Ethics and Anti-Corruption Commission v Julius Matasyo, Flora Atiti Matasyo & Robert Hyder Ndub [2014] KEHC 15 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF  KENYA AT  NAKURU

MISCELLANEOUS APPLICATION NO 408 OF 2013

ETHICS AND ANTI-CORRUPTION COMMISSION..........APPLICANT

VERSUS

JULIUS MATASYO.............................................. 1ST RESPONDENT

FLORA ATITI MATASYO......................................2ND RESPONDENT

ROBERT HYDER NDUBI......................................3RD RESPONDENT

RULING

1. The   Applicant  filed    a  Notice  of   Motion   dated   16th January, 2014   seeking orders  inter    alia,    that   the Application be  certified as urgent; that there be  a stay of the order  granted  by   this Court that  the Originating Motion dated  19th December, 2013  be   transferred  to the lower   court for  hearing and determination and that this  Court be   pleased  to   review   and/ or   set  aside the ruling   and/ or   order  delivered  on   8th  January,  2014 requiring the  above transfer.

2. I already dealt with prayers 1 and 2 of the Application on 16th  January  2014, which prayers were granted exparte. This ruling is therefore on prayers 3 and 4.

3. The   Application is  premised  on   the   grounds  that  the Court made an error of  law  and fact   by  not taking into account the   provisions  of   Section  56 of  the  Anti Corruption and  Economic  Crimes Act   in  making its determination to  transfer   the    suit  for    hearing  and determination to  the lower   court; that it  will  be  in  the interest of justice if the said order was reviewed because the applicant   and   the   public  at   large  will suffer irreparable harm if  the  Respondents  continue  enjoying the  proceeds of irregularly acquired public land.

4. The  Application is supported  by  the  affidavit of Kipsang Sambai, an investigator with the applicant Commission who reiterates the above grounds and prayers in  the Application.

5. In a rejoinder the Respondents filed Grounds of Opposition on 11th February, 2014 on  the grounds that the application is incompetent, frivolous, vexatious and unmeritorious; that  the   court properly exercised its jurisdiction   1n    making   the     order   to     transfer   the application  to   the    lower  court  for   hearing  and determination    which    court    has     the     competent jurisdiction to properly dispose of the  matter.

6. The Application was heard on  11th February, 2014.  Mr Machira, learned counsel  for  the   Applicant submitted that Section 56  of  the Anti  Corruption and  Economic Crimes Act  gave  the High  Court exclusive jurisdiction to make orders     on evidence to prohibit the  transfer of property acquired through corrupt conduct and that the matter is about jurisdiction, not   pecuniary value of  the property.  He relied on various authorities which I will refer to later in  this ruling. Further, it was his contention that Rule 12 of the Chief Justice's Practice Directions dated 9th November, 2012 as issued in Gazette Notice No. 16268 excludes matters under Rule 7 of the   same practice directions.

7. Mr  Machira also submitted  that  the   Environment and Land  Court  is  empowered under  Article  162  of   the Constitution and Section 13  (7) of its constituent Act  to issue    preservation  orders,  and   that   this   particular application under Section 56  of  the  Anti Corruption and  Economic Crimes Act  is unique to  the High  Court, and is couched in  mandatory terms.

8. Mr Mongeri for  the Respondents submitted that Section 56   of  the Anti  Corruption and  Economic  Crimes Actwasnot mandatory, as  the  use of the  word "may'' implies. Furthermore, the court cannot on its own Motion go granting orders guided   by    Section  55(3)  which  requires  that   the application be  brought by  way  of  Originating Summons, which  is   not    the  position  in   this  case.  Mr  Mongeri further  submitted  that  the applicants had admitted to the  pecuniary jurisdiction of  the   lower court,  that  the matter of preservation had already been dealt with; that Section 30 of  the Environment and   Land  Court   Act was clear that  the Chief   Justice's  could make rules to help in  operation of the  court and there would be  no constitutional crisis should the matter be heard and determined in  the lower  court.

9. Mr Machira by  way  of rejoinder reminded the court that this  matter was just  about  preservation and  that  the court had discretion. He  pointed out that Section 55 (3) of  the Anti-Corruption and  Economic Crimes Actonly contemplates such an application once investigations are completed  and   that   this   application  was  made  on property that is suspect.

10.  The  question before this court therefore, is  whether an application filed under   Section 56 of  the Anti­ Corruption and  Economic Crimes Act  can be  handled by the subordinate Court.

11. Before I make a determination in this matter, it is important to  have a glance at what Section 56( 1) of  the Anti Corruption and Economic Crimes Act  states. It provides as follows:

"56 (1) On  an ex  parte application by the Commission, the  High Court  may make an order prohibiting the  transfer  or disposal of  or  other dealing with property on  evidence that the  property was acquired as a  result of corrupt conduct ........."

12. Section 5 of   the  Magistrates' Courts Act   provides for  the  pecuniary jurisdiction of the Magistrate Courts' in civil   matters  and  the fact   that  the  suit  property falls within the   pecuniary  jurisdiction  of  the  Magistrate Courts is indeed admitted by both parties.

13. Mr Machira for the  Applicant          relied on  several authorities to  support  his position. I  shall comment on two:  the first is Kenya Anti Corruption Commission v Judith Marilyn Okungu &  2 others (Miscellaneous Application No  186 of  2007) and the second is Kenya Anti Corruption Commission  v  Wilson Gachanja &  4 Others [2007] eKLR (Miscellaneous Application No 42 of 2007.

14. In  the above two  decisions both by  Visram J (as  he then was), he  noted that Section 56 created a new jurisdiction and  henceforth  new  procedure.  He   also noted that the filing of a suit under section 7 (h)  (i) (or indeed any other    section  as    was  contended  by Mr Mangen)  was not  a condition precedent to  the success of such application under Section 56. In the case of Kenya Anti Corruption Commission v Wilson Gachanja & 4 Others [2007] eKLR (Miscellaneous Application  No 42 of  2007),Visram J(as  he then was)  stated;

"Indeed, it  is  easy to come  to  the conclusion that  Section 7(h)  (i)  of  the  Act requires that a suit for  the recoveryof property be  instituted, before Section 56  is invoked to seek an Order preserving the property sought to be  recovered. That is logical. But I must go well beyond the logical analyses         presented by Counsel; I must look  at the intention of Parliament in enacting this important legislation; I must consider the mischief that this  law intended to address; and I  must give it  a purposeful interpretation  that I  believe coincides with the intent of  the legislature. In Kenya  Anti-Corruption  Commission  v. Lands Limited (supra) I observed as follows;

"Section 56   (1) empowers this  Court to prohibit the transfer or  disposal or  any dealing with property  which "on evidence"  was acquired  as a result of corrupt conduct. The "application" may be  made ex-parte, and the Order of  prohibition "shall" have effect for  six months. This Section clearly envisages that an application will, in  the first instance, be  "ex parte", and where the Court is satisfied that there is "evidence" to support the  grant of  the  Orders sought, may make the Orders preserving the property for  six months (subject to further extensions). Ordinarily, under the Civil Procedure Rules the Court would grant ex parte restraining Order for  only 14 days initially,  and direct  that the matter be  heard inter-partes. Section 56 of  the new Act does not envisage an inter-partes hearing but  shifts  the burden on  the aggrieved party to apply to the Court  to discharge or  vary  the Order {Section 56  (4)}. I am satisfied that this Section creates a new jurisdiction, with a  new remedy, and a new procedure. And where it  deviates from the Civil  Procedure Act  and Rules, I must apply  and follow the Act.In  Syedna Mohamed  Burhannudin  Saheb vs Mohamedally HassanallyCivil  Appeal (No 28 of 1980,  Nairobi), the  Court  of  Appeal stated:

"In construing an Act as this, the ordinary rule as laid down by  Esher, M R in R V Judge of Essex County Court(1887)  18 Q   B   704,  must  be applied i.e. ... In the case of  an  Act which creates  a  new   jurisdiction, a new  procedure, new  forms or  new remedies, the procedure, forms or remedies  there  prescribed,   and   no other, must be  followed until altered by  subsequent legislation."

I reiterate the same here. I am of the view that   the Act allows  the  use   of    new procedure.   This new   procedure, of  itself, does  not   in   any  way prejudice  the Respondents. Nor can procedure alone invalidate suits."

15. I wholly agree with the views  expressed by  the  learned Judge in  the  above two  determinations, that Section 56 creates      a  novel procedure,  whose  exercise  is  to   be wielded solely  by  the High Court, and a suit need not  be filed  earlier so  that such an application may succeed.

16.  From the  above dicta, it was  noted, which fact I shall state very  clearly again that this is NOT a civil  suit, and cannot be  subject to  the normal dictates and procedures of     a  civil    suit.  It   is  an  application  made  by  the Commission for  orders seeking the  preservation of  the suit property, or   in   the  exact  words  of   the  statute,

" ...prohibiting the transfer  or  disposal of  or other dealing with property on  evidence that the property was acquired as a result of  corrupt  conduct." It is clear that the Act provides for such application to be made by the Applicant Commission and the cases referred to buttress that position. It therefore follows that the Subordinate Courts have no jurisdiction to hear and determine such  an application, notwithstanding the value of the suit property and consequently its pecuniary jurisdiction.

17. Accordingly, I transfer this application back to the Environment and Land  Court  for  hearing  and determination.

Dated at Nakuru this 25th day of  July 2014

L N  WAITHAKA

JUDGE

In the presence of:

- Mr.  Kisila holding brief  for  Mr.  Munai for the Applicant.

- Ms.  Kilach holding brief  for  Mr.  Mongeri for  the Respondent.

- Court Assistant: Emmanuel Maelo.