N8247

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NO. 1330 OF 2018

THE STATE
V
WILLIAM  MODUDULA

Alotau:  Toliken, J
2019:  15th August
2020:   4th February

CRIMINAL LAW – Sentence – Misappropriation of employer’s property by employee – Plea – Mitigating and aggravating factors considered –  Prisoner has propensity for dishonest application of property – Offer for full restitution – Appropriate sentence – 4 years – Wholly suspended with condition for full restitution – Criminal Code Ch. 262, s 383A(1)(2)(b)(d).  

Cases Cited:

Avia Aihi v The State (No.3) [1983] PNGLR 92
Belawa v The State [1988-1989] PNGLR 496 
GoliGolu v The State [1979] PNGLR 653
Public Prosecutor v Tardrew[1988 – 89] PNGLR 91
The State v Felix Kautete(2018) N7544
The State v LeamegaNoka(2019) N7849
The State v Mercy Lohia(2018) N7614
The State v WaraiKisua(2018) N7513
The State v Watangia (2018) N7175

Counsel:

A Kupmain, for the State
N Wallis, for the Prisoner

JUDGMENT ON SENTENCE

04th February, 2020

1.	TOLIKEN, J: 	William Modudula, on 15th August 2019, you pleaded guilty to an indictment charging with one count of misappropriation, an offence under Section 383A(1)(2)(b)(d) of the Criminal Code, Ch. 262.

2.	You were charged that on 18th March 2015 at Losuia Station, Kirriwina Island, you dishonestly applied to your own use K12,000.00 worth of Office Stationery, the property of Nur Printing & Office Supplies Limited.

FACTS

3.	The brief facts upon which I am going to sentence you are as follows: On 18th March 2015, you were employed by Nur Printing as a Sales Representative at Losuia Station.  You were responsible for the Sales and Distribution of Office Supplies for the company at Kirriwina and especially to schools there.  You would normally visit the schools and collect orders which you would then send to the Head Office here in Alotau. Upon receipt of these orders, the company would then deliver the supplies to the schools.

4.	In this case, you raised two Invoices.  The first was Invoice No.031682 for the amount of K7,576.84 and the second was Invoice No.031683 for the amount of K5,011.88 for a total sum of K12,588.72 under Vakuta Primary School.

5.	You, however, did not secure those invoices from the school.  Rather, you fraudulently raised them and sent them off to Head Office, which subsequently shipped out the supplies to Kirriwina.  These supplies were, however, not delivered to the school and remained unaccounted for, because you had subsequently dishonestly applied them to your own use.

THE OFFENCE

6.	The offence of misappropriation normally carries a maximum penalty of 5 years imprisonment.  However, where the offender, among other things, is an employee and the property dishonestly applied is the property of his employer, or the property misapplied is of a value of K2,000.00 or upwards, as in your case, an offender is liable to imprisonment for a term not exceeding 10 years.

7.	In your case, the property you misapplied belonged to your employer and was worth more than K2,000.000, hence, you are liable to be imprisoned for 10 years.

8.	It is, however, settled that the maximum penalty is usually reserved for the worst instances of offending and that each case must be treated on its own facts and circumstances so that the punishment must fit the crime as often said. (Goli Golu v The State [1979] PNGLR 653; Avia Aihi v The State (No.3) [1983] PNGLR 92).

ISSUE

9.	And so, if I find that this is a worst case, I might impose the maximum penalty on you.  Other than that, you will be sentenced to a lower period should I am of the view that your offence is not a case of misappropriation.

10.	At the outset, I can say that yours is not a worst case, hence, it will not attract the maximum penalty of 10 years but something lower.  Whatever your sentence will be will depend on your mitigating and aggravating factors and other considerations which I shall presently consider.

SENTENCING PRINCIPLES 

11.	To give you some idea about what you should expect, it is appropriate to refer to the prevailing sentencing principles set by the Supreme Court in the case of Belawa v The State [1988-1989] PNGLR 496.  There, the Supreme Court held that the following factors ought to be taken into account when sentencing an offender:

(a)	The amount or value of property taken;
(b)	The quality and degree of trust reposed in the offender;
(c)	The period under which the offence was perpetrated;
(d)	The effect of the offence on the public and public confidence;
(e)	The use to which the money was used;
(f)	The effect upon the victim;
(g)	Whether any restitution was made;
(h)	Any expression of remorse;
(i)	The nature of the plea;
(j)	Any prior record;
(k)	The effect on the offender; and
(l)	Any matters in mitigation special to the offender such as i.e.
health, young or old age, being placed under great strain or perhaps long delay in being brought to trial.

12.	The Supreme Court also suggested the following sentencing scale (even though these may now be outdated)depending on the amount or value of property misapplied:

K1 – K1,000	-	a goal term should rarely be imposed.
K1,000 – K10,00-		up to two years.
K10,000 – K40,000 -	up to three years.
K40,000 – K50,000 -	up to five years.	

13.	It is also worth noting that Parliament has since made some amendment to the penalties for misappropriation so that where the amount misapplied is between K1 million but does not exceed K10 million an offender may be sentenced to 50 years imprisonment.  Where the amount exceeds K10 million an offender shall be sentenced to life.

14.	This increase in the penalties has largely been brought about, not only by the prevalence of this offence, but also by the huge amounts of money now being misappropriated.

15.	While the majority of offenders will continue to be those that misapply properties below K1 million, it is apparent that Parliament is not oblivious to the increase or upsurge of this type of offence and the huge amounts of money now being misappropriated which run into millions of Kina.

SENTENCING TREND

16.	Let me now consider a few cases of misappropriation, most of which were cited to me by your lawyer, and the sentences they attracted.

17.	The State v Warai Kisua (2018) N7513 per Koeget, J:  The offender there was employed by PNG Micro Finance Limited in Daru as its Branch Manager.  He directed two tellers to lend him varying amounts of money totaling K30,000.00 which he did not repay fully.  He only repaid K25,000.00.  He pleaded guilty for misappropriating K30,000.00 belong to his employer and was sentenced to 18 months imprisonment which was wholly suspended with conditions including restitution.

18.	The State v Watangia (2018) N7175) per Susame, AJ.  The offender there was employed by Oceania Communication Limited as Operations Logistics Officer and Stock Controller.  He had over sight of stock, dispatch and sales of Digicel PNG Products while the Ground Manager was on leave.  Audits were done by the company’s Operations Manager and later by the Ground Manager after he resumed duties.  The Audits revealed that K10,000.00 cash, Prepaid SIM Cards and Phones valued at K6,814.50 were unaccounted for while the offender was in-charge of the company’s operations.  He was originally charged for misappropriating K17,114.50 but on plea bargaining.  This was reduced to K9,000.00.

19.	On a plea of guilty was sentenced to 3 years which was wholly suspended with an order for restitution.

20.	The State v Felix Kautete (2018) N7544 per Berrigan, J.  The offender there met the complainant and her husband at the NCDC Office and showed them the photographs of a motor vehicle which he said was on internal tender for sale.  All that they needed to do was make the payment to him and he’ll take care of things for them. The next day, they gave him K24,00.00 cash.  He asked them to return at 4.00 pm while he sort things out including processing a cheque from NCDC to MVIL for payment of registration.  They returned but were advised that things will be sorted out the next day.  The offender never returned to the complainant but instead applied the money to his own use.  On his guilty plea, the offender was given 3 years suspended sentence with a condition for restitution.

21.	The State v Mercy Lohia (2018) N7614 per Berrigan, J.  The offender was employed by the PNG Red Cross Society as an Accounts Clerk.  Over a period of time, she forged the signatures of authorized signatories for 25 cheques for a total sum of K19,151.75 belonging to the Society.  She pleaded guilty to one count of forgery and one count of uttering.  She was sentenced to 3 years which was wholly suspended with condition for restitution.

22.	In The State v Leamega Noka (2019) N7849, in a fundraising drive by parents and citizens of Koyabule Primary School here in Alotau, the offender was appointed to collect the funds raised and pass them over to the school’s Bursar.  She collected a total of K9,555.50 but did not hand it over to the Bursar.  She instead applied the funds to her own use.  I sentenced the offender to 3 years imprisonment which I wholly suspended with condition for restitution.

23.	We can then see from the above that all cases attracted 3 years suspended sentences.

CURRENT CASE

(i)	Antecedents

24.	Now to your case.  What do we know about you?  You now 40 years old but 36 years old at the time of the offence.  You come from Wedau Village, Weraura RLLG, Alotau District.  You are married with 4 children.  You are an Anglican and were educated up to Grade 12.  You are currently employed by EM Office Supplies as Senior Sales Representative.  You were previously employed in various capacities, as Shop Assistant with Steamships, and Tally Clerk with Trukai Rice.  You later were employed by More Stationeries as Sale Representative and later promoted to Assistant Sales and Marketing Manager before joining Nur Printing & Office Supplies in the same capacity, a position you held at the time of your termination.You are a first-time offender and had been out on bail since your arrest.

(ii)	Allocutus

25.	You apologized for your crime and offered to make full restitution.  You said you were concerned about your young children who are all in primary school.  Your imprisonment will be a big challenge for them and for their sake, you asked for leniency.

(iii)	Submissions

26.	Mr. Wallis submitted in your behalf that an appropriate sentence for you ought to be 3 years which ought then to be suspended with a condition for full restitution which should be made within 4 months.

27.	You Pre-Sentence Report is quite revealing.  It appears that you have a propensity for fraudulent and dishonest behavior which also appears to have continued into your new job with EM Office Supplies.  According to Mrs. Monica Basinauro, the Business Manageress, you have been caught once doing side sales of supplies worth K1,000.00 over which you were reprimanded, but not terminated due to intervention by your good friend and part-owner of EM Office Supplies, Mr. Esmond Basinauro who interestingly was a former colleague of yours at Nur Printing, and like you was also terminated for fraudulent behaviour against the company.

28.	The complainant does not want restitution.  Rather, it wants you to be sent to prison to deter others from repeating what you did.

29.	Mr. Kupmain on the other hand submitted that you be given a custodial sentence for personal as well as general deterrence.

(iv)	Mitigating Factors & Aggravating Factors

30.	I accept the following as mitigating your offence:

(i)	You pleaded guilty to the charge;
(ii)	You are a first-time offender;
(iii)	You were of good character prior to your offence.

31.	Against you though is the fact you betrayed the trust of your employer, the value of the properties you misapplied was quite substantial and this is a very prevalent offence.

(iv)	Deliberations

32.	So, what then should be an appropriate sentence for you?

33.	I have already said that this is not a worst case of misappropriation.  But on the same token, it cannot be said to be a minor or trivial case of offending because your offence involved quite a substantial amount of money and abuse of trust.   Viewing your culpability and the harm done to the victim objectively, I would set a starting point of 5 years.

34.	And so, considering the circumstances of your offending against the principles in Belawa v The State (supra), I note firstly that the value of the properties you applied to your own use was an excess of K12,000.00 which ought to attract a sentence of 3 years.

35.	As Sales Representative for the complainant, the quality and degree of trust reposed in you was quite high.  The company trusted you well enough to send you out to remote Kirriwina to procure business from schools in the area.  You had the choice of remaining faithful to your employer and conduct its business honestly, but you chose to defraud it by what you did.

36.	It is not apparent from the material before me how long this fraud was perpetrated, but what is apparent or clear to me is that you had the time to plan the whole thing and then put it into action.

37.	There is no impact on public confidence and on the public generally, but it would go without saying that Kitava Primary School and other schools in the District would have been concerned that they were used by you in your fraudulent scheme.

38.	There is no evidence of how you used the proceeds from your fraud.  Of course, the effect of this on you is that you have been dismissed from your job.  Apart from that, you have not made any restitution, but your current employer has offered to do that for you.  I am not convinced though that you are genuinely sorry for your offence.  The victim on the other hand lost stock valued at over K12,000.00 but as we have seen, they do not want to be compensated for that.

SENTENCE

39.	I have also taken into account your mitigating factors and those factors against you and I should think, all things considered, that you should get a sentence of 4 years imprisonment.

40.	I, therefore, sentence you to 4 years imprisonment with light labour.

SUSPENSION

41.	Should any part of your sentence be suspended?  Your Pre-Sentence Report is non-committal as the author left it to the Court to exercise its discretion as to whether or not to give you a suspended sentence.

42.	I do take into account yours and your current employers’ offer for restitution.  That, however, flies in the face of the victim’s refusal to be compensated.  One of the considerations for exercise of discretion to suspend a sentence is the likelihood of restitution: Public Prosecutor v Tardrew[1988 – 89] PNGLR 91.

43.	There is no doubt that you must pay for your crime by going to gaol. The cases were cited above, however, showed that all sentences were suspended, and restitution ordered.  Those who commit this type of crime must not only serve time for breaking the law but must make restitution as well.

44.	Imprisonment does not in itself put the victim back to the position he was before he was dishonestly and fraudulently dispossessed of his property.  Hence, it is only appropriate and fair that the prisoner compensates the victim for his loss, notwithstanding the contrary views of the victim.

45.	Now, you were concerned about the welfare of your children.  Well, you did not think about them when you committed your offence, so it is a little too late to suddenly start thinking about their welfare.  They will suffer but you will have to shoulder the blame for their suffering yourself.

46.	Be that as it may, I would think that this is an appropriate case for a suspension and I will, therefore, wholly suspend your sentence with conditions.

ORDERS

47.	My Orders, therefore, are:

1.	You are sentenced to 4 years imprisonment with light labour.

2.	The whole of your sentence is suspended  upon your entering into recognizance with a cash surety of K500.00 to be of good behavior for the whole period of your good behavior with the following conditions:

(i)	You shall within 4 months from today pay to Nur Printing & Office Supplies the sum of K12,588.00.

(ii)	You shall not commit any similar offence of dishonesty.

(iii)	You shall not enter the premises of Nur Printing & Office Supplies for whatever reason and you shall keep the peace towards the staff and management of the said company.

3.	Your bail of K500.00 shall be converted to your surety.

4.	Cash sureties paid by your guarantors shall be refunded to them.

__________________________________________________________________
P Kaluwin, Public Solicitor: Lawyer for the State
L B Mamu, Public Solicitor: Lawyer for the Prisoner