3» C.L.R. **\,u . >.' ' v" · AW -'• <>t-/i|; • :\-'••!·" "••- -. ;. Ί988 June14 , - t j·,.--, - - , . . .*• Λ 'ir',r:)/i fM - -,\ty ' Ι- > .i .. ' , · : ΙΓ.'Γ,.'.·, , ' ;i *£-' * ' , Ι ' ΐ .. *.;» .Μ. f. ^.-|θ...·/:.ζΐ αϊ!··.·! [ Α .ijoi20U;P.l r ; " '" • ' ':»·ϋ<*' -''-'" Χ ' ίιν ο (',<,;*/' :-.'..' .fyit.-.'L 1 • . · ·ι!-"'> '"1 '''. , IN THE MATTEROFA R T I C L E ^ OF THE CONSTITUTION ι r· -..-υ · "'"Λ t· j MAROULLAA.ANTONlApES, fl , Ί t i. -,; •i'r . · . ' ;<i .: THEREPUBLICOFCYPRUS THROUGH ''' ri , J !tHE DIRECTOR OF INLANDREVENUEDEPARTMENT, ! Respondent. < ι- ; '" 3 ' . [ •·* u ••· . · * ' « , ; • ' J H .'>-.- • • · . ! - ' - ί-" 1 *' ι.· »·;; > - . ' ι . · '„•••. (CaseW ο. 174187), taxation-Capital Gains—TheCapital Gains Ταχ,-1980 (Law 5211980)— Whether a disposition was'made before''orafter its enactment—Contract providingfor transfer andregistration in thename ofpurchaser(a company ••· limitedby shares)or anyperson or company thepurchaser may indicatev,oNewcontractswithother companies—inthe circumstances, suchnew contractsweretreatedas independentfrom thefirstone. Immovable Property—Transfer—The Land Transfer Amendment Law 1890, sections 4 and 7 (now sections 5 and 59 of Cap. 228)—Documents pro ducedatLandRegistryOffice—-Deemed to be true. >·*.• Ί ,. ' ^ 1J 20 The applicant and her father were joint owners of*a plot of land. By contractmadein 1979 they agreed tosellitto "Kotsonis Estates Ltd". They undertookto "transfer andregister" itinthenameof the purchasers "orany person orpersons or company indicated by thepurchasers/"The price was £115,000. ο· ** ι:The plotwas 'divided intotwo parts,each one' of which-was registered. in 1981 in thejoint names'of.applicant:and.herfather.,Th_eAone part .was sold in 1981 to"Pelesa TouristEnterprises Ltd." for £63,888. Moreover,in 1982 theapplicantand her father granted apower of attorney to "Kotsonis Estates Ltd." empowering thelatter to register such part to any person.or company. ,;1217 Antoniades v. Republic
(1988)Theotherpartwas sold in 1982 to"Matsis andKotsonis DrillingLtd." for £51,
- By a further agreement madein 1983 "Matsis andKotsonis Drilling Ltd." were substituted by "Melounda Development Ltd." On 15.7.83theapplicantandherfather madeanewcontractwith thelastmen tionedcompany,sellingsuchpartfor£55,
- 5 Therelevant transfers weremadein
- Therespondent considered thatdispositions weremadeafter theenactmentofLaw 52/80and, conse quently,subjected themίοCapitalGainsTax,whereas theapplicantcon tendedthatthedisposition was madein 1979andwhatever was done there after was infurthranceof thesaid undertakingintheagreementof
- 10 Held,dismissingtherecourse:
(1)Thenewcontractswereenteredinto notinpursuanceof theundertakingintheoriginal contract,butwereentire ly new agreements intending tosubstitute theoriginal one.Underthesaid clause4therewas noobligation toenterintonewagreement,butonly to "transfer andregister." 15
(2)Inanyeventonecannotgobehindthedocumentsasproducedatthe LandRegistry Office, asby virtue ofsections4 and7of theLand Transfer Amendment Law 1890,Law No. 19of 1890 - (nowsections 5and59re spectively,of Cap.228) such documentsaredeemed tobe trueexceptin cases wherefraud orfalseentriesareclaimedtohavebeenmade. 20 Recoursedismissed. Noorderastocosts. Casesreferredto: AdisLtd. v. TheRepublic
(1986)3 C.L.R.900; VarnavidesandOthersv.TheRepublic
(1986)3C.L.R. 1385. 25 Recourse. Recourse against the decision of the respondent to impose on applicant capital gains tax and interest thereon at 9% for the dis position of her property at Pissouri and Limassol. 1218 3'C.L.R. ,, Antoniades v. Republic ,ι·;*κ*./ Th.Ioannides, for theapplicant,i, i i : j . t t ,_, .l / ; y.Lazarou, for therespondent. jf * Ί' _» ,· ·.» I-.- j ' . .' ο• ; Γιy , ... Cur.adv.vult. : ,•. ί. * •A·. LOIZOUP.readthefollowingjudgment.Theapplicantin 5 - -thisrecourse,seeksadeclarationof theCourtthat(a)thedecision of therespondentDirectortoimpose upon hercapital gains tax andinterestthereonat9% asfrom 25thOctober 1983and(b) the valuation of the'marketivalue of her soldproperty being exces sive,arenulland^voidandof nolegaleffect whatsoever.. 10 _,.Theapplicantwasjointowner with herfather^o theextentof - 1/2 shareeach,of landatPissouri,Limassol, plotNo. 51-Sheet/ *Plan L-VII/14 regr No. 21315 of anarea of 45 donumsand 1ev. lek- - . ' . . * • By.virtue of contractdated2st December 197,9the.applicant 15 andherfather, agreedtoselLthe aforesaid property tothecompa ny "Kotsonis Estates Ltd" for the amountof £115,000.- to be , paidby specified instalments,failure of paymentof which bear. inginterestat6%. * • ·τ ,· • . f ί , ' . · , Also,clause4of thesaid agreementprovidedasfollows: ""I 20 t "Moreover thesellers ...areobliged uponpaymentto them by thebuyer,of thewholeof thebalance... totransfer andreg isterimmediately theaforesaid propertyinthenameof thepur chaser oranypersonorpersons orcompany indicatedby the purchaser." , ι * , j Theapplicantandherfather - astheyallege- attherequest of thepurchasers -;divided theproperty intotwoparts which were registered onthe3rd;November 1981,jointly,inhernameandher father's totheextentof 1/2 shareeach.Meanwhile onthe7thJuly 1981 anagreementwas signed by theapplicantandherfather for the sale of one of the newly registered parts, under;Reg.No. 1219 A.Loizou P. Antoniadesv.Republic
(1988)25476,toacompanycalled "PelesaTouristEnterprisesLtd"for theamountof£63,888-.Therelevantdeedoftransferwassigned onthe28thApril1982. Onthe2ndMarch 1982theapplicantandherfather signedan agreementofsaletothecompany "MatsisandKotsonisDrilling 5 Ltd.," of the secondpartunderReg.No.25475,for thepriceof £51,112.-, theremaining balanceof £36.000.to bepaid bythe 15thJune 1982,plusinterestat9%. Onthe5thJuly 1983theapplicantandherfather signedafurtheragreement with "MatsisandKotsonisDrillingLtd"andan- 10 other company called "Melounda Development Ltd" whereby "Matsis &Kotsonis" was substituted aspurchaser by the latter company "Melounda" and whereby therightsand obligations stemming from the contract of saledated 2nd April 1982were transferred to the substitute purchaser for the same amount of j ^ £51,112.-.It wasfurther agreedtherein thatnofurther payment wastobemadebythe substitute purchaser totheapplicantand herfather, allmoneysduehavingbeenpaid. Subsequentlyonthe25thJuly, 1983theapplicantenteredinto an agreement with "MeloundaDevelopmentLtd"for thesaleof 20 plot reg.No.25475for theamountof£55,050.-whichasstated thereinwaspaidincash.Therelevanttransferwaseffected onthe 6thDecember1983. Therespondent Director considering that theaforesaid sales wereeffected bytheapplicantandherfatherafterthecominginto 25 force oftheCapitalGainsTaxLaw 1980,(LawNo.52of 1980) -hereinafter tobereferred toasthelaw,leviedtaxuponthemas follows: (
- a)Replotreg.No.25476,atthemarketpriceof£25,000.-. asat27thJune 1978,andsalepriceof£37,000.-,tax£1,500.-. (
- b)Replotreg.25475,atthemarketpriceof £15,000.-,asat 27thJune 1978,andsalepriceof£37,500.-,tax£1,500.-. 1220 30 3C.L.R. Antoniadesv/Republic A.'LoizouP. Asaresulttheapplicantfiledthepresentrecoursethe'essence ofwhichconcernsthedateofthedispositionoftheaforesaidimmovableproperties. •- ; Itwascontendedbytheapplicantthattherespondentdirector 5 actedcontrarytotrieprovisionsofsection 10oftheLaw,inthat, itwasallegedtherehadnotbeenany'disposalinthewidesense ofthewordbecauseatthetimeofthesaiddisposaltheapplicant wasnotinfact theownerasanysalebytheapplicantofthepropertyinquestiontookplacepriortothecorningintoeffect ofthe JO Lawandisthereforenotliabletotax.' ' 15 The respondents on the other hand argued that the further agreementsofsaleenteredintobytheapplicant'were'not togive effect toclause4oftheoriginalagreementofthe21stDecember 1979,butinordertoterminatearidsubstitutesuchagreementand thefact thatitwassubdivided andnewagreementswereentered intowith different parties showsaclearintention torescind the originalagreement.Inanycaseitwascontended,thedeclarations of transfer submitted to theLand Registry Office show clearly thatthedisponersweretheapplicantandherfather. Fromaperusalofthevarious'documentswhicharebeforeme, Icanreachnootherconclusion butthat'the newcontractswere entered intonotinpursuanceof clause4of theoriginal contact 4 butwereentirelynewagreementsintendingtosubstitutetheoriginalwithnew.Underthesaidclause4therewasnoobligation to enterintonewagreementsbutonlyto"transfer andregister".The 25 intention toenterintonewagreementsbecomesevenmoreobviousinthecaseofplot Reg.No.254/75where thetermsarenot eventhesameasthoseoftheoriginalcontract. 20 Evenifitweretobeastheapplicantalleges,neverthelessone cannot gobehindthedocumentsproduced attheLandRegistry Office, as by virtue of sections 4 and 7 of the Land Transfer Amendment Law 1890,Law No. 19of 1890- (now sections5 and59respectively,of Cap.228)suchdocumentsaredeemedto betrueexceptincaseswherefraudorfalseentriesareclaimedto 1221 A. Loizou P. Antoniades v. Republic
(1988)have beenmade. To this effect it was stated inAdis Ltd. v.Republic
(1986)3 C.L.R. 900 at p.907:"I must say at this stage that a Declaration of Transfer is formal document prescribed by Law and one cannot accept 5 anything inconsistent with its contents merely because it is useful sotodoon agiven occasion. By thisIamnot referring to the cases where fraud or false entries are claimed to have beencommitted inrespectof suchdeclaration." Similarly in the case of Varnavides and others v. Republic
(1986)3C.L.R. 1385it washeldat p. 1394. 10 "Asalready stated above,itis before theL.R.O.and it has so been declared at the time of the transfer the said transfer wasbywayofsale.The applicantsandtheirfather madeatthe timeof the transfer therequisitedeclarations tothateffect and 15 all theformalities werecomplied with.Itwasneveralleged in the past that such declarations were false or untrueor that the sale wasfictitious.This Courtcannot gobehind whatwasstatedintheOfficial documentsattheLand Registry whichinlaw aredeemed tobetrue." 20 For thereasons stated above this recourse fails and is hereby dismissed with noorder astocosts. Recourse dismissed. Noorderasto costs. 1222