The State v Francis Natuwohala Laumadava

• Jurisdiction: Papua New Guinea
• Citation: [1994] PNGLR 291
• Court: National Court
• Year: 1994

National Court: Injia AJ

Judgment Delivered: May 1994

1 Criminal law—misappropriation of government funds from Village Improvement Fund set up by provincial government—minister in provincial cabinet which set up the fund—provincial staff member, as instructed by accused, applied for, obtained, and used money to pay off accused's personal debt, in breach of program guidelines—s383A(1)(a) Criminal Code (Ch262)

2 Evidence—accomplice evidence—weight

3 Words and phrases—"dishonestly"

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Injia AJ: The accused pleaded not guilty to a charge pursuant to s383A(1)(d) of the Criminal Code (Ch262) ("the Code") that he "between the 1st day of April 1992 and the 31st day of May 1992 at Alotau in Papua New Guinea dishonestly applied to his own use the sum of Two Thousand Four Hundred and Seventy Kina and seventy–two toea (K2,470.72), the property of the State."

The State alleged that in the period as mentioned in the indictment, the accused applied for K2,976.00 from the Village Improvement Fund ("VIF") which was set up by the Milne Bay Provincial Government ("MBPG") to assist the village people in the various Constituencies in the province. He applied for the money to be used for meeting administration costs of the VIF Committee in his North Goodenough Constituency ("NGC"). When the application was approved and a cheque for K2,976.00 was released, instead of applying the money to meet administrative costs, he used part of the money, the sum of K2,470.72, to repay a personal loan or debt which he had with Milne Bay Properties Pty Ltd ("MBPP/L'). He obtained this loan to buy a piece of land at Sandersons 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 the sum of K2,470.00, the property of the State.

It is not disputed that the money belongs to the State. It is also not disputed that the accused applied for the K2,470.72 from the VIF, that the application was approved and a cheque for the sum of K2,976.00 which included K2,470.72 was released and the money was paid to MBPP/L to pay off the accused's said debt. What the accused contends is that:—

(1) He did not apply the money to his own use because he never personally paid the money to MBPP/L or authorised or instructed any person to cash the cheque and pay the money to MBPP/L. He says that even when the money was paid to MBPP/L by the Co–ordinator of VIF Mr James Kilileu, without his instructions or authorisation, he did not benefit from the payment because he never received any title to the land from NHC.

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

The first issue is an issue which can be decided on my findings of fact on the evidence. The second issue, which is the main issue, is not only factual, which depends on my findings of fact, but also a question of law. And so it is convenient for me to first set out what the law is regarding dishonest application of money. The crucial issue here is the meaning of the word "dishonestly" in the context of s383A(1)(a). This issue was decided by the Supreme Court in the case of Brian Kindi 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's 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 what he was doing was dishonest.

The State called 4 witnesses who gave oral evidence. In addition, the State tendered, by consent, certified statements of 10 witnesses plus a total of 15 other documents which includes the Record of Interview (ROI) conducted by the police arresting officer. The accused gave sworn evidence and called one James Ambrose to support his case. James 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 a member for the NGC in the Milne Bay Provincial Assembly ("MBPA"). He is still the member having been elected to a total of three consecutive terms of four (4) years each. In this period, he held various executive positions in the MBPG. In his first term (1982–1986), he held the portfolios of Minister for Finance, Minister for Works and Minister for Primary Industry. In his second term (1987–1990) he was elected speaker. In his third term (1991–1992) he was Minister for District Services, a position he held up to the time of suspension of the MBPG on 16.10.92. On 13.11.93 the suspension was lifted pursuant to an order of the National Court and the MBPG re–instated. He is now the Minister for Mines and Lands.

In 1991/92, the MBPG established the VIF. The accused was aware of the establishment of the VIF as he was a member of the MBPA and the PEC. The MBPG also formulated guidelines which prescribed the purpose of the VIF; the procedure for applying for the VIF, approval of applications, manner and method of payment of approved funds, expenditure of funds for designated funds, 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 the village in the various Constituencies in 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 particular constituency of the member concerned. A committee comprising of 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 Chairman of the PEC who was the Premier of the Province. The committee's administrative expenses such as sitting allowances and stationery were met by a separate allocation of K5,000.00/annum per constituency made under the VIF. Funds for administrative expenses of the VIF committee were applied for and once approved, dispatched to the committee members using the same procedures as the normal project applications.

In early 1989, the accused went to NHC Alotau and discussed with the Sales Officer, Mr Jack Nunisa, about the accused's desire to apply for a piece of land at Alotau under the NHC Home Ownership Scheme. He told Mr Nunisa that he wanted the land for his people of the NGC to build a transit house for them. Mr Nunisa advised him that it was not possible for groups or corporate entities to apply for land under the scheme whereas only individuals were allowed to participate. And so the prisoner 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 his people of the NGC. By letter dated 10.9.90, the NHC advised the accused that his application had been approved and that he should pay K2,100.00 being for the purchase price for the land plus K106.00 being for the legal fees, within three (3) months. This letter is in evidence (Exhibit "S"). This letter was received by the accused on 11.9.90 (see endorsement on Exhibit "S"). Upon receiving this notification, as the accused had no money then, he went to see his bank, Westpac Bank, Alotau, but his bank refused to help...