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BPT (PNG) Pty Ltd v Torobon [1995] PGNC 38; N1383 (26 October 1995)

Unreported National Court Decisions

N1383

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 383 OF 1994
BPT (PNG) PTY LTD
V
SAM TOROBON

Tabubil

Sawong J
24-26 October 1995

CIVIL LAW - Claim for reimbursement of money - Money alleged to have been stolen by employee during the course of his employment - Evidence - Comparison of Hand writing - No expert evidence - Dangers inherent - Need for tribunal of fact to be cautious.

Cases Cited

R v Hobart Magalu [1974] PNGLR 188

St v Baine [1991] PNGLR 1

Counsel

R Doko for the Plaintiff

D Lora for the Defendant

1 December 1995

SAWONG J: This was a claim brought by the Plaintiff against the defendant claiming that, the Defendant whilst being employed by the Plaintiff converted to his own use, money belonging to the Plaintiff. He is alleged to have done so, by removing from the cash register or other possession sums of money of the plaintiff at the plaintiff’s premises at Tabubil and converted and used the said money. The amount the plaintiff claims that was so removed and used was Seventy Five Thousand Four Hundred & One Kina & Sixty one toea (K75,401.61). It is alleged that all these occurred between November 1991 - and March 1994.

Neither counsel has referred me to what the law is on this matter. I have not been referred to any authority nor any law, as to the issue of whether a servant who fraudulently obtains property, such as in the present case, would be liable to repay the property so obtained. I have not been able to find any local authorities directly or indirectly on this particular point. But I am of the view that, a defendant who has obtained money from the Plaintiff by fraudulent means, is liable to the Plaintiff for the money so obtained.

Three people were called to give evidence on behalf of the Plaintiff. I will shortly set out the nature of each of their sworn testimony.

The 1st witness was James Dom. He is employed by OK Tedi Mining Ltd (OTML) at Tabubil as a supervisor Contracts Accounting. He is responsible for checking and making payments to contractors who provides goods and services to OTML. His evidence was that the Plaintiff is one such Contractor. It supplies fuel, maintenance and other related services to OTML owned vehicles. He said that sometime in May 1994, either during or after an internal audit was carried by OTML auditors, on the books of accounts of OTML, it was discovered that someone had been applying correction fluid on the daily fuel supply forms. This document is issued by the Plaintiff. During the conduct of the internal audit it was discovered that a lot of correction fluid was applied over hundreds of entries in the daily fuel supply forms. The procedure was, it appeared that after the actual volume of fuel was supplied, and the actual volume and the amount is entered in the daily fuel supply form - someone would, apply correction fluid over the original volume and value, and then would write over it a new or adjusted volume and amount.

This procedure was used by someone and it was used over the period from November 1991 to about March 1994.

In all instances, during the period, some of the entries were tampered with and the alterations that were made, increasing both the volume of fuel supplied and the corresponding amount was also thereby increased.

For instance on 30th November 1991 about 24.81 litres of fuel was supplied by the Plaintiff to OTML Motor vehicle L 447 for a certain amount. Correction fluid was subsequently applied over the volume and amount entries and new volume of 44.81 litres was written for an amount of money.

On 1 June 1992 OTML vehicle L 390 was supplied with 34.34 litres of fuel for an amount . Subsequently correction fluid was applied over the original figures and someone wrote the new volume and the corresponding new value.

The system described above was consistently used over the period from November 91 to March 1994 when these discrepancies or alterations were discovered. And so during the entire period this system was used consistently.

As a result of this, OTML paid to the Plaintiff a sum of money over and above the actual fuel supplied. In the process it paid over K75,000 to the Plaintiff. After the alterations were discovered, it was brought to the attention of the Plaintiff, and the Plaintiff has now entered arrangements with OTML, for the Plaintiff to reimburse the money to OTML.

I observed his demeanor carefully. He was consistent in his testimony and although there were minor discrepancies, these did not affect his testimony at all. He was an independent witness. I accept his testimony as truthful.

The next witness for the plaintiff was one Keith Geoffrey Reick. He is the Branch Manager of the plaintiff branch operation at Wewak. He was previously employed by the plaintiff at its Tabubil branch as its branch manager. He was so employed from March 1992 to the end of June 1992. His evidence was that the defendant was employed by the plaintiff as a service station attendant. He said that the defendants duties included serving customers, receipting money in the cash register & compiling or entering daily fuel sales forms. There were three forms, which was required to be done, one was for fuel sold to OTML, the other for other credit customers and third one was cash sales to customers. He took became aware of the alterations in the daily fuel forms credit to OTML, when the internal auditors of OTML came in & informed him.

At the relevant time, ie for November 1991 to March 1994, he said 2 people were employed as fuel attendants. These were the defendant and another person called Russell. These two were the fuel pump attendants and either of these two would serve the customers and enter the entries in the daily fuel supply form. In addition to these, there were according to this witness two other employers who were admin. staff and but there were no accounts person or clerks. He further stated that from the daily fuel supply form for OTML, daily cash & daily credit sales to open customers would be compiled into a one document called the daily Sales Summary form. In regard to the daily credit sales to OTML vehicles, the original of that document would be sent direct to OTML and Copies of it would be sent to the plaintiff’s headquarters in Port Moresby together with daily Sale Summary form. The statements & invoice etc. would then be raised by Port Moresby.

He said that the daily Sales Summary form would be compiled by the Defendant, the next day from the previous days entries in the daily fuel issue forms. Once the daily summary form is completed it was then brought to him for cross checking. After that the original of this particular form was send to the plaintiff’s, Port Moresby office.

He went on and said that after the discrepancies were discovered and made known to him, he initially asked the defendant if they were his hand writing and the defendant denied that it was his handwriting.

He also gave evidence regarding the system that was used by the Plaintiffs employee to record fuel and other sales. In so far as cash sales were concerned, he said that the two fuel pump attendants were given waist pouches to hold cash so that they could attend to several customers at any one time. After receiving the cash, the fuel attendants, were required to enter cash into the cash register and deposit cash into it. In the cash register was a cash register roll on which the cash that was deposited would be recorded. At the end of the days transactions, the actual cash that had been deposited in the cash register together with the cash register roll, would be collected by the admin. staff, and either reconciled or put away for reconciling next day for banking.

The last witness for the Plaintiff was Wendy Nuka. During the relevant period she was employed by the Plaintiff as an accounts clerk and she was so employed for two and a half years. She said her responsibilities were to enter entries in the books of accounts detailing the cash received from the service station, reconcile the actual cash with the cash register roll, and prepare and do banking. She said that she regarded the Defendant as a friend.

The Defendant called several witnesses. The first three witness generally gave evidence regarding the character of the Defendant. In general they all have high regard for the defendant and they all hold the view that the defendant was incapable of perpetrating, the allegations against him. They said they trusted him and regarded him as a truthful and an honest man and that he was not capable of committing the alleged fraud.

The defendant gave evidence admitted that he and another person were responsible for entering the original entries in the daily fuel supply form (DFSF). He said that after that docket was filled in it was handed over to the other staff in the office. He said that once the daily fuel supply form was handed over to the office staff he had nothing to do with it. He said he did not compile the daily summary form (DSF) and that that particular form was compiled by other staff in the office. However, he denied strenuously that he made any of the alterations that appear in the DFSF during the relevant period, or that he stole cash moneys from the till or any other possession during the relevant period. He explained how he started off his small businesses with a second-hand motor vehicle, and eventually together with contributions from his fellow villagers, managed to buy other vehicles and assets.

On the basis of the evidence before me I make the following findings of facts:

1. At the relevant time the plaintiff employed two persons, namely the Defendant and one Russell as fuel service station attendants at Tabubil.

2. The Defendant and Russell would also receive cash from cash paying customers. The amount would then be punched or keyed in into the cash register and the cash deposited into it. By this method the amount of cash once keyed would be registered in the streamer which was inside the cash register.

3. At the end of the day, the actual cash together with streamer would be removed from the cash register by the administration Staff and stored away. The next day the cash would be counted and reconciled with the amounts appearing in the streamers so as to balance the actual cash with the amount appearing therein.

4. These two men were responsible for making of entries in the daily fuel supply forms (DFSF).

5. The Plaintiff also during the relevant period employed several other people in the office doing various jobs.

6. Once the daily fuel supply forms were completed, it was delivered or taken into the office, where the information from that particular form and the information from other documents were transferred to and entered into another document, known as the daily summary form (DSM).

7. That the DFSF was handled by many other people. It was not only handled by the Defendant.

8. That during the relevant period, correction fluid was used on one or more of the entries in each days (DFSF) to wipe out the original hand written entry, and subsequently the entries affected were altered and new entries were entered thereon.

The evidence shows that the Defendant was not the only person who made the original entries in the DFSF nor the cash, for there was another fuel attendant who also made or entered the entries in that form and handled the cash during the relevant period in question. More over there is also evidence that these particular documents and the cash was and did pass through the hands, not only of the Defendant & his co-workers, but some of the other employees of the Plaintiff. The defendant has denied that he made any of the alterations in the entries in the daily fuel sales form. He has also denied fraudulently removing cash form the cash register or from any other thing. I have had the opportunity of having examining the alterations that had been made in all those documents (i.e daily fuel supply form) for the period claimed in the Writ, and in every single one of them, it appears that the alterations were made in either different pen and a different hand writing from the original hand writing & original ink.

There is therefore, a dispute as to handwriting which appears in the alterations that were made on the original entries in the daily fuel supply form during the relevant period. I have already noted the evidence of Mr Reick in relation to this issue with regard to the defendant. The defendant has denied that it was he who made those alteration.

Although both counsel have not addressed this issue, I consider it an important issue in the light of allegations against the defendant and the evidence that has been given.

And so what is the answer, in cases where there is a dispute as to the hand writing. It would have been helpful had either of the parties called expert evidence who would have given evidence and to assist the Court. But that was not done, and so the Court does not have the benefit of an expert evidence.

The relevant statutory provision so far as it relates to comparison of disputed handwriting is Section 31 of the Evidence Act, Ch 48. It reads:

“31. Comparison of disputed hand-writing

A comparison of a disputed hand-writing proved, to the satisfaction of the court, to be genuine may be made by witnesses, and the hand-writing and the testimony of the witnesses respecting them may be submitted to the Court as evidence of the geniuses or otherwise of the handwriting in dispute.”

My short research reveals that there are two reported cases in Papua New Guinea which considered and dealt with this particular point. Both of them are criminal matters but I am of the view that the principles set out therein are quite relevant and applicable in civil matters, such as the present case, where there is a dispute as to the handwritings.

The first case is the pre Independence case of R v Hobart Magalu [1974] PNGLR 188. In that case Frost, A-CJ, as he then was, considered s. 66 of the Evidence & Discovery (Papua) Act 1913-1964, which was the predecessor of S. 31 of the Evidence Act Ch 48. His honor held that the provision of S. 66 of that Act, did not prevent the Court from reaching its own conclusions as to the genuineness or otherwise of hand writing in dispute by reason of the absence of any expert witness called to make comparison of the handwritings. However, his Honor, did remind himself that a judge sitting alone should warn himself of the dangers of reaching a conclusion upon a comparison of the handwriting without the assistance of expert evidence.

In State v Baine [1990] PNGLR 1, Brunton AJ, as he then was, had this to say (at p. 3):

“The law is that although expert evidence is not essential for a tribunal of fact to come to a conclusion about comparative handwritings, there is danger involved when a tribunal of fact proceeds without expert testimony (see Oi Sullivan v the Queen (1969) 53 Cr App. R 274 at 284, per Winn LJ)... In the course of his judgment Winn LJ said (at 282):

‘The fact remains that there is a very real danger where the jury make such comparisons, but as a matter of practical reality all that can be done is to ask then not to make the comparisons themselves and to have vividly in mind the fact they are not qualified to make comparisons. It is terribly risky for jurors to attempt comparisons of writing unless they have very special training in this particular Science...’”

I would adopt and apply the principles of law set out in the above cases as both relevant and appropriate to the circumstances of this country. I am not a handwriting expert. The Court can only make comparison, and should not come to any conclusion without any expert testimony about comparative handwriting. I am mindful that it is dangerous to do so and to come to any conclusion as to who made those alterations in the DFSF during the relevant period.

I have examined and compared closely the alterations that were made on each and every daily fuel supply form during the relevant period in issue. I am convinced upon comparison of the hand writings that appears in those documents that some one did in fact made those alterations in the entries. But that is as far as I am able to go. Without any expert testimony I am unable to make any positive conclusion as to who made those alterations.

I am not able to make any finding, nor am I able to draw any inference on the basis of the evidence, as it stands, that those alterations were in fact made by the Defendant. Put it, another way, I am not satisfied, on the balance of probabilities that it was the Defendant who made those alternations in the entries in the daily fuel supply forms during the relevant period.

There is another reason why I consider that the Defendant is not liable. The reason is this. There were several keys on the cash register to key in particular type of sales. For instances if a customer was served fuel and he paid cash for it, the appropriate key would be keyed in and the amount of sales entered in the cash register and the streamer or roll of paper inside the cash register.

This streamer was removed together with the actual cash either during the day or at the end of the day, for counting, reconciling and banking. The cash and the streamer was removed by the office staff; and it was counted by the office staff, reconciled by them with the actual cash and the amount appearing in the streamer. It was checked by the office staff, cross checked by Mr Reick and then banked.

But there is absolutely no evidence at all that during the relevant period in issue, of whether there was any discrepancies in between the actual cash and the amounts appearing in the streamers or roll.

I have carefully considered all of the evidence adduced before me. I have also read and considered carefully the written submissions that have been put to me by both parties.

Mr Doko, in essence submits that looking at the circumstances of the employment of the Defendant, the duties he performed, the amount of assets he has, the wage he earns, I should draw an inference that monies the Defendant has in his accounts, the assets he has, cannot or could not have come from elsewhere, but from funds he fraudulently obtained from and during the course of his employment with the Plaintiff.

I do not accept this submission, simply because the evidence is such that I cannot make that inference and make a conclusion to that effect.

There is absolutely no scintilla of evidence from any of the Plaintiff’s witnesses, that they had witnessed him removing any money from either the cash register or from any other sources. The allegations against the defendant was that he would either get the cash from the cash register, the cash having been already paid by each customers - and he would then make the alterations in the DFSF for OTML vehicles, so as to cover the discrepancy if any in the cash register from the cash that had been stolen.

Mr Lora submits that there is absolutely no evidence to show any discrepancies between the actual cash and the amount of cash printed in the streamers or roll of papers which were in the cash register at the relevant time. He says that the Plaintiff ought to have produced the cash register printouts for the relevant dates to indicate the amount of money missing, the dates those amounts relate to and any evidence of such discrepancy between the actual cash and the cash register printout.

For instance, there is evidence from Mr Dom that on 30 April 1992, that on OTML motor vehicle no. L 462 the correct liteage of fuel supplied and recorded was 30.20 litres, but was deceitfully altered to 40.40 litres. A similar scheme was employed on motor vehicle L 591. The witness said the correct litage was 34.34 litres but was altered to read 54.54 litres. This system was consistently used during the relevant period in issue.

But Mr Lora submits that there is no evidence of cash being taken out of the till on any of these days, which could have been done to balance the deficiency.

I accept this submission as correct. There is absolutely no evidence of any cash discrepancy occurring during any of the dates in the period in issue, nor is there any evidence of such cash discrepancy connecting to the alterations that were made in the OTML daily fuel supply forms. There simply is no nexus between those. There is no evidence connecting the deceitful alterations in DFSF to any loss of cash money during the material period. Put it in another, there is absolutely no evidence of any loss of any cash occurring during the material period. There is no evidence connecting such loss, of which there is none to the deceitful tampering of the DFSF.

In these circumstances, I am mystified as to how the defendant was able to remove the money from the cash register, then subsequently make alterations in the DFSF. This is compounded by the fact that the cash register was located inside the office building and the cash was collected at the end of the day locked away in the safe for the night, retrieved the following morning, counted, reconciled, checked and cross-checked and then banked.

Further more we have evidence which shows that cash receipts balanced on nearly all occasion during the period. Put it another, there is absolutely no evidence at all that there were any discrepancies showing in the cash register receipt, at the end of the day or the next day when the actual cash was counted balanced and reconciled with or against the cash receipt in the cash register in preparation for banking.

In those circumstances, I am quite amazed to say the least, of the plaintiff hoping to succeed, on what quite clearly appears to be no evidence at all to prove its allegations.

Serious allegations have been made against the Defendant on purely speculative basis. I say purely speculative, because Mr Reich says that he was suspicious, because of the amount assets the Defendant had. But we have evidence as to how those assets were acquired. Those assets were not bought solely by the defendant, but it was bought from contributions from his fellow villagers and others. That evidence has not been destroyed in any manner or form.

In the light of what I have said, I am not satisfied on the balance of probabilities, that the Defendant is liable for the alleged loss. It follows that I find the defendant not liable and I dismiss the whole of the Plaintiff’s claim against the Defendant.

I order that the Plaintiff pay the Defendant’s costs, such costs to be agreed, and if not to be taxed by the taxing officer.

Lawyer for the Plaintiff: Carter Newell Lawyers

Lawyer for the Defendant: A D Lora Lawyers