Hardy Enterprises Limited & 3 others v Assets Recovery Agency
The bottom line
#Kenya's Court of Appeal confirmed that freezing assets as suspected crime proceeds stands unless owners prove real hardship, not just innocence.
What this practically means
#Executive summary
#Key legal issues
#Application of section 82 of POCAMLA to the ex parte preservation and seizure orders
The trial court correctly exercised the discretion conferred by section 82, which permits ex parte preservation orders where there are reasonable grounds to believe property is proceeds of crime or intended for use in an offence.
The court set out section 82 and held that the trial judge was exercising a statutory discretion. The respondent, as the institution mandated under POCAMLA, alleged irregular county tenders whose proceeds bought the vehicles. The investigation revealed large suspicious cash deposits, interbank transfers and luxury vehicle purchases, supporting reasonable grounds for the orders.
Whether the appellants met the section 89 threshold for variation or rescission
The appellants failed to discharge the onus of showing that the orders would deprive them of reasonable living expenses and cause undue hardship outweighing the risk to the property.
Section 89(1) requires the applicant to satisfy the court on both hardship and the balance of hardship against risk. The seized vehicles were luxury vehicles, not tools of trade, and the appellants' arguments that the assets were not proceeds of crime were premature, belonging to the pending forfeiture application under sections 90 and 92.
Prematurity of the appellants' challenge to the characterization of assets as proceeds of crime
Allegations contesting whether the assets are proceeds of crime were premature at the variation stage; the proper avenue is the forfeiture application.
At the section 89 stage, sufficient interrogation cannot be made to reach the balance-of-probabilities standard under section 92(1). The court endorsed the trial judge's finding that arguments on proceeds of crime must await the hearing of the substantive forfeiture application, citing the Samuel Wachenje case.
Legal principles established
#- On a first appeal, the Court of Appeal must re-evaluate the entire record and make its own conclusions, but should not interfere with findings of fact unless they were not based on evidence, were based on mis-apprehension of the evidence, or the judge acted on wrong principles.
- Under section 89(1) of POCAMLA, the applicant for variation or rescission bears the onus of demonstrating undue hardship and that the hardship outweighs the risk to the property; arguments that property is not proceeds of crime are reserved for the forfeiture hearing.
- Ex parte preservation orders under section 82 of POCAMLA rest on reasonable grounds, whereas forfeiture under sections 90 and 92 must be determined on a balance of probabilities at a hearing of both sides.
Court orders
#- 1.The appeal is dismissed with costs
- On appeal from
- High Court of Kenya at Nairobi, Anti-Corruption and Economic Crimes Court
- Misc. Civil Application No. 8 of 2020
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal Rules from the High Court ruling under sections 82 and 89 of POCAMLA
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hardy Enterprises Limited & 3 others v Assets Recovery Agency", Case Analysis (2022). Civil Appeal E297 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/587/eng@2022-07-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.