N7454
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
CR 144 of 2018
STATE
V
RICHARD BUDU
Waigani:    Salika DCJ
2018:  3, 7 & 14 September

CRIMINAL LAW– Practice and Procedure – Offence of False Pretence – the false pretence – material existing facts – intent to defraud – S 404(1)(a) Criminal Code Act, 1974. 

Cases Cited:
Papua New Guinea Cases 
	
Albert Alexander Age v The State [1979] PNGLR 589
Paulus Pawa v The State [1981] PNGLR 498.  
Prosecutor’s Request No 4 of 1974 [1975] PNGLR 365
The State v Stanley Tua CR (FC) 254 of 2017, 20 December 2017

Overseas Cases:

Director of Public Prosecutions v Ray [1974] AC 370

Counsel:

Wilma Malo, for the State
Gaure Odu, for the Accused

DECISION ON VERDICT
14th September, 2018 
1.    SALIKA DCJ: BACKGROUND: The accused is charged with one count of obtaining a Toyota Land Cruiser 10 Seater, Registration No BEW 840 by falsely pretending to Tony Nekin that he will pay monies owed for the hire of his vehicle, at a rate of K600.00 per day, which would be paid on a later date, with intent to defraud, contrary to Section 404(1)(a) of the Criminal Code Act, 1974.

Evidence   

2.   The State called one witness, the complainant, Tony Nekin, who gave evidence that on 10 April the accused, through his associate, Heagi Wari, hired a vehicle, Nissan Navara, Registration No. BEH 232, from Mr. Nekin’s hire car company, Whitestone Hire Cars Limited, pursuant to a verbal agreement at a rate of K600.00 per day, to be paid every few days.  Initial payments of K1200, K1200 and K1800 were made at intervals of 2, 2 and 3 days respectively (a total of 7 days’ hire or K4200).  No further payments were made and on 23 April Mr. Nekin contacted Heagi Wari who told him he was hiring the vehicle on behalf of the accused.  Mr. Nekin called the accused who asked to meet at Jack Pidik Park.  At the meeting the accused told him that he was hiring the vehicle for the purposes of his National Election campaign in Rigo District.  Asked what he would do about payment, the accused asked for one week, to which Mr. Nekin agreed.  

3.   At some stage thereafter Mr. Nekin became aware that the accused wanted a replacement vehicle as the first vehicle had a problem with the clutch. Mr. Nekin, who was out of the province at the time, called the accused who asked if he could swap the vehicle for another at the same rate.  Mr. Nekin agreed and a second vehicle, Toyota Land Cruiser, 10 Seater, Registration No. BEW 840, was provided.  

4.   Mr. Nekin called the accused numerous times for several weeks thereafter but the accused failed to answer his calls and failed to make any further payments.  Mr. Nekin initially assumed the accused was busy with his election campaign.

5.    Eventually, however, Mr. Nekin reported the matter to Gordons Police Station on 21 July 2017.   Later the same day he received a call from the accused who asked to meet at the Ela Beach Hotel.  Mr. Nekin attended with two police officers from Gordons Police Station. At that meeting the accused told him that he was the Director of Trans Wonderland, which would transfer him the funds but that he was having problems with opening a new bank account and signatures.  He asked for a further week, to which Mr. Nekin agreed.  

6.    On 28 July 2017 Mr. Nekin called the accused who asked to meet at the Holiday Inn.  Mr. Nekin attended in the company of the same two police officers from Gordons Police Station.  Before anything could be said the accused made the same excuse and apology.  Mr. Nekin asked the policemen to take the accused into custody and he recovered his vehicle, Toyota Land Cruiser, 10 Seater, Registration No. BEW 840, which was damaged.  

7.   Mr. Nekin says that the total amount outstanding for both vehicles is K50,400 at a rate of K600 per day for a period of 84 days and that it remains outstanding to this day.  

8.   The State tendered by consent the record of interview in which the accused admitted to hiring both vehicles from Mr. Nekin pursuant to an oral agreement at a rate of K600 per day for the purposes of his National Election campaign.  The accused also admitted that the total amount owed by him for the two vehicles was K52,000, in addition to repair costs, and that he would settle both amounts within 21 days. 

9.   In his defence the accused gave evidence that he hired the first vehicle through his trusted friend and protocol officer, Heagi Wari, at a rate of K600 per day on the basis that he would pay every week, which he claims he did.  He also claims that he received an invoice from the complainant for the sum of K14,000 relating to the use of the first vehicle, the Nissan Navara, and that he settled that invoice through Heagi Wari but that Mr. Nekin did not provide full receipts.  He says that Heagi Wari arranged the replacement vehicle and that he never discussed the hire of the Toyota with Mr. Nekin, nor its rate.  He does not understand what the sum of K52,000 relates to, namely whether it is for the hire of the Toyota or for repairs, and that he was waiting for an invoice.   

10.   Whilst he agreed that he met Mr. Nekin three times, he says that they did not discuss the amount outstanding for the Toyota.  He says at the Ela Beach Hotel he told Mr. Nekin that he would process the payment but that the K14,000 for the first vehicle had already been paid by then.  He says there was no discussion at the Holiday Inn because he was arrested but agreed that the vehicle was rightfully repossessed because he had not paid for it.

11.   Under cross-examination the accused agreed that Mr. Nekin allowed him to use the second vehicle.  Whilst he maintained that Mr. Nekin never discussed the K52,000 outstanding with him, he agreed that he was provided with the vehicle on the basis that he would pay K600 per day.  He further agreed that he did not make any payments for the second vehicle and that he owed that money but said that he was waiting for the invoice and later, that the matter was with the police.  

Elements of the Offence

12.   Section 404(1)(a) of the Criminal Code Act 1974 provides that:

(1)	A person who by a false pretence or wilfully false promise, or partly by a false pretence and partly by a wilfully false promise, and with intent to defraud –
a.	obtains from any other person any chattel, …
is guilty of a crime.

13.   The elements of the alleged offence are that:
a.	The accused 
b.	At a time and place
c.	By false pretence 
d.	With intend to defraud
e.	Obtained 
f.	From another person
g.	Any chattel  

14.   The State has the burden of proving each and every element of the charge beyond reasonable doubt.

Issues 

15.   It is not disputed that between 10 April and 28 July 2017 the accused obtained Toyota Land Cruiser, 10 Seater, Registration No. BEW 840 from the complainant and registered owner, Mr. Nekin and this has been proven beyond reasonable doubt by the State.   

16.   What is at issue is whether that obtaining was caused by a false pretence and with intent to defraud.

17.   A false pretence is a representation made by words or otherwise of a matter of fact, past or present that is false in fact and that the person making it knows to be false or does not believe it to be true: Section 403(1) Criminal Code Act, 1974.  The false representation must be to material existing facts and not a promise to do something in the future or a representation by the representor as to the existence of an intention to do something in the future: Albert Alexander Age v The State [1979] PNGLR 589 at 592.  

18.   The State must also prove an intention to defraud as a separate element.  Whilst an obtaining by false pretence will usually provide evidence upon which an intention to defraud may be inferred, it will always be a question of fact to be determined.   See Prosecutor’s Request No 4 of 1974 [1975] PNGLR 365.

Analysis

19.   The State’s witness Mr. Nekin impressed me as a witness of truth.  I accept that he did not issue invoices for either the first or second vehicle on the basis that payments were due every few days.  I accept that outstanding monies for the first vehicle were discussed at the meeting at Jack Pidik Park and that the accused asked for one week to pay.  I also accept that at some stage thereafter the accused asked to swap the first vehicle for another at the same rate.  The accused then failed to answer his calls for several weeks before contacting the complainant on 21 July. I also accept that outstanding monies for both vehicles were discussed at the Ela Beach Hotel meeting on 21 July and that the accused asked for a further week to pay on the basis that he was waiting on a transfer of funds from his company, Trans Wonderland, but was having difficulty with a new account.  I note that no evidence as to the existence of this company, the respective role of the accused, or the opening of a bank account by him at that time was led by either party.

20.  Mr. Nekin openly admitted some uncertainty as to the amount owing exclusively to the hire of the Toyota Land Cruiser.  He was only able to confirm a total of 84 days’ hire for both vehicles.   

21.    There is also some divergence between the complainant’s evidence that the meeting at the Holiday Inn took place on 28 July and the record of interview which is dated Tuesday, 25 July, and was tendered without the statements of the interviewing officers.  The exact date of the meeting is not, however, material.  

22.   The accused on the other hand was not a reliable witness.  I formed the opinion that he was evasive and untruthful.  It is overwhelmingly clear that he hired each of the vehicles on the same terms.   I do not accept his evidence that the outstanding monies for the first vehicle were not discussed at the meeting at Jack Pidik Park on 23 April.  Nor do I accept that the outstanding monies for the second vehicle were not discussed at the Ela Beach Hotel meeting on 21 July.  His evidence that they only discussed the payment for the first vehicle, which he says had already been paid by then in any event, is both nonsensical and implausible.  

23.  In evidence-in-chief the accused tried to distance himself from any agreement as to the hire of the Toyota Land Cruiser and claimed that there were no discussions with Mr. Nekin regarding the rate.  Whilst he conceded in cross-examination that the second vehicle was provided on the basis that he would pay K600 per day, that he did not make any payments for it and that he owed money for this purpose, he maintained that he was waiting for an invoice.  I don’t accept this.  

24.   It is clear from the admissions in the record of interview that the accused was well aware that he owed money for the hire of both vehicles.  In fact it was he who volunteered that the amount outstanding was at least K52,000 in addition to repair costs.   

25.   In summary, I formed a very low opinion of the accused’s credibility and am unable to rely on his evidence.  I make it clear, however, that I take account of this untruthfulness only in relation to his credibility and the reliability of his evidence and for no other purpose.

26.  Nevertheless, the issue remains whether the State has proven its case beyond reasonable doubt.  

27.  In the recent case of The State v Stanley Tua CR (FC) 254 of 2017, 20 December 2017, I convicted the accused of obtaining a hire vehicle by false pretences. In that case the accused falsely purported to enter into a vehicle hire agreement on behalf of another person when in fact the rental agreement was for himself.  He did not return the hire vehicle on the expiry of the hire period and under pressure to pay presented a valueless cheque of K35,000 knowing that there was no money in the account.  The accused maintained that he would pay for the hire and exchanged the original vehicle for another.  He then refused to answer any calls and used the vehicle for 7 months without paying for its use.   

28.  By comparison the present case against the accused is substantially circumstantial both as to the alleged false pretence and the associated intention to defraud.  In order to bring in a verdict of guilty it is necessary not only that it should be a rational inference but that it should be ‘the only rational inference’: Paulus Pawa v The State [1981] PNGLR 498.  

29.   It is not contested that the accused represented that he would hire the Toyota Land Cruiser at a rate of K600 per day.  By continuing to hold the vehicle, the representation was a continuing one up until the time the vehicle was repossessed by the complainant.   

30.   In Director of Public Prosecutions v Ray [1974] AC 370 the respondent ordered a meal at a restaurant believing that his companion would lend him the money to pay. He then discovered that he was unable to pay for the meal and remained silent as to his change in circumstances. The defendant waited until the dining area was clear of waiters before running out. The defendant was convicted under s16(2)(a) of the UK Theft Act 1968 (now replaced by the Theft Act 1978).

31.   On appeal the House of Lords held that the transaction must be regarded in its entirety.  By remaining seated the respondent had created the continuing representation that he was an honest customer who intended to pay the bill.  Per Lord MacDermott at page 4:

 “… that initial representation must, in my view  be regarded
not as something then spent and past but as a continuing representation which remained alive and operative and had already resulted in the respon-
dent and his defaulting companions being taken on trust and treated as ordinary, honest customers. It covered the whole transaction up to and including payment and must therefore, in my opinion, be considered as continuing and still active at the time of the change of mind. When that happened, with the respondent taking (as might be expected) no step to bring the change to notice, he practised to my way of thinking a deception just as real and just as dishonest as would have been the case if his intention all along had been to go out without paying.”

32.   In the present case it is not alleged and I don’t find any wrongdoing on the part of the accused with respect to the first vehicle.  It is clear, however, that payments on the first vehicle ceased within a matter of just seven days, and that the accused failed to pay outstanding amounts on that vehicle within a week of the 23 April meeting as agreed.  

33.   It is also clear that the accused hired the Toyota Land Cruiser 10 Seater, Registration No. BEW 840 at a rate of K600 per day, to be paid every few days, on the same terms as the first vehicle, and that he continued to use the vehicle up until it was repossessed, without any payment whatsoever, and beyond the close of the election campaign for which it was purportedly required.  He repeatedly failed over several weeks to respond to the complainant’s calls, and further failed to pay the outstanding amounts within a week of the meeting on 21 July as agreed.  Whilst he did subsequently respond to the complainant’s call and meet with him on 28 July, he did so in the knowledge that the complainant had involved the police by that stage. 

34.   Having regard to the conduct of the accused as a whole, I am satisfied beyond reasonable doubt that the obtaining of the vehicle was by a false representation.  The fact that to this day, more than a year later, the accused is yet to make any payment, or any attempt at payment, is also relevant to my determination that the State has eliminated any rational inference that he was innocently trying to sort out his financial situation.  If he was honest he would have made the payments by now and the charges may have possibly been dropped. 

35.   I am also satisfied beyond reasonable doubt that there was an intention to defraud the complainant.  I refer to the Supreme Court decision of Albert Alexander Age v The State (1979) PNGLR 589 where the court said:
“There can be no doubt on the evidence that not only was there a false pretence made by the appellant which induced the bank to grant the loan concerned but also there was the intent to defraud necessary to constitute the offence.  The intention was to induce the bank to do what it would not otherwise have done, if it had known the truth, and thereby to act to its detriment.  The appellant was dishonestly seeking an advantage for himself; and it is not essential to have established that necessarily, economic loss to the representee would have resulted (Balcombe v. De Simoni (1972) 126 CLR. 576 at pp. 583-584; Prosecutor’s Request No. 4 of 1974 [1975] PNGLR 365).”

36.   In this case there was a clear intention to induce the complainant to do what he would not otherwise have done, if he had known the truth, and thereby act to his detriment.  

37.   There does remain one final question, however, and that is whether the false representation might properly be regarded as a false pretence or a wilfully false promise.

38.   The State has particularized the offence as falsely pretending to Tony Nekin “that he would pay monies owed for the hire of his vehicle, at a rate of K600 per day, which would be paid at a later date”.  It might be said that is a wilfully false promise, which is defined in Section 403(2) of the Criminal Code Act, 1974 as a promise made by words or otherwise to do or omit to do any thing by a person who at the time of making the promise does not (a) intend to perform it; or (b) does not believe he will be able to perform it.

39.   In my view, however, the offence was correctly particularized as a false pretence. The gravamen of the offence was an ongoing representation as to a material existing fact, namely that the accused’s initial intention to pay for the vehicle at a rate of K600 per day, to be paid at a later date, continued, when in fact it did not. It was on this basis that the complainant allowed the accused to continue to hold and use the vehicle. 

40.   I am thus satisfied beyond reasonable doubt that Mr. Richard Budu by false pretence and with intent to defraud obtained from Mr. Tony Nekin a Toyota Land Cruiser, 10 Seater, Registration No. BEW 840.  

41.   Accordingly, I convict Mr. Richard Budu of the charge.
__________________________________________________________
Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Prisoner