A public servant who commits illegality

"Second employment by a civil servant is illegal and may lead to disciplinary and/or criminal prosecution"

The hidden second employment by a civil servant, who uses his wife's name instead of his own, seems to be happening in Cyprus, a sign of illegality and corruption, with many collateral implications. Either the civil servant is dedicated and carries out his duties unswervingly for the public interest and good, as he should do, or he takes advantage of his position entrusted to him by the state and commits illegal acts. This fact can easily be established, as long as his superiors, colleagues or even citizens do not cover him or tolerate him and/or use him, but denounce him, so that this illegality disappears from the public service.

There are examples that should concern the state, but fortunately they are not many and should disappear. A typical example is the complaint from the Court of Appeal which requested that the case file be sent by the Registrar to the Attorney General to examine the possibility of a disciplinary and/or criminal offense being committed by a party who turned out to be a civil servant who carried out a second activity in the name of his wife.

Facts

The Court of Appeal in the decision it issued in C.A.332/18, dated 4.7.2024, dealt with the correctness of the first instance decision to award damages for the benefit of the shop tenant against the owner. In particular, the tenant complained that there was a breach of an implied term of the rental agreement by the owner regarding the peaceful enjoyment and use of the store as a fast-food restaurant and that he lost profits from sales.

The trial Court held that although the tenant registered the business in his wife's name for tax purposes earlier before the complaint, he was nevertheless the one operating the business and awarded him damages based on the testimony of his accountant. The latter stated in his report that the tenant was the owner, manager and beneficiary of the business that operated as a fast- food restaurant in the shop. The business for tax purposes only was written to his wife, who always with their children to some extent helped in the running of the business. The landlord claimed that the tenant did not have a right of action because he transferred the business earlier and did not suffer any damage himself. Finally, the case ended up in the Court of Appeal following an appeal by the owner of the shop for review of the first instance decision.

Decision of the Court of Appeal

The Court of Appeal ruled that the decision of the Court of First Instance was wrong, stressing that it does not mean a typical transfer of the business in the name of the wife, simply for tax reasons at the suggestion of the accountant. Based on article 6 of the VAT Law of 2000 to 2010, a taxable person is any person who is registered or required to be registered under the Law. It stated that it is clear under the legislation that there is no "typical" registration in the name of a business owner for VAT purposes and another person for other purposes, as was the finding of the Court of First Instance. It was wrongly held that the tenant was the owner of the fast-food business and therefore suffered the damage for which it awarded him damages and therefore set aside the trial Court's decision.

Referring to the minutes of the trial, the Court of Appeal indicated that an issue of illegality was raised by the business activity of the tenant, who, when asked if he was a civil servant, answered positively "and what does it matter, I am an employee of "Public Works". The Court of Appeal emphasized that it is not possible to remain indifferent, since it has come to know the above testimony, regarding the tenant's business activity, which is not consistent with his public servant status. A question is also raised by the consequences of the "typical" transfer of the business to the wife and the statements made in relation to it. It judged that these are statements that at first sight create the impression of misleading the authorities, regarding the real owner of the fast-food restaurant.

In view of the above, the Court of Appeal, as stated in its decision, instructed the Registrar to send the minutes of the first instance proceedings, as well as copies of the written statements of the tenant and the accountant and the evidence they submitted, to the Attorney General for the purposes of investigating possible committing a disciplinary and/or criminal offense by the tenant and other involved persons with the registration of the business in the name of the tenant’s wife.