Unreported National Court Decisions
N916
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
CR 665 OF 1989
THE STATE
V
JIMMY LIRIOPE
Waigani
Jalina J
11-13 July 1990
16-20 July 1990
23-31 July 1990
1 October 1990
CRIMINAL LAW - Misappropriation of property - Dishonest application of property of another to own use and use of another person - Public money allocated for specific purpose - Application to other official purpose - No evidence of application for other official purpose - Matter within accused’s own knowledge - No reasonably acceptable explanation - Offences proved - Criminal Code (Ch. No 262), s 383A.
Cases Cited:
The following is the only case cited in the judgment.
Brian Kindi Lawi v The State [1987] PNGLR 183.
Counsel:
J. Wala, for the State.
P. Mamando, for the Accused.
Cur adv vult
1 October 1990
JALINA J:  The accused is charged pursuant to s 383A of the Criminal Code Act Ch 262 with the following counts:
1.       that he between the 4th day of November 1987 and the 16th day of May 1988 at Port Moresby in Papua New Guinea dishonestly applied to his own use Twenty-nine Thousand, Four Hundred and Twenty-seven Kina and fifty toea (K29,427.50), the property of the State.
2.       that he between the 4th day of November 1987 and 16th day of May 1988 at Port Moresby in Papua New Guinea dishonestly applied to the use of one ORA VETALI, One Thousand and four Hundred Kina (K1,400.00), the property of the State.
He has pleaded not guilty to the charges.
THE ALLEGATIONS
The State has alleged that the accused between the dates specified in the indictment was employed as the employed by the Department of Education as the Assistant Secretary for Education; National Capital District. During that period two cheques valued at K20,000 each were sent to his office, the first one being sent in late 1987 and the second one in March, 1988 both cheques having been made out by the Department of Finance and despatched by the Department of Education, Headquarters. The moneys were particularly for maintenance of institutional houses occupied by teachers in the National Capital District. This purpose was stated in letters accompanying those cheques.
The cheques were received by the Paymaster and handed to Mr Ora Vetali, the Provincial Administrative Officer. Mr Vetali then saw the accused as to what he should do with the cheques and was instructed by the accused to deposit them in the District Education Board Cheque Account (DEB Account) at the ANZ Bank, Boroko Branch. The two signatories to the DEB Account were the accused and Mr Vetali. The second cheque was deposited while the accused was on leave.
The credit balance at the time the first cheque for K20,000 was deposited was K4,869.24.
During the period in question (the period specified in the indictment) a total of 101 cheques were issued resulting in withdrawals amounting to K30,827.50. Out of the 101 cheques, 74 cheques were raised payable to cash whilst 19 cheques were issued to individuals and firms. The remaining 8 cheques were cancelled on advice given to the bank to stop payment.
The State further alleged that when Mr Vetali affixed his signature to the cheques before taking the cheques to the accused to affix his (the accused’s) signature and to fill other particulars in the cheques, including the amount, he was acting under instructions from the accused. After signing and filling in the other particulars in the cheque the accused would give the cheque back to Mr Vetali to cash. Mr Vetali would cash the cheque at the ANZ Bank, Boroko and since the accused was the overall boss of the office in which they were working, Mr Vetali would give the cash to the accused. Sometimes the office driver, Mr Alphonse Moroi, would be sent to cash the cheques and return the cash to the accused. Through the application of such method the State alleged that the accused applied to his own use the sum of K29,427.50 the property of the State and also to the use of another person, namely Mr Vetali the sum of K1,400.00 also the property of the State.
The accused was arrested and charged as a consequence of an investigation due to the absence of proper records as to how and where the proceeds of the two K20,000 cheques were spent.
THE CASE AGAINST THE ACCUSED.
Before I proceed to consider the evidence it must be pointed out that the accused does not deny spending the money. What he denies is that he dishonestly applied the moneys to his own use and to the use of another namely, Ora Vetali. He says that even though the moneys were sent to his office for the purposes of maintenance of teachers’ houses in the NCD he decided to use the proceeds of the cheques to buy materials for schools in the National Capital District as he saw that the need for materials far outweighed the need for maintenance of institutional houses.
Did the accused apply the moneys as alleged by the State?
The procedure regarding the distribution and expenditure of institutional housing maintenance funds were explained by Mr Louis Keamau, the Superintendent (Management), Department of Education Headquarter whose office controls the distribution of such funds.
The maintenance funds are given to the National Department of Education by the Department of Finance every year for distribution to provinces and the national institutions for three reasons:
1.       for maintenance of school buildings.
2.       for maintenance of institutional houses.
3.       for furniture replacements.
The funds are then sent to the offices concerned to expend on those purposes. If the money is spent, it should be acquitted with expenditure report which are required to be sent to Head office in accordance with the Financial Management Manual.
In 1987 a cheque for K20,000. was sent by Mr Keamau’s office to the Provincial Education Office, Konedobu purely for the maintenance of teachers” houses both in Community Schools and High Schools in the NCD. It was sent with a covering letter dated 29 September 1987 prepared by Mr Keamau and signed by his Departmental Head. The letter specifically stated that the funds were for maintenance of teachers houses. It also stated that the Assistant Secretary, Education in each province should make appropriate arrangement with the Department of Works as to who will authorise particular jobs to be done and paid for, from this money. I note that although the letter was dated 29th September which is before the date on the cheque (30 October, 1987) it was endorsed by the accused as payee indicating that the accused had received the cheque. Mr Kuamau also sent with the cheque a computer listing of names of teachers who were paying rent during 1987.
Similar arrangements were made for the second cheque of K20,000. issued for the same purpose except that the covering letter was prepared and signed by Mr Keamau himself. The cheque was dated 16 March, 1988 whilst the covering letter was dated 22 March, 1988. It again specifically advised that the funds were for maintenance of teachers houses and public servants who were paying rent (as indicated in the computer listing which was also provided) and that the Assistant Secretary should make appropriate arrangements with the Departments of Works as to who will authorise particular job to be done, and paid for, from this money. The letter went on to request acknowledgement of receipt of the cheque. No acknowledgement however has been received by Mr Keamau. The cheque, I note, has not been endorsed although there is an ANZ Bark, Boroko Branch imprint on it which means that it was deposited through the ANZ Bank and paid.
Mr Keamau went on to say that after the two cheques were sent to the Provincial Education Office, Konedobu, no acquittals in respect of the expenditure of those funds have been received by his office. Because of the non-acquittals of the 1987 and 1988 cheques no funds were issued to the Provincial Education Office, Konedobu, in 1989.
Although he did not write to Education Office, Konedobu to enquire about whether the cheque had been received and also formally point out to them that acquittals had not been made for those cheques, he did make verbal request in about May or June 1988 for the 1987 cheque and at the end of 1988 for the 1988 cheque, both enquires being made with Mr Ora Vetali the Administrative Officer and The Acting Assistant Secretary for Education, NCD. Mr Mero Mefaramu but no acquittals appear to have been provided by them to Mr Keamau.
Investigations into the expenditure of the said monies did not commence until late June 1988. It was as a result of a request by the Department of Provincial Affairs through its letter dated 26 May, 1988 to the Secretary of the Department of Finance and Planning.
A preliminary investigation was carried out by Geoffrey Kurua on 24 June, 1988 (see His Affidavit sworn on 30 March 1989 which was tendered by consent). This was under the direct supervision of his immediate superior Mr Perfecto Nunez. Because the investigations related to the two K20,000. cheques, the first one in October 1987 and the second one in March, 1988, the investigations were confined to the use of the proceeds of those two cheques. He found that the two cheques were deposited into the DEB Account No.27-60810400 with ANZ Bank, Boroko. The accused and Mr Ora Vetali were joint signatories to the account. He (Mr Kurua) then took hold of the cheque book and discovering that the first K20,000 cheque was deposited on 4 November 1987 and the last cheque was drawn on the DEB Account on or about 15th or 16th May, 1988, he further confined his investigations to that period. At the time the first K20,000 was deposited on 4 March 1987 the credit balance of the DEB Account was K4,869.24.
Mr Kurua further found that during the period specified in the indictment, there were 101 cheques issued comprising of Cheque Numbers 097095 to 097195 charged to the District Education Board Account. Of the total 101 cheques issued, 74 cheques totalling K30,827.50 were raised payable to “Cash” and in fact have been cashed, and 19 cheques totalling K2,23.94 were raised payable to “firms and individuals” while the remaining 8 cheques were cancelled or they advised the bank to “Stop Payment” as they (the cheques) were outstanding for months.
From his investigation of the records made available to him he found that the 19 cheques which were made payable to firms and individuals amounting to K2,231.94 were legitimate payments/charges to the then credit balance of K4,869.24 of the Account when the first K20,000.00 cheque was deposited into it. He found no impropriety in respect of these 19 cheques and therefore have passed them as appropriate charges to the Board’s account. In other words, the District Education Board Account had an adequate credit balance of K4,869.24 to absorb the 19 cheques totalling K2,231.94 charged to it.
The seventy-four (74) cheques totalling K30,827.50 raised payable to “Cash” were jointly signed by the accused and Mr. Ora Vetali. The corresponding “paid” cheques showed that all these 74 cheques were cashed but the cheques did not show who did the encashment. It must be noted, however, that the accused was the Education Superintendent (Assistant Secretary - Division of Education) for National Capital District while Mr. Vetali, as the Provincial Administrative Officer, was a junior officer under him. According to Mr. Kurua, it was not a case of who actually cashed the cheques but rather it was a matter of who authorized the issuance of the said cheques made payable to “cash”.
There were no vouchers, receipts or even explanations written on the stubs as to whom and for what purpose these cheques raised payable to “cash” were drawn. The query sent by the Finance Department to the accused regarding the matter was not answered while Mr. Vetali, in response to a similar query, provided an account of what had happened, including his admittance of the amount he borrowed from the account allegedly approved by his boss (Mr Liriope). Mr Vetali confirmed his receipt of K1,400.00 out of the cheques cashed from the proceeds of the two (2) K20,000.00 cheques.
It appeared to Mr Kurua that the seventy-four (74) cheques raised payable to “cash” were either initiated by the accused himself or were raised under his direction and consent. This fact, Mr Kurua said, was quite visible from the hand writing and ink used on the cheques themselves.
Similar evidence regarding the investigation carried out by the Department of Finance and Planning was given by Mr Perfecto Nunez who is the immediate supervisor to Mr Kurua. His evidence regarding the investigation basically confirmed or corroborated Mr Kurua’s evidence. Following the failure by Mr Vetali to provide information requested by the Department of Finance and Planning through its letter dated 21st July, 1988, Mr Nunez wrote to Mr Vetali on 19th August reminding him (Mr Vetali) of the information required. Mr Vetali replied to the Department of Finance and Planning through his hand written letter dated 22 August 1988 (which was tendered by consent of Defence Counsel) in which Mr Vetali basically stated that most of the cheques which were cashed were for the purchase of materials however there was no indication of invoices after the cash payments. He said that several times he approached the accused and indicated his refusal to sign the cheques because the money was public money and that the auditor might make an unexpected audit of the books and discover what was happening. Because they were public money and he was scared, he kept a record of the particulars of cheques cashed including amounts that were given to him by the accused. He said that he was acting under instructions from the accused who was his boss as well as the overall boss of the Division of Education and as such he did not do anything to stop it from continuing because he was scared of losing his job.
He said that when he received the first cheque for K20,000 he saw the accused who told him to Bank it in the DEB Account to which both of them were signatories. He received the second K20,000 cheque when the accused was on leave but notified the accused of it after depositing it in the DEB Account. He was given various amounts at various times including K300.00 for school fees and K260.00 to pay his electricity bills. A Notice of Proposed Surcharge pursuant to the Provisions of The Public Finance (Management) Act 1986 was sent by the Security for Finance to the accused on 3rd October and the accused replied to that notice through his letter of 17 October, 1988 in the following terms:
Notice of Proposed Surcharge
“As in response to your correspondence Ref: 85/817 (INV-1988), dated 3 October, 1988 regarding the abovementioned subject, I wish to inform you of the following:
1.       When the first cheque valued K20,000.00 addressed to the Secretary of the Department of National Capital District, was received from the Department of Education sometimes in late 1987, I took it that the k20,000.00 was allocated to N.C.D. under the Rural Teachers’ Housing Scheme for the 1984 to 1987 period. This was because the N.C.D. was still waiting to receive it’s allocation of K5,000.00 per year for the 1984-1987 period. Therefore, without making any further enquiries, the money was deposited into the N.C.D. Education Account. I was not aware of the receipt of the second cheque valued K20,000.00 and the depositing of this money into the N.C.D. Education Board’s Account because I was on my seven weeks recreation leave. I first came to know about the receipt of the second lot of K20,000.00 on the 23 May, 1988. This was very day and the time that I was first informed of an investigation being conducted on the use of the K40,000.00 received from the Department of Education.
2.       The first lot of K20,000.00 was used in meeting the urgent material needs and demands of schools and vocational centres in N.C.D. This was because the urgent needs for materials in school and centres far out - weighed the need to provide and improve teachers’ housing at that point in time. The Provincial Administrative Officer, with the support and assistance from his subordinates were expected and trusted to attend to all material needs of the schools and the centres. The P.A.O. was expected and trusted to keep detailed records of all items purchased and dispatched to schools and centres which required them. This area of responsibility was passed on to the P.A.O. because normally between October and April or May the following year, the Assistant Secretary is very busy in attending to hundreds of parents’ enquiries on such matters as selection and placement of 7 to 9 old children in Grade One in Community Schools, selections and placements of Grade Six leavers in high schools, placement of students transferring into NCD schools. These are usually very touchy and time consuming matters because of the very limited places available in schools in N.C.D. A lot of my time during the period mentioned earlier was devoted to these matters. I had therefore respected and trusted that the P.A.O. would perform his delegated duties as expected of him. Unfortunately, he had led me down and has placed me and my family in a very difficult and embarrassing situation. I know it is already too late to complain about my P.A.O’s failures as the damage has already been done. As his immediate supervisor, I know I would be blamed for anything that goes wrong within our own establishment or areas of administration.
3.       I am deeply concerned and embarrassed about what has actually happened because during my 23 years of service with the education division, I have never come across such an experience and situation. It is the first time that I have experienced such an embarrassing situation which is really affecting me and my family. I know I cannot blame my P.A.O. for what has happened because being his immediate supervisor, I would be blamed for anything that goes wrong within my division. The difficult work situation as indicated in Point 2 has somewhat put me in this very difficult situation. I am therefore asking and appealing to you if you kindly consider allowing me and my P.A.O to pay back the K30,827.50 as mentioned in your correspondence. I personally do not want to see this matter be handed over to police. I am therefore willing to have K100.00 deducted from my fortnight salary to recover the money. I want this deduction to start when I take my furlough leave soon after a decision is made on this case.
Sir, your understanding and sympathetic and favourable consideration on this request and appeal would be very much appreciated.
Thanking you so much in anticipation.
Yours faithfully
Jimmy M. Liriope.”
Following the receipt of the accused’s response to the Notice of Surcharge, Mr Nunez conducted a record of interview with the accused on 28 November, 1988. I will deal with the interview later. The accused was surcharged for K29,427.50 on 28 December 1988 and then appealed against the surcharge. Mr Vetali was also surcharged but he did not appeal. He agreed to comply with the surcharge.
Evidence was also called by the State from Mr Ora Vetali. Mr Vetali, who is strictly an accomplice, gave evidence without the benefit of an immunity from the Public Prosecutor. He gave evidence after due warning by the Court to the effect that he was not obliged to answer any question the answer to which might incriminate him. In his evidence Mr Vetali basically confirmed what he stated in his handwritten letter to the Department of Finance and Planning which I have referred to earlier. He also gave evidence that when they wanted to cash cheques sometimes he would sign the cheque and give it to the accused who would sign and also insert the amount and then give it to him to cash. He would cash it and bring the cash to the accused who would then give him some of the cash. Sometimes the accused would sign first and insert the amount and then request him (Mr Vetali) to sign and after which signature he would either cash it himself and bring the cash to the accused or the accused would cash it himself. On occasions while the accused was on leave the accused would ring him (Mr Vetali) up to sign cheques, he would sign, give to the driver to take it to the accused to sign and also insert the amount and then cash it. Other times he would sign and give the cheque to the driver to take the cheque to the accused’s house for the accused to sign. The driver would then cash the cheque and give it to him (Mr Vetali).
Other evidence (which were tendered by consent of Defence Counsel) were a statement from Mero Mefaramu who is the current Acting Assistant Secretary, NCD and an affidavit from Mr Alphonse Moroi, the driver at the Division of Education, Konedobu.
Mr Mero started work as the Senior Professional Assistant at the Division of Education, NCD on 16 August, 1987. When he commenced work he had no knowledge of the DEB operating a cheque account with ANZ Bank, Boroko. It was not made known to him by the accused or Mr Vetali that there was such an account. He also said that he had not sighted the two cheques and was also not involved in the purchasing of materials in 1987 due to heavy work commitments with enrolment and other administrative matters in the office. He came to know of the problem when he took over as Acting Assistant Secretary on 24 May, 1988.
Mr Alphonse Moroi who is employed as a driver at the Education office said that in February and March, 1988 he was sent by Mr Vetali to cash cheques. He cashed a total of four cheques during that period and gave the cash to Mr Vetali as instructed by Mr Vetali. He did not know how or where these moneys were used.
The accused gave evidence on oath and basically maintained what he said in his letter dated 17 October, 1988 to the Secretary for Finance and Planning in response to the Notice of Proposed Surcharge. He categorically denied what Mr Vetali had said in his evidence. Instead he that he acted on what Mr Vetali was advising him and he even told Mr Vetali to comply with his directions to keep proper records but Mr Vetali only promised to comply but did not in fact comply. He did not take any action against Mr Vetali for not complying with his directions nor did he seek authorisation from higher authorities such as the Department of Finance and Planning through the Department of Provincial Affairs or the Department of Education (HQ) to use the money for purchase of materials for schools in view of the urgent need in schools within the NCD for materials.
The defence, having called evidence, addressed the Court first. It submitted that whilst the accused did not dispute the receipt, authorisation and deposit of the first K20,000 cheque into the DEB Account in 1987 and the purpose of that cheque (which the accused saw in the covering letter some three days later) he had no knowledge of the second K20,000 cheque in 1988 as it was received and deposited into the DEB Account by Mr Vetali while he was on recreation leave. Although this is not conceded by the Defence, it also appears that the fact that the two K20,000 cheques are the property of the State is not in dispute.
It went on to submit in relation to the first K20,000 cheque that at the time the cheque was deposited into the DEB Account and later when he directed the proceeds of that cheque to be used for the purpose of purchasing materials, he did not have a dishonest intention. In respect of the second K20,000 cheque it submitted, in effect, that he had no knowledge of it and as such cannot be said to have dishonestly applied the proceeds of that cheque to his own use and to the use of Ora Vetali as alleged by the State. It relied on the Supreme Court Dicision in Brian Kindi Lawi v The State [1987] PNGLR 183 where the Supreme Court held, inter alia, that
“As the word “dishonestly” in s 383A only relates to the state of mind of the person who does the act which amounts to misappropriation, whether an accused has a particular state of mind in relation to the application of property which is dishonest is a question of fact for the trial judge to consider on all of the facts of the case before him and (per Amet J) according to the ordinary standards of reasonable and honest people.”
It submitted that in the accused’s case, according to the ordinary standards of reasonable and honest people, the accused, by depositing the cheque into a public account operated by the office to which the cheque was sent in the first place and as there were two signatories and the cheque was not specifically payable to another account, never had any dishonest intent nor did he act dishonestly. Failing to follow instructions and diverting the money to a different purpose than it was originally meant to serve, did not in any way give rise to a dishonest application by the accused within the definition of the word ‘dishonestly’ under s 383A of the Code.
It further submitted that although the money was diverted to a different purpose, it was a purpose within the interest of “education”. It was a public purpose and the accused acted in good faith and within his employment and responsibility. If the accused had put the money into a private account and used it to do some things completely irrelevant to Education in the NCD, then one would without hesitation infer that the accused dishonestly applied the money or had such an intent in mind. Purely being the head of the Division of Education, being a co-signatory to the DEB Account and directing the use of the money for purpose of purchase of materials, the absence of requisitions (as Mr Vetali was responsible for ensuring that they were in order) and the mere signing of the cheques to cash and in fact cashing a large number of cheques did not, according to the ordinary standards of reasonable and honest Papua New Guineans, in the accused’s position and generally in directing the money to be diposited in the DEB Account and subsequently directing it for purchase of materials, mean that the accused dishonestly applied the moneys as alleged by the State.
It also submitted pursuant to s 24(1) of the Code that the accused is not criminally responsible for the alleged misuse of funds because it happened independently of his will as it occured by accident. No cases were quoted to me as to the application of s 24 to cases of misappropriation.
The State’s submission is obviously to the contrary. It said that the accused should be found guilty as charged because in so far as the first cheque is concerned he was aware of the purpose and in so far as the second cheque is concerned he was notified by Mr Vetali after depositing the cheque in the DEB Account even though he was on recreation leave and whilst he was on leave he continued to sign cheques to cash with the knowledge that the second cheque for K20,000, had been deposited into the DEB Account. It submitted that the fact that the accused had applied the moneys as specified in the indictment can be inferred from the circumstances particularly the lack of proper records as to the expenditure of the two cheques which were public moneys. The charges, the State submitted, has been proved beyoned reasonable doubt through the evidence of its witnesses particularly Louis Keamau, Geoffrey Kurua, Pefecto Nunez, Ora Vetali and Alphonse Moroi.
DISHONESTY
Was the application of the moneys dishonest? This issue, which is the main issue in view of the fact that the accused does not dispute that the property, namely the moneys, belonged to the State, can best be determined by considering the actions of the accused from the time the first K20,000 cheque was deposited to the time the last cheque was signed on or about 16 May, 1988. But before proceeding to consider that aspect it is necessary to say something about who the accused is and what he knows about his office, the funding for that office and his responsibilities during the period in which the moneys are alleged to have been misappropriated. His position and his responsibilities etc. can best be ascertained from his answers to questions asked by Mr Nunez during the record of interview on 28 November, 1988.
He was the Assistant Secretary, Division of education NCD. As Assistant Secretary he had overall supervision of the development of education activities within the NCD including the supervision of staff and administration of the office of education.
Regarding funds generally of the Division of Education, he was the co-signatory to the DEB Account. The other signatory was of course Mr Ora Vetali. The purpose for which the DEB Account was opened was to:
1.       Help pay school fees for students who faced difficulty in paying fees,
2.       purchase school supplies
3.       purchase supplies for use during meetings.
4.       to help Board of Management put up facilities in schools and vocational centres.
5.       pay salaries for relief teachers.
6.       pay sitting allowances for board members.
7.       help fund inservice programmes for teachers.
The normal source of credit to the DEB Account was from grants from the Department of Education (National Government). There were no other sources.
After Mr Vetali and himself took over from Mr Albert Waira and one expatriate Senior Professional Assistant as Co-signatories to the DEB Account in about October 1987 Mr Vetali was working directly under him and as Mr Vetali was one of the new signatories to the DEB Account, he gave him instructions or informed him (Mr Vetali) of his responsibilities in respect of the DEB Account and the purpose of that account. Some of his instructions to Mr Vetali were:
1.       that all moneys to be spent from the DEB Account - must be supported by requisitions which must be signed and approved by him (Mr Liriope, the accused).
2.       that payment must only be made upon receipt of goods.
3.       All payment documents must be kept at all times.
As stated earlier in the judgment, he was aware of the first K20,000 from the Department of Education which came to the office sometime in October as Mr Vetali told him and he himself comfirmed it from the paymaster. Mr Vetali even showed him the cheque together with the letter dated 29 September, 1987 which was sent with the cheque. He instructed Mr Vetali to deposit it in the DEB Account after being advised by Mr Vetali that it was alright to deposit it in that Account.
Although the letter accompanying the cheque clearly showed that it was for the purposes of maintenance of teachers houses, but because Mr Vetali and himself thought of using the vocational centres to carry out maintenance work he did not instruct Mr Vetali to the pay it to the Finance Department to credit it to the correct vote so that it can be used for maintenance purposes.
He however stated later (see Q.34) that he was not able to use the money for the repairs and maintenance of teacher’s houses using Vocational Centres because of shortage of materials in schools including school desks, text books, black boards chalks etc. and it was him who decided to use the K20,000 to purchase these materials.
How they went about purchasing materials was that when a school requested materials, he would ask Mr Vetali to check with the suppliers. The ordering and purchasing would be made by Mr Vetali using the authority of the DEB Requisitions form signed by the accused. Some of the purchases were made in cash but they did not specify in the requisition whether the payment was to be in cash or not but all purchases must be in cheques. Only sitting allowances were normally paid in cash.
Because he went on leave in March, 1988 he was not aware of the second K20,000 cheque. He returned from leave on 23 May, 1988. It must be mentioned in passing that from Geoffrey Kurua’s evidence the last cheque was drawn about 15th or 16th May, 1988 - a week before the accused was due to resume duty from recreation leave.
Asked as to whether or not it had occured to him that the first K20,000 could have been exhausted in view of the fact that he had been signing cheques whilst on duty and on leave he replied that it did not occur to him that way as he was too busy with people so he just signed cheques as presented to him by Mr Vetali as they were accompanied by requisitions. But how could he say that he was busy because he was on leave but continued to sign cheques. He should have had the good sense to enquire as to the state of the DEB Account.
The cheques he signed payable to cash were also accompanied by requesitions and these requisitions (for cheques payable to cash) were approved at the time he signed the cheques and not before he signed. The names of the supplier and the goods or services to be supplied were also known before hand and when he signed the cheques to cash it was on the understanding that the goods and services had already been supplied. But suppliers, unless the customer is a credit worthy customer, do not supply the goods first and receive payments later. I do not think that companies suppling the materials would have accepted such a practice. With government purchases you either pay cash on delivery or give an ILPOC on delivery.
When he went on leave Mr Meferamu Mero was Acting as Assistant Secretary for Education NCD but was not given authority to sign cheques on the DEB Account.
While the accused was on leave cheques were brought to him by the driver Alphonse Moroi and he signed cheques without knowing or even asking who had sent him or authorised the cheques. He thought that it was the Acting Assistant Secretary in consultation with the PAO (Mr Vetali) and he kept signing cheques payable to cash while he was on leave because they were accompanied by requisitions but then he goes on to contradict himself by saying that he asked Mr Vetali to provide receipts which he (Mr Vetali) had received for the payments but he failed to comply. Mr Vetali just continued to promise to supply the receipts but did not in fact do so. If goods were delivered before payment then there would have been invoices from the suppliers but no invoices were found by Mr Kurua or Mr Nunez during their investigations.
From an analysis of all the evidence it can be seen that the accused who has worked in the Public Service for more than 23 years was an experienced officer who no doubt worked through the ranks particularly in the teaching profession to reach the position he was occupying at the time he committed the alleged offence. From his answers to the questions put to him by Mr Nunez during the record of interview on 28 November, 1988 there is no doubt that he was aware of the procedure as well as the regulations and rules relating to the expenditure of public monies including the requirements that all purchase of goods and services from the funds in the DEB Account had to be supported by requisitions and authorised by him under his personal signature.
I spent hours comparing the list of cheques signed to cash against the requistions and the list of amounts given by him to Mr Vetali. From a comparision of his evidence that that he signed cheques to cash because they were accompanied by requisitions as against the seventy-four (74) illegitimate cheques and the DEB Expenditure Authorities on the arch file (see Exhibit “S”) it appears that there is total lack of any requisitions setting out the goods and services supplied as well as the supplier let alone receipts, invoices and authorisations by him under his signature.
Furthermore, from the 74 cheques made payable to cash it is noted that many of those cheques were for large amounts sometimes for several hundred kina and it is further noted that these cheques were drawn almost every other day or week purportedly for the purchase of school materials and yet no evidence has been found by Finance inspectors Messrs Kurua and Nunez of any correspondence from any school requesting materials. Not one correspondence have been found and it appears to be rather odd that all requests for supplies of school materials were made by the relevant headmasters verbally. The accused makes an assertion that the money was spent on buying materials yet he has called no one to give oral evidence to substantiate this claim. Instead he has sought to blame Mr Vetali for destroying the evidence when the investigations commenced while he was on recreation leave but no good ground has been shown why Mr Vetali should do that. In fact both Mr Vetali and the accused confirmed in their evidence that they had no bad feelings against each other.
With respect to the various amount given by the accused to Mr Vetali, an examination of the list of amounts he kept (see Exhibit “Q”) as against the 74 cheques made to cash and the dates on which they were cashed, there appears to be consistency in the amounts given to Mr Vetali by the accused. For example, if K650.00 was cashed, Mr Vetali would be given K50; if K470. was cashed Mr Vetali would be given K70. etc. etc. This went on even during the time the accused was on leave. Mr. Vetali continued to accept the various amounts without any complaints. Mr Vetali gives the reason that he was acting under instructions and because he was scared of losing his job he continued to accept it without complaining to anyone within the Division of Education at Konedobu or to someone higher up in the Department of Education. I do not think that he was scared of losing his job. What appears to me is that the accused and Mr Vetali had embarked on a scheme whereby the accused would be given some of the proceeds of the hundred of kina worth of cheques essentially to keep his month shut. It seems to me that because it was a scheme there is hardly any proper record of the transactions. Furthermore because it was a scheme, they did not even change the signature to the DEB Account so that the acting Assistant Secretary Mr Mefaramu Mero could, as the acting head of the Division, approve expenditure from the account. No reason for this failure has been given by both the accused and Mr Vetali.
I do not think, as I have stated earlier, that Mr Vetali was shifting the blame to the accused only. He admitted receiving some of the money and in this respect it must be noted that Mr Vetali was giving evidence without the protection of an immunity from Prosecution signed by the Public Prosecutor and in fact Mr Vetali was warned by the Court against answers which might incriminate him and yet he chose to continue to give evidence.
From the fact the accused was an experienced public servant of over 20 years service who was familiar with the requirements, I find his evidence that money was spent on buying materials incredible to believe particularly in the absence of any evidence at all to substantiate this. Being an experienced officer he did not even seek the approval of the higher authorities to use the funds to purchase materials instead of maintaining institutional houses. He chose deliberately to ignore that and use the money as he pleased and this went on right up to the 16th of May, 1988. That is to say that it went on even after the second cheque for K20,000 had been deposited. I find that he was informed by Mr Vetali after the second K20,000 cheque had been deposited and the purpose of that cheque and he continued to sign cheques to cash with that knowledge. In light of all the evidence before me I find that the accused had lied to this court. I cannot accept the defence contention. I do agree that he did not have a dishonest intention at the time the first K20,000 kina was deposited. He also did not have a dishonest intention merely by being the head of the office and being a co-signatory. But in my view the moment he signed cheques to purchase materials using funds which were not intended for the purpose, his actions became dishonest. There is however total lack of evidence as to the actual purchase of materials which makes his assertion doubtful. From the fact he offered to repay if the matter was not brought to the police brings him within the ambit of s 383(3(b) of the Code and thus made the inference to be drawn from his action much stronger against him. I also reject defence submission based on s 24(1) of the Code as I do not think that such a submission (without any legal authority to back up his submission) would be tenable in cases of this nature. In the light of the evidence before me and applying the ordinary standards of reasionable and honest people as enunciated by the Supreme Court in Brian Kindi Lawi’s case, the accused, by signing cheques to cash and utilising the proceeds of the cheques for purposes other than that intended, was acting dishonestly. I accordingly find him guilty as charged.
Lawyer for the State: Public Prosecutor.
Lawyer for the Accused: Waner Shund Lawyers.