[2023] KEHC 27222 (KLR)

Ethics & Anti-Corruption Commission v Wambua (Miscellaneous Civil Application E024 of 2023) [2023] KEHC 27222 (KLR) (Anti-Corruption and Economic Crimes) (9 November 2023) (Ruling)

Neutral citation: [2023] KEHC 27222 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Miscellaneous Civil Application E024 of 2023

NW Sifuna, J

November 9, 2023

Between

Ethics & Anti-Corruption Commission

Applicant

and

Daniel Munywoki Wambua

Respondent

Ruling

1. The Applicant, Ethics And Anti-corruption Commission (EACC- hereinafter referred to as the Commission) is Kenya’s Anti-Corruption Agency. The Respondent is an Accountant at the Kenya Rural Roads Authority (KeRRA) a State Corporation. The Commission filed in this Court, under a Certificate of Urgency, an ex parte Originating Motion dated 7th August 2023. The same was supported by the Supporting Affidavit of the Commission’s Forensic Investigator Mathews Ong’ondo, sworn on even date.

2. The Motion was filed pursuant to Section 56 of the Anti-Corruption and Economic Crimes Act (Act No. 3 of 2003, referred to herein as the ACECA). It sought preservation orders prohibiting the Respondent Daniel Munywoki Wambua from withdrawing, transferring, disposing or in any other way dealing with funds held in his three Bank Accounts at Equity Bank, namely Account Nos. 0840xxxxx9257, 0120xxxxx0027, and 0390xxxx9903.

3. The Motion which was based on the grounds stated in it, principally stated that while the Respondent’s known legitimate source of income is his monthly salary of Ksh 55,607/65 that he earns at KeRRA, he had on 15th March 2023 opened the said Bank Account No. 0840xxxxx9257 at Equity Bank, and in a period of four (4) months transacted and/or received through it a total of Ksh 21,189,125=.

4. Further that the Respondent had also in that period been transferring money between those three Accounts; and that huge deposits had during that time been made into those Accounts. Some by him, and others by other persons that the Commission reasonably suspects to be his proxies. Hence that those Accounts are conduits of crime. On those preliminary facts, the Motion proceeded ex parte under the Certificate of Urgency, and this Court on 9th August 2023 granted those preservation orders, to subsist for a period of six months to enable the Commission conduct investigations into the actual source(s) of the funds in those Bank Accounts.

The Respondent’s Application 5. Aggrieved by those freeze orders, the Respondent promptly filed in this Court a Notice of Motion dated 17th August 2023, supported by his Supporting Affidavit sworn on even date. In which it has protested and contested those orders and sought to set them aside. On the argument that the Ksh 21,189,125= was money that the Respondent had raised from his friends through a WhatsApp group that they had formed for the purpose of raising money for him to pay dowry for his fiancée. This Ruling is on that Application.

6. The Application which was supported by the Respondent’s Supporting Affidavit and Affidavits of others, was opposed by the Commission through the Replying Affidavit of its Forensic Investigator Mathews Ong’ondo. The Affidavit maintained that the impugned money was suspect, and that dowry in the Kamba Community of his alleged fiancée was just a few goats. The Application was heard orally, with each party’s Advocate urging the party’s position through oral submissions.

7. The Respondent’s position was urged by Mr Dunstan Omari, while the Commission’s position was urged by Ms Culent Lunyolo. The narrative by Mr Omari was that the Respondent was a popular person, who managed to pull together a WhasApp group of over 900 members; and that apart from his salary, he also earned income from crop and dairy farming in his Ukambani homeland.

Determination 8. The main issue for determination in this Application is whether the Respondent has through the Application and the Supporting Affidavits, placed before this Court sufficient facts and evidence to persuade the Court to discharge or vary the said orders. I have considered that material as well as the submissions by both counsels, the applicable legal principles, the relevant legal provisions including those of the ACECA under which these proceedings have been brought. Particularly whether those freeze orders should be lifted and the Respondent be free to resume operation of his hitherto frozen Bank Accounts; or even whether he should be allowed partial access to part of the funds in those Accounts.

9. Besides, the purpose of such preservation orders under the ACECA, is merely preservatory in nature, to preserve the funds and allow for investigations into the source(s) of the funds and evaluation of the explanation offered by the Respondent. That is why they should always be for specific period specified in the law. In this case the six months prescribed be the ACECA. The orders are of a temporary character, and meant to merely preserve the funds, and not to permanently or indefinitely deprive the Respondent of the said funds. They are neither forfeiture nor sequestration orders.

10. An Application for the discharge, variation or the setting aside of preservation orders issued under the ACECA is provided for by Section 56 (4) of the Act, and it is therefore not clear why the Respondent in his Application decided to proceed under provisions other than the ones in the ACECA. Whereas under the ACECA this Application ought to have been made under Section 56 (4) of the Act, the Respondent’s Application has stated that it is brought under Articles 45, 50, 159 (2) of theConstitution of Kenya 2010; Sections 1A, 1B, 3A of the Civil Procedure Act; and Order 40 Rule 7 of the Civil Procedure Rules, 2010.

11. The preservation and civil forfeiture proceedings under the ACECA, such as these, although essentially civil in nature, they are civil proceedings sui generis. In two aspects. First, like in other civil proceedings the standard of proof is on a balance of probability (the preponderance of doubt). All that the Commission is required to do is to cast reasonable doubt and create reasonable suspicion on the source of the impugned funds. Secondly, unlike in other proceedings where the burden of proof is on the one alleging, in proceedings under the ACECA, once the Commission through casting reasonable doubt has established reasonable suspicion, the burden of explaining and proving the source of those funds lies on the Respondent suspect.

12. Further, preservation orders issued under Section 56 of the ACECA are not the conventional Order 40 interlocutory injunctive orders. Hence Order 40 of the Civil Procedure Rules (including Rule 7 on discharge, variation and setting aside of interlocutory injunction) does not apply. The Respondent’s Application having been brought under provisions other than the ACECA provisions, is actually defective. However, in the interest of substantive justice and in the spirit of Article 159 (2) of the Constitution of Kenya 2010, I have spared it from dismissal, and instead proceeded to determine it on its merits or lack thereof.

13. On an Application for discharge, variation or setting aside of preservation orders issued under ACECA, Section 56 (5) states that a court may discharge or vary an order issued under subsection (4) only if the court is satisfied on the balance of probabilities, that the property in respect of which the order is discharged or varied was not acquired as a result of corrupt conduct. In my view, however, the legal threshold for an application for discharge or variation is not exclusively confined to that in subsection (4).

14. To my mind, this legal rule does not oust the legal principles under common law, the doctrines of equity, as well as the principles of natural justice. I therefore hold that the preservation Application being an ex parte one, apart from interrogating the source of that property or funds as decreed by subsection (5), a court to which the Application is made, may intervene and discharge or vary a preservation ACECA order in other circumstances such as:a.Where there is an apparent error(s) on the face of the record.b.Where the orders have caused or are likely to cause extreme hardship or depravity.c.Where the Applicant obtained the orders through an abuse of the court process.d.Where there is an illegality, ore.where the Applicant obtained the orders through any other inequitable or unconscionable conduct for instance suppression or non-disclosure of material facts.

15. The instant case being one under the ACECA, the burden of proving that the suspect funds were not acquired through corruption is on the Respondent, and the Agency’s task as I have already clarified above, is essentially that of poking holes, casting doubt, and creating reasonable suspicion on the source of the funds.

16. I find that the material that the Respondent has so far placed before the Court in answer to the now existing suspicion, has failed to discount and allay that doubt and suspicion; hence fallen far short of providing a satisfactory and persuasive prima facie explanation of the source. At this moment there is no material upon which to confidently hold that the impugned funds were not acquired from corruption. The explanation given by the Respondent so far, raises more questions than it provides answers on this question.

17. Therefore, there is need to continue the freeze and preservation of the funds until the Commission has completed investigations into the source(s) of those funds and huge deposits that the Respondent and other persons deposited into those Bank Accounts. It is documented in the filed Affidavits (in fact those filed by the Respondent to support his case) on record, that one James Kivuva for instance, habitually made curiously huge deposits in the Accounts.

18. From the facts presented to this Court by the Commission in its Application for the orders, as well as the facts that emerged from the Respondent’s Affidavits, the rival submissions by both parties on this Application, I find that there is reasonable suspicious and sufficient reason for retaining those preservation orders, hitherto subsisting, for the already decreed statutory period of six months to allow for investigations.

19. Further, since the subject of the preservation orders is money in Bank Accounts, it is prudent that the same be insulated from access, withdrawal and transfer; until investigations are completed or until further orders of this Court. Those monies are safe in the bank and they will still be available for the Respondent once the legitimate purpose for which they were preserved is fulfilled (and which is investigations), or after he wins any forfeiture suit that the Commission may hereafter institute against him, if at all. In my view, the need to preserve these funds, far outweighs the concerns and contentions that the Respondent has cited for his Application.

20. When determining an Application of this nature, the Court needs to refrain from a merit determination of the entire matter at this preliminary stage, as that is for later should a forfeiture suit be instituted after the Commission has completed investigations and arrived at final findings on which to support a subsequent forfeiture suit.

21. Besides, this kind of proceedings is not about the purpose of those monies or the reason for which they were sourced, but their sources. ACECA proceedings interrogate the source, rather than the purpose of the impugned property. If it is a building for instance, it matters not that it is being used or intended to be used for a benevolent purpose such as worship, charity or public health. The question is whether the source of the impugned funds is unexplained, and whether they are from corrupt activities. Hence proceedings under the ACECA are not those where the end justifies the means.

22. It therefore matters not that the funds were intended for dowry payment, leisure, prestige, archival value, investment, or even mere saving. What is to be ascertained by way of legal proof is their source. Unfortunately, it is purpose that both the Applicant and the Respondent emphasized and dwelt on at the oral hearing of this Application. This is regrettably, what both parties delved into at the hearing of Application.

23. In so doing, more suspicion was generated than was allayed; even by the Respondent’s own affidavits. For instance the one sworn by one James Kivuva who the Respondent’s other Affidavits’ annextures have documented as one of those who frequently deposited part of the suspect funds held in the subject bank accounts.

24. The said James Kivuva’s 25 paragraph Affidavit filed in support of this Application, was sworn by him on 22nd September 2023. He is definitely a person of interest in this matter, and I hope he will be one of the witnesses in any other proceedings that may arise from those transactions. It is important to establish whether he or his company (if any) is one of KeRRA’s pre-qualified suppliers and contractors.

Orders 25. For the reasons above, I hold that the Respondent’s Application is not only misconceived, but lacks merit. It is therefore hereby dismissed, and the Applicant (the Ethics And Anti-corruption Commission - EACC) awarded costs.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 9TH DAY OF NOVEMBER 2023. PROF (DR) NIXON SIFUNAJUDGE