Court holds 'buy' in Exchange Control Law includes non-monetary payments like taxi services.

[*365] 1977 January. 7

(PIKIS, AG.P.D.C.)

IN THE DISTRICT COURT OF FAMAGUSTA

SITTING AT LARNACA

Police

v.

Andreas Georghiou Kapsis,

Accused.

(Criminal Case No. 2392/76).

Statutes

- Construction - "Buy" in section 3(1) of the Exchange Control Law, Cap. 199 - Whether it encompasses dealings concluded otherwise than by means of a direct monetary payment.

Exchange Control Law, Cap. 199 - Foreign currency - Possession of - Acquired in exchange of taxi services rendered - Offence under s. 3(1) of the Law Committed.

Criminal Law - Sentence - Illegal dealings with foreign currency - 72 U.S.A. dollars and

28 pounds sterling found hidden In accused's car - Need to deal with severity with such offences - £10 fine and forfeiture of currency - Section 3(1) of the Exchange Control Law Cap. 199 and section 1(3) of part II of the 5th Schedule to the Law.

Insp. Chr. Economides, for the Prosecution.

A. Mathicolonis, for the Accused.

JUDGMENT

The following judgment was delivered by:-

PIKIS, AG.P.D.C.: On 3rd September 1976, [*366] the police erected a road block at a point on the Larnaca/ Dhekelia road with a view to searching drivers, passengers and vehicles in order to carry out a spot check in connection with the possession of foreign currencies.

In the course of these searches the police stopped the accused, a taxi driver then on his way to Dhekelia and questioned him asking him, in the first place whether he was in possession of any foreign exchange. The accused gave a negative reply and produced money in his possession thereby supporting his allegation that he was not in possession of any foreign currencies. The two constables who were manning the road-block, namely P.C. Louka (P.W.1) and P.C. Markou (P.W.2) proceeded to search his vehicle. They found, carefully hidden in an empty space behind the dashboard ashtray, 72 dollars (U.S.A.) and 28 pounds Stg. The accused, on being cautioned, admitted ownership of this money and added that he had received it from several customers. Subsequently, in a statement made in answer to the formal charge, he gave further details of how he came in possession of the dollars and Sterling, his version being that he received the money from customers in consideration of taxi services rendered to them. He explained his failure to cash the money before a bank, saying that he is in the habit to collect in the first place an appreciable amount of foreign exchange before depositing it with a bank, his target being the collection of an amount in the region of £50. In his testimony before me the accused gave a slightly different account and attributed his failure to cash the money before a bank to the fact that he had collected the money that day and did not find an [*367] appropriate opportunity to visit the bank. It seems that the accused has a station at the Larnaca airport and every other day he picks up customers from the airport whom he transports to different parts of the island. Be it noted that there is a hank at the airport.

Having carefully considered the evidence before me I make the following findings: The accused was in possession of the foreign currencies mentioned above, that he acquired in exchange of taxi services rendered. The accused, feeling that possession of foreign currencies was illegal, carefully hid the money in his car. He remained in possession of the money for a period longer than a day, if this is at all significant, and failed to cash it before a bank at the first reasonable opportunity that presented itself. The foreign currencies had been obtained from persons who were not authorized dealers within the meaning of the law.

On count 1 the accused is charged with dealing in foreign exchange, the particulars being that he purchased the foreign exchange without the permission of the Governor of the Central Bank.

Dealings in Foreign Exchange - "Buy"

It has been submitted on behalf of the accused that inasmuch as the accused acquired the foreign exchange in consideration of services rendered and not by the payment of money he should not be deemed to have bought the foreign exchange found in his possession as the word "buy"i, in the context of s. 3(1) of the Exchange Control Law, Cap. 199, does not encompass dealings concluded except by means of a direct monetary payment. Thus I am asked to interpret the word "buy" [*368] in the context of the aforesaid legislation in the limited way above suggested.

The word "buy" is a word in common daily use and has a pretty clear meaning in ordinary parlance. Like every other word, in the absence of any indication to the contrary, it must be construed in accordance with its ordinary meaning. The Concise Oxford Dictionary gives the primary meaning of "buy" in the following terms: "Obtain by paying a price" and in parenthesis it is mentioned that usually such price is paid by a direct monetary payment. If one proceeds further down and examines the secondary meanings of the word it is manifest that the word "buy" connotes an exchange that is the acquisition of something by the payment of money or money’s worth. The word "buy", in its ordinary connotation, encompasses every transaction whereby something is acquired in consideration of the exchange of something else capable of being valued in money terms. The verb "buy" may be contrasted with the verbs "give" or "donate"; in the latter cases something is partex with in the absence of consideration.

As one may gather from such scanty authority as there is, on the interpretation of the verb "buy" and the noun "buyer" these words are apt to derive colour from the objects of the enactment in which they appear and the general hybrid of the law. In R. v. The Minister of Agriculture and Fisheries, Law Journal Reports, volume 101 , (1932) p. 561, Lord Hanworth M.R. debates the implications and meaning of the word "buy" but in the context of an enactment with different objects namely the Agricultural Marketing Act,1931. [*369] His analysis, to whatever extent it is relevant to the interpretation of the word "buy" in this case does suggest that the meaning of the word "buy" is not limited to the acquisition of something by a direct monetary payment. Further some guidance may be derived from the interpretation of the word "buy" in the context of section 62 of the Sale of Goods Act, 1893 and the Hire Purchase Act, 1965. (See Words and Phrases Legally Defined, volume I. at p. 203).

Turning to the objects and general scheme of the Exchange Control Law, Cap. 199 it is manifest that the legislature seeks to introduce rigid controls and regulate in a detailed manner dealings in foreign exchange. Thus, both the unauthorized import and export of foreign exchange is prohibited. By virtue of the provisions of section 3(1) it is sought to prohibit every unauthorized transaction in foreign exchange and this is in line with the general pattern of the 1aw. To accede to the submission that the word "buy" covers only transactions whereby foreign exchange is acquired in consideration of a direct monetary payment would be equivalent to introducing a highly artificial distinction between different types of dealings, equally objectionable from the viewpoint of the purposes of the law and differentiate between dealings between which there is no intrinsic difference. If such artificial distinction was acknowledged the enforcement of the law, the provisions of section 3(1) in particular, would be rendered virtually impossible. To ascribe the meaning suggested to this sub-section of the law would lead to absurd results and would amount to ascribing to the legislature an intention to make arbitrary differentiations. [*370] This was neither intended nor manifested by the phraseology used and the provisions of section 3(1) clearly lay down that the purchase of foreign exchange is illegal and contrary to the law irrespective of the mode of payment.

I find that the prosecution proved its case beyond any reasonable doubt on count 1 and the accused is found guilty accordingly. I agree with the submission made on behalf of the prosecution that counts 2 and 3 are alternative charges and inasmuch as section 4 applies to unauthorized transactions concluded by authorized dealers, and the accused is not an authorized dealer, its provisions cannot apply to the facts of the present case. On the other hand, the acts of the accused are caught by the provisions of section 5 of the law covering transactions in foreign exchange by unauthorized persons. The accused failed to notify the Governor of the Central Bank of the fact that he was in possession of foreign currency and, therefore, he committed the offence set out in count 3 and he is found guilty accordingly.

SENTENCE

The facts of the case appear from the judgment of the Court and need not be repeated. It is quite obvious from the reaction of the accused, when stopped for the purpose of being searched in relation to foreign exchange, that he was aware of the fact that being in possession of foreign currency, is illegal and did everything in his power to hide the fact from the authorities. Therefore the [*371] submission made on his behalf that he was, to a degree, ignorant of the provisions of the law, cannot be sustained. On the contrary, it emerges that he was acting with full knowledge and in defiance of the provisions of the law,

As I had occasion to stress in a previous decision of the Court illegal dealings in foreign exchange are nowadays a matter of great consequence for the proper management of the economy of Cyprus. Such dealings often lead to the illegal export of capital, a matter that affects directly the struggle that is being waged for the salvation of Cyprus. Therefore the Court cannot but view acts similar to those of the accused with severity. In accordance with the provisions of section 1 (3) of Part II of the 5th schedule of the Exchange Control Law there is a discretion to order the forfeiture of the foreign currency in question. This discretion must be exercised judicially in the light of the facts of the case and always having in mind the general objects of the law. Having in mind the facts before me I feel justified to make a forfeiture order and in consequence I order that the foreign exchange (exhibit 1, before the Court) be forfeited. In coming to this decision I have not overlooked the personal circumstances of the accused or the fact that he has no similar previous convictions.

The accused is further adjudged to pay a fine of £10. But let it be known that in future the Court may not be disposed to show similar leniency and it must be made [*372] generally known that contraventions of the Exchange Control Law are nowadays matters of extreme gravity that deserve severe punishment.

Accused to pay £10.- fine.