N8732 

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 579 OF 2018

BETWEEN:
AUSTRALIA & NEW ZEALAND BANKING GROUP (PNG) LIMITED
Plaintiff

AND:
SYLVESTER LAFANA
Defendant

Lae: Dowa AJ
2020:  08th, 21st September & 5th November

TORT – CONVERSION - plaintiff’s claim based on the common law tort of conversion –principles of conversion – discussion of -  plaintiff alleges the defendant stole and misappropriated sum of money to his own use while employed with the plaintiff – plaintiff’s claim is liquidated – defendant has not filed a defence and no evidence in rebuttal - Plaintiff has proved its claim on the balance of probabilities – judgment is entered in favour of the Plaintiff in the sum claimed with interests and costs

Cases Cited:
Papua New Guinea Cases

Covec (PNG) Ltd v Kama [2020] PGSC 9; SC1912
TT Angore Noa Hai Investment Ltd v Buna (2019) N7881
Yooken Paklin v The State (2001) N2212

Overseas Cases:

R v Ratten [1972] AC 378

Counsel:

E. Noki, for the Plaintiff
J, Kusip, for the Defendant

JUDGMENT

5th November, 2020

1.	DOWA AJ:	The Plaintiff instituted recovery proceedings against the Defendant seeking damages for monies converted to his own use.  This is a decision after trial on both issues of liability and quantum.

2.  	At the close of the Plaintiff case on 8th September 2020, the defence applied for dismissal of the proceedings submitting, that the evidence is weak and there is no case for the Defendant to give evidence in rebuttal. I reserved the ruling until 21st September 2020.

3.	On 21st September 2020, I ruled that the Plaintiff provided sufficient evidence for the trial to continue. The defendant was then granted leave to give evidence. The defendant elected not to give evidence and closed his case.

4.	The parties then made submissions. Ms Noki relied on her written submissions. Mr Kusip, counsel for the Defendant made oral submissions and also gave undertaking to file written submissions. I directed Mr Kusip to file his written submissions by 30th September 2020.  I reserved my decision to a later date which I now deliver. I note the Defendant has not filed his written submissions since.

	Facts

5.	The Plaintiff is a Commercial bank.  The Defendant is a former employee of the Plaintiff bank.  He was employed as the custodian of the ATMs in Lae in 2016. The Defendant’s duty involved daily replenishment of cash, removal of cash and reconciling of cash returns.  

6.	It is alleged that between 15th January 2016 and 12th July 2016, in the course of employment, the Defendant fraudulently converted to his own use a total sum of K1, 488, 260.00, the property of the Plaintiff.

7.	The fraudulent actions of the Defendant was uncovered in September 2016 and investigations were carried out thereafter. The matter was reported to police and the defendant was charged with misappropriation. 

8.	The Plaintiff instituted the current proceedings to recover the monies allegedly stolen by the Defendant.

	Issue

9.	The main issue before the court is whether the Plaintiff has proved liability on the balance of probabilities. 

	Law

10.    The relevant law to be applied is the common law of tort of conversion. Conversion is defined as someone dealing with a chattel or property not belonging to him in a manner inconsistent with the rights of the true owner.

11.	It was adopted and applied in the case of Covec (PNG) Ltd v Kama [2020] PGSC 9; SC1912 by the Supreme Court that conversion is defined as:

	an act…. of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it.  Two elements are combined in such interference: 	(1) a dealing with the chattel in a manner inconsistent with the right of the person entitled to it, and (2) an intention in so doing to deny that person’s right or to 	assert a right which is in fact inconsistent with such right.  But where 	the act done is necessarily a denial of the other’s right or assertion of a right inconsistent with it, the tort may have been committed, though the doer may not know of or intend to challenge the property or possession of that other.  If a person, not being an agent or bailee, deals with the goods of another as his own, 	his intention is irrelevant, for liability in conversion is strict.” (See salmon on 	the Law of Torts, 16th Ed., at pp96-97; Wahad v Wilkinson [2006] PGNC 94).

12.	In TT Angore Noa Hai Investment Ltd v Buna (2019) N7881, David J discusses the principles of conversion in detail and lists amongst others the following elements to be satisfied to succeed in a claim for conversion:  

1.	 He is the owner of the chattel or one who derives title from the owner (special property);
2.	The defendant is dealing with the chattel in a manner repugnant to the immediate right of possession of the owner of the chattel or one who derives title from the owner;
3.	The defendant’s act must constitute a denial of the claimant’s right;
4.	The dealing with the chattel is intentional.

	The Burden and Standard of proof

13.	The Defendant has denied liability in the proceedings.  The plaintiff has the onus of proving his loss on the balance of probabilities.  It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)

Evidence

14.	At the hearing, the Plaintiff tendered the following affidavit evidence which are exhibited below:

1.	Affidavit of Titus Kemi sworn 13/07/20 filed 20/07/20 Exhibit P1
2.	Affidavit of Andrew Moana sworn 17/07/20 filed 22/07/20 Ex P2
3.	Affidavit of Sam Wangon sworn 08/07/20 filed 22/07/20 Ex P3
4.	Affidavit of Tony Vagi sworn 26/07/19 filed 31/07/20 Ex P4

15.   	The Affidavits were tendered into evidence without much contention and without cross-examination. The Defendant did not call evidence. Let me summarise the evidence of each witness.

 Andrew Moana

16.      Andrew Moana is an employee of the Plaintiff, as a Bank Teller.  His duties involve receiving deposits and making payments to commercial customers, and transferring monies to ATMs for cash replenishment, and accepting cash returns from ATMs.  He says the counting and reconciling of cash returns against each replenishment is done daily.  Mr Moana deposes that the Defendant was at the material times the custodian of the ATMs in Lae. The Defendant’s duties included:

a)	Daily replenishment of the ATM with cash.
b)	Removing remainder of cash from previous days stock of cash (cash returns)
c)	Counting and reconciling the cash returns against the cash replenishments.
          
17.	Mr Moana deposes that the above information is recorded in the following documents:

a)	    Journey copy;
b)	    Cash docket; and
c)	    ATM cash balance sheet.

18.	Mr. Moana says the counting and reconciling of cash returns against the cash replenishment is verified by two (2) people and then given to him for processing to return to the bank’s cash account. Mr Moana deposes, he noticed that the Defendant’s ATM cash returns were not given daily or on a regular basis. This went on for a while and he became concerned and reported the matter to his Supervisor, (Head Teller) Tom Apake.  Mr Moana deposes that upon further investigation it was established that the Defendant did steal or convert to his own use a sum of money exceeding K1.2million, being monies belonging to the Plaintiff over a period of time between January 2016 and July 2016.

	Sam Wangon

19.	Sam Wangon is a bank officer with the Plaintiff bank, as District Manager, Retail banking Northern Region.  He is responsible for the seven (7) ANZ branches including the ATMs at the relevant period.  Amongst his duties, he is responsible for the supervisory role on ATM reconciliations.

20.	He deposes that around September 2016, the bank located some missing documents which were later identified as evidence of missing cash returns. The cash returns were not returned to the bulk teller.   He then questioned the Defendant about the missing cash.  In response, the Defendant admitted taking the money, totalling K1.2 million.  The Defendant was asked where the money was and if he could return it to the bank. The Defendant said he used up all the money and gave them to a gold buyer, and he would return the money later.

21.	Mr Wangon deposes, he then referred the matter to Fraud Squad, Lae police.  The Defendant was subsequently charged by the police, and the case is pending trial in the Crimes Court.

	Tony Vagi

22.	Tony Vagi is the Plaintiffs Manager Group Investigations for period 2009 and 2017.  He is based in Port Moresby, the Plaintiff’s Head Office.  His duties involve the investigations of all internal and external fraud related matters.  He was asked to investigate the fraud allegations against the Defendant involving the Lae Market branch ATM.

23.	Mr Vagi deposes, he interviewed the Defendant at the Lae Police Station.  During the interview, the Defendant freely admitted taking the money totalling K1, 279, 640.00. He said the Defendant freely gave details of the dates and the amounts taken over a period of seven months. Mr Vagi deposed that the amounts and details given by the Defendant matched with the ANZ Lae Market Branch’s ATM Reconciliation. Mr Vagi attached to his affidavit a schedule showing the dates and amounts stolen by the Defendant. The Defendant was said to be remorseful.  The Defendant admitted he used part of the money to buy two motor vehicles, A Toyota Land Cruiser Reg. No. MAE 623 and one Mazda Titan Truck Reg. No. LBQ 591.  The vehicles were then seized by the Plaintiff.  

	Titus Kemi

24.	Mr Titus Kemi is an employee of the Plaintiff bank.  He is employed as Manager Group Investigations.  He is based in Port Moresby, the Plaintiff’s Head Office.  He deposes, he accompanied Mr Vagi in investigating the allegation of fraud against the Defendant involving the ATMs in Lae.  He was present when the Defendant admitted stealing the money.  He heard the Defendant giving details of the amounts and dates when the money was stolen over a 7-month period.  His evidence is identical to the evidence of Mr Vagi, and I need not repeat it.

	Submissions by Counsel

21.	Ms Noki for the Plaintiff submitted that there is overwhelming evidence that the defendant stole or converted to his own use a sum exceeding K1, 488,260.00 being monies or property of the Plaintiff.  She submitted that the Defendant was the custodian of the Plaintiff’s money.  During the course of employment, he had excess and custody of the monies at the relevant period.  During questioning, the Defendant has admitted taking K1, 279,640.00 over a period of seven months.  She submitted that part of the stolen money was used to purchase two motor vehicles, a Toyota Landcruiser Reg. No. MAE 623 and Mazda Titan Truck Reg. No. LBQ 591.  These vehicles were then given back to the Plaintiff by the Defendant.  In the circumstances, Ms Noki submitted that the Plaintiff has discharged the burden of proof on the balance of probabilities.

22.	Mr Kusip, Counsel for the Defendant, on the other hand, submitted that the Plaintiff has not proven its claim.  He submitted the evidence given by the Plaintiff witnesses were hearsay only.  There was no credible evidence.  There was no evidence of physical dealing or direct possession of property belonging to the Plaintiff by the Defendant. Mr Kusip submitted that the witness statements contained just mere figures without tangible evidence.

	Reasons for Decision

23.    I have studied the pleadings, the evidence, and submissions of counsel. Following is my decision and reasons for decision.

24.	The Plaintiffs claim is for moneys stolen or converted to his own use by the Defendant.  The allegations are that the Defendant was the custodian and was in custody of the cash, being the property of the Plaintiff when the moneys went missing.  The Plaintiff provided two lists showing dates and amounts which went missing.  The first list relates to the total sum of K1, 488, 260.00 claimed in the proceedings.  The second list contains particulars of monies totalling K 1,279,640.00 being the amount the Defendant admitted stealing. 

25.	The Plaintiff relies on four witnesses to prove its claim.  The first two witnesses, Andrew Moana and Sam Wangon are fellow employees of the Plaintiff, who were directly engaged with the Defendant at the Lae Branch.  The next two witnesses, namely Tony Vagi and Titus Kemi, were external investigators, also employees of the Plaintiff, from their Head office, Port Moresby.

26.  	The summary of the evidence is that the Defendant is a former employee of the Plaintiff Bank.  He was the custodian of the ATM machines in Lae.  He was responsible for cash replenishment and returns each day.  He was also responsible for the reconciliation.  The evidence shows between January 2016 and July 2016, a total of K1, 488, 260.00 was stolen.

27.	The evidence suggests it was the Defendant who stole the money and used it for his own purposes to the detriment of the Plaintiff.  There is evidence that the Defendant admitted taking the money.  There is evidence that some of the monies were used by the Defendant to buy two motor vehicles which were later seized by the bank. The matter has also been referred to fraud Squad and the Defendant has since been charged with stealing and misappropriation. His case is pending before the Crimes Court.

28.	The Plaintiff, however, did not produce any documents like the cash dockets, journal copies, and the ATM cash balance sheets etc.  There is no evidence or incidence of the Defendant being caught with actual cash.

29.     I am also mindful of the Defendant’s submissions that some parts of the Plaintiff’s evidence contain hearsay material and that the Defendant was not caught with the actual and physical dealing of the Plaintiff’s property. 

30.  	The question I ask is whether the evidence provided so far is sufficient to establish liability on the balance of probabilities. To arrive at a just conclusion, I need to consider and have regard for the following matters:
 
•	 Weight to be given to uncontested sworn affidavit evidence
•	Admissibility of hearsay evidence under the doctrine of res gestae
•	Admissibility of admissions by the Defendant
•	 Pleadings support a finding in favour of the Plaintiff
•	 Any ulterior motives of witnesses
•	Any inference to be drawn from absence of Rebuttal evidence by the Defendant.

	Affidavit Evidence

31.	What weight should the Court give to the uncontested sworn affidavits.  The four witnesses have consciously sworn Affidavits intending that the facts contained in it are true and to be relied on.  Swearing an affidavit is a serious matter.  Signing a false affidavit is an offence.  I find the witnesses have sworn facts on matters they have personal knowledge due to their working relationship with the Defendant and also from information they have obtained in the course of their investigations.  The affidavits were tendered into court as evidence without objection.  The deponents have not been cross-examined on the contents.  The facts sworn are not discredited or contradicted in anyway. I find the evidence of the four witnesses as consistent and corroborative. I will therefore give due weight to the evidence of the witnesses.

	Motives of Witnesses

32.	Did the four witnesses have any ulterior motives to blame the Defendant, a fellow employee.  There is no suggestion that the witnesses collaborated to shift the blame on the Defendant.  There is no suggestion that they lied or had a motive to fabricate. The witnesses took a bold step to tell the facts as they were.  I find the evidence of the four witnesses truthful and credible.

	Relevance of Hearsay Evidence under the doctrine of Res Gestae

33.	The evidence of Sam Wangon, Tony Vagi and Titus Kemi contain some hearsay evidence.  This evidence relates to admissions made by the Defendant during the interview.  The deponents say, the Defendant admitted that he converted to his own use the sum of K1,279, 640.00 being monies belonging to the Plaintiff.  The admissions were obtained during the investigations.  The admissions when retold, appear to be hearsay but are admissible in fact under the doctrine of res gestae because of its relevance.  There is no evidence that the Defendant was intimidated or coerced in any way.  It was given voluntarily in response to questioning during the investigations.  It was given spontaneously, freely and in more detail.
34. 	In State v Petrus (2020) N8380 Geita J, in adopting the principle of res gestae as expressed by Lord Wilberforce in the case of R v Ratten [1972] AC 378 said this in paragraph 33 of the judgment:
	“….. I will accept this piece of hearsay evidence as res gestae. I have been ably assisted by Ms Ambuk on a case law on this point to which I have adopted the principle. Lord Wilberforce in the case of R v Ratten [1972] AC 378 at 3387 had this to say and I quote:
“The mere fact that evidence of a witness includes evidence as to words spoken by another who is not called is no objection to its admissibility. Words spoken are facts just as much as any other action by a human being. If the speaking of the words is a relevant fact, witness may give evidence that they were spoken. A question of hearsay only arise when the words spoken are relied on ‘testimonially’, i.e. as establishing some fact narrated by the words”
 (Emphasis mine).
35.	In State v Wanjil (1997) PNGLR 684 Lenalia AJ (as he then was) said:
	“The second issue was that during the course of the State’s evidence Mr Kumo repeatedly referred to certain evidence and urged the Court to accept them under the "res gestae" rule. The doctrine of res gestae is mainly concerned with admissibility of statements made contemporaneously with the "factum probandum". A fact may be relevant to the "factum probans" because it throws light on it by reason of its proximity in time, place or circumstances. It is said that under this doctrine evidence may be received although it may infringe the rule against hearsay, the opinion rule or the rule against self-corroboration. Thus, where an item of evidence forms part of the res gestae rule, it simply means that, that item is relevant on account of its being made contemporaneously with the matters under investigation.”
36.	Applying the above principles to the present case, I find the Defendant’s admissions are admissions of facts as they are relevant and uttered spontaneously and freely in the answer to questioning by the witnesses in the normal course of their duties. I also find the probative value of accepting the admissions as corroboration of the Plaintiff’s evidence outweigh any prejudicial effect on the Defendant. This is especially so when the admissions were only a confirmation of the evidence the Plaintiff has had in its possession in the first place.  
	Pleadings

37.	The Statement of claim made specific allegations against the Defendant, with a relief for liquidated sum of K1, 488, 260.00.  Paragraphs 7, 8 and 9 of the Statement of Claim contain details of dates and amounts of money allegedly stolen by the Defendant.  The Defendant was required to verify his Defence.  The Defendant filed a Defence on 8th March 2019 but without verification.  After a careful perusal of the Defence, I note there is no specific denial by the Defendant.  The Defendant repeatedly pleaded he was not the only employee in charge of the ATMs but he did not specifically deny stealing the Plaintiff’s money. The defendant was clearly avoiding the issue by pleading generally.  The inference that can be drawn is that the Defendant did not have a defence on the merits. 

	Absence of Rebuttal Evidence

38.	The Defendant did not give evidence in rebuttal.  He was given leave by the Court to give evidence.  He chose not to give evidence at the trial.  That is his right, and that is how he wanted to conduct his trial.  The Court respects his decision.  After all, the onus is on the Plaintiff to prove its claim, and not the Defendant.

39.	However, there were specific allegations made against the Defendant.  The evidence was that he was custodian of the money that went missing.  There was evidence that he made admissions of stealing K1, 279, 640.00 over a period of seven months.  There was evidence that he used part of the monies to buy two motor vehicles, which he voluntarily returned them to the Plaintiff.  In the circumstances, it is not unreasonable to expect, the Defendant to give rebuttal evidence, denying the allegations, or at least discrediting or contradicting evidence brought against him.  By choosing to remain silent, allows for an inference to be drawn that he has nothing to say in rebuttal or that his evidence might not assist him in his defence. The common law principle of Jones v Bunkel which forms part of our law is applicable. The principle “provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence could not have assisted the case of the party who might be expected to call the witness” by Kirby J in Ghazal v GIO (1992)29 NSWLR336

40.	This principle is often applied in criminal proceedings but the reasoning is equally applicable in civil cases.  In my view, the Defendant’s silence has strengthened the evidence of the Plaintiff’s witnesses and the case of the Plaintiff.  That is, their evidence remains unchallenged.

Conclusion

41.	After considering the pleadings, evidence, and submissions and other relevant factors I have discussed above, I am satisfied that the evidence of the Plaintiff is acceptable and be given due weight.

42.	I find the Defendant a former employee of the Plaintiff Bank, was the custodian of the ATM machines in Lae.  He was responsible for cash replenishment and returns each day.  He was also responsible for the daily reconciliations.  Between January 2016 and July 2016, a total of K1,488,260.00 was converted by the Defendant to his own use.

43.	I find it was the Defendant who stole the money and used it for his own purposes.  I accept the evidence that he admitted taking the money, not as to prove the fact of conversion but for probative value to evidence given by the witnesses of the Plaintiff.  There is evidence that some of the monies were used by the Defendant to buy two motor vehicles which were later returned to the bank. The matter has also been referred to fraud Squad and the Defendant has since been charged with stealing and misappropriation.  I also find the money belongs to the Plaintiff’s cash account, the property of the Plaintiff.  Money in cash is a property, interest or chattel capable of being dealt with or converted to one’s own use, in this case by the Defendant, in the manner inconsistent with the rights of the Plaintiff Bank.  The Plaintiff has therefore suffered loss as a result.

44.	The standard of proof required in a civil case is on the balance of probabilities.  I am satisfied that the Plaintiff has proved its claim on the balance of probabilities, and there shall be Judgment for the Plaintiff.

45.     	In respect of the damages, I note the total amount claimed is K1,488,260.00.  There is evidence that the total amount stolen by the Defendant is K1,488,260.00 although there is admissions by the Defendant for a lesser sum of K1,297,640.00.  In my view the Plaintiff is entitled to judgment for the full sum claimed in the statement of claim.

46.     The Plaintiff claims interest and cost of the proceedings. I am inclined to award interest at 8% and cost of the proceedings.

Orders

1)	Judgment is entered for the Plaintiff in the sum of K1,488,260.00. 
2)	Interest on the judgment sum is awarded at 8% from date of filing of the Writ of Summons to date of judgment, and further interest shall accrue at the rate of 8% until settlement.
3)	The Defendant shall pay the cost of the proceedings to be taxed, if not agreed.
4)	Time be abridged.

________________________________________________________________
Bradshaw Lawyers	: Lawyer for the Plaintiff
Kusip Lawyers: Lawyer for the Defendant