Regina v Paycha [2013] SBHC 115; HCSI-CRC 02 of 2013 (8 August 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS
Criminal Jurisdiction

REGINA

v

DAVID DAY PACHA

Date of hearing: 9th July 2013
Date of Judgment: 8th August 2013

A. Aulanga for the Appellant.
G. Suri for the Respondent.

JUDGMENT

Apaniai, PJ:

Introduction.

1. The Respondent was charged in the Central Magistrates Court in Honiara with one count of conversion contrary to section 278(1)(c)(ii) of the Penal Code and one count of abuse of office contrary to section 96 of the Penal Code.
   
2. In regards to the conversion charge, it was alleged that the Respondent, between 1st October and 24th November 2006, had fraudulently converted $148,950.00, money which he had received on account of South Guadalcanal Fiberglass Project chaired by Rolland Seleso, and had used the $148,950.00 for the benefit of other persons.
   
3. In regards to the charge of abuse of office, it was alleged that the Respondent, being employed in the public service, had abused the authority of his office between 1st October and 24th November 2006 by committing an arbitrary act, which was prejudicial to the rights of Rolland Seleso as chairman of South Guadalcanal Fiberglass Project.
   
4. The trial into these charges was conducted on various dates between 6th March and 23rd October 2012.
   
5. At the close of the prosecution case on 23rd October, the Respondent made a no case submission. The submission was accepted by the magistrate court, which then ruled that the Respondent had no case to answer in relation to both charges. As a result, the Respondent was acquitted.
   
6. Against that ruling, the Crown now appeals. The appeal grounds are:-
   

[1] The magistrate erred in law in that he failed to correctly apply the test of "no case to answer" in relation to the scope of the inquiry that could properly take place at that point.

[2] The magistrate erred in fact and in law when he failed to take into account relevant considerations pertaining to the object and beneficiaries of the project.

[3] The magistrate erred in fact and in law when he acquitted the Respondent on the basis of irrelevant consideration, namely, that the South Guadalcanal Fiberglass Project was used as a front by Rolland Seleso and his committee members.

7. The above appeal grounds have raised two simple issues. The first is whether or not the magistrate had applied the proper principle relating to a no case submission and the second is whether or not there was sufficient evidence at the close of the Crown case to require the Respondent to state his defence.
   
8. In that regard, I do not propose to deal with this appeal with specific reference to the three grounds of appeal set out above. Instead, I propose to address the general issues as to whether or not the magistrate had applied the proper principles relating to a no case submission and as to whether or not there was sufficient evidence to put the Respondent to his defence. The 3 grounds of appeal will be covered when dealing with these general issues.
   

Principle governing no case submissions:

9. This was a trial before a magistrate court. Section 197 of the Criminal Procedure Code (Cap. 71) ("CPC"), which applies to criminal trials before magistrate courts, provides for the acquittal of an accused person where there is no case to answer. The section provides:-
   

"197. If at the close of the evidence in support of the charge it appears to the court that a case is not made out against the accused person sufficiently to require him to make a defence, the court shall dismiss the case and shall forthwith acquit the accused."

10. The test that applies under section 197, therefore, is whether or not a case has been sufficiently made out against the accused.
    
11. In R v Lutu[1] ((Lutu), Ward, CJ, said that the words "it appears to the court that a case is not made out against the accused person sufficiently to require him to make a defence" in section 197 suggests that where the tribunal is judge of fact as well as law, it is entitled to consider the sufficiency of the evidence at the close of the prosecution case so that where there is evidence that could result in a conviction by the court, the accused should be put to his defence. However, where there is some evidence but it is so little and unconvincing that it is insufficient, even if uncontradicted by the defence, to make a conviction possible, the court should not put the accused to his defence.
    
12. Hence, where a no case submission is made in a magistrate court, the question to ask is whether there is evidence that could result in a conviction. If there is, the accused must be required to make his defence. If there is not, then the accused must be acquitted forthwith. The question is to be decided by considering the whole of the evidence produced by the Crown at the close of its case.
    
13. At this stage, the question is not whether the Crown has proved its case beyond reasonable doubt. The question is simply whether or not the Crown has produced sufficient evidence which, taken at its highest, is capable of proving beyond reasonable doubt that the accused has committed the offence[2]. Taking the prosecution case at its highest means taking the evidence most favourable to the prosecution and assuming that such evidence is true. Evaluation of such matters as credibility of witnesses and discrepancies in witness testimonies are not considered at this stage[3].
    

The test applied by the magistrate:

14. What then was the test applied by the magistrate in this case?
    
15. In his ruling[4] on the submission of no case to answer, the magistrate had rightly quoted the principle relating to a no case submission as laid down in Lutu. He did that at paragraph 6 of his ruling. I see nothing wrong with his reference to the principle.
    

The charges:

16. In the present case, the Respondent was charged with conversion and abuse of office.
    
17. The essence of the offence of conversion is that the property had been received by, or was in the possession of, the accused lawfully and that he fraudulently converted it to his own use or to the use of some other person[5]. The most significant element of conversion is the fraudulent intent and fraudulent intent is disclosed when one deals with the property of another without that other's consent and well knowing that it will prejudice that other's interest[6].
    
18. As for the offence of abuse of office, the crucial element is the doing of, or directing to be done, an arbitrary act "in abuse of the authority" of the accused's office. What differentiates something done in abuse of office from something not done in abuse of office is the state of mind of the accused. An act done or direction given, which is otherwise within the power of an officer of the public service, will constitute an abuse of office if it is done or given maliciously with intention of causing loss or harm to another, or with the intention of conferring some advantage or benefit on the officer or on some other person[7].
    
19. For instance, it is an abuse of office for a person employed in the public service, and having the necessary authority, to direct payment to be raised in favour of a company as advance for development works allegedly carried out by the company without inspection being made to determine the extent of the work done by the company. Such contact would prejudice the rights of the owner of the funds paid out[8].
    
20. In Naiveli v The State[9], the Fiji Supreme Court had this to say in relation to the offence of abuse of office under s.111 of the Fiji Penal Code (which is identical to s. 96(1) of the Solomon Island Penal Code):-
    

"Central to the commission of an offence under s.111 is the doing or directing to be done an arbitrary act "in abuse of the authority" of the accused's office. What differentiates something done in abuse of office from something not done in abuse of office in many cases will be the state of mind of the accused. An act done or direction given which is otherwise within the power of an officer of the public service will constitute an abuse of office if it is done or given maliciously with intention of causing loss or harm to another, or with the intention of conferring some advantage or benefit on the officer."

Has the prosecution produced evidence capable of proving beyond reasonable doubt that the accused is guilty of the offences charged?

21. I have gone through the evidence produced by the prosecution in this case as appears in the Appeal Book, which comprises the Record of the Central Magistrates Courts Proceedings. The evidence consists of the testimonies of Rolland Seleso (PW1), Michael Reuben (PW2) Victor Totu (PW3) and Grace Delight Hebala (PW4).
    
22. The evidence also consists of 14 witness statements, which have been tendered by consent. These are the statements of Michael Rueben, Victor Totu, Peter Hauia, Kennedy Isou, Florence Puda, Abel Prince Vane, John Hunurua, Ontona Riringa, Daniel Haridi, John Ta'aru, Moses Virivolomo, Stanley Sofu, Luma Darcy and Gordon Darcy Lilo.
    
23. Further evidence has also been produced by the prosecution in the form of agreed exhibits marked as exhibits "S2", "S3", "S4", "S5", "S8", "S9", "S10", "S11", "RS 02", "RS 03", "RS 04", "RS2".
    
24. An agreed bundle of statements has also been tendered into evidence marked as exhibit "P2". These comprise statements by Lemech Deni Suia, John Kebol, Mathias Eddie Lima, Ben Anderson and Scot William Poke.
    
25. Other exhibits also tendered as evidence are exhibits "S1", "01', "02", "D5", "D3", and "D11".
    
26. These evidence show that on or about 21st April 2005, a Project proposal known as the South Guadalcanal Fiberglass Project[10] ("Project") was drawn up by a committee consisting of Rolland Seleso as chairman, Alistair Morris as secretary and Michael Rueben and Malon Pero as members.
    
27. The objectives of the Project were to acquire fiberglass materials, tools and accessories; to manufacture and market fiberglass canoes/boats; to provide job opportunities; and, to invest capital to enhance boat building capacity and ability practically realized and sustainable[11].
    
28. At paragraph 7 of the Project document[12], it is said that the vision of the Project is that the donor partner in the Project will provide capital assistance for the procurement of fiberglass canoe building materials along with the required tools and accessories and that, upon successful implementation and completion of the Project, it is hoped that the Project will contribute in a small but significant way to improving the standard of living and quality of life of the beneficiaries. It is also hoped that the Project will provide productive engagement to the youth of South Guadalcanal Constituency and will generally be of benefit to the South Guadalcanal constituents[13].
    
29. A budget of $350,000.00 was drawn up for submission to the donor partner. The money was to be spent on materials and other items as listed at paragraph 11 of the Project proposal[14]. These included the following:
    

[a]	Materials	-	$205,788.00
[b]	Accessories	-	5,000.00
[c]	Tools & Equipment	-	125,527.00
[d]	10% contingency	-	13,685.20
Total		-	$350,000.00

30. The Project was endorsed by the then MP for South Guadalcanal constituency, Mr. Victor Totu, who wrote a letter to the then Prime Minister, Sir Allen Kemakeza, in support of the Project and that the Prime Minister had endorsed the Project funding [15].
    
31. On 31st August 2005, the Government of the Republic of China ("Taiwanese Government") approved funding for the Project in the sum of only $300,000.00 instead of the $350,000.00 requested and the first tranche of $150,000.00 was paid into the account of the Central Bank of Solomon Island ("CBSI") with the Federal Reserve Bank of New York[16].
    
32. That first tranche ($150,000.00) was received by CBSI, which then paid it into a cheque account opened by the Ministry of Infrastructure Development ("MID") with the Bank of South Pacific ("BSP"). That cheque account was titled "MID-ROC Project" and the account number was 160000001004 ("BSP A/C"). Cheques were then issued from that account to various suppliers who had supplied materials to Mr. Seleso for the Project.
    
33. The MID Officer who opened, and managed, the BSP A/C was Grace Delight Hebala (PW4) ("Ms Hebala"). She was the Chief Accountant for the MID at that time.
    
34. According to Ms. Hebala, the procedure for issuing payments from the BSP A/C was that a request for payment must be made by the person managing the Project. That request must be supported by documents such as proforma invoices from suppliers. A payment voucher would then be raised for approval by the Permanent Secretary to MID ("PS/MID"). Upon approval of the payment voucher, cheques would then be issued to the suppliers for the sums indicated in their respective proforma invoices. The signatories to the cheque account at that time were the PS/MID and the Accountant General of the Ministry of Finance ("AG/MOF"). After the cheques were signed, the Project manager would take the cheques to the suppliers and would then collect the materials[17]. It would be improper to issue cheques from that account for anything else other than for materials and other expenditures relating to the Project.
    
35. Having spent the first tranche of $150,000.00, Mr. Seleso submitted an acquittal report to the Taiwanese Embassy explaining how the money was spent[18]. The report covers the period October 2005 to January 2006. Apparently, a condition for the release of the second tranche was to submit such a report.
    
36. On 31st July 2006, the Taiwanese Government released the second tranche ($150,000.00) of the Project money into the CBSI account with the Federal Reserve Bank of New York. This information was conveyed by the Taiwanese Embassy to the then new Prime Minister, Mr. Manasseh Sogavare, by letter dated 31st July 2006[19].
    
37. The letter was copied to others including the Respondent who had then become the new MP for South Guadalcanal Constituency in the place of Victor Totu.
    
38. It is this second tranche money, which is the subject of these charges against the Respondent.
    
39. It is clear from his decision on the no case submission that these are some of the main facts as found by the Magistrate.
    
40. However, the evidence by Ms. Hebala further shows[20] that the Respondent had contacted her by phone sometime in 2006 and told her that the 2nd tranche for the Project had been paid into the Project account with BSP. Ms. Hebala was not aware of the release of the second tranche but came to learn of it only when the Respondent told her about it during his phone call to her. During the phone conversation, the Respondent introduced himself to Ms. Hebala as the new MP for South Guadalcanal Constituency. He then asked Ms. Hebala how to access the funds.
    
41. Ms. Hebala explained to him that the procedure for releasing funds from the account was to obtain proforma invoices from suppliers. She also told him that Mr. Seleso was the administrator of the Project and that the Project was to manufacture fiberglass products. The Respondent, however, responded to Ms. Hebala saying that the funds belonged to him as he was the MP for South Guadalcanal constituency.
    
42. On 30th October 2006, the Respondent went and saw Ms. Hebala in her office at MID armed with 2 proforma invoices[21] and a letter[22] signed by himself and addressed to the accountant of MID.
    
43. In that letter, he indicated that he had another project worth SBD155,350.00 and requested that the $148,957.28 for the SGFP Project be channelled through the South Guadalcanal Constituency account with the ANZ Bank ("ANZ A/C"), account number 4331014 so he could facilitate the project. He signed the letter as the MP for South Guadalcanal Constituency.
    
44. That letter is significant in that it showed that the Respondent had requested that the $148,957.28 in the BSP A/C be transferred to the ANZ A/C, which was a South Guadalcanal constituency account. The evidence shows that the Respondent was a signatory to the ANZ A/C. It is clear that the ANZ A/C was a different account, which had nothing to do with the SGFP Project.
    
45. The letter also showed that the Respondent had come up with another project ("New Project") for the South Guadalcanal Constituency worth $155,350.00. This project would involve the purchase of 4 x 21 feet fibreglass ray boats from LDS Fiberglass worth $80,000.00[23], 1 x 40hp Suzuki outboard motor engine worth $22,400.00 and 3 x 30hp Suzuki outboard motor engine for three wards in the South Guadalcanal constituency. The total worth of the new Project was $52,950.00[24].
    
46. It is clear from the letter that the Respondent wanted to use the $148,957.28 towards the New Project and, in his record of interview with the police[25], he did admit that the money was for the Project but that he used the money for the purposes of the New Project[26]. His explanation was that the money belonged to the South Guadalcanal constituency.
    
47. When the Respondent came to see Ms. Hebala in her office, Ms. Hebala tried to explain to the Respondent that the $148,957.28 was approved for the Project and that the Project was managed by Mr. Seleso. That did not go down well with the Respondent. According to Ms. Hebala's evidence, the Respondent became angry and told Ms. Hebala that he did not come to argue, he came to take the cheque payments. Ms. Hebala's evidence was that the Respondent was the care-taker Minister for Mines & Energy, a position of authority.
    
48. Ms. Hebala said the angry appearance of the Respondent had caused her to fear that if she refused to comply with the Respondent's instructions she would lose her job. As a result, she raised a payment voucher ("PV") in favour of the South Guadalcanal Constituency for the sum of $148,950.28 and took the PV to the PS/MID, Mr. Peter Hauia, for endorsement. Upon endorsement of the PV, she raised a cheque in favour of the South Guadalcanal Constituency for the signing by Mr. Hauia and the AG/MOF.
    
49. There is no dispute that the $148,950.00 was transferred from the BSP A/C to the ANZ A/C on 03/11/12[27] and that the Respondent had used the money to purchase items for the New Project.
    
50. There seems to be some confusion as to whether the authority for the transfer of the money from the BSP A/C to the ANZ A/C came from the Prime Minister's Office. In my view that is unnecessary as far as the issues in this case are concerned. It was the request by the Respondent to transfer the $148,950.28 from the BSP A/C to the ANZ A/C that resulted in the money being transferred to the ANZ A/C. Clearly, if the proper procedures had been followed, the money would not have ended up in the ANZ A/C.
    
51. The magistrate, in his ruling, had concluded that the Project was a scheme designed by Mr. Seleso and his committee as a front for their own benefit. Despite that conclusion, he contradicted himself by saying that the evidence was clear that the endorsement by the then MP for South Guadalcanal constituency, Mr. Victor Totu, as well as the endorsement by the then Prime Minister, Sir Allen Kemakeza, and the approval of funding by the Taiwanese Government were made on the understanding that the Project was for the benefit of the people of South Guadalcanal constituency. He therefore ruled that since the Respondent had used the money for purposes beneficial to the people of the South Guadalcanal constituency, he could not be guilty of the charges against him.
    
52. With respect, I do not agree with that conclusion. It is clear that Mr. Seleso and his committee have applied for funding from the Taiwanese Government for the Project. The Project was to manufacture fiberglass canoes for sale to the residents of the South Guadalcanal constituency. The Project would also provide employment for the youth of the South Guadalcanal constituency. Those are the fringe benefits of the Project. The then MP for South Guadalcanal constituency, Mr. Victor Totu, as well as the then Prime Minister, Sir Allen Kemakesa, have endorsed the Project and have recommended the approval of funds for the Project and the $300,000.00 approved by the Taiwanese Government was for the Project. The MID had opened the BSP A/C specifically for the Project. The first tranche had been paid into that account and had been used by Mr. Seleso and his committee to purchase materials for the Project. An acquittal report had been forwarded by Mr. Seleso to the Taiwanese Embassy in regards to the use of the first tranche as a result of which the second tranche of $150,000.00 was also released into that Project account.
    
53. Whether or not Mr. Seleso and his committee were guilty of devising some fraudulent scheme to defraud all concerned, as appears to have been the conclusion of the magistrate, is not relevant to the issues in this case.
    
54. The fact is, there was a Project and the $148,950.00 was meant for that Project. The Respondent had used that $148,950.00 to purchase 4 fibreglass ray boats, the 40hp Suzuki outboard motor engine and the 3 x 30hp Suzuki outboard motor engine, products which were not part of the Project and the Respondent knew that. He had demanded from Ms. Hebala that the $148,950.00 be transferred to the ANZ A/C, he, at that time, being the MP for South Guadalcanal Constituency and a caretaker Minister at that time in the Ruling Government. Those are very important national positions.
    
55. The ruling by the magistrate seems to suggest that the money had been paid into the South Guadalcanal Constituency account with the ANZ bank on the basis of approvals given by those who have authority to do so. That may well be the case. Unfortunately, such approvals do not change the fact that the funds were meant to be paid towards the SGFP Project.
    
56. As stated in paragraph 18 above, the essence of the offence of conversion is that the property had been received by, or was in the possession of, the accused lawfully and that he fraudulently converted it to his own use or to the use of some other person. The evidence shows that the accused knew that the funds were meant for the Project and that he had diverted the funds for purposes other than the Project without the consent of the owners of the Project and knowing well that in doing so the interests of the owners of the Project would be prejudiced.
    
57. I am satisfied that the evidence before the magistrate court was capable of proving beyond reasonable doubt that the Respondent was guilty of the two charges laid against him and the magistrate should have required the Respondent to state his defence. That was not done and, unfortunately, I have to say with respect, that in not doing so, the magistrate had fallen into error.
    
58. It follows therefore that the magistrate's dismissal of the charges against the Respondent pursuant to the no case submission must be set aside and the case remitted back to the magistrate's court for continuation of the trial.
    
59. It has been submitted by Mr. Aulanga that the contract of employment of the magistrate who heard the case has lapsed and he may have already left the jurisdiction. Mr. Aulanga further submits that it is not certain whether the magistrate's contract would be renewed. In those circumstances, Mr. Aulanga submits that the proper order would be to order a re-trial before a different magistrate.
    
60. I agree that if the magistrate's contract is not renewed, the only option available is to order a re-trial.
    

Orders:

61. The orders of the court are:

[1] The appeal is allowed;
[2] The magistrate court decision is set aside;
[3] The case is referred back to the magistrate court for continuation of the trial or, in the event that the magistrate's employment contract is not renewed, that the case be re-tried before another magistrate.

THE COURT

JAMES APANIAI
PUISNE JUDGE

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^[1] R v Lutu [1986] SBHC 16; [1985-86] SILR 249 (23 October 1986) at pages 2 and 3.
^[2] R v Tome [2004] SBCA 13; CA-CRAC 004 of 2004 (10 November 2004).
^[3] R v Lutu, opcit.
^[4] See pages 9 and 10, Appeal Book.
^[5] R v Regeo [1998] SBHC 69, HC-CC 096 of 1993 (19 July 1998).
^[6] Toritelia v Regina [1987] SBCA 1; [1989] LRC (Crim) 647 (30 March 1987).
^[7] Naiveli v The State [1994] FJCA 29.
^[8] Tamaibeka v State [1999] FJCA 1; AAU0015u,97s (8 January 1999).
^[9] [1994] FJCA 29 (Paclii).
^[10] See Appeal Book, pages 159 to 171.
^[11] Ibid, p. 162.
^[12] Ibid, p. 161.
^[13] Ibid, pp. 159 - 160.
^[14] Ibid, p. 10.

^[15] Ibid, p. 172.
^[16] Ibid, p.175
^[17] Ibid, pp. 54-55.
^[18] See evidence by Seleso p. 22, Appeal Book, see also pp. 176 – 188, Appeal Book.
^[19] Page 156, Appeal Book.
^[20] Ibid, pp. 56 and 57.
^[21] Ibid, p. 152
^[22] Ibid, p. 155.
^[23] Ibid, p. 153.
^[24] Ibid, p. 152.
^[25] Ibid, pp. 120 – 147.
^[26] Answers Nos. 12 and 13, pp. 124-125, Appeal Book.
^[27] Page 149, Appeal Book.