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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
CR 597 of 1999
THE STATE
v.
ANDREW LUDWIG POSAI
Kimbe: Sevua, J
2004: 1st, 2nd & 16th June
CRIMINAL LAW – Misappropriation – Sum of K10, 000.00 – Public funds – Accused former Member of Parliament for Kandrian and Glouster Electorate – Former Minister for Home Affairs and Youth - Money intended for projects for three Youth Groups and a Women’s Group – Paid into private Joint Super Saver Account – Money drawn from that account in name of accused and another and paid to other persons.
Held:
(1) The act of depositing the moneys into the accused’s private account when he should have paid the money to the Pasis Manua Youth Group, Gumi Ranto Youth Group, West Arowe Youth Group and Besse Women’s Group who requested the money and the cheques were made payable to them, amounted to dishonestly applying the money.
(2) Paying the moneys to the Kandrian Mothers Group and the Catholic Youth Rally in Kimbe amounted to dishonestly applying the moneys to the use of other persons.
(3) The accused is guilty of the crime of misappropriation
Cases cited:
Brian Kindi Lawi v The State [1987] PNGLR 183
The State v Sylvanis Simebo & 2 Ors, unreported and unnumbered, 30th May 2000, (CR 1220/2000, CR 97/2000 & CR 722/2000)
Counsel:
F. Popeu for State
O. Oiveka for Accused
16th June 2004
SEVUA, J: The accused, Andrew Ludwig Posai of Amgen village, Gasmata, West New Britain Province, is charged that between 2nd October and 31st October 1992 at Kimbe, he dishonestly applied to his own use and to the use of one other person the sum of K10, 000.00 the property of the Independent State of Papua New Guinea.
The facts were that in 1992, the accused was the elected Member of Parliament for Kandrian Gloucester Open Electorate in the National Parliament and held the position of Minister for Home Affairs and Youth. In that capacity, he received various requests from youth groups for funding their projects. In the present case, the accused, as Minister, received requests for funds from Pasis Manua Youth Group, Gumi Ranto Youth Group, West Arowe Youth Group and Besse Community Service (Womens Group) all from his own electorate.
On 2nd October 1992; four cheques, drawn on the Bank of Papua New Guinea, were processed and made payable in the names of these four groups. Cheque No 372203 in the sum of K2,000.00 was raised for Pasis Manua Youth Group. Cheque No 372205 for K2, 000.00 was raised for Gumi Ranto Youth Group. Cheque No 372207 also for K2, 000.00 was raised for West Arowe Youth Group. And finally, cheque No 372219 for a sum of K4, 000.00 was raised for Besse Community Service.
On about 9th October the accused deposited all four cheques into a private Joint Super Saver Account No 04800 – 10494620 conducted at the Kimbe Westpac Bank Branch in his joint name and that of one Janet Kirkman. Between 9th October and 18th December 1992, the accused and Janet Kirkman were alleged to have withdrawn the money from that account and dishonestly applied it to their own use, thereby contravening s. 383A (1) (a) & (b) and 2 (b) of the Criminal Code.
The accused pleaded not guilty to the charge and so the State adduced evidence from the Westpac Bank Manager, Kimbe Branch in respect of various bank records that come under his responsibility.
The defence objected to the evidence of the only State witness, Yawe Tau Salem on the basis that his evidence would be hearsay. However, the State was not calling him to testify as to the documents he dealt with personally, but as to the bank records that came to his possession in his capacity as the Manger therefore having the overall responsibility of the management of the Branch documents. The defence objection was overruled on the basis that the witness is the Bank Manager in Kimbe, therefore in that capacity; he has managerial responsibility over all matters including the possession of bank records and documents.
Most of the documentary evidence was tendered by consent of the accused and those documents are not really in dispute. The documents supporting the requests by the four groups and the processing of the cheques were not disputed by the accused. In fact the accused denied the charge on the basis that he did not withdraw the money therefore did not misappropriate the money. But as will be seen from his own evidence, that plea was contradicted by his sworn testimony and his interview with police that he admitted diverting some of the money to persons other than the recipients named in the original cheques.
The documentary evidence in Exhibit "B" to Exhibit "N" inclusive are actual photocopies of requisitions for expenditures, general expenses forms and remittance advices directly relating to the four cheques made payable to the four groups. The copies of the cheques raised in the name of each of those four groups are not in dispute. I am satisfied that four cheques were processed and made payable to those groups.
Exhibit "O" is a copy of the Bank of Papua New Guinea (hereinafter BPNG) Cheque No. 372203 dated 2nd October 1992 in the sum of K2, 000.00 made payable to Pasis Manua Youth Group. Exhibits "M" and "N" are General Expenses Form and Remittance Advice respectively in support of that cheque. Exhibit "H" is a copy of BPNG Cheque No. 372205 dated 2nd October 1992 in the sum of K2, 000.00 drawn in favour of Gumi Ranto Youth Group. Exhibits "F" and "G" respectively are General Expenses Form and Remittance Advice relating to that cheque. Exhibit "Ë" is a copy of BPNG Cheque No. 372207 dated 2nd October 1992 in the sum of K2, 000.00 payable to West Arowe Youth Group. Exhibits "C" and "D" respectively are General Expenses Form and Remittance Advice respectively in support of that cheque. And finally, Exhibit "K" is a copy of BPNG Cheque No. 372219 dated 2nd October 1992 for the sum of K4, 000.00 in favour of Vesse Community Service. Exhibits "Ï" and "J" respectively are General Expenses Form and Remittance Advice in support of that cheque.
Exhibit "P" is a deposit form dated 6th October 1992 for the sum of K10, 000.00 paid into Account No 480010494620 in the name of the accused, Andrew Posai. In the same document, the reverse side of it shows the amount in each cheque with the name of the four groups referred to above. The money was deposited into the accused’s account at the Westpac Bank at Kimbe. The Account Statement, which is exhibit "R", shows that the sum of K10, 000.00 was deposited on 9th October 1992 into Account No 4810494620 in the name of Andrew Posai. Page 1 of that document shows the transactions in that account between 30th September and 13th November 1992. This evidence is important as it shows that the account under the accused’s name was either established on 30th September 1992 or earlier than that. I consider that this is crucial to the issue of "intention" of the accused.
The accused testified on oath and called two witnesses. In essence his evidence is that at the material time he was the Minister for Home Affairs and Youth. He recalled that there were many requests from various groups in West New Britain Province for funding and that he had had four cheques in his possession for three youth groups; K2, 000.00 for West Arowe Youth Group, K2, 000.00 for Gumi Ranto Youth Group, K2, 000.00 for Pasis Manua Youth Group and K4, 000.00 for Besse SDA Mothers Group. He brought the cheques to Kimbe, however he said due to the remoteness of the areas he had to return to Port Moresby so decided to deposit the money into an account to preserve the validity of the cheques until the groups who requested the money needed it. In Kimbe he said he found out the three youth groups were not registered except the Besse Mothers Group. As he had to return to Port Moresby, he met one Janet Kirkman, an officer of Westpac Bank in Kimbe, and asked her if they could open an account to deposit these cheques into until the groups were registered then he would have the moneys paid to them. There is no evidence as to the date he opened that account.
Sometime later, the accused did not say when, but he found out that there was insufficient fund in the account when he rang Kirkman to release the sum of K8, 000.00 to his Electoral Officer to be paid to these groups. That was when he organized the sum of K4, 000.00 of his own money to make the shortfall and gave that amount to one John Midan to take to his (accused’s) Electoral Officer, one Clement Walis, to deliver to the Besse Womens Group. The accused then directed that the other K4, 000.00 be paid to Kandrian Mothers Group since the three youth groups who were the initial recipients of the money, did not register their groups. Of the balance of K2, 000.00, the accused said he attended a Catholic Youth Rally in Kimbe and distributed the money in small amounts to various members of the Youth Rally in Kimbe including K200.00 to four youths who were returning to Kaskas village at Fulabon and had asked for assistance. He said when he discovered that the money had been fraudulently dealt with he did not lodge a formal com-plaint to police. No reasonable explanation has been offered as to why public funds held in his private, and withdrawn without t his authority as he alleged, was not reported to the police for investigation.
The accused called two witnesses, his former Electoral Officer, Clement Walis, and John Midan. Both witnesses’ testimony relate to the handling of the two lots of K4, 000.00 which were given to Besse Women’s Group and Kandrian Mothers Group. John Midan said he was given the sum of K4, 000.00 to deliver to Clement Walis for Besse Women’s Group. He was also told to go to the bank to see a lady there to collect another K4, 000.00 to deliver to Clement Walis for the Kandrian Mothers Group. Clement Walis’ evidence is that he was the former Electoral Officer of the accused based in Kimbe. He received a telephone call form the accused to see John Midan and collect some money from him. He met John Midan in the shopping area and asked him about the money. John Midan gave him two bundles of cash amounting to K8, 000.00. Two weeks later, he sent his Executive Officer with the K4, 000.00 to Besse in Kove. The other K4, 000.00 was given to the President and Vice President of Kandrian Council of Women.
There is no documentary evidence to confirm that the monies were received by these two women’s groups. No date has been given as to when these monies were given to those groups. Even if I accept that the money was delivered to those two groups, I still need to determine if there had been misappropriation.
Before I discuss the relevant law on this matter, I make some observations based on the demeanour of the accused during his evidence. I find the accused to be an intelligent person with a good command spoken English. However, having observed his demeanour during his testimony, he seemed quite evasive at times. He seemed to play the "I don’t know" game in some of his answers, and he seemed to pretend that he did not know how to go about certain things. Some examples to highlight these observations are as follows.
He did not know that a cheque becomes stale after 12 months. On this aspect, it is his evidence that one of the reasons for depositing the four cheques to his private account was to avoid the cheques becoming stale. He did not know that he could deposit the four cheques totalling the sum of K10, 000.00 into a Trust Account. The bank did not advise him of that procedure despite the fact that he opened the private Super Saver Account with the assistance of Janet Kirkman, an officer of the bank. It is surprising that funds intended for youth groups were not held in a Trust Account. I can therefore assume that he did not inform the bank that the money was to be held in Trust for four different groups in his electorate. He could have left the money in the BMS Cash Office, but he said it did not occur to him that this could be done. He could have left the money with the Provincial Youth Office, but then he did not trust the staff there due to past incidents of misappropriation of public funds. Prior to the processing of the cheques he could have checked if the three Youth Groups were registered, if registration was a criteria for approval of funds. On that aspect, it is his evidence that he did not give the cheques to the three youth groups – Passis Manua, Gumi Ranto and West Arove because they were not registered with the Provincial Youth Office. The only registered group out of the four was the Besse Women’s Group, but then why did he not pay the money to that group when he came to Kimbe? After all, the accused brought those cheques from Port Moresby, from his Office and Department, if I may add, specifically for those groups.
One important aspect of the evidence which I have alluded briefly, is the date the private Joint Super Saver Account was established at Westpac Bank in Kimbe. Exhibit "R", which is the Account Statement, clearly shows that the account was already in existence as at 30th September 1992 because it showed a credit balance of K600.00. A sum of K100.00 was withdrawn from the account on 1st October 1992 prior to the deposit of the sum of K10, 000.00 on 9th October 1992. The accused’s testimony that he had opened the account with Janet Kirkman to deposit those cheques into is therefore not the truth
The accused is charged under s. 383A (1) (a) & (b); and (2) (b) of the Code, which provides:-
(1) A person who dishonestly applies to his own use or to the use of another person –
- (a) property belonging to another; or
- (b) property belonging to him which is in his possession or control (either solely or cojointly with other person) subject to a trust, direction or condition or on account of any other person,
is guilty of the crime of misappropriation of the property.
(2) An offender guilty of the crime of misappropriation of property is liable to imprisonment for a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 years:-
- (a) .........................
- (b) Where the offender is an employee and the property dishonestly applied is the property of his employer; or
The law on misappropriation, especially on the meaning of "dishonestly" in s.3983A has already been settled in this jurisdiction in Brian Kindi Lawi v The State [1987] PNGLR 183. That was a case were the appellant received two cheques for K6, 000.00 and K10, 000.00 respectively from the Government for specific projects for road and agriculture works and the moneys were deposited into his private account. The moneys were not expended on the projects intended for, but they were withdrawn from the appellant’s account and there was no evidence as to how the moneys were spent. The appellant was indicted with two counts of misappropriation and convicted and sentenced to 2 years IHL for the first count and 5 years IHL for the second count with an order for a reduction to 3 years if the appellant repaid the sum of K10, 000.00 to the State.
The Supreme Court on appeal held that:
(1) There was evidence that the moneys were given to the appellant for specific public purposes and this evidence sufficiently proved that the moneys were the property of another, namely, the Government of Papua New Guinea and remained the property of the Government until they were expended on the purposes for which they were granted.
(2) As the word "dishonestly" in s. 383A only relates to the state of mind of the person who does the act which amounts to misappropriation, whether an accused has a particular state of mind in relation to the application of property which is dishonest is a question of fact for the trial Judge to consider on all the facts of the case before him and (per Amet, J) according to the ordinary standards of reasonable and honest people.
The Supreme Court also said, for the purpose of this section, a person’s "application may be dishonest although he is willing to pay for the property or he intends to restore the property afterwards or .... to fulfil his obligations afterwards in respect of the property ............."
Defence counsel, Mr. Oiveka submitted that there was no dishonest intention on the part of the accused. Although the accused did admit getting the funds and depositing them into his account contrary to the requirements of the Public Finance (Management) Act 1995, the funds were not misappropriated by him. Counsel further submitted that the highest the Court could find is that the accused mismanaged his account, but did not misappropriate the money.
On the contrary, the State submitted that the accused should be found guilty of misappropriation. The facts of the case are such that the accused misappropriated the funds and some of the matters the Court is asked to consider towards making that finding are these. The accused deposited the money into his private account. He did this with the help of one Janet Kirkman whom he hardly knew well. In one of the withdrawals, Exhibit "Q4" the sum of K2,000.00 was withdrawn and K1, 000.00 was sent to Waigani by telegraphic transfer. The State asked, if the accused was in Kimbe that time, why was the money sent to Waigani? Even if he was in Kimbe, why was the money sent to Waigani at all? It was also submitted that the Court should not accept the accused’s evidence that he withdrew K2, 000.00 and distributed it to youths in Kimbe during a rally. The State further submitted that the withdrawal slip relating to the sum of K200.00, which the accused said he gave to youths to travel to Fulabon should not be accepted because the withdrawal slip was endorsed, "Fares to Rabaul".
It was further submitted that the money was intended for specific youth groups, yet the cheques were deposited into the accused’s private account co-jointly held by another person, Janet Kirkman, whom the accused did not know well, but entrusted her with such public money. The State has urged the Court to find the accused guilty because he did not report the alleged fraud to the police despite his evidence that he did not sign all the withdrawal forms. In any event, the State submitted that the depositing of the money into the accused’s private account in the first place was dishonest. Despite the accused’s evidence that the sum of K8, 000.00 was paid to two women’s groups, the initial deposit to his account was with dishonest intention.
Mr. Oiveka in reply submitted that there is evidence that two women’s groups received the sum of K8, 000.00 therefore, if the accused is guilty, he should be guilty of misappropriating only the sum of K2, 000.00.
After reviewing all the evidence in this case, I consider that the primary facts are not in dispute. The documentary evidence supporting the processing of the cheques (money) clearly shows that the moneys were the property of the State. The Requisitions were made to the Assistant Secretary Finance and Administration of the Department of Home Affairs and Youth from the Minister’s Office for funding of Youth Groups projects. The accused was the Minister for Home Affairs and Youth at that time. The Remittance Advices pertaining to each cheque came form the Finance Cashier Branch of the Department of Finance at Waigani. The cheques were government cheques drawn against the Department of Finance FCB Drawing Account 3 and drawn upon the Bank of Papua New Guinea. There is no doubt that the moneys were the property of the State, and I so find.
The following are findings of facts I make in this case. Requests for funds were made to the accused as Minister for Home Affairs and Youth by Pasis Manua Youth Group; Gumi Ranto Youth Group, West Arowe Youth Group and Besse Community Group, also referred to as Besse Mothers Group. Cheques numbers 372203, 372205, 372207 and 372219 were processed and made payable to these groups respectively. The accused brought these cheques to Kimbe, however instead of paying them to these four groups, he deposited them into his private Joint Super Saver Account at Westpac bank in Kimbe, co-jointly operated by bank officer, Janet Kirkman, whom the accused did not know very well. Various sums totalling K10, 880.00 were withdrawn between 9th October and 31st December 1992 until the account was closed on 22nd January 1993 with a credit balance of K27.32. A sum of K2, 000.00 was withdrawn by the accused and paid to various youths in Kimbe during a Catholic Youth Rally. Another sum of K4, 000.00 was paid to Kandrian Mothers Group. Again he gave no dates of these transactions.
Despite the accused’s evidence that he did not authorise the withdrawals from this account, I find that he did withdraw a total of K6, 100.00. His signature on the deposit form dated 6/10/92 when the four cheques were deposited into his private account also appears on the withdrawal forms dated 7/10/92 for K100.00; 12/10/92 for K2, 000.00 and 6/11/92 for K4, 000.00. This piece of evidence is consistent with the accused’s own admission in answer to Question 15 of the record of interview.
In relation to the findings of facts I have made, I am not so certain if the sum of K8, 000.00 were paid to the Besse Women’s Group and the Kandrian Mothers Group. As I noted earlier on, there is no documentary evidence that these monies were received by these two groups. The evidence of John Midan and Clement Walis must therefore be treated with caution because theses two witnesses are close associates of the accused and they could be here to lend credence to the accused’s own evidence. However having said that, I will give the benefit of the doubt to the accused and accept that the sum of K8, 000.00 was paid to Besse Women’s Group and Kandrian Mother’s Group. There is no doubt that the balance of K2, 000.00 was withdrawn by the accused and distributed to various youths during the Catholic Youth Rally in Kimbe
The issue of dishonest intention submitted by the defence, in my view, is contrary to the principle established by the Supreme Court in Lawi’s case (supra). The whole case rests on the premise that the sum of K10, 000.00 was intended for four specific groups for specific purposes, that is, to fund their projects, whatever those projects were. The money was not intended to be paid into the accused’s private account. He came specifically to Kimbe to deliver these cheques and should have given those cheques to the four groups. Instead he deposited them into his own private account contrary to the provisions of the Public Finance (Management) Act. He should have paid the money into a Trust Account, since he was required by law to do that. He claimed he did not know that he could do that and I find that as a weak excuse to escape his responsibility as a Minister to ensure that the funds were safely delivered to the persons the moneys was intended for. He ought to have known that the public funds were not intended to be deposited into his private account. He alluded to holding the funds in trust in answer to Question 13 in the record of interview; however he never set up a Trust Account to pay the cheques into, if for any reason, he was unable to deliver them to the recipients. Contrary to his counsel’s submission that he (accused) merely mismanaged his account, I find that he misappropriated the funds.
Then there is the withdrawal of the sum of K2, 000.00 on 12th October 1992, on withdrawal form which I consider was endorsed by the accused and Janet Kirkman, Exhibit "Q4". On the reverse side of the form it was noted that the sum of K1, 000.00 was "T/T Waigani" while the balance of K1, 000.00 was "cash". There is something which is same through most, if not all the withdrawal forms, and it is the signature which does not belong to the accused. It is my view that that other signature belonged to Janet Kirkman and she should be arrested and charged with stealing or misappropriation as well.
I have no doubt that the accused was in Kimbe that time and he applied that sum to his own use. He has not offered any explanation on this withdrawal, nor has he denied that the signature does not belong to him. By his own admission in the record of interview, Exhibit "A", he withdrew the sum of K2, 000.00 on 12th October 1992. See his answer to Question 15. The Account Statement, Exhibit "R", shows that two lots of K2, 000.00 were withdrawn on 9/10/92 and 15/10/92. The only explanation to these dates is that the dates in the Account Statement show the actual dates the transaction was cleared at the bank.
The facts of the case clearly show that the accused dishonestly applied the money to his own use and to the use of other persons. I reiterate that the money totalling K10, 000.00 was intended for four specific groups and the cheques should have been paid to those groups. The fact that he did not deliver the cheques to those four groups, but deposited the money into his private account amounted to misappropriation. The moneys were public funds intended for four specific groups for their projects, not intended to be deposited into the accused’s own private account. The act of depositing the cheques into his private account, and not paying them to the recipients of the moneys whose names appear on those cheques, amounted to misappropriation. See: The State v Sylvanus Siembo & 2 Ors.; (CR 1220/2000; CR 97/1999 & CR 722/1999), unreported and unnumbered, 30th May 2002.
But even if I am considered wrong on that conclusion, I consider that the accused had .misappropriated the money in the following circumstances. Kandrian Mothers Group and Catholic Youth Rally were not recipients of any of those funds. The evidence does not disclose that those two groups did requisition any money from the accused. However, the accused said he used his discretion to divert the sum of K4, 000.00 to Kandrian Mothers Group. The fact is, he has no power or discretion as to the purpose of the public funds. He had no power to divert the funds to any other person or groups of person other than those named in the four cheques. I find that the accused misappropriated the sum of K4, 000.00 when he diverted that amount to Kandrian Mothers Group. Similarly, he had no discretion to divert the sum of K2, 000.00 to members of the Catholic Youth Rally in Kimbe. The Catholic Youth neither request any funds from the accused, nor did the Catholic Youth a recipient of any of those four cheques. I find that the accused misappropriated the sum of K2, 000.00 when he withdrew that amount from his account and distributed that money to the youths in that rally. The funds were not intended for those groups and for those purposes. I therefore find that the accused misappropriated the sum of K6, 000.00
The accused had deposited the four cheques totalling K10, 000.00 into his private account on the basis that he would later give the funds to the four groups. In my view, that is not the purpose the funds were processed and made payable to those groups. I find the accused’s evidence that the three youth groups were not registered as part of his intention to use the money for purposes other than the purposes the moneys were intended, and as it were, he did use the money for purposes than what the moneys were originally intended for. Rather than the accused being ignorant of various things, I consider that he should have known those things. As Minister of State responsible for Home Affairs and Youth responsibilities, he tried to paint a picture of himself as an ignorant Minister, however I find that the accused is an intelligent liar. He has not been very honest and he seemed to think that he has discretion to divert public funds at his whim when he had no discretion at all.
Furthermore, I am of the view that the reasons offered by the accused for not returning the funds to the Department of Finance were very poor excuses. The money was intended to fund projects by the four groups that requested the money. The funds were not intended to be paid into the private account of the accused. If for any reasons he was unable to deliver the funds to the four groups, he should have returned the money to Treasury or Department of Finance. If it was correct that the three youth groups were unregistered and therefore as he said, he could not give them the money, he should have returned the money to the Department of Finance or Treasury. He had no right to deposit the funds into his private account. As for the K4, 000.00 intended for Besse Women’s Group, he should have delivered the money to that group, since by his own evidence, that was the only group that was registered out of the four groups which requested financial assistance. If he did not have the time to do that he could have used his Electoral Officer, as he said he eventually used him.
The accused said he had been aware from advices from past Members of Parliament that if the funds were not utilized for the intended purposes they would be returned to consolidated revenue therefore he wanted to avoid that. However, the money could have been returned to the Treasury or Department of Finance and then secured in a Trust Account pursuant to the provisions of the Public Finances (Management) Act. The procedures are set out in Sections 10, 11, 12, 15 and 16 of that Act. The money did not belong to him to be paid into his private account. Neither was any of the money intended for the Kandrian Mothers Group or the Catholic Youth Rally. They belong to the State, and until they were used for the purposes they were intended, the money remained the property of the State.
From the evidence before me, I am satisfied that the four cheques totalling, K10, 000.00 were paid into the accused’s private Joint Super Saver Account No 4810 494620, although there is evidence that the account number 4800 10494620 was used at times. It is the one and same account. I find that when the accused did that he misappropriated the money. I also find that when the accused paid the sum of K4, 000.00 to Kandrian Mothers Group and the sum of K2,000.00 to the Catholic Youth Rally, he dishonestly applied the money to the use of other persons.
I have already made findings of facts which are not really in dispute. The accused admitted some of those facts in his evidence. From those facts, and all the evidence before me, I am satisfied that there was dishonest application of the funds by the accused. Despite the fact that the accused said he would pay the moneys to the four groups later, I am of the view that he is caught by what the Supreme Court said in Lawi, especially on the issue of dishonest application of the funds. The facts of the case are such that as a matter of fact, I find that the accused had dishonestly applied the funds to the use of other persons.
For these reasons, I am satisfied beyond reasonable doubt that the accused is guilty of misappropriation, and I convict him accordingly.
Lawyer for State : Public Prosecutor
Lawyer for Accused : Public Solicitor
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