3 C.L.R. 1988March19 [LORIS,J.] • - INTHE MATTER OFARTICLE 146OFTHE CONSTITUTION SUNINSURANCE OFFICE LTD., Applicants, v. THEMUNICIPALITY OFLIMASSOI, Respondent. (CaseNo. 639/86). Misconception offact-—Probability that it led to the subjudice decision— Groundof annulment. 5 10 The respondent mistook an application dated 29.10.86 submitted by FEDERATED AGENCIESLTD.as havingbeen submitted by applicants (whoare anoverseas company with permit toact asan insurer in Cyprus and have theircentral offices in Nicosia),and imposed on the applicants professional tax for carrying on business for profit within the Municipal limitsof Limassol. Notwithstanding themistake, therespondents submitted that the decisionshouldbeupheldon theauthorityof thedecision inTheAmerican Ex' port Lines Inc. v. TheMayor, Deputy Mayor, Councillors and Townsmen ofLarnaca, 19CX.R. 206.The mistake,they suggested,wasnota materialone. Held,annulling thesubjudicedecision: 15
(1)Theaforesaid mistake manifests the material misconception under whichtherespondent waslabouring whenreachingatthesubjudicedecision;tosaytheleastthereisaprobability thattheaforesaid errorledtothe 585 Sun Insurance v. L'ssol Municipality
(1988)materialmisconceptionthattheapplicantwascarryingonbusinessforprofit withintheMunicipallimitsofLimassolTown.
(2)Itissettled thataprobability thatthemisconception hasledtothe makingofthedecision complainedofissufficient tovitiateanadministrativeact 5 Subjudicedecisionannulled. Noorderastocosts. Casesreferredto: TheAmericanExportLinesInc. v.TheMayor,DeputyMayor, CouncilllorsandTownsmenofLarnaca, 19C.L.R.206; 10 Skaros v. TheRepublic
(1986)3 C.L.R. 2109. Recourse. Recourse against thedecision of therespondent toimpose on applicants the sumof £350.-asprofessional tax. A. Drakos, for theapplicants. ie Y.Potamitis, for the respondent. Cur. adv. vult. LORIS J.read the following judgment. The present recourse isdirected againstthedecisionoftherespondentMunicipality dated 5.8.86, whereby professional tax amounting to £350.- was imposed on the applicant, for carrying on business for profit 20 within theMunicipal limitsoftherespondent Municipality. The applicant is an overseas insurance company registered in the United Kingdom, which was granted leave pursuant to the provisions of s8 (as amended) of the Insurance Companies law 1967 (Law No. 27/67 as amended byLaws 85/69,21/76and 32/ 25 80 ) to act as insurer in Cyprus (vide the relevantcertificate Exhibit 3attached tothewritten addressof theapplicant). 586 3 C.L.R. Sun Insurance v. L'ssol Municipality Loris J. Thus the applicant became a foreign insurer (αλλοδαπός ασφαλιστής) within themeaning of s. 2 of Law 27/67 as amend ed. 5 10 15 20 The applicant is also keeping central offices in Nicosia under the supervision of one of its high ranking officials as envisaged by s.28 of Law 27/67 as amended,and paid Professional Tax.for 1986 totheMunicipality of Nicosia, within thelimits of which it was carrying its business for profit. It is the stand of the applicant thatit carries on its business at Nicosia where they "accept offers for contracting insurance poli cies through brokers". The applicantdenies ever having offices in Limassol or acting in anyway through employees residing in Limassol either permamently orfor any period of time whatever. Theapplicant further flatly denies ever having submitted tothe respondent, as per the allegation of the latter in his letter dated 29.10.86, an application pursuant to the provisions of section 105
(1)of Law 111/85, as amended, praying for professional li cence with aview tocarrying its profession, for 1986 or for any year, within theMunicipallimits of therespondent Municipality. Applicant complains that the respondent reached at the subjudice decision without dueinquiry andhas acted underamiscon ception of law and fact. TheRespondentmaintainsin his written address thattheappli. cantiscarrying on business inLimassol through acertainkaterina 25 M.Papa whom "FEDERATED AGENCIESLTDdeclared tothe Municipality of Limassol as their employee." The written address proceeds to mention 30 (a) the names of two more persons through whom the appli cant allegedly carried onbusiness inLimassol without giving any otherparticulars except thenamesthereinmentioned. 587 LorisJ. Sun Insurance v.L'ssolMunicipality
(1988)(b)theaddressallegedlyappearingonletterheadsofapplicant company which is the address of 'FEDERATED AGENCIES LTD', anothercompanyengaged intravel,touristandinsurance agencybusinessdulyregisteredinCypruswhichcarriesonbusiness atNicosia and admittedly keeps apermanent sub-office in 5 LimassolTownemployingmorethan 12employees. TherespondentMunicipalityinthewrittenaddressfiledonits behalf admits, having addressed to the applicant the letter of 29.10.86(videExhibit2attachedtothewrittenaddressoftheapplicant)andmaintainsthattheaforesaid factwasnotmaterialfor JQ theimposition of professional taxorthefixingoftheamountof thetax. At the clarification stage the applicant company submitted, relyingonthefacts setoutinitsrecourse,thewrittenaddressand thedocumentsappendedthereto,thattherespondentwronglyim- 15 posedthesub-judiceprofessional taxrelyingonmisconceptionas tomaterial facts. Therespondent atthesamestagesupportedhisstandthroughout these proceedings andinvited theCourt on theauthorityof TheAmerican ExportLinesInc.v.TheMayor, DeputyMayor, 20 CouncillorsandTownsmen ofLarnaca, 19C.L.R.206,toupholdthesub-judicedecisionoftheRespondentMunicipality. Before goingintothemeritsof thecaseunderconsiderationI consideritnecessary todealasbriefly aspossible,withthecase of theAmericanExport LinesInc.(supra)citedonbehalf ofthe respondentinsupportofhiscase. 25 Thefacts of theaforesaid casewhichwasdecided onappeal bythethen SupremeCoutofCypruson24.2.53werethefollowing: "InanactionbytheMunicipalAuthorities,Lamaca,against anAmerican ShippingCompanywhoseshipscallatirregular 30 intervalsatLamaca,theDistrictCourtheldthattheAmerican 588 3 C.L.R. 5 SunInsurance v.L'ssolMunicipality LorisJ. Companywas"carrying onorexercising atradeorbusiness forprofit within themunicipal limitsofthetownofLamaca" and had thereby rendered itself liable tothetradeor profes' sionaltaxsetoutinsection 159oftheMunicipalCorporations law, (Cap 252)." TheShippingcompanyinquestionfiledanappealagainstthe judgment of theDistrict Court(pursuant totheprovisionsofthe lawapplicableatthetime). Fortheappellantsitwasargued
(1)thattheCompanyhadno 10 regular office in Lamaca and that all their business wasdone throughagentswhowereagentsforotherlinesaswellandthemselvespaidthetradeandprofessional tax;
(2)thattheirshipsdid not call regularly at Lamaca; and
(3)that the words "carry on business"should not beinterpreted in accordance withEnglish 15 IncomeTaxcases and should notbeunderstood toapply tothe merecallingofshipsataportforloadingandunloading. 2o 25 ItistruethatonappealthethenSupremeCourtofCyprushad tointerpret and apply theprovisionsof s.159 of theMunicipal CorporationsLawin force atthetimei.e.Cap.252of the 1949 codification of theLaws of Cyprus.The aforesaid Law (which wasenactedon 10.6.1930)appearsaswellinthecodification of 1959therelevantchapterbearingadifferent number(Cap.240) andtherelevantsectionrenumbered ass. 156;itmayaswellbe addedthats.159of Cap.252inthe 1949co'dification oftheCyprusLawsisidenticaltos. 156ofCap.240in'the1959codification · Thematerialpartsofsection 159ofCap.252readasfollows: 30 "159. Noperson shall,within any municipal limits,carry on,exerciseorpracticeanybusiness,trade,callingorprofessionfor profit unlesshehasobtained alicencesotodoinaccordancewiththeprovisionsofthisLaw: 589 LorisJ. Sun Insurance v.L'ssol Municipality
(1988)Providedthat: (
- a)(b)anypersonwhohastakenoutalicenceinanymunicipal limitsshall not berequired totakeoutanotherlicenceinany othermunicipal limitsunlesshehasapermanentplaceofbusi- 5 nesstherein orremainsthereinfor thepurposeofcarryingon hisbusiness,trade,callingorprofession atanyonetimefora periodexceedingsevendays; (
- c)Itmay be noted here thattheportionsof section 159 setout above are identical with theprovisions of s. 104(l)(
- b)of Law 111/85andtheonlydifference isconfined tothenumberofdays envisaged byproviso (
- b)which havenowbeen increased to15 daysinvirtueoftheprovisionsofs. 104(l)(b)ofLaw111/85. ThethenSupremeCourtofCyprusintheAmericanShipping Company(supra)heldthat: "Theonlyexemptionisundersection 159(b)for thosenonresidents whohavenoplaceofbusinesswithinthemunicipal limits andhave taken out alicencetocarry ontheirbusiness within the municipal limitsof some other town of Cyprus. Thisexemption howeverdoesnotextend topermit suchpersonstoremainforthepurposesoftheirbusinessformorethan sevendaysatanyonetime;butnootherpersonsareentitledto anyexemption."(videp.209). 20 25 Although it may be argued that the then Supreme Courtof Court of Cyprushad toconsider and interpret provisions of the lawinforce atthetime,whicharealmostidentical totheprovisions of s. 104(l)(
- b)of Law 111/85,yet they had to applythe law asthey found it,toacompletely different setof facts from 30 590 3 C.L.R. Sun Insurance v. L'ssol Municipality Loris J. thosepertainingtothecaseunderconsideration. 5 Intheinstantcasethegistoftherecourseisthattherespondent failedtocarryoutdueinquiryinreachingatthesub-judicedecision;andthatasaresultheactedunderamisconceptionastomaterialfacts. Havingcarefully gonethroughthematerialbefore meIhold theviewthattheimpositionofprofessional taxontheapplicant wasduetotheobviousmistakeoftherespondenttoconsiderthe applicaton of analtogether different company, notably "FEDE10 RATEDAGENCIESLTD",asanapplicationemanatingfromthe applicant:theaforesaid applicationdated28.1.1986(attached to the written address of the respondent) clearly emanates from FEDERATEDAGENCIESLtd.,acompanyregisteredinCyprus whohasbyvirtueofthesaidapplication,undertheprovisionsof 15 s. 105
(1)ofLaw 111/85,appliedfor theissueof a professional licencetoit, asit wascarryingon businessfor profit within the limitsofLimassoltownaswell. 20 25 30 Therespondenterroneouslymistooktheaforesaid application asemanatingfrom theapplicantinthepresentrecourseandproceeded to impose professional tax on the applicant company whichisanoverseacompanyregistered intheU.K.,andisinno wayconnectedwiththeformercompany. AsstatedoninthepresentjudgmenttherespondentMunicipalityadmitshavingaddressedtotheapplicanttheletterof29.10.86 (Exhibit2)whereinitisstatedthattheapplicantinthiscaseaddressedalettertotheMunicipalityinvitingthelatterunders.105
(1)ofLaw 111/85toimposeprofessional taxonit;therespondentmaintainsthattheaforesaid factdidnotplayanymaterialrole "fortheimpositionofprofessionaltaxorthefixingoftheamount ofthetax". With respect I feel unable to agree with the submission of learnedcounselfor therespondentinthisconnection. Ihaveno doubtthattheaforesaid mistakeoftherespondent manifests the 591 LorisJ. Sun Insurance v.L'ssolMunicipality
(1988)material misconception underwhich therespondent waslabouringwhenreachingatthesub-judicedecision;tosaytheleastthere isaprobabilitythattheaforesaiderrorledtothematerialmisconception that the applicant was carrying on business for profit within theMunicipal limitsofLimassolTown.Anditiswellset- 5 tiedthat"aprobabilitythatthemisconceptionhasledtothetaking ofthedecisioncomplainedofissufficient tovitiateanadministrativeact" (vide Skarosv.The Republic
(1986)3C.L.R. 2109 at p. 2115 - 'TheLaw ofAdministrativeActs'byStassinopoulos 1951 ed.at305-'TheJudicialControlofDiscretionaryPowers" ,( byEconomou 1965 ed.p.250). Intheresultpresentrecoursesucceedsandthesub-judicedecisionisherebyannulled. Lettherebenoorderastocosts. Subjudicedecisionannulled. Noorderastocosts. 592 1