SC1833

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCRA No. 62 and 69 of 2017

ROLAND TOM and KALEN KOPEN

V

THE STATE

Waigani: Mogish, Hartshorn and Berrigan, JJ
2019: 28 February and 22 August

CRIMINAL LAW – Conspiracy to defraud – Agreement to deprive or put at risk that which another is or would be entitled – Agreement may be express or implied - Admission of statements into evidence by consent.  

On a trial for conspiracy to defraud, the learned trial judge convicted in circumstances where there was no direct evidence of an agreement between the two appellants, and where the complainant did not legally own the subject property.  Furthermore, he did so in reliance of several statements admitted by consent.

Held:

(1)	To establish the offence of conspiracy to defraud contrary to Section 407(1)(b) of the Criminal Code (Ch. 262) (the Criminal Code) the State must prove that:

(a)	the accused person;
(b)	conspired with one or other persons;
(c)	to defraud the public or any person (whether or not a particular person).

(2)	To defraud means:
(a)	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;
(b)	by using deceit, or fraudulent or dishonest means;
(c)	knowing that he has no right to deprive that person of that property or to prejudice those rights or interests: 

Scott v Metropolitan Police Commissioner [1975] AC 819; Peters v The Queen (1998) 192 CLR 493 adopted and applied; Potape v The State (2015) SC1613 clarified.

(3)	It was not necessary in the present case to establish that the complainant owned the property the subject of the conspiracy as an essential element of the offence.  Proof that the complainant had a right or interest in the property which was capable of being prejudiced either by actual loss or by being put at risk was sufficient: Scott, Peters (supra) applied. 

(4)	There was sufficient evidence to establish that the complainant had an equitable interest in the property in this case: Iravela v Samson (2018) N7212.  

(5)	A conspiracy is an unlawful agreement between two or more people. There is no need to establish direct communication between co-conspirators, nor even an express agreement, provided there is a design which is common to all of them to bring about the unlawful object of the agreement: The State v Iori Veraga (2005) N2849.

(6)	It was open to the trial judge to find on the evidence that there was a conspiracy, or an agreement between the appellants, to defraud the complainant. 

(7)	A trial judge has an overall duty to ensure that only legally admissible evidence goes in to the trial record: Epeli Davinga v The State [1995] PNGLR 263. In a criminal proceeding he may also intervene by asking questions and calling or recalling witnesses if he considers in his discretion that the course is necessary to the ascertainment of truth or in the interests of justice: Birch v The State [1979] PNGLR 75. The adversarial nature of a criminal trial is well established, however, and a trial judge must be careful not to interfere in the conduct of a trial or unduly participate in it himself. The question will be one for determination in each case: Birch (supra).  Crampton v R (2000) 206 CLR 161 considered.

(8)	Subject to well-defined exceptions, parties are bound by the conduct of their counsel, who exercise a wide discretion in deciding what issues to contest, what witnesses to call, what evidence to lead or to seek to have excluded, and what lines of argument to pursue:  The Queen v Baden-Clay (2016) 258 CLR 308 adopted.

(9)	It was permissible for the learned trial judge to rely on statements admitted into evidence by consent. There was no material irregularity in the conduct of the trial, nor any error of fact or law as a result: Fred Bukoya v The State (2007) SC887 distinguished.

(10)	The appellants have failed to demonstrate that the verdict is unsafe or unsatisfactory, that the conviction entailed a wrong decision on a question of law, or that there was a material irregularity in the trial.

(11)	Convictions and sentences affirmed.

Cases Cited:
Papua New Guinea Cases

John Beng v The State [1977] PNGLR 115
Birch v The State [1979] PNGLR 75
Epeli Davinga v The State [1995] PNGLR 263
Jimmy Ono v The State (2002) SC698 
The State v Iori Veraga (2005) N2849 
Fred Bukoya v The State (2007) SC887 
Lati v The State (2015) SC1413 
Potape v The State (2015) SC1613 
Wei v The State (2018) SC1720 
Iravela v Samson (2018) N7212 

Overseas Cases

Johnson v Miller (1937) 59 CLR 467
Scott v Metropolitan Police Commissioner [1975] AC 819 
Wai Yu-Tsang v The Queen [1992] 1 AC 269
Peters v The Queen (1998) 192 CLR 493
Crampton v R (2000) 206 CLR 161
The Queen v Baden-Clay (2016) 258 CLR 308

References Cited

Sections 404(1)(a), 407(1)(b) and 463(2) of the Criminal Code (Ch. 262) (the Criminal Code)

Counsel

Ms. H. Roalakona and Ms. L. Jack, for the State 
Mr E. Sasingian, for the Appellants

DECISION ON APPEAL

22 August, 2019

1.	BY THE COURT: The appellants appeal against a decision of the National Court in which they were each convicted following a joint trial of one count of conspiracy to defraud, one count of uttering and one count of obtaining by false pretence contrary to Sections 407(1)(b), 463(2) and 404(1)(a) of the Criminal Code (Ch. 262) (the Criminal Code), respectively.  

2.	The appellants were each sentenced to an effective sentence of 4 years of imprisonment, which is not challenged. 

3.	It was alleged on Count 1 that between the 1st of September 2009 and the 31st of August 2014 the appellants conspired with each other to defraud Philip Kandes of his property, Section 255, Allotment 01, Gerehu Stage One, National Capital District (the Property) by presenting a false contract of sale purporting to have title and ownership of the Property.

4.	Count 2 alleged that during the same period the appellants knowingly and fraudulently uttered a false document namely a contract of sale purporting to transfer title and ownership of the said Property.

5.	Finally, Count 3 alleged that the appellants obtained the title from the National Housing Commission (NHC) by false pretence, with intent to defraud.

6.	At trial the learned trial judge found that the complainant, Philip Kandes, was a longstanding employee of the Prime Minister’s Department when he entered into a tenancy agreement with the NHC in 1986 to rent the Property.  Via letter dated 13 February 1987 the NHC offered to sell the Property to him, which he accepted and paid for through fortnightly instalments as part of the “Government Sale of Houses Scheme” for public servants. On completion in April 2011, the complainant signed a contract of sale with the NHC, and all documentation was sent to the Lands Department for formalisation of the title in his name.  It was at this stage that he and the NHC became aware that a title had purportedly been issued in the name of the appellant, Roland Tom, for the same property.  

7.	Roland Tom had been living at the Property since 2005 and paying rent to the complainant pursuant to an arrangement with the Property’s caretaker, Dr Amean.  Dr Amean had been appointed caretaker by the complainant following his transfer to Wabag for work purposes in 1993. 

8.	The trial judge further found that Roland Tom conspired with Kalen Kopen, an employee of the Lands Department, to defraud the complainant of the Property, that they uttered a false contract of sale, and falsely pretended to the NHC that the contract was genuine for this purpose.

9.	There was no dispute that Roland Tom was not a public servant.  The NHC had no record of any dealings with Tom, nor any purchase of the Property by him. According to the NHC the purported contract for sale was not genuine.  Similarly, the Registrar of Lands had no record of transferring title to the appellant as purported and had since, upon becoming aware of the irregularities, issued a notice requiring Roland Tom to surrender his title.

Grounds of Appeal 
10.	The appellants’ notices of appeal, which are identical in material respects, raise 13 grounds, all of which have been considered in rendering this decision.  In summary, they may be categorised as follows:

(a)	Grounds 1 to 8, which assert that the State failed to establish for the purposes of the alleged conspiracy that the complainant ever legally owned the Property;

(b)	Ground 11, which challenges the finding that there was evidence of a conspiracy between the appellants to defraud the complainant; and 

(c)	Grounds 9, 10, 12 and 13, which challenge, on all counts, the reliance of the learned trial judge on witness statements tendered by consent.

11.	It is well established in this jurisdiction that to succeed on an appeal against conviction an appellant must by virtue of s. 23 of the Supreme Court Act establish that: the verdict is unsafe or unsatisfactory; the conviction entailed a wrong decision on a question of law; or that there was a material irregularity in the trial.  In the event that the appellant establishes one of those matters the Supreme Court must then consider whether a miscarriage of justice has actually occurred.  If not, it may dismiss the appeal:  Lati v The State (2015) SC1413 applying John Beng v The State [1977] PNGLR 115.

Grounds 1 to 8:  Ownership of Property

12.	The appellants argue that the State failed to establish that the complainant owned the Property during the material period, or at any time.

13.	It is submitted that the complainant only ever had a conditional offer of sale, which he breached by failing to pay the outright value of the purchase price within twenty (20) years, namely by 2007, and further that he breached the tenancy agreement by abandoning the Property and/or subletting it to the appellant, Roland Tom. Further, that the evidence established that Roland Tom became the registered title owner of the Property on 6 April 2010.  

14.	On this basis the appellants contend that the complainant cannot be defrauded of something which he never owned.  

15.	Section 407 of the Criminal Code provides:

“Conspiracy to defraud.
(1) A person who conspires with another person–
(a) by deceit or any fraudulent means to affect the market price of any thing publicly sold; or
(b) to defraud the public, or any person (whether or not a particular person); or
(c) to extort property from any person,

is guilty of a crime.”

16.	In Potape v The State (2015) SC1613 at [28], the Supreme Court set out the elements of an offence contrary to s 407(1)(b) of the Criminal Code as follows (emphasis ours):

(a)	the accused person;
(b)	conspired with other persons;
(c)	by deceit or any fraudulent means;
(d)	to defraud the public or any person;
(e)	of any property;
(f)	property belonging to that other person. 

17.	There was no issue as to property, or its ownership, in Potape (supra) and the appeal was concerned with the third element identified above: “deceit or any fraudulent means”.  

18.	In respect to the sixth element referred to in Potape (supra), “property belonging to that other person”, a reading of s. 407(1)(b) of the Criminal Code does not reveal that the subject property must “belong”.  Notwithstanding that statement of the sixth element by the Supreme Court in that case, it is important to make clear in general terms, in our view, that conspiracy to defraud does not require proof of ownership, or even of property as such, as essential elements of the offence.  To the extent that the reading of the Court in Potape (supra) may be interpreted otherwise, then we respectfully disagree.

19.	The leading statement of conspiracy to defraud at common law is found in the words of Viscount Dilhorne in Scott v Metropolitan Police Commissioner [1975] AC 819 at 838 to 839 in which he said that where the intended victim is a private individual or corporation (as distinct from a public official authority) (emphasis added):

“‘to defraud’ ordinarily means … to deprive a person dishonestly of something which is his or something which he is or would be or might but for the perpetration of the fraud be entitled”.

20.	In that case the accused was convicted of conspiracy to defraud owners of the copyright and distribution rights of cinematographic films. He and other employees of film theatres agreed, without the consent or knowledge of the copyright owners, to temporarily take and make unauthorised copies of films for commercial distribution. 

21.	Similarly, the High Court of Australia held in Peters v The Queen (1998) 192 CLR 493, per Toohey and Gaudron JJ, at [30] to [33] that a conspiracy to defraud involves an agreement to use dishonest means to deprive another person of money or property, or to put the money or property of that other person at risk, or to imperil some lawful right, interest, opportunity or advantage of another person knowing that he or she has no right to deprive that person of that money or property or to prejudice those rights or interests. 

22.	There, the accused, a solicitor, was convicted of conspiracy to defraud the Commonwealth on the basis that he was a party to an agreement to conceal the true amount of his client’s income through sham mortgage transactions and thus deprive the Commissioner of Taxation of tax payable on that income.

23.	It is clear from the above that the offence of conspiracy to defraud is broad.  There is also authority in the United Kingdom and Australia that the offence is not confined to a risk of possible injury resulting in economic loss in the ordinary sense of that term.  In most cases concerning a private individual, however, it will be necessary for the prosecution to prove that the victim had an economic right or interest which was capable of being prejudiced either by actual loss or by being put at risk.  See Welham v DPP [1961] AC 103; Toohey and Gaudron JJ in Peters at [25] and McHugh in Peters at [74]; cf R v Evans [2014] 1 WLR 2817.  See also Archbold Criminal Pleading, Evidence and Practice, 2015, at 17-63.

24.	It is also clear in our respectful view that the Supreme Court in Potape (supra) did not intend to hold in general terms that property, or its ownership, were essential elements of the offence under s. 407(1)(b).  At [43] it said (emphasis added):

“In conspiracy with intent to defraud, it is the agreement to deprive the owner or a person having interest in a property by means …”
 
25.	Similarly, the test in Scott was recently quoted with approval by the Supreme Court in Wei v The State (2018) SC1720 at [9].  That case was also concerned with the third element of the offence; deceit or fraudulent means.

26.	Thus, in general terms, the State did not need to establish that the complainant legally owned the property the subject of the conspiracy as an element of the offence.

27.	It is the case, however, that Count 1 on the indictment stated that the appellants conspired to defraud the complainant of “his property, Section 255, Allotment 01, Gerehu Stage One, National Capital District by presenting a false Contract of Sale purporting to have title and ownership of the property”.

28.	It is trite to say that an accused person is entitled to have identified with precision the transaction upon which the State relies, the overt acts alleged and the legal nature of the charge brought against him:  Johnson v Miller (1937) 59 CLR 467.  A distinction is, however, to be drawn between the essential elements of the offence alleged and the particulars of that offence.  

29.	In a conspiracy to defraud the conspirators may never intend, or even foresee, loss or injury to another.  The offence consists in agreeing to take the risk of injuring another’s right which the accused know they have no right to take: see Peters at [26], Wai Yu-Tsang v The Queen [1992] 1 AC 269, and Archbold Criminal Pleading, Evidence and Practice, (2015), at 17-63.  

30.	As above, it was not necessary for the State to establish that the complainant owned the Property as an element of the offence.  In the circumstances the description of the Property as “his” was merely a particular of the conspiracy alleged.  It did no more than supply particulars of the Property to which the State alleged the agreement to defraud related: see R v Caldwell (2009) VSCA 41 and R v Ongley [1940] WN (NSW) 116 where similar issues arose.

31.	What the State did have to establish was that there was an agreement to use dishonest means to deprive the complainant of the Property or to put at risk his lawful right or interest in the Property, knowing that they had no right to do so.

32.	There was ample evidence to establish that the complainant had a proprietary right or equitable interest in the Property, enforceable by law, during the relevant period, which was capable of being prejudiced either by actual loss or by being put at risk. 

33.	Under the terms of the agreement with NHC, the complainant was the approved purchaser. The complainant’s right to purchase the Property and to have title transferred to him accrued when he started paying for the Property through fortnightly deductions. The right remained in force whilst the agreement remained on foot, which it did as evidenced by the ongoing salary deductions paid to the NHC and the other records produced by the NHC on the trial.  Upon paying off the Property in 2011 all ownership rights vested in the complainant: Iravela v Samson (2018) N7212.  

34.	The submission that Roland Tom became the registered title holder in 2010 does not assist the appellants; the legitimacy of that title was the very issue for determination before the trial judge.

35.	Nor was this a case where the particulars of the agreement were insufficiently detailed.  There was no uncertainty at the trial as to who the parties to the agreement were, or to what they had agreed.  

36.	Grounds 1 to 8 are dismissed.

Ground 11: Evidence to establish conspiracy

37.	The appellants submit that the learned trial judge erred in fact and law in finding that there was a conspiracy between them.  They point to the fact that Kalen Kopen did not permanently transfer to the Lands Department in Port Moresby until 2011, and a lack of direct evidence as to any agreement, or indeed any meetings, between them.

38.	In a conspiracy to defraud the prohibited act (actus reus) is the entry into an unlawful agreement, express or implied, which need never be implemented.  The offence is complete the moment that the offenders enter into the agreement: The State v Iori Veraga (2005) N2849 applying R v Aspinall (1876) 2 Qu D 48. 

39.	Whilst complete upon agreement, conspiracy is a continuous crime.  It extends over the period of the agreement until it is discharged, or terminated, by completion of its performance or by abandonment or frustration:  Veraga (supra).

40.	There is no need to establish meetings between co-conspirators, nor even an express agreement, to establish the offence.  Per Sakora J in The State v Iori Veraga (supra) (emphasis added):

“A conspiracy involves an agreement expressed or implied… 

It is not necessary, therefore, in order to prove conspiracy, that there should be shown to have been direct communication between each conspirator and every other, provided that there is a design which is common to all of them: Kalajzich and Orrock (1989) 39 A Crim R 415….

“By the very nature of an offence such as conspiracy rarely if ever are there any direct evidence of an agreement between persons to involve in criminal activities. The rare occasions when direct evidence may be available is when a co-conspirator admits the offence and turns State evidence”.   

41.	In this case the learned trial judge had regard to the oral and documentary material before him, admissions as to certain matters by both appellants, the nature of their relationship, the longstanding position held by Kalen Kopen with the Lands Department, and the presentation by him of the purported title and related documentation to the NHC on behalf of Roland Tom.  

42.	The learned trial judge was satisfied beyond reasonable doubt that there was a conspiracy, or an agreement, between the appellants to defraud the complainant by presenting a false contract of sale purporting to have title and ownership of the Property.

43.	The conclusion was open to the learned trial judge on the evidence.  There was no error of fact or law.

44.	Ground 11 is dismissed.

Grounds 9, 10, 12 and 13:  Reliance on Statements Admitted by Consent

45.	It is submitted that the learned trial judge erred in fact and law with respect to each of the three counts contained in the indictment in relying on eight statements which had been tendered by consent.  

46.	The adversarial nature of a criminal trial in this and other common law jurisdictions is well established.  As the High Court of Australia recently observed in The Queen v Baden-Clay (2016) 258 CLR 308 at [48]:

“a criminal trial is accusatorial but also adversarial.  Subject to well‑defined exceptions, "parties are bound by the conduct of their counsel, who exercise a wide discretion in deciding what issues to contest, what witnesses to call, what evidence to lead or to seek to have excluded, and what lines of argument to pursue."”. 

47.	There is no doubt that a trial judge has an overall duty to ensure that only legally admissible evidence goes in to the trial record: Epeli Davinga v The State [1995] PNGLR 263.  Similarly, in criminal proceedings the trial judge has the power to intervene by asking questions and calling or recalling witnesses if he considers in his discretion that the course is necessary to the ascertainment of truth or in the interests of justice: Birch v The State [1979] PNGLR 75.

48.	A trial judge must also be careful, however, that he does not interfere in the conduct of a trial or unduly participate in it himself.  The question will, of course, be one for determination in each case: Birch (supra). 

49.	In our view the comments of Gleeson CJ in Crampton v R (2000) 206 CLR 161 at [19] regarding the neutrality of the decision-making tribunal are particularly apposite in a jurisdiction such as ours where judges are both arbiters of fact and law: 

“One of the objects of a system which leaves it to the parties to define the issues, and to select the evidence and arguments upon which they will rely, is to preserve the neutrality of the decision-making tribunal.  Courts are hesitant to compromise features of the adversarial system which have implications fundamental to the administration of justice.”  

50.	The appellants rely on Fred Bukoya v The State (2007) SC887 in which the Supreme Court held that allowing the State’s case to proceed solely on tendered statements tainted the entire trial.

51.	In that case all witness statements were admitted by consent.  “The Court did not advert at all to the desirability or otherwise of following that course or to the prejudice it might cause the appellant or the difficulties it might pose for the Court when it came to decide the issues of fact”: Bukoya at [32].

52.	Furthermore, the statements were admitted in a way that deprived the accused of the right to cross-examine evidence that went to the heart of the issue in that case: [17], namely whether injuries were consistent with shots having been inflicted in self-defence or murder as alleged.  Eye witness accounts of the alleged offence were thus critical but without an opportunity to observe any witness, the trial court had no basis on which to prefer the statements of some witnesses over others, which it did: [36].  Moreover, real issues were raised on the face of the statements in that case about the literacy of their makers and whether the statements had been translated, and understood by them. 

53.	With respect, this is a very different case from that of Bukoya.  The learned trial judge in this case clarified at the beginning of the trial the extent to which statements and related materials were being admitted by consent with experienced defence counsel who was representing both appellants.  Counsel indicated that the defence objected to the admission of certain statements and documents and not to others.  He was entitled to do so on strategic and other grounds having regard to his clients’ instructions and the issues in dispute.

54.	Furthermore, the State’s case did not proceed entirely on the basis of tendered statements. The State called three witnesses, all of whom gave oral evidence and were cross-examined including: the complainant, Philip Kandes; the Acting Deputy Registrar for NCD, Registrar of Titles Office, Department of Lands and Physical Planning, Moudogegila Mogiyauma; and Conveyancing Officer, NHC, Percy Vagi.  

55.	In addition to his statement, the affidavit of Philip Kandes, together with other documents was tendered as part of the State’s case through him.  Mr Mogiyauma’s affidavit was not tendered until he gave evidence in chief.  Whilst Mr Vagi’s statement had been admitted earlier into evidence by consent, the trial judge allowed an adjournment to ensure that he was made available for cross-examination at the request of the defence.  He was called and gave brief evidence for the State before being cross-examined, during which two exhibits were admitted for the defence.  

56.	The trial judge had the opportunity to observe these witnesses and assess their credibility having regard to both their demeanour and the content of their evidence. 

57.	Putting aside the statements of the investigating and corroborating officers, four statements were admitted for which their makers were not called.  For the most part their evidence was formal in nature.  Officers from the NHC outlined the history and nature of the complainant’s interest in the Property according to NHC records, including that: it was only upon sending the documentation to the Lands Department for formalisation of title in favour of the complainant that the NHC became aware of a purported title in the name of the appellant, Roland Tom; and that the purported contract for sale with him was not on official NHC letterhead.  One officer, Jonah Sasingian, went on to state that he had not witnessed the contract with Roland Tom, as purported on the document; that his name was spelt incorrectly and that the signature purporting to be his was not genuine.  The Registrar of Land Titles stated that according to his records he had never prepared a transfer of title in favour of Roland Tom and had since called for the title to be surrendered.  

58.	The statements were admissible.  Defence counsel was at liberty to require the makers for cross-examination as he had for other witnesses.  He chose not to do so, presumably for good reasons, but in any event that was a matter for him. There was certainly no material irregularity in the conduct of the trial by the learned trial judge in this regard, nor any error of fact or law as a consequence.  

59.	Whilst some of the witnesses did go on to express a view in their statement about the fraudulent nature of Roland Tom’s title, that was ultimately a matter for the trial judge to determine, which he did having regard to the totality of the evidence.  

60.	It is well established in this jurisdiction that the Supreme Court will not readily interfere with the assessment of the evidence and the findings of the trial judge:  Jimmy Ono v The State (2002) SC698.   We see no reason to do so in this case.  

61.	Grounds 9, 10, 12 and 13 are dismissed.

Conclusion 

62.	For the above reasons we conclude that in all the circumstances of the case the appellants have failed to demonstrate that the verdict is unsafe or unsatisfactory, that the conviction entailed a wrong decision on a question of law, or that there was a material irregularity in the trial.

63.	The appeals are dismissed and the convictions and sentences confirmed.
_______________________________________________________________
Public Prosecutor:   	Lawyer for the State		
Public Solicitor:   	Lawyer for the Appellants