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State v Bruno [2017] PGNC 34; N6652 (23 February 2017)

N6652

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) No. 22 OF 2016

THE STATE

V

MAIKA BRUNO

Waigani: Cannings J

2017: 16, 23 February

CRIMINAL LAW – sentencing – Section 383A (misappropriation of property) – acting head of governmental body convicted after trial of two counts: amounts of K55,000.00 and K36,000.00 – sentence of 3 years.

The offender was convicted after trial of two counts of misappropriation committed in the last few days that he held office as the acting head of a governmental body. Under count 1, he authorised the use of K55,000.00 of State money to pay a law firm he engaged to commence court proceedings challenging his removal from office and the appointment of his successor. Under count 2, he directed that a government cheque for K36,000.00 be cashed, he obtained the cash and failed to acquit the cash. This is the judgment on sentence.

Held:

(1) The maximum penalty for the amounts misappropriated is, for each count, ten years imprisonment.

(2) As two offences were committed, it is appropriate to fix a head sentence for each offence, then determine whether the sentences should be served concurrently or cumulatively, and then apply the totality principle to arrive at a final sentence, and then, after deducting any pre-sentence period in custody, determine whether all or part of the final sentence should be suspended.

(3) In fixing a head sentence for each offence, the modified sentencing guidelines from Wellington Belawa v The State [1988-89] PNGLR 496 ought to be applied: K1.00 to K1,000.00: suspended sentence; K1,000.00 to K10,000.00: four years imprisonment; K10,000.00 to K40,000.00: four to six years imprisonment; K40,000.00 to K1 million: six to ten years imprisonment.

(4) For count 1, involving K55,000.00, with a starting point of six to ten years, mitigating factors are: it was a one-off transaction; no evidence that the money was applied to an entirely wasteful or selfish purpose; there was no direct adverse effect on any individual or group; the offender’s reputation has been tarnished already; he has cooperated with the Police and the Court; no prior conviction; long and unblemished prior record of public service. Aggravating factors are: large amount of State money misappropriated; serious breach of trust; serious effect on public confidence in the integrity of the public sector. Other relevant considerations: the offender took the matter to trial and there has been no restitution. Because of the strength of the mitigating factors, a sentence below the starting point range is appropriate: five years imprisonment.

(5) For count 2, involving K36,000.00, with a starting point of four to six years and a smaller amount than in count 1 and similar mitigating and aggravating factors, the appropriate sentence is three years imprisonment.

(6) The total potential sentence is 5 years + 3 years = 8 years imprisonment. As the offences were two separate events the sentences should be cumulative. However, by applying the totality principle, due to special circumstances peculiar to the offender, such as his age, his poor prospects of re-employment, his medical condition, his long record of public service, his impressive pre-sentence report, the total sentence was reduced to three years imprisonment.

(7) There being no pre-sentence period to deduct the question was whether all or any of the three years should be suspended. In misappropriation cases the major consideration is whether there has been any actual restitution of the money misappropriated and whether there is a realistic prospect of restitution within a limited period. There was proof of neither. None of the sentence was suspended. The offender was thus sentenced to three years imprisonment, to be served in custody.

Cases cited:

The following cases are cited in the judgment:

Public Prosecutor v Kerua [1985] PNGLR 85
The State v Cynthia Feria (2013) N5386
The State v Graham Duk (2009) N3924
The State v Maika Bruno (2017) N6596
The State v Middleton Philip (2013) N5386
The State v Philip Wiamai (2007) N5492
The State v Steven Lasin (2007) N5052
Wellington Belawa v The State [1988-89] PNGLR 496

SENTENCE

This was a judgment on sentence for misappropriation.

Counsel:
M Tamate, for the State
M N Wilson, for the Offender

23^rd February, 2017

1. CANNINGS J: This is the decision on sentence for Maika Bruno (the offender) who was convicted after trial of two counts of misappropriation committed in the last few days that he held office as acting Director-General of the National Intelligence Organization (NIO).
   
2. In late October 2013 the accused was notified that his appointment had been revoked and that he would be replaced by Mr Gari Baki. In the days after he was in fact told that his appointment was revoked and before the date that Mr Baki assumed office, the offender gave instructions for two cheques to be drawn against the NIO’s bank account.
   
3. Under count 1, the offender instructed that a cheque in the sum of K55,000.00 be drawn in favour of a law firm, Warner Shand Lawyers, which, on his instructions, on 1 November 2013, commenced proceedings in the National Court, seeking declarations that the offender had been unlawfully removed and that Mr Baki had been unlawfully appointed.
   
4. Under count 2, the offender instructed that a cheque for K36,000.00 be drawn for special operations purposes, payable in cash.
   
5. The offender’s instructions were carried out and both cheques were drawn on 4 November 2013. The cheque for K55,000.00 payable to Warner Shand was presented on 5 November 2013 and the proceeds were credited to the firm’s account. The cash cheque for K36,000.00 was presented on 4 November 2013 and all the cash was obtained by the accused.
   

Count 1

6. The Court concluded that the K55,000.00 paid to Warner Shand Lawyers was not applied to a lawful purpose. It was public money. Although it was within the financial delegation of the offender to, generally, expend up to K500,000.00, any such money had to be applied to purposes of the NIO. The primary purpose of the court proceedings, OS No 573 of 2013, was not to protect the interests of the NIO. The primary purpose of the proceedings was to protect the interests of the offender.

The court proceedings could not properly be regarded as a special project for which special project funds could be utilised. Even if the proceedings could be regarded as having been commenced to protect the interests of the NIO or as a special project of some sort, the approval of the Attorney-General was not sought or granted, as required by Section 7 of the Attorney-General Act.

7. Furthermore, the offender gave the administrative instruction to process and raise the cheque for K55,000.00 on 1 November 2013, two days after a meeting with the Chief Secretary to Government at which the offender was clearly told that he was being replaced. He thus made the decision to commit public funds to his private purposes at a time when he knew that there was considerable doubt as to his legal authority to do so.
   

Count 2

8. The Court concluded that the K36,000.00 cash obtained by the offender on 4 November 2013 was not applied to a lawful purpose. The offender’s evidence that the cash was used to pay sources used in “Operation Black Tee-Shirt” was vague and unconvincing. The offender’s explanation that he was prevented by Mr Baki from making an acquittal was rejected. The offender had the opportunity at the trial to state who the cash was given to and why, but failed to take the opportunity. The offender gave the administrative instruction to process and raise the cheque for K36,000.00 on 1 November 2013, two days after the meeting with the Chief Secretary at which the offender was clearly told that he was being replaced. He made the decision to commit public funds, allegedly to pay “sources” at a time when he knew that there was considerable doubt as to his legal authority to do so.
   

Further details of circumstances in which the two offences were committed are in the judgment on verdict, The State v Maika Bruno (2017) N6596.

ANTECEDENTS

9. The offender has no prior convictions.
   

ALLOCUTUS

10. The offender was given the opportunity to address the court. He further explained the circumstances in which he had authorised the processing of the two cheques. He repeated the explanations and defences that he had put to the court in his evidence and through defence counsel’s submission at the trial, the bulk of which were rejected by the Court. In conclusion he stated:
    

Whilst I respect and accept the ultimate wisdom and ruling of the National Court, I honestly maintain that I had no intent to defraud the State because I had believed that my action taken at the time of committing State funds was to protect the interests of the State and not my personal interests.

Further I believed I still had the authority to commit the funds as I was not served any formal notice on the revocation of my appointment.

It was not an easy decision given the national security urgency of the situation but my honesty of intent is at peace with my God believing that the decisions I made was done in the best interests of the State.

The prolonged court case has adversely affected by family, I have not been able to travel out of POM to visit my mother when she suffered a minor stroke. More importantly my life came to a standstill as I could not plan my life ahead without having an end to the court case, to at least find formal employment to support my family. My family and I have gone through so much hardship in the past two years awaiting the outcome of the court case.

I pray that the court will consider the good work that I have committed throughout my 25 years of service to the State and maybe more years of service if I was not forced to resign and give me a fair non-custodial sentence.

I will make restitution over two years by the sale of my motor vehicle.

PRE-SENTENCE REPORT

11. The Court obtained from the Probation Service a pre-sentence report prepared by Probation Officer James Gopave. Maika Bruno is aged 54, from Rasese village, Namatanai District, New Ireland Province. He is married to Winifred Gegeyo of Tufi District, Northern Province, who is strongly supportive of him. They have a stable and loving marriage. They have five children, ranging from the ages of 18 to 26 years. Three of the children were interviewed by the Probation Officer. They all spoke very highly of their father as an honest and caring man.
    
12. Maika Bruno is a highly educated man. His primary and secondary education was in New Ireland. From 1982 to 1985 he undertook theological studies at Ulapia Seminary, Rabaul and Bomana Seminary, NCD. He graduated from the University of Papua New Guinea in 1989 with a Bachelor’s degree in Political Science and Public Administration. In 1991 he completed a course in Indonesian military and political systems at James Cook University, Australia. He has a Diploma in Military and Security Studies obtained from the Asia Pacific College of Security Studies, Hawaii, USA in 2000. In 2005 he obtained a further diploma in political and military warfare from an institution in Taiwan.
    
13. From 1989 to 1994 he was an intelligence officer in the Department of Defence. From 1994 to 1999 he was an officer of the Department of Prime Minister and National Executive Council in the Office of Security Co-ordination and Assessment. He joined the NIO in 1999 as Deputy Director-General, a position that he substantively occupied until his resignation in 2014. At the time of commission of the offences, October-November 2013 he was acting Director-General, a position that head occupied for more than two years prior to the appointment of Mr Baki in October 2013.
    
14. The offender is presently unemployed. However, he runs a small hire care business in New Ireland. As for assets he lists two Toyota vehicles with a combined value, he estimates, of K100, 000.00. His wife is the registered proprietor of the family home at North Waigani in the NCD. He states that he has nil savings.
    
15. As for his health the offender has recurring chest and back pain, emanating from injuries received in a motor vehicle accident in Port Moresby in 1999. A recent medical report by Dr Kaigul of attests that the offender suffers from chronic lower backache and difficulty ambulating, indicative of spondylosis and spinal osteoarthritis.
    
16. The probation officer concludes that the offender “doesn’t pose any threat to the community and the country as a whole” and that he is “capable of restitution and suitable for probation”
    

SUBMISSIONS BY DEFENCE COUNSEL

17. Mr Wilson highlighted that the offender has no prior convictions and has received a very favourable pre-sentence report. He cooperated fully with the Police. He is a highly qualified and educated man who has given much to the country through his long and distinguished career in the area of national defence and security. He has been punished enough, he poses no threat to the community. He is capable of making restitution within two years. He should be given the opportunity to do so by being visited with a fully suspended two-year sentence.
    

SUBMISSIONS BY THE STATE

18. Ms Tamate stressed that there were a number of serious aggravating factors: the large amount of money, the fact that the offender was in a position of trust; the very improper use of the funds; the negative impact on public confidence in the integrity of the public sector and the integrity of the NIO; the degree of premeditation involved; the lack of any serious plan to repay the money misappropriated. There is a need for a strong deterrent penalty. A sentence of three to five years imprisonment should be imposed for each offence. If any part of the sentence is to be suspended it must be on condition that there be full restitution within a reasonable period.
    

DECISION MAKING PROCESS

19. To determine the appropriate penalty I will adopt the following decision making process:
    
    • step 1: what is the maximum penalty for each offence?
    • step 2: what is a proper starting point?
    • step 3: what sentences have been imposed for equivalent offences?
    • step 4: what is the head sentence for each offence?
    • step 5: should the sentences be served concurrently or cumulatively?
    • step 6: what is the effect of the totality principle?
    • step 7: should the pre-sentence period in custody be deducted?
    • step 8: should all or part of the sentence be suspended?
      

STEP 1: WHAT IS THE MAXIMUM PENALTY?

20. As the amount of money misappropriated is, in each offence, more than K2,000.00 and less than K1 million, the maximum penalty for each offence, under Sections 383A(1A) and (2)(d) of the Criminal Code, is ten years imprisonment.
    

STEP 2: WHAT IS A PROPER STARTING POINT?

21. The Supreme Court set out starting point ranges in Wellington Belawa v The State [1988-89] PNGLR 496, depending on the amount of money misappropriated. I have stated in previous cases that these should be increased and regarded as follows:
    
    • K1.00 to K1,000.00 – suspended sentence usually appropriate;
    • K1,000.00 to K10,000.00 – four years imprisonment;
    • K10,000.00 to K40,000.00 – four to six years imprisonment;
    • K40,000.00 to K150,000.00 and beyond – six to ten years.
      
22. Count 1 falls into the fourth category, which means the starting point range is six to ten years imprisonment for each offence. Count 2 falls into the third category, so the starting point range is four to six years imprisonment for each offence.
    

STEP 3: WHAT SENTENCES HAVE BEEN IMPOSED FOR EQUIVALENT OFFENCES?

23. It is useful to consider sentences I have imposed in cases involving similar amounts of money.
    

SENTENCES FOR MISAPPROPRIATION, CANNINGS J

STEP 4: WHAT IS THE HEAD SENTENCE FOR EACH OFFENCE?

24. There are a number of considerations to take into account in deciding on the head sentence. The more mitigating factors there are, the more likely the head sentence will be reduced below the starting point. The more aggravating factors present, the more likely the head sentence will be above or at the starting point. However, sentencing is not an exact science. It is a discretionary process. When a factor is marked as mitigating or aggravating it does not mean necessarily that it is given the same weight as another mitigating or aggravating factor. Some mitigating factors may be strongly mitigating. Others may be mildly mitigating. The same goes for aggravating factors. I will deal with the two offences separately.
    

Count 1: misappropriation of K55,000.00: payment to Warner Shand Lawyers to pay for private legal costs

Mitigating factors

25. The following matters mitigate the seriousness of the offence and militate towards a sentence lower than the starting point range:
    
    • it was a one-off transaction;
    • no evidence that the money was applied to an entirely wasteful or selfish purpose; there was no direct adverse effect on any individual or group;
    • the offender’s reputation has been tarnished already;
    • he cooperated fully with the Police and the Court;
    • no prior conviction;
    • long and unblemished prior record of public service;
    • he is a highly qualified and educated man who has given much to the country through his long and distinguished career in the area of national defence and security;
    • a very favourable pre-sentence report, showing that he is highly regarded and loved by his family who are strongly supportive of him.
      

Aggravating factors

26. These factors militate towards a sentence above the starting point range:
    
    • large amount of State money misappropriated;
    • serious breach of trust;
    • serious effect on public confidence in the integrity of the public sector.
      
27. Other relevant considerations:
    
    • the offender took the matter to trial;
    • there has, to date, been no restitution.
      

After weighing all these factors, noting that there are more mitigating factors than aggravating factors and comparing this case with other misappropriation sentences, the head sentence should be below the starting point range of six to ten years is appropriate. The appropriate sentence is five years imprisonment.

Count 2: misappropriation of K36,000.00: obtained in cash, without acquittal

28. The mitigating and aggravating factors and other relevant considerations are similar to those for count 1. Having regard to the lower starting point range of four to six years imprisonment for this offence, the appropriate sentence is three years imprisonment.
    

The total potential sentence the offender is facing is:

5 years + 3 years = 8 years imprisonment.

STEP 5: SENTENCES CONCURRENT OR CUMULATIVE?

29. The question is whether the head sentences should be served concurrently (at the same time) or cumulatively (the sentences are added together). As there are two separate transactions involved, even though the offences were committed almost simultaneously, the sentences should be served cumulatively (Public Prosecutor v Kerua [1985] PNGLR 85).
    

STEP 6: WHAT IS THE EFFECT OF THE TOTALITY PRINCIPLE?

30. I now look at the total sentence the offender is facing, to see if it is appropriate having regard to the totality of the criminal behaviour involved. The court needs to guard against imposing a crushing sentence. I consider that eight years would be excessive. I return to the strong mitigating factors highlighted by Mr Wilson. I also take into account the age of the offender and his worsening medical condition. I reduce the total sentence to three years imprisonment, allocated as follows: two years for count 1 and one year for count 2.
    

STEP 7: SHOULD THE PRE-SENTENCE PERIOD IN CUSTODY BE DEDUCTED FROM THE TERM OF IMPRISONMENT?

31. There is nothing to deduct.
    

STEP 8: SHOULD ALL OR PART OF THE HEAD SENTENCE BE SUSPENDED?

32. No. This is a misappropriation case. The fact that the offender is regarded as not a threat to the community is largely irrelevant. Of course he is not a threat. No one contends that he is. He appears to be a decent man with a loving wife and family. That is to his credit. It has been taken into account as a mitigating factor. Also to his credit is the manner in which he conducted himself throughout the trial: with dignity and respect for the Court. He has strongly defended his actions, as is his right. He has not expressed remorse. The underlying consideration is that his explanations and defences have been rejected and the State has proven that he committed two serious criminal offences involving State money. No realistic plan has been put to the Court for restitution of the funds misappropriated, a total of K91,000.00. A deterrent sentence is required. There will be no suspension.
    

SENTENCE

33. Maika Bruno, having been convicted of two counts of misappropriation, contrary to Section 383A(1)(a) of the Criminal Code in circumstances of aggravation under Section 383A(2)(d) of the Criminal Code, is sentenced as follows:
    

Sentenced accordingly,

__________________________________________________________________
Public Prosecutor : Lawyer for the State
Warner Shand Lawyers : Lawyers for the Offender