Regina v Ashley [2011] SBHC 169; HCSI-CRC 178 of 2011 (1 December 2011)

HIGH COURT OF SOLOMON ISLANDS
(PALMER CJ.)

Criminal Case Number 178 of 2011

REGINA

V

CHARLES KAUKUI ASHLEY

HEARING: 28, 29 November 2011
JUDGEMENT: 1st December 2011

F. Joel and R. Olutimayin for the Crown
Charles Ashley in person.

Palmer CJ.

The defendant, Charles Ashley is charged with 29 counts of conversion contrary to section 278(1)(c)(i) of the Penal Code, that on various dates he being entrusted with various sums of money, the property of Francis Sawane and Molaisufa Sawane, fraudulently converted them to his own use or benefit, or the use or benefit of others.

There is no dispute that the sum of $1,454,000-00, being part of the proceeds of the sale of the Auki Plaza owned by Francis Sawane and Molaisufa Sawane ("the Beneficiaries") was paid into the trust account of Mr. Ashley, no. 4221889 at ANZ Bank, styled Charles Kaukui Ashley T/F A & A Legal Service. This was paid on 26 February 2009 for disbursement to the Beneficiaries.

The case for prosecution is that on numerous dates thereafter, Mr. Ashley used the money for his own purpose or benefit, and or the benefit of others, apart from the various payments[1] that been made totalling $104,000-00 and his legal fees ($240,000-00) for his services. Those payments or their value, came to $344,000-00, which is not the subject of these charges. It is the balance of $1,110,000-00 yet to be paid that is the subject of those charges. There is no dispute this amount remains outstanding at this point of time.

Ms. Olutimayin for the Prosecution submits that the money which was paid into his account was entrusted to him as the family lawyer for further disbursement to the Beneficiaries and that it was not to be used for any other purpose. There does not appear to be any dispute that legal fees would be deducted in the normal course of events. She submits that at no point did the Beneficiaries or their representative, Ms. Constance Timothy-Sawane ("Constance") ever agree that the money be used in any other way.

I understand prosecution case to be that all the 29 counts relate to the $1,110,000-00 trust money held in Mr. Ashley's trust account and which has not been accounted for to the Beneficiaries or Constance.

Summary of the defence case and submission of no case to answer.

Mr. Ashley submits that the payment or issuance of the various cheques by him from his legal practice account cannot amount to any fraudulent conversion on his part for he is entitled to make payments from that trust account in respect of matters pertaining to his legal practice for any purpose. He says that he was entitled to make such payments from his account to anyone and did not require any consent from the Beneficiaries to do that. All that was required of him was to account to the Beneficiaries for that money. To that extent the payments could not amount to fraudulent conversion on his part and he has no case to answer.

Some preliminary issues.

I have taken the time to do some mathematical calculations on the value of the 29 counts in the information and note that this came to $1,472,968.39; counsels can check the accuracy of this for yourselves. This is $362,968.39 more than the amount of $1,110,000-00 for which he had been alleged to have converted. What this means is that he could not be charged for converting money to that value. What should have happened is that the charges should have been amended to reflect the value of only $1,110,000-00.

Since prosecution has closed its case, it is left to the court to determine which charges ought to remain and which ought to be removed to reflect the value of the money converted. Again I have done some calculations and come to the conclusion that save, for counts 3, 20, 24, 25, 26, 28 and 29, the rest should be dismissed forthwith. The total value of those seven counts, come to $1,110,035-00, which is a little over the alleged amount converted. I do not think however that matters too much now as there is no dispute to the amount alleged to have been converted and the final figure or value should be adjusted by $35-00 to reflect that value.

The law.

Section 278(1)(c)(i) of the Penal Code provides:

"278.— (1) Any person who—

...

(c) (i) being entrusted either solely or jointly with any other person with any property in order that he may retain in safe custody or apply, pay or deliver, for any purpose or to any person, the property or any part thereof, fraudulently converts to his own use or benefit, or the use or benefit of any other person, the property or any part thereof or any proceeds thereof; ...

is guilty of a misdemeanour, and shall be liable to imprisonment for seven years."

The elements of the offence which prosecution is required to prove beyond reasonable doubt are essentially four-fold:

1. Being entrusted with property, (the sum of $1,110,000-00);
2. That he may pay or deliver it to Francis Sawane and or Molaisufa and or Constance;
3. Fraudulently converts to his own use or benefit, or the use or benefit of any other person; and
4. The property or any part thereof or any proceeds thereof.
   

Decision.

In so far as elements (i) and (ii) are concerned, I am satisfied there is ample evidence which has been provided to show that the sum of $1,110,000-00 was entrusted into the safe custody of Mr. Ashley for onward transmission to the Beneficiaries and or Constance. That money did not belong to him or to anyone else and therefore could not be used for any other purpose other than for what it was entrusted into his custody for.

As to elements (iii) and (iv), I am also satisfied there is cogent evidence which demonstrates that the said amount of money were fraudulently converted to his own use or benefit and or the use or benefit of others.

The evidence adduced by prosecution is that the money had been paid into his trust account so that he may after deduction of his legal fees pay the balance to the Beneficiaries and or Constance. The flaw in Mr. Ashley's argument, that he may make payments from the account for any purpose provided he accounts for them, is that this is not money which could be utilised in that way for or by his legal practice. This is trust money; it does not belong to him or to his legal practice and so cannot be touched without the express authority of the Beneficiaries.

While Rule 19(1)[2] of the Legal Practitioners (Professional Conduct) Rules makes no further provisions for the receipt, maintenance and conduct of trust monies, recourse can be had to the general rules and duties of Legal Practitioners as to how trust monies are to be dealt with. One such basic requirement is that trust accounts must be kept separate from the normal legal practice account of the Legal Practitioner. It cannot be mixed with his personal private practice account and cannot be used without express authority or consent from the client, in this case the Beneficiaries.

A general definition of trust money is that this is money received by a legal practitioner to which the practitioner is not wholly entitled both at law and in equity and therefore cannot be accessed without clear accountability being provided, in this case it will have to be to the Beneficiaries. Even when it comes to the payment of legal fees, these cannot be deducted or paid from the trust account without prior delivery of the bills to the client. In this particular instant, he could not touch that amount until after it was determined and agreed to by his clients, the Beneficiaries, which according to the evidence would be around 16 March 2009. By that date however, the trust account containing the trust money, (see Exhibit E-3) had been depleted to a mere $35,879-52. The evidence adduced by prosecution is very strong and clear that he had misappropriated monies from the trust account which he was not entitled to.

While there has been no argument as to the meaning of the phrase "fraudulently convert", in essence it means dishonestly to prejudice or take the risk of prejudicing another's right, knowing that you have no right to do so[3]. In Toritelia v. The Queen[4], the Court of Appeal of Solomon Islands held, that the question to be considered is whether the prosecution had proved beyond reasonable doubt that the accused did prejudice or take the risk of prejudicing another's right, knowing that he had no right to do so. The question can be asked therefore, whether Mr. Ashley did prejudice the right of the Beneficiaries to their money or risked prejudicing their rights, knowing that he had no right to it anyway?

I am satisfied on the evidence before me there is sufficient material which if accepted is capable of proving beyond reasonable doubt the state of knowledge of Mr. Ashley as to his understanding and appreciation of what was required of him in relation to the said monies entrusted into his care and custody. Even if he was merely required to account for the said monies, he has not done that to date despite repeated requests by the Beneficiaries or Constance.

The submission of no case to answer is dismissed accordingly. I find a case to answer in respect of counts 3, 20, 24, 25, 26, 28 and 29. As to the other counts those are dismissed for the reasons stated in this judgement.

Orders of the Court:

1. Order that the following 22 counts be dismissed forthwith:
   

- Counts 1 – 2;
- Counts 4 – 19;
- Counts 21 – 23; and
- Count 27.

2. Dismiss submission of no case to answer, instead I find a case to answer in respect of counts 3, 20, 24, 25, 26, 28, and 29.
   

The Court.

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^[1] $54,000 paid 11^th March 2009; $20,000 paid on 26 March 2009; $25,000 paid on 26^th March 2009; and $5,000 paid on 7^th April 2009.
^[2] Rule 19(1) provides that “A legal practitioner shall comply with the provisions of the Act with respect to costs and to the operation and maintenance of trust accounts.”

^[3] Toritelia v The Queen [1987] SBCA 2; [1987] SILR 4 (30 March 1987) at page
^[4] Ibid at page 8.