N9886

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1072 OF 2015

BETWEEN:
SIMON SANAGKE
- Plaintiff-

AND:
QUENTIN CHOLAI as CHAIRMAN OF THE NATIONAL GAMING CONTROL BOARD
-First Defendant-

AND:
NATIONAL GAMING CONTROL BOARD
-Second Defendant-

AND:
KONSII ZEBULON & MURRAY KAIA as the investigator of the NATIONAL FRAUD & ANTI-CORRUPTION DIRECTORATE of the DEPARTMENT OF POLICE AND INTERNAL SECURITY
-Third Defendant-

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
-Fourth Defendant-

Waigani: Tamade AJ
2022: 22nd April, 12th September

TORTS – malicious prosecution – breach of constitutional rights – criminal charges in Committal Court and National Court not sustained – reasonable and probable cause not established – No element of malice in pleadings – due process of the criminal procedure followed – Plaintiff accorded full protection of the law in the criminal process – proceedings dismissed.

Cases Cited:

Ignote v Hualupmomi and State [1996] PNGLR 308
Kipahi v Nambos [2020] PGNC 222; N8437
Demba Kalo v. Cornnie Akaya and Sam Inguba, Commissioner of Police and The Independent State of Papua New Guinea (2007) N3213
Sarea Soi v. Daniel Korimbao & Ors (2018) N7081 
Nayos v Gawi [2008] PGNC 142; N3484 

Counsel:
	
Ms Emily Dauma and Mr Rakatani Raka, for the Plaintiff
Mr Philip Tabuchi, for the First and Second Defendant
Ms Charity Kuson, for the Third and Fourth Defendant

12th September, 2022

1.	TAMADE, AJ: The trial of this matter was heard on 22 April 2022, and this is a decision on the matter.

2. 	The Plaintiff’s claim is essentially for malicious prosecution and breach of Constitutional rights as against the Defendants. 

3. 	The Plaintiff was the former Chief Executive Officer of the National Gaming Control Board from 30 September 2008 to 31 August 2013 and was terminated upon an investigation and audit report instituted by the then Board headed by the First Defendant. 

4. 	At the time the Plaintiff was the Chief Executive Officer of the National Gaming Control Board, the Plaintiff was a shareholder and director of a company called Sedema Technology Limited. The Plaintiff was also a Trustee to the Community Benefit Fund which is a Trust set up under section 163(6) of the Gaming Control Act 2007 to address State Funds by ordinary citizens at the grassroots level as can be seen in the Trust Deed in the Affidavit of one Ms Imelda Agon who was the incumbent Chief Executive Officer of the National Gaming Control Board in 2018. Ms Agon states that under Clause 2.6 of the Trust Deed, it expressly prohibits a Trustee from directly or indirectly benefiting from the Community Benefit Fund. 

5. 	The evidence in this matter by Ms Agon reveals that Sedema Technology Limited as owned by the Plaintiff was awarded a contract for the refurbishment of the old Taurama Leisure Centre in 2011 and funds were granted to Sedema Technology Limited for this contract. It was until the 2011 political impasse that at the installation of a new government, an investigation was ordered into the affairs of the National Gaming Control Board in which Frank Benabo & Associates conducted an investigation and produced a report on the matter. The report revealed that Mr Sanagke, the Plaintiff was a shareholder and director of Sedema Technology Limited and was also a trustee of the Community Benefit Fund at the time. It was based on the findings of the report claims of impropriety on the part of Mr Sanagke for breaching the terms of the said Trust Deed in benefiting from the Community Benefit Fund through his company Sedema Technology Limited that recommendations were made for formal complaints to be lodged to the police for the Plaintiff to be charged according to law. In the report as annexed to the Affidavit of Ms Agon sworn on 10 August 2018 and filed on 15 August 2018, there was a payment of K1 831 451 to Sedema Technology Limited. The report also addressed other payments by those responsible in the management of the National Gaming Control Board at the time. 

6. 	In the Affidavit of the State witness Detective Senior Constable Konsii Zebulon sworn on 28 June 2018 and filed on the same date, he states in evidence that he was the investigating officer tasked to conduct investigations into the claims of financial abuse and mismanagement at the National Gaming Control Board and he was assisted by Detective Sergeant Murray Kaia. 

7. 	Detective Senior Constable Konsii Zebulon in his affidavit makes reference to investigations into a payment into the Wantok Gaming System Limited for the purchase of gaming machines and also payments from the Community Benefit Trust Fund which incriminated Mr Sanagke. 

8. 	Mr Sanagke was charged for misappropriation of property under section 383(a)(1), conspiracy to defraud under section 407(b) and abuse of office under section 92(1) of the Criminal Code. The criminal charges against Mr Sanagke were struck out by the Committal Court on 27 March 2013 on a no-case submission that there was insufficient evidence to commit Mr Sanagke.

9. 	The Plaintiff was also charged to stand trial at the National Court on charges of false pretence contravening section 404(1)(a) of the Criminal Code, charges pursuant to section 89 of the Criminal Code and for money laundering pursuant to section 34(2)(a) of the Proceeds of Crime Act 2005. After a trial, the Plaintiff was acquitted by the National Court on 16 October 2014.

10. 	It is the Plaintiff’s submission that he was acquitted because of the admission of Ms Agon that she was forced to swear a false Statement relied on by the prosecution regarding the matter in the National Court. Ms Kuson of the State argues that there was a total of five witnesses that the State was prepared to call however only two were called resulting in the acquittal of Mr Sanagke.

11. 	The Plaintiff’s case on malicious prosecution is premised largely if not entirely on the fact that as the criminal charges against him in the Committal Court and in the National Court were not sustained, he was therefore maliciously prosecuted.

Is the Plaintiff entitled to a claim for malicious prosecution?

12. 	It was held in the case of Ignote v Hualupmomi and State  that:
“The tort of malicious prosecution is committed if an arrest is procured maliciously and without probable cause.
Malice may be inferred where the defendant has a purpose other than bringing an offender to justice: Herniman v Smith [1938] AC 305 cited.
The decision to initiate proceedings is based on the following factors:
a)	That the defendant must have been instrumental in instigating the proceedings;
b)	That the proceedings must terminate in favour of the plaintiff; and
c)	 That the proceedings instigated must be done maliciously and without reasonable and probable cause.”

13. 	The Deputy Chief Justice, Justice Kandakasi in the case of Kipahi v Nambos made reference to several cases dealing with malicious prosecution claims and held that malice is an important element in a claim for malicious prosecution. He said this:

“(1) ‘malice’ is defined to mean a desire to cause harm or difficulty to others, [by] ill-will or harmful intent;
(2) malice may be inferred where the defendant has a purpose other than bringing an offender to justice;
(3) the defendant did not believe that the plaintiff was probably guilty of the offence;
(4) a person of ordinary prudence and caution would not conclude, in the light of the facts in which he honestly believed, that the plaintiff was probably guilty.”

14. 	The Court, therefore, found in the Kipahi case that the elements of the tort of malicious prosecution are:

(a) the defendant is responsible for the institution of proceedings against the plaintiff;
(b) the defendant has instituted the proceedings without reasonable and probable cause;
(c) the defendant was motivated by malice or some other improper purpose; and
(d) the criminal proceedings have been resolved in favour of the plaintiff.”

15. 	In regard to whether there was reasonable and probable cause in the institution of charges and criminal proceedings against Mr Sanagke, the Court said this in the case of Kipahi quoting Justice Davani (as she was then) in Demba Kalo that (with emphasis underlined):

“In an action for malicious prosecution, the burden of proof is on the plaintiff to prove (inter alia), that the defendant in instituting or maintaining the prosecution acted without reasonable or probable cause and also acted maliciously. In order that one person may have reasonable and probable cause for prosecuting another for an offence, it is necessary that the following conditions should exist: (1) The prosecutor must believe that the accused is probably guilty of the offence. (2) This belief must be founded upon information in the possession of the prosecutor pointing to such guilt, not upon mere imagination or surmise. (3) The information, whether it consists of things observed by the prosecutor himself, or things told to him by others, must be believed by him to be true. (4) This belief must be based upon reasonable grounds. (5) The information possessed by the prosecutor and reasonably believed by him to be true, must be such as would justify a man of ordinary prudence and caution in believing that the accused is probably guilty.
In order that the plaintiff may succeed on the issue of reasonable and probable cause, it is essential that he should establish that one or more of these conditions did not exist. This he may do by proving, if he can, that the defendant prosecutor did not believe him to be guilty, or that the belief in his guilt was based on insufficient grounds. To establish the first of these matters, it is essential that evidence should be given of some fact or facts which, either inherently or coupled with other matters proved in evidence, would enable the inference that the defendant did not believe in the plaintiff’s guilt... Merely to prove that the defendant had before him information which might or might not have lead a reasonable man to form an opinion that the plaintiff was guilty supplies no evidence that the defendant did not believe him to be guilty. If this ground is relied on, the plaintiff must give some evidence from which an inference may be drawn as to what the defendant’s belief actually was. It is not sufficient to give evidence from which a guess may be made as to what it was. Nor is it sufficient merely to supply evidence of reasons for non-belief; and if such evidence is relied on there must also be evidence that these reasons were in fact operative... It may, for example, be supplied by evidence that the defendant had before him facts pointing to the plaintiff’s innocence so overwhelming that no reasonable man could have believed in his guilt... But the necessary evidence is not supplied by proof that the defendant was aware of facts which might or might not have satisfied him of the plaintiff’s guilt, or that he had before him information, some of which pointed to guilt and some to innocence.
If the plaintiff proposes to establish that the defendant had not sufficient grounds for believing him to be guilty, the burden is on the plaintiff to give evidence of what information the defendant in fact had... If he contends that the defendant did not believe some of the information which he had, he must supply evidence supporting an inference as to what the defendant’s belief actually was with respect to the accuracy of the information in question, not a guess as to what it was... It is only when he has supplied some evidence of the nature of the whole of the information that the defendant had that he can invite an inference that it was insufficient... If the plaintiff does place before the court evidence of the nature of the whole of the information which the defendant had, it is for the judge... to determine whether it was reasonable for the defendant to believe in the accuracy of the information and also to determine whether it was reasonable for him to act on it, i.e., whether it was sufficient to justify a man of ordinary prudence and caution in believing that the plaintiff was probably guilty.”
16. 	Having read the evidence of Detective Senior Constable Konsii Zebulon, the Plaintiff has not proven on the balance of probability that the Defendants acted without probable and reasonable cause.

17. 	The Court also said this in the Kipahi case on the importance of the pleadings in a claim for malicious prosecution on the state of mind of the accusers;

“The foregoing discussions of the law, make it clear that the element of malice is a critical element. Malice has to do with and concerns the accuser’s motivation for bringing the failed criminal proceedings. Most of the time it is difficult to know what is in one’s mind, except only to infer from one’s actions or inactions. The motives or intentions of an accuser are matters that are personal and are best known to him or herself. Given that, it would be most difficult for the victim of any malicious prosecution to succeed in a claim of vicarious liability against an accuser’s employer or principal, because the plaintiff will need to plead with sufficient particulars mind set and motivation of two different persons. To succeed in a claim based on malicious prosecution against accuser and his employer, the victim plaintiff has a duty to clearly and succinctly plead with particulars the bases for also claiming malice against his or her accuser’s employer or principal.”

18. 	In a review of the pleadings in the Statement of Claim revealed that, the Plaintiff pleads the particulars of malicious prosecution that the Prosecution had compiled the Hand Up Brief with hearsay and indirect evidence and that the decisions the subject of the criminal charges were board decisions and not his own decisions and that the Plaintiff’s arrest was done in bad faith to discredit the Plaintiff’s reputation, standing and character in society.

19. 	The Plaintiff states that he was ridiculed, embarrassed, defamed and belittled when he was escorted to the Boroko cells at the time of his arrest, and he suffered shame and was branded as a criminal. 

20. 	I find no malice in the pleadings of the Plaintiff and no malice in the evidence by the Plaintiff. He simply complains about the fact that he was charged and brought to the Committal Court and the National Court, and he was acquitted. 

21. 	Justice Manuhu in the case of Nayos v Gawi that:

“It is a worthy reminder that it is in the public interest for police, a vital enforcement agency of the State to investigate, charge and prosecute offenders without fear of being sued. The rule of law and democracy will disintegrate and collapse if anyone acquitted is given an easy passage to sue for malicious prosecution. The tort of malicious prosecution is of course available but malice must be shown to the entire satisfaction of the Court for a malicious prosecution suit to succeed.”

22. 	I adopt His Honours views and say that it is in the normal procedure of criminal arrest and detention and appearing in Court that one would feel condemned, shamed and ridiculed however that is the criminal process regardless of whether you are a high esteemed person in private or public sector, the rule of law applies to every person, there are no special procedures or favours, the law is the ultimate equalizer.

23. 	In regard to the Plaintiff’s claims for breach of his Constitutional rights, I find that due process was accorded to the Plaintiff from his interrogation with the police, his arrest, to being granted bail to appearing in Court and finally to the Court’s decision to acquit him of the charges labelled against him. I accept the State’s submissions that the Plaintiff was given the full protection of the law in the criminal process.

24. 	I find that there was reasonable and probable cause for Mr Sanagke’s arrest and charges as per the evidence of Detective Senior Constable Konsii Zebulon and the report by Frank Benabo & Associates to my mind provided just cause for investigations into officers of the National Gaming and Control Board which included Mr Sanagke who was not the only person the subject of the investigations by the police but also included other officers of the National Gaming and Control Board. Though the criminal proceedings were resolved in Mr Sanagke’s favour albeit entirely dependent on how the Prosecution ran and managed it’s case, I find that there was no malice on the part of the Defendant’s in prosecuting Mr Sanagke for the offences he was charged with. The element of malice is therefore missing in the Plaintiff’s claim for malicious prosecution. This is a claim which is premised on a reaction of an individual holding a high position in a high office who had been subjected to a criminal process seeking validation from the Court of his innocence however this is misconceived, the criminal process and the duties of the State to prosecute offenders cannot be trivialised nor negated just because of an outcome of acquittal, malice must be proven to the satisfaction of the Court in a claim for malicious prosecution. The claims for malicious prosecution and breach of constitutional rights by Mr Sanagke shall be dismissed forthwith. 

25. 	The Court, therefore, makes the following orders:

i)	These proceedings are dismissed in their entirety.
ii)	The Plaintiff shall meet the Defendants’ costs of and incidental to these proceedings.

Orders accordingly.

Nelson Lawyers 			: Lawyers for the Plaintiff
Young & Williams Lawyers	: Lawyers for the First and Second Defendants
Office of the Solicitor General: Lawyers for the Third and Fourth Defendants