Godfrey Shamanena v Anti-Corruption Commission and Anor (2022/HB/91) [2023] ZMHC 99 (20 April 2023)

IN THE HIGH COURT FOR ZAMBIA AT THE DISTRICT REGISTRY HOLDEN AT KABWE (CIVIL JURISDICTION) 2022/HB/91 IN THE MATTER OF: SECTION 60 AND 61 OF THE ANTI- CORRUPTION COMMISSION ACT NO. 3 OF 2012 AND IN THE MATTER OF: AN APPLICATION FOR THE REVERSAL OF RESTRICTION NOTICE ON ACCOUNT AT NO. ZAMBIA BRANCH, INDUSTRIAL COMMECIAL BANK, KITWE HELD AND IN THE MATTER OF: — REPUBLIC OF ZAMBIA THE JUDICIARY GODFEY SHAMANEN. AND -~ ; 701 APR 972 | R o g', ég;c; REGISTRY 0607 KI\FAIWF 5‘1}5 APPLICANT ANTI-CORRUPTION COMMISSION ZAMBIA NATIONAL COMMERCIAL BANK 1sT RESPONDENT 28D RESPONDENT For the 1st Respondent: Mr. E. Mbewe — In House Counsel For the 2nd Respondent: Mr. W. Kayope — Messrs Simeza, Sangwa and Advocates RULING Cases Referred to: 1. Joyce Kapapa Tijiuannah Mwela Kapapa Mulenga vs The Anti- Corruption Commission 2003/ HP/ 816. 2. Martin Simumba vs Anti-Corruption 2014/ HP/ 637. 3. Lackson Mwabi Mwanza vs Kangwa Simpasa and Chisha Lawrence Simpasa 2005/ HP/ 0500. Legislation Referred to: 1. The Anti-Corruption Commission Act No. 3 of 2012. INTRODUCTION this Applicant commenced 28t The September, 2022 by originating summons seeking for an order to reverse the restriction notice on his Account No. 2nd Respondent Bank at 0510411200235 held with matter the the on Kitwe. 2.0.0 THE APPLICANT’S CASE The affidavit in support of the originating summons deposed to by the Applicant, Mr. Godfrey Shamanena (Chief Nkana), shows that the company in which he was shareholder and Director, Bisma Investment Limited, was on the 20t August, 2021 offered to be sold to Pridegenus Mines Limited through Messrs Muya and Company. 2.0.3 2.0.4 September, A contract of sale was concluded on the 6t October, 2021 with Pridegenus Mines Limited for $ 5,000,00 USD. Later on its Pridegnenus 5t holding company, Grizzly Mining Limited, made its last and final instalment payment for the sale of $165,000 USD to 2nd account number 0510411200235 through Limited with held the Respondent. On the 6th September, 2022 when attempts were made by the Applicant to access and transact on his account the 2nd Respondent informed him that the funds were not reflecting. Follow ups revealed that the 1st Respondent had issued a restriction notice which was not served on him. -R3- 2.0.5 2.0.6 1st the write to lawyers his The Applicant instructed Respondent demanding the removal of the restriction notice but the 1st Respondent has neglected and or refused to yield He argues that the said restriction notice to the request. was effected without compliance with the law and is thus illegal and without any effect at law. the He further argues that the continued denial of access to the a account despite the customer and banker relationship which breach of renders the 2nd Respondent complicit in the violation of the Anti-Corruption Act and the rights of customers. notice being illegal restriction is 3.0.0 SUBMISSIONS IN SUPPORT OF THE APPLICANTION 3.0.1 Counsel for the Applicant filed skeleton arguments and a list of authorities in support of the application. He argued that the application was premised on Section 60 (5) and (6) of the Anti-Corruption Act No. 3 of 2012 which gives the court the jurisdiction to hear the matter. Reference was made to Section 60 (1), (2) and (3) of the Anti-Corruption Act in relation to the service of a restriction notice, that is, that; “(1) The Director General may, by written notice to a person who is the subject of an investigation in respect of an offence alleged or suspected to have been committed under this Act, or against whom a prosecution for an offence has been instituted, direct that such person shall not dispose of, or -R4- otherwise deal with, any property specified in such notice without the consent of the Director — General. A notice issued under subsection (1) may be served by delivering it personally to the person to whom it is addressed or may, where the Director- General is satisfied that that person cannot be found, or is not in the Republic, be served on or brought to the knowledge of that person in such Director-General may the other manner as direct. A notice issued under subsection (1) shall - an investigation within the (a) jurisdiction, have effect from the time of service and shall continue in force for a period of nine Director- cancelled by until months or General whichever is earlier; and in respect of an investigation outside the (b) jurisdiction, have effect from the time of service and shall continue in force for a period of twelve the Director — until cancelled by months or General whichever is earlier...” in respect of the @) 3.0.2 Counsel argued that the restriction notice was not served on the applicant. He also argued, with reference to the Supreme Court of Zambia decision in the case of Joyce Mulenga Kapapa Tuijuannh Mwela Kapapa Mulenga vs The Anti- Corruption Commission! wherein it was held that; «p Restriction Notice is effective only for twelve months from the date of service.” RS- that the failure to serve the said notice entails that it is null The restrictive notice only takes effect and void ab initio. from the date of service and if it is not served it is ineffective, null and void ab initio.? is Counsel’s position that the said restrictive notice not It having been served on the applicant is illegal and should thus be removed with costs to the applicant. 1T THE APPLICATION RESPONDENT’S OPPOSITION TO THE The 1st Respondent opposed the application as per the affidavit in opposition filed on the 20t October, 2022 and deposed to by Mr. Desmond Chiboola. Mr. Chiboola averred that the 1st Respondent is conducting investigations into alleged corrupt practices in the manner 2=d that Respondent has been receiving funds suspected of being proceeds of crime. Applicant’s bank account held with the the A third party restriction notice was on the 8th September, 2022 served on the 2nd Respondent in furtherance of the investigations. The notice was served on the 2nd Respondent as the bank being in possession of the funds. 3.0.3 4.0.0 4.0.1 4.0.2 4.0.3 The 2nd Respondent’s obligation to comply with a third party restriction notice is not dependent on the service of the said notice on the person under investigations and that it is -R6- The effectiveness of a obliged to comply with the notice. third-party restriction notice is not dependent on the service of the said notice on the Applicant. 4.0.4 Reference was made to the said notice issued on the 8% September, 2022 exhibit “DC 17 which is anchored on of the Anti-Corruption Act, that is, (1) and (5) Section 61 that; “61 (1) has it is where Commission may, The reasonable grounds to believe that a third property, any party including money in a bank account for, or on behalf of, or to the order of a person who is under investigation, by notice, in writing, holding, party under the hand of the Director — General, serve a notice on the third party directing that the third party shall not dispose of, or otherwise deal with, any property specified in the notice. 61 (5) A third party on whom a notice is served under subsection (1) who disposes of, or deals with, the property specified in the Notice without the consent of the Director- General commits an offence and is liable, upon conviction to imprisonment for a period not exceeding five years.” 5.0.0 THE 15T RESPONDENT’S SKELETON ARGUMENTS AND LIST OF AUTHORITIES as 1st the per Respondent skeleton submitted, The arguments, that what informs it to issue a restriction notice is not proof of any illegality having been committed but merely there being investigations into an offence under the Anti-Corruption Act or other relevant statute. In the case in is conducting investigations into alleged corrupt casu, it practices in the manner that the Applicant’s bank account 2nd Respondent has been receiving funds the by held suspected of being proceeds of crime. 5.0.1 5.0.2 of the Anti- Counsel went on the argue that Section 61 Corruption Act makes provisions for restriction on disposal of property by a third party. Thus contrary to the applicant’s contention that a restriction notice takes effect only from the in date of service on the person under investigations, it, (5) and (6), takes effect upon (a), terms of Section 61 (1), This is unlike a first-party service restriction notice issued under Section 60 of the Act which is directed and served on the person being investigated. the third-party. on (4) It was also argued that the case of Joyce Mulenga Kapapa Anti- and Tijuannah Mwela Kapapa Mulenga vs the applicant is Corruption Commission referred to distinguishable from the case in casu as it involves a first- party restriction notice which is only served on the person under investigations. The above position is the same as per Anti-Corruption Simumba the Martin case The vs by of RS- 5.0.3 5.0.4 Commission. The two authorities do not bind the court but are merely of persuasive value. Counsel argued that paragraphs 16 — 20 of the applicant’s affidavit in support of the application contains extraneous matters in form of legal arguments. The same is against the position of the law in Order V Rules 15 and 16 of the High Court Rules and the case of Lackson Mwabi Mwanza Vs Kangwa Simpasa and Chisha Lawrence Simpasa.3 It was also submitted that on the strength of the above submissions this court finds in the 1st Respondent’s favour and upholds the third-party restriction notice which was legally issued and served pursuant to Section 61 of the Anti- Corruption Act notwithstanding the fact that it was not served on the applicant. 6.0.0 THE 2 RESPONDENT’S OPPOSITION TO THE APPLICATION The 2nd Respondent opposed the application as per the affidavit in opposition of 19th October, 2022 deposed to by Mr. Kauka Siavwela. 6.0.1 Mr. Siavwela averred that on the 8th September, 2022 the 1st Respondent served the 2nd Respondent a restriction notice issued under Section 61(1) of the anti-Corruption Act prohibiting it from disposing of or dealing with the monies held in the applicant’s account number 0510411200235. -R9- 6.0.2 The applicant wrote the 2nd Respondent seeking access to his account but was informed on the 16t September, 2022 that his account was restricted following the restriction notice. 7.0.0 THE 2¥0 RESPONDENT’S SKELETON ARGUMENTS AND LIST OF AUTHORITIES Counsel for the 2nd Respondent argued, as per the skeleton 1st Respondent were arguments, that the actions of the anchored on Section 61 of the Anti-Corruption Act which empowers it to serve a third party notice directing the third party not to dispose of property which is the subject of a restriction notice except with the consent of its Director General. 7.0.1 The 2nd Respondent accordingly followed the law as per the notice and gave the Applicant reasons for its failure to allow access to the funds thereby not breaching the customer- banker relationship. There is no requirement, as per Section 61 of the Anti-Corruption Act, for the third party to serve the notice on the applicant. 7.0.2 Counsel also argued, in response to the position by the applicant that it was not served with the notice and that it was thus illegal, that by virtue of the applicant having knowledge of the duly issued restriction notice, as per the provision of Section 60 of the Anti-Corruption Act, he is deemed to have been served. He was also made aware of the notice by the 274 Respondent thus was in effect served in accordance with Section 60 (2) of the Anti-Corruption Act. -R10- 7.0.3 He submitted that the application lacks merit as the 2nd Respondent is under a legal duty to restrict the Applicant’s notice. The 2nd bank account following the restriction Respondent is under no legal duty to serve the notice. The application should be dismissed with costs. 8.0.0 THE POSITION OF THE LAW AND ANALYSIS OF THE ADDUCED EVIDENCE The Ant-Corruption Act No. 3 of 20 12 (the Act) provides in terms of investigation of corrupt practices for the restriction on the disposal of property and the restriction of the disposal of property by third parties. a great extent was recited Section 60 of the Act, which to under paragraph 3.0.1, relates to the restriction on the a person who is subject of an disposal of property by investigation. It, under Section 60 (3), spells out the effect of a person being investigated and the a notice issued to duration of such notice. (6) and (7) of the Act provides recourse to Sections 60 (5), the courts for a person whose property is the subject of Anti- restriction following the Corruption Director — General. restriction notice the by 8.1.0 8.1.1 8.1.2 It is noted, however, that Section 60 is distinguishable from Section 61 of the Act as will be discussed and made clear below. -R11- / 8.2.0 Section 61 of the Act relates to the restriction on the disposal of property by a third party. It provides that; “61 (1) The Commission may where it has reasonable grounds to believe that a third party is holding any property, including money in a bank account for, or on behalf of, or to the order of a person who is under investigation, by notice, in writing, under the hand of the Director-General, serve a notice on the third party directing that the third party shall not dispose of, or otherwise deal with, any property specified in the notice. A notice issued under subsection (1) shall be served on the third party to whom it is directed and on the person being investigated. The Commission may, in issuing a notice under this section impose such conditions as it may determine. A notice issued under subsection (1) shall - (a) in respect of an investigation, have effect from the time of service upon the person and shall continue in force for a period of nine months or until called by the Director-General whichever is earlier; () @) and ... Provided that the Director General may issue a fresh notice upon the expiry of the previous one for further final term of six months to facilitate the conclusion of an investigation. @) Subsections (5), (6) and (7) of Section Sixty apply to this section.” 8.2.1 It is clear from the above that Section 61 of the Act relates -R12- from to a restriction notice served on a third party As argued by the 1st Respondents in paragraph 5.0.2, the notice in casu is being served distinguishable referred to investigated and to some extent (6) and (8), authorities. In so far (7). per Suffice to state that Section 60 of the Act is the same as Section 61 (4) an as the referred to cases refer to the above provisions they are he @), d person that the on (7) as t applicable. 2nd the adduced evidence that the clear from It also is by the party notice restriction Respondent was on the 8th September, 0022 served with the 1st Respondent in third accordance with Section 61 (1) of the Act. Although the Applicants seem to suggest that they became aware of the said restriction notice on the 6th September, 2022 as per paragraph 2.0.4 above, the correct positon is that it was formally informed about the restriction on the account on the 16t September, 2022 as per paragraph 6.0.2 above. The 1st Respondent is empowered as per the Act to restrict 2nd which an account under Respondent has to follow as per the law. directive Section the far The third party restriction is strictly governed by the law in as the period for the investigations is concerned. so Section 61 (2) and (4) (a) are very clear in so for as the service to the person is concerned, that is, the restriction notice has effect from the time it is severed on the person and continues a period of nine months and or upon bein; in force for g -R13- 8.3.0 8.3.1 8.3.2 8.3.3 8.3.4 8.3.5 cancelled by the Director-General (D. G) of the Commisslan whichever is earlier. From the facts in the case in casu and as already stated, P Applicant and the 2nd Respondent were served the 37 restriction notice and thus unless the notice expires an if the D. G. cancels it, it remains in force. . the party d or 1t is therefore in the interest of justice that the period of the restriction notice as provided for by the law is followed and fit and in the interest of speedy or where the D. G sees it criminal in investigations which justice system, he acts in accordance with the powers vested in him. confidence create the 9.0.0 DECISION The actions of the 1st Respondent and consequently the 2nd Respondent are as per the provisions of the law. The application is accordingly declined. DELIVERED AT KABWE ON THE DAY OF.../LO-/%\ ... APRIL, 2023 K. LIMBANI HIGH COURT JUDGE