SC891

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 56 OF 2001

BETWEEN:

PUBLIC PROSECUTOR
Appellant

AND:

ARTHUR JAWODIMBARI
First Respondent

AND:

MONTY DERARI
Second Respondent

Waigani: Salika, Kirriwom, Lay JJ

2005: 30 September
2006: 18 May

CRIMINAL LAW – Appeal against inadequacy of sentence – an order on conviction is a sentence – No conviction recorded – National Court has no jurisdiction to not record a conviction. 

Counsel
Mr C Sambua, for the Appellant
Mr A Kwimberi, for the Respondents

18 May, 2006

1. BY THE COURT: The Appellant in this matter is the Public Prosecutor. He appealed against the inadequacy of the sentences given by the National Court on the two (2) Respondents.

2. The facts in this case are that the State indicted the respondents on three (3) counts: - The first charge was that the two (2) respondents had conspired to defraud the State contrary to s 407 (1) of the Criminal Code Act. The second charge was that the two (2) respondents had abused their offices contrary to s 92 (1)(a) of the Criminal Code Act and the third charge was that they misappropriated K20, 000, the property of the State of Papua New Guinea contrary to s 383 (1)(a) of the Criminal Code Act.

3. The respondents at the time of the commission of the offences were both public servants employed by the Department of Oro. Arthur Jawodimbari was the Provincial Secretary for the Department of Oro whilst Mr. Monty Derari was the Assistant Secretary, Division of Finance and Administration with the same department. In January 1993 the Westpac Bank (PNG) Ltd decided to close its Popondetta Branch operations due to escalating law and order problems. A meeting was convened between Westpac branch management and senior officers of the Department of Oro. Both respondents were at the meeting together with some other senior officers. At that meeting Westpac management made their intentions known to the senior officers of the Department of Oro to close their operations in the Oro Province. Upon hearing of the Bank’s intention to leave, the two (2) respondents expressed their interest to purchase the Manager and the Accountant’s house. There were seven (7) houses altogether and the Bank’s intention was to sell all of them in a package at K110, 000.

4. The respondents at the material time did not have finance readily available to purchase the properties as a package. They instead used their position as Provincial Secretary and Assistant Secretary Finance and Administration and committed the Department of Oro to purchase the properties with the department funds. As a result of this, arrangements were made by the two (2) respondents for the Department of Oro to purchase the properties at K110,000 from Westpac Bank. That spending was not a budgeted item for the department to purchase. No proper financial procedures were followed to purchase properties. After the houses had been purchased, the two (2) houses were then transferred to the two (2) respondents with the understanding that they would repay the Department of Oro for the monies spent to buy the two (2) houses. Mr. Derari repaid some of the monies in instalments but then defaulted for two (2) years and one month when it was discovered by the audits that he had failed and defaulted in his repayments. 

5. In Mr Jawodimbari’s case he had the finance available to pay K20,000 to the Department of Oro with the proceeds obtained from selling his property in Port Moresby. He as the Secretary for the Department of Oro and the Chief Accountable Officer was instrumental in allowing the transactions to go through. It was these deeds that the State instigated the investigation which uncovered the deal. They were consequently charged for three criminal charges of conspiracy to defraud the State, abuse of office and misappropriation.

6. They were each found guilty on Counts 2 and 3 but not guilty on Count 1. The sentence each of the respondents received was "no conviction was entered against their names" and were "discharged from any penalty on each count". They were each ordered to pay K2,000 as interest and stamp duty that were expended by the department to purchase the properties and go towards compensating the provincial government for any loss that might have incurred through this action.

7. The Public Prosecutor has appealed the sentences imposed by the learned trial judge pursuant to s 24(1) of the Supreme Court Act.

Section 24 says:

(1)	In this section "sentence" includes any order made on conviction with reference to the person convicted or his property.

(2)	The Public prosecutor may appeal to the Supreme Court against any decision of the National Court, whether on appeal or sitting as a court of first instance, as to sentence, and the Supreme court may in its discretion vary the sentence and impose such sentence as it thinks proper.

The learned trial judge in sentencing said:-

"The decision of the court therefore in both cases, is that they are found guilty of counts 2 and 3. They are wrong in law for what they have done but no conviction will be entered against each of their names in respect of those charges. They are not convicted of any of the crimes. They shall be discharged from any penalty in each count upon each of them paying to the provincial government and exhibiting the receipt to the Registrar of the Court or the clerk of the Court here in Popondetta, receipts from the sum of K2,000 each which will go towards interest, stamp duty that was expended by the department in the purchase of these houses which will serve to compensate the department and the provincial government for any loss that it may have incurred through this transaction."

The above paragraph in my view constitutes an order or orders in the trial judges sentencing of the respondents. It is this order or orders that are sought to be varied.

8. The issue it seems is whether the above passage by the learned trial judge amounted to a sentence consistent with s 24(1) of the Supreme Court Act. A sentence includes any order on conviction but the convictions in this case were not recorded or entered against them. Their position was as if they had not committed any crime or that they had not been convicted of any crime. They were then discharged from any penalty upon each of them paying K2,000 as compensation to the provincial government. Could it be that the trial judge was dealing with them under Section 602 of the Criminal code Act? We can only speculate.

9. Subsection (1) of s 24 of the Supreme Court Act does not limit what a sentence means. However we are of the view that the above passage is a sentence because it was an order made on conviction. It was upon their conviction that the court decided not to enter conviction against them and discharged them. If they had not been convicted no such orders would have been made or no such orders would have been necessary.

10. Therefore, these orders in our view were made upon conviction. The decision or order not to enter conviction on the respondents in our view is part of the decision or order.

11. The grounds of appeal are that:-

(a)	His Honour erred in law in not giving weight to the seriousness of the offences; and or

(b)	His Honour erred in the exercise of his sentencing weight to the seriousness of the offences; and or

(c)	His Honour erred in the exercise of his sentencing discretion in law in that the sentence was a significant departure from established tariffs for misappropriation offences".

The Public Prosecutor sought increases in the sentences imposed on the respondents.

12. In relation to the first ground of appeal the learned trial judge acknowledged the seriousness of the respondents dubious actions in securing the deal for themselves rather than for the Provincial Government, he said:-

"All the evidence leads overwhelming to only one conclusion. The purchase by the Oro provincial Government and the taking of title to the properties to facilitate the purchase on the properties by those intending to acquire them for themselves personally or the purchase by the Oro Provincial Government including the purchase of the bank building for the Oro Treasury and a house for their legal officer and two provincial executives. Those amounted only to 45 percent, less than half of the total purchase price. The majority value of the purchase price was for the benefit of Mr Jawodimbari, Mr Derari, the Member for Sohe and the Provincial Executive minister, Mr Gosode. Without the Provincial government being the purchaser of the whole package there could have been no purchase by any of these individuals.

It is not impossible to consider that the Provincial Government individuals could bind themselves in joint venture. But that just did not occur in this case. There was no consultation with the Provincial Executive Council or the Provincial Assembly at the time event thought that was plainly possible since there was said to be Provincial Executive council approval sought and obtained in respect of the purchase of the bank officer and the legal officer’s house.

The Secretary, Mr Jawodimbari, had a duty of disclosure of his personal interest to the PEC as did Mr Derari. And in Mr Derari’s case, in his role of approving funds for release was clearly in a similar position of trust; and making available funds for the purchase of property which included themselves put him in a conflict of interest situation requiring full disclosure that did not occur.

I accept too, the evidence of Mr Kinch that not withstanding the authority of Mr Jawodimbari or Mr Derari to transfer within designated purposes, that authority does not extend to the use of funds from maintenance or repairs account to acquire assets, not only for the Provincial Government, but ultimately for themselves. Because ultimately the purchase by the Oro provincial Government of the whole of the properties to enable Mr Jawodimbari to purchase his house even though he paid for it entirely, or nearly entirely, because it would have been impossible for him to have purchase it himself. It was also for the benefit of Mr Derari because that purchase was funded by the Provincial Government itself."

13. While the learned trial judge did acknowledge the part the respondents played in abusing their offices, it is not in our respectful view, reflected in the sentences he imposed. While he found the respondents guilty of abusing their respective offices, he declined to enter or record any convictions. Unlike the District Court Act s 132, the Criminal Code Act does not provide such a provision for the National Court Judge. The closest the Criminal Code gets is s 602.

14. Section 132 of the District Court Act says:-

132: Conditional release, etc.

(1)	Where a person charged before a Court with a simple offence or an indictable offence triable summarily, and the Court thinks that the charge is proved but is of opinion that, having regard to –

(a)	the character, antecedents, age, health or mental condition of the person charged; or
(b)	the trivial nature of the offence; or
(c)	the extenuating circumstances under which the offence was committed.

It is inexpedient to inflict punishment, or other than a nominal punishment or that it is expedient to release the offender on probation, the court may, without proceeding to conviction, make an order –

(d)	dismissing the charge; or
(e)	discharging the offender conditionally on his entering into a recognizance, with or without sureties, to be of good behaviour and to appear for conviction and sentence when called on at any time during such period, not exceeding three years, as it specified in the order.

An order made under Subsection (1) shall, for the purpose of:-

(a)	revesting or restoring stolen property; and
(b)	enabling the court to make orders as to the restitution or delivery of property to the owner; and
(c)	the payment of money on or in connection with that restitution or delivery; and
(d)	an appeal against the conviction.

15. Such a provision is non existent under s 19 or any other provision of the Criminal Code Act. Section 132 talks of "a simple offence or an indictable offence triable summarily". The offences for which the respondents were found guilty of are neither simple offences nor are they offences which can be tried summarily. Indeed there was a full scale trial on the matter. There is no jurisdiction given to the National Court Judge to deal with the charges as he did.

16. Moreover there is no jurisdiction given to the National Court Judge to impose a sentence that is not prescribed by law namely the Criminal Code. On that count alone we are of the firm view that by not recording a conviction against the respondents he fell into error. 

17. KIRRIWOM, J: The Supreme Court in SCR No.2 of 1981; Re s.19(1)(f) Criminal Code (Ch 262)[1982] PNGLR 150 presided by Kidu CJ, Kearney DCJ, Greville Smith, Kapi and Pratt, JJ sitting on a reference by case stated from Andrew, J in the case of The State v Peter Mel Poming where His Honour upon finding the charge proved proceeded to dismiss the charge without recording a conviction because of the triviality of the offence complained of, ruled that without a statutory mandate as that provided in the District Court s 132 of District Act (and formerly s.20 of the Local Court Act), a judge of the National Court presiding in a serious indictable case has no power nor discretion to proceed in the manner as did the trial judge. The Supreme Court therefore directed the trial judge to proceed to record conviction and apply s 19 of the Criminal Code.

18. In Peter Mel Poiming’s case, he was charged with a minor fraud case of forging his superior officer’s signature to secure a scholarship from the government which the trial judge thought was a trivial matter that did not have to be handled like a serious criminal case.

19. Contrasting Mel’s case with this one, this case was no trivial matter. White collar crime of this type is quite rampant amongst senior officers in the Public Service and the fact that monies were repaid to the State at the time of the trial did not dilute the gravity of their criminal acts of unjust enrichment by unlawful means albeit with the intention to repay.

20. The trial judge was clearly wrong in not proceeding to convict in the face of a clear authority that prohibited him from doing so.

21. As the trial judge in this case is no longer serving on the bench, this Court, in the exercise of its inherent power orders in lieu of the sentence quashed that both prisoners be convicted and sentenced to two years imprisonment and pursuant to s 19 (10)(f) of the Code, their respective sentences are wholly suspended.

22. The second ground of appeal was that the learned trial judge erred in the exercise of his sentencing discretion in that the sentence he imposed was a significant departure from the established tariffs for misappropriation cases. His Honour the trial judge ordered the respondents to pay K2,000 each which would go towards interest on the stamp duty which the Provincial Government paid and to serve as compensation to the Provincial Government for any loss that it may have suffered through the transaction.

23. The sentencing trend for misappropriation cases has been outlined in the cases of Wellington Belawa v The State, Brian Kundi Lawi v The State, Gabriel Ramoi v The State and numerous other cases subsequent to those. The Belawa cases sets out the guidelines. From K1.00 up to K1,000 an offender would not get custodial term. An offender who got convicted for misappropriation of up to K10,000 would get about one (1) year imprisonment.

24. An amount of K20,000 misappropriation would attract a one (1) year imprisonment. In this case the monies were repaid and so the Provincial Government recovered all its money. The assets the money was used to purchase were lost to the respondents and others who benefited from the scheme. The usual sentence would have been to impose a sentence of 2 years but suspend it on the basis that the moneys had been repaid. That would have been much more consistent with the sentencing tariffs.

25. On that basis, and also because the trial judge is now retired and no longer serving on the bench, we would allow the appeal, quash the sentences imposed by the learned trial judge and substitute them with the following. We would enter and record a conviction on each of the respondents and impose a sentence of 2 years imprisonment on each of them with hard labour. The whole of the 2 years imposed on each of the respondents is suspended on the basis that the K20,000 has been repaid and also on the basis that each has paid K2,000 as compensation to the Provincial Government.
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Public Prosecutor: Lawyer for the Appellant
Kwimberi Lawyers: Lawyers for the Respondent