The State v Jimmy Mostata Maladina

• Jurisdiction: Papua New Guinea
• Judge: Salika, DCJ
• Judgment Date: 13 August 2015
• Citation: (2015) N6049
• Court: National Court
• Year: 2015
• Judgement Number: N6049

Full : CR (FC) 402 of 2004; The State and Jimmy Mostata Maladina (2015) N6049

National Court: Salika, DCJ

Judgment Delivered: 13 August 2015

N6049

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 402 of 2004

BETWEEN:

THE STATE

AND

JIMMY MOSTATA MALADINA

Waigani: Salika, DCJ

2015: 04th, 05th & 21st May, 24th July and 13th August

PRACTICE AND PROCEDURE – Criminal Law – Dishonesty offence – Sentence – Conspiracy to defraud – misappropriation of superannuation funds - Chairman of a superannuation fund – a high position of trust – total amount restituted – a deterrent sentence to be imposed.

Cases Cited:

The State v Paroa Kaia Unreported, (1995) N1401

The State v Iori Veraga Unreported N2849

The State v Jimmy Kendi (No 2) N3131

The State v Stanley Haru (2014) N5660

The State v Peter Tokunai(2015) N6039

Avia Aihi v The State (1982) PNGLR 92

Goli Golu v The State (1979) PNGLR 653;

The State v Niso (No2) [2005] PGNC 26; N2930

The State v Paul Tiensten Unreported (2015) N5563

Ure Hane v The State (1984) PNGLR 105

Counsel:

Mr A Kupmain, with Ms R Koralyo, for the State.

Mr Ian Molloy, with Mr G Purvey and Ms C Copland, for the Defence

Sentence

13th August, 2015

1. SALIKA DCJ : Introduction On 21 May 2015, I convicted Jimmy Maladina on the following charges namely:

“First Count:

Jimmy Mostata Maladina of Mena’ala, Esa’ala, Milne Bay Province stands charged that he, between the 1st day of November 1998 and the 10th day of October 2000, at Port Moresby, National Capital District in Papua New Guinea, did conspire with Herman Joseph Leahy, Henry Fabila, Shuichi Taniguchi, Kazu Kobayashi and other persons to defraud the National Provident Fund Board of Trustees of the sum of K2,650,000.00 by fraudulently increasing the construction costs of the National Provident Fund Tower situated at Douglas Street, Port Moresby, National Capital District.

Second Count:

Between 26 February 1999 and 30 July 1999, at Port Moresby, National Capital District, he dishonestly applied to his own use and to the use of others the sum of K2,650,000.00, the property of the National Provident Fund Board of Trustees.”

Facts:

2. Between the 1st of November 1998 and 10th October 2000, National Provident Fund engaged the services of Kumagai Gumi Limited (Kumagai) to build the NPF Tower. National Provident Fund Board of Trustees also engaged the services of Pacific Architects Consortium Limited as the administrators of the project. Their job was to provide monthly progress reports to NPF Board of Trustees and to negotiate other subcontracts, mainly the administration part of it. The Court found that between November 1998 and around June 1999, the accused conspired with Mr Herman Joseph Leahy, Mr Henry Fabila, Mr Shuichi Taniguchi and Kazu Kobayashi and other persons to defraud the National Provident Fund Board of Trustees of K2,650,000.00.

3. This court found that the conspiracy to defraud occurred between Mr Shuichi Taniguchi and Mr Kazu Kobayashi who both were employed by Kumagai as General Manager and Project Manager respectively and Jimmy Maladina, the Chairman of Nasfund Board, Mr Herman Joseph Leahy and Mr Henry Fabila both employees of NPF Board of Trustees and a host of others. Jimmy Maladina was at the relevant time a partner with Carter Newell Lawyers and was appointed the chairman of the NPF Board of Trustees in January 1999.

4. The court found that the conspiracy began from around November 1998 onwards. The conspirators agreed for Kumagai to falsely charge extra fees termed as “further accelerated fees” on top of the normal cost of building the tower which was contractually agreed at K50 million. The further accelerated fee of K2,650,000.00 was fraudulently paid to Kumagai by Nasfund bankers which was then paid to Ken Yapane who then distributed to each of the conspirators..

5. The Court further found that the conspiracy was accordingly executed as planned and Kumagai paid the moneys to Mr Ken Yapane who in turn paid it to the other beneficiaries. Those payments were made in accordance with the conspiracy that the accused would engage or would use Ken Yapane and his company account to have this money transferred. The court found the way the money was being handled amounted to money laundering,

Issue

6. The issue before this Court is what penalty to impose on the prisoner.

The Law

7. The charge of conspiracy to defraud was brought under s.407(1) (b) of the Criminal Code. It also provides the penalty. It reads:

407. Conspiracy to defraud.

(1) A person who conspires with another person—

(a) by deceit or any fraudulent means to affect the market price of anything publicly sold; or

(b) to defraud the public, or any person (whether or not a particular person); or

(c) to extort property from any person,

is guilty of crime

Penalty: Imprisonment for a term not exceeding seven.

years.

8. The charge of dishonestly applying property to his own use or to the use of others was brought under s.383A(i)(a) of the Criminal Code . It reads :-

“383A. Misappropriation of property.

(1) A person who dishonestly applies to his own use or to the use of another person—

(a) property belonging to another; or

(b) property belonging to him which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person,

is guilty of the crime of misappropriation of property.”

9. The penalty provision for misappropriation of property is under subsection 2. It reads:-

“(2) An offender guilty of the crime of misappropriation of property is liable to imprisonment for a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 years.

(a)...................

(b)...................

(c) where the property dishonestly applied was subject to a trust, direction or condition; or

(d) where the property dishonestly applied is of a value of K2,000.00 or upwards.”

10. The law as demonstrated above provides for the maximum penalties of 7 years and 10 years respectively for counts 1 and 2 of the charges. The courts have however stated on many occasions that the maximum penalties should be reserved for the worst type of cases in each category of offence depending on the circumstances and the aggravating features of the case. See Goli Golu v The State (1979) PNGLR 653; Ure Hane v The State (1984) PNGLR 105 and Avia Aihi v The State (1982) PNGLR 92. Many National Court and Supreme Court decisions have subsequently approved the above Supreme Court decisions as the appropriate law on that point.

11. Moreover, this court is mindful of the provisions of s.19 of the Criminal Code. That provision empowers the court to impose lesser penalties other than the maximum prescribed.

12. Apart from the provision of statute, the court is also usually guided by similar case precedents in determining what penalty to impose. The following cases were cited by counsel as relevant in assisting the court in determining the appropriate sentence in this case.

Case	Offence	Sentence	Particulars
St v Niso (No2) [2005] PGNC26; N2930 Gavara-Nanu, J	1 x conspiracy 1 x forgery 1 x fraudulently uttering a false document and 1x misappropriation	3 Yrs 6 mths IHL for conspiracy 1 Yr 3 mths IHL for forgery 1 Yr 3Mths IHL for fraudulently uttering a false document. 7 Yrs 6 Mths IHL for misappropriation (sentences for first, second and third counts to be served concurrently with the sentence for the fourth count). (effective term of imprisonment 7 yrs 6 mths IHL minus period spent in custody which is 8mths. Balance of effective sentence at 6 yrs 10 mths IHL.	Not Guilty Plea The prisoner conspired with one Soni Harvies and other unknown persons to the Bank of PNG of K500,000.00 He then forged a Westpac Bank (PNG) Ltd cheque account application form in the name of Raymon Mell. Prisoner knowingly and fraudulently uttered a false document purporting to be a Westpac Bank (PNG) Ltd Cheque Account application form in the name of Raymond Mell. He then applied to his own use and to the use of others K500,000.00.
St v Paroa Kaia Unreported, 6 September 1995 CR340/1995 N1401 Sawong, J	Misappropriation x 1	4 Yrs IHL	Guilty Plea. Account Supervisor applied money to his own use and to the use of others K94,478.31 from ANZ Bank Corporation over 2 years period. No restitution made. An Account Supervisor, high degree of trust. Severe sentence required to act as deterrent and restore public confidence in banking institutions.
St v Iori Veraga Unreported 17 June 2005 CR 389/2004 N2849 Sakora, J	Conspiracy x 2 Misappropriation x 4	4 Yrs on each conspiracy count to be served concurrently; 2 yrs of each misappropriation count to be served concurrently. Misappropriation sentences cumulative on conspiracy sentences	Not Guilty Plea. Valuer conspired with others, including senior executives of NPF, to defraud NPF of K60,300.00 and K175,000.00,by charging valuation fees that were excessive. Valuer then applied K20,300 and K7155 of that money to his own use, and K30,000 and K87,500 to the use of Jimmy Maladina. Court found that the prisoner played...