Pacific Commercial Bank Ltd v Commissioner of the Police & Prison Service of Samoa [1998] WSSC 36 (25 August 1998)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

THE PACIFIC COMMERCIAL BANK LTD
a duly incorporated company having its registered office at Apia
Plaintiff

AND:

THE COMMISSIONER OF THE POLICE & PRISON SERVICE OF SAMOA
Defendant.

Counsel: R Drake for the Plaintiff
Latu for the Defendant

Hearing Date: 25 August 1998

ORAL JUDGMENT OF JUSTICE YOUNG

The Pacific Commercial Bank as Plaintiff sues the Commissioner of Police as Defendant arising from at least a single and possibly a double theft of a sum of money.

Thus is an unhappy situation and most unfortunate that the matter has now reached the court. At the end of the case during submission by counsel for the plaintiff a question arose as to whether or not the Commissioner of Police as opposed to the Attorney General representing the Government was the correct defendant.

After some discussion it was clear to me the Commissioner was the proper person to sue. In any event the defendant accepts that given the Commissioner of Police is an appointment of the government it would be inappropriate now for the "government" as litigant to take this point. While in my view the Commissioner of Police was the right person to sue I acknowledge that I have not heard detailed argument and a determination of this issue will have to wait another day. I am required to make no order. I acknowledge the defendant's responsible attitude.

The facts here are simple. In September 1996 $10,000.00 cash was discovered missing from the plaintiff's head teller's office. As a result a few of days later the plaintiff reported the missing cash to the Police Criminal Investigation branch particularly to Inspector Sale Ualesi. In turn the Inspector advised the plaintiff's manager Anthony Wullf that constable Tulaniu would investigate the alleged crime.

Over the next few weeks there was an investigation into the crime by the police. Tellers were interviewed but no immediate arrest. After White Sunday on 10 October 1996 the bank held a sports day. After the Sports day $500.00 was found in the car park. The General Manager of the bank invited whoever had lost the money to come forward and recover it but no one claimed it.

Later on 12 October an employee of the bank approached the general manager and said she had lost the $500.00. Mr Wullf who was the Manager of the Company, Premises and Property Administration of PCB advised the General Manager that the $500.00 should be held and the finding of the $500.00 reported to the police. That was because the $500.00 was all in one hundred tala notes, the same denomination that had been stolen.

The policeman interviewed the woman who claimed the $500.00. Ultimately the woman's residence was searched and further $2,500.00 was discovered. The woman was charged on 20 October 1996 with theft. The $500.00 found in the car park was handed by Mr Wulf to Constable Tulaniu so at the time the woman was charged Constable Tulaniu had in his possession $3,000.00 which was assumed to be money from the theft. The woman pleaded not guilty.

In November 1996 the auditors of the bank asked for proof that funds of $3,000.00 were held by the Police. Mr Wulf rang Constable Tulaniu and asked for the $3,000.00 back. The Constable said that he could not return the money until the case was resolved. Mr Wulf asked for and was given a receipt for the money by the Constable.

Eventually the criminal case involving the theft of $10,000.00 was to be heard. Mr Latu the principal State Solicitor Mr G Latu for the $3,000.00 held by the police. Mr Wulf was to be a witnesses. As the witnesses for the police were being briefed by the Attorney General's office they were advised the woman had pleaded guilty. Mr Wulf asked referred Mr Wulf to the Police Service for the return of the plaintiff's money.

Mr Wulf rang Inspector Sale Ualesi about the money. He was told by the Inspector after he enquired about the $3,000.00 and its return that he should contact Constable Tulaniu who had the money. The Inspector told Mr Wulf that Constable Tulanui could be found at the Immigration Office.

I mention now the evidence of the Chief Inspector Sale Ualesi who gave evidence. I have an account of the immediately above described discussion from the Inspector and Mr Wulf. I can say that the Chief Inspector did not have an accurate recall of the precise terms of the conversation he had with Mr Wulf. If there is any doubt I certainly prefer the evidence of Mr Wulf as to the content of the conversation I have recounted above.

Mr Wulf was straight forward direct and accurate witness. It was never put to him that he was mistaken or wrong about his conversation with the Inspector and the Inspector's reference to the Constable having possession of the $3,000.00. At the end of the Inspector's evidence I was not quite sure whether or not he agreed or disagreed or could not remember the actual conversation.

The Inspector was clear that Mr Wulf had wanted to find the Constable and he had told Mr Wulf where to find him. He was unsure that about whether or not there had been discussion about the $3,000.00.

Mr Wulf was trying to get the $3,000.00 back and I am certain that the Inspector told him (Mr Wulf) that he should go and see Constable Tulaniu about the money.

So efforts were made by Mr Wulf to try to get the money back. Constable Tulanui told him that he had already given $2,500.00 of the money back to the bank and produced a receipt which was signed, the Constable said, by a bank employee. The person who the Constable claimed had signed the receipt was an employee of the bank who had left the bank several months before and could not possibly have signed the receipt. So on the face of it the receipt for $2,500.00 was fraudulent.

I am satisfied therefore that the $3,000.00 which the police had in their possession from the PCB theft was never returned to the Bank.

Subsequently Mr Wulf approached the Commissioner of Police and attempted to get the money returned (August 1997). It seems that the Commissioner of Police and I accept his evidence with respect to this had not been told by his officers about the embarrassment and difficulty of the missing $3,000.00.

Ultimately the $3,000.00 has not been found. I am told that the constable has confessed to the theft he has been charged with theft as a servant. He has been pleaded not guilty and remains to be tried.

The evidence for the police was from the Commissioner of Police, Mr Blakelock and the Chief Inspector Sale Ualesi. I accept from the evidence of the Commissioner that there is in police instructions advice to all police officers that when money is received particularly as an exhibit that the police are to return it as soon as possible to the identified owners of the money as long as it consistent with the investigation of the case.

Such a process is necessary because the police do not have adequate facilities to keep money safe themselves. That was their own evidence as to why such action was necessary. In any event it would be logical for the police not to hold valuable exhibits unless essential to the investigation and prosecution of a particular crime. In support Regulation 76 of the Police Service Regulations advises the police not to keep any longer than necessary any public money they are in possession of.

Chief Inspector Sale Ualesi said that in October 1996 he handed Constable Tulaniu the $2,500.00 that was recovered as a result of the search recovered from the woman who stole the money from the Pacific Commercial Bank.

The Inspector kept the money himself overnight because there were no facilities at the police station to do so. He said next day that he gave the $2,500.00 to the Constable to show to the Superintendent-in-Charge of the section. He saw the Superintendent and the Constable counting the money. He assumed, but did not know, that in turn the Superintendent would instruct the Constable to give the money back to the bank. The Constable was being supervised in his investigation of the crime by the Superintendent. In cross examination he accepted that as a policy the police did desire to return money to owners, when found or when an exhibit of the a case, as soon as possible.

The Inspector seemed to accept, as I indicated previously, that he may have had a conversation with Mr Wulf about the money many months later or at best he had no recollection of that conversation. I am satisfied that Mr Wulf has accurately described that conversation and that at the time the Chief Inspector knew that Pacific Commercial Bank did not have the money and he knew that the last he had seen of the money, it was in Constable Tulaniu's possession.

This issue is important in this way. The Chief Inspector was aware from the enquiries of Mr Wulf that 9 months after the police had received the $3,000.00 it had not been returned. If as was claimed by the defendant there was a properly working process for immediately returning money received by the police then I would have expected the Inspector on being told the Bank money was still in the possession of the police 9 months later to have immediately reacted. If the process was as claimed I would have expected the Inspector to immediately investigate the whereabouts of the money. If the process for the return of the money was in fact working this must have seemed a highly worrying situation to the Chief Inspector.

But the Inspector made no enquires and expressed no concern about the money at all. He was not concerned about the money still being in the possession of the police 9 months after they first came into possession of it. It became clear that despite the theory, money coming into the possession of the police was not immediately returned to its rightful owner and that senior Police Officers, such as the Inspector, had little idea what was happening.

Those are the facts as I find them. The plaintiff in its second cause of action on which it primarily relies sues the defendant in bailment. The plaintiff alleges this is a case of gratuitous bailment. It says the obligation on the police was similar to a bailment by finding. The plaintiff says the police received the money belonging to the plaintiff and they should have kept it safe and returned it to the true owner.

The degree of care and diligence required depends upon the circumstances under which the item comes into the possession of the bank. The common law duty of the bailee was to take reasonable care of the bailors goods and not to convert them.

Here the police received the money as part of an exhibit in one sense compulsorily. Because of its easy convertibility the need to keep money safe is self evident, money can be converted simply and easily.

In this case the police knew the owner of the goods and it was open to them to return the property (as the Commissioner hoped) immediately. They did not take that opportunity.

In cases such as this where the police come into possession of goods taken through their investigation and thus are bailees and the goods subsequently go missing it is for the police to establish they took every reasonable care to safeguard the money. Other than the claim that public money was to be returned as soon as possible to the true owner there was no system to ensure the money was safe. And the claim that a system to ensure public money was immediately returned has been shown in evidence to be inadequate. For those reasons the police have not been in this case kept to the standard required of a bailee. For the police it was said they could not guard against theft. That may be true in isolation but here they had no effective system to ensure goods coming into the possession of the police were safeguarded.

While it is valuable to have an instruction that money should be returned as soon as possible to the owner, the police must ensure the system works. In addition when money is taken into their possession they must also have a system which ensures the money is receipted, safely stored (even by arrangement with a bank) and can only be released by an independent system. Thus the police need to do the best to ensure money in their possession is not stolen or if it is who is responsible can be easily identified.

No such process is present here or if it is no evidence has been given as to it.

I am therefore satisfied that the police were bailees and they failed to take all reasonable precautions to keep the money safe. Interest at 12% the rate at which the bank says it could have lent the money out at is also claimed from 22 July 1997, the day the money should have been returned to judgment. That evidence has not been subjected to any cross examination a challenge. I accepted it.

I therefore award judgment to the plaintiff in the sum of $3,000.00, interest at the rate of 12% from the 22 July 1997 down to today's date. General damages of $1,000.00 are sought but no evidence was called as to them and I would not award general damages to such a case. Finally, costs to the plaintiff as set by the Registrar.

JUSTICE YOUNG