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State v Chilen [2008] PGNC 200; N3549 (10 October 2008)

N3549

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR 1282 OF 2006

THE STATE

V

WILLIAM CHILEN
Of
LONIU VILLAGE, LORENGAU, MANUS PROVINCE
Prisoner

Waigani: Davani .J
2008: 9th, 10th October

SENTENCE – Criminal Law – Misappropriation – K65, 000.00 – s.383 (A) (1) (2) of Criminal Code Act

SENTENCE – Guilty plea– creation of bank accounts– application of proceeds to personal use – breach of trust – 4 years

Facts

As representative of a church group, and on behalf of that group, the prisoner applied to the National Gaming Board (‘NGCB’) for funding to build a church in his village. The NGCB approved funding and paid to the church group a cheque of K65, 000.00. The prisoner collected this cheque then opened a new bank account in his name and with 3 others, deposited the cheque after which he made several withdrawals.

The cheque of K65, 000.00 was never applied towards the building of the church.

Issue

What is an appropriate sentence?

Held

A short, sharp sentence of 4 years.

Cases cited
State v Zimma Munduai (2000) N2036
State v Scott Lalio (2006) N2967

Counsel:

T. Ai and P. Yaku, for the State
L. Simingi and N. Yawip, for the Prisoner

SENTENCE

10 October, 2008

1. DAVANI .J: On 9th October, 2008, William Chilen of Loniu Village, Lorengau, Manus Province (the ‘prisoner’) pleaded guilty to one count of misappropriation, charge laid under s.383(A)(1)(2) of the Criminal Code Act (‘CCA’). The provision reads;
   

"383A .Misappropriation of property

(1) A person who dishonestly applies to his own use or to the use of another person –

• (a) property belonging to another; or
  
• (b) property belonging to him which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person.
  

is guilty of the crime of misappropriation of property.

(2) An offender guilty of the crime of misappropriation of property is liable to imprisonment for a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 years:-

• (a) where the offender is a director of a company and the property dishonestly applied is company property; or
  
• (b) where the offender is an employee and the property dishonestly applied is the property of his employer; or
  
• (c) where the property dishonestly applied was subject to a trust, direction or condition; or
  
• (d) where the property dishonestly applied is of a value of K2, 000.00 or upwards.
  

(3) For the purposes of this section –

• (a) property includes money and all other property real or personal, legal or equitable, including things in action and other intangible property; and
  
• (b) a person’s application of property may be dishonest even although he is willing to pay for the property or he intends to restore the property afterwards or to make restitution to the person to whom it belongs or to fulfil his obligations afterwards in respect of the property; and
  
• (c) a person’s application of property shall be taken not to be dishonest, except where the property came into his possession or control as trustee or personal representative, if when he applies the property he does not know to whom the property belongs and believes on reasonable grounds that such person cannot be discovered by taking reasonable steps; and
  
• (d) persons to whom property belongs include the owner, any part owner, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender’s application of the property, had control of it."
  

Evidence

2. The evidence or circumstances under which the prisoner pleaded guilty to are as outlined in a statement handed up to me by Mr. Ai for the State. These are facts that Defence counsel accepts as being the evidence on which their client could be convicted.
   
3. The evidence is that in March 2000, the Lolak Local Catholic Church of Manus (‘LLCM’) prepared a proposal for submission to the National Gaming and Control Board (‘NGCB’) seeking financial assistance for the completion of the Loniu Lolak Local Catholic Church. The amount sought was K28, 000.00. The prisoner took this submission to Port Moresby for presentation to the NGCB. Thereafter, a cheque dated 4 August, 2000 in the sum of K65, 000.00, cheque no. 603856, was raised by the NGCB for the Lolak Catholic Church. The prisoner uplifted this cheque. On 15th August, 2000, he deposited this cheque into an account with the PNGBC Boroko Branch in the name of the Lolak Catholic Church, Account No. 201-6065769. Withdrawals of K25, 000.00 and K31, 000.00 were then made from those accounts following the deposit.
   
4. On 20th December, 2000, a deposit of K28, 000.00 was paid into the Lolak Catholic Church, Account No. 304-6244793, a PNGBC account held in Madang.
   
5. The Lolak Catholic Church Committee of Manus noted this deposit and assumed that these were the funds from the NGCB. However, they later learnt that the NGCB had paid a sum of K65, 000.00 for the project. Inquiries were then made, and a complaint lodged with the Police. Investigations revealed that in reality, instead of a request to the NGCB for K28, 000.00, the prisoner had submitted a proposal for K65, 000.00. It was further revealed that the prisoner had opened the Account No. 201-6065769 at the BSP Boroko on 14th August, 2000, a day before the deposit of the cheque of K65, 000.00 from NGCB. The signatories to that account were the prisoner as the Chairman, Mary Chilen, his wife as the treasurer and James So’on, a relative as the secretary. From the Account No. 201-6065769, the prisoner withdrew the sum of K37, 000.00, monies belonging to the NGCB, and applied it to his own use.
   

Aggravating factors

6. The aggravating factors in this case are the following;
   
   1. The prisoner was in a position of trust when he took the proposal for fundraising to the NGCB.
      
   2. He did not advise the other committee members or the villagers that he had received K65, 000.00 from the NGCB.
      
   3. He opened an account in Port Moresby without the knowledge of the villagers and there, deposited the NGCB’s cheque of K65, 000.00. He then dealt with the monies without authorization from the Church Committee.
      

Mitigating factors

7. The mitigating factors are;
   
   1. He admitted to having applied the monies to his own use.
      
   2. This is his first offence. He does not have any prior convictions.
      

Existing bank accounts;

The documentation on the Court file also shows that there were three submissions prepared to the value of K28, 000.00, K50, 000.00 and K65, 000.00. These were submitted respectively to the Chairman, Catholic Church of PNG, the Chairman of Law and Order Committee and the National Gaming Control Board. This is contained in the prisoner’s affidavit sworn on 16th August, 2006 and filed in the District Court Waigani as CR 382 of 2002 between the State and William Chilen. The affidavit deposes further that he delivered the proposal for K65, 000.00 in his capacity as the Chairman of the Port Moresby branch of the Fundraising Committee of the building of the Lolak Catholic Church. The submission of K28, 000.00 was delivered by Mr. Karol Minas in his capacity as the Chairman of the Lolak Catholic Church. Karol Minas also took delivery of the submission for K50, 000.00 to the Bishop of the New Guinea Islands and the Port Moresby members of the Catholic Church of PNG. In that affidavit, the prisoner deposes that the Committee had requested a sum of K83, 000.00 from the NGCB, but only K65, 000.00 was approved.

He deposes that upon receipt of the cheque of K65, 000.00 on 1st August, 2000, that he, together with James So-on as the Secretary, Mary Chilen as the Treasurer and he, as Chairman, opened a bank account with the PNGBC Boroko Branch, Account No. 201-6065769. On 15th August, 2000, the cheque of K65, 000.00 was deposited into that account.

A copy of the National Gaming Control Board’s cheque shows that it is dated 4th August, 2000, cheque no. 603856 made payable to "Lolak Local Catholic Church", the sum of K65,000.00.

8. The evidence is that there were several bank accounts in operation in the name of the "Lolak Local Catholic Church", before the cheque of K65, 000.00 was deposited, after it was deposited and during the period, the several transactions referred to above were conducted. I set out below the name and description of these accounts and the transactions that were carried out on these accounts. These accounts are;
   
   1. Account No. 100043078 in the names of William Chilen and Mary Chilen of P O Box 487, Boroko, NCD.
      
   • On 30th October, 2000, a sum of K15, 000.00 was transferred to this account from Account No. 201-6065769.
     
   2. Account No. 304-62447 held at the BSP Madang in the name of Lolak Local Catholic Church care of the Patron, Mr. Paul Pokolou, Lolak Local Catholic Church, P O Box 37, Lorengau 641.
      
   • On 20th December 2000, a sum of K28, 000.00 was deposited into this account from Account No. 201-6065769.
     
   3. Account No. 201-6065769 was opened on 8th August, 2006 at the BSP Boroko Branch, in the name of "Lolak Local Catholic Church", care of the Chairman, Lolak Local Catholic Church, P.O. Box 487, Boroko, NCD. The signatories to this account were William Chilen, Mary Chilen and James So’on, with any two to sign.
      
   • On 30th October, 2000, the sum of K25, 000.00 was withdrawn. Copy of the withdrawal form signed by Mary Chilen and William Chilen is exhibit "H" on the Court file.
     

Money trail

9. Before the cheque of K15, 000.00 was deposited into Account No. 1000430781, in the name of the Chilens, there was a balance of K309.19. After the deposit of K15, 000.00, the balance increased to K15, 309.19. During the period 31st October 2000 to 21st December 2000, a total of 37 withdrawals were made. By 21st December, 2000, only K20.03 remained in the account.
   
10. This account is exhibit "W" in the Court file.
    
11. Exhibit "R" is Account No. 201-6065769, a transaction account in the name of the Lolak Local Catholic Church, P O Box 487, Boroko, NCD. During the period 15th August, 2000 when the cheque of K65,000.00 was deposited to 20 August, 2000, seven withdrawals were made in the amounts of;
    

K 1,000.00

K 800.00

K 2,000.00

K25, 000.00

K 1,500.00

K 2,900.00

K31, 000.00

12. Exhibit "V’ which is a statement of the Lolak Local Catholic Church, Account No. 304-62447 care of the President, Mr. Paul Pokolou, P O Box 37, Lorengau 641, shows a transfer of funds of K28,000.00 on 20th December, 2000, from Account No. 201-6065769. It also shows a deposit of K2, 500.00 on 2nd February, 2000.
    

Analysis of evidence and the law

13. The statements from Paul Pokolou, President of the Los Negros LLG Manus dated 27th April, 2005 and Joseph Pokolou, Secretary to the Executive of the Lolak Local Catholic Church of Los Negros Island, state that a sum of K28, 000.00 was deposited into cheque account no. 304-6244793. That is the only amount.
    
14. The trail of monies shows that K65, 000.00 was deposited into the new account created by the prisoner, some of which were then transferred to his personal account (1000430781), being the sum of K15, 000.00 transferred on 30th October, 2000. There are withdrawals on that account of various amounts which remained unaccounted for.
    
15. Clearly, the prisoner cannot say that K65, 000.00 was applied towards the building of the Catholic Church. The evidence shows that the monies were applied to his own use that is the balance of K37, 000.00. If the monies were applied towards fundraising purposes, there is no evidence or at least statements from members of Loniu Village to show that this was done with their agreement.
    
16. The Pre-Sentence Report speaks or recommends a suspended sentence. The Pre-Sentence Report does not contain the views of the victims.
    
17. The Courts have held that if the prisoner is looking to a drastic suspension of sentence or in other words, a huge drop in sentence, it must obtain the views of members of the community on an appropriate punishment or whether the community is prepared to assist manage the community works. The Courts are bound to be in touch with the aspirations of the people, as mandated by the Constitution and if the criminals are to be sent back to the community, the community must have a say in this ( see State v Zimma Munduai (2000) N2036; State v Scott Lalio (2006) N2967).
    
18. As far as I am aware, the church building remains incomplete, a white elephant. The prisoner requests that he be released on probation to complete the church. There is no guarantee that this will occur.
    
19. In any event, these are funds from the National Gaming Control Board which have been misappropriated and not applied towards the purpose they were supposed to. These funds that were meant for a village church project but have been misused. Effectively, the villagers received the K28, 000.00 they requested but the balance of K37, 000.00 was used by the prisoner.
    
20. As far as the villagers are aware, they applied for a sum of K28, 000.00 which was paid to them. As far as the prisoner is concerned, he increased the amount to K65, 000.00, obtained the funds and then applied to his own use, a complete misuse of funds not provided for under the protocols of the National Gaming Control Board. These protocols were approved by the then Prime Minister and the Minister for Finance, Sir Mekere Morauta, who adopted a policy guideline that funds from the NGCB will be applied towards assistance for youths, women, sports, church, schools and health. (see statement by Jacob Gris Jumogot dated 6th April, then Governor of Manus and Registrar of the NGCB in July 1999).
    
21. If monies are to be repaid, it should be repaid to the National Gaming Control Board. As far as I can tell, the prisoner is not in a position to repay this amount because the Pre-Sentence and Means Assessment Report shows that his family members will contribute K150.00 each fortnight, a sum total of K1,500.00. There is always this strong possibility that monies meant to be applied towards repayment of the amount owing to the National Gaming Control Board, will be applied towards every day family expenses.
    
22. As far as this Court is concerned, the prisoner was aware he was misusing funds meant for the village project.
    
23. In this case, he has not yet attempted to repay the monies owing, although he was committed on 6th September, 2006, some 2 years ago. I find his requests for repayment are not genuine.
    
24. The Pre-Sentence Report states that the prisoner applied K36,332.77 towards fundraising activities for the church and has K1,488.76 remaining. There are copies of receipts in the Court file. In any event, these receipts have not been verified and tested so I cannot place any weight on them. But I accept that some of the K37, 000.00 may have been applied towards the fundraising effort. But the prisoner’s claims of applying funds towards fundraising are negated by the statements from Martin Makan Pokolou dated 6th April, 2006 who is the Treasurer of the Loniu/Lalok Local Catholic Church who said at no time did the church authorize the opening of the account that the prisoner opened in Port Moresby. Paul Pokolou states in his statement that the prisoner headed the fundraising committee in Port Moresby and did send them some funds. He did not say how much.
    
25. The maximum sentence for this offence is 10 years because the amount used is more than K2, 000.00.
    
26. The offence is committed by a trusted member of the community. From the statements on the Court file, it tells me that the Loniu people are reluctant one way or another, to say that the prisoner misappropriated these monies. But in terms of mitigation, I can say that some of the K37, 000.00 was used for the fundraising drive and some were applied to the prisoner’s own use. The evidence is that he created an account without the authority of the Church Committee and obtained monies from the NGCB that the committee members were not aware of and thereafter used it without their knowledge.
    
27. Because he has come to Court and admitted this offence, and that he is a respected member of the community, the sentence must reflect that. I find that a short sharp sentence is appropriate. The prisoner shall serve 4 years in hard labour.
    

Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Prisoner