Supreme Court grants certiorari to quash Registrar's arbitration decision due to procedural irregularities under Co-operative Societies Law.

[*853] 1965 July 26

(VASSILIADES, J.)

ORIGINAL JURISDICTION

Ioannis V. Hji Papayiannis,

Applicant,

and

The Registrar of Co-operative Credit

Societies of the Greek Commtmal Chamber,

Respondent.

(Civil Application No. 12/63).

Prerogative Writs - Certiorari - Co-operative Societies Law, Cap. 114, sections 53(2)(a)(4), 54(1)(2)(r) and the Co-operative Societies Rules, Rules 98, 99, 100, 100(l) and 102 - Arbitration proceedings under section 53 of the Law - Application for certiorari to move into this Court and quash arbitration decision - Irregularity of proceedings - Control by. prerogative orders - Application granted.

C. Myrianthis, for Ph. Clerides, for Applicant.

M. Spanos, Counsel of the Republic, for Respondent.

JUDGMENT

VASSILIADES, J.: This is an application for all order of certiorari "to move into this Court and quash a decision made by the Registrar of the Co-Operative Credit Societies under the Greek Communal Chamber, on the 18.1 .1963, in arbitration proceedings," under section 53 of the [*854] Co-Operative Societies Law, Cap. 114, whereby the applicant was adjudged to pay to a co-operative society in his village, £100.- damages for failing to deliver to them his carrots, as required by their bye-laws. The date of the decision complained of is given as the 18.1.63, while according to exhibit 2, the decision was made on 14.12.62.

The application is based on Article 155.4 of the Constitution; on section 19 of the Courts of Justice Law, 1960; on Order 59, rule 3 of the English Rules of Civil Procedure; on section 53(5)(6) of the Co-Operative Societies Law, Cap. 114; and on "the general law and practice of the Courts" - as learned counsel who prepared the application has put it - whatever that may mean as reference to the law on which the application is based.

The proceeding is opposed on the ground that, in making the order complained of, the respondent was acting within his powers under section 53 of the Co-Operative Societies Law, Cap. 114; and no sufficient cause for certiorari has been shown by the applicant on the face of the record.

The material facts leading to the dispute may be summarised as follows:

A co-operative society, formed at Katocopia

village under the name Συνεργατική Εταιρεία Διαθέσεως Φθαρτών Κατωκοπιάς Λτδ., was

duly registered in June 1961 under the Co-Operative Societies Law, Cap. 114. A photostatic copy of the document under which it was registered, containing, as usual, its objects and bye-laws, as well as the signatures of the persons who formed it, was put on the record by consent, as exhibit 1. This exhibit shows that one of the 163 original signatories was the applicant, whose signed name appears - opposite number 161. (Exhibit 1, p.7). [*555]

The first object of this society was:

"(α) H ομαδική

πώλησις οσπρίων, λαχανικών, φρούτων, πατατών και άλλων φθαρτών προϊόντων

των μελών, εν τοις κατωτέρω αναφερομένων ως των "προϊόντων".

Article 18 exhibit 1, on page 2, under the heading "Παράδοσις Προϊόντων", provides:-

18. Έκαστον μέλος υποχρεούται να παραδώση εις την εταιρείαν δι'ομαδικήν

πώλησιν ή κατεργασίαν όλην την ποσότητα προϊόντων των παραγομένων υπ' αυτού ή της

συζύγου του και των αγάμων τέκνων του, πλην ως αναφέρεται εις το άρθρον 22 των παρόντων κανονισμών και μικράς ποσότητος δια τας

οικιακάς του ανάγκας, οριζομένης υπό της επιτροπείας".

Inserted in this article in a rather strange manner, in handwriting at the end of page 2, is this:-

"καθώς και όλην την παραγωγήν του ανήκουσαν εις αυτόν και εν συνεταιρισμώ μετ'άλλων".

The next article 19, on page 3, reads:-

"19. Μέλος τι απολείπον να παραδώση την ελαχίστην τουλάχιστον ποσότητα

προϊόντων του

συμφώνως προς το άρθρον 18 των παρόντων κανονισμών υποχρεούται να πληρώνη εις την εταιρείαν δια το αποθεματικόν κεφάλαιον αυτής 50%

επί της αξίας

των προϊόντων τα οποία απέλιπε [*856] να παραδώση, της τοιαύτης αξίας οριζομένης υπό της

επιτροπείας και του εποπτικού συμβουλίου συμφώνως προς την τρέχουσαν τιμήν

της αγοράς κατά την περίοδον που το μέλος παρέλειψε να παραδώση τα προϊόντα του".

In the spring of the following year, 1962, a dispute arose between the applicant and the co-operative society in question, under the provisions of these articles 18 and 19. The society claimed that the applicant produced a considerable quantity of carrots which he failed to declare and deliver to the society for sale, and so rendered himself liable as provided in Article 19. The appellant rejected the claim, apparently on the allegation that he was not one of their members.

The dispute was referred to arbitration, presumably under section 53 of the Co-Operative Societies Law (Cap.114) which, as far as material, provides that:-

"(l) If any dispute touching the business of a registered society arises –

XX XX XX XX XX

(b) between a member, past member or person claiming through a member........ and the society...

XX XX XX XX XX

such dispute shall be referred to the Registrar for decision.

XX XX XX XX XX

(2) The Registrar may, on receipt of a reference under sub-section (1) –

(a) decide the dispute himself; or [*857]

(b) refer it for disposal to an arbitrator or arbitrators.

XX XX XX XX XX

(4) Any party aggrieved by the award of the arbitrator....... may appeal therefrom to the Registrar as may be prescribed by the Rules.

(5) A decision of the Registrar under subsection or an appeal under subsection (4) shall be final and shall not be called in question in any civil Court. "

XX XX XX XX XX

(The printed text in this last part of subsection (5) refers to subsection (3) but apparently that is a printing error).

In the course of the hearing before me, counsel for the respondent based his argument on the contention that the respondent derived the power to make the order complained of, on section 53 of Cap 114. It is common ground that he purported to act under that section.

It is likewise common ground that the record of proceedings which resulted in the order complained of, may be seen in the copies produced at the hearing and put in by consent, as exhibits 2 and 2a. The latter shows that on the 3rd of September, 1962, the applicant herein, appeared before "G. Ierides" at Morphou, in the course of matters concerning the co-operative society in question, and rejected the claim against him on the ground that he was not one of the Co-Operative's members. [*858]

The document (exhibit 2a purporting to be a full copy of the record) then reads:

"Ιωάννης Β. Χατζηπαπαγιάννη..£510. Ούτος ισχυρίσθη ότι επειδή κατά την γνώμην του δεν ήτο μέλος της ως άνω

εταιρείας, δεν έπραξε συμφώνως του καταστατικού της εταιρείας και συνεπώς δεν

παρέδωσε καρόττα εις την Εταιρείαν.

Ο Γραμματεύς δηλοί ότι ο εναγόμενος είναι μέλος συμφώνως του Νόμου, των θεσμών και των

Ειδικών Κανονισμών της εταιρείας. Εις ερώτησίν μου εάν ο εναγόμενος έδωσε

γραπτώς προς την επιτροπείαν της εταιρείας την παύσιν του, ο εναγόμενος

απήντησεν αρνητικώς. Αφού εξήγησα εις τον εναγόμενον τί αναφέρει ο Νόμος

σχετικώς με την παύσιν μέλους τινός από μίαν συνεργατικήν εταιρείαν, εξέδωσα

απόφασιν εναντίον του δια το ποσόν των £510.

(Υπογ) Γ. Ιερείδης

Μόρφου, 3.9.62".

This exhibit 2a is the record of what purports to have been the arbitration proceeding under section 53(2)(b) of the Co-Operative Societies Law.

The other document, exhibit 2, apparently purports to be the proceeding on appeal before the Registrar, under section 53(4). This was in Nicosia on the 14th December, 1962. The Registrar was dealing with applicant's appeal from the above award of £510,- against the applicant, for failing to deliver his carrots to the co-operative.

Here the applicant is recorded to have stated that on the 7th May, 1962 (four months prior to the arbitration [*859] proceeding in exhibit 2a): "με εκάλεσαν εις διαιτησίαν επί τω ότι δεν εδήλωσα την παραγωγήν μου, εγώ τότε τους είπα ότι δεν είμαι μέλος όταν ενεγράφην δεν είχα διαβάσει το καταστατικόν και τότε ο κ. Ερωτοκρίτου μου είπεν εν τάξει αν θέλης μπορείς να παραιτηθής από τώρα".

The Registrar thereupon, asked whether after his "καταδίκην" (apparently referring to the proceeding of 7th May) the applicant handed to the committee of the co-operative, his withdrawal in writing. And to a negative reply, the Registrar "του υποδεικνύει τας

υπογραφάς του, και ο εφεσείων παραδέχεται ότι υπέγραψε την αίτησιν δι'εγγραφήν

Συνεργατικής Εταιρείας Διαθέσεως Φθαρτών Κατωκοπιάς και αναγνωρίζει την

υπογραφήν του, δι'εγγραφήν της Εταιρείας".

There is, however, a statement on this record (exhibit 2) that after the proceeding on 7.5.62, the applicant was condemned by the arbitrator to £5 fine (πρόστιμον) for failing to declare his produce. Was this an "arbitration" in connection with the same case? The record does not show. It would seem to have been the penalty provided in article 21, at page 3 of exhibit 1. If so, did that confirm applicant's membership? Or, did it confirm his intention to withdraw from membership? The question, I think, does not call for an answer in this proceeding. But it tends to show the way matters were being handled in the co-operative in question.

Be that as it may, the record shows that the Registrar finding that the applicant "ουδεμίαν

γραπτήν δήλωσιν έκαμε προς την Εταιρείαν δια να διαγραφή από μέλος αυτής", and that "οι

επίτροποι δηλούν ότι εκαλλιέργησε καρόττα και ότι ο ίδιος είχε δηλώσει παραγωγήν

καρόττων" , came to his decision, which he put in one word and a figure:- "ΑΠΟΦΑΣΙΣ £100". [*860]

There is nothing on the record to show that the Registrar exercising his powers under section 53(4) went into the question whether the award of the arbitrator for the payment of £510.- was made in accordance with article 1 9 of exhibit 1 (supra); or, whether it was made in accordance with the rules governing such arbitrations; or, to show that in reaching his decision he (the Registrar) had any regard to the provisions in article 19, that applicant's obligation to the co-operative, for the benefit of its reserved capital, was: "50%

επί της αξίας των προϊόντων τα οποία απέλιπε να παραδώση, της τοιαύτης αξίας

οριζομένης υπό της επιτροπείας και του εποπτικού συμβουλίου

συμφώνως προς την τρέχουσαν τιμήν της αγοράς κατά την περίοδον που το

μέλος παρέλειψε να παραδώση τα προϊόντα του".

The main issues arising in the dispute in question, were three:-

(a) whether the applicant herein, was a member of the co-operative;

(b) whether he cultivated carrots which he failed to deliver; and

(c) whether the amount payable for such failure, was properly found.

The answer to the first question may, I think, be found in the last page of exhibit 1 where the Applicant signed as a member against number 161. And must be in the affirmative. The applicant was a member of this Co-Operative. And had not duly withdrawn at the material time. As regards questions (b) and (c) the record does not show the necessary connection between these questions and the Registrar's decision under consideration. [*861]

Section 54(1) of the Co-Operative Societies Law provides for the making of Rules "for the purpose of 'barrying out or giving effect to the principles and provisions of this Law". And section 54(2)(r) for rules to "prescribe the mode of appointing an arbitrator .... and the procedure to be followed in proceedings before the Registrar or such arbitrator ……" The Co-Operative Societies Rules were published in 1940; and are now found in Volume I of the Subsidiary Legislation of Cyprus at p. 426.

Rule 102 (at p. 443) provides for the disposal of produce through a registered society. And rules 98, 99 and 100 cover proceedings on a reference of a dispute to the Registrar for

decision; arbitration by the Registrar; and proceedings before the arbitrator or arbitrators. Rule 100(l) provides that "the proceedings before the arbitrator or arbitrators shall, as nearly as possible be conducted in the same way as proceedings before a Court of Law……..". And rule

101 (l) provides that "the procedure to be followed by the Registrar in deciding a dispute under the provisions of section 53(2)(a) of the Law or an

appeal under the provisions of sub-section (if.) of the same section shall be, as nearly as possible, similar to that followed by a

Court of Law in trying a civil case and the provisions of rule 100 shall apply mutatis mutandis".

The case for the applicant in the present application for certiorari, is that the proceedings before the arbitrator as well as those before the Registrar, which resulted in the decision complained of (for the payment of £100.- damages) are irregular on the face of them, to the extent of showing that both the arbitrator and the Registrar went beyond

their statutory powers in dealing with the matter. Their powers [*862] were to deal with the claim of the Co-Operative for 50% of the value, of

applicant's produce, as provided in article 19 of the bye-laws of this particular Co-Operative Society; and rule 102 of the Co-Operative Societies Rales. And in dealing with such claim they (the arbitrator and the Registrar) should act in the manner prescribed in section

53 of the statute and in rules 98-01 inclusive. While their records (exhibits 2 and 2a) show that the said arbitrator and Registrar purported to deal with the claim in question and the dispute thereon, in utter disregard of the requirements of the rules applicable to such matters.

The case for the respondent is that section 53 of the statute gives power to the Registrar to deal with the matter. And having acted within such powers, the Registrar made a decision which cannot be questioned in certiorari proceedings. As put by learned counsel for the respondent, the matter turns solely on the question whether the Registrar had jurisdiction or not.

I cannot accept this proposition. The powers of the Registrar are derived exclusively iron the statute; and, in my opinion, they can only be exercised as provided in the relative rules. Purporting to exercise such powers, regardless of the requirements of the rules, is, in my view, beyond the power conferred by the statute. The statutory powers of the Registrar can only be exercised within the fence of the rules. He cannot carry them outside that fence.

The competence of this Court to grant the remedy sought by the present proceeding has not been questioned here. It emanates from section 9 of the Administration of Justice (Miscellaneous Provisions) Law, No.33 of 1964. And [*863] it originates in Article 155(4) of the Constitution and Section 19 of the Courts of Justice Law, No. 14. of 1960.

The principles guiding the exercise of such jurisdiction have been considered in numerous cases in England (where proceedings of this nature originated) and in some cases in Cyprus dealing with prerogative writs. I shall, only refer to the General Council of Medical Education and Registration of the United Kingdom v. Spademan

(1943) 2, All E.R. p.337); Hussein Shefik v. The First Limassol Co-Operative Savings Bank Ltd., (1953) 19, C.L.R. p.244; Lambrianides v. Mavrides (1 958) 23, C.L.R.,p.49; and the Application by the Attorney-General of the Republic in the matter of an order for maintenance made in the District Court of Larnaca, and Panayiotis Christou (Civil Application 3/62 in the High Court, decided on 27.6.62)* where certiorari proceedings were discussed and applied in the "exercise of (the High Court's) "supervisory jurisdiction and controlling powers over inferior courts": and over persons having "legal authority to determine questions affecting the rights of citizens and having the duty to act judicially". In Hussein Shefik's case (referred to by both sides) an arbitration-decision under section 53 of the Co-Operative Societies Law (Cap. 11 4) was the main subjectmatter before the Court.

Here, there is no doubt that the dispute between the applicant and the Co-Operative Society was a matter which properly fell within the statutory arbitration provided in section 53· And, as said in Shefik's case (p.246 top) such arbitration is subject to control by prerogative orders. [*864]

This application for certiorari is based on the contention that the record of the arbitration-proceedings which resulted in the Registrar's decision complained of (l4. 12.62) amply shows that the arbitration was not carried out as required by the statute and the rules

applicable thereto: The assessment of the value of the goods, does not appear to have been done as provided in bye-law 1

9 and rule 102; the arbitration purporting to decide the dispute, does not appear to have been carried out as required by rules 98-100 inclusive; and the procedure followed by the Registrar in dealing with applicant's appeal under subsection (4) of section 53. does not appear to have been the procedure prescribed in rule 101.

The application, therefore, must succeed; and order for certiorari be made, to bring up and quash the arbitration proceedings complained of, including the decision of the 14th December, 1962. With an order for costs to be taxed in favour of the applicant at the top of the scale applicable to claims not exceeding the amount of the Registrar's award.

Orders in terms.