Hathor Labs v Peken Global Limited & Anor (MC 13 of 2023) [2024] SCSC 116 (30 April 2024)

SUPREME COURT OF SEYCHELLES In the matter between: HATHOR LABS (rep. by Mr. Audrick Govinden) and PEKEN GLOBAL LIMITED (unrepresented) THE GOVERNMENT OF SEYCHELLES (rep. by Mrs. Nissa Thompson) Reportable MC 13/2023 Applicant 1st Respondent 2nd Respondent Neutral Citation: Hathor Labs v Peken Global Limited and Anor (MC 13/2023) (30 April Before: Summary: Heard: Delivered: 2024) Esparon J Application to vary or discharge a section 4(1) Order under section 4(3) of the Proceeds of Crime (Civil Confiscation) Act - Preliminary objections 23rd October 2023 30th April 2024 RULING ESPARON J Introduction [1] This is an Application by the Applicant Hathor Labs seeking an Order from this Court to transfer the tokens found in the Kukoin accounts to which the Applicant is the rightful owner to certain addresses or alternatively the Applicant prays that the Judge’s Order dated 12th August 2022 in MC 12/2022 be discharged. [2] The 2nd Respondent being the Government of Seychelles filed preliminary objections to the said Application namely; a. It is not stated in which case the matter arise from, and this is crucial as the Application cannot be a standalone matter. b. The Applicant cannot make an Application for a variation order given that the 2nd Respondent has indirectly brought Proceeds of crime (Civil Confiscation) Act 2008 as amended (‘pocca’) proceedings on its behalf. Section 4 (3) POCCA provides that where an interlocutory order is in force, the respondent or ‘any other person’’ (Emphasis mine) may make an Application for discharge or variation of the Order. The 2nd Respondent submits that “any person” cannot and should not include the Applicant as the Interlocutory Application was indirectly brought on its behalf, and as such the Applicant should have followed the proper channel if it so wished for the interlocutory Order in MC 17 of 2022 to be withdrawn by 2nd Respondent or for any other redress; c. In effect, the first Order being sought in the Application is for a disposal Order under section 5 of POCCA under the guise of an Application for a variation order pursuant to section 4(3); d. The Affidavit is defective in that the jurat does not immediately follow the last paragraph of the Affidavit in support. Submissions of Counsels [3] As regards to the 1st preliminary objection, counsel for the second Respondent submits to the Court that the Application for a variation Order cannot be a standalone matter. Counsel for the 2nd Respondent relies on section 4(3) of the POCCA and laid emphasis on the opening words of the said provision namely ‘Where an interlocutory order is in force’ and submitted to the Court from the reading of the said provision that it is clear therefore that the Application should have been brought in the matter from which the interlocutory application arises from. However, this has not been done for the purpose of this Application. [4] As regards to the second preliminary objection, counsel for the 2nd Respondent submitted that although the first part of section 4 (3) of POCCA provides that the Application for a discharge or variation order may be brought by the Respondent or ‘’any other person ‘(emphasis mine)’ the 2nd Respondent submitted that the words the ‘other person’ cannot and should not include the Applicant as the interlocutory Application was indirectly brought on its behalf. Instead, the Applicant should have followed the proper channel available in international cooperation for mutual legal assistance in criminal matters between states if so wished for the interlocutory order in MC 17 of 2022 for any redress. [5] As regards to the 3rd preliminary objection, Counsel invited the Court to look at the 1st prayer in the Application and submitted to the Court that base on the wording of the first order being sought, it is clear that the Applicant is praying for transfer of the assets which occurs at the stage of section 5 of the POCCA. [6] On the 4th preliminary objection, counsel for the 2nd Respondent submitted that the Affidavit in support of the Application is bad in law and is defective in respect to the jurat and hence the Court should rule that there is no Application before the Court. Counsel for the second Respondent relied on the case of Elmasry and Anor V Hua Sun SCA MA 08 of 2019, the case of Lablache de Charmoy, the case of Savoy Development Limited V Salum SCA MA 16/2021 [7] According to Counsel for the second Respondent, the Applicant has sworn the jurat of the Affidavit on a separate page by itself independent of the body of the Affidavit and the facts stated therein. [8] On the other hand Counsel for the Applicant has submitted to the Court that as regards to the 1st preliminary objection that the Applicant should have brought an incidental Application to the main case is flawed since Hathor Labs is not a party to the Application in the main case filed under section 4(1) of the POCCA. Counsel relied on section 4(1) and rule 4 (1) and (2) made under POCCA and submitted that from a reading of the section and rule 4(1) and (2), it is clear that the Act’s intention is to treat such Application as a standalone application. [9] It is submitted that since there are no avenues of intervention in the section 4 Application and that the Applicant is a third party to the case of which section 4 (3) gives the ability to a third party to bring a fresh application and that the Applicant has followed the lawful procedure available to bring such an Application. [10] Counsel has submitted on the second preliminary objection on the argument that the FIU has brought the Application under section 4(1) of the POCCA and as such the Applicant does not have standing as ‘any other person’ under section 4(3) is misconceived since section 4(3) does not define any other person. Since the act defines the Applicant and the Respondent under section 4(1) it is submitted by counsel for the Applicant that as such the Act applies to any other persons excluding the Applicant and the Respondent which is the FIU and Peken in the section 4(1) respectively. [11] Counsel further submitted that the Application was brought as a result of an arrangement between States under the Mutual Assistance in Criminal Matters Act and not on behalf of the Applicant and hence it is clear that Hathor Labs is a third party to the Application. [12] As regards to the 3rd preliminary objection that the section 4(3) Application is disguised as a disposal Order, it is submitted that it is not in dispute that the Applicant is the owner of the cryptocurrency and hence such Application under section 4(3) is well founded of which the Application is to vary the Order as to who possesses the cryptocurrency assets. [13] It is further submitted that an application under section 5 is only available to the FIU whereas section 4(3) allows Hathor Lab to motion for a variation Order. It is submitted that such a variation of the Order is in the discretion of the Court. [14] As regards to the 4th preliminary objection of which the 2nd Respondent argues that as the Jurat in the Affidavit does not immediately follow the last paragraph of the Affidavit on the same page. According to Counsel rule 4(1) (6) (R. S. C 1995) does not sate that Affidavits should never end on the previous page with the jurat following the overleaf. As such it is submitted that the Affidavit of the Applicant is not defective. It is further submitted that the last paragraph of the Affidavit is Paragraph 14 which also includes the demand of the Applicant and as such paragraph 14 follows the previous page. It is hence submitted that the Affidavit ends with paragraph 14 and the jurat follows immediately after. The law [15] This Court shall reproduce the relevant provisions of section 4 of the Proceeds of Crime (Civil Confiscation act and it reads as follows; ‘4. (1) Where, on an inter partes application to Court, in that behalf by the applicant, it appears to the Court, on evidence, including evidence admissible by virtue of section 9, tendered by the applicant, that — (a) a person is in possession or control of — (i) specified property and that the property constitutes, directly or indirectly, benefit from criminal conduct; or (ii) specified property that was acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes benefit from criminal conduct; and (b) the value of the property or the total value of the property referred to in sub- paragraphs (i) and (ii) of paragraph (a) is not less than R50,000, the Court shall make an interlocutory order prohibiting the person specified in the order or any other person having notice of the making of the order from disposing of or otherwise dealing with the whole or, any part of the property, or diminishing its value, unless, it is shown to the satisfaction of the Court, on evidence tendered by the respondent or any other person, that — (i) the particular property does not constitute, directly or indirectly, benefit from criminal conduct and was not acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes benefit from criminal conduct; or (ii) the total value of all the property to which the order would relate is less than R50,000: Provided that the Court shall not make the order if it is satisfied that there would be a risk of injustice to any person (the onus of establishing which shall be on that person), and 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 (1)(a) when becoming involved with the property. (2) An interlocutory order — (a) may contain such conditions and restrictions as the Court considers necessary or expedient; and (b) shall provide for notice of it to be given to the respondent and any other person as directed by the Court, who appears to be affected by it unless the Court is satisfied that it is not reasonably possible to ascertain the whereabouts of the respondent or that person. (3) 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 (1)(a) when becoming involved with the property. (4) The Court shall, on application to it in that behalf at any time by the applicant, discharge an interlocutory order. (5) Subject to subsections (3) and (4), an interlocutory order shall continue in force until - (a) the determination of an application for a disposal order in relation to the property concerned; (b) the expiration of the ordinary time for bringing an appeal from that determination; or (c) if such an appeal is brought, when the appeal is determined or abandoned, Whichever is the latest, and shall then lapse. (6) Notice of an application under this section shall be given — (a) in case the application is made under subsection (1) or (4), by the applicant to the respondent, unless the Court is satisfied that it is not reasonably possible to ascertain his whereabouts; (b) in case the application is made under subsection (3), by the respondent or other person making the application to the applicant; and (c) in the case of an application made under either subsection (1) or (4), to any other person in relation to whom the Court directs that notice of the application be given. (7) An application made under subsection (1) shall — (a) specify the name, address and national identity number (if known) of the respondent; (b) set out the particulars of the property in respect of which the interlocutory order is sought; (c) specify the grounds on which the interlocutory order is sought; and (d) be supported by an affidavit verifying the matters set out in the application’. Analysis and determination [16] As for the first preliminary objection namely that it is not stated in which case the matter arise from, and this is crucial as the Application cannot be a standalone matter , this Court has considered the submissions of counsel for Applicant and counsel for the Respondent as well as the relevant laws namely section 4(1) and section 4(3) of the proceeds of crime ( Civil Confiscation) Act as well as rule 4(1) and (2) of the POCCA Rules and is of the view that the Applicant was not a party to the section 4(1) Application and neither is there any provision for intervention in the matter. Since in section 4(3) of the POCCA the word an Application is used in the said provision, this Court is of the view that in view that the Applicant is a person other than the Respondent or the Applicant, the only avenue which is available to the Applicant is to make an Application before the Court. I see no irregularity in the Applicant making a fresh application to the Court seeking an order from the Court to vary or to discharge such an order made under section 4(1) of the Proceeds of Crime (Civil Confiscation) Act. [17] Furthermore it is clear from the Application itself that the Applicant has stated in its Application that the Applicant is seeking for an order to vary the Judge’s order dated 12th August 2022 bearing MC 17 /2022 and in its alternative prayer is praying that the Judge’s Order dated 12th August 2022 bearing MC 17/ 2022 be discharged. In the case of Mary Quilindo and Ors V/S Monchery and Ors, (2012) SCCA 29/2012, Where the Court relied on the Privy Council decision in the case of Toomany and Anor v Veerasamy (2012) UKPC 13, where the Court held the Following; ‘That such technicalities raised to shut out litigants from the Court system constitute a blot of the administration of Justice.’ In the case of Mary Kilindo (supra), Twomey JA held that ‘where no prejudice was suffered by the proceedings being initiated by petition and not by plaint as such technical objections should not affect the fair administration of Justice.’ Similarly in the present Application, I find that there is no prejudice suffered by the second Respondent by the Applicant making a fresh Application rather than making an incidental Application to vary or discharge the order made under section 4 of the Proceeds of Crime (Civil Confiscation) Act especially when the Applicant has prayed in his Application that he is asking the Court to discharge or vary the said order in MC 17 /2022. As such this Court finds that such a technical objection should not affect the fair administration of justice as to allow such a technical objection raised, this court would be shutting out a litigant from the Court system which may have a genuine case and as such may constitute a blot to the administration of justice. As a result, I accordingly dismiss the first preliminary objection. [18] As for the second preliminary objection namely that the Applicant does not have standing to bring the Application under section 4(3) of the Proceeds of Crime (Civil Confiscation) Act, since the words ‘other person’ cannot and should not include the Applicant as the interlocutory Application was indirectly brought on its behalf. This court has to turn to the rules or canons of statutory interpretation to find out what mischief which parliament wanted to cure when it enacted such a provision of the law. This court would turn its attention to section 4(3) of the Proceeds of Crime (Civil Confiscation) Act which reads as follows; ‘ 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), [19] From a reading of section 4(3) of the said Act, it is clear that one of the mischief of which Parliament namely the National Assembly wanted to cure is that if such order causes any other injustice to any person. In this matter counsel for the 2nd Respondent has admitted in her submissions that it has brought this section 4(1) Application indirectly on behalf of the Applicant. As a result this Court finds that as a result of the admissions of counsel for the Respondent in her submissions that the Applicant is one of the persons that the Application has been brought indirectly on its behalf, an injustice may be caused to the Applicant if he was to wait for a section 5 Application under the said Act of which if such preliminary objection is allowed may be justice delayed which may come to justice denied to the Applicant. This Court finds that in the present circumstances, the fact that the Applicant did not follow the proper procedure under the Mutual Assistance in Criminal Matters Act is irrelevant for the purpose of curing any injustice if any. [20] The third preliminary objection is that in effect, the first Order being sought in the Application is for a disposal Order under section 5 of POCCA under the guise of an Application for a variation order pursuant to section 4(3). This Court hereby reproduces the relevant provisions of section 5 of the Proceeds of Crime Civil (Confiscation Act) and it reads as follows; ‘5.  (1) Subject to subsection (2), where an interlocutory order has been in force for not less than 12 months in relation to specified property and there is no appeal pending before Court in respect of the interlocutory order, the Court, on application to it in that behalf by the applicant, may make a disposal order directing that the whole or a specified part of the property be transferred, subject to such terms and conditions as the Court may specify, to the Republic or  to such other person as the Court may determine and such transfer shall confer absolute title free from any claim of any interest therein or encumbrances to the Republic or such person. (2) No application may be made by the applicant for a disposal order while — (a) an application made under section 4(3); or (b) an appeal against an order made under the application referred to in paragraph (a); or; (c) an appeal against any order made under section 4, is pending, and so that after such application under section 4 (3) and any appeal shall have been disposed of, the 12 month period shall be calculated from the making of the order under section 4, unless the Court for good cause shall otherwise determine. (3) Subject to subsections (8) and (10), the Court shall make a disposal order in relation to any property, the subject of an application under subsection (1) unless it is shown to its satisfaction by the respondent or any person claiming any interest in the property, that the property does not constitute, directly or indirectly, proceeds of criminal conduct and was not acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of criminal conduct. (4) The applicant shall give notice to — (a) the respondent unless the Court is satisfied that it is not reasonably possible to ascertain his whereabouts; and (b) such other person, (if any) as the Court may direct, of an application under this section. (5) The application shall — (a) specify the name, address and national identity number (if known) of the respondent; (b) set out the particulars of the property in respect of which the disposal order is sought; and (c) be supported by an affidavit verifying the grounds in which the disposal order is sought. (6) A disposal order shall operate to deprive the respondent of his rights (if any) in or to the property to which it relates and, upon the making of the order, the property shall stand transferred to the Republic or other person specified in the order. (7) Where the Court in a disposal order has specified that the property be transferred to the FIU, the FIU may sell or otherwise dispose of any property transferred to it under this section as the Minister may direct, and any proceeds of such a disposition and any moneys transferred to it under this section shall be paid to the Republic by the FIU. (8) In any proceedings under subsection (1), before deciding whether to make a disposal order, the Court shall give any person who the Court believes to have an interest in the property or any part of it, an opportunity to be heard and to show cause, why the order should not be made. (9) The Court, if it considers it appropriate to do so in the interest of justice, on the application of the respondent or, if the whereabouts of the respondent cannot be ascertained, on its own initiative, may adjourn the hearing of an application made under subsection (1) for a period not exceeding three months as it considers reasonable. (10) The Court shall not make a disposal order if it is satisfied that there would be a serious risk of injustice to any person (the onus of establishing which shall be on that person) and 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 section 4(1)(a) when becoming involved with the property. (11) For the purposes of this section and section 4, “injustice” shall not include hardship to the respondent or any other person claiming under him. [21] Counsel for the Applicant has argued in his submissions that the Applicant under section 5(1) of the Proceeds of Crime (Civil Confiscation) Act can only be the FIU. At this juncture this Court would like to clarify the law namely Act 10 of 2017 of which an amendment was made to section 2 of the said Act so that the Applicant now ‘means the Government of Seychelles and hence the Applicant in a section 5 of the POCCA application can only be the Government of Seychelles whereas a reading of section 4(3) of the POCCA, the Application can also be made by any other person, including the Applicant as this Court has already ruled in the present ruling. [22] On careful perusal of the relevant provisions of section 5 of the Proceeds of crime ( Civil Confiscation) Act of which firstly we shall consider section 5 (6) of the said Act which reads as follows; ‘(6) A disposal order shall operate to deprive the respondent of his rights (if any) in or to the property to which it relates and, upon the making of the order, the property shall stand transferred to the Republic or other person specified in the order. [23] In considering the above said provision of the law, this Court is of the view that the said provision of the law allows the said property subject to a section 5(1) order to be transferred either to the Republic or to other person specified in the Order which may also include the Applicant in event it shows that it has suffered such an injustice. This Court has to now find what was the intention of Parliament when it enacted section 5 of the Proceeds of Crime (Civil Confiscation) Act. [24] From a cursory look at section 5(1) of the said Act, it is clear that such an Application cannot be made until 12 months after the Order has been in force and that there is no Appeal pending. Furthermore from a reading of section 5(3) of the Proceeds of Crime (Civil Confiscation) Act read with section 5(1) of the said Act it is clear that by enacting such provisions of the law Parliament intended to give time to the Respondent or to any other person having interest in the property to show to the satisfaction of the Court that the property does not constitute directly or indirectly proceeds of criminal conduct and was not acquired in whole or in part with or in connection with property directly or indirectly constitute proceeds of criminal conduct or any other person to show to the satisfaction of the Court that they may suffer a risk of injustice. [25] This Court is also of the view that since the only time that an Application can be made to the Court to transfer the property to the Republic or to any other person is under section 5(1) of the proceeds of Crime (Civil Confiscation) and for the reasons mentioned in paragraph 24 of this ruling, this Court finds that such an Application made at this stage of the proceedings to transfer the assets to any other person namely at the stage of a section 4 Order being in force , such an application is premature and that such an Application for a disposal order has been made under the guise of seeking an order from this Court namely for a variation order under section 4(3) of the Proceeds of Crime (Civil Confiscation) Act. [26] Furthermore this Court is of the view that the Applicant by seeking such a remedy in its Application is a futile exercise in view that the second Respondent is not in possession of the said assets despite repeated request to the 1st Respondent Peken Global Limited to transfer the said assets to the 1st Respondent of which they have refused or failed to transfer the said cryptocurrency assets to the 2nd Respondent i.e. to the receiver as averred in paragraphs 11 and 12 of the 2nd Respondent’s Affidavit in reply to the Application . Hence the 2nd t Respondent not being in possession of the said assets is unable to transfer the said Cryptocurrency assets to the Applicant. [27] For the reasons mentioned in paragraphs 23, 24, 25 and 26 of this ruling, I shall uphold the 3rd preliminary objection raised by the 2nd Respondent. [28] The fourth preliminary objection of the second Respondent is that the Affidavit is defective in that the jurat does not immediately follow the last paragraph of the Affidavit in support. In the case of Elmasry & Anor V/S Hua Su ( MA 195/2019 ( arising in CC 13/2019 (2019) SCSC 962 ( 8te November 2019), the Court relied on Rule 41 (1) (6) of the Supreme Court Rules of England (1965) which in relevant form provides in mandatory terms as follows: “Jurat – The jurat of every affidavit should contain the full address of the place where the affidavit was sworn, sufficient for identification. Affidavits should never end on one page with the jurat following overleaf. The jurat should follow immediately after the end of the test. The signature of the Commissioner for Oaths should be written immediately below the words “Before me” [29] In the case of Elmasry ( supra), Twomey CJ stated the following at paragraph 19 ; ‘The obvious reason for this rule is that an extra averment may be inserted after the jurat has been sworn to amount to a tampering of evidence. The Court of Appeal in Lablache de Charmoy (supra) held that irregular affidavits cannot be waived by the parties and is bad in law. I agree with this position. Affidavits are sworn evidence and evidential rules for their admission cannot be waived’. [30] In the case of Daniela Lablache de Chamoy V/S Patrick de Chamoy Lablache, Robinson JA stated the following at paragraph 27; ‘Irregularities in the form of the jurat cannot be waived by the parties. In Pilkington v. Himsworth (1 Y. & C. Ex. 612), the court held that: ″[j]urats and affidavits are considered as open to objection, when contrary to practice, at any stage of the cause. That is an universal principle in all Courts; depending not upon any objection which the parties in a particular cause may waive, but upon the general rule that the document itself shall not be brought forward at all, if in any respect objectionable with reference to the rule of the Court’. [31] As regards to the above, I have considered the submissions of counsel for the Applicant and Counsel for the Respondent as well as the above case laws cited. Counsel for the Applicant has submitted to the Court that the last paragraph of the Affidavit is Paragraph 14 which also includes the demand of the Applicant and as such paragraph 14 follows the previous page. It is hence submitted that the Affidavit ends with paragraph 14 and the jurat follows immediately after. After a careful perusal of the Affidavit of the Applicant, I agree with the submissions of Counsel for the Applicant that the last paragraph of the Affidavit is Paragraph 14 which falls on the next page and immediately follows the jurat. Hence I find that the Affidavit is not defective and is in accordance with Rule 41 (1) (6) of the Supreme Court Rules of England (1965). Furthermore as stated by CJ Twomey in Elmasry (supra) that ‘The obvious reason for this rule is that an extra averment may be inserted after the jurat has been sworn to amount to a tampering of evidence. I find that the Applicant has done just that in preventing such tempering of evidence by adding an averment at paragraph 13 of his affidavit on the previous page namely that ‘the next paragraph is numbered 14 and appears on the next, jurat page of the Affidavit’. [32] As a result of the above paragraph 31 of this Ruling, I accordingly dismiss the 4th Preliminary objection of the 2nd Respondent. [33] Since this Court has upheld the 3rd preliminary objection of the second Respondent, this Court notes that both in the Application of the Applicant namely the notice of motion and in the averments in paragraph 13 of the Affidavit in support of the Application, there is an alternative prayer seeking for an order of this Court that the Judge’s Order dated 12 th August 2022 bearing MC 17/2022 be discharged. Hence this being the case, the matter shall proceed on the merits as regards to alternative prayer being sought by the Applicant namely seeking an order from this Court to discharge the said Order in MC 17/2022 dated the 12th August 2022. Signed, dated and delivered at Ile du Port on 30th April 2024. ____________ D. Esparon Judge 16