Acting Public Prosecutor v James [2025] PGNC 505; N11638 (15 December 2025)

N11638

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS (POC) NO 2 OF 2025

IN THE MATTER OF SECTION 32, 63 AND OTHER RELATED PROVISIONS OF THE PROCEEDS OF CRIME ACT 2022

BETWEEN
ACTING PUBLIC PROSECUTOR
Plaintiff

AND
KATHLEEN RUTH JAMES
Defendant

WAIGANI: BERRIGAN J
3, 15 DECEMBER 2025

PROCEEDS OF CRIME ACT 2022 – APPLICATION TO REVOKE RESTRAINING ORDER – Sections 57, 37 and 61 of the Proceeds of Crime Act – Application refused.

The defendant applied to revoke a restraining order made pursuant to s 32 of the Proceeds of Crime Act 2022 on 12 September 2025 against all funds standing to the credit of the defendant’s personal bank account and that of the company, Karma Investments Limited, of which the defendant is the sole director and shareholder, on the basis that there were no grounds for the suspicion that she committed serious offences and on the undertaking that she will carry out her company’s contractual obligations.

The application was initially brought under s 57 but the defendant was allowed to amend the application to bring it under s 61 of the POCA 2022.

Held

(1) Section 57 of the POCA, 2022 governs when a restraining order ceases to be in force. A person may apply for a declaration to the effect that a restraining order has lapsed but s 57 is not concerned with revocation as such. Whilst the defendant has not been convicted of or charged with the offences to which the restraining order relates and nor has a confiscation order been made with respect to the subject property, the originating summons applies for forfeiture. There is therefore an application for a confiscation order before the Court: s59 of the POCA. Section 57(1)(b) does not apply.

(2) The application under s 61 of the POCA is in fact an application for revocation on the basis that there were no grounds on which to make the restraining order. Such an application is to be made under s 37 of the POCA within 28 days after the person is notified of the order or becomes aware of the order, subject to any extension granted by the Court up to a period of three months. The defendant did not apply for revocation under s 37. The defendant became aware of the order on 18 September 2025. Any application to revoke the restraining order on the basis that there were no grounds for the order is out of time.

(3) The matters raised by the defendant are not sufficient to remove the reasonable grounds for the suspicion that the defendant committed the offences alleged. There are reasonable grounds to suspect that about K1.757m was paid to the defendant’s company between April and May 2024 for which goods and services have yet to be provided, other than the Sports Mapping Report, which was provided on 25 September 2025 and after the restraining order was made.

(4) The proposed order under s 61 is inappropriate. It would release monies to a person who is suspected on reasonable grounds to have committed serious offences, which monies would be sent overseas, on the promise that they are paid to a company based in another jurisdiction, from which there are no recent invoices, in respect of which little is known, and over which the Court has no effective supervision or control. It would also defeat the purpose of the restraining order which is to ensure that monies are available to meet any confiscation order that might be made.

(5) The Court’s power to make orders in the interests of justice under s 155(4) of the Constitution means justice according to law. The applicable law is the POCA 2022 and the remedies available are contained in that law. The fact that the defendant has failed to demonstrate that she is entitled to those remedies does not entitle her to any other remedy under s 155(4). See Powi v Southern Highlands Government (2006) SC844.

Application refused

Cases cited
State v Kathleen Ruth James (2025) N11483
APP v Kathy Pitzz (2025) N11611
The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568
George v Rockett [1990] HCA 26; (1990) 170 CLR 104
Shaaban bin Hussien v Chong Fook Kam [1969] UKPC 26; [1970] AC 942
Queensland Bacon v Rees [1966] HCA 21; (1966) 115 CLR 266
Electoral Commission v. Pila Niningi (2003) SC710
Kala Rawali v. Paias Wingti; Tom Olga v. Paias Wingti (2009) SC1033
PNG Tropical Wood Products Ltd v. Manuel Gramgari (2013) SC1145
Nikint Investment Ltd v. Niganu (2020) SC1919
Telikom PNG Ltd v Kopalye (2021) SC2141
State v Yomba (2022) SC2274; SCR No 2 of 1981; Re S19(1)(f) Criminal Code (Ch 262) [1982] PNGLR 150
Peter Makeng v. Timbers (PNG) Ltd (2008) N3317
Louis Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144
Air Niugini Ltd v Warakai
Powi v Southern Highlands Government (2006) SC844

Counsel
T Kametan for the plaintiff/respondent
E Sasingian for the applicant/defendant

DECISION ON APPLICATION TO REVOKE RESTRAINING ORDER

1. BERRIGAN J: This is an application to revoke a restraining order made on 12 September 2025 against all funds standing to the credit of the defendant’s personal bank account and that of the company, Karma Investments Limited, of which the defendant is the sole director and shareholder: State v Kathleen Ruth James (2025) N11483.
   
2. The order was made pursuant to s 32 of the Proceeds of Crime Act 2022 upon application by the Acting Public Prosecutor (APP) on the basis that there were reasonable grounds to suspect that the defendant had committed several “serious offences” (as defined) by obtaining goods by false pretence in an unspecified sum contrary to s 404(1)(a) of the Criminal Code and four counts of misappropriating K250,000, K250,000, K628,924.72 and K628,924.72, respectively, belonging to the State, contrary to s 383A(1)(a) of the Criminal Code.
   
3. The grounds were set out in the affidavit of a police officer, Detective Constable Jeremiah Kalap, stating that he suspected that the defendant was married to the Honourable Don Pomb Polye who was the Minister for Higher Education, Research, Science and Technology at the time. The defendant’s company, Karma Investment Ltd, received a total of K1,757m from the PNG Sports Foundation (PNGSF) between 6 February 2024 and 6 May 2024 pursuant to contracts for goods and services which were never delivered. Instead, the funds were applied to the personal bank account of the defendant and on one occasion to a bank account to which her husband was the sole signatory.
   
4. As at 2 September 2025 K120,611.97 was standing to the credit of the defendant’s personal account and a further K180,712.93 to the account of Karma Investment Ltd.
   

Application under s 57 of the POCA 2022

5. The application was initially made pursuant to s 57(1)(b) of the POCA.
   
6. Section 57 of the POCA 2022 governs when a restraining order ceases to be in force according to s 57(1) to (6).
   
7. A person may apply for a declaration under s 57(7) to the effect that a restraining order has lapsed but s 57 is not concerned with revocation as such.
   
8. Section 57(1)(b) in particular provides that:
   

57. WHEN RESTRAINING ORDER CEASES TO BE IN FORCE. (1) A restraining order ceases to be in force if, within 28 days after the order was made - (a) the suspect has not been convicted of, or charged with, the offence or at least one offence, to which the restraining order relates; and (b) there is no confiscation order or application for a confiscation order that relates to the offence.

9. Whilst the APP does not contend that the applicant/defendant has been convicted of or charged with any of the offences to which the restraining order relates and nor has a confiscation order (that is a forfeiture or pecuniary penalty order: s 3) been made with respect to the property, the originating summons filed by the APP applies for forfeiture. As such, there is an application for a confiscation order before the Court: s 59 of the POCA, 2022; APP v Kathy Pitzz (2025) N11611.
   
10. Accordingly, s 57(1)(b) does not apply.
    
11. It became apparent from the written submissions of counsel that the defendant was in fact seeking to rely on s 57 of the POCA 2005, which was amended in 2015 and has since been repealed and replicated in s 61 of the POCA, 2022, which came into force in September 2024.
    
12. Upon this being raised with counsel, the defendant applied to amend the application. The APP objected to the amendment on the basis that she was not in a position to respond to the application.
    
13. On balance I intend to allow the amendment in this case. The APP has not demonstrated any prejudice. The application is for revocation which is governed by certain provisions within the Act. Whilst the notice was deficient as to the grounds for revocation, the basis of the application is effectively set out in the defendant’s affidavit, which has been with the APP for some time. The investigating officer upon whom the APP relies should be present to assist the Court if required and the APP did not apply for nor identify any basis upon which an adjournment was required in order to properly respond.
    

Application under s 61, POCA 2022

14. The defendant submits that the sole purpose of the application is to give an undertaking satisfying the Court to revoke the restraining order and allow the defendant to carry on her contractual obligations on the basis that there were no grounds for the suspicion that she committed serious offences. Work was done under the agreements, the work is ongoing, the monies paid to her husband’s account were not PNGSF funds and the value of the property in the bank accounts is disputed.
    
15. In particular, the defendant contends that correspondence from the current CEO and Managing Director of the PNG Sports Foundation establishes that the PNGSF is willing to continue to work with Karma Investment Limited and the projects are ongoing. The Sports Mapping Contract was valued at K500,000, including K250,000 upon signing and K250,000 upon completion. The PNGSF has received the Social Mapping Report and is currently vetting it. The current Managing Director, Micah James, replaced the former Managing Director, Albert Varatau, who signed the contract. Emails and Whatsapp messages show that the defendant was communicating with PNGSF in 2024 even though PNGSF did not respond. The defendant provided the PNGSF with the Social Mapping Report in December 2024 but due to in-house fighting over leadership and the change in Managing Directors, the PNGSF did not respond. As the Sports Mapping Report is valued at K500,000 that amount must be deducted from the K1.757m paid to Karma Investment Ltd. An IRC Tax Clearance for Karma Investment Ltd to Pacifica Sport Pty Ltd in Australia to purchase sport equipment was obtained. Pacifica was the recommended supplier for the PNGSF. The defendant’s husband, the Honourable Don Poyle is no longer the responsible Minster for Sport. The payment to Mr Poyle’s company’s account, Sabbath Inn, of K100,000 was in payment of rent under a lease agreement and the payment was made from the K110,000 received from Mappin Mande Trading not PNGSF funds. The goods were not purchased because the date of the PNG Games has been repeatedly deferred by NEC and is now scheduled for 2026.
    
16. The defendant also contends that K600,000 is missing from her bank account and that of her company. Upon raising this with the Bank of South Pacific, it wrote to the defendant on 6 October 2025 advising that it was closing the accounts “after reviewing its conduct with BSP’s standard practice”, and advising that the defendant had 30 days to make alternative banking arrangements and any residual credit after bank fees would be available for collection.
    
17. Finally, the defendant has provided an undertaking to use the remaining funds in her accounts to purchase the equipment in accordance with the contracts with the PNGSF.
    
18. The application under s 61(1)(b) is misconceived on several fronts.
    
19. Firstly, and perhaps critically, the application is in fact an application for revocation on the basis that there were no grounds on which to make the order.
    
20. Such an application is to be made under s 37(1) and (6) of the POCA in the case of a person who was not notified of the application for the restraining order and must be made within 28 days after the person is “notified of the order or becomes aware of the order”, subject to any extension granted by the Court up to a period of three months: s 37(2).
    

37. APPLICATION TO REVOKE A RESTRAINING ORDER. (1) A person with an interest in property who was not notified of an application for a restraining order that covers that property may apply to the Court to revoke the order. (2) The application must be made - (a) within 28 days after the person is notified of the order or becomes aware of the order; or (b) if the person applies to the Court, within that period of 28 days, for an extension of the time for applying for revocation within such longer period, not exceeding three months, as the Court allows. (3) The applicant must give written notice to the Public Prosecutor and the Commissioner of Police of both the application and the grounds on which the revocation is sought. (4) However, the restraining order remains in force until the Court revokes the order. (5) The Public Prosecutor may adduce additional evidence to the Court relating to the application to revoke the restraining order. (6) The Court may revoke the restraining order if satisfied that there are no grounds on which to make the order at the time of considering the application to revoke the order.

21. The application for the restraining order was made on 12 September 2025 ex parte upon the application of the APP pursuant to s 35(2).
    
22. The defendant contends that she was not given notice in accordance with the orders that directed that notice be given to her at her residential address and that she is therefore not out of time.
    
23. There are a number of problems with that contention. The defendant has not applied for revocation under s 37 and did not provide the notice required under s 37(3).
    
24. Moreover, whilst an order was made to give notice at the defendant’s residential address, that is really beside the point.
    
25. Whilst it might have been prudent, it was not necessary for the APP to apply for such an order. The Public Prosecutor is obliged to give notice to any person with an interest in the property restrained pursuant to the terms of s 42(1) to (9) but is not required to seek orders to that effect otherwise than by exception as provided by that section.
    
26. Orders were made in this case. Nevertheless, the determinative question under s 37(2) is not one of service nor of written notification but when the person “becomes aware of the order”. This is entirely consistent with the purpose of the Act, which is to preserve property in the event a confiscation (forfeiture or pecuniary penalty) order is made: APP v Kathy Pitzz (2025) N11611 at [17]. There is nothing about the order directing the APP to give notice to the defendant at her residential address that restricts that requirement.
    
27. Further to that, the APP has provided affidavit evidence to show that the order was served at the registered address of the defendant’s company on 18 September 2025. Accordingly, I find that the defendant became aware on that date. Any application to revoke the restraining order on the basis that there were no grounds for the order is therefore out of time.
    
28. Secondly, even if I am wrong about that, the contentions raised by the defendant are not sufficient to remove the reasonable grounds for the suspicion held by Detective Constable Jeremiah Kalap that the defendant committed the offences alleged.
    
29. Whether or not the defendant and/or her company did correspond with the PNGSF as to the difficulties encountered completing the Social Mapping report and nevertheless provided the Report in December 2024 will be matters relevant to any criminal trial or any forfeiture application under the POCA. On the material before me, however, Mr Micah James, the Managing Director of PNGSF, states in his letter of 17 October 2025 that his office never received any of the correspondence referred to by the defendant in her letter of 23 September 2025, or the Social Mapping Report until 23 September 2025, which is some eleven days after the restraining order was made. The Report is still being vetted.
    
30. Whilst Mr Winston Nelson, Finance & Administration Manager in his report of 16 October 2025 states that the “procurement of sporting equipment and supplies and the sports social mapping project” were executed and “undertaken in accordance with contractual arrangements and organizational responsibilities” it is not clear what he means by that given Mr James’ statements above, the fact that the Report is currently being vetted following receipt, and the fact that the defendant herself does not dispute that sporting goods have yet to be procured under the contracts.
    
31. I do not have the document referred to in which Mr Maniana states that the work within the Karma Investments Limited contract was in progress and delays were to be expected. Only a few of the Whatsapp messages referred to in the defendant’s affidavit have been produced. Nevertheless, as to those and the meetings referred to in her affidavit between March and November 2024 the defendant contends that she was seeking assistance to conduct the Social Mapping exercise and clarify the sporting equipment required.
    
32. Whilst I understand that Ms James claims a right to the monies received for the Social Mapping Report, and possibly more in the sum of an additional K500,000 for costs expended, and produces a report of some 174 pages in length plus annexures, the total cost of the Report was invoiced between April and May 2024 and long before its submission, even on her own evidence that it was submitted in December 2024.
    
33. I also accept that there may have been issues and delays with respect to the procurement of goods but again the monies were invoiced, received and transferred to the defendant’s personal bank account by 27 December 2024 and yet no goods have been procured or firm arrangements made.
    
34. Not all of the invoices are addressed to Karma Investment Ltd, some are directly addressed to the PNGSF, and those that are addressed to the company date from April and May 2024, have long lapsed, are invoices not receipts, are limited in nature and equate to only about K300,000 or more. As for Pacifica it appears to have been a supplier recommended by the defendant but it is not clear whether it is a preferred supplier of the PNGSF. I take judicial notice of the fact that there were exchange restrictions in 2024 but whilst there is an IRC invoice it is only for the sum of K40,000 in March 2024.
    
35. I also appreciate that the defendant contends that the supplies could not be purchased given ongoing issues with PNGSF and the deferral of the Games and potential issues with storage but that remains to be determined. In the meantime according to Kalap, K473,846.39 was sent overseas from the defendant’s personal bank account.
    
36. It does appear that there were funds of at least K110,000 available from another source to meet rent which may have been due under an agreement with Sabbath Inn dated 20 August 2020 at the time the payment of K100,000 was made to it albeit that there are some anomalies, ie the invoice produced is dated 18 June 2025 for the year ending August 2023 whilst the payment was made on 5 June 2024.
    
37. The relationship between the defendant and the responsible Minister at the time the contracts were awarded nevertheless remains.
    
38. As for the contention that about K600,000 is missing from the defendant or her company’s bank account I have not been directed to where that money has gone missing and the defendant properly concedes that is a matter the bank disputes.
    
39. Whether or not the State has sufficient evidence to establish a case against the defendant beyond reasonable doubt or even on the balance of probabilities under the Act remains to be seen. As it stands, however and noting the test to be applied (see App v Kathy Pitzz (2025) N11611 at [64] to [67] and the cases referred to: Acting Public Prosecutor v James (2025) N11483 at [19] to [21]; The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 at [110 to 113] adopting George v Rockett [1990] HCA 26; (1990) 170 CLR 104 at [7] and [8]; citing Shaaban bin Hussien v Chong Fook Kam [1969] UKPC 26; [1970] AC 942, 948 and Queensland Bacon v Rees [1966] HCA 21; (1966) 115 CLR 266)), there are reasonable grounds to suspect that about K1.757m was paid to the defendant’s company between April and May 2024 for which goods and services have yet to be provided, other than the Sports Mapping Report, which was provided on 25 September 2025 and after the restraining order was made.
    
40. Thirdly, as to the undertaking offered by the defendant, s 61 provides:
    

61. COURT MAY REVOKE RESTRAINING ORDER UPON GIVING OF SECURITY, ETC. (1) If the Court has made a restraining order against a person's property, the Court may, on application by the person, revoke the order if - (a) for an applicant who is a suspect, the applicant gives security to the Commissioner of Police that is, subject to Subsection (3), satisfactory to the Court for the satisfaction of any pecuniary penalty order that may be made against the person under this Act; or (b) the applicant gives undertakings satisfactory to the Court about the property. (2) An applicant under Subsection (1) must give reasonable written notice of the application to the Public Prosecutor and, if the restraining order directed the Commissioner of Police to take control of property, the Commissioner of Police. (3) Security is satisfactory only if the Court is satisfied that the security - (a) is equivalent to the market value of the property covered by the restraining order; or (b) is of a value sufficient to meet any liability of the applicant that may be imposed under this Act. (4) The Commissioner of Police shall manage the security given under Subsection (l)(a) in accordance with Part VII as if it were restrained property in respect of which a custody and control order has been made. (5) If the Court makes a confiscation order in respect of property that was previously covered by a restraining order that was revoked under Subsection (1 ), the confiscation order may be enforced by forfeiting the security provided under Subsection (l)(a). (6) If a person - (a) fails to provide the security required under Subsection (l)(a); or (b) fails to comply with an undertaking given under Subsection (1), the person is guilty of an offence. Penalty: (a) In the case of a natural person, a fine not exceeding K20,000.00 or imprisonment for two years, or both; or (b) In the case of a body corporate, a fine not exceeding K100,000.00

41. Section 61 requires, for present purposes, that an applicant must give “reasonable written notice” of the application to the Public Prosecutor.
    
42. Neither party addressed what constitutes reasonable notice but on its face s 61 is not confined by the 28 day requirement under s 37. That is because s 61 is very different in nature, purpose and effect from s 37.
    
43. Section 61 allows the Court to revoke a restraining order but not in absolute terms. Instead the Court makes orders effectively in substitution of the restraining order, whilst ensuring that property remains available to meet any confiscation order that might be made, either upon the giving of security to satisfy any pecuniary order that may be made or upon the giving of a satisfactory undertaking about the property itself.
    
44. To give an example, a restraining order might be made over a person’s home. The Court might be willing to revoke the restraining order and accept security in some other property or monies of an equivalent value given that restraint of the property could seriously impact others living at the home, like the person’s family. In the event such an order is made, however, the security is managed by the Police Commissioner “as if it were restrained property in respect of which a custody and control order has been made”: s 61(4).
    
45. Alternatively, the Court might revoke the restraining order and allow a person and their family to remain in the property under s 61(1)(b) on the undertaking that they not sell it, allow a caveat to be registered, maintain it well, allow regular inspections etc rather than deliver it to the Police Commissioner’s custody and control.
    
46. That is not the purpose of the application here. The defendant is seeking to revoke the order on the undertaking that the monies in the bank accounts are applied towards the purchase of goods under the contracts given by the PNGSF to Karma Investment Ltd.
    
47. That application really proceeds on the basis that there are no reasonable grounds for the restraining order, which as above, is an application out of time and without merit.
    
48. In addition, quite apart from the fact that there are no recent invoices, or arrangements made regarding the receipt, transportation and storage of the goods, the order would see the release of monies to a person who is suspected on reasonable grounds to have committed serious offences, which monies will be sent overseas, on the promise that they are paid to a company based in another jurisdiction, in respect of which little is known, and over which the Court has no effective supervision or control.
    
49. Moreover, it would defeat the purpose of the restraining order which is to ensure that monies are available to meet any confiscation order that might be made.
    
50. The application under s 61 of the POCA is refused.
    

Section 155(4) of the Constitution

51. Finally, the defendant seeks to have the restraining order set aside pursuant to s 155(4) of the Constitution.
    
52. It is well established that the Court’s power to make orders in the interests of justice under s 155(4), Constitution, means “justice according to law”: Electoral Commission v. Pila Niningi (2003) SC710; Kala Rawali v. Paias Wingti; Tom Olga v. Paias Wingti (2009) SC1033; PNG Tropical Wood Products Ltd v. Manuel Gramgari (2013) SC1145; Nikint Investment Ltd v. Niganu (2020) SC1919; Telikom PNG Ltd v Kopalye (2021) SC2141; State v Yomba (2022) SC2274; SCR No 2 of 1981; Re S19(1)(f) Criminal Code (Ch 262) [1982] PNGLR 150.
    
53. Furthermore, s 155 (4) Constitution, “is not the source of primary jurisdictional power”: Peter Makeng v. Timbers (PNG) Ltd (2008) N3317 and cannot be applied to do anything contrary to or inconsistent with the provisions of the National Court Rules: Louis Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144. Similarly, it cannot be applied to do anything contrary to or inconsistent with the provisions of a statute”: Air Niugini Ltd v Warakai at [9]: as summarised in APP v Morgan Mogu & Dominic Terupo (2025) N11428 at [19] and [28].
    
54. The law applicable here is the POCA, 2022 and the remedies available to the defendant are contained in that law. The fact that the defendant has failed to demonstrate that she is entitled to those remedies does not entitle her to any other remedy under s 155(4). See Powi v Southern Highlands Government (2006) SC844.
    
55. The application under s 155(4) of the Constitution is also refused.
    

Notice of intention to close the defendant and her company’s bank account

56. Before closing there is an important matter which I am grateful to the defendant for bringing to the Court’s attention and that is that BSP purported on 6 October 2025 to close the bank accounts of both the defendant and her company effective 14 November 2025 and directed her to withdraw the funds standing to the credit of the accounts following the deduction of bank fees.
    
57. That is in direct contravention of the restraining order made on 12 September 2025, which I expressly directed the bank to be given notice of by the APP. The APP did not address that matter.
    
58. A failure to comply with a restraining order is a serious matter. A person who knowingly contravenes a restraining order by “disposing of, or otherwise dealing with, property that is subject to the restraining order is guilty of an offence” which attracts a penalty in the case of a natural person, of a fine not exceeding K70,000.00 or imprisonment for seven years, or both, and in the case of a body corporate, a fine not exceeding K350,000.00: s 46 of the POCA.
    
59. I hesitate to make a further order. It should not be necessary. The Act has been little utilised until recently, however, and so for abundant clarity I will direct that the bank comply with the order of 12 September 2025 and not dispose of or otherwise deal with the monies standing to the credit of accounts held in the name of the defendant and her company, which shall not be closed.
    
60. I make the following orders.
    

Orders

(1) The application by the defendant to revoke the restraining orders made on 12 September 2025 is refused.

(2) Pursuant to the orders of 12 September 2025 the BSP Financial Group Ltd (BSP) shall not dispose of or otherwise deal with the following property and shall not close the said accounts:

1. all funds standing to the credit of BSP Account No 0000318038 in the name of Kathleen Ruth James as at 12 September 2025, including any interest on that account; and
2. all funds standing to the credit of BSP Account No 0000244588 in the name of Karma Investment Limited as at 12 September 2025, including any interest on that account.
   

(3) The APP will give written notice of these orders by close of business today.

(4) Time is abridged.

(5) The defendant shall pay the costs of the plaintiff on a party-party basis to be taxed if not agreed.

_______________________________________________________________
Lawyer for the plaintiff: Acting Public Prosecutor
Lawyers for the defendant: Sasingian Lawyers