N10905
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 347 OF 2023

THE STATE

V

HAGAI JAMES

Waigani: Berrigan J
2024: 2nd, 3rd, 9th, 30th April and 19th July

CRIMINAL LAW – PRACTICE AND PROCEDURE – OBTAIN BY FALSE PRETENCE – Section 404(1)(a) of the Criminal Code – Elements of Offence – Distinction between false pretence and false promise – Whether representation was false at the time it was made – Whether at the time the monies were obtained the accused held intention to defraud  -  Not guilty. 

Cases Cited
State v Solis Ima (2020) N8676
Prosecutor’s Request No 4 of 1974 [1975] PNGLR 365
Albert Alexander Age v The State [1979] PNGLR 589 
Roland Tom v The State (2019) SC1833

References Cited
Sections 403, 404(1)(a) of the Criminal Code

Counsel
Mr S Kuku, for the State 
Mr J Kolowe, for the Accused  

DECISION ON VERDICT

19th July 2024 

1.	BERRIGAN J:  The accused, Hagai James, is charged with four counts of obtaining monies by false pretence with intent to defraud, contrary to s404(1)(a), Criminal Code.

Evidence

2.	The complainant, Margaret Ugl, wanted to purchase a property in late 2019 and was introduced by an agent to the accused, who wanted to sell the property left to him by his late father. The accused explained to the complainant that he needed to obtain administration of the property as his father had died intestate. Both were keen to go ahead with the sale nevertheless. Mrs Ugl needed a place to live. The accused needed to pay off a mortgage over the property. There was no evidence as to the amount of the mortgage at that time but by 22 November 2022 it was about K502,000. At the accused’s suggestion they went to the Public Solicitor’s Office (PSO) sometime in November 2019 where they executed a contract for the sale of the property for K550,000. The accused and the lawyer at the PSO suggested that Mrs Ugl obtain her own lawyer but she declined to do so. Under the contract a deposit of K20,000 was required. The contract did not reflect the fact that title was pending. Completion was to take place within 14 days. Possession was to take place on completion or as otherwise agreed in writing by the parties. 

3.	Bank records confirm that K20,000, K5500, K20,000 and K30,000 was deposited by the complainant to the accused’s personal bank account on 8 November, 27 November, 5 December and 24 December 2019, respectively.  An additional K10,000 not the subject of the charges was deposited on 10 December 2019.

4.	The complainant says that the accused asked her for an advance payment to assist him to sort out the title. Upon signing the contract she had confidence that she had purchased the property and so paid K20,000 into his account on the basis that the amount would be deducted from the final purchase price. The administration was taking some time and she needed a place to stay so she asked if she could move in to the property with him until all the paperwork was done. The accused agreed and said he wanted to fix the fence. He asked for K5500 to fix the fence so she could move in. She got her cargo and she and her son moved in with the accused, his mother, stepfather and family. The accused requested another advance of K20,000 to sort out family issues and other needs. She paid it on 5 November. He was still trying to get administration and saying there was some delay. He asked her for a further K10,000. She paid it on 10 December. It was during the pandemic and it was crowded. The accused asked for another K30,000 to buy a block of land and relocate his family. She paid that on 24 December 2019.  She was afraid to stay there because of Covid and so she and her son left. After that she never heard anything again from the accused because he was saying he was having problems. He told her that most of the government offices were closed because of Covid and that there was delay from the civil registry office. She was waiting for the administration process but was not familiar with it and was suspicious he might be doing something behind her back. She and the accused went to see the Fraud Squad together and until now there has been no positive answer from the accused.  

5.	The accused says that they agreed that she would pay a 10% security fee. She said she would make a first down payment of K20,000. He told her that he was trying to sort out title and she asked if he could accommodate them whilst they were waiting for it to be finalised because it was difficult for her to find a place to live. Because she was coming to live in the house he asked for K20,000 for his own use and for the purpose of obtaining administration, and for renovating her property, including the room she moved into. He admits that he asked for the other amounts but says that they were not only for his benefit as the complainant had an interest in the property. The property had no fencing. The complainant said she did not feel secure and so asked him to put in fencing. He had no money so requested a further advance of K5500. The other amounts were for his own use and received on the basis that he would deduct them from the purchase price upon settlement. As for the last K30,000 there was by that time friction between the complainant and his family. She was frustrated by the delay and wanted everyone to leave the property. He did not want to spoil the agreement with her for the purchase of the property and so he decided to buy another property to relocate his family. He purchased a block in Taurama.  

6.	He never completed the sale with the complainant because she made it very clear when she moved out that she did not want anything more to do with the property and would instead take him to court and let it decide. 

7.	He could not recall when he and Mrs Ugl first went to the police station. Records show he was charged on 29 April 2021. 

8.	Records also show that the accused subsequently obtained letters of administration on 21 June 2022.  He sold the property to a third party, John Kila, after receiving an offer for K620,000 on 24 August 2022.  After payment of the mortgage and agent’s commission, together with arrears for land rent (six years), land tax (more than five years), garbage (20 years), water and sewerage rates (many years), a balance of K3,489.70 was paid to the accused. 

Elements of the Offence 

9.	To establish the offence contrary to s 404(1)(a) of the Criminal Code the State must prove beyond reasonable doubt that the accused:

a.	by a false pretence (or a wilfully false promise, or partly by a false pretence and partly by a wilfully false promise);
b.	obtained from another person;
c.	any chattel, money or valuable security;
d.	with intent to defraud.

State v Ima (2020) N8676 at [29]. 

10.	The State must establish that the accused obtained the monies by reason of or as a result of the false pretence: Ima at [32] applying R v Roebuck (1856) 25 LJMC 101. 

11.	The State must also prove an intention to defraud as a separate element of the offence. 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 in the circumstances of any particular case: Prosecutor’s Request No 4 of 1974 [1975] PNGLR 365; Age v The State [1979] PNGLR 589. 

12.	An intention to defraud means an intention on the part of an accused to deprive a person of property which is his or to which he might be entitled, or to put the property of that other person at risk, or to imperil some lawful right, interest, opportunity or advantage of another person by using deceit, or fraudulent or dishonest means knowing that he or she has no right to deprive that person of that property or to prejudice those rights or interests: Roland Tom v The State (2019) SC1833; applying Scott v Metropolitan Police Commissioner [1975] AC 819 and Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493: State v Ima at [33] to [35].

Consideration 

13.	Having heard and observed the witnesses, I approach Mrs Ugl’s evidence with caution. Her evidence was vague. Her recollection of events was not good in general terms and she had a very poor recollection of particular events. The accused’s evidence was similarly affected by poor recollection of detail. Both were confused about when the pandemic started. 

14.	The State’s case is not entirely clear. The indictment is arguably duplicitous as to the false pretence alleged in each count but no objection was raised and it is not material for the reasons outlined below. 

15.	Essentially the State’s case is that between 1 November 2019 and 24 December 2019 the accused obtained monies from Mrs Ugl on four separate occasions by “falsely pretending” that the amounts would be deducted from the final purchase price. There is also some suggestion by the State that the accused lied about the purpose for which he was obtaining some of the monies.

16.	To be clear, each of the charges concern an alleged false promise rather than a false pretence, that is a promise “to do or omit to do any thing by a person who at the time of making the promise does not intend to perform it or does not believe he will be able to perform it”, rather than a representation “of a matter of fact, past or present that the person knows to be false in fact or does not believe to be true”: s 403, Criminal Code. See again Age v The State, supra. No issue was raised in relation to that matter and it is not material in this case.  

Count 1

17.	The State alleges on Count 1 of the indictment that the accused obtained K20,000 from Mrs Ugl by falsely pretending - or rather, falsely promising - that he would advertise the Notice of Intention to Apply for Administration on the understanding that the cost would be deducted from the purchase price on settlement.  

18.	The accused says that the K20,000 was for both personal expenses and for the purpose of obtaining administration. The monies were agreed under the contract and at the time he obtained the monies he intended that they be deducted from the balance of the purchase price upon settlement. 

19.	The State’s evidence does not exclude that possibility beyond reasonable doubt. 

20.	I am unable to find on the complainant’s evidence that there was any lie on the part of the accused as to the intended purpose of the funds or his intention to deduct the monies from the balance owing upon settlement or that there was any intention to defraud on his part at the time he obtained the monies. 

21.	The complainant’s evidence is insufficient to show that the accused told her that the sole purpose of the funds was to advertise or obtain administration. The contract itself refers to a K20,000 deposit, albeit that the contract was in standard form and did not accurately reflect the totality of the agreement between the complainant and the accused. As to any false promise about deducting the monies from the balance upon settlement a number of matters are relevant.

22.	It is unclear when the complainant moved in to the property with her son, that is whether it was before or after the K20,000 was paid but it appears it was not long after the contract was signed. The fact that the accused agreed to have the complainant and her son move into the property soon after the contract was signed, apparently rent free, is a significant factor pointing away from either the promise being false or the accused possessing an intention to defraud the complainant at the time he obtained the monies. 

23.	In this regard, it was clearly in the interest of the accused to obtain administration of his father’s estate as soon as possible given that the property had a very large mortgage over it which would have continued to increase over time. 

24.	There can also be no doubt that the pandemic caused great disruption to the operation of many public offices throughout 2020 and 2021 and I accept the accused’s evidence that it delayed the administration process. 

25.	For obvious reasons the accused cannot have anticipated the advent of a global pandemic in March 2020 at the time he obtained the monies in late 2019. 

26.	It is also a significant factor that points away from any false promise by the accused or any intention to defraud on his part at the time he obtained the monies that it was, on the complainant’s own evidence, her decision to subsequently move out of the property because of health concerns about living with others during the pandemic. 

27.	I also accept the accused’s evidence that the complainant told him when she moved out that she wanted nothing more to do with the property but was going to take the matter to the police and let the court decide.

28.	Additionally, whilst the complainant took the accused to the police in or about April 2021, on her own evidence the accused went there with her willingly. 

29.	It is yet further relevant that it took until 21 June 2022 for the accused to obtain letters of administration. This was well after the complainant moved out of the property in 2020 and well after he had been taken to the police and charged in 2021. 

30.	The fact that the accused did not repay the complainant some or all of the monies deposited might constitute a civil debt depending on the terms of the contract as altered by the associated oral agreement but that is not the issue before this Court. 

31.	As it was, there was no money left over after the outstanding mortgage had been deducted together with the many rates and taxes, which had been calculated by the purchaser’s lawyer.  The evidence is insufficient to show that the accused was aware of those obligations at the time he entered the agreement with the complainant given his age, education or experience, or by reference to the original contract with the complainant, which was prepared by a lawyer at the PSO, or otherwise. 

32.	In short, the State has not excluded the possibility that at the time the accused obtained the monies he intended that they would be deducted from the balance upon settlement. He could not have anticipated that administration would be delayed by a global pandemic or that the complainant would in those circumstances abandon the agreement. 

Count 2

33.	With respect to Count 2, there is some evidence in the bank records from which it might be inferred that at the time the accused obtained the monies he did not intend to use them solely for the purpose of constructing a fence but ultimately it is insufficient to establish that to the requisite standard and the complainant’s evidence about that was vague and unconvincing in any event. For the reasons outlined above the evidence is insufficient to establish that the accused lied about his intention to deduct the monies from the balance upon settlement. The State’s evidence is insufficient to establish that the accused intended to defraud the complainant at the time he obtained the monies. 

Count 3

34.	On Count 3 there is no dispute that the K20,000 obtained by the accused on 20 December was for his own use.  For the reasons outlined above, the State has failed to establish beyond reasonable doubt that he either falsely promised to deduct the monies from the balance upon settlement or that he held the requisite intention to defraud at the time that he obtained them.

Count 4

35.	On Count 4, the accused says that he obtained K30,000 for the purpose of purchasing a property. The State failed to exclude that possibility beyond reasonable doubt albeit that it appears that at least some of the monies were applied soon after they were obtained for other purposes. The complainant’s evidence that he subsequently told her that he was having problems settling with the landowners is hearsay and does not assist the State’s case in any event. The State also failed to establish that the promise to deduct the monies from the balance upon settlement was false at the time it was made. Again, the State failed to establish that the accused held the requisite intention to defraud at the time he obtained the monies. 

Conclusion

36.	The accused is acquitted of all charges. 

Verdicts accordingly. 
___________________________________________________________
Public Prosecutor: Lawyers for the State
Public Solicitor:    Lawyers for the Accused