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Papua New Guinea Law Reports |
NATIONAL COURT OF JUSTICE
THE STATE
V
SCHOLAR ZUVANI
WEWAK: CANNINGS J
25 August 2004
CRIMINAL LAW – Indictable offence – Criminal Code, Subdivision VI.1A – s383A, Misappropriation of property – Guilty plea – Sentencing principles – Prisoner a bank officer at time of offence – Relevance of amount misappropriated (K22,685.43) – Violation of position of trust – Abuse of privilege – Consistent course of conduct – Use to which money put questionable – Effect on bank's customers – Effect on offender – Degree of restitution – Appropriate head sentence – Whether part or whole of sentence should be suspended – Trend towards alternative sentencing for crimes not involving physical violence – Probation – Conditions.
Facts
The accused was charged with misappropriating substantial funds whilst employed as a bank officer. She pleaded guilty to the charge.
Held
1. The criteria in Wellington Belawa v The State [1988-89] PNGLR 496 are still the guiding principles when deciding on sentences in misappropriation cases. That case is useful as it sets out the different factors that have to be weighed in the balance when determining the length of the term of imprisonment.
2. The tariff of sentences suggested by Bredmeyer J in that case needs upgrading. Circumstances in Papua New Guinea have changed. There is an enhanced level of community concern about corruption, dishonesty and misappropriation both in the public sector and in the private sector. There have been significant developments in misappropriation cases. Some of those cases have involved bank officers.
3. There is a clear direction and policy in those cases. Where non-violent crimes are involved, a Judge should conscientiously explore the feasibility of a non-custodial sentence. In that way, the local community where the offence was committed will become part of the process of solving the problem that has been brought about by the offender.
Papua New Guinea cases cited
Doreen Liprin v The State (2001) SC673.
Eric Vele v The State (2002) N2252.
The State v Mekeu Kig (2001) N2177.
The State v Paroa Kaia (1995) N1401.
The State v Peter Sari [1990] PNGLR 48.
The State v Yaulipa Bulaim (1980) N234.
Wellington Belawa v The State [1988-89] PNGLR 496.
Counsel
J Wala, for the State.
L Siminji, for the accused.
25 August 2004
Cannings j. This is a criminal case. The accused, Scholar Zuvani, is a woman aged 27, who lives in Wewak. She faced the following indictment:
Scholar Zuvani of Abegani in Madang Province stands charged that while being employed as a bank officer by Bank South Pacific Ltd, Wewak branch, she between 13 August 2003 and 4 March 2004 at Wewak in Papua New Guinea, dishonestly applied to her own use K22,685.43, property of Ponam Local Church and Ecom High School, both in Manus Province.
The indictment was presented under Section 383A of the Criminal Code.
Section 383A states:
(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.
(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) where the offender is a director of a company and the property dishonestly applied is company property; or
(b) where the offender is an employee and the property dishonestly applied is the property of his employer; or
(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.
(3) For the purposes of this section—
(a) property includes money and all other property real or personal, legal or equitable, including things in action and other intangible property; and
(b) a person's application of property may be dishonest even although he is willing to pay for the property or he intends to restore the property afterwards or to make restitution to the person to whom it belongs or to fulfil his obligations afterwards in respect of the property; and
(c) a person's application of property shall be taken not to be dishonest, except where the property came into his possession or control as trustee or personal representative, if when he applies the property he does not know to whom the property belongs and believes on reasonable grounds that such person cannot be discovered by taking reasonable steps; and
(d) persons to whom property belongs include the owner, any part owner, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender's application of the property, had control of it.
Background
The events giving rise to the charge occurred from August 2003 to March 2004. On 27 April 2004 the accused was interviewed, arrested
and charged at Wewak. She was released on K400.00 Police bail. On 29 July 2004 she was committed to stand trial.
On 19 August 2004 the indictment was presented and the accused was arraigned. She pleaded guilty. I then entered a provisional plea
of guilty subject to my reading of the District Court depositions.
CONSIDERATION OF GUILTY PLEA
Purpose
The purpose of my reading the District Court file was to satisfy myself that the accused had properly pleaded guilty to the charge.
I had to be satisfied that there was reasonable evidence available, on the face of the file, of all of the elements of the charge.
Further that there were no reasonable defences available to the accused that may have been overlooked. An accused person has a right
under section 37(1) of the Constitution to the full protection of the law.
The Court has a duty to satisfy itself that it is safe to accept a plea of guilty. The Court must not surrender its duty by relying merely on the word of defence counsel. (See The State v Yaulipa Bulaim (1980) N234 and The State v Peter Sari [1990] PNGLR 48 and, generally, Chalmers et al, Criminal Law and Practice of Papua New Guinea 3rd edition, Lawbook Co 2001, at pages 471– 479.)
District Court depositions
The Court was adjourned for 15 minutes and I examined the depositions and observed the following matters.
The accused was a bank officer. She was employed by the bank from October 1996 to March 2004, when her employment was terminated. In 2003 she was working at the bank's Lorengau branch until November when she transferred to Wewak. She was at the Wewak branch when she was terminated.
From August 2003 to March 2004 she used her knowledge and position as a bank officer to transfer a total of K22,685.43 from two accounts at the Lorengau branch to an account in the name of her sister-in-law. She transferred the money by 'paperless transactions' without the knowledge or consent of the operators of the accounts or her employer, the bank. The bulk of the money (K20,015.43) came from an account operated by Ponam Local Church. It was transferred by making 25 separate transactions. The rest (K2,670.00) was from the Ecom High School account.
She obtained the use of her sister-in-law's Save card. Then she used the card to withdraw cash from her sister-in-law's account for personal consumption. Her sister-in-law did not know about this and was not a party to the scheme.
In March 2004 the church and the school discovered that their accounts were depleted of funds. They contacted the bank. The bank investigated. The accused was interviewed. She admitted what she had done. The matter was reported to the Police National Fraud and Anti-Corruption Squad. On 27 April 2004 she was interviewed by Detective Senior Sergeant Frank Misso at Wewak. She admitted everything. She has co-operated with the Police.
Amendment of indictment
When looking at the District Court file I reconsidered the indictment. It originally stated that the misappropriated property belonged to Bank South Pacific Ltd. Upon my suggestion and with the consent of the accused's counsel, Mr Simingi, the prosecutor, Mr Wala, amended the indictment. It then read that the misappropriated property was that of Ponam Local Church and Ecom High School.
I read the amended indictment to the accused. She again pleaded guilty.
Entry of plea
I was satisfied that the accused had properly pleaded guilty. I accepted the guilty plea, entered a guilty verdict and convicted the accused of the offence as charged.
ANTECEDENTS
Mr Wala notified the Court that the prisoner has no prior criminal record.
ALLOCUTUS
The prisoner was given the opportunity to say what matters the Court should take into account when deciding on punishment. A paraphrased
summary of her statement follows:
I have pleaded guilty to the dishonest application of funds. This is the first time I have appeared in Court. Because I come from
a God-fearing family I apologise in this court to God, my family, BSP, those who have been affected – the complainants –
and this Court for the offence I have committed.
During the time I committed the offence I was the only salary earner in a family of 13 members, including both parents and in-laws. I am the third born in a family of three brothers and two sisters. Both parents are unemployed.
I have been suffering a lot – physically, financially, spiritually and mentally. I have cooperated well with my former employer and with State authorities. I have been complying with bail conditions.
This offence has brought shame and disgrace to my family and myself.
I am facing a financial crisis. All my accounts and my sister-in-law's account have had a stop caution put on them by the bank. No
withdrawals can be made. We have been surviving on daily sales of cream buns. Therefore I cannot afford to seek legal advice from
a private lawyer. But thank you to the Government and the Court for providing the Public Solicitor.
On the day of my termination from the bank I signed a form that all my NASFUND [superannuation] funds would be paid to the bank. I have also signed an irrevocable authority to assign my savings to the bank.
I am able to reimburse the full amount that I misappropriated to the bank. My father has assured me that he will help me pay any outstanding amount that I still owe to the bank. This assistance will come from his final entitlements as a casual employee, deposited to his account two days ago.
I have suffered a lot mentally because of the financial constraints and humiliation my family and I have been going through.
I now have a criminal record. My chances of obtaining alternative employment are very slim.
Kindly have mercy on me and do not send me to gaol.
SUBMISSIONS BY DEFENCE COUNSEL
Mr Siminji, for the prisoner, adopted everything stated in allocutus, then added the following.
Discretion
The prisoner is aged 27 and single. Both parents are alive and present in Court. The prisoner was educated to Grade 12. Her only job was with Bank South Pacific or its predecessor the Papua New Guinea Banking Corporation. The amount misappropriated is more than K2,000.00. Therefore under s 383A of the Criminal Code the maximum penalty is ten years imprisonment.
However s.19 of the Criminal Code (construction of provisions of Code as to punishment) gives the Court a wide discretion. Sections 19(1)(d) and 19(6) are particularly relevant.
Section 19(1)(d) states:
In the construction of this Code, it is to be taken that, except when it is otherwise expressly provided ... a person convicted on indictment of an offence not punishable with death may —
(i) instead of, or in addition to, any punishment to which he is liable—be ordered to enter into his own recognizance, with or without sureties, in such amount as the court thinks proper, to keep the peace and be of good behaviour for a time fixed by the court; and
(ii) comply with such other conditions as the court may, in its discretion, impose.
Section 19(6) states:
When a court sentences any person convicted under subsection (1)(d) to a term of imprisonment, it may further order that—
(a) the offender be imprisoned for such portion of that term as it thinks proper; and
(b) the execution of the sentence for the remaining portion of the sentence be suspended on his entering into a recognizance, with sureties if so directed, in accordance with subsection (1)(d) but further conditioned that, if called on, he shall appear and receive judgement in respect of his service of the portion of the sentence.
Mitigating factors
Mr Siminji referred to a number of mitigating factors in support of his submission that the discretion conferred by sections 19(1)(d) and 19(6) should be exercised in this case:
1 The prisoner pleaded guilty. She co-operated immediately after the matter was detected, both with the bank and with the Police.
2 She is a first offender.
3 She has made almost full restitution of the money she misappropriated.
4 She has the support of her parents.
5 She used the money that she misappropriated to support her family.
6 She is a young woman who will live with the stigma of this conviction for the rest of her life.
Documentary material
Mr Siminji placed the following documents before the Court.
No Date Description
1 19.08.04 Pre-sentence report by Moses Galus – Community Corrections Officer, Wewak – prepared pursuant to Sections 13
and 25 of the Probation Act 1990 – this records the prisoner's residence, family background, marital and dependents' status, education, work history, financial
situation, health, future plans, community history, contact with the complainant (the bank), circumstances of the offence and attitude
towards the offence – as to potential danger of the prisoner to others, the report states: "the offender is not a danger to
the community nor to any individual persons" as to suitability for probation supervision, the report states: "this offender is a
suitable candidate for probation supervision on a longer term of one year. If the Court sees appropriate it could order a period
of community work to be performed at Wewak Town Clinic doing general clean up and washing up".
2 16.08.04 Reference by Fr Otto Separy, Parish Priest, St Francis Parish, Kaindi – this states that the prisoner is a very good person in her moral behaviour – she and her family are of good standing – her daily life is directed by Catholic principles.
3 Undated Reference by Cr Francis Hevu, Ward Member, Mengar Village, Wewak Rural Local-level Government this states that the prisoner is in the councillor's ward 21 area – he has known the prisoner for a life time – she is a very honest and reliable person.
4 17.08.04 Statement by Theodore Zuvani, the prisoner's father – his family has strong Christian values – shocked by news of the prisoner's termination and the reasons given – she has said sorry – she as the main breadwinner – feels guilty as he has been the one contacting her regularly seeking financial assistance – have always been ready and willing to repay the full amount outside the court – his daughter was very honest with the Police – told the truth and co-operated freely – he and the prisoner's mother are old and want to say sorry to her for getting into this situation while trying to help the family – also want to say sorry to the State through the Court.
Sentencing guidelines
Mr Siminji submitted that the Court should pay close attention to the criteria outlined by the Supreme Court in Wellington Belawa v The State [1988-89] PNGLR 496. These are summarised in Chalmers et al at page 364, as follows:-
(a) the amount taken;
(b) the degree of trust held by the offender;
(c) the period over which the offence was committed;
(d) the use to which the money was put;
(e) the effect on the victims;
(f) the effect on the offender herself; and
(g) whether restitution was made to the victims.
There were some other factors identified in Wellington Belawa's case by Bredmeyer J (at pages 500-501) and Barnett J (at pages 505-507). These were: the impact of the offence on the public and on public
confidence; whether genuine remorse has been shown; whether the offender pleaded guilty; whether there was any prior record; whether
there are any matters of mitigation special to the offender. These will also be considered below.
As to a tariff of sentences Bredmeyer J suggested the following:-
Mr Siminji conceded that factors (a), (b) and (c) identified in Wellington Belawa's case were not in the prisoner's favour. But the remaining factors would militate towards a light-range sentence, in the order of two years imprisonment. This should, however, be suspended on condition that the prisoner is placed on probation and ordered to do community work. The Court should exercise the discretion in Section 19 of the Criminal Code to achieve that end, Mr Siminji argued.
SUBMISSIONS BY THE STATE
Mr Wala, for the State, submitted that the prisoner was guilty of a serious offence. He conceded that there were mitigating factors. In particular that she had pleaded guilty; that she is a first time offender; and that she has almost completely made restitution of the money she misappropriated. He referred me to the case of The State v Mekeu Kig (2001) N2177. A woman employed by a clothing company in Madang misappropriated approximately K28,000.00 from her employer. She pleaded guilty but had not paid back the money. Sawong J imposed a sentence of two and a half years. But it was suspended on condition that the prisoner be subject to probation and make restitution within the period of the sentence.
Mr Wala concluded by submitting that a prison sentence of two to three years be imposed in this case, but the sentence should be suspended on condition that the prisoner undertakes unpaid community work.
PRECEDENTS AND PRINCIPLES
Guiding principles
The criteria in Wellington Belawa v The State are still the guiding principles when deciding on sentences in misappropriation cases. That case is useful as it sets out the different factors that have to be weighed in the balance when determining the length of the term of imprisonment.
But in my view the tariff of sentences suggested by Bredmeyer J needs upgrading. Circumstances in Papua New Guinea have changed. There is an enhanced level of community concern about corruption, dishonesty and misappropriation both in the public sector and in the private sector. There have been significant developments in misappropriation cases. Some of those cases have involved bank officers.
The bank officer cases
In The State v Paroa Kaia (1995) N1401 an ANZ Bank accounts supervisor pleaded guilty to misappropriating approximately K94,000.00. He was convicted and sentenced to four years imprisonment. He had hatched a scheme in collaboration with two associates. He misused his authority to withdraw amounts from innocent customers' accounts and transfer them to his associates' accounts. Sawong J emphasised the adverse effect that that sort of blatant abuse of trust has on the community. It undermines confidence in the banking system. His Honour recognised the special place that bank officers have in the business community and in the lives of many thousands of individuals in Papua New Guinea.
Another bank officer/misappropriation case is Eric Vele v The State (2002) N2252. That was a decision by Kandakasi J. A Westpac Bank supervisor based in the International Business Centre at the Port Moresby Branch misappropriated approximately K16,000.00. He used his position to withdraw amounts from different accounts and transfer them to accounts in the name of himself, his wife and a cousin. A head sentence of two and a half years was imposed. But it was suspended subject to strict probation conditions.
Alternative sentencing practices
In the Eric Vele case Kandakasi J carefully assessed the policy considerations the Court must take into account in deciding on sentence. His Honour noted the significance of the decision in Doreen Liprin v The State (2001) SC673 (Supreme Court, Amet CJ, Kapi DCJ, Los J.) The Supreme Court examined the conflicting interests that have to be balanced whenever a person is punished for a crime of non-physical violence such as misappropriation. A Judge should, for the purposes of imposing an effective punishment that will rehabilitate the offender, explore all options before taking what might be regarded as the drastic step of imposing a prison sentence.
A prison sentence costs the State money and exposes the offender to what is often not a conducive environment for rehabilitation. It does not involve the community very much in the sentencing process, compared with the direct community involvement that happens when, for example, an offender is forced to do community work as part of his or her punishment.
Kandakasi J stated in the Eric Vele case:
It might be argued that such an approach to criminal sentencing might let offenders off the hook or that they might be made to avoid the full weight of their wrongs by reason of it being shared. The argument might be extended to say that ...offenders might force their family or communities to bear the penalty and they themselves avoid it. The simple response to that is, prior to Independence and even before the coming of the white man, our people lived and continue to live in their respective societies without prisons and a police force to maintain law and order. Collective community or family responsibility prevailed. The situation is still the same throughout the country today. Even at the international scene, though not strictly in relation to the subject under discussion, countries are desperately trying to form into bigger unions or communities because of the strength or the force collective responsibility brings as opposed to working alone. The chances of success at the community level are far greater than going through the prison system, because it becomes personalised as opposed to an imposed system and people just doing a job under the current criminal law justice system.
Only an effective sentence can bring about a real achievement of the aims or purposes of criminal sentencing. It is now well accepted that an offender may be better reformed through community participation. As I already stated, my previous community-based sentence orders are doing well and were having a positive impact on the offenders. When placed with such information, it is far better to get the community involved than not, if to do so will keep reformed offenders whilst at the same time make them pay for their wrongs by rendering free service to the community rather than become a strain in the public purse. The onus is on a sentencing judge to devise a sentence that will meet the interests of society in punishing offenders and at the same time the interest of the offender to be treated fairly and to be given a chance to reform and become a better law abiding citizen.
There is a clear direction and policy in those cases. Where non-violent crimes are involved, a Judge should conscientiously explore the feasibility of a non-custodial sentence. In that way, the local community where the offence was committed will become part of the process of solving the problem that has been brought about by the offender.
I will be candid and say that I have some reservations about that policy and its effectiveness. But I must attempt to impose a penalty and impose a sentence that is consistent with the authority of recent decisions of the National Court and certainly the Supreme Court.
Decision making process
I have accordingly adopted the following decision making process for the present case. In step 1 the question is: what is the appropriate head sentence, in terms of years? In step 2: should the whole or part of the sentence be suspended? And step 3: if the whole or part of the sentence is suspended, what conditions should be imposed?
Step 1 – what is the appropriate head sentence?
I apply the seven major Wellington Belawa criteria as follows:
(a) The amount taken is considerable, approximately K22,000.00. This puts it in the mid-range of seriousness.
(b) The degree of trust held by the offender was very high. I refer to the considerations highlighted by Sawong J in Paroa Kaia's case. The offender was a bank officer. She was in a position of trust. The people trusting her included her colleagues and her supervisors and the managers of the branches where she worked; the shareholders in the bank; and, perhaps most importantly, the hundreds of customers whose affairs she would have dealt with. Everyone in Papua New Guinea who puts money into a bank account puts trust in the bank officer they deal with. This is so, whether the customer is a large multi-national corporation or a village trade store or a salaried employee or a grassroots person who just puts their vanilla money into an account whenever they get some. Bank officers are privileged because they are privy to a considerable amount of personal, sensitive and confidential information. In this case a bank officer violated her position of trust. She betrayed that large range of people who trusted her. She abused her position of privilege. That goes very much against her.
(c) The period over which the offence occurred was considerable: from August 2003 to April 2004. The money was misappropriated by about 30 transactions. It was a consistent course of conduct. The prisoner had ample opportunity to question her own actions and take corrective measures. Her deceit was calculated and considered. The opposite of impulsive. That also goes very much against her.
(d) The use to which the money was put is questionable. She says that it was used for her family purposes. But in the absence of detailed evidence that that was the case, the presumption must remain that this money was for her personal use.
(e) The effect on the victims, the bank's customers, was grave. She in effect stole approximately K20,000.00 from a church group and approximately K2,000.00 from a high school. These were not large entities which could easily carry such losses. Though the bank apparently made good the discrepancies in their accounts once the fraud was discovered, the fact remains that the prisoner stole from community groups who could ill afford to lose these large sums of money. The signatories to the accounts would have been greatly distressed upon making the discovery that the money was missing from their accounts. All these things go against her.
(f) The effect on the offender was also grave. She lost her job almost immediately after her misdeeds were revealed. To some extent she has already been punished for what she has done. But the bank simply did what was to be expected. This is a neutral factor, which neither works for nor against her.
(g) The degree of restitution is high. The pre-sentence report indicates that all but about K2,000.00 has already been reimbursed to the bank. This is commendable. It is a factor which works in favour of the prisoner.
I also considered other matters put to me by Mr Siminji:
The prisoner co-operated immediately after the matter was detected, both with the bank and with the Police.
She pleaded guilty.
She has the support of her parents.
She is a young person who will live with the stigma of this conviction for the rest of her life. She may find it difficult to get another job.
Taking all the above considerations into account my decision is that the head sentence in this case should be four years.
Step 2 – should the whole or part of the head sentence be suspended?
Yes. I feel obliged to suspend the sentence in light of the recent trend towards imposition of non-custodial sentences in non-violent crime cases. I have given consideration to whether I should suspend only a part of the sentence so that the prisoner should spend some time in prison. But I have ultimately elected not to exercise that discretion.
The whole of the sentence will be suspended, subject to certain conditions.
Step 3 – what conditions should be imposed?
The seriousness of the offence requires the imposition of strict conditions, as follows:
1 Immediately after the handing down of this decision, the offender, Scholar Zuvani, shall meet with and attend upon the Wewak-based Community Corrections Officer to negotiate a detailed plan of action for the service of her period of probation, which will be four years. And I encourage her to do that in consultation with her parents and also with the support and involvement of her parish priest, Father Otto.
2 The Community Corrections Officer shall within one month after today file that detailed plan of action with the Clerk of the Court in Wewak.
3 The Clerk of the Court shall then forward copies of that plan of action to me as the presiding Judge and to the lawyers involved in this case.
4 As part of that report containing the detailed plan of action, the Community Corrections Officer shall forward documentary evidence in the form of a statutory declaration by a duly authorised officer of Bank South Pacific that all of the money misappropriated has been repaid.
5 I will consider the detailed plan of action, then notify the Community Corrections Officer and the lawyers involved in this case whether that plan of action is acceptable. That will be done within 14 days after receiving it. If it is not acceptable to the Court, then the prison sentence will crystallise, which means that Scholar Zuvani will have to go to prison.
6 There shall be a probation report submitted by the Community Corrections Officer to the National Court every three months after today.
7 The prisoner shall not leave Papua New Guinea without the leave of the National Court. If there is to be an application for leave it shall be submitted through the Community Corrections Officer.
Remarks
I have imposed conditions that leave scope for negotiation. The prisoner herself is a party to the formulation of the plan of action. It becomes a joint effort. The conditions also ensure continuing accountability for administration of the sentence. The Court must be kept informed about how the probation is going. The prisoner is not just being released into the community so that everybody forgets about her. She must not forget that she will, throughout this period of four years, continue to be under sentence.
Sentence
For the reasons stated above Scholar Zuvani is convicted of the crime of misappropriation.
The punishment is:
four years imprisonment; and the whole of that term shall be suspended subject to seven conditions, as prescribed above.
Lawyers for the State: Public Prosecutor.
Lawyers for the accused: PublicSolicitor.
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