Law on forfeiture of bonded property on Mphwiyo house was diligently followed

* As Mphwiyo’s wife is denied of her intervention for State not to forfeit matrimonial home used as bond for husband’s bail

* The suspect of offenses of theft by public servant, money laundering and conspiracy to fraud is still at large

By Duncan Mlanjira

After Paul Mphwiyo jumped bail following his arrest on offenses of theft by public servant, money laundering and conspiracy to fraud, the High Court granted the Anti-Corruption Bureau that the house he used as his bail bond be forfeited to the State — but his wife applied, as an intervenor for the order be stayed and set aside.

Following the revocation of Mphwiyo’s bail due to absconding of the charges of theft by public servant contrary to Section 278 as read with Section 286(1) of the Penal Code; money laundering contrary to section 35(1)(c) of the Money Laundering; proceeds to Serious Crime and Terrorist Financing Act and conspiracy to defraud contrary to section 323 of the Penal Code — the court forfeited amongst other bonded properties the residential house in Area 43.

The wife argued in court that the house (Alimaunde 43/2/877) is a matrimonial property saying that “the general principle when dealing with stay is that the court does not make a practice of denying a successful litigant the fruits of his litigation”. 

It was argued that from the March 28 ruling, the Court “was alive to the devastating impact of a forfeiture order on third parties” and that in particular, “the Court wanted to know if the home was a matrimonial one”. 

But, Justice Ruth Chinangwa said it appears that instead of inviting the wife to make representations, the State was content to simply make submissions highlighting that it was only Mphwiyo’s name that appears on the property register. 

“The fact that it’s only a single spouse’s name appearing on a property register is not conclusive evidence that the said property is not matrimonial.

“The Court should have looked at all of the facts including the facts of intention of the parties as well as their contributions. The Court should have taken judicial notice of the fact that it is common practice for married couples in Malawi to have family assets in the name of one spouse.”

The Court further observed that the wife, as an Intervenor “deponed that despite her name not appearing as joint proprietor of the property in question, she did substantially contribute financially and in kind on the acquisition and development of the property in question”. 

Thus, the house in Area 43 cannot be forfeited against this interest in the property and it was further argued under section 66 of the Financial Crimes Act that before forfeiture orders are made, care is taken to notify all persons who may have an interest in the property to come forward and make representations. 

Section 66 reads as follows:  

1. If a court makes a preservation order, the authority shall, within twenty-one days after the making of the order, give notice of the order to all persons known to the authority to have an interest in property which is subject to the order; and publish a notice of the order in the Gazette or two newspapers of widest circulation in Malawi.

2.  a notice under subsection (1) shall be served in the same way as any other civil court process. 

3. a person who has an interest in the property which is subject to a preservation order may give notice to his intention to oppose the making of a forfeiture order, or to apply for an order excluding his interest in the property concerned from the operation thereof.

“Thus, before the forfeiture order was made this court was supposed to invite the intervenor being an affected party in the forfeiture of the property in question.

“Regarding the setting aside of the order of forfeiture, the intervenor argued that both application for stay and setting aside of the execution order had to be made at the same time considering that they had been served with a notice to vacate the property in question by end April 2024. Time is of the essence to avoid the Intervenor being rendered homeless.”

In addition, it was contended in Court that “where an order affects a party which ought to be heard but was not heard, the party need not appeal but pray to have the order set aside under the inherent jurisdiction of the court”.

In response, the State quoted precedent rulings from the Supreme Court of Appeal (Mulli Brothers Ltd v. Malawi Savings Bank Limited, MSCA Civil Appeal No. 48 of 2014 and Mike Appel and Gatto v. Saulos Chilima, MSCA Civil Appeal No. 20 of 2013) that laid down key principles to guide the Court when considering an application for stay of execution. 

“Firstly, the Courts will grant a stay in a case when it is necessary to secure the rights of a party. The primary consideration in the court’s determination will be whether the applicant for the stay has discharged the onus of demonstrating that there is a proper basis for the stay.

“Secondly, when courts are exercising their discretion in applications of stay of execution of judgment, they should try to strike a balance between two considerations. 

“First, the consideration that the court does not make a practice of depriving a successful litigant the fruits of his litigation; and second, the consideration that when a party has appealed, which is a right, the court should see to it that the appeal, if successful, is not rendered nugatory.

“It was further argued that the intervenor must demonstrate that justice favours the granting of a stay [and] it was further argued that the intervenor has not submitted documents attesting to her rights or contributions as she claims. 

“The narrative of making contributions and applying in the name of the accused person in order to secure an offer of land does not have the legal or policy backing and therefore wanting.

“Furthermore, it is stated that even assuming there was a triable issue the intervenor has not demonstrated what she would like to do after the stay. It is a stay pending nothing with no appeal.”

Thus Justice Chinangwa maintained that if for arguments’ sake, her court would entertain the stay, it is her view that it would be dismissed for several reasons that include “the law on forfeiture of bonded provided as provided in section 121 of the Criminal was diligently followed”.

She maintained that what the Court required to do was to invite Mphwiyo that he show cause why the property should not be forfeited and that “there is no further requirement that other persons be invited to show cause why. This would simply be for the reason that the property in question was voluntarily surrendered as the respondents property.”

Secondly, she asserted that there is no necessity to protect any rights Mphwiyo’s wife claims to have in the forfeited property through an order of stay — “any such right can be enforced against the respondent through appropriate court processes and if substantiated appropriate reliefs including damages can be awarded against the respondent”.

Thirdly, the judge said, Mphwiyo’s release from custody was secured on the property in question amongst others to ensure his availability for trial — “now if at the time of enforcement, properties are withdrawn, it surely is a mockery to justice”.

“It is quite interesting to note that the intervenor is picking and choosing which of the bonded property is matrimonial for which her rights are to be enforced. If this argument was to be stretched further, it would be that the respondent’s share would still have to be forfeited.

“As stated in this court’s ruling on March 28, it is this court’s belief that the respondent, having been legally represented at the time of his bail application in 2014, should have been informed by counsel on the need to surrender properties that are free of encumbrances; the consequences of absconding bail on the bonded properties.

“Fourthly, the forfeiture order being a final judgement, this court becomes functus officio — the application for stay thus lacks merit and is dismissed.”