Police v Aiafi [2006] WSSC 69 (20 December 2006)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

POLICE
Prosecution

AND:

FEPULEA’I RIMONI AIAFI
of Vaitele.
Accused

Counsel: R G Marshall and K Koria for prosecution
H J Schuster for accused

Hearing: 5, 6, 7, 8 December 2006
Judgment: 20 December 2006

JUDGMENT OF SAPOLU CJ

The charges

The accused was originally charged with two charges of false accounting by an employee under s.99 of the Crimes Ordinance 1961 and one charge of theft as a servant under ss.85 and 86 (1) (g) of the same Ordinance. At the conclusion of the evidence for the prosecution, I upheld a submission of no case to answer by counsel for the accused in respect of the two charges of false accounting by an employee and refused the submission of no case to answer in respect of the charge of theft as a servant. The two charges of false accounting by an employee were accordingly dismissed. The accused then elected to give evidence on the remaining charge of theft as a servant and that is the charge I will be dealing with in this judgment.

Relevant statutory provisions

Section 85 of the Crimes Ordinance 1961 which is the offence provision in this case provides as far as relevant:-

"(1) Theft or stealing is the act of fraudulently or dishonestly taking or converting to the use of any person, any thing capable of being stolen, with intent:

(a) To deprive the owner or any person having any property or interest therein permanently of such thing or of such property or interest; or

(b)..."

Section 86 (1) (g) which is the penalty provision provides:-

"Every one who commits theft is liable to imprisonment for a term not exceeding seven years if the property stolen is anything stolen by a clerk or servant which belongs to or is in the possession of his employer"

The evidence

I do not propose to traverse the evidence in all its details. It is sufficient to refer only to those parts of the evidence necessary to deal with the submissions of counsel and to come to a decision.

I will refer first to the evidence given by the witnesses called by the prosecution. In 1998 the accused first took up employment as commercial manager with the Samoa Airport Authority (SAA) which is a statutory body located at the Faleolo International Airport. Before that time, there had been in operation within the SAA for several years a scheme for making monetary advances to members of the staff using funds which belong to the SAA. This staff advances scheme continued in operation after the accused jointed the staff of the SAA in 1998. Whether or not this scheme was authorised by the board of directors which is the governing body of the SAA is not clear from the evidence.

How this advances scheme operated was that if a staff member wanted an advance, he would apply in writing to the general manager, later re-designated as the chief executive officer, who would decide whether to approve the application. If an application is approved, the name of the staff member concerned would be entered in a list called staff debts. Repayments for the advance would be made by instalment deductions from the fortnightly salaries of the staff member. When the accused was appointed general manager in 2001, he laid down the policy that staff advances were to be repaid within the financial year they were made.

What is also not entirely clear from the evidence is who would approve an advance to the general manager/chief executive officer if the general manager/chief executive officer wanted an advance as the evidence from the prosecution shows that the general manager/chief executive officer was also eligible under the advances scheme. I accept the evidence of the government auditor who testified in this case that it would have been proper accounting procedure for the general manager/chief executive officer to seek approval from the board of directors of SAA if he wanted an advance. The problem is, what if the staff advances scheme was in operation without the authority of the board of directors. As I have said, this aspect of the case is not entirely clear from the evidence.

In 2001, the accused was appointed, apparently for a three year term, to the position of general manager of the SAA when the then general manager left. This was the first time the accused took up employment with the SAA. The position of general manger was later re-designated as chief executive officer (CEO). From here onwards, I will refer to the position of the accused in the SAA as CEO. The accused gave evidence that when he was appointed CEO of the SAA, he laid down the policy that advances by the staff were to be repaid within the financial year the advances were made in order to avoid any liquidity problems to the SAA. The financial year for the SAA is 1 July to 30 June of the following year.

In October 2002, the Peace Corps Office in Apia advertised a Toyota Landcruiser vehicle for sale and called for tenders. The accused put in a tender for $48,000 which was successful. He testified that he was given one day by the Peace Corps Office to come up with the $48,000. As he was building his house at the same time, he did not have the money to pay for the vehicle. So he asked his financial controller who was also the manager of corporate services of the SAA for an advance of $48,000 to purchase the vehicle from the Peace Corps. That was on 25 October 2002. A SAA cheque number 53513 drawn on the SAA account at the ANZ Bank was then prepared by the manager of corporate services for the amount of $48,000. The cheque was dated 25 October 2002 and signed by both the manager of corporate services and the accused. Any two persons of the CEO, the assistant CEO, and the manager of corporate services may sign the SAA’s cheque. After the cheque was signed, the accused, in the company of another SAA employee, came to the ANZ Bank in Apia on the same day and cashed the cheque. The accused then gave the money to the SAA employee who was with him to go and pay the Peace Corps Office which was done. Ownership of the vehicle was then transferred to the accused.

It is clear that the accused was aware of the staff advances scheme within the SAA. In his evidence he testified that what he did was to ask his financial controller who is also the manager of corporate services for an advance of $48,000 to purchase a vehicle. He had no intention of stealing the money and he had repaid the full amount within the financial year in which the advance was made to him.

At the beginning of 2003, an event occurred to which the prosecution attached some significance. This was the decision by the board of directors of the SAA to purchase a vehicle for the use of the CEO. Three or four quotes were placed before the board for such vehicle. One of the quotes was from a company called Simokata Enterprises Ltd (SEL) owned by the parents in law of the accused. In his position as CEO of the SAA, the accused was a member of the board as well as its secretary. As secretary, he recorded the minutes of the meetings of the board. The accused testified that when the issue of the purchase of a vehicle for his use as CEO was to be discussed by the board, he absented himself from the discussion because one of the quotes was from Simokata Enterprises Ltd. His absence most probably explains why there is no record in the minutes of the discussion that took place within the board on the quotes that were presented for a vehicle to be purchased for the CEO. As it turned out, the quote by SEL was the one accepted by the board. This was for a vehicle valued at $120,000 to be supplied by SEL. On 29 January 2003 the SAA paid $60,000 by cheque to SEL. It appears from the evidence given by the accused that this $60,000 was a deposit or part payment for the vehicle supplied by SEL.

In February 2003, soon after the SAA had paid $60,000 to SEL on 29 January 2003, the board of directors of the SAA decided to reverse its decision to purchase a vehicle for the CEO from SEL. The reason for this, according to the evidence of the government auditor who testified as a witness for the prosecution, was because of the close family relationship of the accused to the owners of SEL. This is somewhat difficult to understand because the board of the SAA at the time it considered the three or four quotes for the purchase of a vehicle for the CEO, must have been aware that the accused was related to the owners of SEL when he absented himself from the meeting as the board was about to discuss those quotes. Be that as it may, the vehicle supplied by SEL was returned to it before 28 February 2003.

On 28 February 2003, SEL made the first refund payment of $30,000 by two cheques to the SAA for the $60.000 that had been paid to it for the vehicle supplied to the SAA. Those two cheques were given by the manager of corporate services to the assistant accountant in the accounts section. A SAA receipt was then issued by the assistant accountant in the name of SEL for that payment. Then on 11 March 2003, the accused made his first cash repayment of $22,000 for the advance of $48,000 he had obtained on 25 October 2002 for his purchase of a vehicle from the Peace Corps Office. This cash repayment on 11 March 2003 was made by the accused to Helen Vaasilifiti, the receivable accountant in the accounts section of the SAA. What might have created some suspicion, if not confusion, here is that the receipt that was issued by the receivable accountant was made out in the name of SEL and not in the name of the accused.

As it was explained by the receivable accountant who was called as a witness by the prosecution, the manager of corporate services who was the head of the SAA accounts section had instructed her to see that all the repayments for the vehicle which had been returned to SEL were entered in the books of accounts to offset the amount which had been paid by the SAA to SEL for that vehicle. The receivable accountant also testified that when the accused came on 11 March 2003 and paid to her $22,000 cash he said to her "that is the money for his car to be repaid to the SAA". The accused then left without a receipt being issued probably as the receivable accountant had to count the money to verify the amount. It would also appear from the evidence that the receivable accountant might not have been aware at the time that the vehicle which was supplied by SEL to the SAA and had been returned to that company was a different vehicle from the vehicle that the accused had purchased from the Peace Corps Office with an advance of $48,000 from the SAA. The reason is that, from the receivable accountant’s own evidence, there were no documentations such as a purchase order, supply invoice or payment voucher in the records of the SAA to explain what the cheque for $48,000 was used for. The only document in which that cheque appeared was a bank statement from the ANZ Bank. So the only document which referred to the cheque for $48,000 was the bank statement. Given the instruction to her by the head of the accounts section to enter in the books the repayments for the vehicle that had been returned to SEL to offset the money the SAA had paid to that company, the receivable accountant might have assumed that the cash payment of $22,000 made to her by the accused was made on behalf of SEL notwithstanding what the accused told her that "that is the money for his car to be repaid to the SAA". This would seem to be a fair explanation of the action by the receivable accountant of making out the receipt for the $22,000 in the name of SEL instead of the name of the accused.

The receivable accountant further testified that after she prepared the receipt for $22,000 in the name of SEL, she placed that receipt in the inwards tray which was in front of the accused’s secretary. She did not give the receipt to the accused. There is no direct evidence that the accused received that receipt though one would tend to think that he did.

Thus the two repayments made to the SAA on 28 February 2003 and 11 March 2003 were for two different persons for two different vehicles. The first repayment was made on 28 February 2003 by the manager of corporate services who gave two cheques to the assistant accountant in the accounts section in respect of the vehicle returned by the SAA to SEL. The second repayment was made on 11 March 2003 by the accused for himself in respect of the advance he had obtained for the purchase of a vehicle. However, the receipts for the two repayments were both made out in the name of SEL.

Following the refund payment of $30,000 made by SEL on 28 February 2003, that company made a second refund payment of $30,000 on 25 June 2003. This payment was made by cheque given to Miriama Lio an accounts clerk in the accounts section of the SAA. The accounts clerk in her evidence cannot recall who gave her the cheque for that payment. However, she testified that the manager of corporate services instructed her to make out a receipt in the name of SEL for that payment which she did. Thus the $60,000 which the SAA had paid to SEL was repaid in full.

On 27 June 2003, the accused made a second cash repayment of $26,000 to Helen Vaasilifiti, the receivable accountant, for his advance to purchase a vehicle from the Peace Corps Office. According to the receivable accountant, when the accused made this cash repayment of $26,000 tala to her, he also told her that "that is the money for my car which is being repaid to the SAA". She then made out a receipt in the name of SEL for that amount even though the accused had said to her that the money was for his car to be repaid into the SAA. The evidence, however, is silent as to the precise time that receipt was made out and whether it was personally given to the accused unlike the receipt for the first cash payment of $22,000 which was placed by the receivable accountant in the inwards tray in front of the accused’s secretary.

All the prosecution witnesses who prepared the receipts in the name of SEL for the refund payments made by SEL and for the cash repayments made by the accused testified that the accused had no involvement in the preparation and issuing of those receipts and he did not instruct any of them as to what to write in the receipts. Their instructions came from the manager of corporate services. These witnesses also testified under cross-examination that at the time the accused made his repayments on 11 March 2003 and 27 June 2003 there was no inquiry, investigation or a suspicion in the SAA about any money having been stolen from the SAA. An internal audit and an audit by the SAA’s independent auditors in 2004 of the SAA for the financial year 1 July 2002 to 30 June 2003 had also not reported any money being stolen from the SAA during that financial year.

Then towards the end of 2004, the position of CEO of the SAA came up for review as the accused’s term of appointment as CEO for three years was coming to an end. The position of CEO for the SAA was re-advertised and amongst the applicants for the position were the accused and a former employee of the SAA. Around this time, according to the evidence given under cross-examination by the payable accountant and the witness Logona Vaafusuaga, an article appeared in one of the local newspapers which was critical of the accused. This newspaper article contained an allegation by the former employee of the SAA who was applying with the accused for the position of CEO of the SAA that the accused had stolen $48,000 from the SAA. In consequence, the office of the Controller and Chief Auditor conducted an audit inquiry into the allegation in October 2004.

The auditor from the office of the Controller and Chief Auditor who conducted the investigation into the allegation of theft against the accused was called as a witness by the prosecution. He testified, however, that he did not go to the SAA to prove any theft but to investigate the allegation that the accused had used $48,000 of the SAA’s money to purchase his own vehicle. The evidence of the government auditor does not reveal any theft of $48,000 being committed by the accused. In fact this witness in October 2004 found that there was no $48,000 missing during the SAA’s financial year from 1 July 2002 to 30 June 2003 as that money had all been repaid. This witness also testified that during his investigation he discussed with the accused the $48,000 alleged to have been used by him to purchase a vehicle from the Peace Corps Office and the accused explained that the cheque for $48,000 was part payment of the vehicle purchased by the SAA from SEL. The accused also said that he had paid for the vehicle he purchased from the Peace Corps Office from various sources including funds from a loan and personal savings. The evidence shows that no further action was taken against the accused. In January or February 2005, the accused left the employment of the SAA for a job elsewhere. Later in December 2005, the present charge of theft as a servant was laid against the accused. This was about two and a half years after the accused had repaid the $48,000 in full on 27 June 2003.

In his evidence, the accused said that when the government auditor discussed with him the allegation against him, the explanation he gave was not true. He was following what was contained in the documentations prepared by his staff. He was more or less protecting his staff. In any event, he had a clear conscience at the time for he knew he had repaid to the SAA the full amount of his advance. But now that he was on oath he wants to tell the truth.

The accused in his evidence also referred to the staff advances scheme which was already in operation within the SAA when he took up employment as commercial manager in 1998. That scheme continued after he joined the staff of the SAA. In 2001 he was appointed CEO of the SAA and in October 2002 he tendered for $48,000 for a Toyota landcruiser advertised for sale by the Peace Corps Office. His tender was successful and he was given only one day to come with the money. As he was building his house at that time he did not have the money to purchase the vehicle. So he asked the financial controller, who was also the manager of corporate services, for an advance of $48,000. A cash cheque for that amount was accordingly prepared, dated 25 October 2002, and signed by himself and the financial controller. He then cashed that cheque at the ANZ Bank the same day and sent a member of his staff with the money to the Peace Corps Office. The accused further said he had no intention of stealing the money which he had paid back in two instalments of $22,000 cash on 11 March 2003 and $26,000 on 27 June 2003 before the end of the financial year 1 July 2002 to 30 June 2003.

Discussion

There is no dispute that the accused took $48,000 which belonged to his employer the SAA to purchase a vehicle from the Peace Corps Office. Counsel for the accused, however, submitted that the accused did not intend to deprive his employer permanently in terms of s.85. On the evidence that was presented by the prosecution and the accused this submission must succeed. There is no dispute that there was a staff advances scheme in operation within the SAA for several years before the accused took up employment with the SAA and that scheme continued after the accused joined the staff of SAA. There is no evidence whether the board of directors of the SAA was aware of such scheme or authorised it. Advances made to members of the staff had to be approved by the CEO. When the accused became CEO he laid down the policy that advances to staff members were to be repaid in full within the financial year the advances were made. The accused on 25 October 2002 asked the financial controller for an advance of $48,000 to purchase a vehicle from the Peace Corps Office. The advance was granted. The evidence is not entirely clear whether the CEO had to obtain approval from the board of directors if he wanted an advance. However, he said he had no intention of stealing the money which he repaid in full within the financial year the advance was made. At the time the accused repaid the money, there was no inquiry or investigation into the SAA about any money having been stolen.

Counsel for the prosecution submitted that the accused had intended to steal the money but when he came under scrutiny, he tried to cover his tracks by paying back the money he took. The difficulty here is that the accused did not come under scrutiny until October 2004 when a government auditor conducted an investigation as a result of an allegation of theft made against the accused in one of the newspapers. By that time, the accused had already repaid on 27 June 2003 the money he took which was more than a year before the government auditor’s investigation. There was also no inquiry, investigation or suspicion of a sum of $48,000 being stolen from the SAA during the period of time the accused paid back the money. It is true that in February 2003 the board of directors of the SAA reversed its earlier decision to purchase a vehicle for the use of the CEO from SEL a company owned by the accused’s parents in law. But there is no evidence of any improper procedure being adopted when the board had decided to accept the quote from SEL over other quotes that were before the board for its consideration and decision. The accused had also absented himself from the discussion of the quotes by the board because one of the quotes was from SEL.

So many details have been given in evidence but when one focuses on the question of whether the accused intended to deprive his employer permanently of the sum of $48,000 he used to purchase a vehicle from the Peace Corps Office, the answer must be that either the accused had no such intention or at least there is a reasonable doubt about the matter. The repayment of the money by the accused within time without any actual or apparent pressure from someone else to do so would negate any conclusion being drawn that the accused intended to deprive his employer permanently.

On the evidence, I am also in doubt whether the taking of the money by the accused to purchase a vehicle from the Peace Corps Office was fraudulent or dishonest in terms of s.85. But as this matter was not distinctly raised by counsel, I prefer to say no more about it.

Conclusion

I am not satisfied that the prosecution has proved the charge of theft as a servant beyond reasonable doubt. It is therefore dismissed.

CHIEF JUSTICE

Solicitors
Attorney General’s Office, Apia, for prosecution
Fepulea’i & Schuster Law Firm for accused