N1230

PAPUA NEW GUINEA
[In the National Court of Justice]

CR NO. /94

THE STATE

V

FRANCIS NATUWOHALA LAUMADAVA

ALOTAU: INJIA, AJ.
1994: MAY

JUDGMENT

Criminal Law - particular offence - misappropriation of government funds obtained from Village Improvement Funds set up by Provincial Government - accused a Minister in the Provincial Cabinet which set up the Village Improvement Fund - money applied for, obtained and used to pay off accused's personal debt on behalf of the accused by Provincial Staff member as instructed by accused, in breach of Village Improvement Guidelines - whether accused applied money to his own use and whether accused acted dishonestly - found guilty and convicted - Criminal Code Chapter No. 262, S. 383(A)(1)(a).

Cases Cited:
State v. Teitern Finako [1978] PNGLR 262
State v. Amoko Amoko [1981] PNGLR 373
Brian Kindi Lawi v. The State [1987] PNGLR 183

Sir Kina Bona, for the State
M. Cholai, for the Accused

23 May 1994

INJIA, AJ: The accused pleaded not guilty to a charge pursuant to Section 383A(1)(d) of the Criminal Code Ch. 262 ("the Code") that he "between the 1st day of April 1992 and the 31st day of May 1992 at Alotau in Papua New Guinea dishonestly applied to his own use the sum of Two Thousand Four Hundred and Seventy Kina and seventy-two toea (K2,470.72), the property of the State."

The State alleged that in the period as mentioned in the indictment, the accused applied for K2,976.00 from the Village Improvement Fund ("VIF") which was set up by the Milne Bay Provincial Government ("MBPG") to assist the village people in the various Constituencies in the province. He applied for the money to be used for meeting administration costs of the VIF Committee in his North Goodenough Constituency ("NGC"). When the application was approved and a cheque for K2,976.00 was released, instead of applying the money to meet administrative costs, he used part of the money, the sum of K2,470.72, to repay a personal loan or debt which he had with Milne Bay Properties Pty Ltd ("MBPP/L'). He obtained this loan to buy a piece of land at Sandersons Bay in Alotau which was allocated to him by the National Housing Corporation ("NHC") under its Home Ownership Scheme. In doing so, it is alleged, the accused dishonestly applied to his own use the sum of K2,470.00, the property of the State.

It is not disputed that the money belongs to the State. It is also not disputed that the accused applied for the K2,470.72 from the VIF, that the application was approved and a cheque for the sum of K2,976.00 which included K2,470.72 was released and the money was paid to MBPP/L to pay off the accused's said debt. What the accused contends is that:-

(1) 	He did not apply the money to his own use because he never personally paid the money to MBPP/L or authorized or instructed any person to cash the cheque and pay the money to MBPP/L. He says that even when the money was paid to MBPP/L by the Co-ordinator of VIF Mr James Kilileu, without his instructions or authorization, he did not benefit from the payment because he never received any title to the land from NHC.

(2) 	In the above circumstances, the accused did not apply the money dishonestly.

The first issue is an issue which can be decided on my findings of fact on the evidence. The second issue, which is the main issue, is not only factual, which depends on my findings of fact, but also a question of law. And so it is convenient for me to first set out what the law is regarding dishonest application of money. The crucial issue here is the meaning of the word "dishonestly" in the context of S.383(A)(1)(a). This issue was decided by the Supreme Court in the case of Brian Kindi Lawi v. The State [1987] PNGLR 183. In brief, it was decided that "dishonestly" relates to the state of mind of the accused. It is a question of fact which the Court has to decide. The court has to decide whether according to the ordinary standards of decent, reasonable and honest people, what the accused did was dishonest. The test here is an objective one. At the same time, it's also a subjective one. The Court must look into the mind of the accused and determine whether given his intelligence and experience, he would have appreciated, as right-minded people would have done, that what he was doing was dishonest.

The State called 4 witnesses who gave oral evidence. In addition, the State tendered, by consent, certified statements of 10 witnesses plus a total of 15 other documents which includes the Record of Interview (ROI) conducted by the police arresting officer. The accused gave sworn evidence and called one James Ambrose to support his case. James Ambrose's statement was also tendered by the State as part of its case.

Undisputed Facts

The undisputed facts which I find on the evidence are as follows. In 1982 the accused was elected as a member for the NGC in the Milne Bay Provincial Assembly ("MBPA"). He is still the member having been elected to a total of three consecutive terms of four (4) years each. In this period, he held various executive positions in the MBPG. In his first term (1982-1986), he held the portfolios of Minister for Finance, Minister for Works and Minister for Primary Industry. In his second term (1987-1990) he was elected speaker. In his third term, (1991-1992) he was Minister for District Services, a position he held up to the time of suspension of the MBPG on 16.10.92. On 13.11.93 the suspension was lifted pursuant to an order of the National Court and the MBPG re-instated. He is now the Minister for Mines and Lands.

In 1991/92, the MBPG established the VIF. The accused was aware of the establishment of the VIF as he was a member of the MBPA and the PEC. The MBPG also formulated guidelines which prescribed the purpose of the VIF; the procedure for applying for the VIF, approval of applications, manner and method of payment of approved funds, expenditure of funds for designated funds, on-site inspection of completed projects and accounting for or acquittal of funds spent. Prescribed forms were instituted for some of the critical phases. The purpose of the VIF was to provide financial assistance to people in the village in the various Constituencies in social and economic projects of benefit to the community. Two copies of the same guidelines, although numbered differently, are in evidence (Exhibit "O" and "Y"). I do not intend to repeat those guidelines here. I will mention the relevant ones in my judgment as I go along.

Under the guidelines the projects must be situated in the particular constituency of the member concerned. A committee comprising of members from that particular constituency, appointed by the member for that constituency and headed by him as Chairman, was established to screen all applications coming from community groups in the constituency and to make recommendations to the Chairman of the PEC who was the Premier of the Province. The committee's administrative expenses such as sitting allowances and stationery were met by a separate allocation of K5,000.00/annum per constituency made under the VIF. Funds for administrative expenses of the VIF committee were applied for and once approved, dispatched to the committee members using the same procedures as the normal project applications.

In early 1989, the accused went to NHC Alotau and discussed with the Sales Officer, Mr Jack Nunisa, about the accused's desire to apply for a piece of land at Alotau under the NHC Home Ownership Scheme. He told Mr Nunisa that he wanted the land for his people of the NGC to build a transit house for them. Mr Nunisa advised him that it was not possible for groups or corporate entities to apply for land under the scheme whereas only individuals were allowed to participate. And so the prisoner applied for a piece of land under his own name. He submitted an application form, a copy of which is in evidence (Exhibit "T"). This application makes no mention of his people of the NGC. By letter dated 10.9.90, the NHC advised the accused that his application had been approved and that he should pay K2,100.00 being for the purchase price for the land plus K106.00 being for the legal fees, within three (3) months. This letter is in evidence (Exhibit "S"). This letter was received by the accused on 11.9.90 (see endorsement on Exhibit "S"). Upon receiving this notification, as the accused had no money then, he went to see his bank, Westpac Bank, Alotau, but his bank refused to help him presumably because he already had an outstanding loan with them of K4,000.00. (see item No. 32 of NHC Application Form, Exhibit "T"). And so he went to see another source for help - MBPP/L which was the business arm of MBPG. Mr Michael Butterfield, who was then the Manager of MBPP/L, agreed to help him and a loan agreement was drawn up and signed by accused and the company under seal on 31.10.90. It was lodged at the Stamp Duties Office and approved on 20.11.90. A stamp duty fee of K44.12 was charged and paid presumably by MBPP/L. Under the agreement, in consideration of MBPP/L agreeing to pay K2,706.00 to NHC for the land, the accused was to repay the principle loan plus interest at 10% of K220.60 by 1.06.91. A copy of this agreement is in evidence (Exhibit "V"). On 11.12.90, MBPP/L paid the sum of K2,206.00 to NHC and a receipt for the payment was issued to MBPP/L. The receipt is in evidence (see Exhibit "U"). The total liability of the accused to MBPP/L under the agreement was K2,470.72 which includes stamp duty fee of K44.12.

On or about 12.11.91 the accused approached the VIF Co-ordinator Mr James Kilileu, to assist him to apply for VIF funding to pay his loan debt to MBPP/L which by the time was more than five (5) months overdue. Mr Kilileu completed a VIF application form, Form No. 1, in the name of MBPP/L for K2,470.72, in the presence of the accused and the accused signed the form. A copy of this application is in evidence (Exhibit "X"). This application was approved by the Premier sometimes in November 1991. However, when the approved application was submitted with a completed payment requisition form to the Acting Deputy Secretary Mr Gedai Gabina, for payment, he rejected the request because the project for which the money was sought was not situated in the accused's constituency as required by VIF Guideline No. 4. Mr Gabina told Mr Kilileu of his reasons for the refusal. As to what happened hereafter between the accused and Mr Kilileu differs. Hence I now come to the disputed facts.

Disputed Facts

The State case is that Mr Kilileu advised the accused of the reasons for rejection of the accused's first application as stated to him by Mr Gabina. However, the accused insisted that Mr Kilileu assist him to submit another application under "administrative costs" because he was under pressure from MBPP/L which wanted to get its money back. The accused also instructed Mr Kilileu to also apply for an additional K500.00 to pay for the registration of the NGC truck operating in Alotau, to reimburse some money to one James Ambrose for cost of repair to the truck and pay labourers who cut the grass on the piece of land allocated to the accused. The pressure was so immense that he as a simple staff of the MBPG had to comply with the accused's instructions. And so upon instructions, Mr Kilileu completed only one blank form which was signed by the accused and left with him. After completing it he showed it to the accused before submitting it for approval. When the application was approved and a cheque for K2,976.00 released, he arranged with James Ambrose for the cheque to be cashed at Westpac Bank, Alotau and the cash paid out to the various people as directed by the accused. The State says that these payments were made by Mr Kilileu in accordance with the accused's instructions whilst the accused was out of Alotau and that Mr Kilileu did not benefit from the exercise. The State's main witness Mr Kilileu has given evidence in support of the State case.

The accused on the other hand, to some extent supported by Mr Ambrose, on the other hand has given a different account as to what transpired between him and Mr Kilileu. At the outset, he does not deny that he approached Mr Kilileu to submit a further application for funding of the repayment of his loan debt to MBPP/L. He does not deny that he asked Mr Kilileu to submit a further application for K500.00 for "administration costs". He does not deny that when the application was approved and a single cheque for K2,976.00 was released to Mr Kilileu, he cashed the cheque with the help of James Ambrose and paid out the cash as follows:

(a) 	K2,470.72
	Paid to MBPP/L on 8.05.92 MBPP/L issued receipt No. 179329 dated 8.5.92 in the name of the Chairman, North Goodenough Constituency (Exhibit "W").

(b) 	K88.20
	Paid to James Ambrose of which K60.20 was for reimbursement of personal money spent on NGEC Truck plus an extra K20.00.

(c) 	K300 - K390.00
	Fee for registration of NGC Truck.

(d) 	Unspecified Amount
	To labourers who cut grass on the land allocated to the accused by the NHC.

The accused also does not contend that Mr Kilileu did not personally benefit from this whole exercise.

What the accused says is that he left two blank VIF forms with Mr Kilileu with his signature on both - one for the payment of K2,470.72 to MBPP/L and the other one for K500.00 for "administrative costs". Although he did not put these amounts on both applications, he instructed Mr Kilileu what to do in those two applications. The reason why he still went ahead to instruct Mr Kilileu to submit an application for the payment to MBPP/L was because Mr Kilileu told him the reason why the first application was rejected by Mr Gabina was because he, the accused, did not give enough reasons in his first application. The accused told Mr Kilileu to hold the money for him if the application was approved so that he would sign and collect it upon his return. He hoped that as a matter of normal practice, he expected Mr Kilileu to hold the cheque for him in the office safe for him to sign and take the cheque upon his return. After leaving these two signed forms with Mr Kilileu, he took a Talair flight to his village the same day without sighting the completed applications. Instead Mr Kilileu lumped the two figures into one application in the application for "administrative costs" and submitted it. Mr Kilileu did all those things he said he did on his own without any instructions or authorisation from him. He says all this time, he was out of Alotau for some six (6) weeks and could not have authorised him or James Ambrose to cash the cheque and pay out the money. Mr Ambrose was the caretaker of the accused's vehicle in Alotau. But he (Mr Ambrose) confirms that he was not told by the accused to go and see Mr Kilileu to get the cheque cashed and get his money. Finally, the accused says he never signed any Contract of Sale on the subject land with the NHC, that Mr Nunisa never delivered the Contract of Sale to him and his wife as Mr Nunisa says in his evidence, and that he has never received the title deed from the NHC to this day.

There are several issues of fact to be decided. I will raise those issues in question form and decide them as I go along.

1. Was the first application for K2,470.72 in breach of the VIF Guidelines?
Yes. It clearly breached guideline No. 4 which provided that the proposed project must be situated within the accused's Constituency. It also breached guidelines No. 7, 8, 9 in that the CIF committee in the NGC did not formally recommend the application in Form No. 1 even though they briefly discussed it. The committee did not consider the viability of the project and the financial requirements of the project and that no feasibility report was submitted with the application. The accused submitted the application on his own.

2. Was the accused aware that the first application breached the VIF Guidelines?
Yes. He appears to be an educated, intelligent and experienced man. He spoke good English in Court. His ROI was conducted in English. He also completed the NHC application form in english. The VIF was established and guidelines formulated and in use when he was a member of the PEC. The guidelines are in simple English. He admitted he was aware of the guidelines. He himself benefited from the scheme previously. Therefore, he did not need anyone such as Mr Gabina or Mr Kilileu to explain the guidelines to him.

But he says he previously applied for a truck to be based at Alotau and his application was approved and the truck was purchased and it is still operating to this day at Alotau. Therefore, he thought this application would also go through as a matter of practice.

It is true that this present application was approved by the Chairman of PEC, the Premier, even though it breached the VIF Guidelines. The Premier no doubt approved his previous application for the truck. But the person who mattered most to the accused was the Acting Deputy Secretary. At the time he lodged the present application, Mr Gabina was only acting on this job. There is no evidence as to who the substantial holder of the position was. There is also no evidence from the accused or Mr Gabina as to whether he was the person who approved the finance for the application for the truck.

As for Mr Gabina, he was not cross-examined on this vital piece of evidence. I noted the State's' objection to this evidence from the accused regarding the application for the truck on the basis of the rule in Browne v. Dunne. I agree with the State that I cannot accept this evidence. In any case, as Mr Gabina rejected this present one, he no doubt would have rejected the application for the truck too if it came before him because I consider him to be a conscious administrator. No doubt he was confirmed on his job and now he is the Deputy Secretary. I think that application for the truck was erroneously approved by Mr Gabina's predecessor. I find that the accused knew that the application for the truck was approved and the funds released in breach of the VIF Guidelines. Only this time, he could not succeed because of Mr Gabina.

3. Did Mr Kilileu advise the accused of the true reasons why the accused's first application was rejected as per advice of Mr Gabina?
Yes. I think the accused is concocting this evidence to support his claims against Mr Kilileu. There is no dispute about what Mr Gabina told Mr Kilileu. There is no dispute about the reasons for the rejection being conveyed to the accused by Mr Kilileu. The dispute is over the contents of what Mr Kilileu told the accused as to the reasons. The area of dispute is very narrow or restricted indeed. There is little room to doubt Mr Kilileu telling the accused that because the guidelines do not permit release of funds for projects situated outside his constituency, Mr Gabina refused to approve the requisition for release of the money.

Let's assume for a moment that Mr Kilileu advised the accused that he did not give enough reasons in his application. And because of this, the accused insisted on Mr Kilileu to put full reasons this time. What other full reasons could the accused have given to Mr Kilileu to put in the next application? Feasibility report for the transit house project on the land? No, because he did not have one. Project funding report for the building of the house on the land? No, because he had substantial debt with his only banker, Westpac Bank and he had been forced by his own financial circumstances to obtain a loan from MBPP/L. The types of benefits to his people in the NGC? No, because his people did not apply for one through the VIF Committee and the Committee did not formally submit a VIF application form. The accused had only two things to disclose - his loan agreement with MBPP/L and documents from the NHC. Would he have disclosed them? No, because that was the very reason why the first application was rejected. Those documents would have clearly shown that he was seeking VIF funds to pay off a personal debt with MBPP/L in relation to monies advanced to the NHC by MBPP/L on behalf and for the personal benefit of the accused. Therefore, his second application was doomed to fail.

It was not put to Mr Kilileu in cross-examination that the accused signed two blank forms and that Mr Kilileu threw away the one regarding the land. I also consider this story to be of recent invention. It is very unlikely that the accused would have himself submitted or instructed Mr Kilileu to submit an improved application regarding the payment of MBPP/L to Mr Gabina. I find that Mr Kilileu told the accused the full reasons for the rejection of the first application as per VIF guidelines No. 4.

4. Did the accused instruct Mr Kilileu to submit two (2) separate applications forms - one to cover the payment to MBPP/L for the loan debt and the other for "Administrative costs"?
No. As I said above, there was only one blank application form which he filled out for administrative costs to cover both the land payment to MBPP/L and administrative costs. I accept Mr Kilileu's evidence that the accused pressured him into applying for the VIF money somehow so that the money could be released easily and quickly. And the only way this could have been done was by submitting one single application for "administrative costs". The accused said he knew that by this time the new allocations for that year, presumably for administrative costs, was being released. So did Mr Kilileu. By putting the two requests in one application form for "administrative costs", Mr Gabina would have no choice but to release the money because it was in compliance with the VIF guidelines. The amount of K2,740.72 had to be conceiled together with the K500.00 for "administrative costs" because they knew that Mr Gabina would reject an application for the money for MBPP/L. In any case, even if the accused left 2 signed forms, which was not the case here, he went to Mr Kilileu for assistance to obtain a release of the VIF money somehow. As to how Mr Kilileu went about completing the form to obtain a release of the money was his prerogative - to employ the most convenient procedure to obtain the money as instructed by the accused.

5. Did the accused instruct or put pressure on Mr Kilileu to apply for and obtain a release of the money to pay MBPP/L?
Yes. By this time the accused had no money to repay MBPP/L. His repayment was in arrears by ten (10) months. If he did not pay up, MBPP/L would have taken certain remedial course of action against him to enforce the loan agreement. The accused says that MBPP/L did not put any pressure in him because it was owned by the MBPG of which he was part of the executive government. That may be true. Nevertheless, this explanation is unacceptable. MBPP/L was a corporate legal entity on its own. His relationship with the company was purely commercial. It was not a matter of goodwill. I find that even in the absence of any formal request or notice by MBPP/L to him to pay up, he was under real pressure to come up with the money. If he did not pay up, he would have been taken to Court. He would then have been exposed to this deal which on the face of it appeared to be a conflict of interest situation.

6. Did the accused give clear and full instructions to Mr Kilileu to apply for K2,976.00?
Yes. the accused himself said he gave instructions to Mr Kilileu to apply for the amount in two parts, the total of which was K2,976.00.

7. Did Mr Kilileu show the accused the completed VIF application containing the figure K2,976.00 before the accused left for the NGC? 
Mr Kilileu's evidence on this is slightly distorted. At one stage he says the accused left with him the signed form with instructions to apply and later showed the accused the completed form before the accused left for the NGC and before Mr Kilileu submitted the completed form for approval. It is not clear on which date and time he showed the completed form to the accused. The accused says Mr Kilileu told him he was very busy with other members' application so he told him to just sign the form and leave it with him and go. This he did and he left the office without seeing the completed form and took a Talair flight home the same day. I am left with some doubt as to whether Mr Kilileu showed the completed form to the accused. Therefore I will give the benefit of the doubt to the accused. Nevertheless, that does not mean the accused did not know what amount was going to go on the application for "administrative costs". Indeed I have already found that he knew the figure and the purported reasons, albeit misleading, which were going to be stated on the second application.

8. Did the accused instruct Mr Kilileu or anyone else for that matter to cash the cheque and appropriate the money in the manner described by Mr Kilileu?
This issue is an important one. It is the accused's word against Mr Kilileu's word. Which version do I accept? In other words, who is telling the truth? I must now assess the reliability of the testimony in the light of, inter alia, their demeanour in the witness box. This is no easy task. Indeed, my task is complicated to some extent by the part played by these two men in the earlier phase of the application. In a way they are accomplices. They both knew or ought to have known that the guidelines did not allow for such applications. They both tried it in the first application and it failed. They both got together and decided to have second go. This they did, although the method used is disputed. All this was done in an environment of co-operation and trust as is normally found in any working relationship between a senior member of an establishment which employs a support staff member. Mr Kilileu was duty-bound to assist the accused. The accused had a legitimate right to demand efficient performance on the job by Mr Kilileu. When the first application failed, the accused no doubt instructed him and pressured him to devise another method of obtaining release of the VIF funds. So far, they are in agreement up to that point. The only thing they differ on is what the accused told Mr Kilileu to do with the cheque when it was released to him.

I must warn myself as to the dangers of accepting Mr Kilileu's evidence in these circumstances. The reason is that there is a likelihood that one accomplice may fabricate or concoct evidence against another accomplice either to get even or may seek to exonerate himself by casting the entire blame on the other person. It is an established rule of practice that I must warn myself that it is dangerous to convict unless his evidence is corroborated by other witnesses. This does not however mean that I cannot convict on the uncorroborated evidence of the accomplices alone if the evidence of one accomplice alone is cogent, convincing and very reliable. See State v. Teitern Finako [1978] PNGLR 262, State v. Amoko Amoko [1981] PNGLR 373.

As I have already said, the accused and Mr Kilileu only differ on this last episode of their joint exercise. It is submitted for the accused that Mr Kilileu's conduct that day was criminal in nature and that he did some things which the accused in his right-thinking mind would not have done himself. He first received a cheque for K2,976.00 in the name of "CIF Committee Chairman, North Goodenough Constituency, Bolubolu, Goodenough Island "Cheque No. 51204 dated 10.04.92. Then he gave it to Mr James Ambrose who identified himself to him as a Committee man of the accused just to get K68.20 he had spent on the NGC truck. So he gave him the cheque and told him go and cash the cheque at Westpac bank, Alotau and bring back the cash to him. Then Mr Ambrose went to the Westpac Bank and sought to cash it but he was told to go back and get the cheque endorsed for encashment. He went back to Mr Kilileu who enclosed the cheque to "Pay cash". Mr Ambrose then went back to the bank where he signed the cheque under the "payee" section and was given the cash which he took back to Mr Kilileu. Mr Kilileu gave K68.20 plus another extra K20.00 to Mr Ambrose.

In addition it was submitted for the accused that Mr Kilileu is not a man to be trusted because he was doubtful and evasive on some areas of his evidence. Furthermore, the accused did not benefit at all from the exercise because he never got the title to the property.

The State on the other hand submits that Mr Kilileu was only an employee of MBPG and he was merely following instructions given to him by the accused. In other words, he was instructed and pressured and overwhelmed by the pressure exerted on him by the accused to obtain the money and pay up otherwise his job was at risk. It is submitted that Mr Kilileu did not stand to gain from this exercise and did not gain anything except to safeguard his job. It is submitted that everything that he did was under the direction and for the personal benefit of the accused.

It is true that the accused was out of Alotau when Mr Kilileu arranged for the cheque to be cashed and proceeds paid out accordingly. This minimises or should I say eliminates the possibility of any instructions issued to Mr Kilileu by the accused subsequent to the receipt of the cheque by Mr Kilileu. Indeed the accused says he did not know if his application was approved or not and if approved, whether the cheque was with Mr Kilileu.

But that is not the thrust of the State case. The State case is based on the instructions issued by the accused when the rejection of the first application and the proposed second application were discussed at Mr Kilileu's office before the accused departed for NGC. The question is whether the accused gave those instructions which Mr Kilileu says he gave and if so, whether they were such that Mr Kilileu had no option but to follow those instructions in whatsoever manner, albeit illegal, he saw fit.

I agree with both counsels that the decision on these issues depend on my finding on the credibility of the two witnesses. I will deal with Mr Kilileu's evidence first. His evidence on the whole is fairly consistent except for the evidence regarding whether or not he showed the accused the completed form in respect of the second application. I have already found in favour of the accused on this latter piece of the evidence. But I've also said that such evidence is of little value to the defence case because the fact is that the accused knew the details including amount of money which was going to go on that form that he signed. Mr Kilileu has not been charged with any criminal offence yet. But he has given a frank and full disclosure of what transpired between him and the accused including his own probable criminal conduct. He has not withheld anything. He has freely exposed himself to the risk of ridicule, condemnation and possible criminal prosecution. He has not tried to shift the entire blame on the accused. Afterall, he stood to gain nothing whatsoever from the exercise. He was merely performing his job as directed by one of his superior bosses. He had to perform or face the risk of loosing his job. When faced with the dilemma, he chose to keep his job. I do not think he acted unreasonably. I find him to be a truthful witness.

On the other hand, the accused has given various explanations many of which lack logic. He has also raised some fresh material evidence which were not put to State witnesses in cross-examination. I have already pointed out those in my judgment. He gives me the impression of a witness who is calculating his answers to suit the theory of his defence, no matter how shallow and illogical they may sound to others, not to mention the Court e.g. his story about filing in 2 applications on the second occasion, the one seeking funds for payment of MBPP/L being a much reasoned one than the first one. Another example is that he keeps talking about his people in NGC regarding the land at Sandersons Bay when it is very clear that his application form to NHC, which was witnessed by his wife Elasanity, and the loan agreement form which he signed with MBPP/L, are both clearly personal.

He also gave some story to the police in his ROI which is totally contradictory to his line of defence in Court. On 19.07.93, the accused initially told the police that after the NHC approved his application for a land under the Home Ownership Scheme, he went to Goodenough and told his people about it and told them he would apply for VIF funding. This he did and the cabinet approved it and was certified by the Chief Accountable Officer who is the Secretary and a cheque was drawn for the payment of the land. This cheque was paid to "my board of trusty (sic) and they paid this cheque to the Housing Corporation" (see Qns 40-45). When he was pressured further regarding his deal with MBPP/L, he admitted it and said he complied with normal VIF procedures to obtain the money and Mr James Kilileu paid the sum of K2,470.72 to MBPP/L. (Qns 46-49). Then the ROI was suspended for further enquiries. The ROI resumed again on 21.07.93. When it resumed he told the police that he applied for the money to cover the Committees' allowances. He was then shown cheque No. 5124 for K2976.00 and was asked where the cheque was cashed. He answered it was cashed at Westpac bank, Alotau Branch. Asked where the money went, he said, "to the Committees". When shown MBPP/L receipt for payment of K2,470.72 and asked for an explanation, he said "Yes, James Kilileu and Ambrose Ivekolia's cashed the cheque and paid Milne Bay Properties K2,470.72 and paid the rest to the Committees". The above statements and many other statements in that ROI clearly shows that the accused was twisting and turning things around to justify his wrong-doing.

These statements in the ROI and his own evidence in Court which I have referred to show that he is not a credible witness. I find that he lied about not instructing James Kilileu to cash the cheque and pay the monies out in the manner described by Mr Kilileu. I find that Mr Kilileu had nothing to benefit from the exercise.

I also find that despite what James Ambrose said in Court, the accused instructed Mr Ambrose to go and see Mr Kilileu, get the cheque cashed in order for payments to be made out in accordance with his instructions. James Ambrose would not have endorsed that cheque just to get his K68.20. He endorsed that cheque for encashment well knowing that he had the authority to do so from the accused. I consider that the accused is lying on these aspects of the evidence.

The fact that the accused never got the registered title to the land is entirely his fault. It was in his personal interest to ensure that the necessary legal documentation was completed in order to facilitate the transfer of title to him now that the purchase price had already been paid on his behalf. He chose not to follow it up. That is his problem. We are concerned here with his having obtained money from the VIF to pay his personal debt with MBPP/L by virtue of a loan agreement signed between the accused and MBPP/L. Upon payment of the money to MBPP/L the money became the property of MBPP/L. If NHC did not issue the title to the accused, then he has a cause of action against NHC to recover the money paid based on breach of contract.

9. Is Mr Kilileu's evidence corroborated?
At the outset I consider Mr Kilileu's evidence to be so reliable and truthful that it leaves no room for corroboration evidence. His evidence in the light of the evidence given by Mr Nunisa, Mr Butterfield, Mr Gabina and Mr Ambrose and other documentary evidence before me also supports the story given by Mr Kilileu. In any case, the accused's lies to the Court also corroborate Mr Kilileu's evidence.

Legal Issues

Having decided the factual issues, I will revert to the two legal issues which I pointed out in the earlier stages of my judgment. On the first issue of whether the accused applied the money to his own use, I have already found that he instructed Mr Kilileu to apply the money to the payment of his personal debt with MBPP/L. Mr Kilileu paid the money on his instructions on behalf of the accused and for the personal benefit of the accused. The actual payment of the money to MBPP/L was done by Mr Kilileu under direction from the accused. Mr Kilileu merely became a conduit pipe for the payment. It is immaterial that the accused did not pay the money in person - the point was that the money was applied to the personal use of the accused in paying his loan debt. Indeed the accused does not contest this issue as much as he has contested the second issue.

The second issue is whether the accused acted dishonestly. From a subjective point of view, the accused knew that he had no legal right whatsoever to use the money designated for "administrative costs" for the NGC VIF Committee to pay off his own personal debt with MBPP/L. He knew too in the first place that if he had applied for the money to pay off this debt in the second application, the money would not be given to him because he was denied the money in his first application. He was intelligent and experienced enough to know that what he was doing was wrong by virtue of the CIF guidelines.

From an objective point of view, there is no doubt that any ordinary person in his NGC would have known that what he did was wrong because they were not going to collectively benefit from the land on which the accused was allocated to build his personal house. He did not believe in the first place that he required VIF money to buy the land for the people of his NGC because there is nothing in the NHC application form which refers to the people of NGC and funds to come from the VIF. In fact the application contains a full disclosure of the accused's personal financial status in terms of his own source of income and existing savings and debts. Indeed he first went to his own bank and when his bank refused to finance the purchase, he went to another private quasi-financial institution. It was only when he could not repay MBPP/L that he went to seek VIF finance. And when his first application for VIF funds was rejected, he insisted and re-submitted a second application and misled Mr Gabina into approving the finance for "administrative costs." And so who in his NGC would doubt his dishonesty? Likewise any ordinary right-thinking and honest person in Milne Bay Province would have concluded that what he did was dishonest. I too do not have any doubt that he was dishonest.

In all the circumstances, I am satisfied beyond reasonable doubt that he dishonestly applied the money to his own use. I find him guilty as charged in the indictment.

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Lawyer for the State: Sir Kina Bona, PUBLIC PROSECUTOR
Lawyer for the Accused: M. CHOLAI LAWYERS