State v Mauludu [2014] PGNC 47; N5566 (4 April 2014)

N5566

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR NO 285 and 286 OF 2012

STATE

V

MARK MAULUDU

Waigani: Salika, DCJ
2014: 12 & 19 March; 9 & 22 March, 04 April

CRIMINAL LAW – Practice and Procedure – Misappropriation charges – Elements of offence – accused claimed airfares for children over 18 years – claims for on call and overtime allowances – can only claim if on call service is performed – accused action in claiming for the allowance not honest.

Cases Cited:

James Singo v The State (2002) SC700
The State v Nathan Kovoho (2005) N2810
The State v Steven Ulaias (2006) N3033
The State v Iori Veraga (2005) N2849
The State v Robert Tiki, The State v Jim Kamin (2008) N3990
Brian Kindi Lawi v The State [1987] PNGLR 183
The State v. Paul Asakusa (No 1) (2010) N4056
The State v. James Makario (1990) N862

Counsel

Ms P Koralyo, for the State
Mr M Kombri, for the Defense

04th April, 2014

1. SALIKA DCJ: Introduction: The Accused was indicted with two (2) counts of the offence of Misappropriation contrary to s.383A (1) (a) and (b) of the Criminal Code Act, Chapter 262 (the "Criminal Code"). The charges were pleaded in this manner:

"Count One:

Mark Mauludu of Kariru Village, Yangoru, East Sepik Province stands charged that he between the 1st day of August 2008 and the 31st day of August 2008 at Kimbe, West New Britain Province in Papua New Guinea whilst being employed with the Department of Health dishonestly applied to his own use money in the sum of Three Thousand Eight Hundred and One Kina (K3,801.00), the property belonging to the Independent State of Papua New Guinea.

Count Two:

Mark Mauludu of Kariru Village, Yangoru, East Sepik Province stands charged that he between the 1st day of August 2008 and the 31st day of August 2008 at Kimbe, West New Britain Province in Papua New Guinea whilst being employed with the Department of Health dishonestly applied to his own use money in the sum of Thirty Two Thousand Eight Hundred and Ninety Five Kina and Thirty Toea (K32,895.30), the property belonging to the Independent State of Papua New Guinea."

The Allegations

2. The brief facts for the first count are:

(a) The Accused is a Health Extension Officer ("HEO") by profession and was employed as the Chief Executive Officer ('CEO") of the Kimbe General Hospital ("KGH") at the time of the commission of the alleged offence.

(b) On the 21st day of July 2008, the Accused made a claim to the Personnel Section of Kimbe General Hospital for leave entitlements. He claimed entitlements for himself, his wife and all his children including three (3) of his daughters who were over the age of eighteen years. The total entitlement he claimed and received was K18,598.00. On the 15th day of August 2008, a cheque valued at K7,600.00 was made out payable to the Accused and another valued at K10,998.00 was made payable to Air Niugini for the air fares of the Accused and his family.
(c) On 21st day of August, 2008 the Accused instructed the staff of Kimbe General Hospital to cancel the cheque valued at K10,998.00 and convert that into two (2) separate cheques to the value of K5,500.00 and K5,498.00 respectively. The cheque valued at K5,500.00 was made payable to the Accused and the other was made payable to Air Niugini for airline tickets for the Accused and his family.

(d) The State alleged that by Circular Instruction No 36 of 2007 from the Department of Personnel Management dated 12th December, 2007 the Accused was entitled to pay himself only fifty percent (50%) of the total mount of what he is owed for recreational leave fares. By instructing the accounts section of Kimbe General Hospital to pay him a total of K13,100.00 was beyond the fifty percent (50%). The fifty percent (50%) of K18,598.00 was K9,299.00

(e) Hence, the State alleges that the Accused had dishonestly applied to his own use the sum of K3,801.00.

3. The brief facts for the second count are:

(a) The accused is a HEO by profession and was employed as the CEO of Kimbe General Hospital at the time of the commission of the alleged offence.

(b) On the 30th day of October 2008, the accused lodged a claim at Kimbe General Hospital for outstanding overtime and on-call allowances for the period from 2002 to 2006 for duties he performed as Health Extension Officer and Chief Executive Officer .

(c) On the 30th day of October 2008, a cheque valued at K32,895.30 was paid to the Accused being for purported outstanding overtime and on-call allowances from 2002 to 2006.

(d) The State alleged that the Accused was never on the roster for either Kimbe General Hospital or Vanimo General Hospital (where he worked previously as the CEO) and was never entitled to be paid by Kimbe General Hospital because he was the Chief Executive Officer of Vanimo General Hospital from 2002 to 2005.

(e) According to the Memorandum of Agreement Governing the Terms & Conditions of Health Extension Officers in the Health Services with the Department of Personnel Management, a HEO is only paid if he/she is on the roster.

(f) The accused was paid under the rural health category of overtime rate of K7,500.0 per annum, which covers only rural centres or hospitals and not provincial hospitals like Kimbe or Vanimo General Hospitals.

(g) Hence, the State alleged that the Accused dishonestly applied to his own use K32,895.30

The Evidence

4. The documentary evidence tendered by consent are as follows:

(a) Record of Interview in English as Exhibit "A".

(b) Copy of Leave Application Form as Exhibit "B".

(c) Copy of the Note to Corporate Service Director dated 15th August, 2008 as Exhibit "C".

(d) Copy of Cheque No. 021822 dated 15th August, 2008 for K7, 600. 00 as Exhibits "D".

(e) Copy of Cheque No. 021823 dated 15th August, 2008 for K10, 998. 00 as Exhibits "E".

(f) Copy of Requisition Form as Exhibit "F".

(g) Copy of Letter to Mrs. Rita Geno dated 30th June, 2008 as Exhibit "G".

(h) Copy of the Outstanding Calculations document done by Leana Morea and checked by D. Leach as Exhibit "H".
(i) Copy of the Letter to Rita Geno dated 17th October, 2008 as Exhibit "I".
(j) Copy of Cheque No. 408946 dated 30th October, 2008 for K32, 895. 00 as Exhibit "J".
(k) Copy of the Duty Roster for Medical Workers at Kimbe General Hospital for 2005 to 2006 as Exhibit "K".
(l) Copy of the Memorandum of Agreement Governing the Terms & Conditions of Health Extension Officers in the Health Services dated January, 2002 as Exhibit "L".
(m) Copy of the Quotation from Air Niugini with fares for the Mauludu family as Exhibit "M".
(n) Copy of the Circular Instruction No. 36 of 2007 as Exhibit "N".
(o) Public Service General Orders – Order No.14 as Exhibit "O".
(p) Copies of the Concession forms for Mauludu's children as Exhibit "P".
(q) Copy of the Letter by Mark Mauludu dated 10th June, 2010 as Exhibit "Q".
(r) Copy of the Requisition forms for K18, 895. 00 as Exhibit "R".
(s) Copy of the Requisition forms for K10, 998. 00 as Exhibit "S".
(t) Copy of the Requisition forms for K32, 895. 30 as Exhibit "T".
(u) Copy of the Handwritten Note dated 18th August, 2008 by Mr. Mauludu as Exhibit "U".
(v) Copy of the cancelled Cheque of K5, 500. 00 as Exhibit "V".
(w) Copy of the Auditor General's Report as Exhibit "W".
(x) Copy of Cheque No. 021839 for K5, 500. 00 as Exhibit "X".
(y) Copy of Cheque No. 021840 for K5, 498. 00 as Exhibit "Y'.
(z) Copy of Circular Instruction No. 49/2001 as Exhibit "Z".
(aa) Copy of Letter by Dr. Alex Golpak dated 11th March, 2010 as Exhibit "AA".
(bb) Copy of Letter by Mark Mauludu dated 10th June, 2010 as Exhibit "BB".
(cc) Copy of Handwritten Note by Mark Mauludu dated 21st August, 2008 as Exhibit "CC".
(dd) Copy of Handwritten Note by Mark Mauludu dated 17th October, 2008 as Exhibit "DD".
(ee) Extract from General Orders as Exhibit "EE".

5. The State called Erica Tore and Detective Senior Constable Derick Tangua who both gave sworn evidence.

6. The evidence of Erica Tore was that she was part of the Audit investigations team from the Health department, that went to investigate the discrepancies found in the Auditor General's report of 2008 regarding Kimbe General Hospital. She gave evidence of her findings, which was of the two (2) payments made by the Kimbe General Hospital to the Accused. These payments were for the on call and overtime allowance and that of the recreational leave fares.

7. Her evidence regarding the on call and overtime allowance is that the accused can only be entitled to on call and overtime if he is on the roster. She gave evidence that in the course of her investigations she did not find him on the roster.She also gave evidence that he cannot claim for on call and overtime allowances for work done in one hospital from another hospital. This would affect the budgets of the hospitals, because the budgets are different.

8. She further gave evidence that the accused had made claims for overtime and on call allowances for periods worked in Vanimo to be paid from Kimbe General Hospital and said the accused was not entitled to claim this. Furthermore, she said these two(2) hospitals are both urban hospitals and the claim would be for K4500 per annum as per MOA and not for the rate of K 7,500 per annum used by the accused. This would be for rural hospital of which Vanimo and Kimbe general Hospital are not.

9. She also gave evidence regarding the recreational leave entitlement request made by the accused as a dishonest application of Hospital and department funds. Her evidence is that the accused was not entitled to the 50% lump sum payment as well as the airfares. This is in line with the circular instruction 36 of 2007, which states that:

"An employee who is entitled to recreational leave fares may elect to cash out their recreational leave fare entitlement at the rate of 50% of the value of the entitlement, The cash payment shall be paid to the employee as a lump sum payment. An employee who elects to receive cash payment rather than travel to their home province shall be exempted from the prescribed employee contribution of 10% of their fortnightly salary."

10. She said that for leave entitlements in regards to children over the age of 18, it was their policy for the public servant employed by Health department to prove that their child was wholly dependent or was in school and concessions for air fares be provided. She was not discredited in cross-examination and maintained her views and findings that upon receiving the 50% lump sum payment the accused was not entitled to air fares, because this was what he elected to do with his leave payments rather than travel to his home province.

11. The witness Detective Senior Constable Derick Tangua gave evidence that he was the investigating officer who conducted the investigations. His evidence was that he is an investigating officer with the Fraud Squad and also part of the Task Force Sweep Team. He was asked to investigate into the accused and the Kimbe General Hospital by request from the department of health that was forwarded to Task Force Sweep Team of which he is a member. His evidence was consistent with the usual practice and procedures conducted by investigating officers when investigating crimes. This would include the obtaining of statements and conducting the Record of interview. This witness was not discredited during cross-examination.

12. The accused gave evidence on his own behalf and his evidence was that he is a Health Extension officer (HEO) by profession and that he had been employed by the department of Health since 1973. He also gave evidence that he has been a Chief Executive Officer for three (3) provincial hospital since 1995. These hospitals being Mt. Hagen, Vanimo, and Kimbe. He gave evidence that he is currently suspended from his position in the health department due to the allegations involved in this case.

13. In relation to the first charge the accused gave evidence that, he had not thought about claiming for on call and overtime allowances while he was in Vanimo but when he was transferred to Kimbe he claimed from Kimbe General Hospital because in his understanding it was a industrial award and this was between the Department of Personal Management on behalf of the State with the HEO union, of which he is a member.

He said he was entitled to this nationwide industrial award through the provision of paragraph 12.2 of the Memorandum of understanding between HEO's and the Department of Personal Management/Health, wherein he claimed for "reasonable on call and unrostered on call demands.

14. His evidence is that as a CEO he is not required to be on the roster as that is the practice, because he is on standby for any on call 24 hours a day. That is why he made the request to claim for such allowances from Kimbe General Hospital from the period of 2002-2006. He further gave evidence that the rate he used to have his allowances calculated was from the Hospital tiers; wherein Vanimo and Kimbe General Hospitals were level 4 hospitals. These provincial hospitals were regarded as rural hospitals. He further said that because of the different budgets of hospitals he could not claim in Vanimo because such a claim was not included in the hospital budget there, but in Kimbe the hospital had enough money in the budget and that is why he claimed there. He further gave evidence that funding is made to the institutions by the request of these institutions through treasury and finance.

15. In relation to the first charge the accused gave evidence that this was his entitlement to leave fares and that it was his money. Furthermore, he was aware that he was to take 50% in lump sum payment, but he defended himself stating that as per his letter, he was entitled to the leave fares, and also entitled to claim for his three (3) children above the age of 18 who were wholly dependent on him.

16. The elements of offence of misappropriation under s.383A(i)(a) are:

• A person
• Dishonestly
• Applies to own use or use of another
• Property belonging to another
  

17. The above elements of the offence of Misappropriation have been confirmed by the Supreme Court judgment of James Singo v The State (2002) SC700 (Kapi DCJ, Sakora and Kandakasi, JJ) at page 7, and in the National Court judgments of The State v Nathan Kovoho (2005) N2810 (Cannings, J), The State v Steven Ulaias (2006) N3033 (Kirriwom, J), The State v Iori Veraga (2005) N2849 (Sakora, J) and The State v Robert Tiki, The State v Jim Kamin(2008) N3990 (Yagi, J).

18. As to the element of "dishonesty", the Supreme Court in James Sigo (supra) cited with approval the discussions made by the Supreme Court in Brian Kindi Lawi v The State [1987] PNGLR 183 (Kidu CJ, Amet & Cory, JJ) said:

"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 of the facts of the case before him according to the ordinary standard of reasonable and honest people."

19. In the case of The State v. Paul Asakusa (No 1) (2010) N4056, Kawi J said the National Court had this to say regarding the element of "dishonesty":

"b) In Gabriel Ramoi's case, Salika J (as he then was) held that the word "Dishonestly" in the Criminal Code relates only to the state of mind of the person who does the act which amounts to misappropriation. The State of mind, when a person applies the property is a question of fact for the trial judge on all the facts presented before him. And when the judge considers the facts on how the property so applied was dishonestly applied. 'Dishonest' is defined in the Oxford Advanced Learners Dictionary of Current English as 'intended to cheat, deceive or misled'

c) In The State –v- Francis Natuwohala Laumadara [1994] PNGLR 291, at page 293, Injia AJ (as he then was) said:

'The question whether the accused acted dishonestly is an objective one. At the same time it is 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."

20. For the element of "to the use of himself or use of another person", the National Court in The State v. James Makario (1990) N862 Jalina, AJ (as he then was) said:

"(1) As the application of property of another to the use of another person is an essential element of an offence under Section 383A (1) (a) of the Criminal Code in addition to the element of dishonesty, it must be strictly proven that the property was used or applied for the use of no other person than the person specified in the indictment."

21. And "property" is defined under Section 1 (1) of the Criminal Code as;

"'property" includes everything, animate or inanimate, capable of being the subject of ownership..."

22. The State submitted that the evidence by the accused himself implicates him in that he is a long time serving member of the department of health, and that he is familiar with the General orders in relation to leave entitlements and industrial awards. It was further submitted that the fact that he was a CEO, gave him extra responsibilities that are covered in his salary, and that would include his 24 hours stand by status.

23. The State also submitted that as a CEO the accused would have had knowledge of the Hospital budgets and operating accounts and would be familiar with their financial capabilities. He told the Court in Examination in Chief that this claim was not budgeted for in Vanimo General Hospital but that there was enough in the Kimbe General Hospital to make such a claim for on call and overtime allowances. The State submitted that the accused contradicted himself in cross-examination when it was put to him that there was no money in Vanimo so he claimed in Kimbe General Hospital, to which the accused answered "No". This the State submitted shows inconsistency in the Accused's evidence.

24. The State further submitted that in cross- examination the accused told the Court that the calculations were done by officers in the personal management section of the hospital, and that he had nothing to do with the figure raised nor was he concerned with the amount of figure raised. This the State submitted is hard to believe, because where would the officer processing the calculations for his claim get the information required to raise the claim in the first place.

They submitted that this information had to have come from the accused. The accused had to have provided where he worked and the rate to be used, and to have it evenly spaced across the fortnights for the five (5) years he is claiming. The personal management officer at Kimbe General Hospital would only know of the years the accused was with Kimbe General Hospital which started from mid September 2005.

25. The State also submitted in relation to this that it is illogical for the State to pay on call and overtime allowances for reasonable unrostered duty, without evidence of the accused having performed such duties.

How could the State allow taxpayers monies to be used in this way without proof of actual service?

Who determines how reasonable the on call or overtime demand was?

With the appreciation that it is the health industry and there can be very demanding instances, why couldn't time sheets or any form of records be kept even by a CEO, who knows that he's profession as an HEO places him in such a position? This is illogical and its' the State's submission that little or no weight be given to this evidence.

26. It is the State's submission that the accused was evasive and did not answer truthfully in relation to the calculations. The Accused was involved in the calculations because this was his claim, and he had said that during examination in chief, when he was asked,

" Q.can you confirm that you requested? A. Yes, it involves me so I requested."
27. It is also the State's submission that the Accused was the overall head of the hospital as is the evidence before the Court, and hence officers working under him would have processed his claims without question.

28. The State submits in relation to the charge wherein the accused misappropriated K 3, 801.00 which the Accused contends was his leave entitlement, that the accused knowing the circular instructions and general orders claimed for his three (3) children over 18 and then got more than 50% in lump sum payment, with the intention to pay for his children's school fees.

29. He also used airfares in the total of K5, 495.00, which he was not entitled to if he elected to claim cash payment, rather than travel to his home province. It is the State's submission that firstly, the Accused claimed for his three(3) adult children knowing full well the General orders do not provide for this.

30. Secondly the accused, had cheques to the value of K 7,600 and K 5,500 paid out to him, knowing that he would use these for school fees.

31. The State submitted that the accused deliberately had cash payments of more than 50% paid out to him from the leave entitlements, of which he further deliberately included his three (3) adult children to get more money. In cross examination the Accused admits as per the handwritten notes that he had used his leave fare to pay school fees and not air fares to his home province, as is the entitlement under General Orders 14. Hence the State submitted that the accused made this request deliberately to obtain monies belonging to the Department of Health to be used for his children's school fees.

32. In addition to that it was the State's submission that even after the investigations and the suspension on these implications the accused had made no attempt to repay the monies to the Department of Health. The accused acknowledged that he had gone over the 50% cash lump sum payment provided for by circular 36 of 2007, yet he failed to repay this amount.

33. The State submitted that all these matters outlined above shows that the defence case is unreliable and unreasonable and unworthy of credit. They submitted that the case theory does not fit in well with common sense and logic as held by Kandakasi JJ in the case of State v. Taroh saying:

"Which of these versions the Court should accept is dependant on which side the Court finds more credible. Finding of credibility is in turn dependent on matters of logic and commonsense as well as the demeanour of the witnesses and consistencies in their evidence:"

THE DECISION

34. From all the evidence, there is no dispute that the accused applied to his own use K3,801.00 the property of the State. Again from all the evidence there is no dispute the accused applied to his own use K32,895.00 the property of the State. The only issue for the court's consideration is whether the amounts were dishonestly applied.

35. Honesty is a core value in a human character to be honest and straight. Honesty is telling the truth, straight forward conduct, sincerely and trustworthy and moral uprightness. Honest is defined by the Oxford Advanced Learners Dictionary 8th Edition as: Always telling the truth, and never stealing or cheating, showing an honest mind or attitude." In this case the court is determining whether the accused is telling the truth about his action in claiming the airfares for his adult children and the on call and overtime allowances.

36. The accused is now the Deputy Secretary for the National Department of Health. At the time he was the CEO of the Kimbe Hospital. He is a seasoned and well experienced public servant. He ought to have been aware that he cannot claim for airfares of children over the age of 18 years. He also ought to have known that he cannot claim overtime and on call allowances because he did not perform any on call and overtime duty to be entitled. Even if he was entitled to claim those allowances for overtime work in Vanimo, he ought to have claimed for them in Vanimo and not in Kimbe. This is because Vanimo had a separate budget from Kimbe. The accused knew that, as he was the CEO in both places. To play ignorance to this in my opinion is dishonest.

37. The accused was entitled to claim on call allowances whether rostered or unrostered under the Memorandum of Agreement between the Department of Personnel management and the PNG Health Extension Officers Association to be effective from 1 January 2002. The accused has maintained that he claimed under Clauses 12.1 and 12.2 of the MOA. Those clauses say as follows:

12.1 The parties recognise that HEO's shall be required to provide on-call and overtime services to the public at all work locations throughout the Country, and that all health facilities shall be manned to meet emergency requirements at any time night or day.

12.2 Accordingly, on the understanding that an HEO will meet all rostered on-call demands, and all reasonable un-rostered demands, and will meet all necessary overtime demands of the situation, the following consolidated overtime and on-call allowances shall be paid, subject to the further conditions hereunder:

38. The above clauses when closely looked at say that a Health Extension Officer (HEO) is required to provide on call over time service to the public whether or not he or she was rostered. But the demand for the service must be met. In other words the HEO must actually perform the work demanded of him or her, rostered or unrostered. This means you work your claim, you do not work, you do not claim and cannot claim.

39. There is no such thing as getting paid for doing nothing. The principle is simple – you work you get paid – you don't work you don't get paid.

40. The true position in this case is therefore, that the accused was eligible to perform on call and overtime duties as a HEO, whether or not he was rostered for on call and overtime duties, but in this case he was not entitled to claim those allowances because he did not perform any on call or overtime duties. That is precisely what Clauses 12.1 and 12.2 are saying.

41. If he was honest about his Vanimo claims he should have claimed them in Vanimo, so that his claims could be checked and verified. But he did not claim them there because he knew he did not provide and perform any unrostered on call service demands in Vanimo.

42. The same is said for the overtime and on call allowance claims from the Kimbe Hospital. He did no overtime and on call duties in Kimbe. He could not be entitled to the claims, unless he performed the service demands.

43. The fact that he made no claim in Vanimo but instead claimed them in Kimbe where it could not be checked and verified, to my mind is a big indicator that he was not acting in all good faith and honesty.

44. The accused has also explained that he had requested Director – Finance and Administration to see if he could be paid those allowances but said the actual processes were done by the personnel and finance sections. Why put through these claims when you knew you did not perform any service or actual work. The funds of the hospitals cannot be abused in this way without proof of actual service. The accused was not able to produce time sheets to show to the court that he worked or performed those duties even though he was not rostered. To me it is simple – the claims were false and intended to cheat the Kimbe Hospital of its much needed funds. Accordingly, I find the accused guilty on both counts 1 and 2.
____________________________________________________________

Public Prosecutor: Lawyer for the State
Kombri & Associate Lawyers: Lawyer for the Defence