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Laumadava, The State v [1994] PNGLR 291 (23 May 1994)

PNG Law Reports 1994

[1994] PNGLR 291 - State v Francis N Laumadava 

[1994] PNGLR 291

N1230

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

THE STATE

V

FRANCIS NATUWOHALA LAUMADAVA

Alotau

Injia AJ

23 May 1994

EVIDENCE - Accomplice evidence - Weight to be given.

CRIMINAL LAW - Misappropriation - Government funds - Provincial government minister - Village Improvement Fund money applied for, obtained, and used to pay off accused's personal debt - Breach of fund guidelines - Whether accused applied money to his own use - Whether accused acted dishonestly - Criminal Code s 383A(1)(a).

WORDS AND PHRASES - "Dishonestly" in the context of s 383A(1)(a) Criminal Code.

Facts

The accused, a minister in the Milne Bay Provincial Government, applied for money from the province's Village Improvement Fund, ostensibly for projects in his constituency. The prosecution established that he directed his subordinate to apply most of the resultant money to repay a loan for the purchase of land allocated to him privately under the National Housing Corporation's Home Ownership Scheme.

Held

1.       The accused instructed his subordinate to pay his personal debt. The subordinate was only a conduit in that payment. Therefore, the accused applied the money to his own use.

2.       Applying both subjective and objective tests, the accused was aware that what he was doing was wrong. He acted dishonestly and was guilty of misappropriation.

Cases Cited

Papua New Guinea cases cited

Lawi v The State [1987] PNGLR 183.

State v Amoko-Amoko [1981] PNGLR 373.

State v Fineko [1978] PNGLR 262.

Other case cited

Browne v Dunn (1893) 6 R 67, HL.

Counsel

K Bona, for the State.

M Cholai, for the accused.

23 May 1994

INJIA AJ:  The accused pleaded not guilty to a charge, pursuant to s 383A(1)(a) of the Criminal Code Ch 262 (the Code), that between 1 April 1992 and 31 May 1992, he dishonestly applied to his own use K2,470.72 in property of the State.

The State alleged that the accused applied for K2,976 from the provincial government's Village Improvement Fund (VIF), which was set up to assist the village people in the various constituencies. He applied for the money to be used for meeting administration costs of the VIF Committee in his North Goodenough constituency. When the application was approved and a cheque for K2,976 was released, instead of applying the money to meet administrative costs, he used most of the money - K2,470.72 - to repay a personal loan, or debt, which he had with Milne Bay Properties Pty Ltd, the provincial government's business arm. He obtained this loan to buy a piece of land at Sanderson Bay in Alotau, which was allocated to him by the National Housing Corporation (NHC) under its Home Ownership Scheme. In doing so, it is alleged, the accused dishonestly applied to his own use K2,470.72 which was the property of the State.

It is not disputed that the money belongs to the State. It also is not disputed that the accused applied for the K2,976 from the VIF, that the application was approved, a cheque for K2,976 was released, and K2,470.72 of the money was paid to Milne Bay Properties to pay off the accused's debt. The accused contends that:

1.       He did not apply the money to his own use because he never personally paid the money to Milne Bay Properties or authorized or instructed any person to cash the cheque and pay the money to it. He says that the money was paid to Milne Bay Properties by the co-ordinator of VIF, James Kilileu, without his instructions or authorization, and he did not benefit from the payment because he never received any title to the land from the NHC.

2.       In the above circumstances, the accused did not apply the money dishonestly.

The first issue can be decided on my findings of fact on the evidence. The second issue, which is the main issue, depends on my findings of fact, but also is a question of law. And so it is convenient for me to first set out the law regarding dishonest application of money. The crucial issue here is the meaning of the word "dishonestly" in the context of s 383A(1)(a). This issue was decided by the Supreme Court in the case of Lawi v The State [1987] PNGLR 183. In brief, it was decided that "dishonestly" relates to the state of mind of the accused. It is a question of fact, which the Court has to decide. The Court has to decide whether, according to the ordinary standards of decent, reasonable, and honest people, what the accused did was dishonest. The test here is an objective one. At the same time, it is also a subjective one. The Court must look into the mind of the accused and determine whether, given his intelligence and experience, he would have appreciated, as right-minded people would have done, that what he was doing was dishonest.

The State called four witnesses, who gave oral evidence. In addition, the State tendered, by consent, certified statements of ten witnesses plus 15 other documents, which include the record of interview conducted by the police arresting officer. The accused gave sworn evidence and called one witness, James Ambrose, to support his case. Mr Ambrose's statement was also tendered by the State as part of its case.

UNDISPUTED FACTS

The undisputed facts which I find on the evidence are as follows. In 1982, the accused was elected as the member for the North Goodenough constituency in the Milne Bay Provincial Assembly. He is still the member, having been elected to three consecutive terms of four years each. In this period, he held five ministries, and in his second term (1987-1990), he served as Speaker. He was Minister for District Services at the time of events at issue in this case.

In 1991-92, the provincial government established the VIF. The accused was aware of its establishment, as he was a member of the Provincial Assembly and the Executive Council. The provincial government also formulated guidelines, which prescribed the purpose of the VIF, the procedure for applying for funds, approval of applications, manner and method of payment of approved funds, expenditure of funds for designated projects, on-site inspection of completed projects, and accounting for, or acquittal of, funds spent. Prescribed forms were instituted for some of the critical phases. The purpose of the VIF was to provide financial assistance to people in villages for social and economic projects of benefit to the community. Two copies of the same guidelines, although numbered differently, are in evidence (Exhibit "O" and "Y"). I do not intend to repeat those guidelines here. I will mention the relevant ones in my judgment as I go along.

Under the guidelines, the projects must be situated in the constituency of the member concerned. A committee comprising members from that particular constituency, appointed by the member for that constituency and headed by him as chairman, was established to screen all applications coming from community groups in the constituency and to make recommendations to the Premier of the province. The committee's administrative expenses, such as sitting allowances and stationery, were met by a separate allocation of K5,000 per year per constituency, made under the VIF. Funds for administrative expenses of the VIF committee were applied for and, once approved, were dispatched to the committee members, using the same procedures as the normal project applications.

In early 1989, the accused went to the NHC at Alotau and discussed with the sales officer, Jack Nunisa, the accused's desire to apply for a piece of land at Alotau under the Home Ownership Scheme. He told Mr Nunisa that he wanted the land to build a transit house for the people of his constituency. Mr Nunisa advised him that it was not possible for groups or corporate entities to apply for land under the scheme. Only individuals were allowed to participate. And so the accused applied for a piece of land under his own name. He submitted an application form, a copy of which is in evidence (Exhibit "T"). This application makes no mention of the people of his constituency. By letter dated 10 September 1990, the NHC advised the accused that his application had been approved and that he should pay K2,100, the purchase price for the land, plus K106 for the legal fees within three months. This letter is in evidence (Exhibit "S"). This letter was received by the accused on 11 September 1990 (see endorsement on Exhibit "S"). Upon receiving this notification, as the accused had no money then, he went to see his bank, Westpac Bank in Alotau. The bank refused to help him, presumably because he had an outstanding loan with them of K4,000. (See item No 32 of the NHC application form, Exhibit "T"). And so he went to see another source for help - Milne Bay Properties. Michael Butterfield, who was then the manager of the company, agreed to help him, and a loan agreement was drawn up and signed by accused and the company under seal on 31 October 1990. It was lodged at the Stamp Duties Office and approved on 20 November 1990. A stamp duty fee of K44.12 was charged and paid, presumably by Milne Bay Properties. Under the agreement, in consideration of the company agreeing to pay K2,206 to the NHC for the land, the accused was to repay the principle loan plus interest, at 10%, of K220.60 by 1 June 1991. A copy of this agreement is in evidence (Exhibit "V"). On 11 December 1990, the company paid K2,206 to the NHC, and a receipt for the payment was issued to the company. The receipt is in evidence (see Exhibit "U"). The total liability of the accused to Milne Bay Properties under the agreement was K2,470.72, which includes stamp duty fee of K44.12.

On or about 12 November 1991, the accused approached the VIF co-ordinator, James Kilileu, to assist him to apply for VIF funding to pay his loan debt to Milne Bay Properties, which was more than five months overdue. Mr Kilileu completed a VIF application form, Form No 1, in the name of Milne Bay Properties for K2,470.72 in the presence of the accused, and the accused signed the form. A copy of this application is in evidence (Exhibit "X"). This application was approved by the Premier sometime in November 1991. However, when the approved application was submitted with a completed payment requisition form to the Acting Deputy Secretary, Gedai Gabina, for payment, he rejected the request because the project for which the money was sought was not situated in the accused's constituency, as required by VIF Guideline No 4. Mr Gabina told Mr Kilileu of his reasons for the refusal. The accused and Mr Kilileu differ on what happened after that.

DISPUTED FACTS

The State's case is that Mr Kilileu advised the accused of the reasons for rejection of his first application, as stated to him by Mr Gabina. However, the accused insisted that Mr Kilileu assist him to submit another application under "administrative costs", because he was under pressure from Milne Bay Properties, which wanted to get its money back. The accused also instructed Mr Kilileu to apply for an additional K500 to pay for the registration of the North Goodenough constituency's truck, operating in Alotau; to reimburse money to one James Ambrose for the cost of repair to the truck; and to pay labourers who cut the grass on the piece of land allocated to the accused. Mr Kilileu said the pressure was so immense that he, as a simple staff of the provincial government, had to comply with the accused's instructions. And so, upon instructions, Mr Kilileu completed only one blank form, which was signed by the accused and left with him. After completing it, Mr Kilileu showed it to the accused before submitting it for approval. When the application was approved and a cheque for K2,976 released, he arranged with Mr Ambrose for the cheque to be cashed at Westpac Bank, Alotau, and the cash paid out to the various people, as directed by the accused. The State says that these payments were made by Mr Kilileu in accordance with the accused's instructions whilst the accused was out of Alotau and that Mr Kilileu did not benefit from the exercise. The State's main witness, Mr Kilileu, has given evidence in support of the State's case.

The accused, on the other hand, to some extent supported by Mr Ambrose, has given a different account as to what transpired between him and Mr Kilileu. He does not deny that he approached Mr Kilileu to submit a further application for funding of the repayment of his loan debt to Milne Bay Properties. He does not deny that he asked Mr Kilileu to submit a further application for K500 for "administration costs". He does not deny that, when the application was approved and a single cheque for K2,976 was released to Mr Kilileu, he cashed the cheque with the help of James Ambrose and paid out the cash as follows:

1.       K2,470.72 paid to Milne Bay Properties on 8 May 1992. The company issued receipt No 179329, dated 8 May 1992, in the name of the Chairman, North Goodenough Constituency (Exhibit "W").

2.       K88.20 paid to James Ambrose, of which K68.20 was for reimbursement of personal money spent on the constituency's truck, plus an extra K20.

3.       K300 - K390 fee for registration of the truck.

4.       Unspecified amount to labourers, who cut grass on the land allocated to the accused by the NHC.

The accused says that he left two blank VIF forms with Mr Kilileu with his signature on both - one for the payment of K2,470.72 to Milne Bay Properties and the other one for K500 for "administrative costs". Although he did not put these amounts on the applications, he instructed Mr Kilileu what to do in those two applications. He says he instructed Mr Kilileu to submit another application for money to pay Milne Bay Properties because Mr Kilileu told him the first application was rejected by Mr Gabina because he, the accused, did not give enough reasons in it. The accused told Mr Kilileu to hold the money for him if the application was approved, and he would sign and collect it upon his return. He says that, as a matter of normal practice, he expected Mr Kilileu to hold the cheque in the office safe for him to sign and take upon his return. After leaving these two signed forms with Mr Kilileu, he took a Talair flight to his village the same day without sighting the completed applications. The accused says Mr Kilileu lumped the two figures into one application for "administrative costs" and submitted it. He says Mr Kilileu did all those things he said he did on his own, without any instructions or authorisation from him. He says he was out of Alotau for some six weeks and could not have authorised Mr Kilileu or Mr Ambrose to cash the cheque and pay out the money. Mr Ambrose was the caretaker of the accused's vehicle in Alotau. He says that he was not told by the accused to go and see Mr Kilileu to get the cheque cashed and get his money. Finally, the accused says he never signed any contract of sale on the subject land with the NHC, that Mr Nunisa never delivered the contract of sale to him and his wife, as Mr Nunisa says in his evidence, and that he has never received the title deed from the NHC to this day.

ISSUES OF FACTS

There are several issues of fact to be decided. I will raise those issues in question form and decide them as I go along.

1. Was the first application for K2,470.72 in breach of the VIF guidelines?

Yes. It clearly breached guideline No 4, which provided that the proposed project must be situated within the accused's constituency. It also breached guidelines No 7, 8, and 9, in that the VIF committee in the North Goodenough constituency did not formally recommend the application in Form No 1, even though they briefly discussed it. The committee did not consider the viability of the project and the financial requirements of the project, and no feasibility report was submitted with the application. The accused submitted the application on his own.

2. Was the accused aware that the first application breached the VIF guidelines?

Yes. He appears to be an educated, intelligent, and experienced man. He spoke good English in Court. His record of interview was conducted in English. He also completed the NHC application form in English. The VIF was established and its guidelines formulated and in use when he was a member of the Provincial Executive Council. The guidelines are in simple English. He admitted he was aware of the guidelines. He himself benefited from the scheme previously. Therefore, he did not need anyone such as Mr Gabina or Mr Kilileu to explain the guidelines to him.

He says he previously applied for a truck to be based at Alotau, and his application was approved, the truck was purchased, and it is still operating at Alotau. Therefore, he thought this application would also go through as a matter of practice.

It is true that this present application was approved by the Premier, even though it breached the VIF guidelines. The Premier, no doubt, approved his previous application for the truck. But the person who mattered most to the accused was the Acting Deputy Secretary. At the time the accused lodged the application at issue, Mr Gabina was only acting on this job. There is no evidence as to who the substantial holder of the position was. There is also no evidence from the accused or Mr Gabina as to who approved the finance for the application for the truck.

Mr Gabina was not cross-examined on this vital piece of evidence. I noted the State's objection to this evidence from the accused regarding the application for the truck on the basis of the rule in Browne v Dunn (1893) 6 R 67, HL. I agree with the State that I cannot accept this evidence. In any case, as Mr Gabina rejected this present application, he, no doubt, would have rejected the one for the truck too if it came before him, because I consider him to be a conscious administrator. I think that the application for the truck was erroneously approved by Mr Gabina's predecessor. I find that the accused knew that the application for the truck was approved and the funds released in breach of the VIF guidelines.

3. Did Mr Kilileu advise the accused of the true reasons why his first application was rejected, as per the advice of Mr Gabina?

Yes. I think the accused is concocting evidence to support his claims against Mr Kilileu. There is no dispute about what Mr Gabina told Mr Kilileu. There is no dispute about the reasons for the rejection being conveyed to the accused by Mr Kilileu. The dispute is over the contents of what Mr Kilileu told the accused as to the reasons. The area of dispute is very narrow or restricted, indeed. There is little room to doubt that Mr Kilileu told the accused that, because the guidelines do not permit release of funds for projects situated outside his constituency, Mr Gabina refused to approve the requisition for release of the money.

Let's assume for a moment that Mr Kilileu advised the accused that he did not give enough reasons in his initial application. And because of this, the accused insisted on Mr Kilileu putting full reasons in the second application. What other full reasons could the accused have given to Mr Kilileu to put in the next application? Feasibility report for the transit house project on the land? No, because he did not have one. Project funding report for the building of the house on the land? No, because he had substantial debt with his only banker, Westpac, and he had been forced by his own financial circumstances to obtain a loan from Milne Bay Properties. The types of benefits to his constituency? No, because his people did not apply through the VIF Committee, and the committee did not formally submit a VIF application form. The accused had only two things to disclose - his loan agreement with Milne Bay Properties and documents from the NHC. Would he have disclosed them? No, because that was the very reason why the first application was rejected. Those documents would have clearly shown that he was seeking VIF funds to pay off a personal debt with the company in relation to monies it advanced to the NHC on behalf of, and for the personal benefit of, the accused. Therefore, his second application was doomed to fail.

It was not put to Mr Kilileu in cross-examination that the accused signed two blank forms and that Mr Kilileu threw away the one regarding the land. I also consider this story to be of recent invention. It is very unlikely that the accused would have submitted, or instructed Mr Kilileu to submit, an improved application regarding the payment of Milne Bay Properties to Mr Gabina. I find that Mr Kilileu told the accused the full reasons for the rejection of the first application, as per VIF guideline No 4.

4. Did the accused instruct Mr Kilileu to submit two separate application forms - one to cover the payment to Milne Bay Properties for the loan debt and the other for "administrative costs"?

No. As I said above, there was only one blank application form, which he filled out for administrative costs to cover both the land payment to and administrative costs. I accept Mr Kilileu's evidence that the accused pressured him into applying for the VIF money somehow so that the money could be released easily and quickly. And the only way this could have been done was by submitting one single application for "administrative costs". The accused said he knew that by this time the new allocations for that year, presumably for administrative costs, were being released. So did Mr Kilileu. By putting the two requests in one application form for "administrative costs", Mr Gabina would have no choice but to release the money, because it was in compliance with the VIF guidelines. The amount of K2,740.72 had to be concealed together with the K500 for "administrative costs", because they knew that Mr Gabina would reject an application for the money for Milne Bay Properties. In any case, even if the accused left two signed forms, which was not the case here, he went to Mr Kilileu for assistance to obtain a release of the VIF money somehow. As to how Mr Kilileu went about completing the form to obtain a release of the money, that was his prerogative - to employ the most convenient procedure to obtain the money, as instructed by the accused.

5. Did the accused instruct or put pressure on Mr Kilileu to apply for and obtain a release of the money to pay Milne Bay Properties?

Yes. By this time, the accused had no money to repay the company. His repayment was in arrears by ten months. If he did not pay up, the company would have taken certain remedial actions against him to enforce the loan agreement. The accused says that Milne Bay Properties did not put any pressure on him because it was owned by the provincial government, of which he was part of the executive. That may be true. Nevertheless, this explanation is unacceptable. Milne Bay Properties is a corporate legal entity on its own. His relationship with the company was purely commercial. It was not a matter of goodwill. I find that, even in the absence of any formal request or notice by the company to him to pay up, he was under real pressure to come up with the money. If he did not pay up, he would have been taken to court. He would then have been exposed regarding this deal, which, on the face of it, appeared to be a conflict of interest situation.

6. Did the accused give clear and full instructions to Mr Kilileu to apply for K2,976?

Yes. The accused himself said he gave instructions to Mr Kilileu to apply for the amount in two parts, the total of which was K2,976.

7. Did Mr Kilileu show the accused the completed VIF application containing the figure K2,976 before the accused left for his constituency?

Mr Kilileu's evidence on this is slightly distorted. At one stage, he says the accused left with him the signed form with instructions to apply, and that he showed the accused the completed form before the accused left and before he submitted the completed form for approval. It is not clear on which date and time he showed the completed form to the accused. The accused says Mr Kilileu told him he was very busy with other members' applications and told him to just sign the form and leave it with him and go. This he did, and he left the office without seeing the completed form and took a Talair flight home the same day. I am left with some doubt as to whether Mr Kilileu showed the completed form to the accused. Therefore, I will give the benefit of the doubt to the accused. Nevertheless, that does not mean the accused did not know what amount was going to go on the application for "administrative costs". Indeed, I have already found that he knew the figure and the purported reasons, albeit misleading, which were going to be stated on the second application.

8. Did the accused instruct Mr Kilileu, or anyone else for that matter, to cash the cheque and appropriate the money in the manner described by Mr Kilileu?

This issue is an important one. It is the accused's word against Mr Kilileu's word. Which version do I accept? In other words, who is telling the truth? I must now assess the reliability of the testimony in the light of, inter alia, their demeanor in the witness box. This is no easy task. Indeed, my task is complicated to some extent by the part played by these two men in the earlier phase of the application. In a way, they are accomplices. They both knew, or ought to have known, that the guidelines did not allow for such applications. They both tried it in the first application, and it failed. They got together and decided to have a second go. This they did, although the method used is disputed. All this was done in an environment of co-operation and trust, as is normally found in any working relationship between a senior member of an establishment which employs a support staff member. Mr Kilileu was duty-bound to assist the accused. The accused had a legitimate right to demand efficient performance on the job by Mr Kilileu. When the first application failed, the accused no doubt instructed him and pressured him to devise another method of obtaining release of the VIF funds. They are in agreement up to that point. The only thing they differ on is what the accused told Mr Kilileu to do with the cheque when it was released to him.

I must warn myself as to the dangers of accepting Mr Kilileu's evidence in these circumstances. There is a likelihood that one accomplice may fabricate or concoct evidence against another accomplice, either to get even or to seek to exonerate himself by casting the entire blame on the other person. It is an established rule of practice that I must warn myself that it is dangerous to convict unless the accomplice's evidence is corroborated by other witnesses. This does not, however, mean that I cannot convict on the uncorroborated evidence of the accomplice alone if the evidence of one accomplice alone is cogent, convincing, and very reliable. See State v Fineko [1978] PNGLR 262 and State v Amoko-Amoko [1981] PNGLR 373.

As I have already said, the accused and Mr Kilileu only differ on this last episode of their joint exercise. It is submitted for the accused that Mr Kilileu's conduct that day was criminal in nature and that he did some things which the accused, in his right-thinking mind, would not have done himself. He first received a cheque for K2,976 in the name of "VIF Committee Chairman, North Goodenough Constituency, Bolubolu, Goodenough Island," cheque No 51204 dated 10 April 1992. Then he gave it to Mr Ambrose, who identified himself to him as a committeeman of the accused, just to get K68.20 he had spent on the constituency's truck. So he gave him the cheque and told him to go and cash it at Westpac Bank, Alotau, and bring back the cash to him. Mr Ambrose went to the Westpac Bank and sought to cash the cheque, but he was told to go back and get it endorsed for encashment. He went back to Mr Kilileu, who endorsed the cheque to "pay cash". Mr Ambrose then went back to the bank, where he signed the cheque under the "payee" section and was given the cash, which he took back to Mr Kilileu. Mr Kilileu gave K68.20 plus another K20 to Mr Ambrose.

In addition, it was submitted for the accused that Mr Kilileu is not a man to be trusted, because he was doubtful and evasive on some areas of his evidence. Furthermore, the accused says he did not benefit at all from the exercise, because he never got the title to the property.

The State, on the other hand, submits that Mr Kilileu was only an employee of the provincial government, and he was merely following instructions given to him by the accused. In other words, he was instructed and pressured and overwhelmed by the pressure exerted on him by the accused to obtain the money and pay up; otherwise, his job was at risk. It is submitted that Mr Kilileu did not stand to gain from this exercise and did not gain anything except to safeguard his job. It is submitted that everything that he did was under the direction, and for the personal benefit, of the accused.

It is true that the accused was out of Alotau when Mr Kilileu arranged for the cheque to be cashed and proceeds paid out accordingly. This minimises, or should I say eliminates, the possibility of any instructions being issued to Mr Kilileu by the accused subsequent to the receipt of the cheque by Mr Kilileu. Indeed, the accused says he did not know if his application was approved or not and, if approved, whether the cheque was with Mr Kilileu.

But that is not the thrust of the State's case. The State's case is based on the instructions issued by the accused when the rejection of the first application and the proposed second application were discussed at Mr Kilileu's office before the accused departed for his constituency. The question is whether the accused gave those instructions which Mr Kilileu says he gave and, if so, whether they were such that Mr Kilileu had no option but to follow those instructions in whatsoever manner, albeit illegal, he saw fit.

I agree with both counsels that the decision on these issues depends on my finding on the credibility of the two witnesses. I will deal with Mr Kilileu's evidence first. His evidence on the whole is fairly consistent, except for the evidence regarding whether or not he showed the accused the completed form in respect of the second application. I have already found in favour of the accused on this latter piece of the evidence. But I've also said that such evidence is of little value to the defence case, because the fact is that the accused knew the details, including the amount of money which was going to go on that form that he signed. Mr Kilileu has not been charged with any criminal offence yet. But he has given a frank and full disclosure of what transpired between him and the accused, including his own probable criminal conduct. He has not withheld anything. He has freely exposed himself to the risk of ridicule, condemnation, and possible criminal prosecution. He has not tried to shift the entire blame on the accused. After all, he stood to gain nothing whatsoever from the exercise. He was merely performing his job as directed by one of his superiors. He had to perform or face the risk of losing his job. When faced with the dilemma, he chose to keep his job. I do not think he acted unreasonably. I find him to be a truthful witness.

On the other hand, the accused has given various explanations, many of which lack logic. He has also raised some fresh material evidence which was not put to State witnesses in cross-examination. I have already pointed out those in my judgment. He gives me the impression of a witness who is calculating his answers to suit the theory of his defence, no matter how shallow and illogical they may sound to others, not to mention the Court, eg his story about filling in two applications on the second occasion, the one seeking funds for payment of Milne Bay Properties being a much reasoned one than the first one. Another example is that he keeps talking about his people in North Goodenough regarding the land at Sanderson Bay, when it is very clear that his application form to the NHC, which was witnessed by his wife, Elasanity, and the loan agreement form which he signed with Milne Bay Properties are both clearly personal.

He also gave some story to the police in his record of interview, which is totally contradictory to his line of defence in Court. On 19 July 1993, the accused initially told the police that after the NHC approved his application for purchase of land under the Home Ownership Scheme, he went to Goodenough and told his people about it and told them he would apply for VIF funding. This he did, and the Executive Council approved it, and it was certified by the chief accountable officer, the Secretary, and a cheque was drawn for the payment for the land. This cheque was paid to "my board of trusty (sic) and they paid this cheque to the Housing Corporation" (see Qns 40-45). When he was pressured further regarding his deal with Milne Bay Properties, he admitted it and said he complied with normal VIF procedures to obtain the money, and Mr James Kilileu paid the sum of K2,470.72 to the company. (Qns 46-49). Then the interview was suspended for further enquiries. The record of interview resumed on 21 July 1993. The accused told the police that he applied for the money to cover the committee's allowances. He was then shown cheque No 51204 for K2,976 and was asked where the cheque was cashed. He answered it was cashed at Westpac Bank, Alotau branch. Asked where the money went, he said, "to the committees". When shown the Milne Bay Properties receipt for payment of K2,470.72 and asked for an explanation, he said, "Yes, James Kilileu and Ambrose Ivekolia cashed the cheque and paid Milne Bay Properties K2,470.72 and paid the rest to the committees". The above statements and many other statements in that record of interview clearly show that the accused was twisting and turning things around to justify his wrong-doing.

These statements and his own evidence in Court, which I have referred to, show that he is not a credible witness. I find that he lied about not instructing James Kilileu to cash the cheque and pay the monies out in the manner described by Mr Kilileu. I find that Mr Kilileu had nothing to benefit from the exercise.

I also find that, despite what Mr Ambrose said in Court, the accused instructed him to go and see Mr Kilileu and get the cheque cashed in order for payments to be made out in accordance with his instructions. Mr Ambrose would not have endorsed that cheque just to get his K68.20. He endorsed that cheque for encashment well knowing that he had the authority to do so from the accused. I consider that the accused is lying on these aspects of the evidence.

The fact that the accused never got the registered title to the land is entirely his fault. It was in his personal interest to ensure that the necessary legal documentation was completed in order to facilitate the transfer of title to him now that the purchase price had already been paid on his behalf. He chose not to follow it up. That is his problem. We are concerned here with his having obtained money from the VIF to pay his personal debt with Milne Bay Properties by virtue of a loan agreement signed between the accused and the company. Upon payment of the money to Milne Bay Properties, the money became its property. If the NHC did not issue the title to the accused, then he has a cause of action against NHC to recover the money paid, based on breach of contract.

9. Is Mr Kilileu's evidence corroborated?

I consider Mr Kilileu's evidence to be so reliable and truthful that it leaves no need for corroboration evidence. His evidence in the light of the evidence given by Mr Nunisa, Mr Butterfield, Mr Gabina, and Mr Ambrose and other documentary evidence before me also supports the story given by him. In any case, the accused's lies to the Court also corroborate Mr Kilileu's evidence.

LEGAL ISSUES

Having decided the factual issues, I will revert to the two legal issues which I pointed out in the earlier stages of my judgment. On the first issue of whether the accused applied the money to his own use, I have already found that he instructed Mr Kilileu to apply the money to the payment of his personal debt with Milne Bay Properties. Mr Kilileu paid the money, on his instructions, on behalf of the accused and for the personal benefit of the accused. The actual payment of the money to Milne Bay Properties was done by Mr Kilileu under direction from the accused. Mr Kilileu merely became a conduit pipe for the payment. It is immaterial that the accused did not pay the money in person - the point was that the money was applied to the personal use of the accused in paying his loan debt. Indeed, the accused does not contest this issue as much as he has contested the second issue.

The second issue is whether the accused acted dishonestly. From a subjective point of view, the accused knew that he had no legal right whatsoever to use the money designated for "administrative costs" for the North Goodenough VIF Committee to pay off his own personal debt with Milne Bay Properties. He knew, too, in the first place, that if he had applied for the money to pay off this debt in the second application, the money would not be given to him, because he was denied the money in his first application. He was intelligent and experienced enough to know that what he was doing was wrong by virtue of the VIF guidelines.

From an objective point of view, there is no doubt that any ordinary person in his constituency would have known that what he did was wrong, because they were not going to collectively benefit from the land on which the accused was allocated to build his personal house. He did not believe, in the first place, that he required VIF money to buy the land for the people of his constituency, because there is nothing in the NHC application form which refers to the people of North Goodenough and funds to come from the VIF. In fact, the application contains a full disclosure of the accused's personal financial status, in terms of his own source of income and existing savings and debts. Indeed, he first went to his own bank, and when his bank refused to finance the purchase, he went to another private quasi-financial institution. It was only when he could not repay Milne Bay Properties that he went to seek VIF finance. And when his first application for VIF funds was rejected, he insisted and re-submitted a second application and misled Mr Gabina into approving the finance for "administrative costs." Who in his constituency would doubt his dishonesty? Likewise, any ordinary, right-thinking, and honest person in Milne Bay Province would have concluded that what he did was dishonest. I, too, do not have any doubt that he was dishonest.

In all the circumstances, I am satisfied beyond reasonable doubt that he dishonestly applied the money to his own use. I find him guilty as charged in the indictment.

Lawyer for the State: Public Prosecutor.

Lawyer for the accused: M Cholai Lawyers.