The State v Francis Natuwohala Laumadava

• Jurisdiction: Papua New Guinea
• Judge: Injia AJ
• Citation: [1994] PNGLR 291
• Court: National Court
• Year: 1994
• Judgement Number: N1230

National Court: Injia AJ

Judgment Delivered: May 1994

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

THE STATE

V

FRANCIS NATUWOHALA LAUMADAVA

Alotau

Injia AJ

23 May 1994

EVIDENCE — Accomplice evidence — Weight to be given.

CRIMINAL LAW — Misappropriation — Government funds — Provincial government minister — Village Improvement Fund money applied for, obtained, and used to pay off accused's personal debt — Breach of fund guidelines — Whether accused applied money to his own use — Whether accused acted dishonestly — Criminal Code s 383A (1) (a).

WORDS AND PHRASES — "Dishonestly" in the context of s 383A (1) (a) Criminal Code.

Facts

The accused, a minister in the Milne Bay Provincial Government, applied for money from the province's Village Improvement Fund, ostensibly for projects in his constituency. The prosecution established that he directed his subordinate to apply most of the resultant money to repay a loan for the purchase of land allocated to him privately under the National Housing Corporation's Home Ownership Scheme.

Held

1. The accused instructed his subordinate to pay his personal debt. The subordinate was only a conduit in that payment. Therefore, the accused applied the money to his own use.

2. Applying both subjective and objective tests, the accused was aware that what he was doing was wrong. He acted dishonestly and was guilty of misappropriation.

Cases Cited

Papua New Guinea cases cited

Lawi v The State [1987] PNGLR 183.

State v Amoko-Amoko [1981] PNGLR 373.

State v Fineko [1978] PNGLR 262.

Other case cited

Browne v Dunn (1893) 6 R 67, HL.

Counsel

K Bona, for the State.

M Cholai, for the accused.

23 May 1994

INJIA AJ: The accused pleaded not guilty to a charge, pursuant to s 383A (1) (a) of the Criminal Code Ch 262 (the Code), that between 1 April 1992 and 31 May 1992, he dishonestly applied to his own use K2,470.72 in property of the State.

The State alleged that the accused applied for K2,976 from the provincial government's Village Improvement Fund (VIF), which was set up to assist the village people in the various constituencies. He applied for the money to be used for meeting administration costs of the VIF Committee in his North Goodenough constituency. When the application was approved and a cheque for K2,976 was released, instead of applying the money to meet administrative costs, he used most of the money — K2,470.72 — to repay a personal loan, or debt, which he had with Milne Bay Properties Pty Ltd, the provincial government's business arm. He obtained this loan to buy a piece of land at Sanderson Bay in Alotau, which was allocated to him by the National Housing Corporation (NHC) under its Home Ownership Scheme. In doing so, it is alleged, the accused dishonestly applied to his own use K2,470.72 which was the property of the State.

It is not disputed that the money belongs to the State. It also is not disputed that the accused applied for the K2,976 from the VIF, that the application was approved, a cheque for K2,976 was released, and K2,470.72 of the money was paid to Milne Bay Properties to pay off the accused's debt. The accused contends that:

1. He did not apply the money to his own use because he never personally paid the money to Milne Bay Properties or authorized or instructed any person to cash the cheque and pay the money to it. He says that the money was paid to Milne Bay Properties by the co-ordinator of VIF, James Kilileu, without his instructions or authorization, and he did not benefit from the payment because he never received any title to the land from the NHC.

2. In the above circumstances, the accused did not apply the money dishonestly.

The first issue can be decided on my findings of fact on the evidence. The second issue, which is the main issue, depends on my findings of fact, but also is a question of law. And so it is convenient for me to first set out the law regarding dishonest application of money. The crucial issue here is the meaning of the word "dishonestly" in the context of s 383A (1) (a). This issue was decided by the Supreme Court in the case of Lawi v The State [1987] PNGLR 183. In brief, it was decided that "dishonestly" relates to the state of mind of the accused. It is a question of fact, which the Court has to decide. The Court has to decide whether, according to the ordinary standards of decent, reasonable, and honest people, what the accused did was dishonest. The test here is an objective one. At the same time, it is also a subjective one. The Court must look into the mind of the accused and determine whether, given his intelligence and experience, he would have appreciated, as right-minded people would have done, that wat he was doing was dishonest.

The State called four witnesses, who gave oral evidence. In addition, the State tendered, by consent, certified statements of ten witnesses plus 15 other documents, which include the record of interview conducted by the police arresting officer. The accused gave sworn evidence and called one witness, James Ambrose, to support his case. Mr Ambrose's statement was also tendered by the State as part of its case.

UNDISPUTED FACTS

The undisputed facts which I find on the evidence are as follows. In 1982, the accused was elected as the member for the North Goodenough constituency in the Milne Bay Provincial Assembly. He is still the member, having been elected to three consecutive terms of four years each. In this period, he held five ministries, and in his second term (1987-1990), he served as Speaker. He was Minister for District Services at the time of events at issue in this case.

In 1991-92, the provincial government established the VIF. The accused was aware of its establishment, as he was a member of the Provincial Assembly and the Executive Council. The provincial government also formulated guidelines, which prescribed the purpose of the VIF, the procedure for applying for funds, approval of applications, manner and method of payment of approved funds, expenditure of funds for designated projects, on-site inspection of completed projects, and accounting for, or acquittal of, funds spent. Prescribed forms were instituted for some of the critical phases. The purpose of the VIF was to provide financial assistance to people in villages for social and economic projects of benefit to the community. Two copies of the same guidelines, although numbered differently, are in evidence (Exhibit "O" and "Y"). I do not intend to repeat those guidelines here. I will mention the relevant ones in my judgment as I go along.

Under the guidelines, the projects must be situated in the constituency of the member concerned. A committee comprising members from that particular constituency, appointed by the member for that constituency and headed by him as chairman, was established to screen all applications coming from community groups in the constituency and to make recommendations to the Premier of the province. The committee's administrative expenses, such as sitting allowances and stationery, were met by a separate allocation of K5,000 per year per constituency, made under the VIF. Funds for administrative expenses of the VIF committee were applied for and, once approved, were dispatched to the committee members, using the same procedures as the normal project applications.

In early 1989, the accused went to the NHC at Alotau and discussed with the sales officer, Jack Nunisa, the accused's desire to apply for a piece of land at Alotau under the Home Ownership Scheme. He told Mr Nunisa that he wanted the land to build a transit house for the people of his constituency. Mr Nunisa advised him that it was not possible for groups or corporate entities to apply for land under the scheme. Only individuals were allowed to participate. And so the accused applied for a piece of land under his own name. He submitted an application form, a copy of which is in evidence (Exhibit "T"). This application makes no mention of the people of his constituency. By letter dated 10 September 1990, the NHC advised the accused that his application had been approved and that he should pay K2,100, the purchase price for the land, plus K106 for the legal fees within three months. This letter is in evidence (Exhibit "S"). This letter was received by the accused on 11 September 1990 (see endorsement on Exhibit"S"). Upon receiving this notification, as the accused had no money then, he went to see his bank, Westpac Bank in Alotau. The bank refused to help him, presumably because he had an outstanding loan with them of K4,000. (See item No 32 of the NHC application form, Exhibit "T"). And so he went to see another source for help — Milne Bay Properties. Michael Butterfield, who was then the manager of the company, agreed to help him, and a loan agreement was drawn up and signed by accused and the company under seal on 31 October 1990. It was lodged at the Stamp Duties Office and approved on 20 November 1990. A stamp duty fee of K44.12 was charged and paid, presumably by Milne Bay Properties. Under the agreement, in consideration of the company agreeing to pay K2,206 to the NHC for the land, the accused was to repay the principle loan plus interest, at 10%, of K220.60 by 1 June 1991. A copy of this agreement is in evidence (Exhibit "V"). On 11 December 1990, the company...