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State v Luma (No 2) [2021] PGNC 241; N8923 (22 July 2021)

N8923

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 36 OF 2019

THE STATE

V

JOEL LUMA
(No 2)

Bomana: Berrigan, J
2021: 13^th and 22^nd July

CRIMINAL LAW – SENTENCE – ABUSE OF OFFICE – S 92(1) of the Criminal Code - Most serious instance of the offence - deliberate, planned and serious abuse of the authority by Secretary of the Department of Works – Substantial monies committed to the prejudice of the State – Maximum penalty of two years of imprisonment imposed – Wholly suspended due to medical conditions.

Cases Cited:
Papua New Guinea Cases

SCR No 1A of 1981; Re Motor Traffic Act [1982] PNGLR 122
Ume v The State (2006) SC836
Public Prosecutor v Jawodimbari and Derari (2006) SC891
Regina v Peter Ivoro [1971-72] PNGLR 374
Goli Golu v The State [1979] PNGLR 653
The State v Tardrew [1986] PNGLR 91
The State v Frank Kagai [1987] PNGLR 320
Lawrence Simbe v The State [1994] PNGLR 38
The State v Aiwol (2012) N4681
The State v Hevelawa (No 2) (2017) N6875
State v Gilo (2017) N6897
The State v Warur (2018) N7545
The State v Yawijah (2019) N7767
The State v Namaliu (2020) N8506
The State v Joel Luma (2021) N8798

Overseas Cases

Attorney-General’s Reference (No 3 of 2003) [2004] EWHC 2020; [2005] 1 QB 73

References Cited

S. 19, s 92(1), s 92 (2) of the Criminal Code
s. 37(4)(a), ss. 37(4) and 37(5) of the Constitution

Counsel

Ms H Roalakona, for the State
Mr J Napu, for the Offender

DECISION ON SENTENCE

22^nd July, 2021

1. BERRIGAN J: The offender was convicted following trial of one count of abuse of office, contrary to s 92(1) of the Criminal Code: The State v Joel Luma (2021) N8798. The maximum penalty for such an offence is two years of imprisonment.
   
2. The offender was the Secretary of the Department of Works. In January 2011 the offender, in this capacity, executed sixteen written “Profomo (sic) Minor Works Contracts” with Road Stoa Limited for the supply and delivery of a pothole patching product called Quality Pavement Repairs (QPR), at a total value of K4,309,000. The approval of the contracts was a deliberate, planned and serious abuse of the authority of the offender’s office. The offender deliberately avoided the normal procurement processes. He concealed the contracts from the First Assistant Secretary of Operations, immediately responsible for overseeing maintenance and its procurement. He deliberately structured each of the contracts to fall just below his financial limit of K300,000 so as to circumvent the tender process required under the Public Finance (Management) Act, and knowingly issued certificates of inexpediency in his position as Secretary without the requisite approval from the Central Supply and Tenders Board and when there was no emergency. When subsequently met with resistance from his Finance Department, he directed the Assistant Secretary for Finance to make payment under the contracts on the basis that: Provincial Works Managers were urgently demanding the materials when they were not; the Central Supply and Tenders Board had not had an opportunity to meet to consider the Department’s submission for approval, when there was no such submission; and there was no need for legal clearance because the contracts were under his financial limit, when he had structured the contracts to deliberately circumvent the procurement requirements. Whilst it was not possible to say definitively what the comparative cost to the Department would have been if locally available products had been acquired instead of QPR, on a pure bag by bag comparison, QPR was a much more expensive product at a cost of K300 to K330 per bag compared to a maximum of K80 for the local product. In any event the offender’s actions prejudiced the State by committing a very large amount of its scarce financial resources to the purchase of products which had not gone through a transparent and accountable procurement process to consider their comparative quality, cost and value for money, together with the actual needs of the Department for pothole patching material at the relevant time.
   

Allocutus

3. On allocutus the offender said: I realise that the opportunity given to me by the State to head the Department of Works for the upkeeping of the assets of the State was a privilege. I would like to thank the people of PNG for that opportunity and I am very sorry I have committed offences against the standing rules. If given such an opportunity again, which I doubt given my age, I would do my best to avoid this. I have done my best to ensure that the roads in the country were in good strength but would have done better if I had consulted everyone in government and the Department and followed the rules. I say sorry to God. He is the ultimate judge in this matter. He will forgive me. I have confessed. Thank you for the opportunity to address the court.
   

Submissions and Comparative Cases

4. Defence counsel submitted that as no “motive” was established for the offence, in that it was not established that the offender acted for personal gain, the gravity of the offence is diminished. Furthermore, that there is no conclusive finding as to the actual monies lost by the Department. That he did not act alone, that his participation was minimal, that other officers in the finance department vetted the contracts, which were drafted by the State Solicitor’s Office, and that the offender’s participation was minimal. Furthermore, it is submitted that I found that the offender was ignorant of the law. I reject these submissions for the reasons which I set out further below.
   
5. In further mitigation, counsel submitted that he had advised his client to plead guilty but he had refused to do so, and that there is no leniency attached to a guilty plea. I will ignore the matters the subject of lawyer client privilege but will return to the fact that conviction followed trial below.
   
6. In further mitigation counsel submitted that: due to his client’s age and health he would not last a day in prison; he is a first offender; of prior good record; is remorseful; assisted police; pleaded guilty; there was aggravation offered by the victim or de facto provocation in that he as a pragmatic manager acted to address the State’s failure to address the appalling road conditions and road accidents in the country; prison would affect his family; and his education or employment; the offence was technical in nature, there is no evidence that the materials will prejudice the State; the offence is not prevalent because there is not a chance in “1000” years that the offender will reoffend; and “compensation or customary payment”. Accordingly, a suspended or non-custodial sentence is appropriate.
   
7. The State submitted that this was an instance of the worst type, or the most serious instance, of the offence. It involved a serious breach of trust. The effect on the victim was significant given the substantial monies involved, which were not used properly and potholes remain on the road. Whilst acknowledging partial suspension might be warranted it urged the court to require the offender to spend some time in custody.
   
8. The following cases were referred to by the State in its submissions.
   
   1. Public Prosecutor v Jawodimbari and Derari (2006) SC891: The respondents were public servants employed by the Department of Oro. Arthur Jawodimbari was the Provincial Secretary for the Department of Oro whilst Mr. Monty Derari was the Assistant Secretary, Division of Finance and Administration with the same department. The respondents used their positions to commit the Department to purchase houses using department funds at a cost of K110,000. That spending was not a budgeted item for the department to purchase. No proper financial procedures were followed to purchase properties. After the houses had been purchased, the two (2) houses were then transferred to the two (2) respondents with the understanding that they would repay the Department of Oro for the monies spent to buy the two (2) houses. Mr. Derari repaid some of the monies in instalments but then defaulted for two (2) years and one month when it was discovered by the audits that he had failed and defaulted in his repayments. In Mr Jawodimbari’s case he had the finance available to pay K20,000 to the Department of Oro with the proceeds obtained from selling his property in Port Moresby. He as the Secretary for the Department of Oro and the Chief Accountable Officer was instrumental in allowing the transactions to go through. It was these deeds that the State instigated the investigation which uncovered the deal. They were consequently charged for three criminal charges of conspiracy to defraud the State, abuse of office, 92(1), and misappropriation. They were each found guilty on Counts 2 and 3 but not guilty on Count 1. The sentence each of the respondents received was "no conviction was entered against their names" and were "discharged from any penalty on each count". The trial judge declined to enter a conviction in each case and the offenders were ordered to pay K2,000 as interest and stamp duty that were expended by the department to purchase the properties and go towards compensating the provincial government for any loss that might have incurred through this action. On appeal against sentence by the Public Prosecutor the Supreme Court imposed a sentence of 2 years imprisonment on each of them with hard labour. The whole of the 2 years was wholly suspended on the basis that the K20,000 has been repaid and also on the basis that each had paid K2,000 as compensation to the Provincial Government.
   2. The State v Aiwol (2012) N4681, Cannings J: An officer of the Internal Revenue Commission asked a husband and wife who were taxpayers for K1,500.00 for the purpose of issuing a certificate of compliance. They paid him K900.00 before becoming frustrated over not receiving a certificate. There was no such fee provided for by law, the offender acted for personal gain, and no certificate of compliance was forthcoming. He pleaded guilty to the offence of abuse of office. He pleaded guilty to s 92(2) and was sentenced to two years of imprisonment, wholly suspended on conditions including compensation;
   100. The State v Hevelawa (No 2) (2017) N6875, Salika DCJ: Jacob Hevelawa was the Director General of the Office of Library and Archives (OLA). Timothy Numara was the Manager, Corporate Services, OLA. Miriam Hevelawa was the wife of Jacob Hevelawa and the owner and sole Director of a company called Paja Sisters Trading. It was alleged that the three conspired to defraud the State by submitting inflated invoices for grass cutting, landscaping and removal of rubbish services through Paja Sisters Trading. Salika DCJ (as he then was) found all three guilty of misappropriation of State monies, and the two OLA officers guilty of abuse of office for approving the contract when there was a clear conflict of interest. They were each sentenced to 2 years of imprisonment for abuse of office, s 92(1), and 5 years for misappropriation.
        
9. Defence counsel also relies on Hevelawa to submit that in their case they were clearly motivated for personal gain, whereas that was not established here.
   
10. A further case is that of State v Gilo (2017) N6897, Miviri AJ: the offender pleaded guilty to s 92(1). She was employed by the Magisterial Services as land Court clerk at Kimbe District Court. She was appointed criminal clerk on 25^th to the 30^th December 2015. In her possession were 27 cartons of beer that police had confiscated off one Alice Arali Natau for noncompliance with law. Eight (8) cartons went missing. She was sentenced to 12 months, wholly suspended on good behaviour and payment of a K500 fine.
    

Consideration

11. The offender has been found guilty of abuse of office contrary to s 92(1) of the Criminal Code, for which the maximum penalty is two years (emphasis mine):
    

(1) A person employed in the Public Service who, in abuse of the authority of his office does, or directs to be done, any arbitrary act prejudicial to the rights of another is guilty of a misdemeanour.

Penalty: Subject to Subsection (2), imprisonment for a term not exceeding two years.

(2) If an act prohibited by Subsection (1) is done, or directed to be done, as the case may be, for purposes of gain, the offender is liable to imprisonment for a term not exceeding three years.

12. It is well established that the maximum penalty is reserved for the most serious instances of the offence: Goli Golu v The State [1979] PNGLR 653.
    
13. Section 19 of the Criminal Code provides the Court with broad discretion on sentence. Whilst guidelines and comparative cases are very relevant considerations, every sentence should be determined according to its own circumstances: Lawrence Simbe v The State [1994] PNGLR 38.
    
14. The offender is 64 years of age from Avatip Village in Ambunti District, East Sepik Province. His wife died in 2014 and he lives with his five children in Port Moresby.
    
15. The offender is highly educated. He graduated from Kerevat High School in 1973 and obtained a degree from the University of Technology in 1978. He holds a Masters in Construction and Management from the United Kingdom in 1996 and has completed many other training and related courses during the course of his employment.
    
16. In mitigation this is the offender’s first offence. He is of prior good character and has an impressive history of public service with the Department of Works for 36 years. He started as a graduate trainee with the Department in 1975 before rising to the position of Secretary in 2007, a position he held for 6 years. He was half way through his second term when he was dismissed in relation to this offence.
    
17. Defence counsel has submitted there was de facto provocation in this case on the part of the State. I do not agree. Nor do I find that there were extenuating circumstances, that is that “some relevant circumstances which operate so as to diminish the culpability of the prisoner, not in the strict legal sense but broadly, regard being had not only to moral considerations but to all the considerations which might reasonably be taken into account in order to determine whether it would not be just that the law should be applied in its full rigour”: see Regina v Peter Ivoro [1971-72] PNGLR 374; Ume v The State (2006) SC836. I was not satisfied on the evidence that the offender believed he was acting in response to an urgent need to improve the roads: see The State v Luma (No 1) at [216] of the Decision on Verdict.
    
18. It is the case that the State did not allege, and I did not find, that the offence was committed for the purposes of gain. However, I expressly found that the offence was committed in a deliberate, planned and very serious abuse of the authority of the offender’s office: The State v Luma (No 1) at [213].
    
19. The fact that the offence was not committed for personal gain does not reduce the culpability of the offending in itself, that is already reflected in the sentence under s 92(1) when compared with s 92(2) of the Criminal Code.
    
20. I also reject the proposition in mitigation that the offender “did not act alone”. Acting in concert with others is usually an aggravating not a mitigating factor. Putting that aside, as made clear by the decision on verdict, it was the offender who directed his finance officers through a memo containing several untruths, when they dared to question the contracts. I specifically rejected the offender’s evidence that the contracts were drafted by the State Solicitor: [179] of The State v Luma (No 1). I completely reject the suggestion that the offender’s participation was minimal. It was he who was entrusted with the office of Secretary and he who wilfully abused his office.
    
21. To be very clear I did not find the offender to be ignorant of the law. I found that the State could not establish beyond reasonable doubt that the offender deliberately ignored the procurement processes or set about to circumvent them when he approved contracts in 2009 and 2010. By comparison, however, I found that the State had established beyond reasonable doubt that he deliberately avoided the normal procurement processes when he approved the 2011 contracts for the reasons set out at [2] above. He concealed the contracts from the First Assistant Secretary of Operations. He deliberately structured each of the contracts to fall just below his financial limit as Secretary to circumvent the tender process required under the Public Finance (Management) Act. He knowingly issued certificates of inexpediency in his position as Secretary without the requisite approval from the Central Supply and Tenders Board, and when there was no emergency. When subsequently met with resistance from his Finance Department, he directed the Assistant Secretary for Finance to make payment under the contracts on the basis of a number of untruths. His conduct was not that “of a pragmatic manager” acting to address the State’s appalling road conditions. I accept that there was no evidence of gain. He may have acted because he thought he knew better than anyone else what was required but no one is above the law, and as I have said I was not satisfied that he acted out of any genuine belief that urgent action was required.
    
22. Contrary to defence submission, a person is usually entitled to a discount on sentence for pleading guilty. I make clear, however, that a sentence must never be made more severe because a convicted person has insisted on his or her rights under ss. 37(4) and 37(5) of the Constitution, including the right under s. 37(4)(a) to have the charge proved according to law. SCR No 1A of 1981; Re Motor Traffic Act [1982] PNGLR 122.
    
23. Similarly, a failure or a refusal by an offender to provide cooperation to law enforcement agencies does not aggravate his offending. (See a similar discussion in The State v Warur (2018) N7545 at [31] to [34] regarding guilty pleas.) However, cooperation with authorities, like an early guilty plea, will only be a significant factor in mitigation when it constitutes genuine contrition and remorse, or reflects a willingness to assist authorities in their investigations and facilitate the course of justice. The nature and extent of the cooperation and its value to authorities are relevant factors in this regard: see The State v Namaliu (2020) N8506 at [53]. The fact that the offender drove himself to the police station when required by police to do so does not constitute cooperation warranting mitigation on sentence.
    
24. I do not understand counsel’s reference to compensation. None has been made or offered.
    
25. I do accept, however, that the impact of the offending on the offender has been grave. He had an exemplary career. He has lost not only his career but his reputation after a life dedicated to public service. It is clear from the witnesses who testified against him that until the offence they held him in the highest regard. Whilst he has a significant asset in his home, he is financially dependent on his daughter. It appears to me that he will struggle to find employment again in the public service or possibly elsewhere, given the nature of the offence, and his age. Any imprisonment will affect his family.
    
26. The offender has expressed some remorse, but it is limited. He refuses to acknowledge that he wilfully abused his office as Secretary.
    
27. The offender’s age and health do constitute special factors in mitigation. He suffers cataracts on his eyes which affect his ability to read and write. These can usually be corrected but the position is not clear in this case. He also suffers two serious illnesses. Medical records show that he has a heart condition which required an operation, and that he suffers an ongoing urinary condition, which requires regular treatment and the use of a catheter.
    
28. Against these factors, however, the aggravating factors must be taken into account.
    
29. I agree with the State that this case represents the worst type of offence under s 92(2) of the Criminal Code.
    
30. The offence recognises that those who are entrusted to exercise the power and authority of public office must be accountable to the public: see Attorney-General’s Reference (No 3 of 2003) [2004] EWHC 2020; [2005] 1 QB 73; The State v Yawijah (2019) N7767. It applies to any member of the Public Service recognising that an abuse of office can occur at any level, but in general terms, the more senior the official the more serious the offending: The State v Luma (No 1).
    
31. The offence in this case involved a very serious breach of trust by the most senior officer in the Department. Not only was he the most senior officer, but he was an experienced and long serving member of the Department, and had held the office of Secretary for 1 and a half terms.
    
32. The prejudice to the State was grave. The monies involved were extremely large, K4,309,000. These were scarce public funds which should have been used by the Department in accordance with established procurement processes for the benefit of the provision of goods, works and services in the public interest. To suggest that no prejudice was suffered is contrary to my finding on verdict and an insult to the taxpayers of this country whose hard earned monies were applied by the offender in the deliberate abuse of his office.
    
33. The abuse was conducted through various acts by the offender: deceiving his First Assistant Secretary, deliberate structuring of contracts under his limit, supported by the drafting of multiple contracts for that purpose, together with multiple false certificates of expediency. The offence took planning and sophisticated efforts to conceal it. It was not necessary to find “dishonesty”, or conflict of interest as elements but the offender’s conduct was deceitful and deliberate.
    
34. Moreover, I have no doubt that the nature and extent of the abuse has had a serious effect upon the public and public confidence. The offence must have tarnished the reputation and integrity of the Department of Works. Public confidence depends upon department heads ensuring the delivery of public services in accordance with the trust invested in them by the people. At a time when there is huge demand for limited government resources, the exposure of such a deliberate abuse of office, by the most senior person in the Department, in respect of such a large amount of monies, must have had a serious effect on the public confidence in the administration of government services as a whole.
    
35. Abuse of office is a prevalent offence and calls for both specific and general deterrence.
    
36. In all the circumstances, I sentence the offender to two years of imprisonment in hard labour.
    
37. The question remains whether any or all of the sentence should be suspended.
    
38. In The State v Tardrew [1986] PNGLR 91 the Supreme Court set out three broad, but not exhaustive, categories in which it may be appropriate to suspend a sentence, namely: where it will promote the general deterrence or rehabilitation of the offender; where it will promote the repayment or restitution of stolen money or goods; or where imprisonment would cause an excessive degree of suffering to the particular offender, for example because of bad physical or mental health. Suspension is not an act in leniency but a form of punishment that is to be served outside the prison system in the community interest to promote restitution or rehabilitation: The State v Tardrew [1986] PNGLR 91; The State v Frank Kagai [1987] PNGLR 320.
    
39. Probation Services recommends suspension. The recommendation is supported by the Department of Works.
    
40. I have seriously considered the State’s submission that some time should be served in custody. As above, this is a very serious offence and warrants the maximum penalty. There is also a need for general deterrence. Ultimately, however, I cannot ignore the health of the offender. In my view general deterrence will be sufficiently achieved through the imposition of the maximum penalty as the head sentence in those circumstances. As such I intend to wholly suspend the sentence.
    
41. I make the following orders:
    

Orders

(1) The offender is sentenced to 2 years of imprisonment, which is wholly suspended upon the offender entering into his own recognisance to keep the peace and be of good behaviour.

(2) Bail monies shall be surrendered to the State.

Sentence accordingly.
_______________________________________________________________
Public Prosecutor: Lawyer for the State
Napu Lawyers: Lawyer for the Offender