Assets Recovery Agency v Boru & another; Equity Bank (Kenya) Limited & another (Interested Parties) [2022] KEHC 15362 (KLR) | Proceeds Of Crime | Esheria

Assets Recovery Agency v Boru & another; Equity Bank (Kenya) Limited & another (Interested Parties) [2022] KEHC 15362 (KLR)

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Assets Recovery Agency v Boru & another; Equity Bank (Kenya) Limited & another (Interested Parties) (Civil Suit E006 of 2021) [2022] KEHC 15362 (KLR) (Anti-Corruption and Economic Crimes) (10 November 2022) (Judgment)

Neutral citation: [2022] KEHC 15362 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Civil Suit E006 of 2021

EN Maina, J

November 10, 2022

Between

Assets Recovery Agency

Applicant

and

Barak Abdullahi Boru

1st Respondent

Momanyi Makori Dennis

2nd Respondent

and

Equity Bank (Kenya) Limited

Interested Party

First Community Bank Limited

Interested Party

Judgment

1. The Originating Motion dated March 25, 2021 which is supported by an affidavit sworn by CPL Jeremiah Sautet on even date, is made under Sections 81, 90 and 92 of the Proceeds of Crime and Anti-Money Laundering Act and Order 51 of the Civil Procedure Rules and it seeks orders as follows:-“1)That this Honourable Court be pleased to issue an order declaring that motor vehicles registration numbers KBL xxx, Toyota Prado, Station Wagon and KCW xxx, Toyota Pickup are proceeds of crime and therefore liable for forfeiture to the Government.2)That this Honourable Court be pleased to issue orders of forfeiture of the following motor vehicles;i.KBL xxx, Toyota Prado, Station Wagon, Chassis Number xxxxii.KCW xxx Toyota Pickup, CHassis Numberxxxx3)That this Honourable Court be pleased to issue an order that the above motor vehicles be forfeited to the Government of Kenya and transferred to the Assets Recovery Agency (the Applicant herein).4)That this Honorable Court to issue an Order directing the Director NTSA to transfer ownership in the Logbooks of the motor vehicles in prayers 1 and 2 above in the name of the Respondents and Interested Parties in favor of the Assets Recovery Agency. 5)That this Court do make any other ancillary orders it considers appropriate to facilitate the transfer of the property forfeited to the Applicant

6)That costs be provided for.”

2. The Application is made on the following grounds:-“1).........2. .........3. .........4. .........5. That the 1st Respondent is a male adult of sound mind residing at Kampi Bure within Isiolo County and the beneficial owner of the assets KCW xxxx, Toyota Pickup, Chassis Number xxxx registered in his name of the 4th Respondent and 2nd Interested Party.6. That the 2nd and 3rd Respondents are male adults of sound mind residing within isiolo County and charged alongside the 1st Respondent in the Criminal Case number 352 of 2020. 7.That the 4th Respondent is a male Adult of sound mind, co-director of the company Twixt Logistics located within Nairobi County and the beneficial owner of the motor vehicle KBL xxxx, Toyota Prado, Station Wagon, and Chassis Number xxxx registered in his name of the 4th respondent and 1st Interested Party.8. That the 1st and 2nd Interested Parties are the registered owner of the motor vehicles specified under prayers 1 and 2 above.9. That following the arrest of the Respondents on the May 24, 2020 along Merti - Isiolo at Gotu- Merti Junction within Isiolo County and subsequent arraignment in court on June 10, 2020 charged with the offence of inter alia the offence of trafficking in Narcotic drugs contrary to Section 4(a) of theNarcotic drugs and Psychotropic Substances Control ActNo 4 of 1994 in the Chief Magistrates Court at Isiolo vide criminal case No CR 352 of 2020, the Agency commenced investigations to recover proceeds of crime accrued to the Respondents.10. That investigation established that the motor vehicle registration number KBL xxx Toyota Prado was in possession of the 1st, 2nd and 3rd Respondents and was seized while transporting and/or trafficking narcotic drugs on May 24, 2020 along Merti - Isiolo at Gotu-Merti Junction within Isiolo County.11. That during the arrest, a search was conducted on the motor vehicle registration number KBL xxxx Toyota Prado which the 1st, 2nd and 3rd Respondents were in occupation and upon it being searched, a total of 796. 66 grams of heroin were recovered concealed in the motor vehicle and the motor vehicle was seized.12. That on or about August 10, 2020, the Agency received information on ongoing criminal investigations involving the 1st, 2nd and 3rd Respondents who were arrested whilst trafficking Narcotic drugs and who had acquired assets/properties using the proceeds obtained from the illicit trade in narcotic drugs suspected to be proceeds of crime contrary to the provisions of theNarcotic Drugs and Psychotropic Substances Control Act No 4 of 1994, the Proceeds of Crime and Anti-Money Laundering Act, 2009 and thePreventions of Organized Crimes Act 2010. 13. That the Agency opened an inquiry file No 39 of 2020 to investigate and inquire into the activities of the Respondents for purposes of ascertaining whether the said motor vehicles are proceeds of crime.14. That the investigations established that the motor vehicles are proceeds of crime and/or instrumentalities of crime obtained from the illegitimate trade in Narcotic Drugs contrary to the provisions of the Narcotic Drugs and Psychotropic Substances Control Act No 4 of 1994, the Proceeds of Crime and Anti-Money Laundering Act, 2009 and the Preventions of Organized Crimes Act 2010. 15. That the investigations further established that the 1st Respondent acquired assets/property using proceeds from the illegitimate trade in narcotic drugs.16. That further investigations established that the motor vehicle registration KBL xxxx is proceed of crime and/or instrumentality of crime and is registered in the name of the 4th Respondent and 1st Interested Party.17. That investigation has established that the motor vehicle KCW xxxx which is registered in the name of the 1st Respondent and 2nd Interested Party is proceed of crime obtained from the trade in narcotic substances.18. That investigation established that there are reasonable grounds to believe that the assets/properties are obtained through the illegitimate trade in narcotic drugs and the motor vehicle registration KCW xxxx is a benefit of an illegal act and motor vehicle registration KBL xxxx a proceed and/or instrumentality of crime.19. That investigations established that the assets/properties were unlawfully acquired hence proceeds of crime contrary to the provisions of Proceeds of Crime and Anti-Money Laundering Act 2009. 20. That it is in the interest of justice that forfeiture orders do issue forfeiting the assets specified above to the Applicant.21. That unless this Honourable Court grants the orders sought, the economic advantage derived from the commission of crimes will continue to benefit a few to the disadvantage of national security, interest, economy and general interest.22. That there attaches an international obligation for every state to combat illegitimate poaching, transnational organized crime and laundering of proceeds of crime by proper implementation of their national domestic laws.23. That it is in the public interest that the orders sought are granted and the suspect assets and funds in the aforementioned accounts be forfeited to the Applicant on behalf of the Government of Kenya.”

3. During the course of these proceedings, the ARA/Applicant filed a notice of withdrawal of the 2nd and 3rd Respondents dated December 8, 2021 from the proceedings. The Application is therefore against the 1st, 4th Respondents and the two Interested Parties.

4. The 1st Respondent and the 2nd Interested Party did not enter appearance and did not file any pleadings in response to the application while the 4th Respondent and the 1st Interested Party opposed the Originating Motion through the replying affidavits sworn by Momanyi Makori Dennis and Jackson Mugo on June 16, 2021 and May 25, 2021.

5. When this court directed that the Originating Motion would be heard through written submissions the Applicant and the 1st Interested Party filed submissions dated January 31, 2022 and February 15, 2022 respectively. No submissions were received from the other parties.

Analysis and Determination 6. From the pleadings, the responses and the rival submissions of the parties, the following issues arise for determination:1. Whether the motor vehicles KBL xxxx Toyota Prado, Station Wagon, Chassis Number xxxx and KCW xxxx Toyota Pickup Chassis Number xxxx are instrumentalities of crime and or proceeds of crime.2. If so, whether the motor vehicles KBL xxxx Toyota Prado, Station Wagon, Chassis Number xxx and KCW xxxx Toyota Pickup Chassis Number xxxx should be forfeited to the government?

Issue (1) Whether the motor vehicles KBL xxxx Toyota Prado, Station Wagon, Chassis Number xxx and KCW xxx Toyota Pickup Chassis Number xxxx are instrumentalities of crime; 7. The Applicant contends that on May 24, 2020 the 1st Respondent was arrested along the Merti-Isiolo road at Gotu-Merti junction within Isiolo County whilst trafficking and/or transporting narcotics using motor vehicle Registration KBL xxxx Toyota Prado; that during the arrest, a search was conducted on the motor vehicle and 21 bundles of a plant substance suspected to be narcotic drugs, that is cannabis sativa, were found and the vehicle was seized; that the 1st Respondent subsequently charged in the Senior Principal Magistrates Court at Isiolo in Criminal Case No 352 of 2020 for the offence of trafficking narcotic drugs contrary to Section 4(a) of the Narcotics and Psychotropic Substances (Control) Act. The proceedings are currently pending before the magistrates' court. It is the Applicant’s contention that Motor Vehicle KBL xxx is an instrumentality of crime which is liable to be forfeited to the state.

8. The Applicant contends that ARA/Applicant conducted investigations under inquiry file No 39 of 2020, upon which it was concluded that the 1st Respondent is reasonably believed to be engaged in the illicit trade of narcotic drugs and that the motor vehicle KCW xxxx Toyota Pickup Chassis Number xxxx registered in the names of the 1st Respondent and the 2nd Interested Party is a proceed of crime.

9. The Applicant further contends that whereas the motor vehicle KBL xxx Toyota Prado is registered in the names of the 4th Respondent and 1st Interested Party and was hired by the 1st Respondent, the contract for hire between the 1st Respondent and the 4th Respondent had expired on May 22, 2020, two days before the arrest of 1st Respondent and impoundment of the vehicle. That the 1st Respondent failed to respond to the proceedings and as such the evidence is not rebutted.

10. Having considered all the material placed before me, it is my finding that unlike in the case of forfeiture of proceeds of crime where the ARA/Applicant is not required to prove the actual offence committed but needs only to establish unlawful conduct on a balance of probabilities in the case of forfeiture of an instrumentality of crime the ARA/Applicant must prove albeit on a balance of probabilities that the property has been used or is intended for use in the commission of an offence.

11. The issue of whether motor vehicle KBL xxx is an instrumentality of crime is a matter of evidence best left to the magistrate trying the criminal case. It is that court that is best suited to determine whether in fact the motor vehicle was conveying the alleged substance and whether in fact that substance is heroine or cannabis sativa. Whereas the Assets Recovery Agency has annexed a copy of an analyst’s report the same is not conclusive as it has not been tested through cross examination as it should. My holding finds support from the fact that there are several other issues that would require determination upon a full trial. The first is whether the narcotics were being conveyed in motor vehicle KBL xxxx Prado as stated in the Originating Motion or in a government vehicle registration GKB xxx as stated in the charge sheet and the Notice of Seizure annexed to the affidavit of Jeremiah Sautet. The other issue that would require determination is whether the substance found in the vehicle was heroine as alleged in the Originating Motion and the written submissions of the Applicant/ARA or whether it was cannabis sativa as averred in the affidavit of Jeremiah Sautet. It is the trial court which would be in a better position to determine the purpose of the aforestated facts; This upon hearing evidence from both sides in order for it to conclusively determine if the vehicle was indeed a conveyance as provided in Section 20 of the Narcotic Drugs and Psychotropic Substances (Control) Act.

12. The Narcotic Drugs and Psychotropic Substances (Control) Act has an elaborate procedure for forfeiture of conveyances of drugs. Section 20 of the Act states:-“20. Forfeiture of conveyance, implement, etc.(1)Any machinery, equipment, implement, pipe, utensil, or other article used for the commission of any offence under this Act shall be forfeited to the Government.(2)Every conveyance used for the commission of any offence under this Act or for carrying any machinery, equipment, implement, pipe, utensil or other article used for the commission of any offence under this Act, or any narcotic drug or psychotropic substance, shall be forfeited to the Government:Provided that where, on application made by the person who was the owner of the conveyance to the court in which any prosecution for any offence under this Act or before which any proceedings under this Act for the forfeiture and condemnation of any conveyance, not being a proceeding under Part IV is pending, the court is satisfied beyond reasonable doubt that—(a)the person who was the owner of the conveyance; and(b)in the case of an aircraft or ship, every person who was a responsible officer thereof, when it was made use of for such conveyance, was not concerned in or privy to such use, the conveyance shall be restored to the owner by the court.” (Emphasis mine) 13. I am alive to the provisions of Section 131 of the Proceeds of Crime and Anti-Money Laundering Act which provides for the pre-eminence of the Act in the event of a conflict with any other statute(s). However, in my view, there is no conflict between the provisions of the Proceeds of Crime and Anti-Money Laundering Act and those of the Narcotic Drugs and Psychotropic Substances (Control) Act. What there is is that the law provided for concurrent jurisdiction of this court and the Magistrates court in regard to instrumentalities of the crime of Narcotics Drugs and Psychotropic Substances. It is always in the interest and fair administration of justice that a matter be heard in the lowest court having jurisdiction to hear it so as to afford the citizen a second right of appeal.

14. As for the claim of the 4th Respondent that too is a matter that should be determined by the court trying the offence under Section 20(2) of the Narcotic Drugs and Psychotropic Substances (Control) Act by the court trying the offence.

Issue (2) Whether motor vehicle Registration No KCW xxxx Toyota pick-up Chasis No xxxxx is a proceed of crime liable to forfeiture to the State. 15. In regard to motor vehicle KCW xxx Toyota the ARA/Applicant’s contention is that the same is a proceed of crime; that upon investigations it was established that the 1st Respondent is reasonably believed to be engaged in the illicit trade of narcotic drugs and that the motor vehicle which is registered in the names of the 1st and the 2nd interested party is a proceed of that trade – see Paragraphs 18 and 21 of the affidavit of Cpl Jeremiah Sautet sworn on March 25, 2021 in support of the Originating Motion. There was no allegation whatsoever that the motor vehicle is or was an instrumentality of crime.

16. Section 2 of the Proceeds of Crime and Anti-Money Laundering Act defines proceeds of crime to mean:-“.....any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains derived or realized from such property from the time the offence was committed.”

17. It is trite that in forfeiture proceedings the ARA/Applicant need not prove the actual crime committed. Indeed, Section 92(4) of the Proceeds of Crime and Anti-Money Laundering Act expressly states that the validity of a forfeiture order is not affected by the outcome of criminal proceedings, or of an investigation with a view to institute such proceedings, in respect of an offence with which the property concerned is in some way associated.

18. It is also trite that the onus of proof is cast upon the Assets Recovery Agency to prove its case on a balance of probabilities whereupon the evidential burden shifts to the Respondent to demonstrate that they came into possession of the property lawfully (See the case of Assets Recovery Agency v Rohan Anthony Fisher, and others, Supreme Court of Jamaica, Claim No 2007 HCV 003259) where the court stated:-“………Even though these proceedings are quasi Criminal in nature there is an evidential burden of proof on the Defendant. It is incumbent on them to demonstrate evidentially how they lawfully came into possession of the assets seized. Miller for example merely says she worked/works as an higgler but has amassed thousands of United States dollars without more.”There is no indication of any work place or higglering or any enterprise on her part. The only reasonable and inescapable inference based on all the evidence. is that the properties seized are properties obtained through unlawful conduct and are therefore Recoverable Properties.This court finds Applicants case proved and will make a Recovery Order in respect of the properties seized as per the Freezing Order dated the August 14, 2007. This Court found that none of the monies from the freezer was the property of Delores Miller nor earned by her. The money was part of the proceeds of the criminal activities of her two sons, Rohan Anthony Fisher and Ricardo Fisher and as such are part of the recoverable assets…”

19. Similarly, in the case of Director of Assets Recovery Agency & others v Green & Others[2005] EWHC 3168 it was held that:-“In Civil proceedings for recovery under Part 5 of the Act, the Director need not allege the commission of specific criminal offence but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.”

20. In this application Cpl Sautet has at paragraph 18 of the affidavit sworn on March 25, 2021 deposed that investigations established that motor vehicle KCW xxx was acquired from proceeds of the illegal trade of narcotic drugs contrary to the provisions of the Proceeds of Crime and Anti-Money Laundering Act, the prevention of Organized Crimes Actand the Narcotic Drugs and Psychotropic Substances (Control) Act; that the motor vehicle has since been preserved pursuant to an order of this court issued on January 19, 2021. In the submissions the Applicant states that the activities of the 1st Respondent are a threat to national security, public good order, public interest and leads to erosion of societal good values by rendering the youth of this country unproductive hence leading youth to be susceptible to hard core criminal activities. That therefore depriving the 1st Respondent of the benefits of crime shall act as a deterrent and maintain national security.

21. Despite being duly served with this application through an advertisement placed in the dailies of December 28, 2021 the 1st Respondent did not enter appearance in these proceedings. He has therefore not brought any evidence to rebut that of the ARA/Applicant. Documents supplied to ARA by the First Community Bank through a letter dated March 23, 2021 indicates that the purchase price for the vehicle was Kshs 2,500,000/= out of which the Bank loaned the Plaintiff Kshs 1,250,000/=. The 1st Respondent has not adduced evidence of how he obtained the balance. It is my finding therefore that he has not discharged the evidential burden that he acquired the vehicle lawfully. In the premises I am satisfied on a balance of probabilities that the vehicle was acquired through proceeds of crime and that it is liable to forfeiture to the State.

22. Before I make the final orders let me rule on an application made by the 4th Respondent in this matter. The Application is dated June 17, 2022 and was filed herein on even date. In the application the 4th Respondent is seeking to cross examine Cpl Jeremiah Sautet on the contents of the Affidavit sworn on March 25, 2021 in support of the Originating Motion. I have already made a finding that the matter of motor vehicle KBL xxx Toyota Prado and the 4th Respondent’s interest in the vehicle are matters best left to the court trying the offence in which the vehicle is adversely mentioned. It is clear from Cpl Sautet’s affidavit that the 4th Respondent has no connection to motor vehicle KCW xxx and to require Cpl Sautet to be cross-examined on the issue touching on motor vehicle KCW xxx would be not only an exercise in futility but also a waste of juridical time. That application is accordingly rejected.

Disposition 23. In disposition this court makes orders as follows:-a.The issue of whether or not motor vehicle KBL xxx Toyota Prado is an instrumentality of crime and any interest the 4th Respondent may have in the said vehicle is left to the court trying the offence with which the vehicle is alleged to have been used.b.That motor vehicle KCW xxx is a proceed of crime and the same is forfeited to the State.c.That the 4th Respondents Notice of Motion dated June 17, 2022 filed herein on June 17, 2022 is dismissed for lack of merit.d.That the preservation order issued by this court shall subsist for fourteen (14) days so as to avail ARA/Applicant to make the appropriate application through the Office of the Director of Public Prosecutions.e.That the costs of this application shall be borne by the 1st Respondent.Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 10TH DAY OF NOVEMBER, 2022. E N MAINAJUDGE