N7990

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 39 of 2019

THE STATE

V

WANPIS APKAS

Waigani: Berrigan J
2019: 9, 20 May, 17 June, 5 July and 6 September

CRIMINAL LAW – Practice and procedure – Sentence – S. 390A(a)(b)(iii) of the Criminal Code - Unlawful demand for payment – “Extortion”.  

Cases Cited:

Goli Golu v The State [1979] PNGLR 653
The State v Tardrew [1986] PNGLR 91 
The State v Frank Kagai [1987] PNGLR 320.
Rex Lialu v The State [1990] PNGRL 487
Lawrence Simbe v The State [1994] PNGLR 38
The State v Titus Kep & Ors (2004) N2616
The State v Junior Leo Mailen Cr No 965 of 2004, unreported, 11 December 2007
The State v Nathan Mailen and Junior Leo Mailen, (2007) N5036
Kumbamong v The State (2008) SC1017
The State v David Mabo (2009) N3884

References cited

Section 19 of the Criminal Code 
Section 390A(a)(b)(iii) of the Criminal Code (Ch. 262) (the Criminal Code)

Counsel

Ms. T. Aihi and Ms. K. Kametan, for the State 
Ms. P. Tamutai and Mr. J. Ules, for the Offender

DECISION ON SENTENCE

6 September, 2019

1.	BERRIGAN J: The offender was convicted following trial on one count of unlawfully demanding payment from MASIP Engineering and Consultant Limited (MASIP), contrary to Section 390A(a)(b)(iii) of the Criminal Code (Ch. 262) (the Criminal Code), an offence which might commonly be referred to as “extortion”.

Facts

2.	MASIP is an electrical engineering company, based in Mt Hagen, which provides contracting services to the power industry, including generator installation, and the installation and servicing of electrical line and related work.  

3.	In about 2016 MASIP was contracted by Telikom PNG (Telikom) to undertake work on mobile network towers at seven sites in Western Highlands Province.  The company was engaged through the offender, a Field Engineer with Telikom. The company worked on the projects for about a year pursuant to a contract worth about K136,000.  

4.	In November 2017 the company’s Managing Director, Timothy Kapak, received a phone call from the offender demanding K30,000.  The offender told the complainant that if the monies were not paid, the company would be terminated and would not get any future work. He also told the complainant that the company’s outstanding payments would be delayed for a long time. 

5.	The threat to stop or delay payment lawfully due under contract, and to interfere with future tender processes was unlawful, and was made in order to obtain compliance with the demand, with the intent to extort payment from MASIP.  

6.	As a result of the demand, the complainant arranged for MASIP to pay K30,000 into the offender’s personal bank account with Bank of South Pacific (BSP); K15,000 on 17 November 2017 and a further K15,000 on 23 November 2017.   

7.	As noted in my decision on verdict, however, in general terms it is not necessary that the alleged target should actually give way to the threat or force, nor actually hand the thing, payment or compensation over to the person making the demand. The offence will be complete once for the purposes of extorting any thing, payment or compensation from a person, the demand is made, and in order to obtain compliance with the demand, the accused unlawfully threatens or intimidates any person (whether or not the same person). 

8.	The issue now before the court is the sentence to be imposed.

Submissions and Comparative Cases

9.	Defence counsel submitted that a sentence in the range of two to three years would be appropriate, wholly suspended on the basis that the offence involved no actual or threat of violence, and in order to promote restitution.  In support of its submission it relied on the following cases:

(a)	The State v Nathan Mailen and Junior Leo Mailen, (2007) N5036, in which two brothers were convicted in relation to two separate incidents.  In the first, Nathan Mailen pleaded guilty to entering the yard of a neighbouring family, whilst drunk, shouting and swearing.  He demanded K200 compensation over an incident involving the complainant’s son and his sister. He threatened violence against the complainant, his wife and daughter.  A fight broke out and the offender punched the man and his daughter, without causing serious injury. Having regard to the threats of violence, the actual violence, and the risk of serious injury, Cannings J sentenced the offender to three years taking into account his plea of guilt, remorse, lack of prior record and the presence of de facto provocation (regarding the incident with his sister); and

(b)	The State v Junior Leo Mailen Cr No 965 of 2004, unreported, 11 December 2007, referred to in the above decision, in which Cannings J imposed a sentence of three years for a similar offence: “demanding payment and issuing threats of personal violence”.

10.	The State too submitted that an appropriate head sentence lies in the range of two to three years.  It does not appear to oppose suspension.  In support of its submissions it relied on the following cases:

(a)	The State v Titus Kep & Ors (2004) N2616, Sevua J, in which five accused pleaded guilty to demanding compensation of more than half a million Kina from New Britain Palm Oil Limited, contrary to s. 390A(a)(b)(i)(ii) of the Criminal Code.  This followed a motor vehicle accident between a PMV driver and a truck owned by New Britain Palm Oil Limited in which three people died and several were injured. In response the accused issued threats against employees of the company and prevented them from going to work with the use of threats and force.  They also threatened and intimidated company officials and confiscated the keys to three motor vehicles, a tractor and four oil tankers and drove them to a plantation where they kept them.  They then demanded that the monies be paid or they would continue to hold the vehicles. The ringleader was sentenced to 5 years’ imprisonment in hard labour, with the others to serve 4 years each; and

(b)	The State v David Mabo (2009) N3884, Kandakasi J, in which the prisoner and two others had a confrontation with a Morobean family in Kimbe which resulted in the offender receiving a cut to his ear.  The offender and others armed themselves with bush and grass knives, sticks and stones and demanded K1180 with threats of violence, which monies were paid. The offender pleaded guilty, and the Court recognised that there was some non-legal provocation and that the amount of money was not substantial. Against this there were threats of violence, in company, against a person outside his home province.  The offender had a prior conviction for possession of a dangerous weapon.  On guilty plea he was sentenced to 4 years, less time in custody, with one year of the balance to be suspended upon restitution and a public apology. 

11.	The sentence in this case will be determined having regard to its own facts and circumstances: Lawrence Simbe v The State [1994] PNGLR 38.

12.	Defence counsel has asked the Court to sentence from the starting point of three and a half years.  In general terms, sentencing judges are not required to state a notional starting point for an offence and then specify any reductions or additions made.  The Supreme Court has made it clear that sentencing is not a mathematical exercise.  Rather, the preferred approach is to take account all relevant factors and them make a judgement as to the appropriate sentence: see Rex Lialu v The State [1990] PNGRL 487; Lawrence Simbe v The State [1994] PNGLR 38; and Kumbamong v The State (2008) SC1017. Relevant factors will include Supreme Court guideline judgements, where applicable. None apply here. This is sometimes referred to as the intuitive or instinctive synthesis approach: see the discussion in The State v Solomon Junt Warur (2018) N7545.  

Considerations on Sentence

13.	I have taken the following matters into account when determining sentence.

14.	According to the pre-sentence report and the submissions of defence counsel, the offender is 28 years old and from a village outside Mendi called Mogol in the Southern Highlands Province.  He is single and has no children.  He was born to two subsistence farmers and his mother died when he was just a child.  Despite early struggles, he is the only person in his community to have attained tertiary qualifications, graduating from the University of Technology with a Diploma in Electronics of Electrical Engineering and a Bachelor Degree in Electrical Engineering in 2013 and 2015, respectively. Following a short stint with Digicel PNG he commenced with Telikom under their Graduate Development Program in June 2015 before being promoted to Field Power Engineer, on probation, in 2017.  He was terminated by Telikom in July 2018 as a result of the offence and is currently unemployed.  He supports his father, step mothers and three siblings who are currently in primary school.  Given his status, his tribe and community rely on him to support cultural obligations, including compensation and bride price.

15.	The offender operates two registered businesses, Naga Transport Services and Karsum Electrical Contractor.   According to the means assessment report Naga owns (outright) a 25-seater coaster bus which currently operates on the Highlands highway and makes about K8000 monthly.  A land cruiser held by the business was sold in April this year for K80,000.   Details surrounding his electrical business are more limited but according to the report, the offender financially supports himself through that business. 

16.	In mitigation this is the offender’s first offence.  He is previously of good character and held in high esteem by his family, his tribe and his community, who have pleaded for a non-custodial term on his behalf.  According to his community leader, the community is very proud of the offender, who is well loved because of what he does for them and the LLG at large.  He is always consulted to provide financial and other support to resolve fights and issues within the community. He works and socialises well with everyone and takes up responsibilities in his family, church and community as a whole. A Detective Constable with the Criminal Investigation Division (Minor Crimes), who also comes from the offender’s home village, attests to the fact that the offender is usually a humble man focused on church and church activities and asks the Court to suspend the sentence.  His eldest brother makes similar comments and says that he is prepared to support the offender by taking out a loan to repay the monies if required.  A work reference provided by his pastor also states that the offender is a fully committed Christian, who works and socialises well with everyone.  

17.	I also take into account in mitigation that the offender has paid K10,000 in restitution to MASIP since conviction.  

18.	On allocutus the offender said that he accepted the Court’s decision.  He maintained, however, that he received the payment as appreciation and a refund (as asserted at trial). He said that whilst it was not an excuse, he was ignorant and didn’t realise that what he was doing was wrong.  He apologised to the complainant, to the company, to his family and the community, to whom he had brought shame.  He apologised to the Court whose time and resources he had wasted simply because of his “total ignorance”.  He had now learnt his lesson and would never make the same mistake again.  He is the sole breadwinner for his extended family and asked for his sentence to be suspended so that he could complete restitution.  

19.	I do accept his remorse as genuine but only up to a point.  He is clearly sorry for the shame brought to his family and the community as a result of the crime. Whilst acknowledging that ignorance of the law is no excuse he still claims, however, that he didn’t realise that he was doing anything wrong and that the money was received in return for goods and assistance provided.  

20.	As found on conviction, I was satisfied that the unlawful demand was made by the offender, and that at the time he made it he did so with the intention of extorting payment from the company. His unwillingness to acknowledge this and maintain that the monies were received as a refund and for assistance, which I specifically rejected, is troubling.  

21.	For similar reasons I do not accept defence counsel’s submissions that this was “a tiny slip in judgement” on the part of the offender.  This was a serious offence.  Nor can the offender be described as naïve or unsophisticated.  As the material from the pre-sentence and means assessment reports establish, he is a well-educated, enterprising and quite successful businessmen in his own right, despite his humble beginnings and relative youth.  

22.	I do accept, however, that the offence has had and will continue to have a grave impact on the offender.  I have no doubt that the offence will bring shame to him and his community.  As a result of his conduct he has lost a promising career at a very young age and will struggle to find employment in the future in his chosen career. 

23.	I also accept that on the evidence available, the impact on MASIP has been limited to the loss of K30,000. The complainant has joined the other calls for the offender to be placed on probation.  

24.	There are no extenuating or special factors in mitigation in this case.  

25.	Defence counsel has submitted that the following are also mitigating factors, such that, the offence was non-violent, the offender did not use an offensive weapon, or offensive words, or cause physical injury to threaten the complainant.  I agree that there was no actual or threatened physical violence or offensive language.  The absence of those factors is certainly relevant when considering the comparative cases but they are not mitigating factors as such; they are simply not present, and therefore not aggravating factors, in this case.   

26.	There are few reported decisions concerning s. 390A of the Criminal Code.  At least two, and it appears three, of the four cases referred to above concern unlawful demands for considerably smaller amounts of money using threats and/or actual violence.  The threats of, or actual violence, in those cases was clearly aggravating.  In at least two of those cases, however, the presence of some form of de facto provocation was  also taken into account in mitigation on sentence.  In all four cases the offenders pleaded guilty and received the benefit of that on sentence.  Whilst a plea of guilty may be taken into account in mitigation, a sentence must never be made more severe because a person has insisted on his rights under ss. 37(4)(5) of the Constitution including the right under s. 37(4)(a) to have the charged proved according to law.

27.	This was a very different, but nevertheless still very serious case of unlawful demand for payment, albeit for different reasons.

28.	In this case the nature of the threat against the person concerned, the company, was not physical violence but economic or financial damage, including the loss of monies rightfully due from, and the arbitrary loss of potential future work with, one of the country’s few, large telecommunication companies.  

29.	The threat also concerned a significant amount of money, which was received by the offender to his personal account for his own benefit.  The offence was clearly motivated by financial gain.   Moreover, the offender abused his position of trust with his employer, Telikom, to commit the offence, taking advantage of his position of Field Engineer as the “link” between contractors and Telikom, both of whom relied on him to act with propriety.

30.	In The State v Titus Kep (supra) his Honour Justice Sevua said (emphasis added):

“If we allow this kind of lawlessness to go on unpunished, it will eventually destroy the economy of this province and the country and deter genuine investors from coming to invest here to help develop the country financially and economically.

For these reasons, it is my view that although this offence may not be a very common or prevalent offence, it is one which must be punished by incarceration to deter similar conduct in any major industry or corporate sector which brings in millions of kina in needed revenue to the country. So the economic aspect of the effect of this kind of offence to the nation is a paramount consideration, not necessarily to the company.”

31.	The present case is clearly quite different from, and not as serious as, that case which involved multiple offenders, a demand for more than half a million kina, over a period of time, involving threats and the use of force to persons and property. 

32.	Nevertheless, the sort of offence in this case is for obvious reasons much more difficult to detect and has the potential to have an insidious effect on the economy.  Some businesses will simply refuse to buckle to such demands and take their investment elsewhere.  Others will comply, losing profits in the process.  Eventually it can lead to a situation where it is generally regarded as a normal part of doing business. This is clearly detrimental to an open and competitive market, which in turn is important for ensuring the delivery of high-quality products and services at fair prices to consumers.

33.	To be clear I am not suggesting that is what has happened here.  The sentence in this case will be confined solely to the facts established.  Having regard to the potential damage these sorts of offences can have when left unchecked, however, it is my view that a custodial sentence is warranted to deter others. 

Sentence 

34.	The offender has been convicted of one count of unlawfully demanding payment contrary to s. 390A(a)(b)(iii) of the Criminal Code, the maximum penalty for which is seven (7) years of imprisonment.  S. 19 of the Criminal Code provides the Court with broad discretion on sentence and it is well established that the maximum penalty is normally reserved for the most serious instances of the offence: Goli Golu v The State [1979] PNGLR 653. Whilst this case does not fall within that category, the offence is nevertheless a serious one.  The aggravating factors, namely the nature of the threat, the amount involved and the breach of trust, outweigh the mitigating factors, i.e., the fact that this is the offender’s first offence, the demonstration of some remorse on his part, and his partial, if belated, restitution.  I have also taken into account the significant impact of the offence on his own future employment prospects.    

35.	The nature of the offence and its potential to damage business and the broader economy call for both specific and general deterrence. Having regard to all of the above matters I sentence the offender to three years of imprisonment in hard labour.

36.	I have given serious consideration to whether or not I should suspend the sentence.  In The State v Tardrew [1986] PNGLR 91 the Supreme Court set out three broad, but not exhaustive, categories in which it may be appropriate to suspend a sentence, namely: where it will promote the general deterrence or rehabilitation of the offender; where it will promote the repayment or restitution of stolen money or goods; or where imprisonment would cause an excessive degree of suffering to the particular offender, for example because of bad physical or mental health. 

37.	I have also considered defence counsel’s submission regarding Doreen Liprin v The State (2001) SC 673 in which Amet CJ expressed the view that in cases involving misappropriation of amounts of about K6000, the Court should seriously consider alternatives to imprisonment that will achieve the purposes of retribution, restitution and rehabilitation.  This case is nevertheless different having regard to its nature and the amount involved. 

38.	The calls from the offender’s community for suspension have been strong. I am satisfied from his pre-sentence report that he has strong prospects for rehabilitation.  Probation Services identifies him as suitable for probation. 

39.	I don’t intend to order any further restitution. The primary concern in this case is the need to prevent similar offences in the future rather than remedy the loss suffered by the company in this case.  

40.	I am satisfied that partial suspension of the sentence would promote his rehabilitation into the community by enabling him to resume his businesses and support himself, his family and community earlier than otherwise would be the case. This is not an exercise in leniency but an order made in the community interest: The State v Frank Kagai [1987] PNGLR 320.

41.	Having regard to those matters and the partial restitution already paid, I suspend one of the three years imposed.  

42.	I make the following orders.  The offender is sentenced to three years’ imprisonment in hard labour, one year of which is suspended on the following conditions:

(a)	upon release, the offender shall perform appropriately designed community work under the supervision of the Probation Service;

(b)	the work and supervision regime is to be undertaken for the balance of his sentence on weekends; 

(c)	the offender shall enter into his own recognisance to keep the peace and be of good behaviour for the balance of his sentence; and

(d)	the Probation Service is to provide 6 monthly reports.

43.	The offender will serve two years in custody.
_____________________________________________________________
Public Prosecutor:   	Lawyer for the State		
Tamutai Lawyers:   	Lawyer for the Prisoner