Supreme Court voids CYTA's refusal to provide PABX lines, ruling the authority exceeded its statutory monopoly powers.

[*32] 1969 January 4

(TRIANTAFYLLIDES, J.)

REVISIONAL JURISDICTION

In the matter of Article 146 of the Constitution

G.E. Andronicou & Co. Ltd.,

Applicant,

and

The Cyprus Telecommunications Authority,

Respondent.

(Case No. 70/68).

Cyprus Telecommunications Authority (CYTA) - Refusal to provide exchange lines in relation to P.A.B.X. Systems - Alleged to have been based on existing “Rules and Regulations” derived from sections 12 and 13 of the Telecommunications Service Law Cap. 302 (as amended by Law 34/62) - Vitiated by a C material misconception - “Rules and Regulations” non existent.

Cyprus Telecommunications Authority (CYTA) - Decision thereof confirming current practice with regard to P.A.B.X. Systems - Only a policy decision - Not a product of the powers vested in the Respondent under section 12 sub-section 1 paras. (a) and (e) of the Telecommunications Service Law (supra) - In abuse and excess of powers.

Telecommunications Service Law (supra) - Section 12 sub-section 2 paragraphs (b) and (c) - Respondents not entitled thereunder to establish a monopoly regarding supply or installation of P.A.B.X. systems - Article 25 of the Constitution.

Telecommunications Service Law (supra) section 12 sub-section 1 - Whether Respondent might validly provide, by means of Regulations made under para. (e) thereof or by means of terms and conditions prescribed under para. (a.) thereof regarding supply, installation and maintenance of P.A.B.X. systems - Question left open.

Constitutional Law - Article 25 of the Constitution – Establishment of monopolies - To be allowed only where provision has been clears made by a law.

Construction of statutes - Construction of the word “may” in section 12 sub-section 2 of the Telecommunications Service Law (supra).

C. Cacoyiannis, for the Applicant.

A. Hadjiloannou, for the Respondent.

JUDGMENT

The following Judgment was delivered by: - [*33]

TRIANTAFYLLIDES, J.: By this recourse the Applicant company complains against the refusal of the Respondent Authority to provide the required exchange lines (i.e. lines connecting up with a public telephone exchange) in relation to two P.A.B.X (Private Automatic Branch Exchange) systems to be supplied to, and be installed and maintained for, customers of the Applicant, by the Applicant.

A P.A.B.X. system is a combination of internal and external telephone systems, i.e. an internal extension number of such a system can dial directly another internal extension number of the system and, also, by dialling an extra digit - such as ‘9’ or ‘0’ - an internal extension number can dial directly an outside number of the public telephone exchange.

The events which gave rise to this recourse are as follows: -

On the 15th December, 1967, the Applicant addressed a letter to the Respondent stating that the Applicant had D secured two orders for P.A.B.X. systems and would like to have an assurance that the Respondent would rent the required exchange lines to the Applicant’s customers; it was added that all internal telephones would be installed and maintained by the Applicant (see exhibit 1).

On the 23rd December, 1967, the Assistant Chief Accountant of Respondent replied stating that the proposal that Applicant would install P.A.B.X. systems, as well as maintain them, and that the Respondent would rent the required exchange lines could not “be entertained”, as it was “contrary to the Authority’s Rules and Regulations derived from the [*34] Telecommunications Law”. It was pointed out, however, that the Respondent would not interfere if the equipment in question would be used exclusively for intercommunication purposes and without connection to the Respondent’s telephone network (see exhibit 2).

On the 26th January, 1968, counsel for the Applicant B wrote to the Respondent requesting to be informed “which Rules or Regulations of the Telecommunications Law” prevented the course sought to be taken by the Applicant; it was stated, in such letter, that this information was necessary so as to enable counsel to give proper advice to the Applicant (see exhibit 3).

On the 2nd February, 1968, the Chief Accountant of Respondent replied to counsel for the Applicant stating that “the Authority’s rules and regulations ... are derived from the provisions of sections 12 and 13 of the Telecommunications Law (Cap. 302)”.

This recourse was filed on the 7th March, 1968.

Sections 12 and 13 of the Telecommunications Service Law (Cap. 302), as amended, in particular, by the Inland Telecommunications Service (Amendment) Law, 1962 (Law 34/62), read, in their material parts, as follows: -

“12. (1) Subject to the provisions of this Law, it shall be the duty of the Authority to –

(a) operate a good and sufficient

telecommunications service in the Republic for the Government, public bodies, and the public generally, on such terms

and conditions as the Authority may deem expedient; [*35]

(b) …………………………………….

(c) ……………………………………………………

(d) promote the development of the

telecommunications service in accordance, as far as practicable, with recognized international standard practice and

public B demand;

(e) make regulations, in accordance with the provisions of this Law, governing the telecommunications service;

(f)…………………………………….

(2) For the purposes of subsection (1) the Authority may, either by itself or through any duly authorized agent in this respect –

(a) subject to the provisions of this Law, purchase, construct, reconstruct, install, maintain and operate installations and plant, and all buildings and works used in connection therewith;

(b) sell, hire or otherwise supply installations and plant, and install, repair, maintain or remove any such installations and plant; and

(c) carry on all such other works or activities as may appear to the Authority requisite, advantageous or convenient for it to

carry on for or in connection with the [*36] performance of its duties under this law or with a view to making the best use of any of its assets,

or for providing an efficient telecommunications service.

(3) ……………………………….

13. Subject to the provisions of this Law, or of any Regulations made thereunder, in so far as it is able to do so, and having due regard to economic considerations, the Authority shall, either by itself or through duly authorized agents, provide a telecommunications service and the necessary installations and plant for use by any person (in this section referred to as ‘the subscriber’), at any place in the Republic to enable the subscriber to communicate by telecommunications service with any other person”.

It is common ground that no Regulations have as yet been made and published by the Respondent under sub-section 1(e) of section 12.

Counsel for the Respondent has produced, however, as relevant, two decisions of the Board of the Respondent (see exhibit 5):

The first one was taken on the 17th February, 1965; it refers to P.A.B. X. systems) (which admittedly are closely similar to P.A.B.X. systems) and it states that it was decided to continue the existing practice - entailing the purchase and installation of such systems by private persons and the payment by the subscribers to the Respondent of maintenance fees – [*37] but that the subject would be reconsidered as soon as the General Manager of Respondent would put forward a full report on the whole matter.

Apparently, no such report was ever prepared, in writing, by the General Manager; but on the 18th February, 1966, a second decision was taken in the matter, stating that after B explanations given by the General Manager, it was decided that the current practice would remain in force regarding the already existing P.A.B.X. systems, but that, in future, the installation of these systems which belonged to private persons would be prohibited, and that such persons would have to rent the equipment from the Respondent and pay to the Respondent rent therefor, in addition to the maintenance fees.

No decision of the Board of the Respondent, relating specifically to the present case, has been produced, and it has not been alleged that such a

decision was ever taken. The matter seems to have been handled by the managerial staff of the Respondent.

The first thing to be noticed, at. once, is that the sub judice action is vitiated by a material misconception, namely, that there existed “Rules and Regulations” of the Respondent preventing acceptance, or even consideration, of

the request of the Applicant; as counsel for the Respondent has not referred in the Opposition to, produced, or sought to rely on, any such “Rules and Regulations” it

may safely be taken for granted that they were non-existent. This, in my

opinion, constitutes, by itself, a sufficient reason for the annulment of the said action, and it is, therefore, hereby so declared accordingly. [*38].

Let it be assumed, next, that the action in question was, in reality, taken as a result of the aforementioned decision of the Board of the Respondent, dated the 18th February, 1966 (exhibit .5):

Such decision amounts to nothing more than a policy decision. It cannot be treated, by any means, as Regulations made under subsection 1(e) of section 12 of Cap. 302. Nor can it be properly taken to be a formal decision laying down terms and conditions under sub-section 1 (a) of section 12, because it is too vague and lacking in

essential particulars (such as the specific rental to be paid); and, actually, it has not even been suggested by counsel for the Respondent that the decision of the 18th

February, 1966, was ever meant to be a step taken under either paragraph (a) or paragraph (e) of sub-section (1) of section 12.

The case for the Respondent has been (see paragraph 4 of the grounds of law in the Opposition) that such

decision was taken under paragraphs (b) and (c) of sub-section (2) of section

12. It was submitted, in this respect, that by virtue of such provisions the

Respondent/authorized, in the proper exercise of its discretion, to decide to monopolize the supply, installation and

maintenance of P.A.B.X. systems.

In relation to sub-section (2) of section 12, it was, further, submitted, by counsel for Respondent, that the word “may”,

in the opening sentence thereof, should be construed as meaning “shall”.

Counsel for the Respondent has, also, tendered evidence to show that, in the circumstances, the decision of the [*39] 18th February, 1966, was reached in the course of a proper exercise of the relevant discretionary powers. But, I ruled that before hearing such evidence I should decide, first, whether or not the aforesaid decision was in law open to Respondent; only if I were to decide this in the affirmative it would be necessary to hear the evidence tendered by counsel for the Respondent.

In my opinion, the proper construction to be placed on the word “may” in sub-section (2) of section 12 is its ordinary enabling meaning, and it does not mean “shall” ; and this is the view which has been adopted - and correctly so - in practice by the Respondent itself; otherwise there could ( never have arisen any question of considering, in the light of the views of its General Manager, what policy to adopt regarding the supply and installation of P.A.B.X. systems; if “may” meant “shall” then the Authority would have to do - in all cases, and without possessing a discretion or choice in the matter - all the things set out in sub-section (2).

Every Law in Cyprus (unless it is found, to be invalid as being

unconstitutional) has to be construed and applied in conformity, as far as possible, with the letter and spirit of our

Constitution; and in the case of section 12(2) of Cap. 302 it is particularly relevant to bear in mind the provisions

of Article 25, from which it is derived that a monopoly is an exception to the right safeguarded under such Article; with the necessary result that a monopoly should be allowed only where provision to that effect has been clearly made by a Law.[*40].

Moreover, enactments allegedly establishing monopolies have to be construed strictly (see, inter alia, Maxwell on Interpretation of Statutes, 11th ed. p. 285, and The Direct United State Cable Company Ltd. v. The Anglo-American Telegraph Company Ltd. 1877 2 A.C., 394, at p. 412).

Approaching in this manner the enabling provision of section 12(2) of Cap. 302 - and particularly paragraphs (b) and (c) thereof which have been specifically relied upon by the Respondent - I can find nothing therein entitling the Respondent to establish a monopoly regarding the supply or installation of P.A.B.X. systems.

The fact that the Respondent, by virtue of the said statutory

provisions, is empowered to do certain things, does not entail, as a proper juridical consequence, the proposition that the

Respondent is entitled to exclude others from doing the same things.

Nor is there, either, anything in section 13 of Cap. 302 which could be construed as vesting such a right in the Respondent; thereby a duty of the Respondent is laid down, but such duty does not necessarily entail a right to monopolize anything, if the Respondent is not otherwise expressly empowered to do so.

I am, of course, leaving entirely open, in this Judgment, the question of whether or not the Respondent might validly provide, by means of Regulations made under paragraph (e) of sub-section (1) of section 12 of Cap. 302 or by means of terms and conditions precisely and formally prescribed under paragraph (a) of the same sub-section, that P.A.B.X. [*41]. systems are to be supplied, installed and, a fortiori, maintained only by the Respondent; as already pointed out, the aforementioned

decision of the 18th February, 1966, can neither be held to be, nor has it been put forward by counsel for the Respondent as being, a product of the powers vested in the Respondent under such paragraphs (a) and (e).

In the result, for all the foregoing reasons I find that the sub judice action of the Respondent has to be declared to be null and void and of no effect whatsoever, as being contrary to law and in abuse and excess of powers, being, in this respect, also the product of a misconception, as already pointed out in this Judgment.

Regarding costs I have decided to order the Respondent to pay the Applicant only £10 towards Applicant’s costs, taking into account the undisputed fact that the Respondent has acted in all good faith in this matter.

Sub judice action declared

null and void and of no

effect whatsoever; order for

costs as aforesaid.