Kaputin v The State [1979] PGSC 11; [1979] PNGLR 559 (6 November 1979)

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CRIMINAL LAW - Appeal against sentence - Fresh evidence sought to be adduced - Principles - No exceptional circumstances - Leave refused.

APPEAL - Evidence - Appeal against sentence - Fresh evidence sought to be adduced - Principles - No exceptional circumstances - Leave refused.

CRIMINAL LAW - Appeal against sentence - Appeal against severity - Disobeying lawful order of court - Consent order of National Court - Company secretary ordered to make good company’s default as to returns - Whether custodial sentence appropriate - Sentence of ten weeks’ imprisonment confirmed.

This was an appeal against severity of sentence of ten weeks’ imprisonment with hard labour imposed on the appellant, a Member of Parliament and Minister of State, on conviction for disobeying a lawful order issued by the National Court of Justice, and as provided by s. 209 of the Criminal Code. The order made by the National Court was one made by consent directing the appellant as Secretary of the New Guinea Development Corporation Limited to lodge the 1977 annual return of the company and other supporting documents within three months of 30th March, 1978. The documents were eventually filed some fourteen months later but before trial. The evidence disclosed that the company had been persistently remiss in filing documents as required by the Companies Act 1963, despite continuing co-operation from the Registrar of Companies. At the trial the appellant made a statement from the dock attributing blame for the failures, to accountancy difficulties and on the hearing of the appeal sought to adduce fresh evidence as to the structure and sanctions in the Tolai society, to which the appellant belonged, which it was urged should have affected the sentencing policy adopted by the trial judge.

N1>(1) On appeal against sentence, fresh evidence, which was available and which, with reasonable diligence, could have been disclosed to the sentencing judge and was not so placed before him should not be admitted except in exceptional circumstances.

N1>(3) (Wilson J. dissenting) In the circumstances including inter alia, the education of the appellant, the length of time over which the disobedience extended, the circumstances calling for the setting of a good example for the appellant’s particular society and other similar enterprises, a custodial sentence was appropriate and the sentence of ten weeks’ imprisonment with hard labour was not excessive.

N1>(4) (Per Wilson J. dissenting) In the light of sentencing policies adopted by other courts in Papua New Guinea and by other courts in other jurisdictions, particularly those from which the company law, and the law of statutory contempt in Papua New Guinea have derived, a custodial sentence was not appropriate, and the sentence actually imposed was so disproportionate as to be manifestly excessive.

This was an appeal against severity of a sentence of ten weeks’ imprisonment imposed on the appellant, a Member of Parliament and Minister of State as secretary of a public company for disobeying a lawful order issued by the court, and contrary to s. 209 of the Criminal Code. (See The State v. John Rumet Kaputin, [1979] P.N.G.L.R. 532.)

On the hearing of the appeal on the grounds set out at pp. 569-570 in the reasons for judgment of Wilson J., counsel for the accused sought to adduce fresh evidence as to the structure and sanctions in Tolai society to which the appellant belonged. An interlocutory judgment refusing leave to adduce such evidence was delivered on 2nd November, 1979, and on 6th November reasons for judgment on the substantive appeal were handed down. Both sets of the reasons for judgment appear hereunder.

PRENTICE CJ: This is an appeal against severity of sentence. It is sought now to adduce evidence that was not called at the trial. In my opinion no proper basis has been established that would admit of such a course being allowed. It is true that in Ivoro’s case [R. v. Peter Ivoro][dclxxxviii]¹ admission of evidence to establish a condition described as psychopathic tendency — without establishment of the usual ground, was allowed. But that was a special case, in which the death penalty had been imposed by the trial judge in respect of multiple murders. Even there, the evidence was admitted only by majority.

It has not been shown here that the evidence sought to be given was not available at the trial, nor that it was undiscoverable by use of ordinary diligence (the usual basic pre-requisites). It is known that the trial was not a hurried one — it had twice been interrupted by references to this Court. The appellant, as appears from the appeal book, was represented by a senior practitioner who as is well known had been a lecturer in Criminal Law at the University of Papua New Guinea. The appellant far from being an uneducated man who might be unable to give proper instructions, is a Minister of the Government and of superior education and of long experience in the company law field in which the proceedings which had their climax in this prosecution, had their distant origin.

The overall duty of this Court is to do justice between State and subject; but that does not allow it to proceed other than in accordance with statute and well-recognized rules of procedure. The court has always set its face against any attempt to have two trials of any issue — and it can easily be seen why this should be so. See Green v. The King [dclxxxix]²:

“If persons who become subject to the processes of the law were allowed to try again because they had chosen not to use evidence which was available or which with reasonable diligence could have been discovered by them, legal proceedings would tend to become interminable and grave injustice would, in practice, result in many cases.”

Behind this application lies the fact that the appellant elected to make a statement in the National Court and did so. I do not believe it would be proper to allow him to give evidence now in this Court. In addition, for myself, I cannot see the relevance of the evidence sought to be called as to the structure and sanctions in Tolai society. What was in question here was the breach of an order of this Court, not a breach of any customary law, and the National Court was concerned with the question of whether a sanction provided for in the Criminal Code should be applied. This Court is concerned as to whether that sanction was or was not appropriate. What customary society might have done to ensure compliance with the order of this Court, but apparently did not do, seems beside the point. And it would be open to customary society in any case to mould its sanctions to a particular case in the light of what sanction has been imposed in the National Court.

WILSON J: I too would refuse this application to have placed before this Court material which could all too easily have been placed before the trial court. It must be remembered that we are sitting as a court of appeal and not to conduct a fresh hearing.

The appellant was represented before the trial judge by a relatively experienced counsel by Papua New Guinea standards, my own experience of that counsel in other cases before me during the past two years has revealed that he is well aware of the need to provide the sentencing judge with full material which would operate in his client’s favour and the consequences that sometimes flow from decisions to withhold such material. The counsel concerned is also well aware of the opportunity which always exists in a criminal case before the sentence is determined for either the prosecution or the defence or both to adduce evidence or place material before the sentencing judge regarding matters of custom as they may affect either the type or severity of sentence. It is unfair to suggest that he, not being a Papua New Guinean, did not perceive or appreciate the significance of those issues.

If the social structure of Tolai society is such that traditional social constraints and sanctions exist of such a kind as to involve for the appellant the incurring of penalties or the suffering of punishment that a non-Tolai would not be subject to, then evidence of the type sought to be adduced before this Court should have been adduced before the sentencing judge. It could conceivably be important evidence. It is the type of evidence if it existed, which I would have welcomed, if I had been the sentencing judge. It is the type of evidence that the Court gave the parties in the recent Rooney case[dcxc]³ an opportunity to adduce, but neither the prosecution nor the defence availed themselves of that opportunity. The counsel of whom we are speaking was the solicitor for Mrs. Rooney.

Mr. William Kaputin in support of his application argued that there was a constitutional duty upon the court and counsel to provide or consider material relating to custom and in order to develop a jurisprudence and sentencing policy as part of the underlying law which is appropriate to Papua New Guinea.

The time for the performance of that duty in relation to the material sought to be adduced was at the pre-sentence stage of the hearing before the trial court. Such rules of law as exist (and they are entirely applicable and appropriate to the circumstances of this country) establish that new material which was available and which, with reasonable diligence, could have been disclosed to the sentencing judge and was not so placed before him should not generally be allowed to go before a court of appeal.

This is a tragic case; when one considers the background and position held by the appellant. For myself, because of these considerations, I find great embarrassment in having to deal with it. But, inasmuch as any submissions made on the appellant’s behalf might be thought to seek special treatment because of a man’s seniority or standing in the legislative or mercantile spheres, or of his position in customary society, I consider it necessary to say that in my opinion such a consideration may not be entertained. Section 37 of the Constitution of the Independent State of Papua New Guinea provides that every person has the right to the full protection of the law — and that includes the right to have law-breakers who act to the possible detriment of others, deterred from such behaviour. And s. 55 thereof proclaims that “Subject to this Constitution, all citizens have the same rights, privileges, obligations and duties irrespective of race, tribe,...”

It should not need to be stated that all citizens of Papua New Guinea are equal in the eyes of the law and all equally are required to abide by the law.

The appellant was convicted upon a charge under s. 209 of the Criminal Code of failing to comply with an order of the National Court. The order in question was one made on 30th March, 1978, on motion before the court; and it was consented to by the appellant through his then counsel. The order so made by consent, required him as company director and company secretary of the New Guinea Development Corporation Ltd. to make good the default of the company in itself failing to comply with a notice under the Companies Act 1963 to lodge an annual return for 1977. He was required himself to file the statutory return within three months.

Any person who without lawful excuse, the proof of which lies on him, disobeys any lawful order issued by any court of justice or by any person authorized by any law of Papua New Guinea to make the order, is guilty of a misdemeanour, unless some mode of proceeding against him for such disobedience is expressly provided by any law of Papua New Guinea, and is intended to be exclusive of all other punishment.

It is urged in support of the appeal that the sentence of ten weeks’ imprisonment imposed in the National Court was manifestly excessive. As I understand counsel’s submissions, it was not argued that ten weeks was excessive if a custodial sentence were called for; but that indeed imprisonment was not called for at all — the disobedience should have met only with a fine. It was urged that failures to file annual returns of companies were normally met with fines of up to K50 (a list of such fines was handed up), and that failure to file tax returns drew fines of up to K400 (again a list of some such was handed up). It was urged that this was the first occasion on which a sentence of this kind had been imposed; and that such were the circumstances of the offence and the sanctions already existing in Tolai society without recourse to court action, that imprisonment at all was inappropriate and too severe.

It should be emphasised at once that there is no true analogy here with the ordinary case of failure to file a return in response to a notice of requirement to do so, in my opinion. The case went beyond the giving of notices; an order of the court was obtained against the company secretary. It was disobeyed. The trial was in effect a third stage in the face of the failure of the first two, to secure compliance by the appellant with the law.

A study of the factual material available at the trial reveals that the company’s annual returns for the year ending 30th June, 1977, had not been submitted to the Registrar of Companies. Apparently a similar failure occurred in the year 1975 when on 8th September, a fine of K100 was imposed by the National Court and a continuing penalty of K2.50 a day on the company. It is recorded that as at 19th June, 1976, that fine, but not the continuing penalty, had been paid. Further court action was withheld at that time though early in 1976 share allotments as required by law had not been made to the 10,000 subscribers of some K105,000 capital (this seems still to be the position), and returns for 1974 and 1975 had not been made. The appellant was then requesting further time and pleaded accountancy difficulties. The Registrar of Companies pointed out to him that “of all the large P.N.G. owned companies yours has been the most remiss in complying with the law.” The Registrar pointed out also that inability to employ the necessary skills was not an acceptable excuse in the light of the appellant’s frequent statements that the “company’s activities are both large in scale and financially rewarding”; and that for two years he the Registrar had been asking that its affairs be put in order. He suggested as a solution the re-structuring of the company by formation of “business groups”, a course adopted by other national companies; and the possible conversion to proprietary company status, which would avoid the expense of auditing annual accounts. He offered the Companies Branch’s assistance if required. These offers were not taken up. By December 1976, the Registrar was still complaining that the 1976 returns had not been filed. At that time the continuing penalty (then accumulated to K1175) referred to above for the 1975 default as to the 1974 returns) had not been paid. In February 1977 it was again pointed out to the appellant that in respect of the 1975 default penalty, no payment had been made (it was then at a figure of K1315), the 1974 return was still unlodged, as were the 1975 and 1976 — in fact since incorporation in 1972 no annual return had ever been lodged, despite many grants of extra time. The appellant was advised of the legal consequences, and that it was intended to apply for court orders.

Those missing returns were finally forthcoming in March 1977. As at March 1977, it transpires that the company had never held a general meeting; that its returns for 1974, 1975 and 1976 lacked any accounts; that no accounts had ever been presented to members; nor had any accounts ever been audited; that no shares had been issued (this is in breach of law of course) despite undertakings given by the appellant to the Registrar of Companies.

In September 1977 the Registrar began the battle to ensure the presentation of 1977’s returns, and either the fulfilment of the company’s statutory duty to allot shares to its subscribers, or the return of their capital to those persons. Further advice was tendered, and time allowed in view of the appellant’s commitments. On 6th February, 1978, formal advice was given that the 1977 returns must be available by 28th of the month. Again an extension of time was sought, by letter post-marked 20th March. The Registrar sent a further long letter explaining the need for timeliness in compliance with the Companies Act 1963, and stating that experience6 had shown him that dilatoriness commonly indicated a wish to conceal improprieties.

The Registrar in March 1978 initiated action in the National Court which issued the consent order of 30th March, 1978. The appellant must then have known that the order of the court was considered necessary to try to provide protection to the appellant’s own people against possible default by the company.

The National Court’s order was not complied with; and no extension of the time for compliance with it was thereafter sought from the court, though the appellant had been represented by counsel when the order had been made.

On 27th October, 1978, an information was laid in the District Court alleging non-compliance with the National Court order of March 1978, and a contravention of s. 209 of the Criminal Code. Committal proceedings were engaged upon and resulted on 19th January, 1979, in the appellant’s committal for trial in the National Court. Still no returns were filed, though the appellant was on bail. The returns for 1977 were finally forthcoming to the Registrar of Companies on 11th May, 1979, that is some fourteen months after the making of the order by consent, and four months after the committal for trial. Not surprisingly perhaps, the accountant’s certificate accompanying the return states “we were unable to satisfy ourselves as to the adequacy of internal controls and accounting procedures operated by the management of the company during the six months ended 31st December, 1977.” It appeared books of account were written up retrospectively to 1st July, 1976, in 1978; and the accountants were “unable to form the opinion whether the attached balance sheet and profit and loss account gives a true and fair view of the state of affairs of the company at 31st December, 1977.”

I have studied his Honour’s judgment in this matter and his observations on sentence. As has been reiterated many times, the role of this appellate court in such an appeal is to ascertain whether in the exercise of his discretion on sentence, the trial judge has acted on a wrong principle, taken into account extraneous or irrelevant matters, or failed to take into account any relevant matter. I see with respect, no such error. It remains to consider whether nevertheless a sentence of imprisonment as distinct from a fine, of itself demonstrates an excess in sentence.

It was argued most eloquently that a jail sentence was quite inappropriate having regard to the social mechanisms that would be operating in Tolai society upon the appellant. If reliance were to have been placed on any constraints or sanctions of a tribal nature, they should of course have been evidenced in the National Court when it came to sentence. No such evidence was given, and this Court rejected the attempt to call some in the court of appeal because such a course was not properly founded or excused. Nevertheless in the National Court the then accused had not only made a statement from the dock before conviction, but also spoke on the allocutus.

One would be surprised to hear that Tolai custom contained any in-built sanctions in support of the provisions of the company law; and one would with respect think that that society would expect the company law to provide its own sanctions and the National Court to enforce its own orders. The Registrar of Companies indeed could not be thought to be familiar with any such Tolai custom. There was nothing before him or before the National Court to suggest either that such a type of alternate sanction existed, or was in process of being imposed. There was nothing to suggest that the subscribers of capital would know of the provisions of the Companies Act 1963 or what their rights might be to prevent loss to themselves. Nor was there any reason to suppose that creditors would be aware of, or be able to have recourse to, any customary sanctions. It is not apparent whether the customary society of the appellant was even aware that grave statutory breaches exposing subscribers of capital and creditors to possible financial peril had occurred.

One would have expected the attitude of customary society to be to wait until “Government law” had imposed any sanction thought proper, before considering whether any additional customary measures were called for. This is the pattern with which the judges of the National Court are very familiar in the manifold societies of Papua New Guinea.

I do not find myself impressed with analogies drawn from other countries as to sentencing patterns. It is the experience of our courts that Papua New Guinea society calls for and expects treatment other than is accorded law breakers in more sophisticated and more widely-educated overseas communities. Fortunately, disobedience of a National Court order is rare.

The offence here was altogether different to those listed by way of illustrating how cases of failure to make returns were dealt with. This conduct involved a serious breach of a National Court order, which had been made with the consent of the appellant, and no doubt with full regard to his commitments and support facilities, and made with the knowledge of previous events, and with the intention of trying to provide protection to the members of the public concerned in the company’s investment, assets and liabilities. There was a course of helpful assistance offered over a period of years by the companies branch officials. It was met with minimal response. The company, and apparently the appellant, demonstrated contempt for the continuing fine by way of daily default over a lengthy period. A previous fine imposed on the company proved ineffectual to improve the appellant’s performance of his statutory duties. He cannot but be assumed to have treated the National Court consent order and the threat constituted by the subsequent impending proceedings, with contempt. In my view, he clearly required an effective personal deterrent to ensure compliance with the law. I cannot conceive how imposition of a fine on a company secretary who apparently has had the unchallenged disposition of all the share capital K105,000 without allotment of shares — for years — and during that period has failed to keep proper books of account — who had transparently been unimpressed by the previous fine imposed on his company, could provide an adequate deterrent.

Nor can I see in the present climate of widespread loss of monies and failings properly to account, both in the Government and private sector of Papua New Guinea society; that the appellant’s failure to obey the National Court order which was resorted to clearly as a last effort to try to ensure protection for those financially interested in his company’s operations, could have been met with other than a sentence which would operate also as a deterrent to others who might be like-minded.

His Honour clearly gave anxious consideration as to whether he could find a penalty other than imprisonment, and could not do so. I am unable to disagree with him. He was careful to punish only for the offence charged; though he necessarily had to do so having regard to the relevant events preceding that offence. His Honour also very properly considered the obvious reality, in endeavouring to do justice to the particular individual, that a custodial sentence would be more embarrassing and bear more heavily on a person of the appellant’s education and position in society — than it might on some others. Clearly the shortness of the term of imprisonment reflects that view.

Having regard to the education of the appellant, the length of time over which his disobedience extended, and the circumstances that called for a good example to be set by him for his particular society and other similar enterprises, the offence was a serious one.

I find no error of judgment in the National Court. I would dismiss the appeal and confirm the sentence appealed from.

Mr. William Kaputin relied heavily in his argument upon the fact, as he alleged from the bar table, that in a developing country a sophisticated or disciplined company law inherited from another place inhibited growth rather than aiding it, and had a frustrating effect on energetic people with an eye to improving themselves and others.

This has superficial attractiveness. As the Chief Justice observed during argument, we all know the yearly anguish in the making out a mere personal income tax return, which is, of course, nothing to running a fairly substantial company. But the job has to be done. It is not to the point to assert, as counsel for the appellant did from time to time, that the Tolai investors have the utmost faith in the appellant. But faith can be ill founded. Here there is nothing at all before us to suggest there has been any swindle but a company can get into trouble for reasons other than dishonesty. That is why, for the benefit, not only of shareholders, but also of creditors, annual returns should be lodged as required. This is no idle, bureaucratic exercise. Whilst it is true that balance sheets can mislead and confuse they do contain information that a worried creditor or shareholder can follow up if so minded.

The facts reveal that the appellant and the company have adopted a quite cavalier attitude to the Registrar and to the law of the land. The Registrar of Companies has, since 1974 and 1975, pleaded for returns, and, in a most courteous way, pointed out how essential it was that they should be supplied. The terms in which these letters were written are a credit to the Registrar, they could not have been more helpful, and the time limits imposed were more than reasonable. In writing to the appellant the Registrar was not writing to some uneducated villager who was way out of his depth. He was writing to an educated, highly articulate and mature man, a leader on both National and Tolai levels. Indeed the appellant was a former Minister for Justice. He now holds an equally significant portfolio.

As long ago as 11th February, 1976, the Registrar wrote to the company a letter in these terms (inter alia):

“... I must bear in mind that your company has been in existence for nearly four years now and has not yet held an annual meeting. I have had many enquiries from people seeking the sort of information about your company which should be filed in this office. Some such enquiries have been from the general public but others have been from people claiming an interest in your company. Of all the large Papua New Guinean owned companies, yours has been the most remiss in complying with the law.”

The facts indicate to me that certainly as at 22nd March, 1978, no shares had been allotted to subscribers, and although it is not entirely clear, this still seems to be the case, nearly twenty months later, an extra-ordinary state of affairs in view of the number of subscribers and the amount involved.

So many matters like the above were patiently explained to the appellant in the Registrar’s letters to which I have referred. The appellant’s company was convicted by me in September 1975, for a similar offence and fined K100 with a daily default penalty of K2.50 per day. Over a year later only the fine had been paid and the default penalty was still accruing.

In the light of all these matters, and what has been more fully stated by the Chief Justice, how can it be said that the trial judge was in manifest error in feeling himself driven to impose a custodial sentence, and that for only ten weeks? I believe that a custodial sentence was warranted and I do not think that ten weeks was excessive, bearing in mind all I have said, and appreciating, as indeed I do, the high place in which the appellant stands as a Tolai and a Papua New Guinean.

The appellant was convicted in the National Court of the misdemeanour referred to in s. 209 of the Criminal Code. The appellant had disobeyed an order of the National Court requiring him to make good the default of a company, the New Guinea Development Corporation Ltd., in failing to lodge with the Registrar of Companies the 1977 annual return of the company and certain other documents. The National Court made its original order on 30th March, 1978, and it gave the appellant three months in which to comply. There was not ultimate compliance until 11th May, 1979, some ten and a half months late. I do not disagree with the learned trial judge when he said that the appellant had “failed in an extreme way to pay proper attention to his responsibilities” under the order of the National Court, but it must be emphasised that ultimately there was compliance with the court order.

The learned trial judge imposed a sentence of ten weeks’ imprisonment with hard labour.

The appellant’s application for leave to appeal came on for hearing on 2nd November and this Court gave leave to appeal.

N1>1. The sentence was and is in the circumstances manifestly excessive in light of penalties imposed on business or on officers of businesses for similar offences for non-compliance with the requirements of the various business Acts.

N1>2. The sentence was and is in the circumstances manifestly excessive in the light of all the circumstances surrounding the failure to comply with the provisions of the Companies Act 1968 (as amended) and subsequently with the order of the court.

N1>3. This was a case for the formulation of an appropriate sentencing principle or rule of law (as part of the underlying law) under which a fine would ordinarily be the appropriate penalty. (I have altered the wording of ground 3 so as to conform with my understanding of the appellant’s argument.)

The most important issue which arises for consideration in this appeal is the question of whether the appellant should have been sent to prison or whether he should more appropriately have been dealt with by way of fine.

Dr. D. A. Thomas in his book, Principles of Sentencing (1st ed., 1970), said, at pp. 219-220:

“The main principle governing the use of fines is that the offence concerned must be one for which a sentence of imprisonment is not required.”

I will deal later in this judgment with the considerations governing the choice between a fine and a sentence of imprisonment. I will mention the question of whether there is need to impose a retributive or deterrent sentence and related issues. I will also mention some of the kinds of offences for which fines are considered inappropriate.

The question of what offences should be punished by way of a fine is basically one of legislative policy. However, where (as here) the courts are left with a wide range of sentencing alternatives and the maximum prison sentence for the offence is a relatively short period of imprisonment, viz. twelve months’ imprisonment, the question of what offences may appropriately be punished by way of a fine becomes one of sentencing policy.

A sentence of imprisonment is almost universally regarded as a harsher form of punishment than a fine. I accept that proposition as a sound one for the purposes of this appeal.

The Papua New Guinea legislature has adopted in the Criminal Code the usual pattern of referring to an offence and then referring to the amount of the offender’s liability as to penalty by setting what appears to be a mandatory penalty but which is the maximum term of imprisonment which the sentencing court may impose. The sentencing court has a wide discretion in determining penalty owing to the existence of sundry statutory provisions which authorize in appropriate circumstances reduction or mitigation of a penalty. The main provisions to which I am referring are those which enable a sentencing court to substitute for the sentence of imprisonment referred to in the section creating the offence a shorter term (s. 19(a)), to order that sentence of imprisonment in certain circumstances be suspended in whole or in part (s. 19(f) and s. 613), to impose a fine not exceeding K2,000 in addition to or instead of imprisonment (s. 19(c), (d) and (e)), to order the offender to make restitution of property (s. 636A), or to discharge the offender upon a good behaviour bond in the fashion of probation (s. 19(g) and (h)).

I hesitate to differ from the learned trial judge, but have, after anxious consideration, reached the conclusion that a sentence of imprisonment for this appellant (a first offender) and for this somewhat unusual offence was manifestly excessive. I am not suggesting (nor did Mr. William Kaputin, for the appellant, contend) that a sentence of ten weeks’ imprisonment is excessive as far as prison sentences go; if imprisonment was warranted, then a sentence of ten weeks’ imprisonment has to be viewed against the maximum penalty that may be imposed for this offence (i.e. twelve months’ imprisonment) and the several other sentencing alternatives which the legislature has enacted and given to the National Court judge as part of his sentencing armoury.

The appellant is apparently the first person in Papua New Guinea who has been prosecuted for this offence. In support of the first ground of appeal Mr. William Kaputin, for the appellant, tendered some lists showing the range of penalties imposed in the National Capital District Court for failing to lodge with the Registrar of Companies annual returns under the Companies Act 1963 and showing the range of penalties for disobeying orders under the Income Tax Act 1959. Mr. Egan, for the respondent, was not able to refer this Court to any sentencing precedent either within Papua New Guinea or elsewhere in which a company director had been imprisoned, instead of being fined, for disobedience of this type. Indeed, Mr. Egan’s inability to refer this Court to any such precedent coupled with my own experience leads me to venture the opinion that the appellant is likely to be the only company director in the English-speaking world who has been sent to prison for this type of offence in circumstances where ultimately there has been compliance with the order.

Lists of previous sentences imposed for an offence or similar offences are of limited value to a court of appeal. The court cannot properly compare one sentence with the other because it does not have before it the full facts and circumstances which may have called for severity in one case or leniency in another. Nevertheless, the statistics placed before us by Mr. Kaputin and the absence of precedent showing that company directors outside Papua New Guinea have been imprisoned for similar offences committed by them do have some value. They show that imprisonment as a penalty for this type of offence, where there has been eventual compliance is unheard of. This is not to say there may not be a case in which imprisonment is appropriate. When an offence is repeated by an offender or becomes prevalent, harsher penalties may indeed be called for. When the disobedience continues as at the date of sentencing, imprisonment would be called for. However, there is no suggestion in this case that a deterrent sentence is called for on account of prevalence. The appellant is a first offender. There has been, I repeat, eventual compliance with the court order. Although there is little scope in sentencing for the application of the doctrine of precedent owing to the wide measure of discretion conferred on courts by the legislature and even though in a sense every case is unique, courts should not be free to disregard entirely decisions reached by others especially when investigation would reveal a consistent mode of punishment for the type of offence being investigated. On the material placed before this Court, I am led to conclude that for this Court to affirm this sentence and dismiss this appeal would be for this Court to disregard totally the sentencing policies adopted by other courts in Papua New Guinea and to disregard totally the sentencing policies adopted by other courts in other jurisdictions and, in particular, jurisdictions in which the company law of this country and the law of statutory contempt in this country had their origins.

I think that the type of punishment that was imposed here was so different from that usually imposed for this type of crime as to make the sentence an excessive one. The penalty imposed here was so disproportionate as to be manifestly excessive.

In the context of the second and third grounds of appeal I bear in mind the role both the Supreme Court and the National Court must fulfil under the Constitution. I have regard to the historical development of the legislation we are here dealing with. I acknowledge the need for understanding of how a Papua New Guinean company director, albeit an acknowledged leader and a man as mature and as experienced as the appellant, could lead himself into such depths of disobedience. Bearing those matters in mind, this is not, I think, a case in which a prison sentence was warranted. I think the learned trial judge fell into error when he, notwithstanding the careful and anxious consideration that he gave to imposing a fine, reached the conclusion that a fine would not “adequately meet the facts of the case.”

Mr. William Kaputin submitted in support of the third ground of appeal that in this case this Court should “relate the underlying law to the adopted laws with a view to developing an indigenous jurisprudence adapted to and appropriate to the needs and circumstances of Papua New Guinea.” I interpret his submission as an invitation to this Court to develop the underlying law in the manner contemplated by Sch. 2.3 of the Constitution. That provision of the Constitution imposes a duty upon the Supreme Court and the National Court to formulate a rule of law appropriate to Papua New Guinea and to the circumstances of the country “if in any particular matter before a court there appears to be no rule of law that is applicable and appropriate to the circumstances of the country.” I do not think that it is necessary for this Court to perform that duty in this case, as, in my opinion, there is a rule of law that is applicable and appropriate to the circumstances of this country. I refer to the proper application of sentencing principles and rules already adopted and applied in this country.

There are some types of crimes which justify Papua New Guinea in having a comparatively harsh sentencing policy. I consider that this is not one of them. For this Court to affirm the sentence imposed in this case would necessarily involve Papua New Guinea having a comparatively harsh sentencing policy for a crime which may be characterised as one of the lesser corporate affairs crimes. I simply cannot accept that the sentencing policy in Papua New Guinea for offences of this kind, i.e. for offences involving non-compliance with company legislation and disobedience of court orders, should be harsher than in more sophisticated countries whose citizens have had a longer exposure to the complexities and intricacies of corporate affairs.

I cannot associate myself with the decision to dismiss this appeal and affirm the sentence. I cannot associate myself with the establishment of a sentencing policy which I think will be seen as being at variance with the policies in other comparable jurisdictions and at variance with what apparently is the sentencing policy in Australia and England where Papua New Guinea’s criminal law and its company law had their roots.

In the Rooney case[dcxci]⁴ it was held in this Court that there are offences where sentences of imprisonment must be imposed to mark the degree of disapproval by the law of the conduct in question and in the hope that other people will be deterred from like behaviour. This Court also said in that case that a sentence of imprisonment may be fully merited as punishment for a very grave offence and as expressing public disapproval of the whole circumstances of the case. The Rooney case concerned one such offence; prevalent offences such as breaking and entering and stealing (see Paulus Mandatititip v. The State[dcxcii]⁵), crimes of dishonesty committed by public servants and other trusted employees, offences against public safety such as dangerous driving causing death (see Public Prosecutor v. Sima Kone[dcxciii]⁶) have been held to be others. In my considered opinion, the offence in this case was not such an offence; it was not a case warranting either a retributive or a deterrent sentence. The notion of individual deterrence and all other aspects of the sentencing process to which it is proper to have regard could well and truly have been met by the imposition of a heavy fine.

The learned trial judge, in his remarks on sentence said (7): “There should be a substantial personal deterrent, and punishment.”

With all due respect, I cannot see why a fine could not have operated in that way; after all, a fine is expressed in money terms and most businesses of the type conducted by the New Guinea Development Corporation Ltd. are in existence to make profits and build up assets. If there had been no eventual compliance with the National Court order it could fairly have been said that a very substantial fine would not “sufficiently reflect the seriousness” of the matter. If this had been a second or subsequent offence it could fairly have been said that a prison sentence was required to operate as a personal deterrent. In this case the learned trial judge rejected a fine as an appropriate penalty. With respect, he was asserting that a fine would rarely, if ever, be appropriate for this type of offence. That is a proposition with which I cannot agree.

There was nothing before the trial judge to suggest that the appellant did not have the present or shortly anticipated ability to pay a fine. There was nothing before him to show that there was a reasonable likelihood that the major impact of a fine would fall upon persons other than himself. (See Chappell and Wilson’s The Australian Criminal Justice System (2nd ed., 1977), p. 396.) With all due respect to the learned trial judge, it was too sweeping a statement to make and too cynical a view to adopt when his Honour stated[dcxciv]⁷:

“The impact of a fine is often too indeterminate and too diffuse. Often the money is supplied by others, at least in the short term, and is not repaid for a long time, if ever, or creditors or dependants or kinsmen of the accused suffer by its payment.”

Although the appellant was in breach of s. 209 of the Criminal Code and was punished for it under the Code, it must be remembered that the historical origins of s. 209 are to be found in the law of civil contempt in the common law of England. The main powers of the courts to enforce judgments or orders other than for the payment of a sum of money were sequestration, committal, and fine. As far as companies were concerned, sequestration was used as against the company and committal as against its officers. The courts did not lightly commit persons to prison (Gay v. Hancock[dcxcv]⁸) but did so if the contempt was serious or where the defendant deliberately disobeyed a judgment order. In the case of committals to prison, the procedure was well recognised that an application for discharge could be made by the prisoner or on his behalf. The importance of such applications was reflected in the rule of practice that such applications should take precedence over all other motions (Ashton v. Shorrock[dcxcvi]⁹). The courts would only order a discharge either where the offender had purged his contempt (as, for example, by complying with the judgment or order) or where the court considered the offender to have been sufficiently punished.

There are, therefore, some parallels between the prosecution, conviction and punishment of this appellant for a breach of s. 209 of the Criminal Code and the committal to prison of a person found guilty of civil contempt. The similarities are the more apparent now that the appellant has already served nearly half of his sentence and when he may be seen to have been sufficiently punished by the time he has already spent in custody, the loss of his Ministerial portfolio and on account of other factors. The appellant in this case has already purged his contempt; indeed, as the learned trial judge stated in his remarks on sentence, the documents which were the subject matter of the original National Court order which the appellant had disobeyed “have now in fact been lodged and have been lodged for some time”; the purging of the contempt took place prior to the appellant appearing before the learned trial judge for sentence. In these circumstances and remembering that there is no aggrieved victim of the appellant’s crime whose interests are still in need of protection, I see no necessity in a case of this kind for a custodial sentence; for one to have been imposed in circumstances where for civil contempt the offender would not have been committed to prison was to have fallen into error. A sentence of imprisonment, even a short one, may be seen, as Mr. William Kaputin submitted, as “law enforcement for the sake of enforcing the law.”

For all these reasons I would allow this appeal and set aside the sentence of imprisonment and substitute a fine of K500 allowing time to pay, with a default of ten weeks’ imprisonment if the fine is not paid. Had this view been the view of the majority, it would have been necessary to go a step further and decide whether some and, if so, what reduction should be made in the amount of the fine on account of the fact that the appellant has now served almost half of the sentence ordered by the learned trial judge. As I am in the minority, I need not be troubled by this aspect of the case.

[dclxxxviii] [1971-1972] P. & N.G.L.R. 374.

[dclxxxix] [1939] HCA 4; (1939) 61 C.L.R. 167, at p. 176.

[dcxc] [1979] P.N.G.L.R. 448.

[dcxci] [1979] P.N.G.L.R. 448.

[dcxcii] [1978] P.N.G.L.R. 128.

[dcxciii] [1979] P.N.G.L.R. 448.

[dcxciv] [1979] P.N.G.L.R. 544, at p. 554.

[dcxcv] (1887) 56 L.T. 726.

[dcxcvi] (1880) 43 L.T. 530.

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Supreme Court of Papua New Guinea

Kaputin v The State [1979] PGSC 11; [1979] PNGLR 559 (6 November 1979)

Papua New Guinea Law Reports - 1979