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State v Donny [2004] PGNC 145; N2609 (11 May 2004)

N2609

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

CR 206 of 2004

THE STATE

v.

MARGARET DONNY

Kavieng: Sevua, J
6th & 11th May 2004

CRIMINAL LAW – Sentence – Misappropriation – Employee of company - Pay Clerk and Supervisor – Fraudulent scheme established to swindle funds from employer – Amount misappropriated K11, 400.00.

CRIMINAL LAW – Sentence – Misappropriation – No restitution – Employer withheld entitlements and recovered musical equipment purchased with stolen money – Whether amounted to restitution – Sentence of 2 years with partial suspension

Case cited:
Wellington Belawa v. The State [1988-89] PNGLR 496.

Counsel:
L. Rangan for State
A. Turi for Accused

11th May 2004

SEVUA, J: The accused has pleaded guilty to a charge of misappropriation of the sum of K11, 400.00, contrary to s. 386A (2) (b) of the Criminal Code.

She was employed by Emirau Marine Products in Kavieng as a Pay Clerk and Supervisor in the vanilla buying business of the company. Between 30th April and 4th June 2003; she devised a fraudulent scheme where she started to steal cash from her employer. She was responsible for writing receipts for the registered customers of the company who came to sell their vanilla beans to the company. She sent these receipts with details of the customers’ sales, i.e. names, quantity, weight and cost per kilogram to another employee who processed the payment in cash and handed them back to the accused to pay the customers. During the same period, the accused began writing false receipts with falsified entries of customers’ names, weight of their beans and the costs. She submitted these to the other employee who gave her the cash. When she received the cash she paid the customers, however those whose names she falsified, she took the money in their names to her house until she deposited them into her bank account at BSP Kavieng Branch. The total amount of money she misappropriated through her fraudulent scheme was K11, 400.00. Consequently, she was dismissed from her employment.

On behalf of the accused, Ms. Turi submitted the following. The accused is 40 years old and married with 7 children whose ages range from 5 years to 22 years. She comes from Niuiruka Village in Kwikila Sub District of Central Province. She resides at Rawal No 4 Compound near Kavieng and she has been a resident there for 10 years. She was arrested on 13th November 2003 and released on bail on 14th November therefore she spent only one day in custody.

At the time of committing this offence, the accused was employed in the capacity of Pay Clerk and Supervisor by Emirau Marine Products. She commenced employment sometime in 2000 and was eventually terminated in June 2003 so she had been employed for about 3 years. Her commencement salary was K70.00 a fortnight which increased to K80.00 per fortnight last year. Counsel submitted that the reasons the accused stole the money were that firstly, she had asked for financial assistance to attend her father’s funeral at home and was promised assistance, however the employer later reneged on this therefore she was not given any assistance. She therefore did not attend her father’s funeral. Secondly, it was submitted that the accused had been working overtime and long hours but was never paid any remuneration for overtime. She was placed under financial strain that eventually she decided to employ the scheme she set up to systematically swindle funds from her employer.

In answer to Question 57 of the record of interview conducted on 11th December 2003, the accused advanced three reasons for committing the crime. Firstly, she said her father died in Port Moresby and her relatives telephoned her boss to permit her to travel to Port Moresby to see her deceased father. However, when she asked for assistance, her employer did not help. Secondly, she asked the company for financial assistance towards her brother’s bride price but her employer did not help her. And finally, she said she used to work overtime but was never remunerated for that. She therefore decided to steal from her employer.

The accused has not made any restitution of the sum of K11, 400.00 that she misappropriated. At the time of her termination she did not receive her entitlements and I think she is entitled to some benefits in accordance with the provisions of the Employment Act. The Court has perused the documents provided by the Department of Labour in Kavieng relating to this issue and it is noted that the State does not dispute this. The Court has also heard that the money stolen by the accused was used to buy food and other items for her children. There is evidence that the accused purchased a Yamaha PSR 2000 Keyboard for her son on 9th May 2003 for a sum of K5, 999.90. This instrument was recovered by the complainant company on 17th November 2003, some five months after the accused was dismissed over this offence.

Furthermore, counsel had submitted that the Department of Labour in Kavieng was preparing some documents for the accused in relation to her termination benefits which she asked the Court to take into account and these documents have been provided to the Court as I adverted to earlier on. The State has not raised any objection to this and although, the benefits or entitlements are issues that needed to go before a civil Court, this Court is of the view that submissions relative to that issue can be considered in mitigation as it is satisfied that the accused is, in law, (under the Employment Act) entitled to some benefits at her termination. And since the State takes no objection on this issue the Court accepts the accused’s submission that the employer had withheld these benefits and the Court should consider this as part restitution of the total amount of money stolen by the accused. I accept that submission.

From the documents provided by the Provincial Labour Officer, the Court has noted the various calculations of entitlements for the accused. The company was obliged to pay double time wages on Sundays that the accused had worked without being remunerated. For the period 30th April 2000 to 25th June 2003, the accused was entitled be paid double time for Sunday work at 1,216 hours which amounted to K5, 617.92 at K1.54 per hour. Overtime remuneration from 5th May 2000 to 21st January 2002 came to 777 hours @ K1.54 per hour which amounted to K1, 794.97. There is 200 hours of work put in on public holidays from June 2000 to June 2003 and that came to the sum of K924.00 at double time rate of K1.54 per hour. Recreational Leave entitlement is K776. 16 and pro rata long service leave entitlement over 3.2 years is K358.76. All those benefits amount to K9, 471.71.

Then there is the sum of K5, 999.90 for the keyboard that was repossessed by the company. Furthermore, there is the unpaid wages of the accused’s five children who were employed as cheap labourers from 2000 to 2003, which the Court must condemn. It seems that Emirau Marine Products had breached the provisions of the Employment Act in employing under age children to provide cheap labour without remunerating them. The company should therefore be prosecuted for such a breach of the labour laws. So the total amount of benefits which were not paid to the accused at the time of her termination together with the cost of the keyboard repossessed by the company amounted to K15, 471.61, which is more than the total amount misappropriated by the accused.

And whilst this issue is probably not one that a criminal Court could consider, in terms of the benefits that the accused is claiming for her children as unpaid benefits which she wanted to apply as part reimbursement, the Court will accept that. This Court must condemn in the strongest terms possible the company’s breach of the law in employing under age children as cheap labourers. This is a serious issue which the relevant authorities should look into and deal with Emirau Marine Products and its principals.

I accept that the total benefits owing to the accused at the time of her termination plus the cost of the keyboard recovered by the company amounted to more than the sum of K11, 400.00 the subject of this indictment. Even without the unpaid wages of the children, the entitlements due to the accused and the cost of the recovered keyboard amounted to K15, 471.61 which is K4,071.61 more than the amount of money stolen by the accused. If Emirau Marine Products had withheld the accused’s termination benefits then I would accept that as reimbursement of the money misappropriated. In that sense, the accused has repaid all the money she had misappropriated therefore this should have some bearing on sentence.

I think the State had said that the charge was brought under s. 383A (1) (b) of the Criminal Code, however that is not correct. The charge should be under s.383A (2) (b). Defence counsel also alluded to s. 383A (1) (b) and said the maximum penalty was 5 years. But again that is not correct. What counsel failed to point out in her submission is that there is an exception in subsection (2) and the maximum penalty for any of the exception in subsection (2) (a) to (d) is 10 years imprisonment, not 5 years. As the accused falls under subsection (2) (b), which states: "where the offender is an employee and the property dishonestly applied is the property of his employer." The accused is therefore liable to a maximum penalty of 10 years not 5 years as submitted.

In this case, the accused had no right to steal the money. The reasons she advanced for committing this offence are not justification for stealing from his employer. Whilst I can appreciate that she must have felt very upset because she was unable to attend her father’s funeral in Port Moresby as her employer did not help her financially, that did not entitle her to steal from the employer. Even the employer’s refusal to assist her financially with her bother’s bride price is not a justified reason for committing the offence. If she was upset over the employer’s refusal to assist her financially, the money did not belong to her so she had no right whatsoever to obtain the money in the manner she did. There are ways in which she could claim for overtime and weekends and public holiday work. She could have gone to see the Department of Labour for assistance like she has done now with her termination benefits. I find that the reasons given by the accused to swindle money from her employer has no legal justification at all.

So what the accused did was very stupid to say the least. Her counsel described the fraudulent scheme as not a complicated one, and indeed it was a simple, stupid method that was bound to be discovered. The accused was stupid enough not to realise that it would not work and that is why I think the whole scheme was doomed to fail from the start. But I guess she was blinded by her own greed and dishonesty that she failed to realise how stupid she was. Nevertheless, she must be punished for her crime.

In mitigation, Ms. Turi submitted that the accused had pleaded guilty; she had freely admitted her guilt in her record of interview and has not denied any fact; she is a first offender; she committed the offence out of desperation and she has shown remorse for her wrong. The Court is also informed that the company had also terminated the accused’s husband over this matter. Counsel referred to Wellington Belawa v. The State [1988-89] PNGLR 496 and urged the Court to consider the factors in that case – the degree of trust reposed on the offender; the period of time the offence was committed; use of the money; the effect of the offence on the victim and other employees; her own antecedent and restitution. It was submitted that a suspended sentence be imposed. It was also submitted that the offence falls into the second category, which warrants a 2 to 3 years imprisonment term. The Court was urged to consider a 2 to 3 years suspended sentence and a release on probation.

Finally, counsel submitted that a Means Assessment Report be ordered and an order for restitution made. However, I consider that there is no basis for a Means Assessment Report because the accused is no longer employed. Besides, she is incapable of repaying the money as there is no evidence that she has found another job. In any event, I have found that the withholding of her termination benefits by Emirau Marine Products plus the value of the keyboard that she purchased with the stolen money, which had been recovered are more than sufficient restitution.

The Court has duly considered all the matters put forth in mitigation and sentence. I accept that the accused is a first offender and a married woman with 7 children. She has pleaded guilty to the charge thus saving time and money to run a trial, but she would not have succeeded in a trial anyway, as she had no defence in view of her own admissions to police. However, all that aside, the crime of misappropriation is very prevalent nationwide. Despite numerous warnings by the Courts, people like the accused continue to commit this offence. I am of the view that a wholly suspended sentence is not appropriate on the basis that the accused must be personally deterred from committing this offence again. By imposing a custodial sentence, it will act as a public deterrence as well.

In all the circumstances, the accused is convicted and sentenced to 2 years imprisonment with light labour. I order that 18 months be suspended as she has deemed to have repaid the money, and on condition that she enters into a recognizance to keep the peace and be of good behaviour for 2 years commencing today. She will then only serve a period of 6 months in prison.

Lawyer for State : Public Prosecutor
Lawyer for Accused : Public Prosecutor