N7172

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR No. 88 OF 2014

THE STATE 

V

 CHRISTOPHER HULAPE
(NO 1)

Kerema: Koeget, AJ
2017: 29th February, 9th, 10th, 13th, 14th, 15th
16th, 20th, 21st, March, 19th, 20th October.

CRIMINAL LAW- Indictable offences – False Pretence – section 404(i)(a) of the Criminal Code Act – Misappropriation – section 383A(i)(a) of the Criminal Code Act – conviction after trial – maximum sentences – Discretion under section 19 of the Criminal Code Act.

FACTS

The Eopi Cooperative Society Ltd was incorporated on 12th September 2008 and its’ objective was to develop fisheries sector for Vailala Hiloi village in the Ihu Sub District of the Gulf Province. 

The financial members of the Cooperative Society Ltd belong to the Eopi clan ILG and the accused was the Chairman with six other members of the Society.

The Eopi clan ILG was the customary landowner of sea (coast line), water ways and land where the fishing project was to be established and the society conducts its business.  

A bank account was opened at ANZ Bank, Jacksons Airport Branch bearing account number:  13862277 with deposit of K5,100.00.  The signatories to the bank account were the accused, William H. Kapekoro, David S. K. Hulape.

An application for financial assistance was submitted to the Department of National Planning and Monitoring on 23rd of February, 2011.  The application was approved by the Government and on 28th July, 2011, the accused deposited Bank of Papua New Guinea Cheque No. 000043 dated 1st March, 2011 for K1.5 Million drawn on account of Department of National Planning and Monitoring in the Cooperative Society’s account.

It is alleged that between 29th July and 24th October, 2011, monies were drawn, applied to the use of the accused.

On 22nd February 2012, Police investigation confirmed no projects were initiated at the proposed project site.

The accused pleaded not guilty to both counts and a trail commenced to determined allegations of the State.

Counsel:

D. Mark, for the State.
W. Dickson, for the Accused.

20th October, 2017

1.	 KOEGET AJ:  INTRODUCTION:  The accused is charged with one count of False Pretence pursuant to section 404(i)(a) of the Criminal Code Act.  He is also charged with one count of Misappropriation pursuant to Section 383 A(i)(a) of the Criminal Code Act chapter 262.  

Evidence

2.	The undisputed facts that arose from oral evidence and documents tendered are as follows:-

a)	Christopher Hulape is director of Touch Bearer Production Ltd and his wife Agnes Hulape is the only share holder.

b)	Eopi Cooperative Society Ltd was incorporated on 12th September 2008 to develop fisheries sector in Vailala Hiloi village in Ihu Sub District of the Gulf Province.

c)	Christopher Hulape is the chairman with six other officers.

d)	A cheque account was opened with ANZ Bank Jacksons Airport Branch bearing the account number:  1862277 with initial deposit of K5,100.00.  The accused is one of the signatory to the account.

e)	A application on behalf of Eopi Cooperative Society Ltd was submitted to Department of National Planning and Monitoring on 23rd July 2011 and approved for payment.

f)	On 20th September 2011, a Bank of Papua New Guinea cheque No. 000043 dated 1st of March 2011 for K1.5 Million was drawn on the account of Department of National Planning and Monitoring and made payable to Eopi Cooperative Society Ltd and it was deposited into the Society’s bank account by the accused.

g)	Between 9th July, 2011 and 24th October, 2011, monies were drawn on the Eopi Cooperative Society Ltd’s bank account by the accused and applied purportedly to varies persons and companies purportedly to be the suppliers or service providers to Eopi Cooperative Society Ltd leaving a balance of K9,316.47 as at October, 2011.

h)	The police investigation on 22nd February 2012 confirmed that no fisheries project was established at the project site in Vailala Hiloi village in Ihu Sub District of Gulf Province.

i)	An investigation report by Auditor Lambi Kirch dated 7th March 2012 confirmed that no proper practices, commitment and procedures of commitment of funds under the provisions of the Public Finances (Management) Act 1995 and Financial Instructions issued by Department of Finance were followed so the payment of K1.5 Million to Eopi Cooperative Society Ltd by Department of National Planning and Monitoring was irregular.

j)	The project was not established at the proposed project site at Vailala Hiloi village in the Ihu Sub District of Gulf Province.

Documentary evidence

3.	The State tendered into evidence 64 documents as exhibits in the trial.

4.	The accused tendered into evidence 20 documents as exhibits in the trial as well.
         Oral Evidence for the State

5.	The first witness for the State was Chief Sergeant Nicholas Taolo.  He is a member of the Royal Papua New Guinea Constabulary and attach to the National Fraud and Anti Corruption Directorate and stationed at Kokopo Police Station.

6.	He is a member of the Criminal Investigation Division of the Constabulary and was assigned to the Sweep Team established by the Government in 2015.  The Sweep Team was assigned to investigate misuse of public funds under the National Planning and Monitoring Department covering the period between 2009 – 2015.

7.	He was assigned to investigate allege fraudulent payment of K1.5 Million by the Department of National Planning and Monitoring to Eopi Cooperative Society Ltd.

8.	He obtain search warrant issued by the Waigani District Court to search Eopi Cooperative Society Ltd’s bank account No. 13862277 with ANZ bank, Port Moresby Branch.

9.	He produced the search warrant to the ANZ Bank Manager at Harbour City, Konedobu and obtained:

a)	Copy of Department of National Planning and Monitoring Cheque No. 000043 for K1.5 Million.

b)	ANZ Bank statements on Account No. 13862277 for 2009, 2010 and 2012.

c)	Copies of cheques issued by Eopi Cooperative Society Ltd and also withdrawals of monies from the Society’s bank account.

d)	Specimen of signatories to the Eopi Cooperative Society’s bank account.  The signatures to the bank accounts are:-

(i)	Christopher Poniara Hulape.
(ii)	Kapikoro William Herova.
(iii)	Hulape David Steven Kerene.

10.	He noticed from the bank statement that there was an initial deposit of K5,100.00 into the Cooperative Society’s bank account.  Then a second amount of K1.5 Million was deposited into the account and the money was from the Department of National Planning and Monitoring.
11.	The witness further noted that project proposal was a short term for the period between 2010 – 2011.  The project set up for short term for period between 2010 – 2011 were to:

a)	Identify fishing ground.
b)	Build storage and market facilities.
c)	Establish transport and logistic.
d)	Organise and administer small village fishermen and business
 	groups, obtain fishing licences, export licences and purchase
basic fishing equipment.
e)	Engage specialist experts and conduct detail feasibility studies in 
reef fishing.
f)	Commercial fishing project.

12.	When he visited Vailala Hiloi village and in particular the proposed project site, there was nothing so took no photographs and returned to Port Moresby.

13.	The second witness for the State is Kinch Lambi, an employee of Department of Finance and Treasury and he is the Highlands Regional Finance Inspector.  He was assigned to assist the Sweep Team to investigate allegations of abuse, misuse and misappropriation of millions of Kina of State monies including the payment of K1.5 Million to Eopi Cooperative Society Ltd in March 2011.

14.	He conducted investigations into the payment of K1.5 Million to Eopi Cooperative Society Ltd by the Department of National Planning and Monitoring.  The investigation conducted into the account section of Finance and Management Division of the Department of National Planning and Monitoring.

15.	He obtained relevant document in relation to the payment, particularly payment vouchers consisting of FF3 (Requisition form), FF4 (General Expense form) and relevant documents attached.  He made critical observants, analysis and assessments – FF3 and FF4.

Payment Vouches

16.	The following are the payment vouchers:

a)	FF 3 (Requisition Form)

The claim for K1.5 Million was signed by the requisition officer authorised by Section 32 Officer without approval by the Financial Delegate.

In all cases, the Financial Delegate advises the Section 32 Officer on availability of Funds in the vote.  Such advise was not given by the Financial Delegate.

b)	FF4 (General Expenses Form) 

A very significant anomalies were detected on the General Expenses Form.  There was no vote number written on the General Expenses form and the claim was not examined by the authorised Examining Officer of the department.

17.	The actions of the department staff that prepare FF3 (Requisition Form) and FF4 (General Expense Form) were in breach of the provisions of the Public Finances (Management) Act 1995 and Financial Instructions issued by the Department of Finance and Treasury for prudent expenditure of public funds.

18.	So the payment of K1.5 Million to Eopi Cooperative Society Ltd was improper because the proper commitment processes under the Public Finance (Management) Act 1995 were not followed.  The witness concluded that those persons employed in the Department of National Planning and Monitoring that facilitated payment of K1.5 Million to Eopi Cooperative Society Ltd and the recipients of the proceeds of the fund ought to be charged and prosecuted because the fund was not properly expended.

19.	He noted from ANZ Bank statement on Eopi Cooperative Society Ltd Bank account (marked state exhibit “Q”) that 99.9 percents of the funds were withdrawn and used by the accused.

20.	The evidence of Constable Joseph Baundo confirms that he escorted Senior Constable Nicholas Toala to the proposed fishing project and returned.  He was not a member of the investigation team but only provided security to the team.

21.	The last witness for the State was Mere Milameka from Vailala Hiloi village in the Ihu Sub District of Gulf Province.  He belongs to the Akia clan and the accused belongs to Eopi clan of Vailala Hiloi village.

22.	Between 2007 – 2012 he was the Ward 9 Councillor consisting of Vailala West, Vailala Hiloi, Vailala Kupipi, Auma and Haruapi villages.  At the end of 2012 he ceased to be the Ward Councillor as a new Councillor was elected by the villages. 

23.	During the term as Ward 9 Councillor, he was not aware of the existence of Eopi Cooperative Society Ltd nor the establishment of the fishing project by Eopi Cooperative Society Ltd in Vailala Hiloi village.

24.	Between 2011 – 2012 he heard from villagers and also read in the newspapers about the formation of Eopi Cooperative Society Ltd so he travelled to Kerema town and enquired with division of Commerce and received no favourable explanation so he travelled to Port Moresby and met up with the accused and family at their residence at Gerehu Stage 5.

25.	He was briefed on the fishing project but not about Eopi Cooperative Society Ltd so concluded the Cooperative Society only operates from accused’s residence in Gerehu in the National Capital District.

26.	In 2012, Eopi Cooperative Society Ltd purchased two banana dinghies with two 60 horse power outboard motors.  The boats were used by members of Eopi Cooperative Society members to ferry passengers from Vailala Hiloi village to Kerema town return.

27.	The dinghies and outboard engines were not used for the fishing project.

28.	The Eopi Cooperative Society Ltd also purchased a 3 ton Hino truck and it was used as PMV to carry passengers from Kerema town to Port Moresby return.  The Cooperative Society Ltd also purchased a Ford Ranger, double cab utility and it too was used by the accused’s relatives.  So none of the equipment were used for the fishing project.  He does not know that a portion of a customary land was marked for the proposed fishing project.

29.	As a Ward 9 Councillor, he was not aware that the Government had given K1.5 Million to Eopi Cooperative Society Ltd for establishment of the fishing project in Vailala Hiloi village.

Oral Evidence for Defence

Christopher Hulape (sworn)

30.	He is the Chairman of Eopi Cooperative Society Ltd and admits the Cooperative Society receiving funding from the National Planning and Monitoring Department to the tune of K1.5 Million for the fishing project to be established at Vailala Hiloi village.

31.	The cheque was deposited into the Cooperative Society’s bank account with ANZ Bank at Jackson’s Airport branch.

32.	The objectives were, in the short term plan from 2010 – 2011:

a)	Identify fishing ground,
b)	Build storage and market facilities and establish transport and logistic,

c)	Organise administrative structure of small village fishermen and business groups,
d)	Obtain export licence,
e)	Supply basic equipment,
f)	Engage specialists technical experts and conduct detail feasibility studies on reef fishing, coastal area fishing, prawn farming, barramundi farming, deep sea tuna fishing and downstream processing,
g)	Commerce fishing project.

33.	The Cooperative Society Ltd received the sum of K1.5 Million from the State prior to conduct of feasibility studies on the viability of fishing project by National Fisheries Authority.

34.	The budget for Eopi Cooperative Society Ltd were in 3 components.  They are:

a)	Project expenses – 				K259,449.76
b)	Investment expense – 				K200,000.00
Kokopo Drafts (for Double duplexes)
c)	General Expenses/Admin. 			K1,040,550.24
Grand Total -	K1.5 Million

See Defence exhibit “14”	(K1,500,000.00)

35.	The sum of K29,463.40 was used by Eopi Cooperative Society Ltd to purchase equipment and materials for the fishing project leaving the balance of K1,470.436.40 in the Society’s bank account.

Analysis of Evidence in the trial

36.	The States case is that the payment of K1.5 Million to the Eopi Cooperative Society Ltd is illegal or unlawful because the process by which the cheque was raised did not follow the proper commitment practices and procedure as stipulated in the provisions of the Public Finances (Management) Act 1995 and the Financial Instructions issued by Department of Finance and Treasury.

37.	The State witness evidence to that effect has not been challenged by the Defence.  So it remains un-contradicted throughout the trial.

38.	The State contended that according to bank statement dated 21st November, 2011 to the payments of monies to Touch Bearers Ltd and Mettle Ltd were illegal because the accused is the Director of the companies and his wife, Agnes Hulape is a shareholder so both are beneficiaries of the proceeds of the deposits of monies into the accounts of the two companies.

39.	The State further contends that the payment of monies to Kokopo Drafts for construction of double duplex and investment in National Development Bank were illegal as they are accuseds personal investments and are not for the purpose for which the money was granted by the State (see bank statement marked exhibit “Q”).

40.	The Defence contention is that the monies were for short term plan and so were properly expanded by Eopi Cooperative Society Ltd.  There were official receipts produced to court for purchases of goods, materials and equipment for the fishing project totalling K29,463.40.

41.	The balance is K1,470,436.40.

42.	The trial judge asked the accused:  

“Where is the balance of K1,470,436.40?”

43.	The accused paused for a moment and replied:

“It is a failed project.  The monies were withdrawn used, abused and misused by the members of the Cooperative Society not myself.”

44.	So the accused admitted that the sum of K1,470,436.40 was misused.

45.	A question arises:  Who used, abused and misused the monies?

46.	The State exhibit, Bank statement marked “Q” explains when monies were withdrawn and who benefitted from those withdrawals.  In the process the accused benefitted from these withdrawals.

47.	The withdrawals were between September and October, 2011 as alleged by the State in the indictment charging the accused.

Finding of Court

48.	The Court therefore finds that:

(1)	The sum of K1.5 Million obtain by Eopi Cooperative Society Ltd from Department of National Planning and Monitoring were illegal.

(2)	The monies withdrawn from the bank account of Eopi Cooperative Society Ltd with ANZ Bank were for the benefit of the accused and his family members.

(3)	No fishing project was established at Vailala Hiloi village, Ihu Sub District of Gulf Province as funds were misappropriated by the accused.

VERDICT

49.	The formal Orders of the Court are:

(1)	The State has proved its case beyond reasonable doubt on the first count because the accused made false representation to the National Planning and Monitoring Department that the funds were for a fishing project.  The accused is found guilty on count of False Pretence under section 404(i)(a) of the Criminal Code Act.  He is convicted accordingly.

(2)	The State has proved its case beyond reasonable doubt on the second count. The accused is found guilty and convicted of the offence of Misappropriation pursuant to section 383A(i)(a) of the Criminal Code Act.
________________________________________________________________
Public Prosecutor: 	Lawyers for the State
Public Solicitor:	Lawyer for the Defence