State v Duban [2024] PGNC 108; N10776 (3 May 2024)

N10776

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NOS 41-50 OF 2022

THE STATE

V

NIXON DUBAN & HELEN KANIMBA

Madang: Cannings J
2024: 21^st, 22^nd March, 3^rd May

CRIMINAL LAW – SENTENCES – misappropriation, Criminal Code, s 383A – misappropriation of K600,000.00 allocated to public hospital – trial – one offender the local member of Parliament; the other offender a senior public official.

The offenders were convicted after trial of the offence of misappropriation under s383A of the Criminal Code. They misappropriated K600,000.00 of public funds obtained from the National Gaming Control Board which was required to be given to a public hospital for infrastructure and medical equipment purposes. Instead the funds were deposited into the district treasury account under the control of the first offender, as local member of Parliament and chairman of the District Development Authority, and the second offender as district treasurer. The first offender instructed that the funds be diverted to purposes that were unlawful and unauthorised and the second offender facilitated the misappropriation that occurred. This was the judgment on sentence.

Held:

(1) The maximum penalty for the amount misappropriated (K600,000.00) is ten years imprisonment.

(2) The starting point range for the amount misappropriated is seven to ten years imprisonment (Supreme Court sentencing guidelines in Kaya & Kaman v The State (2020) SC2026 applied).

(3) Mitigating factors are: no evidence that the money was applied to entirely wasteful or personal purposes; no prior conviction; and for the second offender: her long and unblemished prior record of public service. Aggravating factors are: large amount of public money misappropriated; breach of trust; a public hospital was directly affected by diversion of money to which it was entitled.

(4) Because of the strength of the mitigating factors, a sentence below the starting point range is appropriate: five years imprisonment for the first offender (as he was a member of Parliament responsible for the application of funds under his control and it was his instructions that led to the misappropriation that occurred) and three years imprisonment for the second offender (she followed the first offender’s instructions but had a long and unblemished prior record of public service and deserves a lesser sentence).

(5) As to the question of suspension, in misappropriation cases the major consideration is whether there has been any restitution of the money misappropriated or there is a realistic prospect of restitution within a limited period. There was evidence of a realistic prospect of partial restitution and in view of the poor health of the first offender and the advanced age of the second offender, fully suspended sentences were appropriate. Conditions included, in the case of the first offender, that he pay the hospital K180,000.00 within six months, and in the case of the second offender, that she pay the hospital K20,000.00 within six months.

Cases Cited
Kaya & Kaman v The State (2020) SC2026
The State v Nancy Uviri (2008) N5468
Wellington Belawa v The State [1988-89] PNGLR 496

Counsel
S Mosoro & J Kase, for the State
B W Meten, for the Accused

3^rd May 2024

1. CANNINGS J: This is the decision on sentence for Nixon Duban and Helen Kanimba who were convicted after trial of one count of misappropriation under s 383A(1)(a) (misappropriation of property) of the Criminal Code.

2. In March-April 2013 when Mr Duban was member for Madang Open in the National Parliament and Mrs Kanimba was Madang District Treasurer, they misappropriated K600,000.00 of public money under the control of the National Gaming Control Board, intended to be applied to an infrastructure and medical equipment project for Yagaum Rural Hospital in Madang District by applying it to unauthorised and unlawful purposes.

3. The Gaming Board funds were parked in the Madang District Treasury operating account, which was under the control of both the offenders. The funds were not applied to their intended use but instead diverted to other uses unrelated to the public hospital that were not proper or lawful purposes:

• Tumbuna Tracks Studios (K200,000.00);
• Yabob Lutheran Church (K140,000.00);
• those who benefited from K202,616.90 applied to an educational tour to Jayapura; and
• beneficiaries of K55,000.00 “financial assistance” (Ivan Kanimba, K20,000.00; Don Bosco Tech, K5,000.00; Tingim Wanskin K30,000.00).
  

4. Mr Duban gave the instructions for application of the funds to the above unlawful purposes and Mrs Kanimba complied with the instructions and facilitated the payments to the unauthorized recipients.

5. Further details of the offence are in the judgment on verdict, The State v Duban & Kanimba (2023) N10501.

ANTECEDENTS

6. Neither offender has any prior conviction.

ALLOCUTUS

7. Each offender was given the opportunity to address the court. Mr Duban expressed his sincere apologies to the Court and to the board of Yagaum Rural Hospital. He said that the diversion of funds that took place was always intended to be temporary and that the intention was that the hospital would get the funds allocated to it by the Gaming Board. He acted for noble intentions in accordance with his duties as the Member for Madang District. He emphasised that he did not personally benefit from the diversion of the funds. The funds were applied to other challenging needs of the district. These are the sort of tough decisions that a member of Parliament must make as there are many demands put upon members which makes it difficult at times to decide which projects should get priority.

8. Mr Duban presented as part of his allocutus a 35-page written statement and voluminous annexures which elaborate on the points he raised in his oral statement to the court and asserts that the decisions he made regarding disbursement of funds were based on the advice of others and that he elected to remain silent at the trial on legal advice.

9. Mrs Kanimba thanked the Court and officers of the Court for the time and attention given to her case. She thanked her family for their support. This case has had a severe impact on her health and well-being.

10. Mrs Kanimba presented as part of her allocutus a six-page written statement and a numerous annexures in which she pointed out that there were difficulties in defending the case due to the death of a number of key personnel in the district administration. She claimed that the key State witness had lied in evidence and that there was evidence in the District Treasury office that went missing, which would have proven that she made a full acquittal of funds she received for the Jayapura study tour. She said she had an unblemished record of 40 years of public service and had been appointed Provincial Treasurer in 2019, which demonstrates the high standing she had in the community until she was charged over this matter, which has caused so much distress.

PRE-SENTENCE REPORTS

11. The Court obtained from the Community-Based Corrections and Rehabilitation Service pre-sentence reports prepared by Senior Probation Officer Alice Biko.

12. Mr Duban is aged 47, from Haimo village, South Ambenob LLG area, Madang District, Madang Province. He has two wives and five children. He has a home in Madang and a home in Port Moresby. His parents are alive but his father is very ill and his mother cares for his father and his sister who is mentally ill. Mr Duban has a Bachelor of Arts from the University of PNG and a post-graduate qualification from the Australian National University, Canberra.

13. Mr Duban was member for Madang Open for most of the period from 2012 to 2017. He was a member of the government of Prime Minister Peter O’Neill. He held three different ministerial portfolios: Minister for Police & Internal Security (August 2012 to January 2014); Minister for Petroleum & Energy (February 2014 to January 2016 and July 2016 to August 2017); and Minister for Transport & Infrastructure (January to July 2016). He was PNG country director of World Access Energy PNG Ltd from 2019 to 2022. He is presently a consultant in the oil and petroleum industry and is financially secure.

14. Mr Duban is in poor health. He is obese and diabetic and in pain due to the onset of osteoarthritis. He is Catholic and supports many local musicians. He has close ties in the local community. Numerous character references have been provided by local community leaders, which are testament to his high standing in the community.

15. Mrs Kanimba is aged 63, from Giri village, Bogia District, Madang Province. She was married for a long time to a man from whom she has recently separated. She lives in Madang and has been for a long period the sole breadwinner in the family. She cares for 12 dependants including her own children and grandchildren who are strongly supportive of her. Her parents are deceased. She has a grade 12 education from Aiyura National High School in 1978.

16. Mrs Kanimba has been a career public servant since 1979 when she commenced employment as an assistant budget clerk at Police headquarters in Port Moresby. She worked for the Defence Force from 1980 to 1985 and later for the Bureau of Management Services in which she held positions at Port Moresby and Goroka. She moved to her home province of Madang in 1985 and has remained employed in the Bureau of Management Services and its successor departments in senior accounting and financial management roles to date. She was District Treasurer at the time of commission of the offence in 2013 and became Provincial Treasurer in 2019.

17. Mrs Kanimba is in good health. She does not chew betel nut or smoke and she does not consume alcohol. However, she and her family have undergone great trauma during the investigation of the matters that resulted in her conviction. She is a member of the Baptist faith and attends church regularly. She is highly regarded in the local community.

SUBMISSIONS BY DEFENCE COUNSEL

18. Mr Meten highlighted that both offenders have no prior convictions and received favourable pre-sentence reports. The large amount of money involved means that the notional sentence for each of them could be around eight years imprisonment. However, there are weighty mitigating factors.

19. In the case of Mr Duban, there is no evidence or allegation that he benefited personally from the diversion of money that occurred. He fully cooperated with the police and he has serious health issues. He is prepared to and has the ability to pay restitution to the hospital if given enough time.

20. Mrs Kanimba is a long-standing career officer with a hitherto clean record. Mr Meten submitted that both offenders have suffered greatly already due to the way in which this case has been pursued and publicised. It would be in the interests of justice and in the interests of Yagaum Rural Hospital if they were given fully suspended sentences and given time to pay restitution to the hospital.

SUBMISSIONS BY THE STATE

21. Ms Mosoro stressed that there were a number of serious aggravating factors: the large amount of money, the fact that Mr Duban held a high public office and was in a position of trust; the grossly improper use of the funds that resulted in a public hospital being denied funds for infrastructure purposes that were desperately required; the lack of any serious plan to repay the money misappropriated. There is a need for a strong deterrent penalty of seven to ten years imprisonment for each offender.

22. If any part of the sentence is to be suspended it must be on condition that there be full restitution within a reasonable period.

DECISION-MAKING PROCESS

23. To determine the appropriate sentence I will adopt the following decision-making process:

• step 1: what is the maximum penalty?
• step 2: what is a proper starting point?
• step 3: what sentences have been imposed for equivalent offences?
• step 4: what is the appropriate head sentence?
• step 5: should the pre-sentence period in custody be deducted?
• step 6: should all or part of the sentence be suspended?
  

STEP 1: WHAT IS THE MAXIMUM PENALTY?

24. As the amount of money misappropriated (K600,000.00) is more than K2,000.00 and less than K1 million, the maximum penalty under ss 383A(1A) and (2)(d) of the Criminal Code is ten years imprisonment.

STEP 2: WHAT IS A PROPER STARTING POINT?

25. The Supreme Court set out starting point ranges in Wellington Belawa v The State [1988-89] PNGLR 496, depending on the amount of money misappropriated. I have stated in previous cases such as The State v Nancy Uviri (2008) N5468 that these should be increased and regarded as follows:

• K1.00 to K1,000.00 – suspended sentence usually appropriate;
• K1,000.00 to K10,000.00 – four years imprisonment;
• K10,000.00 to K40,000.00 – four to six years imprisonment;
• K40,000.00 to K150,000.00 and beyond – six to ten years.
  

26. Recently the Supreme Court reassessed sentencing guidelines for misappropriation in Kaya & Kaman v The State (2020) SC2026. Berrigan J, with whom Batari J agreed, suggested that the following scale of sentences may usefully be accepted as a base, to be adjusted upwards or downwards according to the factors outlined in Wellington Belawa, such that where the amount misappropriated is between:

(a) K1 and K1000 a gaol term should rarely be imposed;
(b) K1,000 and K10,000, a gaol term of up to two years is appropriate;
(c) K10,000 and K40,000, two to three years’ imprisonment is appropriate;
(d) K40,000 and K100,000, three to five years of imprisonment is appropriate;

(e) K100,000 and K500,000, five to seven years’ imprisonment is appropriate; and

(f) K500,000 and K999,999.99, seven to ten years of imprisonment is appropriate, bearing in mind that the maximum under s 383A(2) should be reserved for the worst types of offending involving amounts less than K1 million.

27. The third member of the Court in Kaya & Kaman was Mogish J who had a different view to the majority on the question of sentencing guidelines, preferring to assess each case on its merits without being constrained by sentencing tariffs. With respect, I feel no such constraint. I agree with the guidelines suggested by the majority in Kaya & Kaman. They make eminent sense to me. I will apply them here. They are guidelines only. As Berrigan J emphasised, they are a scale of sentences to use as a base that can be adjusted upwards or downwards according to the factors outlined in Belawa, which I take to mean the mitigating and aggravating factors peculiar to the circumstances of the offence and the offender.

28. I have always used the term ‘starting point range’ when referring to sentencing guidelines. They give the judge somewhere to start making the decision as to what the head sentence should be. Understood that way, I apply the guidelines in Kaya & Kaman, which means that the starting point range, in view of the amount misappropriated, is seven to ten years imprisonment.

STEP 3: WHAT SENTENCES HAVE BEEN IMPOSED FOR EQUIVALENT OFFENCES?

29. In The State v Nancy Uviri (2008) N5468 the offender pleaded guilty to misappropriation of K300,000.00 cash from her employer over an 18-month period. She engineered a scheme of presenting bogus invoices and obtaining cash. Mitigating factors were that she cooperated with police; repaid some money; pleaded guilty and was a first-time offender. Aggravating factors were the very large amount of money; the transactions were committed over long period; severe breach of trust; and the money was not put to good use. I imposed a sentence of seven years imprisonment, none of which was suspended.

30. In Kaya & Kaman the offenders were convicted following a joint trial of misappropriating K5 million belonging to the State. The monies were paid by the State as compensation to the landowners of the East Awin area in Western Province for the compulsory acquisition of land following the resettlement of refugees from West Papua in the 1980s. The appellant, David Kaya, was pursuing compensation payments on behalf of the landowners as Chairman of a landowner company, Paiso Company Limited (Paiso). The Department of Treasury issued a cheque payable to Paiso in the sum of K5 million. On the instructions of David Kaya, the cheque was deposited to the trust account of the appellant, Philip Kaman, a lawyer. Between 17 October and 5 November 2014 the monies were applied from the account through cash withdrawals, transfers to a number of company and personal accounts, and for the purchase of two motor vehicles. They were sentenced to 15 years imprisonment each year, with five years suspended upon restitution. Their appeals against conviction and sentence were dismissed.

STEP 4: WHAT IS THE APPROPRIATE HEAD SENTENCE?

31. There are a number of considerations to take into account in deciding on the head sentence. The more mitigating factors there are, the more likely the head sentence will be reduced below the starting point. The more aggravating factors present, the more likely the head sentence will be above or at the starting point. However, sentencing is not an exact science. It is a discretionary process. When a factor is marked as mitigating or aggravating it does not mean necessarily that it is given the same weight as another mitigating or aggravating factor. Some mitigating factors may be strongly mitigating. Others may be mildly mitigating. The same goes for aggravating factors. I will deal with the offenders separately.

Nixon Duban

Mitigating factors

32. The following matters mitigate the seriousness of the offence and militate towards a sentence within or lower than the starting point range:

• no evidence that the money was applied to an entirely wasteful or selfish purpose or that he personally benefited;
• the offender’s reputation has been tarnished already;
• he cooperated fully with the Police and the Court;
• no prior conviction;
• a favourable pre-sentence report, showing that he is highly regarded in the local community.
  

Aggravating factors

33. These factors militate towards a sentence within the starting point range:

• large amount of public money misappropriated;
• serious breach of trust;
• public hospital directly affected;
• serious effect on public confidence in the integrity of the public sector.
  

Other relevant considerations:

• there has, to date, been no restitution.
  

34. After weighing all these factors, noting that there are more mitigating factors than aggravating factors and comparing this case with other misappropriation sentences, the head sentence should be below the starting point range of seven to ten years is appropriate. The appropriate sentence is five years imprisonment.

Helen Kanimba

Mitigating factors

• the offender’s reputation has been tarnished already;
• she cooperated fully with the Police and the Court;
• no prior conviction;
• a favourable pre-sentence report, showing that he is highly regarded in the local community;
• she has a long and distinguished record of public service, unblemished prior to this offence;
• the degree of criminality was of a lesser degree than Mr Duban’s as she was an implementer and facilitator of his instructions.
  

Aggravating factors

• large amount of public money misappropriated;
• serious breach of trust;
• public hospital directly affected;
• serious effect on public confidence in the integrity of the public sector;
• she to a limited extent personally benefited from some of the misappropriation.
  

Other relevant considerations:

• there has, to date, been no restitution.
  

35. Because of the weighty mitigating factors, compared to the case of Mr Duban, Mrs Kanimba should get a lesser sentence. The appropriate sentence is three years imprisonment.

STEP 5: SHOULD THE PRE-SENTENCE PERIOD IN CUSTODY BE DEDUCTED FROM THE TERM OF IMPRISONMENT?

36. There is nothing to deduct.

STEP 6: SHOULD ALL OR PART OF THE HEAD SENTENCE BE SUSPENDED?

37. In misappropriation cases the major consideration in deciding on the question of suspension is whether there has been any restitution of the money misappropriated or there is a realistic prospect of restitution within a limited period. I adopt the dicta of Berrigan J in Kaya & Kaman:

The promotion of restitution is an important and valid reason for suspending a sentence in certain circumstances: Public Prosecutor v Tardrew [1986] PNGLR 91. It must, of course, never be seen as allowing a person to “buy” their way out of prison: see the comments of Sevua J in The State v Wilmot (2005) N2857. This would defeat the interests of justice and undermine confidence in its administration.

38. Here, there is evidence of a realistic prospect of restitution, especially on the part of Mr Duban who appears to be financially secure and who says he can pay the hospital all the money misappropriated (K600,000.00) if given a couple of years to do so. Mrs Kanimba is less financially well off, but it seems she might be soon at the age of retirement and able to tap into retirement or superannuation benefits.

39. I have decided, especially in view of the poor health of Mr Duban and the advanced age of Mrs Kanimba and again giving her credit for her hitherto long and distinguished career in public financial administration, to fully suspend their sentences.

40. This will be conditional on them paying Yagaum Rural Hospital significant sums within a reasonable period. Two years is too long. The period is six months.

41. As to the amounts they have to pay, I will not order full restitution. I don’t think that is realistic. I need to fix on amounts that are reasonable and realistic and from the hospital’s perspective, still meaningful and significant.

42. In the case of Mr Duban he must pay the hospital K180,000.00 within six months after the date of sentence. In the case of Mrs Kanimba she must pay the hospital K20,000.00 within six months after the date of sentence.

SENTENCES

43. Nixon Duban, having been convicted of one count of misappropriation, contrary to s 383A(1)(a) of the Criminal Code in circumstances of aggravation under s 383A(2)(d) of the Criminal Code, is sentenced as follows:

Length of sentence imposed	5 years
Pre-sentence period to be deducted	Nil
Resultant length of sentence to be served	5 years
Amount of sentence suspended	5 years, subject to conditions that he (a) pays to Yagaum Rural Hospital the sum of K180,000.00, to be applied for infrastructure and medical equipment purposes, by 4 November 2024; and (b) keeps the peace and is of good behaviour until 3 May 2029
Time to be served in custody	Nil, subject to compliance with conditions of suspended sentence

44. Helen Kanimba, having been convicted of one count of misappropriation, contrary to s 383A(1)(a) of the Criminal Code in circumstances of aggravation under s 383A(2)(d) of the Criminal Code, is sentenced as follows:

Length of sentence imposed	3 years
Pre-sentence period to be deducted	Nil
Resultant length of sentence to be served	3 years
Amount of sentence suspended	3 years, subject to conditions that she (a) pays to Yagaum Rural Hospital the sum of K20,000.00, to be applied for infrastructure and medical equipment purposes, by 4 November 2024; and (b) keeps the peace and is of good behaviour until 3 May 2027
Time to be served in custody	Nil, subject to compliance with conditions of suspended sentence

__________________________________________________________________
Public Prosecutor: Lawyer for the State
Meten Lawyers: Lawyers for the Offenders