SC1955

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCRA NO. 25 OF 2014

BETWEEN:
RALPH PETER MAYOH
Appellant

AND:
THE STATE
Respondent

Lae: Manuhu, J, Makail, J & Tamate, J.
2020: 22nd & 26th June

SUPREME COURT – Appeal – Uttering – Money Laundering – Forgery of a cheque – Non-production of forged cheque – Circumstantial evidence – Safeness of convictions.

Cases Cited
Papua New Guinea Cases

Paulus Pawa v The State [1981] PNGLR 498 at 501
State v John Kondi (1991) N956

Overseas Cases

Kirya Robert v. Uganda (2018) UGHCCRD 228 of 23 July 2018.

Counsel:  
  
R. Pariwa, for the Appellant
C. Sambua, for the Respondent

26th June, 2020

1.       BY THE COURT:  This is an appeal against a conviction for uttering, a conviction for money laundering and against sentence.  Against convictions, the main argument was that the appellant did not know that the cheque was a false cheque.

2.      The appellant was indicted on one count of uttering under section 463 of the Criminal Code and one count of money laundering under section 34 of the Proceeds of Crimes Act 2005.

3. 	Section 463 provides:

(1)	In this section, "fraudulently" means with an intention—

(a)	that the thing in question shall be used or acted on as genuine, whether in Papua New Guinea or elsewhere, to the prejudice of some person, whether a particular person or not; or

(b)	that some person, whether a particular person or not, will, in the belief that the thing in question is genuine, be induced to do or refrain from doing some act, whether in Papua New Guinea or elsewhere.

(2)	A person who knowingly and fraudulently utters a false document or writing, or a counterfeit seal, is guilty of an offence of the same kind and is liable to the same punishment as if he had forged the thing in question.

4. 	Subsection (2) creates the offence of uttering: “knowingly” and “fraudulently” are elements which must be proved beyond reasonable doubt.

5. 	Section 34 of the Proceeds of Crimes Act 2005 provides:

(1)	In this section –

“transaction” includes the receiving or making of a gift.

(2) A person engages in money –laundering if the person –

(a) engages, directly or indirectly, in a transaction that involves money, or other property, that the person knows, or ought reasonably to know, to be proceeds of crime; or
(b) receives, possesses, disposes of or brings into Papua New Guinea money, or other property, that the person knows, or ought reasonably to know, to be proceeds of crime; or

(c) conceals or disguises the source, existence, nature, location or control of money, or other property, that the person knows, or ought reasonably to know, to be proceeds of crime.

(3) A person who engages in money –laundering is guilty of an offence.

Penalty: If the offender is a natural person –a fine of K100, 000.00 or imprisonment for 20 years, or both; or
If the offender is a body corporate –a fine of K500, 000.00.

6. 	It was alleged that on the 9th of April 2020, the appellant attended the ANZ Bank in Lae and deposited a cheque number 1972 in the amount of K957,370  into the account of his company, Powa Construction Limited.  The cheque, which was made out to Powa Construction Limited was drawn on account held by Vetco Aibel (PNG) Limited.  It was alleged that neither he nor his company had ever done any work for Vetco Aibel (PNG) Limited.  On 20th April, 2010, the appellant attended the ANZ Bank in Lae and withdrew K700,000 in cash from Powa Construction Limited account.  

7. 	Police confirmed that in 2007 Vetco Aibel (PNG) Limited registered a name change to Aibel Limited and was not trading in 2010.  Police also confirmed that cheque number 1972 was never issued by the company and remains unused in the company’s office in Western Australia.  Police alleged that the cheque was a false document and the appellant was aware of this, and ought to have known that the funds involved in the withdrawal on 20th April 2010 were proceeds of crime.

8.	In the context of the charge of money laundering, the pertinent question is whether the appellant knew or ought to have known that the K700,000 he withdrew on 20th April 2010 were proceeds of crime of forgery, that is, proceeds from the forged cheque.

9.	The main issues of fact therefore is whether the cheque in question was a forged cheque and whether the appellant knew that it was a forged cheque.  

10.	Essentially, the appellant is challenging the factual findings of the trial judge, namely:

(a)	The cheque was a forgery, and the appellant knew this when he deposited it to his company account on 9th April 2010.

(b)	The appellant ought to have known that the K707,000 involved in his transaction of 20th April 2010 was proceeds of crime, that is, of forgery.

11.	The former is the disputed finding of fact in relation to the charge of uttering and the latter is the disputed finding of fact in relation to the charge of money laundering.

12.	The evidence is circumstantial so the law on circumstantial evidence is well settled in this jurisdiction.  In the Supreme Court case of Paulus Pawa v The State [1981] PNGLR 498 at 501, Andrew J said:

"I am in agreement with Miles J in The State v Tom Morris [1981] PNGLR 493 at 495 when he said:

'I take the law as to circumstantial evidence in Papua New Guinea to coincide with what was said in the High Court of Australia in Barca v R (1975) 50 ALJR 108 at 117:

"When the case against an accused person rests substantially upon circumstantial evidence the jury cannot return a verdict of guilty unless the circumstances are such as to be inconsistent with any reasonable hypothesis other than the guilt of the accused': Peacock v R (1911) 13 CLR 619 at 634. To enable a jury to be satisfied beyond reasonable doubt of the guilt of the accused it is necessary not only that his guilt should be a rational inference but that it should be the only rational inference that the circumstances would enable them to draw: Plomp v R (1963) 110 CLR 234 at 252; see also Thomas v R (1960) 102 CLR 584 at 605–606. However, an inference to be reasonable must rest upon something more than mere conjecture. The bare possibility of innocence should not prevent a jury from finding the prisoner guilty, if the inference of guilt is the only inference open to reasonable men upon a consideration, of all the facts in evidence: Peacock v R at 661. These principles are well settled in Australia.’
From that decision of our Supreme Court it seems that the principles are also well settled in Papua New Guinea.”

13.	The witnesses for the prosecution were the bank officers and company director Michael Horsfall from Western Australia.  Tony Vagi works for the ANZ bank as Security Manager and he investigates external and internal fraud related matters.  He gave evidence on the internal trail of the cheque in question and found that the cheque was missing.  He also gave evidence on the clearance procedures and he said the procedures were not followed.  

14.	The missing cheque and non-compliance with clearance procedures suggests that the cheque was genuine, the bank employees were negligent or that the bank employees were part of a conspiracy to defraud.  Relevantly, he didn’t find the cheque so his evidence does not show that the cheque in question was forged and that appellant knew about the forgery.

15.	Julie Tukun gave evidence that she served the appellant on 20th April 2010 regarding the withdrawal of K707,000.  This was 10 days after the appellant was alleged to have uttered the false cheque by depositing it into his companies account.  She did not serve the appellant on 9th April 2010 so she was not in a position to say if the cheque was genuine or not.

16.	Wendy John gave evidence on movement of funds in and out of the account of Powa Constructions Limited after the cheque was cleared. Clearance of the cheque is prima facie evidence that the cheque was genuine.  Her evidence does not show that the cheque was forged or that the appellant knew that the cheque was forged.

17.	Michael Horsfall gave evidence via video link.  Relevantly, his evidence is that Aibel Limited had a cheque account number 11107099 with ANZ bank in PNG.  The cheque book was never in PNG in 2010. Cheque numbers 1971 and 1972 have never been used and are still in the cheque book.  The evidence suggests forgery but because the cheque was missing, he could not verify who the signed the cheque as drawer.  

18.	Relevantly, Aibel Limited had a local company director, who wasn’t called to give evidence.  The signature of the drawer on the cheque would show the signature of the person who signed for the company and such signature would then be verified against the account signatures.  The missing cheque may assist the prosecution’s case.  It could also assist the appellant’s case bearing in mind that the cheque was cleared in the bank.  Until we see the cheque, the mystery of the drawer’s signature may never be solved.
19.	Interestingly, if the cheque book was in Western Australia, where did the cheque in question come from?  How was a cheque leaf in Western Australia duplicated in PNG?  Is it technologically possible to duplicate a cheque leaf from a check book in Western Australia? We note that Mr Horsfall was not cross-examined at all.  He could have explained how a cheque leaf in Western Australia was duplicated in Madang or Lae.

20.	The above named persons were the only witnesses for the prosecution.  There was a no case to answer submission which was refused.

21.	Manu Yama did not feature in the prosecution’s case even when the appellant mentioned his name in the record of interview as the person who gave the cheque to the appellant.  In his evidence, the appellant asked Manu Yama if he could deposit the cheque and Manu Yama said yes.  The appellant showed the cheque to his accountant by the name of John Clark to advise on tax matters.  Then on 9th April 2010, the cheque was deposited and cleared.

22.	Manu Yama and the bank officers who caused the cheque to be cleared did not give evidence but it is not disputed that Manu Yama gave the cheque to the appellant.  Considering that the original cheque leaf was in Australia, where did Manu Yama get the cheque from? The appellant gave evidence that Manu Yama is a trusted friend and business partner so he had no reason to suspect that the cheque was a forgery.  

23.	He also thought that the cheque was given to Manu Yama by Peter Yama who had been awarded K11 million as a result of a successful legal proceeding.  Obviously, Manu Yama is a member of a wealthy family.  On that basis, it is possible for the appellant to think that raising a cheque for K900,000 is within the means of Manu Yama or his father.

24.	There is no evidence that the appellant knew about Aibel Limited and its operations in PNG.  This suggests that the appellant may have thought that Aibel Limited was a company owned by Peter Yama who drew the cheque in question for his son, Manu Yama.

25.	It is necessary to examine the appellant’s evidence and how the trial judge considered them.  

26.	The appellant gave evidence that Manu Yama, a business associate and son of Peter Yama, told him that he had no banking facilities in Madang so he requested the appellant for assistance.  When he saw the cheque and the amount in it, he did not question it and believed that the cheque was given to Manu by his father and that he had no reason to believe the cheque was false.
27.	The trial judge did not believe the appellant.  The trial judge was of the view that Manu Yama had access to bank accounts in Madang and could have transacted the cheque in Madang.  

“…even if Manu Yama did not personally have access to banking facilities, his father would certainly have bank accounts which he could use.  There is no evidence before the Court to show why Manu Yama could not have access to the bank accounts of Bilum Coffee, Mikaela Timbers or Peter Yama.”(our underlining)

27.	The trial judge’s remarks amplify the need to call Manu Yama as a witness.  It is not known if Manu Yama would be arrested and charged for forgery. 
   
28.	In any case, the trial judge’s view of Manu Yama, and what he did or did not do, does not show either that the cheque was false or that the appellant knew about that the cheque was a forgery. Manu Yama was not the accused.  It is erroneous, with due respect, to think that the appellant knew that Manu Yama’s father could assist in depositing the cheque in question.

29.	The appellant also gave evidence that Peter Yama was awarded K11 million by a court at around that time so he thought the cheque was from Peter Yama.  The trial judge did not accept this because there was no evidence of such award.  In any case, the trial judge remarked that “Manu Yama is the son of a wealthy Madang politician and businessman…”

30.	Against that background, Peter Yama had the means to give his son a large amount of money.  Peter Yama is a “wealthy” man so if Manu Yama is seen with large amount of money, most people will not ask any question.  The explanation by the appellant that he had no reason to think otherwise about the cheque is within the bounds of reason and cannot be ruled out.  It appears the trial judge failed to give due consideration to the appellant’s evidence.

31.	The appellant also said that Manu Yama was a close and trusted friend and business associate and that he had no cause to suspect that the cheque was false.  The trial judge accepted the prosecution’s contention that the relationship between the appellant and Manu Yama “was one of rapidly formed bonds, followed by equally rapid disillusionment and parting ways.”  

32.	With due respect, the trial judge did not elaborate but his finding contradicts the evidence that Manu Yama, Mikaela and the appellant established two companies, Bilum Coffee and Mikaela Timbers.  The signatories to the accounts were the appellants, Manu Yama and Mikaela.   It takes time to create a relationship that is suitable for a business partnership, and it takes time to set up a business.  It wasn’t a case of “rapid formed bonds”.   In our view, the trial judge allowed himself to be misled and failed to give due weight to the explanation by the appellant that Manu Yama was his business partner and a trusted friend.

32.	The trial judge also took into account the evidence of Julie Tukun that the appellant lied to her when he sought cash withdrawal of K707,000 and offered K500 appreciation money.  The trial judge accepted the prosecution’s submission that the appreciation was to buy her “silence and discretion”.  We are of the view that the finding of the trial judge is not supported by evidence.  

33.	Certain bank procedures are difficult to overcome.  It is hard to deposit or withdraw large amounts.  The explanation that K500 is thank you money was given by the prosecution witness.  There is no proper basis for the trial judge to conclude that it was to “silence” Julie Tukun.  In so doing, we are of the view that the trial judge misconstrued the evidence to the detriment of the appellant and failed to realise that the evidence of Julie Tukun does not show that the cheque was forged or that the appellant knew the cheque to be a forgery.

34.	The trial judge also took into account the spending spree between 21April and 17 May 2010, a period of nearly one month, when the appellant “still went through about K105,000 in the period… and made non-proceeds deposits of only K5,959 during that period.”Anyone is entitled to spend his money as he pleases.  His honour’s finding is vague in that he did not identify any unusual or irregular spending, and he did not explain the connection between a spending spree and the appellant’s alleged knowledge of a forged cheque.

35.	The trial judge finally took into account that the appellant experienced cash flow difficulties, two company cheques were dishonoured, and the mortgage on his family house was threatened with foreclosure.  Again, his honour did not explain the relevance or link between the appellant’s financial woes and the charges in question.

36.	We note also that Manu Yama did not give evidence.  If he had given evidence, the trial judge would have had a glimpse of his character, his personality and his intelligence.  He could be an honest man.  He could be the greatest con artist.  The cheque came from him so he would have explained how he managed to transnationally obtain cheque number 1972 and how he got the appellant involved.  It seems that his absence has prejudiced the appellant’s defence. 
37.	The bank officers who processed the cheque deposit and cleared the cheque did not give evidence.  The cheque clearance is prima facie evidence that it was not forged.  The cheque going missing suggests that there may have been a conspiracy to defraud somebody by the bank officers and Manu Yama.  The extent of their involvement in any conspiracy could not be ascertained if and unless the bank officers gave evidence or were arrested and charged.  The appellant is either part of the conspiracy to defraud that was always going to be uncovered or he was the biggest foolish innocent old man.

38.	Whatever the case may be, lack of evidence from the bank officers in question may have prejudiced the appellant’s defence.  Similarly, the cheque going missing may have prejudiced the appellant’s case.  Likewise, the failure to cross-examine Mr. Horsfall on the cheque may have prejudiced the appellant’s defence.

39.	With so many loose ends, so many questions unanswered, we are not sure that the appellant’s guilt is the only reasonable conclusion.

40.	On the subject of loose ends, in a forgery and uttering case of State v John Kondi (1991) N956, Woods J had this to say:

“The case against the Accused being circumstantial, one must be very careful in assessing circumstantial evidence and one must be sure that all the loose ends in the circumstantial evidence are tied up. Are the circumstances such as to be inconsistent with any reasonable hypothesis other than the guilt of the Accused. I cannot help noting that there are … serious omissions from the evidence.”

41.	On the subject of missing cheque, in the Republic of Uganda High Court judgment in Kirya Robert v. Uganda (2018) UGHCCRD 228 of 23 July 2018, an appeal against conviction and sentence of the appellant for multiple offences ranging from conspiracy to defraud to forgery including uttering of a false document, the High Court per Lady Flavia Anglin held that:

"Looking at SS. 342, 343 and 351 of the Criminal Procedure Act, regarding the offences of forgery and uttering false documents, the offences relate to and rotate around a document said to have been forged and uttered. It therefore follows that, the documents said to have been forged and uttered must be presented to court and admitted as exhibits for purposes of proving the offences".

42.	The Court further observed:

"There was no evidence to sustain the offences of forgery and uttering a false document. The case would have been different and proved beyond reasonable doubt had the prosecution produced and tendered in evidence as exhibits both the genuine documents and the forged ones in question to enable court to observe and make an informed opinion regarding the two sets of documents".

43.	In this case, the appellant was the only person that saw the cheque and he thought it was genuine.  In fact, his accountant also saw the cheque and he did not say anything.  The cheque was cleared by ANZ which means it must have been genuine.  With the cheque missing, the prosecution could have preferred a different charge.  A charge of forgery or uttering without the alleged forged cheque is a difficult assignment.

44.	Ultimately, we are of the view that there are critical missing links on the question of whether forgery was committed and whether the appellant knew about the forgery, if any. We are of the view also that the trial judge, with respect, heavily criticised the appellant’s evidence as if the onus of proof had shifted to him.  It seems to us that the trial judge with, due respect, turned a blind eye to the loose ends in the case for the prosecution.

45.	In the circumstances, we are of the view that on the evidence, the convictions are unsafe.  We would uphold the appeal and quash the convictions.  The appellant is discharged forthwith.  His bail moneys shall be refunded forthwith.  

Orders accordingly.
________________________________________________________________
Leslie Mamu, Public Solicitor: Lawyer for the Appellant
Pondros Kaluwin, Public Prosecutor: Lawyer for the Respondent