Kenneth v State [2015] PGSC 73; SC1484 (21 December 2015)

SC1484

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCRA 2 of 2014

BETWEEN:

STANLEY KENNETH
KOIVI HARU
Appellant

AND:

THE STATE
Respondent

Waigani: Hartshorn, Sawong and Higgins JJ
2015: 29th June
: 21st December

SUPREME COURT APPEAL – appeal against conviction - appellant indicated and convicted on two counts – first count defective as having being incorrectly worded – second count was proven – conviction on the first count is quashed - conviction on the second count is upheld – appeal allowed in part

Counsel:

Mr. A. Baniyamai, for the Appellant
Mr. P. Kaluwin, for the Respondent

APPEAL AGAINST CONVICTION

21st December, 2015

1. . BY THE COURT: This was an appeal by Stanley Kenneth Koivi Haru against his conviction on 3 October 2013 before his Honour Salika DCJ.
2. . On 15 April 2013 an indictment was presented against the appellant containing two counts:

Count One

... that [the appellant] on or about the 28th day of July 2007 at Port Moresby in Papua New Guinea pretended to one George Augwai the property describe (sic) as Section 468 Allotments 1 and 2 Hohola, the property belonging to Kone Tigers Rugby League Football Club Incorporated was for sale and instructed the sale of the property with intent to defraud.

Count Two

. . . that [the appellant] between 1st day of September 2007 and the 30th day of September 2007 at Port Moresby [etc] dishonestly applied to his own use and the use of other persons a sum of Two Million Six Hundred and Eighty (sic) Hundred and Fifteen (sic) Kina and Eighteen Toea {K2,628,825.18) the property (of) KONE TIGERS RUGBY LEAGUE FOOTBALL CLUB INCORPORATED.

3. . The former count seeks to engage s 404 of the Criminal Code Act. That section provides (relevantly):
   
   • (1) A person who by a false pretence or wilfully false promise, or partly by a false pretence and partly by a wilfully false promise
     
     • (a) Obtains from any other person any chattel, money or valuable security; or
       

is guilty of a crime.

Penalty: Imprisonment for a term not exceeding five years.

4. . It is immediately apparent that this count is defective. It does not allege that any property was obtained by means of the alleged false pretence.
5. . In any event, the false pretence caused a third party to pay money to the credit of the Football Club (the Club) that credit being the subject of the second count.
6. . The indictment might have been amended to reflect that but it was not. It was the purported transferee (purchaser) of the property in question who was the victim of the false pretence, not the Club.
7. . The second count engages s 383 A of the Code. That provides (relevantly):
   • (1) A person who dishonestly applies to his own use or the use of another person
     
   • (a) Property belonging to another; or

. . .

is guilty of the crime of misappropriation of property.

Pursuant to sub-section (2) the penalty is 10 years imprisonment.

8. . The appellant was charged originally on two charges. The first alleged an offence albeit more accurately described than on the indictment, in terms of count 2.
9. . The other information alleged the forgery of a record of meeting so as to falsely represent the grant of authority from the Club to sell the land known as Section 468 Lots 1 & 2 for K2,628,815.18 'and induced one LEE TECK KONG of Bandon Limited with intent there (sic) to defraud'. That was an attempt to engage s 462 (1) and (3) (a) (i) of the Code. That was defective in that the allegedly forged document represented authority to sell real property not a document of title to that property.
10. . The Magistrate, correctly, in our view, committed the appellant for trial only on a charge of misappropriation contrary to s 383 (1) (a) of the Code, although the reference should have been to s 383 A (1) (a).
11. . The factual allegation was that by falsely representing the land of the Club was for sale, the appellant induced a purchaser to pay K2,628,815.18 to the Club and thereafter, he purported to disburse these funds to his own use and the use of others, contrary to the terms upon which those funds were received.
12. . To each count, the appellant pleaded not guilty.
13. . The State called two witnesses. The first, Bernadette Clam, on 14 September 2007, met the appellant at Ela Motors Showroom, Port Moresby. He was offered a trade-in on a vehicle but declined the offer as insufficient. He, nevertheless, got a quote for the purchase of two vehicles and a few days later came back with a cheque to pay for one of those vehicles. It was for the sum of K138,140.00 drawn on the account of "Kone Tigers Rugby League" (Ex D).
14. . Next witness was Mr John Kua. In 2008, he deposed, he was elected President of the Club in place of the appellant. It was then discovered that land owned by the Club had been sold. The Constitution of the Club empowered "the Committee" to sell the property of the Club. It was put to him that the correct description of the Club land was Section 137 not Section 468. This became the mainstay of the appellant's defence.
15. . Mr Lee Teck Kong was the next witness. He was a director of Bandon Limited which purchased the land in question for K3 million. He identified the property as allotment 1 & 2 of Section 137. The purchase price was paid by cheque made out to the Club's account. The cheques were deposited on 13 September 2007.
16. . Significantly, it appeared, the appellant on 18 September 2007 as President of the Club, counter-signed by his wife as Secretary/Treasurer, directed payments "to our creditors":
    

Eric Yapu (for consultancy)	K270,000.00
Ela Motors (Bk Chq)	K140,000.00
Stanley Haru (Trustee & discharge of services)	K 2 million
Cash Miscellaneous Services Survey pegs Construction Materials Labour	K50,000.00

These are approved payments – please process".

17. . The Special Purpose Lease revealed that the Club's property was identified in it as section 137 not section 468.
18. . George Augwi, a real estate agent, gave evidence that he facilitated the sale of the "Kone Tigers oval". He had the property listed as section 468. He asserted that the two descriptions that is Sections 137 and 468 related to the same land.
19. . Mr John Koava Junior gave evidence he was an executive member of the Club in 2007. However, he had no knowledge of the purported sale of the Tigers oval.
20. . That was the State's case. It clearly raised a strong prima facie case of misappropriation.
21. . The appellant gave evidence. He was a well-regarded national figure as a former Rugby League player. He conceded that in 2007, being president of the Club he sold the Club's field. It was decided by himself and his wife to do so. He said they were the only executive members left.
22. He openly admitted that the vehicle purchased from Ela Motors was registered in his name and the bulk of the funds also "as the trustee". There was, however, no evidence of those funds being designated as trust funds.
23. . He further explained what happened to the money, if that be how to describe his statement:

"It was invested in a very risky – the BSP capital invested in various offshore investments: one of them is Lehman Brothers in America. And when the recession and Lehman Brothers crashed, it affected that investment, not just me but – I mean not just that 2 million but other investments". Thus, the money was "practically lost".
The balance was expended. "Mostly it was the legal case and some of it I spent on maintaining my family". He claimed also to have met the Club's expenses.

24. . It came to this. The appellant and his wife disbursed the Club's funds as they thought fit. It was hardly the action of a prudent trustee. Who invested the funds in Lehman Brothers and whether those funds are recoverable, if so, is unclear.
25. . Nevertheless, that was the defence case.
26. . Mr Norum, for the appellant, challenged the indictment as not being supported by the evidence. This relied on the discrepancy in the description of the property. Further, he submitted that the appellant had authority to sell the land.
27. . The next, and more central question, was as to the disposal of the proceeds of the sale. Were they misappropriated or not? Again, Mr Norum linked that with the mis-description of the property in the indictment.
28. . The prosecutor, Mr Kaluwin, submitted that the false pretence was made out because the decision to sell was that of the accused, and he did not have title to the land. The title was held by the Club.
29. . How that was a false pretence is not clear but the next submission was on firmer ground. That is, the proceeds were the property of the Club and were misappropriated, ie; put to purposes other than the legitimate purposes of the Club. This has little to do with the formalities of meetings and quorums. It is not the technicalities of the rules that made the appellant liable to conviction, rather it is the intent of the appellant to act dishonestly. That then was the issue.
30. . On 3 October, 2013, His Honour delivered his decision. Whether the transaction to transfer the property was valid is in our view, irrelevant. The issue is whether the appellant had a dishonest intent. It is not whether the transaction was valid in law. It may have been invalid but still honestly believed by the appellant to be in the interests of the Club. His Honour rightly concluded that the error in the description of the land was irrelevant to the criminal conduct alleged.
31. . The appellant was then found guilty of the two counts in the indictment.
32. . It is true that the appellant was committed only upon the charge of misappropriation. However, as the prosecution correctly submitted, it is then a matter for the prosecutor to determine the form of the indictment (see The State v Michael Name & Ors (1999) N1884 per Kirriwom J)).
33. . However, that does not end the matter. The indictment must contain an offence known to law. In the present case whilst it was open to conclude that the appellant was deceitful in representing to Bandon Ltd that the Tigers Oval was for sale, it is not alleged that he thereby obtained property. It might have been so alleged and the evidence adduced would support the view that he obtained by that false representation K3 million to the use of the Club. That, of course, depends on the correctness of His Honour's assertion that the appellant had no authority to sell the property.
34. . Whatever may have been the validity of the sale, the proceeds were received by and credited to the Club. He, the appellant, dealt with these proceeds in a manner that included misapplication of at least the bulk of these funds, placing them in a fund and purchasing a vehicle in his own name. It was open to the trial judge to conclude, as he did, that that was done with intent to defraud.
35. . We would quash the conviction on the first count but uphold the conviction on the second count.
36. . As there is no arguable case that the existence of the first count affected the criminal responsibility of the appellant there is no need for the appellant to be resentenced.

Orders

1. The Appeal is allowed in part;
2. The conviction on Count 1 is quashed;
3. The Appeal against conviction on Count 2 is dismissed.

________________________________________________________________

Baniyamai Lawyers: Lawyer for the Appellant
Public Prosecutor: Lawyer for the Respondent