Ethics & Anti-Corruption Commission v Kojwando (Anti-Corruption and Economic Crimes Civil Suit 27 of 2018) [2023] KEHC 25351 (KLR) (Anti-Corruption and Economic Crimes) (16 November 2023) (Judgment)
Neutral citation:
[2023] KEHC 25351 (KLR)
Republic of Kenya
Anti-Corruption and Economic Crimes Civil Suit 27 of 2018
EN Maina, J
November 16, 2023
Between
Ethics & Anti-Corruption Commission
Plaintiff
and
Joseph Owino Kojwando
Defendant
Judgment
1.The plaintiff is a body corporate established under Article 78 of the Constitution and the Ethics and Anti-Corruption Commission Act brings this claim against the Defendant who is an Advocate of the High Court practicing in the name and style of Owino Kojwando & Company Advocates, pursuant to its powers under Section11(1)(j) of that Act as read with the provisions of the Anti-Corruption and Economic Crimes Act.
2.The claim which is for a sum of Kshs. 10,000,000/= costs and interest arises from a procurement process in which the City Council of Nairobi, the predecessor of the Nairobi City County, was allegedly defrauded of a sum of Kshs. 283,000,000/- in its bid to procure land for cemetery use. The Plaintiff avers that the Defendant unlawfully benefitted from the fraudulent procurement to the tune of Kshs. 10,000,000/=.
3.It is the Plaintiff’s contention that the procurement process for LR No. 14749/2 was fraudulent for reasons that: -..........a.Naen Rech Limited, the purported winning bidder was not eligible to tender as it had no land to sell to the Council.b.The Tender process was flawed to the extent that no bidder met the mandatory requirements, yet the tender was irregularly awarded to Naen Rech Limited.
c.On 19th December 2008 one Henry Musyoki Kilonzi entered into a sale agreement with Naen Rech Limited for the purchase of LR. No. 14759/2 for Ksh.110,000,000 and on the same day, the Council also entered into a sale agreement with the said Henry Kilonzi to purchase the very same land for Kshs.283,000,000/-.d.The Kshs. 283,000,000 paid by the Council for the land was paid pursuant to the sale agreement dated 19th December 2008, which was forged.e.Naen Rech Limited fraudulently inserted the name of Henry Kilonzi as a Director of Naen Rech in the Confidential Business questionnaire while tendering to the Council.f.Alphonce Mutinda Advocates through a letter dated 7th October 2008, falsely informed the Council that the owner of the land Henry Kilonzo, had appointed Naen Rech Limited as its agent to participate in the tender and bid on his behalf.
g.The valuation report conveying a value of Kshs. 325,150,000/- to the land formed part of the basis upon which the Tender was awarded to Naen Rech Limited. The Plaintiff's investigations established that the said valuation report was a forgery as it was disowned by its purported author, Mr. Anthony Matenge Itui, who was the Deputy Commissioner of Lands (Valuation).h.On 7th May 2009, the subject land (L.R.No.14759/2 Machakos District) was inspected and valued by the Commission's Valuer Mr. Pius N. Maithya at Kshs. 30,000,000/-, yet it was purported that the Council purchased the said land at a consideration of Kshs.283,200,000/-i.Out of the said Kshs. 283,000,000/- paid by the Ministry of Local Government, only Kshs 110,000,000 was paid to the proprietor, Mr. Henry Kilonzi, while the remaining Kshs.173,OOO,OOO was embezzled 
by other parties including the Defendant herein.j.The value of the subject land was inflated to accommodate 
kickbacks to the various players in the process of the release of funds for the purchase of the land in a conspiracy that saw the 
public lose Kshs.173,000,000.”
c.On 19th December 2008 one Henry Musyoki Kilonzi entered into a sale agreement with Naen Rech Limited for the purchase of LR. No. 14759/2 for Ksh.110,000,000 and on the same day, the Council also entered into a sale agreement with the said Henry Kilonzi to purchase the very same land for Kshs.283,000,000/-.d.The Kshs. 283,000,000 paid by the Council for the land was paid pursuant to the sale agreement dated 19th December 2008, which was forged.e.Naen Rech Limited fraudulently inserted the name of Henry Kilonzi as a Director of Naen Rech in the Confidential Business questionnaire while tendering to the Council.f.Alphonce Mutinda Advocates through a letter dated 7th October 2008, falsely informed the Council that the owner of the land Henry Kilonzo, had appointed Naen Rech Limited as its agent to participate in the tender and bid on his behalf.
g.The valuation report conveying a value of Kshs. 325,150,000/- to the land formed part of the basis upon which the Tender was awarded to Naen Rech Limited. The Plaintiff's investigations established that the said valuation report was a forgery as it was disowned by its purported author, Mr. Anthony Matenge Itui, who was the Deputy Commissioner of Lands (Valuation).h.On 7th May 2009, the subject land (L.R.No.14759/2 Machakos District) was inspected and valued by the Commission's Valuer Mr. Pius N. Maithya at Kshs. 30,000,000/-, yet it was purported that the Council purchased the said land at a consideration of Kshs.283,200,000/-i.Out of the said Kshs. 283,000,000/- paid by the Ministry of Local Government, only Kshs 110,000,000 was paid to the proprietor, Mr. Henry Kilonzi, while the remaining Kshs.173,OOO,OOO was embezzled 
by other parties including the Defendant herein.j.The value of the subject land was inflated to accommodate 
kickbacks to the various players in the process of the release of funds for the purchase of the land in a conspiracy that saw the 
public lose Kshs.173,000,000.”
4.It is the plaintiff’s contention that by receiving the sum of Kshs.10,000,000/= which was part of fraudulently acquired public funds, the Defendant was illegally enriched to the detriment of the then City Council of Nairobi and hence restitution of the said amount should be ordered.
5.The Defendant did not file a statement of Defence. This is confirmed by Mr. Oduk, learned Counsel for the Defendant, who in his written submissions adverts to a defence contained in his response to the Plaintiff’s demand letter to the Defendant before filing of the suit.
6.It is instructive that while the Defendant does not dispute that he received a sum of Kshs.10,000,000/- from the firm of Odero, Osiemo & Co. Advocates, he denies any knowledge of the contract for procurement of cemetery land or the source of that alleged contract. He disputed that he received the money fraudulently and contends that the money was for a joint venture between his clients who he named as Joseph Oduor Matuku and Nick Oyugi Ochoko. He contended that he only acted within the parameters of the instructions and information given to him by his clients; that he did not personally receive any money from the City Council of Nairobi and that this suit is a violation of the client/advocate confidentiality and it ought to be dismissed with costs.
The Plaintiff’s case
7.To prove its case, the Plaintiff called seven witnesses who testified and also produced documents in support of their evidence. The sum total of their evidence was that sometimes in May 2009 the City Council of Nairobi advertised a tender for purchase of land for use as a public cemetery; that bidders were to meet various conditions chief among them that the land had to be of red soil up to six feet deep and it had to be in close proximity to the road and other infrastructure such as electricity; that Naen Rech which was one of the companies that bid for the tender ended up being awarded yet it was unresponsive as its land did not meet the mandatory criteria. David Mukiri Wanjohi (PW1) and Patrick Tom Odongo (PW4) were members of the Tender Committee and it was their evidence that they were part of a team that visited the land and came to the conclusion that it did not meet the mandatory requirements. It was their evidence that the land was of black cotton soil which meant that it did not meet the criteria for red soil. They also testified that the land did not meet the six feet depth red soil criteria. According to PW1 who at the time was the City Council of Nairobi Funeral Superintendent, red soil was necessary for body decomposition.
8.Evidence was also led that the valuation report for the land and upon which the tender was awarded was fraudulent as it did not emanate from the Ministry of Lands as expected. According to Anthony Mathenge Itui (PW3), the then Deputy Commissioner of Lands in-charge of valuation, the ministry never carried out a valuation of the land. PW3 disputed that the valuation report relied upon by those who awarded the tender emanated from his office. Pius Maithya (PW2), a land valuer working for the Plaintiff, Commission, told this court that he visited the land and valued it. He contended that it was not worth more than Kshs.30million. The tender was nevertheless awarded to Naen Rech which though not the owner of the land ended up receiving Kshs.283,000,000 but paid only Kshs.110,000,000 to the real owner of the land, one Phillip Kilonzi (deceased).
9.According to the Plaintiff the remainder of the funds was paid to the firm of Odero Osiemo & Co. Advocates which then distributed it to various other persons with the Defendant allegedly receiving Kshs.10 million for no consideration at all. Proof of the payment of the Kshs. 10 million was through bank records.
10.The Plaintiff contends therefore that not only was the tender awarded to an entity whose land did not qualify hence unresponsive but that the land was also overpriced as a result of the fraudulent valuation. The Plaintiff therefore prays for restitution of the sum of Kshs.10million paid to the Defendant, together with interest and the costs of the suit.
The Defendant’s case
11.The Defendant began his testimony by introducing himself as an Advocate of the High Court of Kenya practicing in the name and style of Owino Kojwando & Co. Advocates since being admitted to the Bar in 1993. He stated his current practicing certificate to be No. LSK/2-23/07635 and disclosed that he is a graduate of Dar-es-Salaam University and the Kenya School of Law.
12.Placing reliance on his witness statement, three statements which he recorded under inquiry with the Kenya Anti-Corruption Commission (KACC) the predecessor of the Plaintiff, and a demand letter from KACC, the Defendant testified that he was not privy to the tender for procurement of cemetery land. He contended that he did not act in the matter of that procurement and that he was not at all aware of the loss of Kshs.283 million by the City Council of Nairobi.
13.The Defendant reiterated that he never received any money from the City Council of Nairobi but contended that the Kshs.10million was paid to him by the firm of Odero Osiemo & Company Advocates on behalf of his client and that the said sum was in fact deposited in his client’s account in two batches of Kshs. 4million and Kshs.6million but not in his personal account.
14.He stated that prior to the payment of the money he was approached by one Joseph Odiwour Matuku and one Nick Oyugi Ochok who gave him instructions on a joint venture following which he prepared an agreement.
15.The said agreement was to the effect that the sum of Kshs.10 million would be shared between the said two clients in the manner set out in the agreement. The Defendant testified that his client Joseph Odiwour Matuku told him that the money was payment for a contract for provision of security services to the City Council of Nairobi; that the money would be paid through a lawyer although at the time they were instructing him the City Council had not disclosed who the advocate would be.
16.He further testified that he duly released the money paid to his account to his clients less his agreed legal fees of Kshs. 464,000/. He vehemently denied that he was used to conceal the source of the money and contended that he made full disclosure to the Commission.
17.The Defendant also contended that the money paid into his client account was not his personal money; that his personal money goes to the office account; that it was after he had disbursed the money that the Plaintiff Commission informed him that the money was proceeds of crime; that he duly went to the offices of the plaintiff commission as required and requested for time to consult with his client after which he went and recorded a statement; that thereafter he made two other statements and even disclosed the names of the persons he acted for; that one of the investigating officers contacted one of the persons he had acted for through the telephone and that the said lawyer subsequently went to the Commission’s offices with his lawyer. He contended that he did not know what transpired between his client and the Commission but he himself was charged in a criminal case which is still ongoing. He wondered why his client and six other Advocates involved in the matter were never charged.
18.He contended that his duty to his client was privileged; that he merely acted as an Advocate; that he even had to seek the consent of the client to disclose his identity and that these proceedings are malicious.
19.During cross examination the Defendant revealed that before receiving the sum of Kshs.10 milion from the firm of Osiemo Odero & Company Advocates his account had a sum of Kshs.137,385/75. He stated that upon receipt of the Kshs.10 million he withdrew Kshs. 1 million and thereafter continued to withdraw other sums until the account was depleted. He disputed that he received the Kshs.10 million on account of one Geoffrey Majiwa and stated that it was not the norm for his clients to sign for monies received. It was also his evidence that he did not know whether the said Geoffrey Majiwa was involved in the land saga. He emphasized that it was not his responsibility to establish a nexus between his clients and the City Council of Nairobi but contended that his privilege as an Advocate does not extend to instances where an offence has been committed. Asked how the Kshs.10 Million was to be distributed he stated that Matuku was to receive Kshs.7,036,000/=, Nick Oyugi Ochoko Kshs.1,500,000 and himself Kshs.464,000/= as legal fees. He was then to hold onto Kshs. 1 million just in case there arose a disagreement concerning the joint venture.
20.Learned Counsel for the Advocates summed up their cases through written submissions.
21.There are no issues separate or agreed on the record. However, in their submissions, Learned Counsel for the parties listed the following as the issues for determination: -Plaintiff’s issues: -i.Whether the tender process that led to the payment of Kshs.283,000,000/- by the Council was irregular, fraudulent and illegal.ii.Whether the Defendant received and dealt with public property and has been unjustly enriched to the tune of Kshs. 10,000,000/- at the expense of the Council.iii.Whether the Defendant is liable to restitute the 10,000,000/- he received from the fraudulent transaction together with interest.iv.Which party should bear the costs and interest of the suit.Defendant’s issuesa.Whether the Defendant wrongfully or fraudulently received any monies amounting to Kshs.10,000,000.00.b.Whether the Plaintiff has sufficiently proven that the Defendant is indeed liable to account for alleged secret payments it claims the Defendant received from the alleged fraudulent transaction as proceeds of corruption.c.Whether the Plaintiff has shown that it is entitled to interest at court rates on the said Kshs.10,000,000.00.d.The issue of privity to a contract; whether the Plaintiff has sufficiently proven that the Defendant was indeed privy to the conspiracy to defraud, the fraudulent tendering and Sale Agreement as alleged by it.e.Whether the Defendant intended to defraud the City council and deal with suspect property as alleged by the Plaintiff.f.Whether the Plaintiff violated the provisions of the Advocate-client privilege in this suit.g.Whether the Defendant attempted to or concealed the identities of his clients.”
22.Noting that there is no dispute that the Defendant received the sum of Kshs 10 million from the firm of Osiemo Odero & Company Advocates who in turn had received the money from the City Council of Nairobi pursuant to a contract for purchase of cemetery land awarded to Naen Rech for purchase of land the above issues for determination can be reduced to the following:-i.Whether the sum of Kshs.10 million paid to the Defendant was part of monies paid pursuant to the procurement for land for graves by City Council of Nairobi; whether the procurement and subsequent award of tender was fraudulent and unlawful.ii.Whether the Defendant was privy to that flawed procurement process and whether he intended to defraud the City Council as alleged.iii.Whether the Defendant is liable to restitute the amount paid or whether the Advocate/Client privilege applies to his case.
Issue (i) - Whether the sum of Kshs.10 million paid to the Defendant was part of monies paid pursuant to the procurement for land for graves by the City Council of Nairobi; whether the procurement and subsequent award of tender was fraudulent and unlawful.
23.On this issue it is my finding that the Plaintiff adduced evidence which proves on a balancing of probabilities that the sum of Kshs.10 million paid into the Defendant’s account by the firm of Osiemo Odero and Company Advocates was part of the proceeds of the tender for purchase of land by the City Council of Nairobi. This fact was neither controverted nor rebutted.
24.It is also my finding that the procurement culminating in the award and the subsequent contract/agreement for sale of the land was not only irregular but also unlawful and illegal. This is given that the procurement process was flawed right from the tendering to the evaluation and award. There is evidence which proves on a balance of probabilities firstly that Naen Rech which was awarded the tender was not the owner of the land for which it bid; that the award was not approved by the Tender Committee members appointed in regard to that tender; that the award was also based on a fraudulent/forged valuation; that the consideration was paid to a person who had not even participated in the tender namely Henry Kilonzi and further that the land did not also meet the mandatory requirements in that it was not suitable for the purpose and hence the tender was therefore none responsive.
25.This Tender/Award has been the subject of many cases and it has always been held that the transaction was fraudulent. In the case of Ethics and Anti-Corruption Commission v Stephen Kamau Githinji (HCACEC Suit No. 20 of 2016) [unreported] Mumbi J, as she then was, held as follows in regard to that Award:-
26.Similarly, in the case of John Gakuo & 3 Others v Republic [2020] eKLR the court stated: -
27.This was also the conclusion of the court in the case of EACC v Herman Stevens Chavera and Boniface Okerosi Hcacec Suit 21 of 2016 [Unreported] in that case the court ruled that: -Similarly, in the case of Kenya Anti-Corruption Commission v Paul Chapia Onduso (HCACEC Suit No. 12 of 2018) [unreported] the court held: -
28.Arising from the above decisions which I fully agree with and my own judgment in the case of EACC v Naen Rech and Maina Chege HCACEC Suit No. 3 of 2019 (unreported) my finding is that the payment of the sum of Kshs.10 million arose from a fraudulent transaction.
Issue (ii) - Whether the Defendant was privy to that flawed procurement process and whether he intended to defraud the City Council as alleged.
29.From the evidence adduced by both sides it is apparent that the Defendant was not a party to the fraudulent procurement. He did not act for any of the parties involved in the illegal procurement, and indeed there is no evidence to prove that he was privy to the transaction. There is therefore no evidence to connect him to the scheme to defraud the City Council of Nairobi as alleged by learned Counsel for the Plaintiff.
30.Be that as it may he concedes that the money was sent to his account by the firm of Osiemo Odero & Company Advocates. One would expect that there would have been a communication from that firm notifying him that the money was coming into his account and the reason for the payment. His allegation that his client Joseph Odiwour Matuku had notified him of the impeding payment raises more questions than answers. One would wonder why then the funds were not sent to the said Joseph Odiwour Matuku directly. It was him who after all purportedly had a “contract” with the City Council of Nairobi for provision of security services. One would also wonder which security this was that was being paid for up front. Clearly the Defendant had all the reasons to suspect foul play and it is my finding that he had reason to believe that his firm was being used as a conduit for proceeds of crime and to conceal the real source of the money. He would otherwise have questioned the motive for not paying his so called clients directly. The purported agreement which he produced was but a means by public officers to launder proceeds of crime (money stolen from public cauffers).
31.It is instructive that the Defendant did not in the first place prove, as he was wont to do under Section 112 of the Evidence Act, that there was a contract between his “clients” and the City Council of Nairobi. Secondly, there was no evidence that he indeed paid out the sum of Kshs.10 million to the clients as set out in the agreement which he purported he was instructed to prepare. Further save for the alleged joint venture agreement there is no evidence at all that he acted on behalf of the so called clients. If he did, then nothing prevented him to call them as witnesses or at best joined them to this case as 3rd parties. The fact that he did not do so only goes to confirm that the money may not have been for the benefit of these two persons. Stating that the client was interrogated by the Ethics and Anti-Corruption Commission is not enough to rebut the plaintiff’s case. It is my finding therefore that whereas he was not privy to the fraudulent scheme and he merely acted within the parameters of his profession as an Advocate he was used to conceal the real source of the money and hence launder the tainted money. This then leads me to the next issue.
Issue (iii) Whether the Defendant is liable to restitute the amount paid or whether he is covered by the Advocate/Client privilege.
32.I have already found that payment of the Kshs.10 million to whoever the actual payee was through the Defendant’s client account was a means to disguise its real source and to launder it both of which are offences under the law (see Section 3 of the POCAMLA and the definition of economic crime in Section 2 of the Anti-Corruption and Economic Crimes Act). The funds were public funds unlawfully acquired from the City Council of Nairobi and this court would fail in its duty if it allowed the Defendant who was unjustly paid the funds to be enriched by retaining it. My finding is fortified by the decision of the court in the case of Chase International Investment corporation and another v Laxman Keshra and others, [1978] KLR 143, where at page 154 the court stated: -
33.I am not persuaded that the plaintiff violated the Advocate/Client privilege. At the hearing the Defendant admitted that at the time of recording his statement he was notified that a crime had been committed. His case therefore falls within the proviso (a) of Section 134 of the Evidence Act as communication between him and his so called clients was clearly made in furtherance of an illegal purpose. In the case of Director of Public Prosecutions v Tom Ojienda t/a Prof Tom Ojienda & Associates Advocates & 3 others [2019] eKLR held as follows:-
34.I find therefore that the Defendant is personally liable to restitute the sum of Kshs.10 million to the Plaintiff on behalf of the public. The said sum shall then be paid to the Consolidated Fund as provided in Section 56C of the Anti-corruption and Economic Crimes Act. I am not persuaded that the Defendant acted in any manner other than to conceal the source of funds as would entitle him to retain any part of the funds as his instruction fees. That would be to unjustly benefit him.
Costs
35.Costs follow the event and no special circumstances commend themselves to me to rule otherwise. Accordingly, the Defendant shall also bear the costs of this case and shall also pay interest at the rate of 12% p.a. from the date the sums were paid to him until payment in full as provided in Regulation 3(1) of the Anti-Corruption and Economic Crimes Regulation, 2003.
Final disposition
36.The Plaintiff has proved its cases against the Defendant on a balance of probabilities and accordingly judgment is entered for the Plaintiff against the Defendant as follows; -a.The sum of Kshs. 10 million.b.Interest calculated at 12% p.a. from the dates of payment of the sums in his account until payment in full.c.Costs of the suit.It is so ordered.
SIGNED, DATED AND DELIVERED VIRTUALLY THIS 16TH DAY OF NOVEMBER 2023E N MAINAJUDGE