Bordino v Government of Seychelles and Government of Seychelles v Bordino (MA 167/2020 and MA 169/2020) [2021] SCSC 1030 (25 October 2021)

IN THE SUPREME COURT OF SEYCHELLES Reportable [2011] SCCC G1-3 MA 167/2020 and MA 169/2020 (Arising in MC18/2019) In the matter between: GIANNI BORDINO DEBORA MALCUORI (rep by Frank Elizabeth) and THE GOVERNMENT OF SEYCHELLES (rep by Mrs Thompson) And now Applicants Respondent THE GOVERNMENT OF SEYCHELLES (rep. by Frank Elizabeth) Applicant and GIANNI BORDINO (rep. by Mrs Thompson) Respondent Neutral Citation: Bordino v Government of Seychelles, Government of Seychelles v Bordino (MA1671 2020) (MA 169/20 [2021] SCCC ~ 1-.3 Before: Chief Justice Summary: Variation of Interlocutory Order; lack of injustice; contempt of court; Respondent ordered to give possession; alternative prison term in the event of default. Heard: 3 December 2019 Delivered: 20 October 2020 ORDER Mr Gianni Bordino is ordered to give Mr. Hein Prinsloo, the Receiver, the possession and physical custody the property namely Parcel V 17532 comprising of a condominium unit A4 in Zanmalak, Eden Island, Mahe Seychelles within 14 days of the Ruling, failure of which he shall be committed to prison for three months. RULING GOVINDENCJ [1] The applications (consolidated) were brought to Court by the Applicants and the Respondent. The first, (MA 167/2020) was for an order pursuant to section 4 (3) (b) of the Proceeds of Crime (Civil Confiscation) Act (POCCA), brought by Mr Gianni Bordino and his spouse, Debora Malcuori, requesting for a variation of the Interlocutory and Receivership Orders made by the Supreme Court on the 27th of March 2020. On the other hand, MA 169 12020 is brought by the Government of Seychelles against Gianni Bordino for contempt of court as a result of failure to comply with the same orders. Both applications arose out of the case of Government of Seychelles v Bordino (MC 18/2019) [2019] SCSC 205 (27 March 2020) (the main suit). In that case the Supreme Court following had ordered as follows: 1. Pursuant to section 4 of POCA 1prohibit the Mr Bornino or any other person from disposing or otherwise dealing with whole or any part of the property namely Parcel V17532 a comprising of a condominium unit in Zanmalak, Eden Island, Mahe, Seychelles. 2. Superintendent Hein Prinsloo is appointed as Receiver of the said property to manage, keep possession or dispose of, or otherwise deal with the property in respect of which he is appointed. [2] 1note that an attempt by Mr Bordino to stay the execution of the decision in the main suit failed, pending an appeal to the Seychelles Court of Appeal, when in MA 68/2020 the trial court held that on the law; facts and circumstances it was of the view that any interest the Applicant might have in the property forfeited is reserved under section 4 of the POCCA. The applicant appealed to the Seychelles Court of Appeal against this decision in SCCA 1/20 and the appeal failed. [3] The Notice of Motion for variation is filed under Section 4 (3) of the POCCA, which is to the following effect; "Where an interlocutory order is in force, the Court, on application to it in that behalf at any time by the respondent or any other person claiming an interest in any of the property concerned, may- (a) if it is shown to the satisfaction of the Court, that the property or any part of the property is property to which paragraph (a) of subsection (1) does not apply; or (b) that the order causes any other injustice to any person (the onus of establishing which shall be on that person), discharge or, as may be appropriate, vary the order, and the Court shall not make the order in whole or in part to the extent the Court shall not decline to make the order in whole or in part to the extent that there appears to be knowledge or negligence of the person seeking to establish injustice, as to whether the property was as described in subsection (J)(a) when becoming involved with the property. " [4] The order sought for is on the basis that the applicants are appealing the main suit to the Seychelles Court of Appeal and in the meantime they wish to remain in their residential home as it is alleged that a strict application of the Ruling would lead to them being evicted from their abode whilst they have not exhausted all their legal remedies. At any rate, they argued that executing the judgment would effectively render the appeal nugatory. The Government strenuously resisted this application and argues that the grounds of appeal does not show any significant or persuasive issues of facts or law and has no degree of success; that the applicants have not shown that any loss to be allegedly suffered by them could not be compensated by damages and that at any rate they argue that the applicants have not managed to show that the property is not directly or indirectly the benefit of criminal conduct. [5] On the other hand, the application for contempt filed by the Government of Seychelles is to simply commit Mr Bordino to prison and or to fine him for failure to comply with the Interlocutory and Receivership orders and to surrender his dwelling house to the Receiver. In response to this application, the Respondent raises similar arguments that he has raised in his application variation, namely that he has not exhausted all available remedies. [6] A perusal of the pleadings in both MA 167/2020 and MA 169/2020, revealed that the above applications have been entered essentially between the same parties arising or stemming out of or touching the same subject matter namely the application of the main suit, while the prayers sought would boil down to the same thing - which result would conveniently be achieved and obtained frOl!l the same Court. Therefore, I found it only prudent that both cases be tried or disposed of together. Accordingly, I consolidated both application in pursuant to Section 106 of the Seychelles Code of Civil Procedure. [7] As a result before me for determination is the question of whether to treat Mr Bordino for contempt as a result of his failure to give possession of his house to the Receiver or to alternative, whether to vary the order in the main suit and allow him to live in his house until the full determination of his case by the Seychelles Court of Appeal. I am informed that that case which bears no SCA 211 2020 is still pending before that court and there is no fate fixed for hearing yet, I therefore take Judicial Notice of this fact. MA 167/2020 [8] r have thoroughly considered the facts; circumstances and the law relating to this application and the chequered history of the case before the court. When the court refused Mr Bordino application for a stay of the proceedings and execution of the Interlocutory orders pending his judgment it gave to him an alternative. It informed the applicant that no material prejudice would happen to him if the judgment is not stayed as he has the alternative of making an application under Section 4 (3) of the POCCA. This is what the court said; "In respect of section 4 POCA interlocutory orders yet another element precludes the granting of a stay of execution. When such orders are ultimately made, any interest a person might have in the property that has been forfeited is preserved and remains in the hands of the Receiver and will remain so until the conclusion of the case even if the appeal were to proceed beyond the twelve months' validity of the interlocutory order. The person having such an interest can at any time apply to set the Order aside on certain conditions being satisfied. " [9] The conditions to be satisfied is in the alternatives under Section 4 (3). The Applicant can either show that the property is not directly or indirectly the benefit of criminal conducts under (a) or alternatively under (b) that the order causes any other injustice to any person (the onus of establishing which shall be on that person). [10] This is what this applicant has done; it has applied to vary the conditions. The section 4 Interlocutory Orders as per the POCCA being valid for 12 months, the Applicants, whilst the orders are in operation and pending appeal, has decided to apply to cause it to be discharged or varied. However, they have chosen option (b), namely that the orders causes ., injustice to them. As they have chosen this option they need not satisfied the court that the property in question does not constitute directly or indirectly benefit from criminal conduct or was acquired or constitutes benefit from criminal conduct again at this stage of the proceedings. The only burden that the law imposes in them for proving is one of proving the allegation of injustices caused by the orders. [11] Mr Bordino has a constitutional right to appeal to the Seychelles Court of Appeal under Article 120 (2) of the Constitution. That court has the power to reverse and alter the Interlocutory orders given by this court in the main suit. Whilst this is taking place this court, however, cannot look into the merits of the grounds of appeals in depth as they are pending before a court of higher jurisdiction. To do so may amount to the court abusing its own process for if the Court of Appeal was to reverse the orders in the main suit then those ancillary orders would be quashed and nullified, with the potential injustices that they may cause. At any rate I am of the view that this very exercise has already been carried out by the Supreme Court when it refused to grant the stay of execution application on this case [12] It is with this in mind that I analyse the issue before the court. More particularly, whether injustice would be caused to the Applicants if they are dispossessed of by the Receivership, with his house to be sold to a third party and for the Court of Appeal to later turn around and quash the decisions in the main suit. My analysis would be made bearing in mind that the right of appeal of the applicants is also subject to restriction reasonable prescribed by an Act and in this case, the POCCA has so prescribed. It provides that on appeal to the Seychelles Court of Appeal an Interlocutory Order made under Section 4 (3) can only be varied, inter alia if there is injustice proven by the Appellant. [13] Upon a careful analysis I find that the question of injustice question could only have been answered in the positive if a~er the Receiver would have taken possession, he would have had the right to transfer the property to third parties in good faith and for value. This scenario could have led to great legal complications, both for him and that third party, if he was to press for its return after a successful appeal. However, I am of the view that this cannot be done given the state of our law, even If, as it was in this case, the Receiver was appointed with power to dispose of the dwelling House. This is so because the Receivers right to dispose of the property is restricted by the provisions of Section 5 of the POCCA. This Section prescribed that all properties under Receiverships can only be transferred to third parties through a court disposal order and that this order cannot be made if there is an appeal against the Interlocutory orders, such as in this case. Accordingly, I find that no injustice arises in this context. [14] The next issue to be decided is whether mere possession of Mr Bordino's house by the Receiver and the reciprocal dispossession pending appeal can itself amount to injustice and that this has been proven by the Applicant. [15] Courts have generally held that the appointment of a Receiver does not alter the ownership rights; change the title to property, or affect the title of persons whose property is in receivership. The appointment of a Receiver does not deprive the owners/debtor of the ownership of the property of which the receiver is given authority, and the receiver does not actually take title to the property. Rather, the title to the property in receivership continues in the owner/defendant/debtor whose property is in the receivership until divested by court order, including a court sanctioned sale by the receiver. In this case divesting can only take place by a Disposal Order under Section 5. A Receiver can, pending a Divesting Order, only stand in the shoes of the person over whose assets she/he/it is appointed Receiver and holds property coming into its hands by the same right and title as the person for whose property she/he/it operates as a Receiver. Although title remains technically in the owner of the property, the appointment of a Receiver does divest the owner of possession, management and control of the property subject to the receivership, with the effect of denying the owner the power to transfer of otherwise act with regard to that property. [16] Upon the imposition of a receivership, the property of the receivership estate passes into the custody of the receivership court and becomes subject to the court's authority and control. As the court's officer or agent, the Receiver has the right to hold or possess, or has custody of, the property subject to the receivership for the benefit of all of those claiming an interest in it. Stated another way, upon appointment of a Receiver, the property of the entity in receivership is in custodia legis and the Receiver's possession, as an officer of the court, is considered to be that of the appointing court. As a result, even if the Seychelles Court of Appeal was to reverse the decision in the main suit no harm would be caused through a transfer of ownership interest as the Applicant would have been owner at all material time. [17] It is to be noted that mere averments that there is a right of appeal and that has been exercised is not enough to prove the injustice that would prompt this court to vary a court the court order. If that was to be the case there would have been no need to insert the provision of Section 4 (3) (b) of the POCCA for the benefit of a Respondent Judgment Debtor. The law would have simply excluded him from that provision, which would have meant that he would have no right to seek a variation pending appeal. Now he can seek such variation but he or she needs to prove factual injustice. [18] The affidavit of Mr Bordino and his wife in support of their applications however only avers that the orders in the main suit, which calls for the Receiver to take possession of his house, amounts to injustice as it consist of dispossession pending the exhaustion of his legal remedies. To me that is not enough in law to amount to injustice given the law of receivership as referred to above and as a result, he has failed to discharge the burden of proof, which lies on him in law. [19] Accordingly, the Notice of Motion for variation of the court order dated 27thof March 2021 is dismissed with cost in favour of the Respondent. MA 169/2020 [20] On the other hand, the Government of Seychelles wants this court to treat Mr Bordino for contempt as a result of failure by him to surrender his property the subject matter of the Interlocutory Orders. This order appointed Superintendent Hein Prinsloo as Receiver of the said property to manage, keep possession or dispose of, or otherwise deal with the property in respect of which he is appointed. Though this order is couch in such a way it is clear that the Receiver would not able to dispose of the property in the line of my above findings. At this point he can only manage and keep possession of the property. [21] However, so far, the Judgment Debtor has failed to surrender and give possession of the property despite that this has been demanded by the Applicant. To my mind, this clearly amounts to failure to abide to the orders of the Supreme Court in MC 18/19. The failure is exfacie contemptuous of the said orders, as he has not shown to this court that any injustice would be caused to him pending appeal if possession is taken over by the Receiver pending appeal. [22] I would accordingly grant the prayers of the Applicant in MA 169/20. Mr Gianni Bordino is ordered to give Mr. Hein Prinsloo the possession and physical custody of the property namely Parcel V17532 comprising of a condominium unit A4 in Zanmalak, Eden Island, Mahe Seychelles within 14 days of this Ruling failure of which he shall be committed to prison for three months. Signed, dated and delivered at lie du Port on ~bctober 2020. /.. R Govinden Chief Justice 9