitive taxation. {a) DISCRIMINATION: Itwas submitted on behalf of the applicants that the method of imposition ofthesaidfeeamountstoinvidiousdiscriminationand/ 25 orinfringes the doctrine ofequalityand is,therefore, repugnantto Articles24.1 and 28 of the Constitution. The burden of proving theunconstitutionality ofa Lawisupon him who raises it - (The Board forRegistrationofArchitects and Civil Engineers v. Kyriakides,
(1966)3 C.L.R. 640, and 20 particularlyatpp. 654, 655,664,665). The basic principles which govern the examination of the constituiionality of taxing laws by this Court have been exhaustively expounded inanumberofcasesbyreference tothe caselawofother countriesandinparticularofthatoftheSupreme 25 Court of the United States of America - (See, inter alia, HadjiKyriacou v. The Republic, 5 R.S.C.C.22;Andreas Matsis v. TheRepublic,
(1969)3C.L.R.245;Demetriades v.The Republic,
(1977)3 C.L.R.213;Ioannides v. TheRepublic,
(1977)3 C.L.R. 297;Antoniades and Othersv. TheRepublic,
(1977)3C.L.R.641; 30 Singer Sewing Machine Co. v.TheDirectoroftheDepartment of InlandRevenue,
(1978)3 C.L.R.71). inAntoniades and Othersv.TheRepublic, (supra),atp.655, the position wassummed up as follows:«The basic principles that can be deducted from them are 35 that when the constitutionality of a law imposing taxation is attacked on the ground that it infringes the principle of equality, the legislative discretion isallowed great latitude in viewofthecomplexityoffiscaladjustment andthatintaxation 634 3 5 C.L.R. Hara Hotels v. Republic Stylianldes matters there is a broader power of classification by the legislation than in the exercise of legislative power in other fields Moreover, absolute equality in taxation cannot be obtained,itisnotrequiredbytheprincipleofequalityandthat inmattersof taxation theState isallowed topick andchoose distncts, objects, persons, methods and even rates of taxation» Hence ataxationwillbe struck down as violative of Article 28if thereisnoreasonable basisbehindtheclassification madeby it If 10 a special or local assessment is actually made on the basis of benefit, thereshould notbe any palpable discnmination amongst thesubjects tobe taxed withoutregard tothedegree ofthe benefit -(RoadImprovement Dt ν MissounR C, 274 U S 188) Whenever the Law operates alike upon all persons and 15 property,similarly situated, equal protectioncannotbe said to be denied-(Thomas Walston ν Joseph Nevm,
(1888)128U S 578) Theburden is on theoneattackingthelegislativearrangement tonegative every conceivablebasiswhichmightsupportit Itisnot required to resort to close distinctions or to maintain a precise, 20 scientific uniformity with reference tocomposition,useorvalue (AlhedStoresv Bowers,
(1959)358U S 522,atp 527) Inthepresentcases thefees arebased onobjective, reasonable cntena - theextentof theland,thezonewithin which itissituated 25 and the area of the building standing or proposed tobe erected thereon Theclassification made does notviolate thepnncipleof equality as the difference in treatment is a distinction that has objective and reasonable justification Ithas to be observed that these cntena are of general application for all the owners within 30 theareaof thesupply of Amathus Waterwork For all the foregoing reasons all cases with the exception of Cases No. 394/80, 408/80 and 98/82, with which the Courtwill presently deal,willbe dismissed 1 turnnow tothese last numbered cases. 3 5 CASE No 394/80. Theapplicantsinthiscase aretheregistered ownersof aplotof landunderRegistrationNo. 9578situatedonthemainLimassolNicosia road, within the Improvement Area of Amathus, of an extentof 15donums, 1evlekand2,800sq ft 635 J. Stylianldes J. Hara Hotels v. Republic
(1987)ByApplication B424/79they applied for theissueof a building permit for the erection of a hotel.The appropriate authority - the Improvement Board of Amathus -approved the said application and granted the building permit applied for, and by letter dated 11.3.80communicatedthistothe applicants. Oneof theconditionsimposed was thepaymentof£30,380.- to thefund of the DistrictOfficer as water supply fees.Theapplicants paid on 11.3.80theaforesaid amountandreceiptvoucher, exhibit No.3A, was issuedtothem.Itemerges clearlyfrom thereceiptand from aletterdated 1.9.80,exhibit No.6,thattheaforesaid amount 10 was collected as «connection fees» with the Government Waterwork ofAmathus andthatthecalculation andtheimposition were made in accordance with the provisions of «the 1980 Regulations» towhich reference hasbeen made hereinabove and which are described in the letter, exhibit No. 6, as «Κ.Δ.Π. 104/ 15 80». The applicants, being in dire need ofthe issue of the building permit, paid under protest the aforesaid amount and later they protestedandclaimedtherefund of thewhole orasubstantial part thereof. Their such petition was turned down and by letter dated 20 1.9.80they were informed thatthis was the connection fee with the GovernmentWaterwork of Amathus. Theapplicants by means ofthisrecourse seek theannulmentof the decision contained in the letter dated 1.9.80and declaration that the said imposition and collection were null and void and of 25 no effect. Under the Streets & Buildings Regulation Law, Cap. 96, as amended by Law No. 13/74, theappropriateauthorityshall have power on granting a permit with regard to the erection of a new building to impose, inter alia, a condition for the supply of 30 adequate andsuitable water - (section9
(1)(b)(xi)). Theappropriate authority shall not grant any permit under Section 3, unless it is satisfied that the applicant has complied with the provisions relating to the supply and provision of water contained in this or any other Law or in any Regulations in force for the time being - 35 (Section 9
(3)(b),as amended by Law No. 13/74). Section4
(1)ofthesameLawprovidesthat«No permit shall be granted under Section 3 of this Law unless the appropriate authority is satisfied that the 636 5 3 C.L.R. Hara Hotels v. Repub·.. Stylianldes J, contemplated work or other matter in respect of which the permit issought is in accordance with the provisions of this Lawand the Regulations inforce for the time being» The application forbuildingpermit wassubmitted in 1979 The 5 building permit was granted on 113 80 The appropnate authority -the Improvement Board ofAmathus -was duty-bound undertheLawtobesatisfied thattheapplicantscompliedwiththe provisionsrelatingtothesupplyand provision of water Atthe matenal time the relevant Regulations in force were the 10 GovernmentWaterworkfortheSupplyofWatertotheAreaofthe Improvement Board of Amathus (Grant of Right of Connection withtheWaterSupply)Regulations 1979,Notification No 56/79. published inthe Official Gazette on 30 3 79 Regulation 3 fixed the connection fee at £500 -per donum or IS reateably for part thereof This amount was payable to a person authunsed bythe Committee of the Waterwork composed of the Director-General oftheMinistryofInteriororhisrepiesentative as Chairman, the Director-General of the Ministry of Finance the Director-General of the Ministry of Agriculture and Natural 20 Resources and the Director-General of the Ministry of Communications and Works or their representative The District Officer wastherepresentative ofthe Chairman Theaforesaid Regulation wasrepealed and substituted by«the 1980 Regulations» which were published in the Official Gazette 25 and came into force on 165 80 At the bottom of «the 1980 Regulations»we read «Done on24th Apnl, 1980» It is apparent that the calculation and the imposition for the connection fee was made on the basis of regulationswhich were not existent at the time Probably they were inthe makingat the 30 office of the Distnct Administration of Limassol even before 24.4 80, but a Regulation, being a public instrument, comes into operation on the date of its publication in the Gazette unless otherwise provided for- (See s7of the Interpretation Law) Thesub-judice decision and the consequential collection ofthe 35 amount of£30,380 -wascontrarytoLawand, therefore, nulland void Itwaswithinthecompetence oftheproper Authonty to impose and collect an amount of£500 -per donum and rateably per part thereof The sub-judice decision will,therefore, be annulled Itis 637 Stylianldes J. Hara Hotels v. Republic
(1987)to be noted, however, that the general principle is that the application of the applicants and the imposition and collectionof theconnection fees have tobe made inaccordance withthe legal situation existing at the time of the sub-judice decision and, therefore, anyconnection fees byany new decision havetobein 5 compliance with the regulations in operation on 11.3.
- The payment of the connection fees wasa condition imposed lawfully on granting the permit. The rate, however, wascalculated on the regulationthatwasnotinforceatthetime. Before concluding, I have to observe that counsel for the 10 respondents rightly did not contend that thepayment of the fees, in the circumstances of this case, was an acceptance of the challenged decision which disentitled the applicants from resorting tothe administrative Court for itsannulment. CASENO. 408/80: 15 in this case the applicant is the owner of two pieces of land under PlotsNos.232/1 and 232/2 ofSheet/Plan LIV/45,situated onthemainLimassol -Nicosiaroad,withintheImprovementArea of Amathus, under Registration No. 8294, of an extent of 8 donums,3 evleksand 2,850 sq.ft. 20 The applicant by Application B.342/79 applied for a building permit for the erection of five multi-storey buildings. The appropriate authority - the Improvement Board of Amathus approved the grant ofthispermit and communicated thisdecision to the applicant by letter dated 13.2.80, exhibit No.
- The 25 applicant was requested to pay the fees under the Streets & Buildings Regulations which hedidon 14.2.80.Nevertheless, the permit was not issued to him. On 29.4.80 letter, exhibit No.4, emanating from the District Administration of Limassol, wassent tothe applicant wherebyhe 30 wasasked todeposit £17,625.-tothe DistrictTreasury for water supply and £460.- to the Improvement Board of Amathus for electrification. By letter of hiscounsel dated 18.7.80, exhibit No. 5, the applicant protested. He claimed that no condition was imposed; that he paid the prescribed fees and requested for the 35 issueand delivery tohim of thebuildingpermit forwhich nothing was left to be done. By letter dated 26.8.80, exhibit No. 6, the District Officer as Chairman of the Improvement Board Amathus 638 3 C.L.R. Hara Hotels v. Republic Stylianldes repliedthatthepaymentoftheaforesaid feeswasaprerequisite for theissueofthebuildingpermit. 5 Theapplicantbymeansofthisrecourseseekstheannulmentof the decision to impose the aforesaid water and «electrification fees»asthepayment ofsuchfeesisillegalandcontrarytoLawand the decision of the Administration was made in excess and/or in abuse of power. The allegations about the invalidity of «the 1980 Regulations» raised in the other applications were submitted also in this case 10 Thedecision oftheCourtintheothercasesconstitutesacomplete answer. Counsel for the applicant submitted that the decision to grant thebuildingpermitbecame afinal administrative executory acton thepaymentofthefeesforthebuildingpermiton 14 2.80.Itcould 15 not be altered or completed later; no further conditions could be imposed; atthematerialtimenolaworregulation empowered the respondents oranyofthem toimpose ordemand payment of the connection fees. Counsel for the respondents submitted that on 9.2.80 the 20 application for a building permit had been approved. The applicant wasnotified byletter dated 13.2.80 and on 29.4.80 he wasrequested topay the connection fees sothatthe appropriate buildingpermit would be granted Ineed not repeat what was said earlier in this judgment with 25 regard to the legal aspect relating to the water supply and the connection feeswhendealingwithCaseNo.394/
- The appropriate authority could not approve the issue or granting ofabuildingpermitunlesssatisfied about the compliance with the provisions of the relevant legislation for adequate water 30 supply and compliance with the provisions of the Law and Regulations.Though inthepnnted letterof 13.2.80the condition for the payment of the connection fees was not included, the applicant cannot validly assert that such a condition was not imposed atthetimeofthedecision fortheapproval ofthebuilding 35 permit -9.2.
- The printed letter of 132.80 isnot the decision. The omission to request the applicant bythisletter of 13.2.80 to paythe connection feesisnotfatal for the Administration. 639 J. Stylianldes J. Hara Hotels v. Republic
(1987)The fees were calculated under «the 1980 Regulations» which were non-existent atthematerialtimeas they cameintooperation on the date of their publication intheOfficial Gazetteon 16 5 80 The fact that they «were done on 24 4 80» as pnnted in the Gazette, does not make them operative as from that date The material date for the present case is 13 2 80 Even if it were 29 4 80, which could not be, there is no difference This case with regard to the water fees follows the decision in Case No 394/80 It is plain that the water supply and the electrification were conditions imposed on the granting of the permit though they were notcommunicatedto theapplicant inthe letter of 13 2 80 jo CASE No 98/82 In this case the applicant is the owner of a piece of land under Plot No 249/1, Sheet/Plan LIV/45, situated within the Improvement Board of Amathus, on the main Limassol - Nicosia road, under Registration No 8516, of an extent of four donums and 2,000 sq ft within the Town PlanningZone Β 3 15 The applicant applied for the issue of a building permit with respect to extensions and additions to his house situated on the 20 said land Now plans were requested by the respondent No 2 which were submitted by applicant's architect on 19 3 81 On 9 12 81 the Chairman of the Committee of Amathus Waterwork by letter, exhibit No 2, informed the applicant that with regard tohisapplicationfor abuilding permit,theCommittee 25 of Amathus GovernmentWaterwork decided togranttohim water and thatthe connection fees amounted to£3 960 - which he was requested topay atthe District Treasury The calculation was made on «the 1980 Regulations» Inviewof what was said earlier about thestatutoryprovisions in 30 the Streets & Buildings Regulation Law and «the 1980 Regulations» inconnectionwiththeothercases, thisrecoursefails In the result Cases No 502/81, 91/82, 92/83, 93/82, 94/82, 95/82, 96/82, 97/82, 98/82, 99/82, 100/82, 102/82, 108/82, 127/82 and 128/82 are hereby dismissed The sub-judice 35 640 3 C.L.R. Hara Hotels v. Republic Stylianldes J. decisions are hereby confirmed The sub-judice decisionsinCases No 394/80 and 408/30with regard to the connection fees for the supply ofwaterare declared nulland void and of no effect whatsoever Let there be no order astocosts Subjudice decision in CasesNos 394/80 and 408/80 annulled Allothercases dismissed No orderastocosts 641