Police v Moefaauo [2010] WSSC 28 (26 March 2010)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN:

THE POLICE
Informant

AND:

PERENISE AMETI MOEFAAUO
male of Vaitele
Defendant

Counsels: Mr M. Lemisio for the prosecution
Defendant unrepresented

Hearing: 18, 19 November 2009
Decision: 26 March 2010

DECISION OF NELSON J.

The defendant in this case faces 14 counts of theft as a servant over diverse periods in 2007 when he was employed as a salesperson and subsequently as a marketing officer for the complainant company, Frankie Company Limited. The amounts involved in the charges range from $2,442.80 the smallest to $9,931.00 the largest. It is alleged by the prosecution that the defendant either stole these monies directly by fraudulently and dishonestly converting it to his own personal use and gain or that he was under an obligation to account for these monies to his employer and failed in that obligation and accordingly has committed the offence of theft as a servant pursuant to its extended definition.

The details of the charges are as follows:

S600/07 dated 21 July 2007 involving an amount of $5,050.40;

S138/08 covering the period 28/5/07-29/11/07 involving $3230.56;

S139/08 for the period 11/5/07-29/11/07 involving $3051.189;

S140/08 for the period 29/5/07-29/11/07 involving the sum of $3620.40;

S141/08 for the period 15/6/07-29/11/07 involving $4176.00;

S142/08 for the period 24/7/07-29/11/07 involving $5728.54;

S144/08 for the period 24/7/07-29/11/07 involving $6103.75;

S145/08 for the period 18/7/07-29/11/07 involving $3053.50;

S147/08 for the period 06/8/07-29/11/07 involving $6791.65;

S148/08 for the period 22/8/07-29/11/07 involving $9128.20;

S149/08 for the period 7/9/07-29/11/07 involving $7854.52;

S150/08 for the period 7/9/07-29/11/07 involving $2442.80;

S151/08 for the period 1/10/07-29/11/07 involving $9931.00;

S152/08 for the period 11/5/07-29/11/07 involving $4298.88.

It is not in dispute that the defendant was employed by the complainant company at all material times, initially in sales and delivery of goods around Upolu and Savaii and after four years of doing that, he was promoted to marketing officer in charge of the companys major clients such as Lynn Netzlers at Motootua and Mynas Supermarket at Vaoala. This included the newly opened business of the Taito Galu Supermarket at Vailele ("the supermarket") where all these defaultations emanated.

The prosecution case is that the defendant was paid in cash by the supermarket for goods received but the defendant failed to turn over these monies to his employer Frankie Company Limited. There is no dispute that the complainant company owned the goods supplied to the supermarket and that it was entitled to receive payment for those goods. Neither was contested by the defendant that part of his job was to collect payment for these goods.

The evidence of the supermarket manager Milovale Moke who mainly dealt with the defendant was that their business began operating around 2004 and that the defendant was the representative for Frankie Co. Ltd. Through him they ordered goods for sale at the supermarket. Mokes evidence was either he or his wife or some other member of the immediate family would do the ordering and would be on hand to receive delivery of the goods. Payments were made on each invoice and were by cash if there was sufficient cash, by cheque if not. He also testified that they would request receipts from the defendant but were told no receipts were necessary. All that was required would be for the defendant to mark the invoice "paid/ok" and the store would then retain the invoice copy which the defendant had signed "paid/ok".

Mr Moke went through the various invoices and specifically identified the following invoices.

Invoice 180047 dated 15/6/07 in the amount of $4298.88 produced as Exh. "P.2" for the prosecution, see charge S152/08;

Invoice 175885 dated 29/5/07 in the sum of $3620.40 exhibited as Exh. "P.5" for the prosecution, see charge S140/08;

Invoice 188111 dated 18/7/07 amount $3053.50 produced as Exh. "P.6" for the prosecution, see charge S145/08;

Invoice 189749 dated 24/7/07 in the sum of $7420.42 produced as Exh. "P.7" for the prosecution, see charge S142/08, an invoice that was paid in two payments of $1,691.88 and $5,728.54;

Invoice 1897570 dated 24/7/07 amount $6103.76 produced as Exh. "P.8" for the prosecution, see charge S144/08;

Invoice 193151 dated 6/8/07 amount $6791.65 produced as Exh. "P.9" for the prosecution, see charge S147/08;

Invoice 209140 dated 10/10/07 amount $9128.20 produced as Exh. "P.10" for the prosecution, see charge S148/08;

Invoice 201291 dated 7/9/07 in the amount of 7854.52 produced as Exh. "P.11" for the prosecution, see charge S149/08;

Invoice 201370 dated 7/9/07 amount $2442.80 produced as Exh. "P.12" for the prosecution, see charge S150/08;

Invoice 206960 dated 1/10/07 amount $9931.00 produced at Exh. "P.13" for the prosecution, see charge S151/08;

Invoice 171849 dated 11/5/07 amount $3051.18 produced at Exh. "P.14" for the prosecution, see charge S139/08;

Invoice 171015 dated 8/5/07 amount $5050.40 produced as Exh. "P.15" for the prosecution, see charge S.600/07.

These 12 invoices were identified by Milovale in his evidence as being invoices marked by the defendant "paid/ok".

The defendant who represented himself cross examined Milovale in relation to this matter and in answers to his questions he said that he never agreed to the defendant controlling the account because the outstanding invoices were piling up and becoming too large and he maintained that all these invoices were not paid by cheque but were paid to the defendant in cash. Milovale reiterated in cross examination what he said in examination in chief that his request for receipts was met by the defendants answer that receipts were not required. But that it was sufficient the defendant merely signed the invoice and marked the invoices "paid/ok". Mr Moke said that he relied on the defendants integrity because he had formed a good working relationship with him and had dealt with him over a long period of time as the agent for Frankie Co. Ltd.

Two employees of Frankie Co. Ltd. gave evidence namely the defendants immediate supervisor Mr Shiu Chand who was the supervisor for the latter stages of the defendants employment with the company and Ms Orepa Schwalger who looked after the companys accounts and was responsible for receiving and processing payments and debtors records. Chands evidence was that he joined the company in March 2007 and his task was to supervise all the salesmen reporting directly to the managing director of the company Mr Frankie. He confirmed that the defendant looked after a number of major customers, among them the Taito Galu Supermarket at Vailele. He also confirmed the sales people were responsible for collecting payments for goods supplied to customers and the system used was an invoicing one whereby the salesperson would prepare the relevant invoice, take it to the warehouse and use it to release the goods to be sold. The invoices were in triplicate and one copy was kept by the supervisor, the other two were taken by the salesperson for delivery purposes. The goods would then be delivered to the client by the salesperson, the client would sign for the goods as delivered/received. The client would retain one copy of the invoice and the third copy would be returned by the salesperson to the companys office for their records. Chand testified that because a lot of cash was going missing, when he joined he changed the system and required all payments to be by cheque. Customers were given up to one month to pay and upon payment the relevant invoice would accompany the payment and the relevant salesperson was responsible for delivering the payment and the invoice to the main office cashiers. In the event that a customer still however paid in cash, the salesperson was supposed to keep a daily record sheet of these payments and at days end take the cash and the sheet to the cashier and the cashier would be responsible for entering the payments into the system. Chand said that occasionally invoices could be amended by a supervisor to reflect for example a discount on a bulk order or because not all ordered goods were supplied to the customer and accordingly such goods had to be deleted from the invoice.

The evidence of Orepa Schwalger was that she has worked for the complainant company for a number of years and was in charge of processing payments and clients accounts and that on the instructions of her superior Ms Mayday Leung Hing she undertook a reconciliation of the account of Taito Galu Supermarket. She said she reconciled all invoices against payments made over the 1 January 2006 to 6 November 2007 period and she discovered a substantial number of invoices were outstanding and unpaid as far as the companies records were concerned. In closer investigation she identified invoices "P-2", "P-5", B6, B8, B9, B10, B11, B12, B13, B14 and B15 had all been marked "paid ok" but no payments had been received by the company in respect of these invoices and these were invoices that the family had advised her had been paid to the defendant. To accommodate the request from the defendant Miss Mayday Laung Hing was also called as a witness for the defence as she was not called by the prosecution as one of their witnesses.

Miss Laung Hing was the director of the complainant company and testified that she was fully conversant with the companys operation and procedures and occasionally helped out in the accounts division of the company. Although called at the defendants request her evidence did not really assist the defendant. Her testimony was the investigation into the Taito Galu Supermarket account was launched after a discussion she had had with Mr and Mrs Milovale as to why their account had a large outstanding balance. She was then advised by the couple that payments on various invoices had in fact been given to the defendant in cash. Again to accommodate a request from the defendant who was unrepresented who had suggested to this witness which the witness denied and to the court that there were additional company records that had not been disclosed but which showed these payments in fact had been turned over to the company. The court recalled Orepa Schwalger to produce various extra documents including lodgment book records. These records confirm that they were in fact cheques which had been paid by Taito Galu Supermarket to the defendant which the defendant had passed over to the company cashier but apart from one cheque number 1475337 used to pay B5 and B15, these cheques related to other invoices that is invoices other than those involved in the charges against the defendant and that these cheques were in fact used to pay other purchases of the supermarket from the complainant company. They did not relate to the particular invoices B2 to B14 which are the subject of the charges before the court. For the record I note that I accept the testimony of Miss Schwalger that the reason why these documents were not produced earlier is because they were by and large irrelevant to the subject matter of the charges.

The defendants evidence:

The defendants evidence was that things went smoothly in his employment with the company until Mr Chand joined in 2007. Before that time customers accounts were kept under control and below one hundred thousand per customer and when that amount was reached, customers were required to repay before further goods were sold. But when Mr Chand joined he advised the defendant that a new target of one million a month in sales was being set and the defendants job was to sell, sell, sell and make sure Frankies goods were the only goods filling customers shelves and he instructed that clients were to be given two months to pay. In order to accommodate this, customers accounts were accordingly allowed to dramatically increase including the account of Taito Galu Supermarket at Vailele. But for that company it got to a point where they could not keep up their payments. So they requested his help and what he did was to instruct them to make bulk payments as and when they could and he would be responsible for allocating these payments to the various invoices. His testimony was that all payments from the supermarket were by cheque and that he was never paid in cash. And if after allocating the particular payment to various invoices there was some small overpayment then it was agreed that he could keep this as a "tip". But he said this did not happen often. He did however concede in his evidence that he signed the invoices in question in this matter but explained that his error was not to cancel these entries when presenting the particular invoices and the relevant cheque for payment. The defendant denied receiving the last cash payments Mr Milovale had said that he paid him and he said no business in Samoa, New Zealand or anywhere else would pass over such large amounts of cash. He suggested that the reality of the situation was that the supermarkets account still remained unpaid and he attacked the credibility of the prosecution witnesses saying Milovale was therefore not telling the truth, Orepa Schwalger did not know what she was talking about as she was not involved in the day to day operations and Miss Mayday Laung Hing was hiding relevant documents.

Decision:

The defendant has a point. It is almost unbelievable that any business would pay over such large amounts in cash without proper documentation and without obtaining proper receipts. However the answer to that is the business did this because it had established a working history and relationship with the defendant and it trusted him. Furthermore it accepted his signing and marking the invoices "paid ok" as sufficient acknowledgement of receipt by the company of the monies paid. The defendant used to believe it would mean that he bungled his own system leaving the invoices which are the subject of these charges outstanding and unpaid because I do not accept that the business records of the company however amateurish they may be from certain aspects are in error in recording what invoices were paid and what remained unpaid. I have seen and heard the defendant over the course of what has turned out to be a number of trial days, he is intelligent, articulate and would not make the kind of mistake that he says he may. And if he did it was a mistake easily rectifiable by balancing out the cheques received and the outstanding invoices. It is also quite apparent that no one in the complainant company knew of the defendants system or approved it. In fact his system was completely contrary to company policy a fact aknowledged by him in his testimony. It would not in my view have been an unduly difficult thing to clear such a system of his superiors who were obviously motivated to sell as much of their goods as possible and who could have easily seen the favourable commercial benefit in extending special treatment to a customer like Taito Galu Supermarket.

Perenise I have heard the evidence in your case including listening to the testimony that you gave to the court and credibleness falls on this case on the side of the prosecution. I do not believe Mr Milovale was lying or mistaken when he said he made these cash payments to you. I have considered the matter I believe the defendant was engaged in the classic use todays payment to catch up with yesterdays kind of scheme which even Wall Street bankers have used. The problem with that is on any given day the scheme can be easily be exposed. In reliance on Mr Milovales evidence I find the following charges have been proven beyond reasonable doubt:

S139/08, S142/08, S144/08, S145/08, S147/08, S148/08, S149/08, S150/08,

S151/08, S152/08 ten charges in all

The following charges however have not been proved to the required standard I have a reasonable doubt in respect of them namely:

S600/07 an invoice noted as paid by cheque;

S138/08 which has insufficient evidence;

S140/08, an invoice also noted as paid by cheque; and

S141/08 in respect of which insufficient evidence was presented.

Those four charges are dismissed.

E tusa ai ma le faaiuga a le faamasinoga i le mataupu lenei o lea o le a tolopo i le aso 26 o Aperila 2010 mo se faaiuga. Ua tapa se lipoti mai le Ofisa Faanofovaavaaia, o lona uiga e tatau ona e o’o i se taimi vave i le Ofisa Faanofovaavaaia e tapena mai lau lipoti. Aua le faatamala i le lipoti lena e fesoasoani tele i se faaiuga o lau mataupu. Ona o lea ua faamaonia le solitulafono i moliaga ia e tatau ona faaauau lau saini ae faatasi i le vaiaso e te saini ai. Ia e saini i Aso Faraile o vaiaso uma i le Ofisa o Leoleo i Apia.

JUSTICE NELSON