3 C.L.R. 1988December31 tPIKIS, J.] INTHEMATTEROFARTICLE146OFTHECONSTITUTION THEINSTITUTEOFCERTIFIEDPUBLICACCOUNTANTS OFCYPRUSANDOTHERS, Applicants, v. THEREPUBLICOFCYPRUS,THROUGH THECENTRALBANKOFCYPRUS, Respondents. (CaseNo. 169/86). Executoryact—Whatactsareexecutory—Personsactingonbehalfofothersin arepresentativecapacity(inthecaseaccountantsactingfor clientsfor the purpose offorming an offshore company) has no causeof his own—The executorycharacterofthedecisionisnecessarilydeterminedbyreferenceto therights of theprincipal—If such rights are notaffected,thedecision is notexecutoryanditcannotbereviewedunderanyguise. Executoryact—Legitimate interest—The issueofwhetherthesubjudice act is executoryornotshouldbeexamined beforeexaminationofthequestionof legitimateinterest. Constitutional Law—Constitutionality of astatute—Should not be examined unlessunavoidablefor thepurposeofduedeterminationofthecase. Applicants2areaccountants,whosubmittedonbehalfofclients,applicationtotheCentralBank inrespectofformationofoffshore Companies. TheCentral Bank refused todealwiththeapplicationsonthegroundthat themakingofsuchapplicationsinarepresentative capacityconstitutesa speciesof advocacy (The Advocates Law, Cap.2 asamended,sections2 and 11
(2)).Itis notindispute that theCentralBankcorrectly interpreted theseprovisions;northattherehasbeennodeterminationonthemeritsof Iheapplications.Applicants 1 areacompanylimitedbyguaranteeandregis- 2697 Inst of Certified Accountants v.Republic
(1988)teredunderCap.113.Itsmainobjectistoprotectandpromotetheinterests oftheaccountingprofession. Theissuesraisedfordeterminationconcerned:(a)Theexecutorynature ofthesubjudicedecision,(b)Thelegitimateinterestofapplicants 1 and(c) TheconstitutionalityoftheaforesaidprovisionsoftheAdvocatesLaw. 5 Havingdetermined thefirstoftheaboveissuesbyconcludingthatthe subjudiceactisnotexecutory,theCourtdismissed therecoursewithout determining other issues.Thelegal principles, which, indoing so,the Courtexpoundedandappliedaresufficiently indicatedinthehereinabove, headnote. 10 Recoursedismissed. Noorderastocosts. Casesreferrredto: TheBoardforRegistrationofArchitectsandCivilEngineersv.KyriaJddes
(1966)3CLA. 640; 15 Josephin v.TheRepublic
(1986)3C.L.R. 111; % Panayiotidesv.TheRepublic
(1986)3C.L.R.495; Photiadesv.Photiades
(1988)3C.L.R.2084; Pitsillos v.CM.C
(1982)3C.L.R. 208. Recourse. ?n Recourse against the refusal of the respondents to deal with applications madebyapplicantsonbehalfofindividualclients for theregistration and transfer of shares andthe subscriptionof the Memorandum ofAssociation ofoffshore companies. L. Demetriades, for theapplicants. A. Evangelou, Senior Counsel oftheRepublic, for therespondent. 2698 25 .3CX.R. Inst, of Certified Accountants v.Republic AS. Angelides, for theBar Council of Cyprus, asinterested party. Cur. adv. vult. PIKISJ.readthefollowing judgment. Forreasons thatwill soonbecomeapparentitisnecessarytoreferinsomedetailtothe v identityof theapplicants andthecapacity inwhichtheysue,as wellasanalysethedecision thatformsthesubjectmatterofthese proceedings,withaviewtoestablishingitscharacteranddetermningitsjusticiablity.TheInstituteofCertifiedPublicAccountants 10 thefirstApplicantsisacompanylimitedbygrarantee,registered undertheprovisionsoftheCompaniesLaw-Cap. 113.Itsprincipalobjectistheprotectionandpromotionoftheinterestsofthe accountingprofession.ThesecondApplicants,seveninnumber, arepractisingaccountants,membersoftheInstitute. Applicants1 15 joinedwithApplicants2inchallengingtherefusal oftheCentral Banktodealwithapplicationsmadebythelatteronbehalfofindividualclientsfortheregistration andtransfer ofsharesandthe subscriptionoftheMemorandumofAssociationofoffshorecompanies. Appjicants 1contend that by therefusal of the Central 2Q BanktheinterestofeverymemberoftheInstituteintheexercise ofhisprofession isprejudicially affected, somuchsoastolegitimisetheInstitutetomakethereversalofthedecisionacorporate cause,therebyunitingforces withApplicants2inthepursuit of, whattheyproclaimascommoncause,ultimatelyreducedtothe protectionoftheinterestsoftheaccountingprofession. 5 ™ TheCentralBankrefused todealwithapplicationsofApplicants2madeonbehalfoftheirclientsfor tieeffectuation ofthe purposes above mentioned;for the reason that the making of suchapplicationsin arepresentativecapacity,constitutesaspecies of advocacy and as such cannot be undertaken byanyone otherthanapracticingadvocate(see,s.2ands.l1
(2)oftheAdvocatesLaw-Cap.2,asamended). TheCentralBankdeclined todealwiththeapplicationsafter advicefromtheOffice oftheAttorney-Generaltotheeffect that 2699 PikisJ. Inst, of Certified Accountants v.Republic
(1988)onlypracticingadvocatescantransactinarepresentativecapacity anyofthebusinesssoughttobetransactedbyApplicants2,practicingaccountants.Itisnotindisputethatthisistheeffect ofthe plainprovisionsoftheAdvocatesLawandthattherefusal ofthe Central Banktodealwiththeapplicationsisinconformity with 5 thelaw.Initsreply theCentralBankrefrained from expressing anyopiniononthemeritsoftheapplicationsandinnowayprejudgedtheiroutcomeifandwhenproperlysubmitted. Thecasefor theapplicantsisthatthelaw,invirtuetowhich theapplications werereturned,isunconstitutional for thereason IQ thatitconstitutes animpermissiblerestriction oftheexerciseof theprofession ofanaccountant inbreachoftheprovisionsofArticle25oftheConstitution.Furthermore,therelevantprovisions of theAdvocatesLaw arealsoimpugnedasunconstitutional for breach of therightof theapplicants toequality before thelaw, ,^ safeguarded by article 28of theConstitution. Theexclusionof theaccountingprofessionfromthetransactionofthebusinessin question, is inveighed as arbitrary and unreasonable. No valid reasonsexistforpremisingadistinctionbetweenthelegalandthe accounting profession in the area under consideration. If any- ^0 thing,itismoreinthelineoftheaccountingprofession, soithas beenargued,toundertakebusinessorworkassociatedwithcompanymattersincludingtheregistrationandtransferofshares. Thesubject of theserecourses,itmustbenoticed,istherefusalof theCentral Bank todeal withtheapplicationsof thepur- ^5 suers(applicants2).Theydonotattackanegativedecisionofthe Administration affecting themeritsoftheapplication norcould suchaglossbeputuponthecommunicationsoftheCentralBank (seelettersof24/1/86,31/1/86,5/2/86and7/2/86). Therespondents andtheBarCouncildisputed thevalidityof ™ thepleaofunconstitutionality.Inaddition,theBarCouncilraised questions affecting thejusticiability oftherecourse.Thefollowing twoquestionswould,inanyevent,havetobeaddressed by theCourtastheygotoitsjurisdiction. 2700 3 CX.R. Inst, of Certified Accountants v.Republic Pikis J. (a)Whetherthesubject matterof therecourseiscongnizable underarticle 146,inparticularwhetherthedecisions consumeexecutoryactsofdecisions,and 5 (b)thelegitimacyoftheinterestofapplicants 1 tochallengethe v decisions. . - -t Directprejudicetotheinterestsofthepursuerisa prerequisite fortheinvocationofthejurisdictionunderarticle 146oftheConstitution.InthecontentionoftheBarCounciltheprejudiceofapplicants 1is at the highest indirect.The revisionaljurisdiction 10 vestedintheSupremeCourtunderarticle 146isconfined tothe reviewofactsanddecisionsoftheAdministrationofanexecutorycharacter.Onlypersonsimmediately (presently)anddirectly affected byanexecutoryactordecisionoftheAdministrationoperatinginthedomainofpubliclaw,canbereviewedunderarticle 15 146. Jurisdictional questions must, as a matter of logical sequence,beresolved before theCourtassumesjurisdiction toinquireintothemeritsofthecase.Themeritsofthecaseshouldnot asarulebegoneunlessitisjudgedexpedientforthesustenance oftheefficacy oftherightofappeal.Inthiscasethereisanaddi2Q tional reason for notinquiring intothemeritsofthecaseunless necessaryfor thedipsosalofthecase.Themeritsoftherecourse revolveontheconstitutionality ofthepertinentprovisionsofthe definition of "advocacy"and"practicingadvocacy"intheAdvocatesLawandassuchoughtnottobeaddressedunlessunavoid" able*for thepurpose of duedetermination of thecase. (Seethe BoardforRegistrationofArchitectsandCivilEngineersv.Kyriakides(\966)3 C.L.R. 640, Josephin v. Republic
(1986)3 C.L.R. Ml, Panayiotides v.Republic
(1986)3CUR.495). 30 35 •Theprincipaljurisdictional question inanyproceedingunder article 146istheamenitytoreviewthesubject matteroftheproceedings,anexercisethatrevolvesprimarilyonthedetennination ofthenatureoftheactordecision.Iftheactordecisionisnotexecutory,itcannotbejudiciallyreviewedirrespectiveofthemagnitudeoftheinterestofthepartyinthereversalofthenonexecutory actordecision of the Administration. The legitimacy of the 2701 PikisJ. Inst, of Certified Accountants v.Republic
(1988)interestofthechallengercanonlybeestablished after theindentification ofthecharacterofthesubject matterof theproceeding. Becauseitisinrelationtotheexecutoryelementofadministrative actionthatlegitimacyofinterestmustbeestablished. Theattributesof anexecutorydecision havebeenthesubject 5 ofdiscusioninnumerouscases.Thistopicthathasbeenthesubjectofjudicialpronoucementsprobablymorethananyothersubjectofadministrativelaw.Toqualify asexecutorytheactordecision must beproductive oflegal consequences, that is,it must generaterightsorimposeobligations,oritmustmodify orabol- IQ ish existing rights orobligations.Furthermore,itmustemanate fromanadministrativeauthoritycompetentinlawtobringabout changesintheexistinglegalregime.(See,conclusionsfromthe Greek Council of State 1929-59,p.237,Tsoutsos "AdministrationandtheLaw" 1979,p. 105atseq.)Tsatsos"Application for 1 5 Annulment" 1951, p. 120at seq.)Therightsor obligations enhancedorabridged by thedecision must bethoseof theperson whoserightsand obligations are the subject of thedecision.A representativeor,moreaccurately,apersonactinginarepresentativecapacity,hasnocauseof hisown.Hiscauseisthatofhis principal orclient.Therefore, thefirst question wemustanswer iswhethertherightsor obligations,of theprincipal orclientof therepresentative,areprejudiced bythedecisionunderconsideration.Thequestioniswhetheranycorporealorincorporeal rights oftheapplicant,nottherepresentativeoftheapplicant,withinthe 25 sphereof authorityoftheCentralBanktoacknowledge,give effect toandregister, are adversely affected bythedecision.The executorycharacterofadecisionisnecessarilydeterminedbyreference tothoserights.If thedecision isdeterminativeof those rights, itisproductiveoflegalconsequensesandassuchqualifies 30 asexecutory. Tothequestionwhetherthesubjudicedecisionswereproductiveoflegalconsequencesvis-a-vistherightsoftheclientsof the applicants,the answer isplainly inthe negative.Infact, no decision whatever was taken respecting their rights. Provided 35 they apply in the manner ordained by the law, they canrenew 2702 3 C.L.R. , Inst,of Certified Accountants v. Republic 5 Pikis J. theirapplicationthefollowing daywithoutencounteringanybar rier orestoppelintheirway.Thereply of theCentralBankvis-avis theclients,thebeneficiaries oftherightssoughttobeasserted by theapplicationof theirrepresentatives,was anadvisoryor informatory act acquainting themof therequisites set by law for considerationof theirapplication. Aprincipalcharacteristicof anexecutory administrativeactis theelementof unilateralexpression of thewillof theAdministra tion, aspecies of imperium, inamatteraffecting therightsofthe IQ subject. The Central Bank notonly refrained from determining thesubstanceof theapplicationsbutheldback theexpression of any opinion upontherightssought tobe asserted by theclient. Nodoubt theCentral Bank is bound toobserve the formalities prescribed by law as aconditionfor theexerciseof the powers ,^ vestedin them. «Λ ™ 35 A decision that is not executory vis-a-vis the party whose rights areatissue,cannotacquireanexecutory characterthrough any otherprocess. If theclients of theapplicantschallenged the refusal todealwiththeirapplicationtheywouldbefaced withthe conclusive answer thatthedecision is notexecutory andassuch notafitsubject forjudicial review.Anonexecutory decision can not bereviewed underanyguise. Itis worthy of noticethat the applicantsdidnot treattherefusal of theCentralBanktodealwith their applicationsas anegative decision onthemerits,nor could suchaglossbeputuponit.Asearlierexplained,thelegitimacy of theinterestof thepursuer mustderivefrom thenucleousof the executory decision,thatis from thepartaffecting ina definitive way rights and obligations. It is in relation tothe legalconse quencesarisingtherefrom that thelegitimacy of theinterestmust bedetermined.As thedecisionscomplainedof arenotexecutory, itis unnecessary todebatewhetherdecisions of theCentral Bank affecting registrations of sharesinoffshore companiesandrelated mattersfall in thedomainof public law.(For adiscussion ofthe subject andrelevant caselaw, see therecentdecision of the Full Bench inPhotiades v. Photiades andAnother
(1988)3C.L.R. 2084. 2703 PikisJ. Inst, of Certified Accountants v.Republic
(1988)A third party may, under circumstances, (See,Pitsillosv. C.B.C.
(1982)3 C.L.R. 208,Skouris "Orientations inPublic Law -RecoursebyThirdParties"p.54-55,1981Edition)sufferdirectprejudicefromanactordecisionprimarilyaffecting the rightsof anotherperson andconsequently belegitimised in the 5 pursuitofarecourseofhisown.Classicalexamplesoftheapplication of theserules areinstancesof professional associations, corporateorunincorporatebodies,prejudicially affected byadecision addressed toone ofits members.Provided the prejudice affects universallytheinterestsofthemembersoftheassociation, ^ theassociationcanmountarecourseofitsown.Inthosecircumstancesprejudice totherightsof thememberof theassociation arisescoincidentally from theprejudice totherightsofthememberoftheassociation towhomthedecisionisaddressed.Inthe absenceof anexecutory decision theinterestofthepursuercannotbeprobedforitcannotbecorrelatedtoapropersubjectforreviewinordertodetermineitslegitimacy. Therecourse must, in viewof theabove,necessarily bedismissedbecauseitssubjectmatterisnotjusticiable. Iamnotindifferent tothegrievanceoftheapplicantsortheab- ^ senceofanapparentavenueforitsventilation.Forthattheymust haverecoursetotheirlegaladvisers. Therecourseisdismissed.Noorderastocosts. Recoursedismissed. Noorderastocosts. 9 2704