APOSTOLOU & OTHERS ν. REPUBLIC & ANOTHER (1989) 3A CLR 757

Revisional appeal its subject matter is the legality of the sub judice act or decision-Therefore, a misdirection by a Court of first instance in its appreciation of the legal or factual aspect of a case does not by itself lead to the annulment of an otherwise valid act.

Taxation capital Gains Tax-Fact finding process-Interference by court-Principles applicable-Reference to authorities-Provided the respondents operated within the framework of their powers, they are the judges of the fact finding process-If the inquiry into the facts is due and proper in the circumstances the Court will not interfere with such appreciation of facts. if it was reasonably open to the respondents.

This is an appeal against the judgment of a Judge of this Court, whereby he dismissed the recourse of the appellants challenging the decision of the respondent Director relating to the evaluation of immovable property as at 27/6/78 for the purposes of imposing Capital Gains Tax.

The Trial Judge misdirected himself, in that he thought that the subject property had not frontage to the sea. However, the respondent Director had not acted under such a misdirection.

In the light of the principle enunciated in the First of the above Headnotes, the Court decided that such a misdirection cannot affect the legality of the sub judice act.

Further, having reached the conclusion that in the present case the appreciation of the facts in question had been reasonably open to the respondent Director, the Court dismissed the appeal.

Appeal dismissed. No order as to costs.

Cases referred to:

Republic v. HadjiPanteli (1989) 3 C.L.R. 961,

Republic v. Vassiliades (1967) 3 C.L. R. 82,

Pikis v. Republic (1968) 3 C.L. R. 303,

Constantinides v. Republic (1969) 3 C.L.R. 523,

Papadopoullos v. Republic (1970) 3 C.L.R. 169,

Republic v. Pericleous (1972) 3 C.L.R. 63,

Charalambous v. Republic (1989) 3 C.L.R. 655,

Georghiades v. Republic (1982) 3 C.L.R. 659,

Protopapa v. Republic (1989) 3 C.L. R. 528,

Ieronymides v. Republic (1988) 3 C.L.R. 2657,

Christofides v. Republic (1984) 3 C.L.R. 1454.

Appeal.

Appeal against the judgment of a Judge of the Supreme Court of Cyprus (Pikis, J.) given on the 22nd September, 1986 (Revisional Jurisdiction Case No. 454/85) Reported in (1986) 3 C.L.R. 1838, whereby appellants recourse against the capital gains tax imposed on them for the sale of their land at Pyrgos was dismissed.

Chr. Pourgourides, for the Appellants.

A. Evangelou, Senior Counsel of the Republic, for the Respondents.

Cur. adv. vult.

A. LOIZOU, P. read the following judgment of the Court. This is an appeal from the judgment of a Judge of this Court by which he dismissed the recourse of the appellants with which they challenged the decision of the Director of Inland Revenue Department, hereinafter to be referred to as the respondent Director, dated the 31st January 1985, regarding the evaluation of the subject property as at 27th June 1978.

According to the appellants' contention the value of the subject property was thirty-thousand pounds per donum, whereas according to the respondents it was twelve thousand pounds per donum.

Upon his own assessment of the value the respondent Director acted and made capital gains assessments with a view to enabling him to ascertain the capital gains tax payable.

The subject property which is of an extent of seven donums situated at Pyrghos village outside Limassol town and not far from the sea is jointly owned in equal shares by the appellants who sold same on the 14th November 1981 for two-hundred and ten thousand pounds. Thereupon they submitted a return under the Capital Gains Tax Law 1980 (law No: 52 of 1980) and included therein an assessment of its value as being on the 27th June 1978, one-hundred and eighty thousand pounds. This estimated value of the property on the said date was rejected by the respondent Director after an evaluation made by Mr. Mateas, a Principal Assessor in the Department of Inland Revenue, a qualified assessor and Valuer who valued the property in June 1978, as being worth only eighty-four thousand pounds thus leaving a taxable profit of thirty-five thousand pounds in the hands of each appellant. The assessment raised required each appellant to pay £7,400 Capital Gains Tax.

The learned trial Judge, who had before him all the material and also heard evidence from experts, both an architect and a dealer in land, who is a retired Land Clerk and ex officer of the Town Planning Department, concluded that "it was reasonably open to the respondents to raise the sub judice assessment". He, further concluded that "an adequate inquiry was conducted into the facts relevant to the value of the land, the outcome of which supported the conclusion reached by the respondents".

Regarding the complaint of the appellants about discrimination which was based on the ground that the valuer of the respondent Director "excluded from his sample of comparison sales of property that were apt to shed light to the value of the subject property, in particular the properties used for comparison by the valuers of the applicants", the learned trial Judge found that "those properties were dissimilar to the property of the applicants in two material respects, namely (a) they fronted the seashore, a factor that greatly enhances the value of land and (b), they had access to a road, whereas the subject property had none. The acquisition of such right would not be free from comparison".

After finding as above the learned trial Judge proceeded to hold "that the dissimilarities between the comparables of the valuers of the applicants and the subject property were such as to exclude comparison", and that "notice of these dissimilarities. also, disposes of the complaint of the applicants that the authorities were guilty of discriminatory treatment towards the applicants."

In arguing the appeal before us learned counsel for the appellants challenged the above findings of the learned trial Judge regarding dissimilarities between the comparables of the valuers and the subject property and argued that in fact there were no dissimilarities at all. He also, argued, that the learned trial Judge acted under a misconception of fact when finding that the property of the appellants is not fronting the sea finally he argued that the learned trial Judge erroneously arrived at the conclusion that the sub judice assessment was correct.

As was most recently said by Stylianides J., in delivering the judgment of the full Bench of this Court in the Republic v. HadjiPanteli (1989) 3 C.L.R. 961, the "nature of a revisional appeal is different than the appeal in civil cases, due to the differences between the two jurisdictions The subject matter of the recourse is the legality of the administrative act or decision. The subject matter of the revisional appeal continues to be the legality of the same act or decision".

This view is in line with the Case-law of this Court. (See Republic v. Vassiliades (1967) 3 C.L.R. 82, Pikis v. Republic (1967) 3 C.L.R. 303, Constantinides v. Republic (1969) 3 C.L.R. 523, Papadopoullos v. Republic (1970) 3 C.L.R. 169. Republic v. Pericleous (1972) 3 C.L.R. 63).

In conformity with the above Case-law what we have to consider in this appeal is the legality of the sub judice assessment in the light of the grounds of law relied upon in this appeal.

The approach of the Courts in recourses against such assessments has been stated in a number of cases. Recently this court had the occasion to deal with this matter in the case of Charalambous v. Republic (1989) 3 C.L.R. 655, and it was said:

"Needless to say here that this court in cases of tax review has the same jurisdiction as in any other field of administrative recourse. It is confined to a review of the legality of the action of the administration within the sphere of their lawful authority. Provided they operate within the framework of their powers the administration is the judge of the fact finding process. And if the inquiry into the facts is due and proper in the circumstances and the decision one reasonably open to them, the court will not interfere with such appreciation as a proper exercise of their powers (See Lilian Georghiades v. The Republic (1982) 3 C.L.R. 659).

This Court, also, dealt with the same matter in the case of Protopapa v. Republic (1989) 3 C.L.R. 528 and had this to say:

"The question that arises is not one as to which of the two valuations this court prefers, but as to the extent of the jurisdiction of the Court to interfere with the appreciation by the administration of factual elements and of the material in the file which is not subject to judicial control so long as there does not exist a misconception of fact or law or abuse of power, not is subject to judicial control the appreciation of the weight of the real facts constituting the reasoning.

In the case of Athinoulla leronymides v. The Republic (1988) 3 C.L.R. 2657 I said the following:

'The usefulness of the valuation submitted by the applicant, and which was for the first time brought to light in the course of the present proceedings, is as to whether in appreciating the facts of the case, the respondent Commissioner acted under any misconception of fact or law or in abuse of power, that is in circumstances in which this Court would be justified to interfere with his appreciation of the facts of the determination of the merits. Not being before the Respondent Commissioner when the sub judice decision was reached, it should otherwise be ignored as a review by the Court is confined to the evidence that was before the Respondent commissioner at the time he reached the sub-judice decision - vide Christofides v. Republic (1984) 3 C.L.R. 1454 at 1459-1960'.

The aforesaid approach applies with equal force to the facts of the present case as the valuation that has been placed before me on behalf of the applicants was never before the respondent Commissioner. What has to be decided therefore is whether the decision of the respondent Commissioner was reasonably open to him on the basis of the valuation of Mr. Mateas, that being the only evidence before the respondent commissioner at the material time as to the value of the land in question at the relevant dates: It has, however, to be examined in the light of the valuation produced on behalf of the applicant in order to see if there exists any of the aforementioned reasons justifying an interference of this court with the appreciation of the facts of the case, guided in that respect by the general principles of administrative Law to which I have already referred hereinabove.

On the totality of the circumstances before me I am satisfied that the valuation of Mr. Mateas is duly supported by the material relied upon by him and properly reasoned. He gives a detailed account of the duly recognized method used and the comparable sales which were relied upon in arriving at the conclusion that he did and there has not been established either that there has been any misconception of fact or law or that such valuation gives rise to abuse or excess of power."

We have very carefully gone into all the material that was before the respondent Director and we have considered all the submissions of learned counsel for the appellants. Having done this, we are satisfied that on the totality of the material that was before him it was reasonably open to him to raise the sub judice assessment and in the circumstances he has neither acted under any misconception of fact or law nor in abuse of power. Moreover he duly inquired into all aspects of the matter and the sub judice decision cannot be faulted on any ground. The appeal must, therefore, be dismissed.

Before concluding we would like to add that indeed the learned trial Judge acted under a mistaken view regarding the aspect of the sea-fronting of the subject property, a view, however, which the respondent Director did not have in any way. But as already said what we have to consider in this appeal is the legality of the sub judice act, regarding which we have already given our pronouncement. Any misdirection by a Court of first instance in its appreciation of the legal or factual aspect of a case cannot by itself lead to the annulment of an otherwise valid act.

In the light of the above conclusions this appeal must be and is hereby dismissed. In the circumstances, however, there will be no order as to costs.

Appeal dismissed. No order as to

costs.

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