Embahe v The State [1988] PGSC 1; SC351 (27 May 1988)

Unreported Supreme Court Decisions

SC351

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

S.C.A. NO. 35 OF 1986
WESLEY EMBAHE
APPELLANT
V
THE STATE
RESPONDENT

Kapi DCJ Woods Los JJ
23 March 1988
27 May 1988

CRIMINAL - Misappropriation - alternate verdict of false pretences - sentence varied accordingly.

Counsel

E Kariko for Appellant

L Sarea for Respondent

KAPI DCJ WOODS J LOS J: The appellant was found guilty of misappropriation of the sum of K23,849.52 contrary to Section 383 A (1) of the Criminal Code and sentenced to 4 years imprisonment in light labour with a further Order to suspend 2 years on the condition that the appellant repays K12,000.00 within 6 months. This condition has not be fulfilled and the appellant is serving the full term of imprisonment. He has appealed against both the conviction and sentence.

The Notice of Appeal sets out three grounds in relation to the appeal against conviction. At the hearing, Counsel for the appellant abandoned ground A. The remaining grounds are:

“B. The trial jusge erred in his ruling as irrelevant, the appellant’s attempt through his counsel to procure from the State witnesses evidence of expenditure of moneys by the appellant; and

C. The trial judge erred in convicting the appellant in that there was insufficient evidence of the appellant dishonestly applying the property of another of his own use”.

It is necessary to establish the precise nature of the case against the appellant. The money, the subject matter of the indictment was made available to the appellant from the Agricultural Sectoral Programme Fund. This was a fund established by the National Government to assist Provincial Governments in their agricultural projects. This decision was taken in 1980 and an amount of 2.3 million kina was allocated. As we understand it from the evidence, the money was to have been administered by the Department of the then Primary Industry. In another Cabinet decision in 1981, it was decided that this money should be allocated to National Parliamentarians for distribution by them on various projects rather than through the Provincial Governments. No evidence was called to outline the precise nature of the scheme approved by the cabinet. It would appear from the evidence that the Minister for Primary Industry was responsible for approving amounts of money to be allocated to the Members of the Parliament. Again there was no evidence called as to the guidelines or the criteria for approval of these funds by the Minister for Primary Industry.

The Secretary of Primary Industry gave evidence but he was unable to assist the court on the nature of the Cabinet decision on these funds and he had no knowledge about the way the Minister exercised his discretion in approving these funds.

The Secretary of the Oro Provincial Government was also called to give evidence. He was simply administering the funds and was unable to give evidence of the nature of the scheme. None of the other witnesses who were called were able to assist the court in this regard.

As far as this can be obtained from the evidence of the Secretary of Primary Industry, the scheme was operated in the following way.

The Minister for Primary Industry gave approvals for funds upon application by the Members of the Parliament. Upon approval by the Minister the Secretary of Primary Industry did one of two things:

(a) He issued cheques to the Member of the Parliament for the amount required for various projects. Then the Member obtained this money and used it for the approval projects in the way he thought fit. The Secretary had no control over the way this money was used by the Member. This is exactly what happened in the case of Brian Kindi Lawi v The State Unreported judgment of the Supreme Court dated 13th April 1987 (SC 337). OR

(b) The Secretary authorised the money by way of cash fund certificate for the money to be administered through the Bureau of Management Services in the particular Province. This system enabled Members of the Parliament on behalf of whom the money was transferred to raise ILPOC to be used for projects which were approved by the Minister for Primary Industry.

After the money was paid out either by cheque directly to the Member of the Parliament or through the use of ILPOC, the Department of Primary Industry or BMS had no control over the way the money was used.

In the present case, the money allocated to the appellant was transferred to BMS in Popondetta by way of Cash Fund Certificate and was to be used by the appellant at his discretion for projects that were approved by the Minister.

In 1981, the appellant applied for funds from this Sectoral Fund. Originally he asked for an amount of K50,000. The Minister allocated K30,000. The purpose for which this fund was allocated was to start a Rubber Factory in Popondetta. It appears from the appellant’s evidence that he consulted the then Development Bank to build such a factory. On his evidence he was advised that K30,000. was not sufficient to build such a factory. He then wrote to Mr. Roy Evara, the then Minister for Primary Industry in a letter dated 21st May 1981, advising the Minister that it was not possible to build the factory for which the money was approved. Instead he asked the Minister if he could use the K30,000. to buy equipment for rubber development. When this was approved, he asked the Minister to transfer the K30,000. to the Eikedi Development Corporation which would be responsible for the purchasing of the equipment. There is a notation on a copy of this letter of the same date bearing the approval given by Mr. Evara. The evidence shows that some rubber producing equipment was purchased from Pasuwe Pty. Limited for an amount of K4,472. According to the evidence of the Finance Inspector, this equipment was received by the Primary Industry Department and distributed to the farmers. There can be no misappropriation of this amount. In fact this amount does not form part of the Indictment.

The amount included in the Indictment relates to the purchase of a Toyota Land Cruiser registration No. ADH 112 for K7,846.50, another Toyota Land Cruiser registration No. ADH 108 for an amount of K7,514.38, a Toyota Dyna Diesel Truck registration No. ADQ 039 for K8,185.88, purchase of diesel for use with the vehicles for an amount of K239.00 and an amount of K63.76 for service of the vehicles.

WAS K30,000.00 THE PROPERTY OF EIKEDI DEVELOPMENT CORPORATION PTY. LIMITED?

In essence, the property in the money remained in the National Government until it was paid over to Ela Motors, the suppliers of the motor vehicles. When this occurred the Government still had an equitable interest in the money as a chose in action. See Brian Kindi Lawi -v- The State Unreported judgment of the Supreme Court dated 13th April 1987 (SC 337) per Kidu, C.J. and Amet, J. The property in the money did not pass to Eikedi Development Corporation. What the Corporation acquired was not the money but the property which was purchased and registered under its name. The indictment is not concerned with the misappropriation of the properties which the company acquired. The indictment is concerned with the amount of money. We are therefore surprised that the appellant abandoned ground A of the Notice of Appeal.

The next question is whether the amount included in the indictment was applied to his own use?

The two Toyota Land Cruisers were purchased from Ela Motors for a total amount of K15,360.88. According to the evidence, these two vehicles were included in the list of equipment to be purchased for rubber development. Did the Minister for Primary Industry, Mr. Roy Evara, approve these two vehicles as part of rubber development? Mr. Evara was not called to give evidence on this point. However it would appear from other evidence that these vehicles formed part of a list of equipment that was intended to be purchased for rubber development. Mr. Embahe compiled a list of equipment which is Exhibit ‘G’ in the evidence. This list was shown to the Secretary of Primary Industry as well as the Secretary of Oro Provincial Government. It is clear from their evidence that these vehicles formed part of the equipment that was requested by Mr. Embahe as part of rubber development. These vehicles were to be used for transportation of rubber produced by the village people to rubber factories. It can be concluded from the evidence that the approval given by Mr. Evara to change the project from building a rubber factory to buying equipment for rubber development included the two vehicles.

A third vehicle, Toyota Dyna Diesel truck was purchased from Ela Motors for K8,185.88. In respect of this vehicle, the appellant sought specific approval to purchase this vehicle. At that stage, the Minister for Primary Industry had changed and Mr. Torato was now the Minister for Primary Industry. In a telex dated the 18th of November, 1981, there was a telex from the Secretary of Oro Provincial Government to the Minister, Torato, for the approval to purchase a Toyota Dyna truck. This was approved by the Minister.

On this evidence, the direction by the appellant to the Secretary of the Oro Provincial Government to raise ILPOCs to purchase these vehicles were in accordance with the approval given by the Minister for Primary Industry. The use of Government funds to purchase these vehicles were in accordance with the approvals. When the vehicles were purchased, they were purchased for the purpose of transporting products from village small holders to the factories. This however did not work out satisfactorily because according to the evidence of the appellant, the price of rubber at the time was low and the village people refused to sell their products. There is no evidence to suggest that this was not true. As a result of the low prices of rubber, the appellant put the vehicles to another use namely, to hire vehicle to others. There is no evidence to show that he applied the proceeds of the hire of the vehicles to his own personal use. His evidence shows that all the money was spent on the operation of the vehicles. The attempt by Counsel for the appellant to obtain evidence in cross examination from State witnesses as to the manner in which the proceeds of these vehicles were used, was ruled inadmissable or irrelevant by the trial judge. In our view, the trial judge fell into error in disallowing these questions. There is a gap in the evidence as to whether in using the vehicles as he did, the appellant was using this for his own purpose. It is true that in this trial, the issue is not whether the proceeds of the vehicles were misappropriated by the appellant. The issue was whether the Government allocation of K30,000. was misappropriated by the appellant. The use of the proceeds of the vehicle was only relevant as to whether or not the appellant was using this for his own personal use or for the purpose for which the money was allocated. There is insufficient evidence to show that the appellant applied the amount alleged in the indictment to his own use. Having come to this conclusion, it would not be necessary to consider the meaning of the word “dishonestly” and its application to the facts of this case. We would quash the conviction and sentence on this offence.

It has been submitted that in the alternative the appellant should be found guilty of obtaining goods by false pretence by virtue of Section 544 (b) of the Code. The offence of obtaining by false pretence is set out under section 404 of the Code.

WAS THERE ANY FALSE REPRESENTATION?

As stated before, the original representation by the appellant to the Minister for Primary Industry was for funds to establish a rubber factory in Popondetta. These plans changed to buying of rubber production equipment instead. In respect of this, he made further representation to the Minister in the letter dated 21st May 1981, he requested that the K30,000. should be transferred to the Eikedi Development Corporation. The significance of this is that the money applied for was for the benefit of a group of people. This was a significant representation because when the said vehicle was purchased and approval was given by the Minister, in his telex he specifically stated that the project involves quite a number of groups and people. This representation was that he would play little part in the spending of this money and that the matter would be in the hands of the Eikedi Development Corporation. The impression made by this representation was that this was a matter which the Corporation had authorised and that it would take up such a project. However as the trial judge found that the Corporation was not informed of the project and that Mr. Embahe was not authorised to make this representation in this way, this would amount to false representation. It was this representation which induced the Minister to approve the project and the funds were thereby transferred to Oro Provincial Government to be used for projects which would be undertaken by Eikedi Development Corporation. We are satisfied that there was a misrepresentation to induce the Minister to approve such funds. We would find the appellant guilty of obtaining property by false pretence under section 404 of the Code.

The maximum sentence for this is 5 years and in our view the period already spent by the appellant is sufficient punishment for the offence. We therefore Order that the appellant be discharged forthwith.

Lawyer for the Appellant: Public Solicitor

Lawyer for the Respondent: Public Prosecutor