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Court of AppealDismissedCivil Appeal No. 184 of 2018

Amuti v Kenya Anti-Corruption Commission (Civil Appeal 184 of 2018) [2019] KECA 783 (KLR)

Court of Appeal
10 May 2019
PWP. N. WakiSKS. Gatembu KairuJOJ. Otieno-Odek
10,416 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~42 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed you can lose unexplained wealth without any criminal conviction, so keep solid records proving how you acquired your assets.

What this practically means

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Executive summary

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The Court of Appeal (Waki, Gatembu Kairu and Otieno-Odek JJ.A) dismissed this first appeal against a High Court decree ordering forfeiture of Ksh. 41,208,000/= as unexplained assets under Sections 26 and 55 of the Anti-Corruption and Economic Crimes Act (ACECA). The appellant, a former public officer, had been served with a Section 26 Notice in July 2008 requiring him to explain assets acquired between 1992 and 2008; following an unsatisfactory explanation, the Commission obtained a decree that he pay the Government Ksh. 41,208,000/= comprising cash seized from his house, sums he attributed to a loan from Samuel Gitonga, alleged professional fees from a Sudanese national, instalments from property buyers, and community project funds. The appellant argued the Originating Summons was defective for covering only ten months of the sixteen-year Notice period; that the forfeited sums were not enumerated in the Notice; that forfeiture without proof of corrupt conduct or conviction violated Articles 40 and 50; and that the judge mis-evaluated the evidence. The Court held the greater period includes the lesser, no fresh Notice was required, and the appellant himself introduced each of the forfeited sums in his response, so his fair-hearing rights were not infringed. Applying UK comparative jurisprudence, it held Sections 26 and 55(2) are civil, in rem tools that do not violate property or fair-hearing rights; the burden under Section 55(2) is 'prove it or lose it', consistent with Section 112 of the Evidence Act. The judgment and decree of the High Court dated 23 November 2017 were affirmed, with no order as to costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Originating Summons was fatally defective for being grounded on a 10-month period while the Section 26 Notice covered a 16-year period
  2. 2.Whether the judge erred in ordering forfeiture of properties/assets not enumerated in the Section 26 Notice dated 9 July 2008 and in denying the appellant a reasonable opportunity to explain them
  3. 3.Whether the learned judge properly exercised her discretion under Section 55(5) and (6) of ACECA in permitting the appellant to testify and in evaluating the evidence
  4. 4.Whether the respondent proved the threshold for unexplained assets under Sections 2 and 55(2) of ACECA
  5. 5.Whether Sections 26 and 55(2) of ACECA violate the right to property under Article 40 and the right to fair hearing/presumption of innocence under Article 50 of the Constitution
  6. 6.Whether forfeiture of unexplained assets under ACECA requires proof of corrupt conduct or conviction for a criminal offence
  7. 7.Whether adverse inferences were properly available from the failure of the appellant to call material witnesses

Key legal issues

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01

Whether the Originating Summons confined to 10 months was defective relative to the 16-year Notice

Holding

Not defective; the lesser period fell within the greater period in the Notice and the OS itself identified the 10-month investigation period

Reasoning

The Section 26 Notice required explanation of property acquired between 1992 and June 2008. The OS expressly identified September 2007 to June 2008 as the period of investigation. The greater period includes the lesser, so no fresh Notice was required. It is the Commission, not the trial court, that identifies the period under investigation under Section 26 read with Section 55.

p. 6
02

Whether assets ordered forfeited but not enumerated in the Notice denied the appellant fair hearing

Holding

No violation; it was the appellant himself who placed each of the forfeited sums in issue in his response, so he had a reasonable opportunity to explain them

Reasoning

The appellant's response of 17 July 2008 introduced and admitted each of the sums later forfeited - the cash seized, the loan from Gitonga, professional fees from a Sudanese National, the community project funds and the property sale instalments. Having placed the sums in issue, he had the opportunity to explain their source and his Article 50 right to fair hearing and Section 55(2) opportunity were not violated.

p. 6
03

Whether forfeiture without proof of corrupt conduct or conviction is lawful

Holding

Lawful; ACECA forfeiture of unexplained assets is civil, in rem, and requires only proof on balance of probability of disproportionate assets with no satisfactory explanation

Reasoning

Sections 26 and 55 of ACECA are civil recovery provisions directed at the property itself, not at conviction for corruption. The Commission must prove on balance of probability that assets are disproportionate to known legitimate income; the evidentiary burden then shifts to the person under investigation to give a satisfactory explanation, consistent with Section 112 of the Evidence Act. The presumption of innocence is not displaced.

p. 10
04

Whether requiring explanation of disproportionate assets violates Article 40 property rights

Holding

No violation; property protection does not extend to unlawfully acquired property and the requirement is a proportionate interference

Reasoning

Persuaded by UK comparative jurisprudence including National Crime Agency v Mrs A, the court held the right to property protects legitimately acquired wealth, not proceeds of crime. If the requirement to explain were held to violate Article 40, enforcement of Section 26 Notices would be rendered nugatory. Article 40(6) expressly excludes unlawfully acquired property from protection.

p. 10
05

Whether the trial judge's discretion to call the appellant to testify and her evaluation of evidence should be disturbed

Holding

No; the appellant did not show the discretion was exercised on a whim, unreasonably, unlawfully or injudiciously

Reasoning

Applying Supreme Court dicta limiting appellate interference with discretionary decisions, the court found the judge properly exercised her discretion under Section 55(5) and (6) ACECA. On re-evaluation, the appellant's explanations (the Gitonga loan agreement, the alleged Sudanese professional fees, the community project, the property sale) were unsupported, uncorroborated and in part based on an unsigned agreement, and the failure to call crucial witnesses permitted adverse inference.

p. 8

Legal principles established

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  • Where the greater period stated in a Section 26 ACECA Notice includes the lesser period pursued in the forfeiture suit, no fresh Notice is required for the lesser period
  • The four-part threshold for unexplained assets under Sections 2 and 55(2) ACECA is: a set investigation period; reasonable suspicion of corruption or economic crime; assets disproportionate to known sources of income; and no satisfactory explanation
  • Sections 26 and 55(2) ACECA do not violate Article 40 of the Constitution; constitutional protection of property does not extend to unlawfully acquired property, and requiring explanation of disproportionate assets is a justifiable interference
  • Forfeiture of unexplained assets under ACECA is a civil, in rem proceeding that does not require proof of corrupt conduct or a criminal conviction; the evidentiary burden rests on the person under investigation to prove it or lose it
  • The presumption of innocence is not displaced by a Notice to explain how assets have been acquired
  • A court cannot ordinarily direct a party to call any witness; failure to call a material witness who is available may found an adverse inference
  • An appellate court will not interfere with the exercise of judicial discretion by a trial court absent a demonstration that the discretion was exercised on a whim, unreasonably, in violation of law or the Constitution, or plainly wrong causing undue prejudice

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The judgment and decree of the High Court (Achode J.) dated 23 November 2017 is affirmed and upheld
  3. 3.No order as to costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

PW
majority
SK
majority
JO
majority
On appeal from
High Court of Kenya at Nairobi (Anti-Corruption & Economic Crimes Court)
Anti-Corruption & Economic Crimes Court Misc. No. 5 of 2016, formerly HCCC No. 448 of 2008 (OS)
Jurisdiction invoked
First appellate jurisdiction under Article 164 of the Constitution / Court of Appeal over the High Court (not expressly stated in the judgment text)

Relief refused

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Setting aside of the judgment and decree of the High Court dated 23 November 2017

The appeal had no merit; the judge correctly identified the investigation period, the appellant had a reasonable opportunity to explain the assets, and did not discharge his evidentiary burden under Section 55(2) ACECA

p. 11

Costs

No order as to costs (appeal dismissed with no order as to costs)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the final analysis, our evaluation of the evidence on record and applicable law lead us to find that this appeal has no merit and is hereby dismissed with no order as to costs. We affirm and uphold the judgment and decree of the learned judge dated 23 rd November 2017.
p. 11Final orders - dismissal and affirmation of the High Court forfeiture decree
Under Section 55 (2) of ACECA, the theme in evidentiary burden in relation to unexplained assets is prove it or lose it.
p. 10Evidentiary burden in unexplained-asset forfeiture
The right protects the sweat of the brow - it does not protect property acquired through larceny, money laundering or proceeds of crime or any illegal enterprise.
p. 10Scope of Article 40 property protection
In our view, the greater period includes the lesser period and no fresh or new Notice was required for the 10-months between September 2007 and June 2008.
p. 6Relationship between Section 26 Notice period and the OS period
The presumption of innocence is a fundamental right that cannot be displaced through a Notice to explain how assets have been acquired.
p. 10Presumption of innocence in civil recovery proceedings

Issues in the judgment

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material

The official judgment text as supplied contains substantial textual corruption/garbling in several passages, including portions of paragraphs 5, 21, 28, 47, 58 and 79, and a corrupted rendering of the quoted trial court decree at paragraph 11 (e.g., 'Sudanese National', 'instalments paid by Evelyn Mwaka' appear in garbled form), and the citation '(2105) eKLR' for a 2015 decision

minor

Internal inconsistency in amounts: the trial court decree is recorded in one passage as ordering payment of Ksh. 41,208,000/=, but the list of sums comprising the decree totals Ksh. 41,208,000/= only if Ksh. 10,900,000/= is used for the third item; elsewhere the same item is stated as 'Ksh. 10,900,000/=' and the sum of cash outflows conceded by the appellant is recorded as both Ksh. 43,208,000/= and forfeited sums of Ksh. 41,208,000/=

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Amuti v Kenya Anti-Corruption Commission (Civil Appeal 184 of 2018) [2019] KECA 783 (KLR)", Case Analysis (2019). Civil Appeal No. 184 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/783/eng@2019-05-10

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.