Attorney General v Daria Shannie Philoe and Ors (CS 04/2022) [2023] SCSC 818 (6 November 2023)

R. GOVINDEN CJ

INTRODUCTION

1. This Application is regarding the contravention of section 3 (1) of the Immovable Property (Transfer Restriction) Act (the IPTR Act) in respect of property purchased by the 2^nd, 3^rd, 4^th and 5^th Defendants who are non-Seychellois.
2. The Plaintiff has applied to the court for forfeiture of the Immovable Property purchased by a non-Seychellois without the necessary sanction, to be forfeited to the Republic in terms of section 5 of the IPTR Act.
3. The 1^st Defendant has conceded to the plaint of the Plaintiff.
4. The 2^nd, 3^rd, 4^th and 5^th Defendant aver that the application for forfeiture amounts to an abuse of right by the Plaintiff.

FACTS OF THE APPLICATION

5. The property in question, referred to as J482, was transferred and registered respectively 11 March 2020 and 2 April 2020 to the 1st Defendant. The property was sold to the value of Seychelles Rupees Nine Million Two Hundred and Fifty Thousand (SCR 9,250,000).
6. The 1st Defendant is the registered proprietor of land parcel J482 and is employed as an Administration officer for the 2nd Defendant. The 2nd Defendant is a company registered under the Companies Act and is deemed a non-Seychellois under the IPTR Act. The shareholders and members of the 2nd Defendant are non-Seychellois and the directors of the 2nd Defendant are non-Seychellois.
7. The 3rd, 4th and 5th Defendants are Chinese national’s resident in Seychelles under a gainful occupation permit issued by the Immigration Division of Seychelles and are non-Seychellois under the Act and are shareholders and directors of the 2nd Defendant. 
8. The Plaintiff avers that the monies for the purchase price of the property was transferred from the SCR bank account of the 2nd Defendant with ABSA Bank (Seychelles) to the account of Ms. Manuella Parmantier, an Attorney. The funds that the 2nd Defendant transferred to the account of Ms. Manuella Parmantier and which was used to effect the purchase of J482 originated from a USD bank account of the 2nd Defendant at ABSA Bank (Seychelles) Limited.
9. The Plaintiff further avers that on the application made by the 1st Defendant to develop J 482 to construct apartments, a boundary walls, security booth, electrical substation, bin site, swimming pool and retaining wall thereon, which was granted by the Town Country Planning Authority.
10. The Plaintiff avers that the 1st Defendant is not the ultimate beneficial owner of J 482 and that the 1st Defendant only facilitated the transaction for the purchase of the above-mentioned property, in her capacity as a citizen of Seychelles. This was done to absolve the 2nd, 3rd, 4th and 5th Defendant from applying for sanction in respect of section 3 of the Act and to circumvent the application for the purchase of Immovable Property by a non-Seychellois.
11. On the 7th June 2022, the 3rd Defendant filed an application for stay of proceedings on the basis that he had applied for retrospective sanction to purchase parcel J 482 and was waiting for a response from the Minister. The application was subsequently withdrawn due to the fact that the Minister rejected the application for retrospective sanction.
12. The 1st Defendant has conceded to the entirety of the Plaint. The 2nd, 3rd and 4th Defendant maintain that the transfer did not contravene the Act, and if it is proven that the said parcel was purchased in contravention of the said Act, the forfeiture of J 482 by the Plaintiff would be an abuse of right.
13. The 3^rd Defendant applied for retrospective sanction to the Minister responsible for Lands and Housing and submitted that he is the ultimate beneficial owner of parcel J 482 and he wanted to complete the sale of the parcel urgently. Due to travel restrictions he could not travel from China to Seychelles and he only came back to Seychelles in July 2021.
14. Despite the claims that the 3rd Defendant had returned to Seychelles in July 2021, application for sanction to the Ministry was only made after a notice for an application for Forfeiture of J 482 was filed by the Republic. The Minister rejected the application by the 3rd Defendant for retrospective sanction due to the absence of good grounds and that the Plaint by the Plaintiff is not abuse of power.
15. The Plaintiff submits that the transfer constitutes a contravention or breach of section 3 (1) of the IPTR Act and renders J 482 to be forfeited to the Republic of Seychelles. The Plaintiff prays the court as follows:

1. Declares that the 1^st Defendant is not the ultimate beneficial owner of J 482
2. Declare that the 2^nd Defendant and/or the 3^rd Defendant and/or the 4^th Defendant and/or the 5^th Defendant are the ultimate beneficial owner of J 482.
3. Declare the purchase of the J 482 is in contravention of section 3(1) of the IPTR Act.
4. In accordance with section 5 of the IPTR Act, order the transfer of J 482 to the Republic
5. Order the Land Registrar to rectify the land register of J 482 by registering it on the Republic.

16. The 1^st Defendant has confirmed the Petition by the Plaintiff and does not contest the content thereof.
17. The 2^nd, 3^rd, 4^th and 5^th Defendant concedes that the 1^st Defendant is not the beneficial owner of J 482 and that the 3^rd Defendant had purchased the property in the 1^st Defendants name to facilitate the sale while he was not able to travel from China to Seychelles during the Covid-19 pandemic. The 3^rd Defendant indicated that he would apply for the retrospective sanction as soon as he arrived in Seychelles. The 3rd Defendant submits that he did not contravene section 3 (1) of the IPTR Act and that the forfeiture of the property would amount to the abuse of the right by the Plaintiff

LAW AND ANALYSIS

18. Section 3 (1) of the Immovable Property (Transfer Restriction) Act provides that:

“A non-Seychellois may not—

(a) purchase or acquire by any means whatsoever and whether for valuable consideration or not, except by way of succession or under an order of the court in connection with the settlement of matrimonial property in relation to a divorce proceeding any immovable property situated in Seychelles or any right therein; or

(b) lease any such property or rights for any period; or

(c) enter into any agreement which includes an option to purchase or lease any such property or rights, without having first obtained the sanction of the Minister.”

19. The above section is clear that a non-Seychellois may not purchase or acquire immovable property without first obtaining the sanction of the Minister. In this case, the 3rd Defendant purchased J 482 by using a Seychellois citizen who is employed by the 2nd Defendant to circumvent the requirement of Section 3(1) of the IPTR Act, that the Minister must first give sanction for a non-Seychellois to purchase immovable property in Seychelles.
20. Further, section 8(1) of the IPTR Act provides the following

“The Minister may, in his entire discretion and subject to any conditions which it may deem fit to impose, on good grounds shown, give retrospective validity to a transaction which would otherwise be unlawful and void in accordance with the provisions of section 4. Such transaction shall then have full force and effect and shall be deemed to have been valid ab initio.”

21. The IPTR Act gives the Minister the discretion to grant retrospective sanction, on good grounds shown for otherwise unlawful and void transactions. This administrative decision is solely within the discretion of the Minister, provided that such decision is reasonable and does not amount to an abusive administrative decision.
22. The Court in Servina v Seychelles International Business Authority (487) [2016] SCSC 487) stated that in determining rationality or reasonableness one should examine whether the decision-maker took into account ‘factors that ought to be taken into account’ and did not take into account ‘factors that ought not to be taken into account’ and, furthermore, that the decision must not be so unreasonable ‘that no reasonable authority would ever consider imposing it (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223)’. 
23. In the present case, the Minister indicated that the 3rd Defendant did not show good grounds on which the retrospective sanction should be granted. The Minister took into consideration that the 3rd Defendant only applied for retrospective sanction after the application was made for forfeiture by the Republic and that he used a Seychellois citizen to purchase the Immovable property, which would render the purchase of the property unlawful.
24. When determining whether an administrative decision is unreasonable, it is important to look at the reason and rationality for the decision that was made. The standard of a reasonable administrative decision therefore refers to a midpoint between obviously variable decision-making and what would be perceived as perfect decision-making.  What is reasonable in a particular case will then depend on the circumstances which may be defined by factors such as the nature of the decision, the identity and expertise of the decision-maker, the issues relevant to the decision, and the reasons given for the decision.
25. Rationality is regarded as a minimum threshold requirement for the exercise of public authority (Pharmaceutical Manufacturers Association of SA in Re: Ex Parte Application of President of the RSA 2000 (3) BCLR 241 (CC), 2000 (2) SA 674 (CC): para 90). The rationality standard of reasonableness requires that the administrative action or decision have a sound and rational basis, i.e. be based on reason. Every administrative decision has an element of subjectivity in the sense that a decision is based upon a particular public official’s special expertise.
26. Lord Diplock explained irrationality in Council of Civil Service Unions and others v Minister for the Civil Service [1984] 3 All ER 935 as follows:

“By 'irrationality' I mean what can now be succinctly referred to as 'Wednesbury unreasonableness'… It applies to a decision which is outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.”

27. When looking at the reasons for the decision of the Minister and the threshold for whether an administrative decision is unreasonable, it is clear that the decision by the Minister is sound, rational and reasonable. Rationality refers to the structure rather than the effects of an administrative decision. The structure refers to the manner in which the action is taken or in which the public official reaches his decision.
28. In respect of abuse of power, the power of discretion given to administrative decision makers ensures that they have adequate independence and liberty in carrying out their activities. The abuse of power occurs when the administrative authority may not duly exercise the power and authority entrusted to it or they may exercise the power and authority under the coercion of another body, which may have improper motives (like mala fides, improper purpose, irrelevant considerations, leaving out relevant consideration, colourable exercise of power, judicial discretion, unreasonableness). This leads to biases and incorrect usage of power delegated to such administrative authority.
29. In the present case, section 8 (1) of the IPTR Act provides that it is within the discretion of the Minister, whether retrospective sanction can be granted. This discretion is dependent on whether the applicant for retrospective sanction is based on good grounds. The Minister would also have the discretion to decide on what constitutes ‘good grounds.’ The Minister argued that purchasing the above-mentioned property in the name of the 1st Defendant and the argument that the 3rd Defendant could not travel during lockdown, does not constitute ‘good grounds’ on which to base the application for retrospective sanction.
30. With respect to the alleged absence of the 3^rd Defendant from Seychelles on the ground of force majeure , I find that this fact has not been sufficiently supported by evidence and is therefore unproven . At any rate I am of the view that even if he was so absent there were myriads of ways in which he could have made the application for sanction from abroad and that he has failed or has been unwilling to do so.
31. Taking into consideration the facts of the case, there is no evidence that the Minister acted in bad faith when refusing the application and that he provided rational and sound reasons for his decision that is governed by section 8(1) of the IPTR Act that grants the Minister the power to make such a decision.
32. In respect of the claim made by the 3rd Defendant that the forfeiture of the property would amount to the abuse of the right by the Plaintiff, section 5 of the IPTR makes provision that any transaction made in violation of section 3 of the IPTR Act would be unlawful and void and as a result “any immovable property or rights therein purporting to have been transferred under such sale shall be forfeited to the Republic.” Therefore, the IPTR Act makes provision for the property to be forfeited and therefore this is not an abuse of right by the Plaintiff. It is clearly the duty of the Minister not to condone illegal acts whether especially retrospectively. A right as provided for in the Constitution of Seychelles can be limited, when the limitation of a right is reasonable and justifiable and it is further so limited when it comes to selling of properties to non- Seychellois nationals under its Article 26 (2).
33. DETERMINATION
34. After careful consideration of the application before this court and the applicable legal principles in this case, I have come to the determination that the 1^st Defendant is not the beneficial owner of parcel J482 and that she is a mere nominee used by the 2^nd to 5^th Defendants to acquire the ownership of this parcel. The 2^nd to 5^th Defendants being the beneficial owners violated section 3 (1) of the IPTR Act when purchasing J482, without obtaining sanction of the Minister prior to the purchase. The transfer of J482 to the 1^st Defendant is therefore unlawful and void for lack of sanction under section 5 of the IPTR Act . The Minister’s refusal not to grant retrospective sanction was neither unreasonable nor abusive given the underlying unlawfulness in the actions of the Defendants.

ORDER

35. Accordingly, this court makes the following orders;

1. The property J842 is forfeited to the Republic of Seychelles in terms of Section 5 of the IPTR Act.
2. The Land Registrar is ordered to rectify the Land Register of J 482 by registering it on the Republic of Seychelles.

Signed, dated and delivered at Ile du Port on 06 November 2023.

A copy of this decision shall be served upon the Land Registrar of Independence House, Victoria, Mahe.

_________­_____________

R. Govinden

Chief Justice