State v Kakawi [2002] PNGLR 4 (13 February 2002)

[NATIONAL COURT OF JUSTICE]

THE STATE

V

TOM KAKAWI, ROSINA KURU TERRY, TERRY KURU & ALFRED PUPIA

Kokopo: Lenalia J

15-18, 23-24, 29-30 January; 7, 13 February 2002

CRIMINAL LAW – Misappropriation – No guilty pleas – Trial – Criminal Code s. 383 A (1)(a), 383A (2)(b) – (Ch. No. 262).

CRIMINAL LAW – practice and procedure – Submission of "no case to answer" – Discretion – When exercisable – Question of law – Inferences to be drawn.

SENTENCING – Guideline.

Facts

The facts are adequately stated in the judgment.

Held

1. The act of 'dishonesty', or misappropriation referred to in s 383A of the Criminal Code relates to the state of mind of a person who is alleged to have misapplied the property in question and such acts must be strictly proved.

2. The term "dishonestly" as appearing in s 383A of the Criminal Code relates to the State of mind of the person who misappropriates, or misapplies whatever property is the subject of the charge under consideration. It is a question of fact for the judge or tribunal to decide upon the evidence being put before it, Lawi v The State [1987] PNGLR 183 (supra) and The State v Gabriel Ramoi [1993] PNGLR. 390, followed.

Papua New Guinea cases cited

Allan Oa Koroka; and Simon Wani v The State [1988-89] PNGLR 131.

Brian Kindi Lawi v The State [1987] PNGLR 183.

Paulus Pawa v The State [1981] PNGLR 498.

R v Angle – Ogun [1969-70] PNGLR 36.

The State v Paul Kundi Rape [1976] PNGLR 96.

The State v Yuans Kaman [1993] PNGLR 488.

The State v Gabriel Ramoi [1993] PNGLR 390.

The State v Roka Pep (No. 2) [1983] PNGLR 287.

The State v Tom Morris [1981] PNGLR 493.

Wellington Belawa v The State [1988-89] PNGLR 496.

Counsel

L Rangan, for the State.
M Peter, for the four accused.

13 February 2002

Lenalia j. The first three accused are charged with nine (9) charges of misappropriation either to their own use or to the use of other persons, while the fourth (4th) accused joins them all in counts eight (8) and nine (9). The monies allegedly dishonestly applied were property of the Bitapaka Local Level Government. The first two accused were then employed by the State and allegedly committed the offences in the course of their employment in their capacities,in the case of Tom Kakawi, as an Assistant Co-ordinator and accused Rosina Kuru as an Executive Officer with the Bitapaka Local Level Government (hereinafter referred to as BLLG). The third and fourth accused had certain dealings and connections with the first two accused in their involvement with certain sums of monies. The third accused was the husband of the second defendant.

The State could not proceed with the case against the third accused as Mr. Rangan, counsel for the State, filed a declaration deposing to the third accused being deceased.

The three accused pleaded not guilty to all counts and the trial was conducted for almost one week and three days as the State's case consisted of fourteen (14) witnesses and a great volume of documentary evidence were tendered and accepted as part of the State's case.

The State's evidence alleges that the first two accused whilst being employed by the State with the East New Britain Provincial Administration applied to their own use and to the use of other persons monies, the property of the BLLG as stated on each of the nine counts. On the first count the State alleges that Tom Kakawi and Rosina Kuru dishonestly applied to their own use a sum of K888.00. In the second count, the State further sought to prove that the first two accused on an unknown date in the year 1997, dishonestly applied to the use of DALMINE ENTERPRISES a sum of thirteen thousand five hundred kina (K13,500.00), the property of BLLG.

On count three and four, the State alleges that the accused Tom Kakawi and Rosina Kuru dishonestly applied to their own use sums of four thousand kina (K4,000.00) and two thousand Kina (K2,000.00) respectively. The State further alleges that, the two accused did dishonestly applied to the use of Steven PAAK Enterprises sums of six hundred Kina (K600.00) and two thousand kina (K2,000.00) respectively as stated in counts five and six. Count seven further alleges misappropriation of the amount of four hundred and eighty kina (K480.00).

The State further sought to prove that on 1 June 1998, a Papua New Guinea Banking Corporation cheque no. 181400 was drawn for a sum of K18,288.00. The State's evidence is that an arrangement was made with PNGBC for two bank cheques to be drawn. One for Dalmine Enterprises for the sum of twelve thousand, three hundred and eighty-eight kina (K12,388.00) on bank cheque no. 514273. The other was made payable to Bitapaka Local Level Gvoernment for the sum of two thousand six hundred kina (K2,600.00) on cheque no. 51274.

Practically no evidence was called to show how the amount stated in count nine, an amount of five thousand nine hundred kina (K5,900.00), was used or misapplied.

In all, the State sought to prove that the three accuseds had misappropriated monies stated in the various counts and in their various capacities. Evidence by the Provincial Audit Inspector, Blasius Kulume, and the two Internal Finance Inspectors with the East New Britain Provincial Administration, Tarcisius Paragum and Allan Balbal, reveal a blatant disregard to and violation of procurement procedures in how the first two accuseds had acquired certain properties for the BLLG or by using the complainant's monies under their custody.

For instance, evidence by the audit inspector and that of the two Provincial finance inspectors reveal that what the second accused should have done in the purchase of the computer and pressure pump acquired from Steven Paak Enterprises was to get three quotations from three sources. In raising the Requisition for Expenditure and the General Expenses forms (Forms 3 and 4), there should have been signatures of all the financial delegates. Those forms were not signed by the financial delegates. It was found that there were no signatures of an examiner, the certifying officer and the then Council President on the cash voucher.

The same procurement procedures should have been followed when the first two accuseds, acquired a double classroom design for the Tapo Community School. The State evidence shows that on 23 January 1998, a Cheque No. 181369 for the sum of four thousand kina (K4,000.00) was paid to Yoolim Construction but the narration of particulars made ENB voucher no. 12637 without any supporting documents. A second payment was made on 4 February 1998 to the same suppliers on cheque number 181372, and Voucher No. 12641. On all documents again there were no supporting documents with no signature of Financial Delegates.

The amount of eight hundred and eighty-eight kina (K888.00) stated in the first count relates to an allegation that an armed robbery had taken place on the evening of October 2 1997 involving the second defendant and the driver, Steven Romen. During this hold up, an amount of K888.00 was stolen from Steven Romen. This was his personal money. The incident took place after hours. It is alleged by the State that the next day the victim complainant was refunded his money on Cheque No. 181305. Here the State evidence shows, there was only one signature appeared on the voucher no. 13512. That was the signature of the second accused. In any event, if the victim was to be refunded his monies, a proper resolution should have approved such dealings and there was no way only one person who could possibly authorize such repayment.

In the record of interview, on question 78 and its answer, the first accused said that a request for repayment was made after the hold up and because he received documents on the claim, he signed the cheque. The second accused said in the record of interview that the claim was made by herself and Steven Romen. Interestingly, Steven Romen said in evidence that he never made any claim. It might have been that the pressure of having the armed hold up after hours prompted the two accused to authorize payment.

The wording in count one poses a problem. The State says that on 2 October 1997, the two accuseds whilst being employed by the State with the East New Britain Provincial Administration dishonestly applied to their own use the amount stated in the indictment. The evidence however shows that the sum of K888.00 was not applied to their own use but to the use of another person, Steven Romen.

On counts number two and eight, the State alleges misappropriation of an amount of K13,500.00 to the use of Dalmine Enterprises and a further sum of K12,299.00 as stated in count eight. Mr. and Mrs. Toisiat gave evidence that around about 1997 or 1998, their family company, Dalmine Enterprises entered into a contract with the Bitapaka Local Level Government for the sum of K12,386.00 for road maintenance and back-fillings. Mary Toisiat testified to receiving a cheque of K12,388.00 on cheque No. 514273. Provincial Auditor and Internal Finance Inspectors evidence show that they conducted searches at the PNGBC branch at Kokopo and they found that a Cheque No. 181400 for the amount of K18,288.00 was drawn in favour of Dalmine Enterprises but the break up of this amount went for two beneficiaries.

Mrs. Louise Walutu, a PNGBC employee at that time, testified that a Cheque No. 514273 drawn in favour of Dalmine Enterprises was cashed at PNGBC Kokopo branch on 1 June, 1998 for the sum of K18,288.00. The break up of this amount was as follows. A bank Cheque No. 14273 was drawn in favour of Damine Enterprises for the sum of K18,288.00 some four days later. From this amount the documentary evidence shows that a sum of K2,600.00 was converted to a bank Cheque No. 51274 made payable to BLLG for purchase of a tendered vehicle by the BLLG.

Evidence by former President and Acting President of the BLLG at different times Messrs Joe Ben and Jeremiah Rovoi revealed a further sum of K13,500.00 was also drawn in favour of Dalmine Enterprises for road construction, but, according to these two gentlemen, no road maintenance was ever carried out. Jeremiah Rovoi recalls that the amount charged in count two was properly approved by the full Council Executive, but actually no road maintenance was ever carried out.

It may have been that the sum of K13,500.00 was the subject of some earlier deals between the BLLG and Dalmine Enterprises. Upon examination of all other evidence by the audit inspector and the evidence of the two provincial finance inspectors and even by the investigator, no clear reference has been made to the sum stated in count two. As well no documentary evidence was tendered such as a cheque butt or a copy of the cheque itself. In fact, witness Mr. Joe Ben testified to the deal being made in 1995 while the date stated on Count 2 on the indictment was an unknown date in 1997.

Evidence was led in relation to counts number three and four as to how the two accuseds misappropriated sums of K4,000.00 and K2,000.00 respectively. These two sums were advanced to Yoolim and Tamur Construction for payment of a Double Classroom design for the Tapo Community School. These sums were advanced to Yoolim and Tamur Construction at different times and dates. The first payment of K4,000.00 was made on 3 January 1998 on Cheque No. 181369. The second Cheque No. 181372 for the sum of K2,000.00 was later paid on 4 February that same year. From documentary evidence, both cheques were endorsed to be paid in cash. Patrick Tamur the proprietor of Yoolim and Tamur construction, testified that he disassociated himself from Yoolim in 1998 and would not actually recall what happened.

Despite his evidence, two cash vouchers ENB. 12637 for the Cheque No. 181369 for the first sum of K4,000.00 was made out and the second one ENB. 12641 for the sum of K2,000.00 was later paid to Yoolim and Tamur Construction. Ekonia Walom, the current Assistant Co-ordinator for the BLLG, stated in cross-examination that when he took over from the first accused on 1 June 1998, he sighted a double classroom design some where in the records of the BLLG. Counts two and three may not necessarily be criminal misappropriation but may fall within the ambit of The State v Yuans Kaman [1993] PNGLR 488, where it was held that a misappropriation of monies without proper control, accountability or without proper acquittals amounts to gross mismanagement of public monies and is not necessarily criminal misappropriation.

Additionally, the double classroom design was such that this design could have been easily obtained from the East New Britain Provincial Government Technical Division and, more particular, the Education Department because they have standard designs for double classrooms which could have been acquired free of charge.

Ekonia Walom also testified to sighting a computer bought by the two accused and a pressure pump. Evidence in relation to the computer is that instead of acquiring three quotes from three suppliers as required by the State's financial manuals, the two accused signed and authorised to pay cash Cheque No. 181380 for K600.00 and 181389 for a sum of K2,000.00. These were all endorsed "pay cash", but cash vouchers were made out and signed by the Executive Officer. They were voucher Nos. 12670 and 12656. The vouchers bear the name of a supplier as "PAAK Enterprises". These amounts were receipted by Steven Paak Enterprises. The later amount of K600.00 was for the purchase of the pressure pump bought from the same source which is now in use in the assistant co-ordinator's house.

It may have been urgent to acquire the pressure pump immediately, but the case of the computer may not have been urgent. The evidence reveal that the Apple computer set bought for a sum of K2,000.00 did not include a printer. In fact the quotation put by PAAK Pty Ltd quotes extras such as one key board plus booklets lets and appliances and the total value was put at K2,000.00. The essential part of the sale was missing and it was the printer. Without the printer, unless there was another computer with a printer in the Local Level Government Chambers, the computer bought would virtually be useless. Simply because, though you can store up information in the computer, if there is no printer, you cannot get anything in black and white unless operating a disk in another computer with a printer. As the evidence shows, there was no other computer in the BLLG chambers.

Evidence led in relation to the sum of K480.00 on Cheque No. 181392 made in favour of Dalmine on 24 April 1998, Herman Toisiat and his wife Mary Toisiat, proprietors of Dalmine Enterprises, testified to receiving only K12,388.00 and never knew of the K480,000,00. Once more it is noted that there was blatant disregard to properly account for this amount. There are no documents to reveal how this money was being appropriated. Nor are there any documents to show where the amount went. Evidently the cheque was cashed.

I have already canvassed the evidence in relation to count eight and in regard to the amount of K18,288.00. Cheque No. 181400 for the sum stated in count number eight was drawn in favour of Dalmine Enterprises. Somehow when the cheque reached Papua New Guinea Banking Corporation Kokopo Branch it was cashed into the following break up. A Bank Cheque No. 181400 for an amount of K12,388.00 was made payable to Dalmine Enterprises. Mr. and Mrs. Toisiat testified confirming receipt of an amount of K12,388.00 only.

A further Bank Cheque No. 514274 for an amount of K2,600.00 was made payable to the Bitapaka Local Level Government. As to why such sum was paid back to the BLLG, the State alleges that such amount was spent in favour of the third accused Alfred Pupia for purchase of the tendered vehicle by the BLLG. The bank charged a commission fee of K7.40 for processing the two cheques. As the evidence shows, the balance of K3,292.60 was not accounted for. No documents or any records were produced Court as to how the balance was appropriated.

In all, on count eight, the State could not have charged the three accused for the sum stated therein, since more than the half of money was appropriated to Dalmine Enterprises and according to the evidence of the President and the Acting President of the BLLG at one stage, Messrs Joe Ben's and Jeremiah Rovoi's evidence confirmed there was actual work being done by Dalmine Enterprises such as road maintenance and back fillings on their roads around the Bitapaka Local Level Government area.

At the end of the State's case Mr. Peter, counsel for the three accuseds, made a submission of "no case to answer". Mr. Peter submits that on the basis of the first leg of the principles in The State v Paul Kundi Rape [1976] PNGLR 96, there is no case for his clients to answer. The counsel also mentioned the case of The State v Roka Pep (No.2) [1983] PNGLR 287. These two authorities amongst many others establish that at the end of the prosecution case where there is a no case submission being made, the issue to be determined there and then is whether on the evidence as it stands the accused could lawfully be convicted.

It is clear from the authorities cited that the question of guilt of the accused does not arise at this stage of the proceedings. Nor does it involve the question of proof beyond reasonable doubt, which is determined at the end of all the evidence both for the State and the accused.

Mr. Peter, in submissions cited three misappropriation cases. The State v Yuans Kaman [1993] PNGLR. 488, Brian Kindi Lowi v The State [1987] PNGLR. 183 and The State v Gabriel Ramoi [1993] PNGLR. 390. The former case stands for the proposition that where there is misappropriation of monies without proper control, and accountability or where there has been no proper acquittals being furnished, it merely amounts to gross mismanagement of public monies and it is not necessarily criminal misappropriation. An essential feature of Yuans case is that if monies allegedly misappropriated were properly spent without proper accounting procedures, it merely amounts to blatant disregard to financial accounting procedures.

I agree with most other judgments like, that of Kindi Lawi v The State (supra) and The State v Napilye Kuri [1994] PNGLR 371, which say that whether an accused had a particular state of mind is a question of fact. In my view, such state of mind is drawn from all the evidence that are presented before the tribunal. This is a question of fact for the judge to answer according to ordinary standards of reasonable and honest people: Lawi v The State (supra).

A number of charges in the indictment before this Court charged the accused with dishonestly applying to the use of other persons various sums stated in counts 2, 5, 6 and 8. In the case of The State v James Makario (1990) N862, it was held that the application of property of another to the use of another person is an essential element of the charge pursuant to s 383 A (1) (a) of the Criminal Code: The State v James Makario (supra). Thus, it must be strictly proved that the property was used and applied for the use of another person specified in the indictment.

Mr. Rangan counsel for the State submitted that the State has established a case for each accused to answer and I was urged to find that there is a case for the three accuseds to answer. He had also urged the court to infer that the sum stated in count 9 was the balance of monies not accounted for in that count. This was rejected by Mr. Peter for the three accused on the grounds that at this stage of the proceedings, the Court cannot infer anything as yet until all evidence have been completed. I suppose he meant all evidence both for the State and accused. Mr. Peter did not cite any authority to support that contention.

Mr. Rangan cited ss 544 and 547 of the Code. I wish to quote these two sections since they will highlight the question of whether, at this stage of the proceedings, the Court should infer that the amount stated in count 9 is the balance of what is charged in Count eight. Section 544 provides:

"544. Stealing, false pretences, cheating and misappropriation of property.

On an indictment charging a person with—

(a) stealing, with or without a circumstance of aggravation; or

(b) obtaining goods by false pretences; or

(c) obtaining goods by a wilfully false promise; or

(d) obtaining goods partly by a false pretence and partly by a wilfully false promise; or

(e) cheating; or

(f) misappropriation of property; or

(g) procuring any other person to commit any such offence,

he may be convicted of any other of those offences committed with respect to the same property, if that other offence is established by the evidence."

Then s 547 provides:

"547. When evidence shows offence of similar nature.

(1) If on the trial of a person charged with an indictable offence the evidence establishes that he is guilty of another indictable offence of such a nature that on an indictment charging him with it he might have been convicted of the offence with which he is actually charged, he may be convicted of the offence with which he is so charged.

(2) In a case to which Subsection (1) applies, the person is not liable to be afterwards prosecuted for the offence established by the evidence, unless the court before which the trial is heard directs the accused person to be indicted for that offence, in which case he may be dealt with in all respects as if he had not been put upon his trial for the offence with which he is actually charged."

Unfortunately, the above two sections do not say at what stage of the proceedings the Court should exercise its discretion in the application of the mode of practice stated therein, but the common law rules and principles governing reception of circumstantial evidence have been stated over and over again in this jurisdiction. The principles laid down by authority of The State v Tom Morris [1980] PNGLR. 493, Paulus Pawa v The State [1981] PNGLR 498 and Allan Oa Koroka v The State and Simon Wani v The State [1988-89] PNGLR 131 establish that where there are a number of competing inferences to be drawn, it is a question of fact for the judge to decide which and what inferences should be drawn; which should be rejected, which are reasonable, which are mere conjunctures, and which party they should favour at the end of the prosecution case, and where there are inferences inconsistent with the guilt of an accused, there is a discretion to acquit. These principles include the warning that failure by a trial judge who sits alone as both judge and jury to warn himself or herself of the dangers of convicting an accused upon circumstantial evidence could be fatal and dangerous.

I am reminded that at this stage of the hearing I am only required to make a finding if there was a prima facie case made out pursuant to the principles enunciated in The State v Paul Kundi Rape and The State v Roka Pep (No.2) (supra).

In view of the objection raised by Mr. Peter that the court should not draw inferences in relation to count 9, at this stage of the proceeding, I am of opinion that authority for me to draw any inference is ss 544 and 547 of the Criminal Code, which stipulate that in a trial an accused may be convicted of any other offences as is established by the evidence. In my view it would be absurd to determine the issue of drawing inferences only after all evidence have been called both for the State and the accused and which would not serve the purposes of the examination before me.

The court was urged by the counsel for the three accused, in submission on the "no case to answer," that in relation to count nine, no evidence has been called to establish if the K5,900.00 was ever misapplied to the three accused own use. Exhibits No.11 by witness Tarcisius Paragum and No. 18 by Louise Waluta show clearly the break up of the expenditures of the amount charged in count eight being K18,288.00. Quite clearly, the balance as it turned out in the indictment is not a correct amount. But it leaves the balance with non-production of any supporting documents such as invoices, dockets or receipts to verify expenditure. The question that arises is, "where did the balance go?". Both Tarcisius Paragum, Provincial, Audit Inspector, and Louse Waluta, a PNGBC bank employee, say in their testimonies as well as in the exhibits (No. 11 & 18) tendered and accepted that the balance of K3,296.60 was cashed.

In all, as the evidence stands, I find there is no case to answer in counts 1, 2, 3, 4 and 5. In count 1, there is evidence that, although the amount of K888.00 was authorized and signed by the first two accused, and not by other financial delegates, the sum was applied to the use of another person. On the sum of the K13,500.00 charged in count 2, although there is evidence by the former Presidents of BLLG, Messrs. Joe Ben and Jeremiah Rovoi, to show that sum went missing, no documentary evidence was tendered to show that how such sum was misappropriated. Neither Mary Toisiat nor her husband gave any evidence on the amount stated nor even the investigating officer. On counts 3 and 4, the double classroom design acquired by the two accused is still being used by the BLLG and so is the pressure pump in Count 5. These charges fall under the definition in the case of The State v Yuans Kaman (supra).

On count 8, it is a mixed bag actually. Part of the amount therein stated was, as the State says, misappropriated to the use of Dalmine Enterprises and some was spent on other purposes. It is not a clear case coming under the principles enunciated in the case of The State v Yuans Koman (supra). I find, therefore, that there is a case for the first two accused to answer in counts 6 and 7 and all the three co-accused in counts 8 and 9.

On count 9, I make orders pursuant to s 535 of the Criminal Code for the State to make an amendment to the amount stated, as I find the balance after expenditures amounts to K3,292.60. The final count shall be amended forthwith before I proceed to hear the three accused in their evidence.

18, 19 & 26 February

On 14 of this month, the Court handed down its ruling on the "no case submission", in which the Court found that against the first and second accuseds, there was no case for them to answer in counts one, two, three, four and five. The Court further held that there was a case for both of them to answer in counts six, seven and further that there was a case for the whole three of them in counts eight and nine.

I have carefully explored all evidence by the State on counts six to nine and I feel there is no real need for me to repeat myself. After pronouncements of my ruling on the "no case submission", the defence counsel indicated the three accuseds wanted to give evidence. This was despite earlier indications by Mr. Peter for the three accused to call independent witnesses.

On the defence case, evidence by the first accused corroborates that of Rosina Kuru. The first accused, Tom Kakawi, was the Assistant Co-ordinator with the Bitapaka Local Level Government from January 1996 until sometime in 1998 when he was asked to transfer. His main areas of responsibilities included being an Advisor to the Council Executive and an Implementer of executive decisions. He was an overseer of total administration and all operations within the BLLG area.

He would make sure he followed up on decisions made by the Council Executive to see that all projects budgeted for were being executed to the interest of the BLLG. For those contractors who were engaged in contracts for service for the Council, he was responsible to see that the service must be rendered fully. Dalmine Enterprises was one of those Contractors which was engaged to carry out road works for back fillings around the roads in the BLLG geographical location.

The second accused, Rosina Kuru was the then Council Executive Officer with the same authority. She confirmed evidence by the first accused that they were both signatories to the Council's General and Project Accounts which were maintained by the Council. Both accuseds testified to signing with good faith cheques mentioned in counts six, seven and eight. Their evidence shows that at times, they were asked by clients to draw open cheques for the convenience of their clients.

The defence evidence confirms that there was confusion on appropriate accounting procedures created by the new reforms that were adopted in 1997. The old procedure was to be phased out and that in this transitional period, sometimes the old procedure was being resorted to.

The first accused gave an account of procedures adopted to draw cheques from the accounts of the BLLG. Usually, where the Council wanted to acquire property, suppliers' invoices containing quotes would be acquired from a supplier. Evidence by the State shows that the proper procedure is to obtain three different quotes from three different suppliers. In my findings this was not followed in the case of acquiring the Able Computer from Steven Paak Enterprises. Then the Clerk would raise Requisitions for Expenditure and General Expenses Forms followed by the eventual drawing of cheques.

The first two accuseds admitted to signing cheques stated in the indictment. The cheque of K2,000.00 on cheque No. 181389, on count six, was receipted by Steven Paak Enterprises, but the company common seal bears the wording "PAAK PTY LTD". This sum, as the evidence shows, was spent on a computer but there was no printer. As alluded to, the computer today remains the property of the BLLG. It was also budgeted for and the first accused explains that the reason why he wanted to acquire the computer was because it was a quality machine and that a printer was to be acquired later to save costs.

Evidence by Rosina Kuru in relation to counts seven and eight is that, although she raised the cheques and counter-signed them, the cheques were collected by an accountant named Mich for Dalmine Enterprises. Evidence by the two first accused confirm that a person by the name of Mich was for sometime being employed by Dalmine Enterprises as an accountant. Herman Toisiat, proprietor of Dalmine Enterprises, testified to employing Mich, as an accountant sometime in 1997 or 1998, only for a short period of time.

It is apparent from all evidence before this Court that not only Mich was a medium between his employer and the Council but Terry Kuru also was. Mich and Terry Kuru were responsible for taking or receiving the cheque stated in Counts seven and eight. It is clear from all evidence that Mich and Terry Kuru played an important role being mediums for handling large sums of monies, the property of the complainants, from the BLLG Chambers to Dalmine Enterprises.

The last accused was caught up in the scheme when he met Terry Kuru at the junction to Tapo Village. Terry Kuru inquired with the third accused, Alfred Lucas Pupia, when was he going to pick his vehicle up from the Council since he won the tender for the vehicle Reg. No. RAC. 966 put on tender by the BLLG. The third accused indicated that he did not have the money. Hearing the negative comments by Alfred, deceased Terry Kuru, there and then, is supposed to have suggested to the accused that the third accused and himself were to see Dalmine Enterprises proprietor to see if the accused could take out a loan agreement with their firm.

One day, the third accused and Terry Kuru went up to Dalmine Enterprises to see the Manager. The third accused was led up to the door, into the office and according to Alfred, Terry Kuru asked him to wait outside the office while Terry himself went in to see the manager. When the deceased came out from the office, he immediately informed Alfred that all was Ok for the accused to get a loan. What Terry Kuru informed the third accused were complete lies. Herman Toisiat, when asked in both examination in chief and cross-examination, said he never knew or had known of any loan arrangement entered into between him or his company and the third accused.

On the 1st of June 1998, the deceased Terry Kuru went to Alfred's village with a short, clean-shaved man whom Alfred later learnt to be Mich. Alfred said Mick was the one who gave the cheque worth K2,600.00 to him. Once he got the cheque, Alfred said he was happy and proceeded straight to BLLG chambers to get the vehicle away. The third accused got to the office so late that, on receiving payment, the second accused advised the third accused to come the next day for his receipt. The vehicle ignition keys were given to Alfred and he drove away happily.

After using the vehicle for two months, Terry Kuru got on to the third accused one day and told him Mr. Herman Toisiat wanted to respossess the vehicle because Alfred had not complied by repaying the loan. This, too, was totally false, according to the State's evidence.

Actually, such arrangement was not a bank loan deal. Mr. Toisiat testified to knowing nothing about any loan agreement between his firm and the accused, Alfred Pupia. In any event, unless there were specific arrangements, such a deal would have been in great doubt.

The question really is how come, the accused being the major or key player in this loan arrangement, did not to see the Dalmine Enterprises manager himself? The loan arrangement was between the third accused's and the firm. Although no evidence was put to the Court on the accused's back-ground in terms of his education or qualification, he seemed on the witness stand to understand the English language and certainly he would have the urgency and seriousness to see the manager himself rather than taking advice from the driver now deceased.

The defence's submission at the end of their case, in relation to counts six and seven, is that the two amounts were accounted for according to the State's evidence. In case of the sum stated in count six, an Able Computer was actually bought and is still being used by the Bitapaka Local Level Government. And in count seven, the amount of K480.00 was spent on hire of a Ute from Dalmine enterprises to transport fencing equipment from Rabaul to Bitapaka Council Chambers. The defence evidence shows the fence has since been erected.

On counts eight and nine, the defence argued that it is duplicity. I can see the point in their line of argument. The logic is that what is charged in count nine has been charged in count eight. Count nine is actually the balance of what has already being charged in count eight. I shall return to this argument later.

Mr. Rangan, counsel for the State, submitted that the court should find the three accused guilty on the four remaining charges. He reiteriated that the Court should use its powers to make alternative findings as established by the evidence under s 544 of the Criminal Code.

On all the evidence in relation to the four remaining counts (6,7,8 and 9), remembering well that these are misappropriation charges laid pursuant to s 383 A (1)(a) and (2)(b) of the Code in the case of the first and second accused, the following is relevant. Since the decision in the case Kindi Lawi v The State, The State v Yuans Kaman (supra) and Wellington Belawa v The State [1988-89] PNGLR 496, the National and Supreme Court have consistently held that the act of "dishonesty", or misappropriation, relates to the state of mind of a person who is alleged to have misapplied the property in question and such acts must be strictly proved.

The term "dishonestly", as appearing in s 383A of the Criminal Code, relates to the State of mind of the person who misappropriates, or misapplies whatever property is the subject of the charge under consideration. It is a question of fact for the judge or tribunal to decide upon the evidence being put before it, see, Lawi v The State (supra) and The State v Gabriel Ramoi [1993] PNGLR 390.

The case of The State v Francis Natuwohala Laumodava [1994] PNGLR 291 establishes that in order for the Court to determine dishonesty, it must look into the mind of the accused person and determine whether, given the accused's intelligence, he would have appreciated if what he was doing was or amounted to dishonesty. Another case, The State v James Makario [1990] PNGLR N862, establishes that the application of property to the use of another person named in the indictment is an essential element and it must be strictly proved.

Mr. Rangan argued for the State that most monies stated in the indictment, although they may have been budgeted for were advanced or appropriated contrary to the Resolution made by the BLLG Executive made on 15 April 1998. (see Ann.H. Ex. 26). I find that part of his submission to be faulty. The terms of that Resolution was to stop calling contracts for further road works until further notice and until proper tender was being advertised by the Council Executive. I must concede with the defence that the resolution did not call for banning of payments made for work which had already been done and for which payments were due.

Former Presidents of the BLLG, Messrs. Joe Ben and Jeremiah Rovo, testified to actual work being done on the roads around the Bitapaka Local Level Government area in 1998. Corroborating their evidence is Herman Toisiat, proprietor of Dalmine Enterprises; he testified to his company being contracted by BLLG for road maintenance and for which he was paid.

For the Court to make a finding of guilty on the first two accused on counts six and seven, it must be satisfied beyond all reasonable doubt that there was some dishonest motive on the part of the first two accused. For the amounts stated in count six, an Able Computer was acquired for the benefit of the BLLG Chambers. This was despite the fact that it was bought without a printer. Accused Tom Kakawi and Rosina Kuru explained why the Able Computer was acquired. It was because of the quality of the machine and they could have easily got a printer somewhere else. Even if they had bought a complete set, the Council Executive had budgeted an estimate of K4,000.00 for purchase of a computer.

The situation in count seven is similar. Accused Tom Kakawi, explains that the sum of K480.00 was spent for hire of a vehicle to uplift fencing material from Rabaul to Bitapaka Local Level Government Chambers. The fence was actually erected. It is petty. The evidence led by the State branches out into two possible solutions here. In regard to counts seven and eight, cheques were raised signed by the first two accused but there were two other middlemen, Mich and Terry Kuru, who, according to the evidence, received cheques from the second accused on behalf of Dalmine Enterprises. This is evident from Mary Toisiat and the defence evidence. One of those two culprits, Terry Kuru, is already deceased while the other whom witnesses refer to, Mich, has simply disappeared and might not be apprehended to be prosecuted.

On the issue of duplicity, I am more than compelled to accede to the argument by the defence that count nine is a duplicity of count eight, as I find the amount charged in count nine (K3,292.60) has already been included in the former charge. I commented on this issue in my ruling on the "no case submission". I have also referred to count eight as a "mixed bag" because I had in mind the issue of duplicity. It is not only because some of the money (K12,388.00) was applied for the use of road maintenance, but the recipients of that sum are not here, and the balance stated in count nine is said to have been cashed. I must say counts eight and nine are bad for duplicity. Otherwise, if there was a finding of guilt, the three accused would have been charged twice for the same thing. Charge eight must be struck out.

One of the essential elements to be proved in a charge of misappropriation under s 383 A of the Criminal Code is that there must be a finding of dishonesty. This issue has been carefully considered by the Supreme Court case of Lawi v The State [1987] PNGLR 183. The Court there held that the term "dishonesty" in that section relates to the state of mind of the person who does the act which amounts to misappropriation. The ordinary standard of judgment to be placed on the issue is the ordinary reasonable man test from the area where an accused comes from, and the question of whether or not an accused had a particular state of mind in relation to the application of money or any other property dishonestly, is a question of fact for the trial judge to consider.

By looking at the line of decisions in cases such as the State v Laumadava [1994] PNGLR 291, The State v Napilye Kuri [1994] PNGLR 371, The State v Gabriel Ramoi [1993] PNGLR 390 and Kindi Lawi v The State [1987] PNGLR 183, can it be said against the first two accused that there was on element of dishonesty? Or, using the test applied in those cases, can it be said that the first two accused dishonestly applied to their own use or the use of the others stated in the remaining charges? I would answer that in the negative; it is to the contrary.

The defence evidence confirms evidence by the State witnesses, Mr. And Mrs. Herman Toisiat, that Dalmine Enterprises employed a person by the name of Mich as an accountant. The Defence evidence shows that Mich and Terry Kuru were key players in receiving cheques and amounts stated in counts seven and eight. Since those two gentlemen are not here to testify, it leaves in the mind of this Court a lot of doubts on who was actually responsible for sums stated in counts eight and nine.

There is clear evidence that the K18,288.00 in count eight was a cheque made out by the Executive Officer Rosina Kuru. There is no direct evidence to show who did the break up at the bank but from the defence evidence, the accused Alfred Pupia testified to Terry Kuru and Mich giving him the Cheque of K2,600.00 for the tendered vehicle. As to what connections Mich and Terry Kuru had with Rosina Kuru is not clear except for the fact that the deceased, Terry Kuru was married to the second accused but apart from that, there is no evidence to suggest otherwise or even conspiracy.

There has been many instances of persons being charged for misappropriation, but by the end of evidence, what is established is gross mismanagement of financial accounting procedures. An example of this trend is the case of The State v Yuans Kaman [1993] PNGLR 488. In that case the judge found that application of a sum of K5,000.00 was not necessarily criminal misappropriation because the monies were used to purchase certain building materials which were distributed to various church organizations.

So, when applying the test in Lawi v The State, The State v Napilye Kuri, The State v Gabriel Ramoi, The State v Laumadava and The State v Yauans Kaman (Supra) to the circumstances and evidence in the instant trial where do we fit the cases of the three accused before this Court. On the part of the first and second accused, this Court is not satisfied, beyond reasonable doubt, of their guilt and the Court must dismiss the four remaining charges against them.

On the last accused, there could be some element of misappropriation on his part. Here was a case where the accused was supposed to have arranged for a loan by himself. He well knew Terry Kuru was employed as a driver. When Terry Kuru and the third accused fronted up at the Dalmine Enterprises Office, the accused chosed to remain aloof when he well knew that he himself was arranging for a loan. The situation with the accused Alfred Pupia was like arranging for a bank loan which usually requires the person who wants to take out a loan to do so personally.

This Court is mindful of the fact that the charges before me are misappropriation on which the element of dishonesty ought to be strictly proved.

There is no evidence before this Court on conspiracy between Alfred Pupia, Terry Kuru or the person referred to as Mich. Nor is there any evidence linking the accused Alfred Pupia to Rosina Kuru. The evidence clearly show the accused received the cheque. On his part, the third accused said in evidence that he received the cheque in good faith. There is only evidence to support a charge of receiving the sum of K2,600.00 pursuant to s 410 of the Criminal Code.

I accept Mr. Rangan's submission that, pursuant to s 544 of the Criminal Code where evidence establishes another offence in respect of the same property, an accused may be convicted on that other offence as established by the evidence.

Because of the above findings, I order the State Prosecutor to amend, terms of s 535 (1)(a)(b)(i)(ii)(2) of the Criminal Code the charge of dishonestly applying to his own use to that of receiving pursuant to s 410 of the Code. The Court also directs that the amount stated there shall be amended from K3,292.60 to K2,600.00, the amount actually received by the accused Alfred Pupia. Having incorporated those amendments, the Court shall read the amended charge of receiving to the accused Alfred Pupia (amended charge read to accused). I now find accused Alfred Pupia guilty of receiving pursuant to s 410 of the Criminal Code.

5 March

The accused Alfred Lucas Pupia was charged together with two others for misappropriation of public monies the property of Bitapaka Local Level Government. The trial lasted some fourteen days after which Tom Kakawi and Rosina Kuru were found not guilty. The Court found the accused Alfred Lucas Pupia guilty instead on a charge of receiving an amount of K2,600.00, the property of the same authority.

On his statement on allocutus, the accused said he was sorry he had committed this offence but that he received the cheque in good faith. I said in my judgment (see separate) that the prisoner must bare some blame because he, being intelligent, would have known that it was his personal loan arrangement with Dalmine Enterprises and he was personally responsible for seeing the proprietor of the firm for this purpose. The prisoner did not do this but relied on Terry Kuru, being the driver, to arrange for his loan while well knowing that person to be a driver.

On submission, the counsel for the defence submitted that the court take into account the fact that the prisoner did not actually know that the cheque he was receiving was or may have been the proceeds of a stolen cheque but from a misappropriated amount which came out to be part of the balance of a sum of K18,288.00 stated in count eight of the indictment. It is rather unfortunate that the person alleged to have arranged for the loan on behalf of the accused is now deceased (Terry Kuru).

Because of the suspicious behaviour and manner of approach by the accused toward the arrangement of the loan, I am entitled to infer that the accused might have certainly known something about the loan arrangement that he and Terry Kuru talked about.

The suspicious conduct and careless attitude of the accused prior to receiving the cheque worth K2,600.00 would, in my view, be the equivalent consideration in the case of R v Angie Agun [1969-1970] PNGLR 36 only that in the case cited, the surreptitious nature of receiving property must have existed after receipt of the property alleged to have been stolen.

In the case before me, the evidence by the accused himself shows he was not so serious about finding out from the Manager of Dalmine Enterprise what were the conditions attached to the loan agreements. The same attitude is further evidenced by the fact that if there was any loan agreement at all, the accused would have the urgency to repay the loan. He used the vehicle for two to three months without any repayment being made. These are factors that weigh heavily against the accused.

On mitigation, the only factor that can be mentioned in his favour is that he is a first offender. I do not accept the accused's remorse in his plea for leniency after he had been found guilty.

On consideration of an appropriate sentence, the case of Wellington Belawa v The State [1988-89] PNGLR 496 must be resorted to for the convenient scale of sentencing guidelines being set there. The amount received by the accused falls within the second category of between K1,000.00 and K10,000.00 being in the vicinity of two years. It is my view that an appropriate penalty is a sentence of two years imprisonment in hard labour with the following conditions:

1. The sentence is fully suspended on condition he effects restitution within three months with the sum he received, namely K2,600.00.

2. His bail of K200.00 be converted into part-payment of restitution.

3. He shall forthwith enter into a recognizance to be of Good Behaviour Bond for two (2) years.

Sentence accordingly.

Lawyer for the State: The Public Prosecutor.
Lawyer for the accused: The Public Solicitor.