(1986) 1 CLR 288
[*288] 1986 April 24
[TRIANTAFYLLIDES, P., A LOIZOU, MALACHTOS, LORIS,
STYLIANIDES, PIKIS, KOURRIS, JJ.]
SAVVAS PAPANICOPOULOS AND OTHERS,
Appellants–Applicants,
v.
MORPHOU CO-OPERATIVE CREDIT SOCIETY,
Respondents.
(Question of Law Reserved Nos. 224 & 225).
Constitutional Law-Separation of State Powers-The Debtors’ Relief (Temporary Provisions) (Amendment) Law 114/85-Sections 3 and 4-Do not offend against the Separation of the Legislative and the Judicial Power.
Constitutional Law-Retrospective legislation-Unless it offends against a specific provision of the Constitution, a statute is not unconstitutional merely because it was given retrospective effect-Constitution, Articles 12.1, 23.3, 24.3, 61 and 82.
Constitutional Law-Vested rights-Meaning of-A statute is not unconstitutional merely because it disturbs vested rights-The Debtors Relief (Temporary Provisions) (Amendment) Law 114/85, sections 3 and 4.
Constitutional Law-Equality-Constitution, Article 28-The Debtors Relief (Temporary Provisions (Amendment) Law 114/85-Sections 3 and 4-Do not in fringe the principle of equality.
The Debtors Relief (Temporary Provisions) Law 24/79-“Stricken Debtor”-Definition of, amended with retrospective effect by Law 114/85-Sections 3 and 4 of Law 114/85-Effect-Not unconstitutional. [*289]
The interpretation Law, Cap. 1-Sections 7 and 10(2). Vested rights-Meaning of-Distinction between “vested” and “existing” rights.
The question raised in these proceedings is whether sections 3 and 4 of Law 114/85, whereby the definition of “stricken debtor” in the Debtors Relief (Temporary Provisions) Law 24/79 was amended with retrospective effect, are unconstitutional as offending against the Separation of Powers between the Legislative Power and the Judicial Power, as infringing vested rights of the appellants and as contravening the principle of equality safeguarded by Article 28 of the Constitution.
The appellants submitted, inter alia, that the legislature invaded the province of the judiciary because they attempted to supersede the decision in Evangelou and Another v. Ambizas and Another (1982) 1 C.L.R. 41, and that in view of Article 82 of the Constitution the scope of legislative competence under Article 61 is limited to the enactment of prospective legislation.
Held: (A) Per Triantafyllides, P., A. Loizou, J., Malachtos, J., Loris, J., Stylianides, J. and Kourris J. concurring: (1) As it was made clear in Diagoras Development Ltd. v. National Bank of Greece (1985) 1 C.LR. 581 it was open to the legislature to amend the definition of “stricken debtor”, in order to alter, the meaning attributed to such definition in the Evangelou case supra. This has been done by section 3 of Law 114/85 and buted to such definition in the Evangelou case supra against the Separation of Powers between the Legislative and the Judicial Powers.
(2) When Articles 61 and 82 of the Constitution are read together, it becomes clear, that a statute is not unconstitutional merely because it was given retrospective operation, unless it offends against a specific provision of the Constitution, excluding retrospectivity, such as Article 24.3.
(3) A statute, which is given retrospective effect, is not unconstitutional merely because it interferes with vested rights. [*290]
(4) Sections 3 and 4 of Law 114/85 do not offend against the principle of equality because the amended definition of “stricken Debtors” is applicable to all parties affered thereby ab initio as from the coming into force of Law 24/79, whereas if the amendment had not been given retrospective effect then there might arise of different meanings of “stricken debtor” before and after the enactment of Law 114/85.
(B) Per Pikis, J.: (1) Each of the three state powers is only entitled to assume competence in respect of matters specifically assigned to it by the Constitution or matters intrinsically falling in its sphere of competence. Dicta in Diagora case, supra and in Malachtou v. Attorney-General (1981) 1, C.L.R. 543, strongly support the proposition that there is, no constitutional impediment to the enactment of retrospective, legislation. The Constitution does not: limit legislative competence to the enactment of prospective, legislation, except in two respects, i. e. the prohibition of ex post facto criminalisation of conduct (Article 12.1) and the imposition or taxes, duties and rates (Article 24.3).
Article 82 does not import the suggested constraint on the exercise of legislative competence. Its object, which is identical with the object of section 7 of Cap. 1, which has never been construed as importing a similar limitation, is to bring the law to the notice of the public and regulate the formal commencement of it. Article 82 is not intended to regulate the content of legislation or limit the legislative discretion in that respect.
Contrary to the submission of counsel Article 23.3 of the Constitution, which deals with the expropriation of rights by public authorities and how it may be accomplished, does not limit the legislative, power to the enactment of prospective legislation.
The law under review does not purport to disturb the outcome of Evangelou case, supra or any other case decided by the Court. The declaration of the Law by [*291] the Courts does not impose any limitation on the power of the legislature to alter the Law.
(2) Freedom to legislate with retrospective effect encompases amenity to disturb vested rights. The statutory presumption of s. 10(2) of Cap. I against retrospectivity of a law may be rebutted h the face of clear language to that effect.
In the case of Republic v. Menelaou (1982) 3 C.L.R. 419 this Court discussed the attributes of a vested right and the way it contrasts with an existing right. As under Law 24/79 the test of inability to pay fell to be determined at the time of the hearing of an application for strickenness and, consequently, no one had a vested right under Law 24/79, until he was adjudged as such by the Court in relation to a specific obligation. As the Law under consideration does not purport to upset nor could it disturb the effect of any judicial declaration of stickiness, neither the appellants nor any order creditor in their position have a vested right to recover any monies owing by person afflicted by the events of 1974.
(3) The notion of equality, safeguarded by Article 28 of the Constitution, does not limit legislative discretion to make reasonable differentiations or distinctions warranted by inherent dissimilarities between objects and situations. The law under consideration does not aim to disturb transactions concluded by private agreement, but by the same reasoning and logic as that in Stefanidou v. Ioannides (1985) 1 C.L.R. 718 the legislature can distinguish between the rights of citizens that have been settled by private agreement and those who have resorted to Court.
If the appellants had acquired any vested rights a question of unequal treatment compared to other persons would have arisen.
Opinion as above.
Cases referred to:
Diagoras Development Ltd. v. National Bank of Greece S. A. (1985) 1 C.L.R. 581; [*292]
Evangelou and Another v. Ambizas and Another (1982) I C.L.R. 41;
Attorney-General v. Vermazza [1960] A.C. 965;
Varnavides v. Ioannou (1982) 1 C.L.R. 263;
Liatsos v. Ponirou (1985) 1 C.L.R. 165;
Ttofis Kyriacou and Son Ltd. v. Rologis Ltd. (1985) 1 C.L.R. 211;
The Republic v. Menelaou (1982) 3 C.L.R. 419;
Malachtou v. Attorney-General (1981) 1 C.L.R. 543;
Lewis v. Lewis [19841 2 All E. R. 497;
Tryfonos V. Famagusta Shipping Co. (1981) 1 C.L.R. 137;
Santis and Others v. Republic (1983) 3 C.L.R. 419;
Aloupas v. National Bank of Greece (1983) 1 C.L.R. 55;
Stefanidou v. Ioannides (1985) 1 C.L.R. 718;
Republic (Minister of Finance and Another) v. Demetriades (1977) 3 C.L.R. 213.
Questions of Law Reserved.
Questions of law reserved by the District Court of Nicosia (Ioannides, D. J.) for the opinion Of the Supreme. Court under section 9(1) of the Debtors Relief (Temporary Provisions) Laws, 1979 - 1984, relative to a ruling of the said District Court made in the course of the hearing of Applications Nos. 99/82 and 102/ 82 filed by Savvas Papanicopoulos against Morphou Co-Operative Credit Society under the provisions of the Debtors Relief (Temporary Provisions) Law, 1979 (Law No. 24 of 1979).
A. Pandelides, for the appellants.
Chr. Kitromelides, for the respondent.
Cur. adv. vult. [*293]
The following judgments were read:
TRIANTAFYLLIDES P.: During the proceedings in Applications Nos. 99/82 and 102/82, which were filed under the provisions of the Debtors Relief (Temporary Provisions) Laws 1979-1985, there were reserved for consideration by this Court, on joint applications by counsel for the parties, identical questions of law as to whether sections 3 and 4 of the Debtors Relief (Temporary Provisions) (Amendment) Law, 1985 (Law 114/85) are unconstitutional as offending against the Separation of Powers between the Legislative Power and the Judicial Power, as offending, moreover, against the principle of equality which is safeguarded by Article 28 of the Constitution, and, also, as infringing vested rights of the appellants.
By means of section 3 of Law 114/85 there was amended the definition of “stricken debtor” in section 2 of the Debtors Relief (Temporary Provisions) Law, 1979 (Law 24/79) and by means of section 4 of Law 114/85 such Law was given retrospective effect as from the 23rd March 1979.
It is useful to note that in Diagoras Development Ltd. v. National Bank of Greece S. A. (Question of Law Reserved No. 218 in respect of which judgment was delivered on the 3rd October 1985 and has not yet been reported) it was held by majority that section 2 of the Debtors Relief (Temporary Provisions) Amendment) Law, 1984 (Law 92/84) was unconstitutional as offending against the Separation of Powers between the Legislative Power and the Judicial Power of the Republic because it was an attempt to interpret by legislation the aforesaid definition of “stricken debtor” in Law 24/79 in a manner reversing the interpretation given to such definition, by the Supreme Court in Evangelou v. Ambizas, (1982) 1 C.L.R. 41.
It was made clear, however, in the judgments delivered in the Diagoras Development Ltd. case, supra, that, had section 2 of Law 92/84 not been an interpretative provision but an amending provision, then it would not have been found to be unconstitutional as offending against the [*294] Separation of Powers between the Legislative and the Judicial Powers because it was open to the Legislature to amend the definition of stricken debtor” in section 2 of Law 24/79 in order to alter the meaning which was attributed to such definition in the Evangelou case, supra.
This is what has been done now by means of section 3 of Law 114/85 and I cannot see any reason for holding that the said section 3 amending the definition of “stricken debtor”, in the way in which it has done, offends against the Separation of Powers between the Legislative and the Judicial Powers. In my opinion the Legislature was perfectly entitled to effect such amendment in the exercise of its legislative power under Article 61 of the Constitution.
Counsel for the appellants has contended, mainly, that the amendment which was effected as aforesaid by section 3 of Law 114/85 is unconstitutional because of the retrospective operation which was given to Law 114/85 by means of its section 4.
When Articles 61 and 82 of the Constitution are read together it becomes clear that a statute is not unconstitutional merely because it has been given retrospective operation, unless it offends against a specific provision of the Constitution excluding retrospectivity, such as, for example, Article 24(3) of the Constitution which excludes the with retrospective effect imposition of taxes, duties or rates and it is useful, to refer, also, in this respect, to the case of The Attorney-General Vernazza, [1960] A.C. 965, 978, which was followed by our Supreme Court in Varnavides v. Ioannou, (1982) 1 C.L.R. 263, 274, a well as to our own case-law such as Liatsos v. Ponirou, (1985) 1 C.L.R. 165, 169 and Ttofis Kyriacou, and Son Ltd., v. Rologis Ltd., (1985) 1 C.L.R. 211, 214.
Moreover, it cannot be said that a statute which is given retrospective effect is unconstitutional merely because it interferes with vested rights (see, inter. alia, in this respect, the Varnavides case, supra and The Republic v. Menelaou, (1982) 3. C.L.R. 419, 429).
Also, as it clearly emerges from the judgments delivered in the Diagoras Development Ltd. case, supra, a retrospective [*295] statute does not offend against the Separation of Powers between the. Legislative Power and the Judicial Power only because, as n the present instance, it retrospectively amends legislation in order to give to a definition n such legislation a meaning other than that which was given to it by judicial interpretation.
There remains to be dealt with next the issue of whether the amendment, with retrospective effect, by means of sections 3 and 4 of Law 114/85, of the definition of “stricken debtor” in section 2 of Law 24/79 results in contravention of the principle of equality, whi.ch is safeguarded by Article 28 of the Constitution:
In my view this is not so in the present instance because the amended definition of “stricken debtor” has been rendered applicable to all parties affected thereby ab initio from the coming into force of Law. 24/79 on the 23rd March 1979, whereas if such amendment had not been given retrospective effect then there might arise instances of unequal treatment in view of the existence of different meanings of the notion of “stricken debtor” before and after the enactment of Law 114/85.
For all the foregoing reasons I am of the opinion that sections 3 and 4 of Law 114/85 are not unconstitutional.
A. LOIZOU J.: I agree with the judgment just delivered by the President of the Court. I wish only to reiterate the approach that I gave in my dissenting judgment in Diagoras Development Ltd., v. The National Bank of Greece (1985) 1 C.L.R. 581 regarding the issue of the retrospectivity of statutes or legislation and the principles governing same as regards vested rights and pending proceedings and I consider it unnecessary to repeat them here as the reasons and the analysis made therein will be published in due course.
MALACHTOS J.: I also agree with the judgment just delivered by the President of the Court for the reasons given and the conclusions reached by him and there is nothing that I wish to add. [*296]
LORIS J.: I fully agree with the judgment delivered by the Hon. President and its reasoning and I have nothing useful to add.
STYLIANIDES J.: I agree with the judgment delivered by the President of the Court and the reasons given and I have nothing useful to add.
PIKIS J.: I come to the same conclusion. My reasons being somewhat different from those of my colleagues are explained in the judgment that follows.
PIKIS: J.: In this appeal we are required to answer three questions reserved for out consideration under section 9, Debtors Relief (Temporary Provisions) Law 1979 (Law 24/79). All three questions revolve round the constitutionality of Law 114/85), a statute amending the definition of “stricken debtor” under Law 24/79. Specifically the questions raised require us to decide whether the law is unconstitutional for -
(a) Encroachment of the legislature on the competence of the judiciary;
(b) interference with vested rights; and
(c) infringement of equality before the law, safeguarded by Article 28.
We shall answer the questions in the order above outlined. Before doing so, a word or two about the amending law. Section 3 amends the law in a way making the 14th of August, 1974, the crucial date for determination of strickenness. And section 4 makes this definition applicable from 23.3.74, that is, the date on which the basic Law 24/79 was promulgated.
LEGISLATION - AREA OF COMPETENCE OF THE LEGISLATIVE AND JUDICIAL POWERS OF THE STATE: The gravamen of the submission for the appellants is that the legislature by the enactment question, especially its avowed aim to give retrospective effect to it, invaded the province of the judiciary because by their, legislative action they attempted to supersede the decision [*297] of the Supreme Court in Evangelou and Another v. Ambizas and Another. In Evangelou, supra, the Supreme Court held that as a matter of interpretation of the definition of “stricken debtor” in Law 24/79, strickenness was tied down to inability to pay one’s obligations at the time of the proceedings and not to any antecedent date. What counsel suggested is that by the device of retrospective legislation the legislature reversed the effect of judicial action-an exercise allegedly involving the assumption of power to control the exercise of the judicial power of the State.
With respect, the submission is founded on a misconception of the constitutional role of the legislative and judicial branches of the State and, the doctrine of separation of powers. The province of the judiciary is confined to the definition, interpretation and application of the law to judicial causes it is a domain wholly separate and distinct from that of the legislature, entrusted by the Constitution with law-making power. Both the legislature and the judiciary, as well as the third coordinate power of the State, the Executive, are constrained to operate within the system of separation of powers that underlies the assumption of exercise of State power. Thus, each of the three powers is only entitled to assume competence in respect of matters specifically assigned it by the Constitution, or matters intrinsically falling in its sphere of competence. In Diagoras Development v. National Bank of Greece, we declared the Debtors Relief (Temporary Provisions) (Amendment) Law 1984 (Law 92/84) unconstitutional because the legislature purported to furnish an interpretation of the statute law, a judicial function in the exclusive competence of the judiciary. The decision illustrates forcefully the need for each power to heed the limits of its constitutional competence. However, it was pointed out, the outcome of the case might, be different if the legislature amended the law, in order to streamline it with its wishes retrospectively, if they so choose. Dicta in Diagoras, supra, as well as in Malachtou v. Attorney-General, strongly support the proposition there [*298] is no constitutional impediment to the enactment of the retrospective legislation.
The Constitution does not specifically limit legislative competence to the enactment of prospective legislation, except in two respects:-
(a) The prohibition of ex post facto criminalisation of conduct (Article 12.1) and
(b) the imposition of taxes, duties and rates (Article 24.3).
Article 61 that defines the scope of legislative competence, does not in terms limit its power to the introduction of prospective legislation. In the submission of counsel, such limitation should be read as implicit in the provisions of Article 61 in view of the provisions of Article 82 of the Constitution, providing that statutes take effect from the date of their promulgation in the official gazette. I am unable to construe Article 82 as importing the suggested constraint on the exercise of legislative competence. A similar, provision in the Interpretation Law-Cap.1, section 7 in particular, incorporating a rule of long standing of English Law, has never been construed as importing a similar limitation. Its object has been held to be to provide for the formal genesis of a piece of statutory legislation in order for the Courts to take judicial notice of it. I appreciate that canons of construction of statute law and constitutional provisions are not necessarily identical. The Constitution is interpreted from a broader perspective; nevertheless, in this case the objects of Article 82 and section 7 are identical, namely, to bring the law to the notice of the public and regulate the formal commencement of it. Article 82 is not intended in any way to regulate the content of legislation or limit legislative discretion in that respect.
Counsel drew attention to the disfavour with which courts of the Federal Republic of Germany view retroactive legislation that they regard as antagonistic to the [*299] rule of law, and the certainty it requires as to the state of the law. Courts of the common law countries, similarly incline against statutory retrospection. No retroactive effect is given to statutes, unless impelled to do so by the clear language of the law. This approach reflects judicial sentiments of fairness and the desirability of sustaining certainty in the management of human affairs. As it emerges from the German case, cited by the counsel, the Federal Constitutional Court of the German Democratic Republic recognises too, subject to narrow and well defined limits, amenity to legislate, retrospectively. It is Unnecessary to debate further German jurisprudence for our law clearly acknowledges power to the legislator to enact retrospective legislation. In the first place, there is no constitutional impediment, as earlier indicated. Contrary to submission of counsel, Article 23.3 does not have that effect. It is concerned with the expropriation of rights by public authorities and how it may be accomplished. On the other hand, our statute law clearly recognises the right to give retrospective effect to legislation. That this is the effect of our law has been recognised by the Supreme Court in the cases of Malachtou v. Attorney-General of the Republic, supra, and Diagoras Development v. National Bank of Greece, supra.
In the light of the above analysis of the law, the answer to the first question, reserved for our consideration, is that the law is not unconstitutional for abuse of legislative power. The rights of the parties in the case of Evangelou, supra, as defined by the Court, remain unaffected by the law here under consideration. Once declared by the Court, they cannot be taken away by the action of any power of the State. The Law under review in no way purports to disturb the outcome of the case of Evangelou, or any other case decided by the Courts. On the other hand, the declaration of the Law by the Courts does not impose [*300] any limitation on the power of the legislature to alter the Law by an appropriate amendment of its provisions. What they cannot do, as decided in Diagoras, supra, is to furnish an interpretation or construction of existing legislation other than the one placed by the Court.
VESTED RIGHTS: The freedom of the legislature to legislate retrospectively, as explained above, encompasses amenity to disturb vested rights. Objections to retrospective legislation are primarily associated with the: undesirability of upsetting rights vested by law. In fact, s. 10(2)-Cap. 1, of the Interpretation Law, creates a specific statutory presumption against such intention being attributed to the legislature; but the presumption may be rebutted in the face of clear language to that effect.
This was recognised to be the effect of the law by the Full Bench of the Supreme Court in Republic v. Menelaou. In the same case we discussed the attributes of a vested right and the way it contrasts with existing right. To illustrate the difference, it is useful to quote the following passage from Menelaou, supra, a quotation equally relevant to determining whether Law 114/85 takes away vested rights:
“The concept of vested rights, straight, forward at first sight, is sufficiently elusive to be susceptible to a number of interpretations. The expression vested rights primarily connotes rights that accrued in Law. Rights may accrue both in civil and public Law. A right may be deemed to vest if the process of the Law for its acquisition has been completed. The right crystallizes thereafter and vests in the subject who becomes its beneficiary in Law”.
Under the enactment that the Law here under consideration purported to amend the least of inability to pay owing to the events of the summer of 1974, fell to be determined at the time of the hearing of an application for a declaration of strickenness. Consequently, no one had a vested right to be regarded as stricken under Law 24/79 [*301] until he was adjudged as such by the Court, in relation to a specific obligation. The Law here does not, purport to upset, nor could it disturb, for the reasons earlier explained, the effect of any judicial declaration of strickenness. Consequently, neither the applicants nor any other creditor in their position could be regarded in Law as having a vested right to recover monies owing b persons afflicted by the events of 1974. Such right could only vest under Law 24/79 upon a declaration of strickenness. The determination of present rights by reference to past events, is not a species of retrospective legislation.
Consequently, the answer to the relevant question raised by the. District Court is that there is no legal obstacle to retroactive deprivation of vested rights and, further, that no vested rights were taken away by the Law, for the reasons above explained.
EQUALITY-ARTICLE 28: Equality before the Law and the administration of justice is safeguarded by Article 28 of the Constitution. As often explained, the notion of equality, imported by the Constitution, affects things or situations intrinsically similar. It does not aim to limit legislative discretion to make reasonable differentiations or distinctions warranted by inherent dissimilarities between objects and situations. In Aloupas v. National Bank of Greece, the Full Bench of the Supreme Court acknowledged wide margin of discretion to the legislature, corresponding to the magnitude of the necessity created by the Turkish invasion, to make adjustments to the rights of citizens de signed to alleviate the hardship that befell the worst hit section of the population. The majority decision of the Court of Appeal in Stefanidou v. Ioannides supports the proposition it is open to the legislation to make distinctions between the rights of litigants depending on the existence of an appeal, without breaching the provisions of Article 28. By the same reasoning and logic, the legislature can distinguish between the rights of citizens that have been settled by a private arrangement and those who have resorted [*302] to Court. For myself, I am not wholly satisfied with the rationale of the distinction and issued a dissenting judgment. However, notwithstanding the amenity of the Full Bench to depart from a decision of the Court of Appeal in an appropriate case, acknowledged in Republic (Minister of Finance and Another) v. D. Demetriades, it would he improper to examine that possibility in view of the recentness of the decision viewed in conjunction with the value of precedent.
The Law does not appear to aim to disturb transactions concluded by private agreement. Where this is contemplated, the intention of the legislature is manifested by clear language and provisions are made for the readjustment of rights settled on the basis of the previous state of the Law; an apt example is furnished by the provisions of section 4 of Law 24/79.
Had the applicants acquired vested rights in the sense earlier explained, and were, by virtue of the retroactive provisions of the Law, deprived of those rights, a question of unequal treatment compared to other persons in the same position, would have arisen. But, as explained, no right vested to be treated as stricken under the repealed legislation before a judicial declaration. Therefore, no question of inequality arises.
For the foregoing reasons, the answer to the third question is negative too, resulting in the dismissal of the arguments propounded for the declaration of the Law as unconstitutional.
KOURRIS J.: I agree with the judgment delivered by the President of this Court and the reasons given therein and I have nothing to add.
TRIANTAFYLLIDES, P.: In the result this Court is of the opinion unanimously that Article 3 and 4 of Law 114/85 are not unconstitutional.
We make no order as to the costs of these proceedings before us.
Opinion as above.
No order as to costs.
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