John Kasaipwalova v The State

• Jurisdiction: Papua New Guinea
• Judge: Kearney J:
• Judgment Date: 29 August 1977
• Citation: [1977] PNGLR 257
• Court: Supreme Court
• Year: 1977
• Judgement Number: SC120

Supreme Court: Frost CJ, Williams J, Kearney J

Judgment Delivered: 29 August 1977

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

JOHN KASAIPWALOVA

V

THE STATE

Waigani

Frost CJ Williams Kearney JJ

1-3 August 1977

29 August 1977

CRIMINAL LAW — Particular offences — Stealing — Money received under a direction — Elements of offence — "Money" — "Direction" — Whether credit in bank account property a thing "capable of being stolen" — Construction of s. 393

Section 393 (379) provides: Funds, etc. held under direction. — When a person receives, either alone or jointly with another person, any money or valuable security, or a power of attorney for the sale, mortgage, pledge or other disposition, of any property, whether capable of being stolen or not, with a direction in either case that such money or any part thereof, or any other money received in exchange for it, or any part thereof, or the proceeds or any part of the proceeds of such security, or of such mortgage, pledge, or other disposition, shall be applied to any purpose or paid to any person specified in the direction, such money and proceeds are deemed to be the property of the person from whom, the money, security, or power of attorney, was received until the direction has been coplied with.1 of the Criminal Code (Queensland adopted) now (s. 379 of the Criminal Code) — Application of s. 391 (1) Section 391 (1) (s. 377 (1) ) provides: A person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person anything capable of being stolen, is said to steal that thing.2 and s. 391 (6) Section 391 (6) (s. 377 (6) ) provides: The act of stealing is not complete until the person taking or converting the thing actually moves it or otherwise deals with it by some physical act.3 of the Criminal Code (Queensland adopted) now s. 377 (1) and s. 377 (6) of the Criminal Code.

The appellant, Kasaipwalova, was charged with the offence of stealing from the Government of Papua New Guinea the sum of K15,000, which it was alleged had been given to him with a direction that it should be applied to the establishment of an arts centre at Kiriwina (the Sopi Arts Centre) and convicted of stealing the sum of K14,000.

The circumstances giving rise to the charge were as follows: The appellant who was managing director of a company, Kabisawali Village Development Corporation Ltd. (K.V.D.C.) incorporated in 1973, had been successful in obtaining loans from the Papua New Guinea Development Bank for enterprises in the Trobriand Islands directed towards the preservation of the culture and arts of those islands. In 1974 the K.V.D.C. first approached the National Cultural Council for funds and in April 1975, through the appellant sought funds for an arts school at Kiriwina to be known as the Sopi Arts Centre. After discussions and correspondence the National Cultural Council resolved to grant K15,000 "to help establish Sopi Arts School — Trobriand Islands". On 27th June, 1975, a cheque for K15,000 was made payable to Sopi Arts Centre and was collected and paid into an account by some person other than the appellant and credited on 15th July, 1975, to account styled Sopi Arts Centre with the Bank of South Pacific, which account wasthe appellant's. On 24th May, 1975, the appellant had arranged an overdraft of K4,500 in the name of Sopi Arts Centre with the ANZ Bank, Boroka, in anticipation of the funding from the National Cultural Council, and for the purposes of paying for stock of a tradestore which the appellant had some time previously agreed to purchase. After receipt of the cheque for K15,000 there followed various banking transactions evidencing manipulation of the various accounts of the Sopi Arts Centre, the appellant and the K.V.D.C. and including a payment by cheque of K9,500 to one Worsley. There was no evidence that the appellant had enriched himself in any way and evidence that little or no money was actually spent on the Sopi Arts Centre.

On appeal against conviction.

Held

(1) For the offence of stealing as defined in s. 391 of the Criminal Code (Queensland adopted) (s. 377 of the Criminal Code) to be constituted there must be an actual moving or in the case of fraudulent conversion an actual dealing by some physical act of a thing capable of being stolen.

(2) (Per Frost C.J. and Kearney J., Williams J. not deciding.) Under s. 391 (s. 377) fraudulent conversion can only be made out if there is a conversion of the thing actually entrusted or bailed to a person.

(3) (Per Frost C.J. and Kearney J., Williams J. dissenting.) Where property is voluntarily entrusted to another with a direction, s. 393 (s. 379) must be read with s. 391 (s. 377) so that for criminal responsibility to be established the offence remains one of stealing, and to enable proof thereof the money or proceeds thereof must remain a thing capable of being stolen in relation to which an actual dealing by some physical act remains possible.

(4) (Per Frost C.J., Williams J. not deciding and Kearney J. dissenting.) Where money is paid into a bank account and the account is then drawn on by the person who received the money, for his own purposes, there can be no stealing under s. 391 (s. 377) unless on the facts the payment of the money into the bank constitutes a taking or fraudulent conversion of the money, as all that remains is a chose in action and the physical acts of operating upon the account by cheque or otherwise cannot constitute an actual moving or other dealing with a thing capable of being stolen.

R. v. Davenport [1954] 1 W.L.R. 569, Croton v. The Queen (1967) 117 C.L.R. 326, and R. v. Jamieson [1975] P.N.G.L.R. 216 referred to; Reg. v. Hally [1962] Qd. R. 214, and R. v. Smalley [1963] Qd. R. 508 considered.

(5) (Per Kearney J.) The fact that a bank credit is at law characterized as a chose in action does not exclude it from being "money" as defined in s. 1 (s. 1) and within s. 393 (s. 379) and property capable of being stolen within s. 391 (s. 377). The effect of s. 393 (s. 379) is that the bank credit is deemed against the receiver to be the property of the person for whom the original money was received which will operate to expose the customer to criminal liability under s. 391 (s. 377) should he fail to comply with the direction given and fraudulently convert the amount of the credit to his own use.

In re Diplock [1948] Ch. 465 at pp. 521-523 and Banque Belge v. Hambrouck [1921] 1 K.B. 321 referred to.

(6) (Per Frost C.J. with whom Kearney J. agreed, Williams J. not deciding.) The instruction or direction required by s. 393 (s. 379) need not be express, it may be tacit, it may be implied from the circumstances and may be conditional; it should be free from ambiguity and uncertainty and understood to be binding between the parties; the purpose specified should be of a general nature and although the direction will usually accompany the receipt of the money, it will be sufficient if the receipt of the money is identified with a prior direction.

Orsi v. Legal Contribution Trust [1976] W.A.R. 74 followed.

(7) (Per Williams J.) The legislative pattern of s. 391 (s. 377) and s. 393 (s. 379) is to deem ownership in the original owner of money received in exchange for money originally handed over or the proceeds of the things substituted for that originally handed over with the effect of extending the definition of stealing, which includes fraudulent conversion to the proceeds of property converted under a bailment by treating a bailor as the owner of the proceeds to the same extent as he was of the property originally bailed.

Slattery v. The King (1905) 2 C.L.R. 546 at p. 560 applied.

(8) (Per Williams J.) In the circumstances it not being contemplated that the money or anything in its stead should be returned to the National Cultural Council or delivered on account of the National Cultural Council, the relationship of bailor and bailer did not exist and there could be no conversion of the proceeds into which the cheque was converted.

(9) (Per Frost C.J.) In the circumstances, from the manner in which the cheque was drawn and the extended period over which the money was to be spent it was clear that the cheque and the money were intended to pass to the appellant and accordingly the money was incapable of being stolen by the appellant under s. 391 (s. 377).

(10) In the circumstances, there being no evidence that the appellant ever handled the cheque or did any physical act or gave any direction in relation to it or that the person who paid it into his account was his servant or agent, there was accordingly no proof that any act of stealing as required by s. 391 (6) (s. 377 (6) ) was completed.

(11) (Per Frost C.J., Williams J. not deciding.) In the circumstances the facts did not justify any more than an inference that the money was granted for the purpose of the establishment of the Sopi Arts Centre and upon the understanding or undertaking that it should be so applied, there was no...