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State v Luma [2021] PGNC 31; N8798 (8 April 2021)

N8798

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NO. 36 OF 2019

THE STATE

V

JOEL LUMA

Waigani: Berrigan, J
2019: 3^rd, 4^th, 5^th and 6^th December,
2020: 17^th and 18^th September, 6^th November
2021: 8^th April

CRIMINAL LAW – S. 92(1) of the Criminal Code – Abuse of Office – Nature and purpose of offence - Elements of Offence – The offence recognises that those who are entrusted to exercise the power and authority of public office must be accountable to the public – Meaning of “Arbitrary”, “Abuse”, and “Authority” - The circumstances in which the offence may be committed are broad and the conduct which may give rise to it is diverse – The offence requires a wilful abuse of authority of the office held – To establish the offence the abuse of office must be so serious that it is worthy of condemnation and criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects. The conduct must fall so far below acceptable standards as to amount to an abuse of the public’s trust in the officer holder.

The accused was the Secretary of the Department of Works. As Secretary he was authorised to approve the expenditure of Department monies up to K300,000.

On 8 September 2009 the accused approved, in his capacity as Secretary of the Department, eight unwritten contracts on behalf of the Department of Works with Road Stoa Limited for the supply and delivery of a pothole patching material called QPR to eight provinces, all at values of less than K200,000, to a total value of K1,561,945. A further three contracts were approved by the accused in 2010 in respect of three provinces, at similar values, to a total value of K574,000.

In January 2011 the accused executed sixteen written “Profomo (sic) Minor Works Contracts” on behalf of the Department of Works in his capacity as Secretary with Road Stoa Limited for the supply and delivery of QPR to fourteen provinces, at a total value of K4,309,000. Contracts ranged in value from K251,000 to K297,000. Two contracts were executed in respect of Central Province in two different amounts. A further two contracts were executed in respect of East Sepik Province in different amounts. Each of the sixteen contracts executed in 2011 was supported by a certificate of inexpediency from tender approved by the accused himself in his capacity as Secretary of the Department of Works.

In total the accused approved 27 contracts with Road Stoa on behalf of the Department to a total value of K6,445,145. Procurement did not take place in the normal manner, through the Operations Division of the Department of Works, following request from Provincial Works Managers, upon need, and from the cheapest supplier at the time. The First Assistant Secretary, Operations was not made aware of the contracts. There was no tender process in accordance with the Public Finance (Management) Act. No application was made to the Central Supply and Tenders Board (CSTB) for a certificate of inexpediency from the tender process. The accused had no authority to issue a certificate of inexpediency which could only be issued by the CSTB or the Minister pursuant to the Act. In every case the contracts fell under the accused’s financial limit as Secretary of K300,000. On a per bag basis the cost of QPR was between K300 and K330 during the relevant period. Local products were available for between K40 and K80 per bag.

On 5 May 2011 the FAS Operations wrote to the accused, copied to the Prime Minister and the Minister for Works, objecting to the contracts on several grounds. On 16 August 2011 the Principal Auditor at the Department of Works wrote to the accused objecting to the contracts on several grounds. On 20 December 2011 the accused wrote to Assistant Secretary, Finance and Budgets, Department of Works, directing her to immediately process payments for QPR on the basis that Provincial Works Managers were begging for the materials on site, the CSTB had been unable to meet for three weeks to consider the Department’s submission, and no legal clearance was required as the contracts fell within his K300,000 jurisdiction.

The State alleged that the accused approved 44 contracts to a value of K9,594, 860.79 in abuse of the authority of his office contrary to s 92(1) of the Criminal Code.

Held:

(1) To establish the offence of abuse of office contrary to s. 92(1) of the Criminal Code the State must prove beyond reasonable doubt that the accused:

1. Whilst employed in the Public Service;
2. In abuse of the authority of his or her office;

100. Did or directed to be done any arbitrary act;

4. Prejudicial to the rights of another.

“Abuse” means: to make bad use of something; to use power or knowledge unfairly or wrongly: Oxford English Dictionary

“Authority” means: the power to give orders in a position of authority; the power or right to do something: Oxford English Dictionary.

“Arbitrary” means: not seeming to be based on a reason, system, or plan and sometimes seeming unfair; using power without restriction and without considering other people: Oxford English Dictionary.

(2) 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.

(3) The circumstances in which the offence may be committed are broad and the conduct which may give rise to it is diverse: Attorney-General’s Reference (No 3 of 2003) (supra).

(4) It applies to any member of the Public Service recognising that an abuse of office can occur at any level, albeit in general terms, the more senior the official the more serious the offending.

(5) The offence extends to any arbitrary act, prejudicial to the rights of another, provided that it is done in abuse of the authority of the office held.

(6) The offence is not one of strict liability. It requires a wilful abuse of the authority of the office held. What this requires on the part of the accused will depend upon the particular circumstances of the alleged offending.

(7) It is not necessary for the purposes of s 92(1) of the Criminal Code to prove that the abuse is conducted for the purposes of gain, or dishonestly, or in conflict of interest.

(8) To establish the offence, the abuse of the authority of office must be so serious that it is worthy of condemnation and criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects. The conduct must fall so far below acceptable standards as to amount to an abuse of the public’s trust in the officer holder: R v Quach (2010) 201 A Crime R 522; Attorney General’s Reference No 3 of 2003; R v Chapman [2004] UKHL 3; [2015] 2 Cr App R 10 adopted; R v Boulanger [2006] 2 SCR 49; and Potape v State (2015) SC1613 considered.

(9) The evidence established beyond reasonable doubt that the accused was employed in the Public Service at the relevant time, as the Secretary for the Department of Works.

(10) The evidence established beyond reasonable doubt that the accused’s approval of the contracts in favour of Road Stoa Limited was arbitrary. The contracts were not procured through, or with the knowledge of the Operations Division responsible for maintenance, in the normal manner, following requests by Provincial Works Managers, in response to need, and from the cheapest supplier available at the time. The contracts failed to comply with the requirement under the Public Finance (Management) Act for a tender process given the total monies involved. The contracts approved in 2009 were not reduced to writing. The contracts approved in 2011 were poorly drafted, contained obvious typographical errors and did not correctly reflect the true nature of the transactions. The contracts were not minor works contracts as described but contracts for the purchase and delivery of stores. The contracts suggested that there had been a tender process when there was none. The certificates of inexpediency issued by the accused in support of the 2011 contracts were non-compliant with the Public Finance (Management) Act. The certificates had not been issued by either the Minister or the CSTB as required. The accused had no authority to issue such certificates himself. Not only was the approval of the contracts arbitrary for failing to comply with normal procurement processes, it was also unfair to other potential suppliers of similar products, and to the State in procuring the best product available following an open and transparent process and having regard to a range of factors including quality, cost and value for money. The approval also involved an arbitrary use of the accused’s power as Secretary for being made in an autocratic manner. The First Assistant Secretary Operations, immediately responsible for overseeing maintenance and its procurement, was not consulted prior to the approval of any of the contracts.

(11) The evidence established beyond reasonable doubt that the approval of the contracts was prejudicial to the Independent State of Papua New Guinea because it committed 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.

(12) Whilst the evidence established that the approval of the contracts by the accused in 2009 and 2010 was arbitrary, it did not establish beyond reasonable doubt that it was done in a wilful abuse of the authority of the accused’s office.

(13) The evidence established beyond reasonable doubt that the approval of the sixteen contracts in January 2011 to the value of K4,309,000 was a deliberate, planned and serious abuse of the authority of the accused’s office. The accused wilfully abused his power and position as Secretary to approve the contracts on behalf of the Department. He deliberately avoided the normal procurement processes. He concealed the contracts from the FAS Operations. He deliberately structured the contracts to fall just below his financial limit as Secretary of the Department in each case, to circumvent the tender process required under the Public Finance (Management) Act, and knowingly issued certificates of inexpediency in his position as Secretary without authority or justification.

(14) The accused was the Secretary of the Department of Works, responsible for overseeing its administration. He was the principal custodian of the State monies entrusted to his department to perform its function. It was his duty to ensure that its scarce financial resources were applied in accordance with established procurement processes for the provision of goods, works and services in the public interest. The nature and extent of the abuse, by the most senior person in the Department, including the deliberate efforts to avoid the procurement process, the concealment and structuring of contracts, the unauthorised use of certificates of inexpediency, and the value of the contracts involved, was so serious, and fell so far below acceptable standards as to amount to an abuse of the public’s trust worthy of condemnation and criminal punishment.

(15) The number and value of the contracts averred in the indictment were not essential elements of the offence and the indictment was not defective on that basis.

(16) The accused was convicted of the offence of abuse of office.

Cases Cited:
Papua New Guinea Cases

The State v Yawijah (2019) N7767
R v Boulanger [2006] 2 SCR 49
Potape v State (2015) SC1613
Toami Kulunga v Geoffrey Vaki (2014)
Joel Luma v John Kali and The State (2016) N6337
Simon Sia v Peter Numa (2019) N7779
Wartoto v The State (2015) SC1411
State v Solis Ima (2020) N8676
The State v Ngasele (2003) SC731
Review Pursuant to Constitution Section 155(2)(b); Application by Herman Joseph Leahy (2006) SC855
The State v Hevelawa (No. 1) (2017) N6815
The State v Raphael Kuandande [1994] PNGLR 512
Ikalom v State (2019) SC1888

Overseas Cases

Attorney-General’s Reference (No 3 of 2003) [2004] EWHC 2020; [2005] 1 QB 73
DPP v Merriman [1973] AC 584
Walsh v Tattersall [1996] HCA 26; (1996) 188 CLR 77
R v Quach (2010) 201 A Crime R 522
R v Chapman [2004] UKHL 3; [2015] 2 Cr App R 10

References Cited

S 92(1), 525, 531, 558 of the Criminal Code
S 37(2), 42(2) of the Constitution

Counsel

Ms H. Roalakona, for the State
Mr J. Napu, for the Accused

DECISION ON VERDICT

8^th April, 2021
1. BERRIGAN J: The accused is charged with one count of abuse of office, contrary to s. 92(1) of the Criminal Code (Ch. 262) (the Criminal Code).

2. The indictment alleges that:
   

“[B]etween the 1st day of January 2009 and the 31st day of December 2013 at Port Moresby in Papua New Guinea being employed in the Public Service as the Secretary of the Department of Works did and directed to be done in abuse of the authority of his office in approving 44 Minor works Contracts to Road Stoa Limited all valued to a sum of Nine Million, Five Hundred and Ninety-Four Thousand, Eighty Hundred and Sixty Kina and Seventy-Nine Toea (K9, 594, 860.79) without proper procurement process, prejudicial to the rights of the Independent State of Papua New Guinea.”

3. On arraignment the State alleged that between the 1st of January 2009 and 31st of December 2013, the accused, in his position as the Secretary of the Department of Works, approved and signed off 44 minor works pro forma contracts with Road Stoa Limited. The contracts or agreements were for the provision of a product known as Quality Pavement Repair’s (QPR) to the Department of Works. The decision of the accused, as the Secretary of Works, to purchase this product was resisted by senior officers. The 44 minor contracts were valued between K285, 000 and K295, 000 each. An internal audit was conducted to assess the procurement process of the QPR which revealed that when the accused approved the 44 contracts he did so without compliance with the procurement procedures of the Financial Management Manual. Further, that he applied for a Certificate of Inexpediency, which he approved himself without the requisite approval from the Central Supply and Tenders Board and when there was no emergency. There was no proper testing of the QPR Product by the Department, and a similar product could be purchased locally and at a lower price. As a result of the accused’s actions, the State paid for a product which was shipped to the provinces without the knowledge of the provincial works managers, and was not used or was not received by some provinces. The provinces that did not receive the products were the Western, Gulf, Southern Highlands and the Autonomous Region of Bougainville. As a result of the accused’s arbitrary actions, he committed the State to pay a total sum of K9, 594, 860.79 to Road Stoa Limited which was prejudicial to the State when the same or a similar product could have been purchased at a lesser price locally. The State says that the accused therefore abused his office as the Secretary of Works through arbitrary acts prejudicial to the rights of the State and thereby contravened section 92 (1) of the Criminal Code.
   

STATE’s CASE

4. The State called eight witnesses.
   
5. Phillip Alan is Principal Auditor at the Department of Works, where he has been employed since 1990. In 2011 he was the Acting Assistant Secretary for Internal Audit with the Department. His responsibilities included providing management oversight of internal auditors and the Department’s audit functions, including compliance with financial regulations.
   
6. The Department of Works provides technical advice on technical and operational tasks including road construction, and sets and oversees the implementation of standards by contractors. The accused was the Secretary of the Department of Works in 2011.
   
7. He was asked to conduct an assessment of the procurement of a bitumen product called QPR from a local supplier against the requirements of The Public Finance (Management) Act (PFMA) and the Finance Management Manual. A copy of his report to the accused as Secretary, “Assessment of Pro Forma Contract Claims for Supply of Quality Pavement Repair (QPR) from Road Stoa Ltd totalling K5,447,500”, dated 16 November 2011 was admitted as Exhibit A.
   
8. In summary, he found that there had been a number of compliance failures: (a) The Minister for Works, Peter O’Neill, had given handwritten approval for 20 contracts in a letter dated 12 July 2011. However, the Minister had no authority to approve any procurement that was not consistent with the PFMA, the Finance Instructions or the Finance Management Manual; (b) The procurement failed to comply with Parts 11 and 12 of the Finance Management Manual as it was a “major procurement” given its value; (c) The procurements breached Part 11.19 of the Finance Management Manual, which provides that: “No attempt must be made to circumvent or by-pass the limits on the powers given under the PFMA or other limits laid down in this Manual by splitting contracts, requisitions or purchase orders”; (d) Section 40(3)(b) of the PFMA provides that the Central Supply and Tenders Board may issue a Certificate of Inexpediency where “inviting of tenders is impracticable or inexpedient”. Part 13.14 of the Finance Management Manual states that Certificates of Inexpediency can be issued in circumstances of: natural disaster, defence emergency; health emergency; or situation of civil unrest. In his view the patching of potholes did not fall in any of the above categories.
   
9. His report also noted that there was a “chorus of opposition and disapproval from senior technical and administration officers”.
   
10. On 31 August 2011, he issued audit queries to all provincial managers regarding the product’s performance, and confirmed his estimates on price. He received varied responses from the provinces: 3 in 2011; 9 in 2015; and 5 undated. Some managers thought the product was good. One did not think it was up to standard. Copies of the audit queries were admitted without objection as a bundle: Exhibit B. Five provinces did not respond. According to the responses, the managers did not request for and had no involvement in the procurement of QPR.
    
11. A further undated “Special Audit Report” was prepared by the witness: Exhibit C. This was the second audit report. It states that following the first report regarding K3,944,545 divided into 19 contracts, a further procurement of K5,447,500 via 20 contracts was conducted, again over opposition from senior officers.
    
12. The report states that he conducted an internet search. According to the website, “Red Laser”, of the 107 reviews provided, on a scale of 1 to 5 with 1 being “poor”: 21.5% reviewers rated the product as poor; 4.7% rated it a 2, 7.5% rated it a 3; 17.8% rated it a 4 and 48.6% rated it a 5 (best).
    
13. The report also states that a methodological field test was carried out at the West New Britain Province which found that: “QPR will perform at its maximum capacity at a thickness between 25 mm and 100 mm on areas of pothole repairs not exceeding 1m x 1m. 200 mm compacted thickness QPR will also not perform well on pothole repair areas with bare subgrade. The material was seen as being brittle.”.
    
14. The website also showed that the product was being sold at USD 17.44 a bag or about PGK47.14 and PGK 37.11 in 2009/2010 and 2010/2011, respectively, on the exchange rate applicable at the time, whilst Road Stoa was charging K300 and K330 per bag respectively.
    
15. He also found that other local suppliers, namely Dekenai, Shorncliffe, the Department of Works in Mendi and Monier were selling similar or better quality products at a much lower price of K50 per bag.
    
16. The first audit report he prepared, and submitted to the Acting Secretary under cover of letter dated 4 June 2013 was admitted as Exhibit D. This report contains similar information to that referred to above. It states that the Department’s Science and Laboratory Branch which was responsible for testing all new and untried products for use in the country had not tested the product.
    
17. A bundle of 28 claims for Road Stoa Ltd were admitted through this witness, showing the accused as the approving officer under s. 32 of the PFMA: Exhibits E, F and G1 to G26, details of which are set out in the table below.
    
18. Under cross-examination Mr Alan confirmed that he was Acting Secretary in 2011 whilst the recruitment process for a Secretary was underway. He agreed that his highest education level was Grade 12 whilst the accused was an experienced civil engineer. He did not agree with the suggestion that the accused procured the best product for Papua New Guinea. Nor that the internet results supported that view, particularly given the high cost of the product. He agreed that he had no other reports from other suppliers. He also agreed that in comparing the cost per bag of USD17.4 with what was charged by Road Stoa, he did not factor in the cost of transport, insurance, taxes or mark up. He agreed that if he did, the cost might be K300 per bag. He agreed that the accused was the Secretary of the Department and the boss. He agreed that the expenditure was from the recurrent budget and that road maintenance was ongoing. The accused as Secretary had power to approve minor works contracts. If money was not spent from the recurrent budget allocated within the year it had to be returned to the Finance Department. Road maintenance, however, was mainly the responsibility of the National Road Authority. Some provinces agreed the product was good, others did not.
    
19. Philip Eludeme, currently self-employed, was the Chairman of the Central Supply and Tenders Board (CSTB) from December 2011 to February 2017. His role was to call CSTB meetings to deliberate on tenders, contracts and policy decisions that came before the board concerning State monies. CEO and departmental heads were subject to a financial approval limit of K0.5m.
    
20. He was not the Chairman at the relevant time. A thorough search of the CSTB’s records found that there was no record of any procurement of QPR from Road Stoa in the amounts of K3.9m and K5,650,000 between 2009 and 2010 from the National Department of Works and Implementation. See also Exhibit H confirming the same. The financial limits are set out in s 47B(1)(b) of the PFMA.
    
21. Joseph Asinimbu has been employed with the Department of Works for 25 years. He is currently the Deputy Secretary for Corporate Services. He has a Bachelor of Civil Engineering and a Masters in Business Administration. From 2016 to 2018 he was the Chief Internal Auditor for the Department of Works. Between 2009 and 2011 he was First Assistant Secretary (FAS) for Operations and in charge of the provinces. The Provincial and Regional Works Managers reported to him. Based on their budget they provided workplans for implementation. He was also responsible for administrative matters. The maintenance budget varied during the relevant period from between K3m to K30m. He oversaw the workplans for the maintenance of all public roads, routine and emergency, the latter including a road closure or land slip. Routine maintenance includes pothole patching, grass cutting and vegetation control. Maintenance was carried out in the field by civil works managers, civil engineers and their supervisors in the provinces. In 2010 or 2011, 2500 kilometres of road was handed over to the National Road Authority which was an entity created to take responsibility for routine maintenance whilst the Department of Works was responsible for rehabilitation and major work. Rehabilitation is required when there are a lot of potholes and the road has to be resealed.
    
22. He was opposed to the purchase of QPR as the FAS. It was never tested by the Department and the manner in which it was procured was “wrong”, being split into pro forma contracts.
    
23. QPR is used for pothole patching, like asphalt pavement. The Department of Works is not responsible for asphalt, only chip sealing. Prior to this the Department used a much cheaper pre-mix from other local suppliers which performed to a similar quality. Those suppliers included Monier, Hebou, Dekenai and Shorncliffe. In addition, some provinces made their own pre-mix, especially those who had the machinery for sealing. The current price from Hebao is K80 per bag. According to his recollection the price of QPR was K350 per bag. The pre-mix was shipped to the provinces.
    
24. He came to know about QPR when he received a memo from the accused asking him to endorse the payments. He told the accused that he would not do so because it was wrong to split the contracts. He also asked why he was using the certificates of inexpediency which were for national or health emergencies, or road closures. It was not necessary in this case to procure without going through the CSTB. Pothole patching is never an emergency and the certificates should not have been used. To his knowledge the Department of Works had no prior relationship with Road Stoa. He was aware of them but regarded them as too expensive.
    
25. After receiving the memo, he wrote to the accused on 5 May 2011 objecting to the procurement, which he copied to the Prime Minister and Minister for Works: Exhibit I. He identified a number of reasons for his objection: (a) it was an abuse of the procurement process to split the contracts to avoid the CSTB and provide to one supplier; (b) a similar procurement had taken place previously without his knowledge and without requests from the provinces, resulting in bags since hardening and no longer fit for use; (c) premix could be obtained from local suppliers rather than from America. He suggested that local suppliers could be asked for quotations which he estimated would be less than K100 per bag; (d) he had seen the product used in some provinces and it performed and failed like other pre-mixes; (e) the abuse of a certificate of inexpediency; (f) no official request from the provinces; (g) no copy of the Minister’s memo purportedly approving the purchase; and (h) given that 90% of roads now fell under the National Road Authority, that is where the premix was required.
    
26. He was only trying to protect the accused but after that their relationship became sour.
    
27. His understanding was that the Secretary’s limit at the time was K300,000. It is now K500,000. Procurements above that had to go to the CSTB for tender, including for the other pre-mixes available. In his view there was nothing wrong with the other pre-mixes available.
    
28. Under cross-examination he stated that he worked for Eda Ranu between 2005 and 2009 as the Sewerage Operations Manager. He agreed that between 2000 and 2005 the Department relied on pre-mixes to pothole patch more than 3000 kilometres of road. He was unaware if procurement went through the CSTB. He agreed that procurement of pre-mix was made through the recurrent budget. He agreed that unlike QPR, some pre-heating of premix was required before application and so some additional work was required but he maintained that QPR was still too expensive as a matter of common sense. The Department estimates that the additional work costs K41 per bag. He did not agree that QPR was a superior product that could withstand all weather. It could become brittle suddenly and performed a similar function to the pre-mixes. He was not questioning the quality of the product but it was too expensive and procurement should have gone through the CSTB. He disagreed that QPR would last for 10 years. He agreed that his view about QPR was his professional opinion. He was not aware of any comparative studies of QPR and pre-mix. He agreed that his opinion was not binding on the Secretary, who was a civil engineer. He disagreed that the procurement was conducted in the same manner as for pre-mix. There was a splitting of contracts and the request for product should have come from the provinces. Bags of pre-mix are usually purchased upon need from the cheapest supplier at the time, not just one supplier.
    
29. As First Assistant Secretary for Operations he was responsible for overseeing road maintenance at the relevant time.
    
30. Hans Sarua is a civil engineer by training. In 2015 he was a project consultant for the Highlands Highway. He was employed by the Department of Works from 1981 until May 2012 when he was Deputy Secretary, Technical Division. The division comprised design services for roads and bridges, and implemented infrastructure development for the government, and road maintenance. Road maintenance involved a number of activities including grass cutting and routine maintenance like pothole patching. Karanas (gravel) is used on gravel roads. Gravel and a type of bitumen or premix can be used on sealed roads. Before a new product is used they are usually tested by the Department’s Material Testing Branch which falls under the Design Services Division. Testing is most critical for construction products. Testing for maintenance products is also necessary because premix products have a shelf life and become brittle and unusable within a period of time
    
31. At the time he was Deputy Secretary, the Secretary’s financial limit was K300,000. At some stage it increased to K500,000. He was not involved in the procurement of QPR. When he became aware he referred it to the Divisional Head which was the First Assistant Secretary, Operations and the custodian of the road maintenance funding which was being committed to pay for the product. He asked him to check compliance in terms of quality, testing and procurement. As far as he recalled its procurement was not supported by the FAS for compliance reasons and lack of testing.
    
32. Under cross-examination he agreed he was fired from the Department in 2012 for insubordination for a number of reasons. One was for not complying with instructions to purchase QPR. The other was because he travelled to the Philippines. He, the Divisional Heads, First Assistant Secretary and Deputy sought approval which was not granted. He had to travel for medical reasons. He had a stroke in 2010. He denied that he did not see eye to eye with the accused. He has a lot of respect for him going back many years. He respects him as a civil engineer with a high level of competence.
    
33. He did not know if premix was ever tested. He was aware that there were several suppliers of premix. He could not recall if procurement of premix ever went through the CSTB during his 30 years at the Department. Procurement of QPR was without workplans from the provinces. He agreed that QPR and premix were similar products. He was not aware of any comparative studies.
    
34. Evoa Miao has been employed as a Financial Delegate in the Accounts Section of the Department of Works for almost 44 years. He signs FF3 and FF4 claim forms as the financial delegate before they go through for approval. He has to check that there was sufficient money available for payment. If he has time he checks the supporting documents, otherwise the examiners do that. If there are supporting documents, he passes the claim to an examiner for examination. If there are no supporting documents, he rejects it. The examiner passes to the certifying officer and they go to the data operator to run the checks. Amounts greater than K300,000 had to go to the CSTB.
    
35. He recalled processing some QPR claims that did not have approval from the CSTB. He did so because he was told to do so by the Chief of Accounting, who was the Secretary, the accused. The claims were not compliant but the accused told him to process it and if he did not he would be “kicked off because he’s my boss”.
    
36. Under cross-examination he could not recall what companies supplied premix between 1976 and 2009. He could not recall any contractor providing premix. He was aware that Hebou, Dekenai and Shorncliffe provided construction works but he could not recall them providing premix. He was aware that they went through CSTB for construction. He initially said that since 2014 the Department is no longer patching roads, it is done through a contractor but then said he wasn’t sure. A contractor might have a length of road under them. For instance, Dekenai might have one stretch of 96kms of road. He did not know who was supplying the product for patching but it was the contractors doing the work. He was aware that contractors tendered for stretches of road. He initially said that they did the pothole patching as part of their contracts but then said he didn’t know and that a technical person would know. He did recall that since about 2009 an Israeli Company, Enway Holdings, has supplied premix, and did go through the tender process. He did reject the QPR claims initially. He took the claim to Mr Asinimbu and he rejected it.
    
37. Bosco Laufa is the Senior Accounting Officer, Finance and Accounting Branch, Department of Works. His task is to examine claims and pass to the certifying officer. He was directed by the accused to get the Road Stoa claims processed. If he failed to do so he would be suspended so he had to do it. There was a memo from the accused to his boss, Acting Secretary for Finance, the late Margaret Malala telling her to pay the claims or the staff would be suspended from the payroll.
    
38. Under cross-examination he said that he never saw the memo himself but they were told by his boss, Margaret Malala to speed up the claims. He agreed the accused did not tell him directly. The defence called for the memo which was produced by Mr Laufa from the Department’s records overnight. He agreed that the memo itself did not contain any threat.
    
39. He was not aware of any claims by an Israeli company for premix. He has been on sick leave since 2016 and will return to work in December 2019. He has been on sick leave because of this case. He could not remember processing claims for premix other than Road Stoa. He could not recall the names of other premix suppliers between 2000 and 2009. That was the responsibility of the Provincial Works Managers. He did not agree that Road Stoa had always been a supplier of premix. Or that he was lying when he said that he had not processed any other claims for premix prior to Road Stoa. He did not agree there were other suppliers before 2009.
    
40. There is a divergence of views as to whether the party calling for a document which is produced under cross-examination should be compelled to tender it as part of their case. The defence was content for the State to tender the document as part of its case and the document was admitted as Exhibit J.
    
41. The memo, addressed to Margaret Malala, Assistant Secretary dated 20 December 2011 states (emphasis mine):
    

“SUBJECT: IMMEDIATE PROCESSING OF PAYMENTS FOR PREMIX UNDER PRO-FORMA CONTRACTS

There is an immediate need to attend to potholes appearing on the National Road Network throughout the country. Provincial Works Managers are begging to have the material on-site to attend to these needs.

CSTB has not met for the last three weeks to deliberate on our submission owing to the uncertainties relating to the chairmanship of the CSTB as well as the Executive Officer.

There is no need for legal clearance for Pro-forma Contracts which fall within the ambit of my jurisdiction at K300,000.00.

Please process the payments immediately under the Pro-forma Contracts to expedite the attendance to maintenance.

Joel Luma
Secretary”

42. Iru Goka has been a Certifying Officer at the Department of Works for 23 years. Her role is to examine claims and make sure they are in order before certifying. This includes claims for goods and services under contract. Where a contract claim is urgent it needs to be supported by a certificate of inexpediency. Other claims require approval from the CSTB or the Provincial Supply and Tenders Board (PSTB). She recalls processing claims for Road Stoa. Claims were raised in 2009 whilst she was on study leave. She became involved when she came back to work in 2010. To be compliant the claims needed CSTB approval, provincial and inspection reports, invoices, and a valid certificate of compliance from the IRC. The Road Stoa claims were not supported by these documents. CSTB approval was required because there were a lot of claims. She queried the claims with her boss, late Margaret Malala, and she told her that they were instructed by the accused to process the claims. She did so for fear of losing her job. She did not see any emergency justifying the certificate of inexpediency.
    
43. Under cross-examination she agreed that she did not stand up to her oath as a public servant but processed the claims in fear for her job. She agreed that the claims were supported by a pro forma contract less than K300,000 and an invoice. She did not agree that a pro forma contract can substitute for an FF3. An FF3 should be attached to a pro forma contract. She agreed that the contract was within the accused’s limit but there were a lot of them, that is why she queried the claims.
    
44. She had seen Exhibit J before. It was attached to all the Road Stoa claims. She had only seen such a letter in relation to those claims. Before Road Stoa she was not aware of any other supplier involved in pothole patching. She started as Certifying Officer in 2009. She was unable to say whether the Department of Works was still obtaining premix from other suppliers because most contracts are for maintaining the roads. There was one company between 2009 and 2013 that supplied premix. It is still supplying now. It was approved by the accused. She cannot recall the value. The CSTB approval and supporting documents were attached to the claim.
    

DEFENCE CASE

45. Mr Joel Luma, the accused gave evidence in his own defence.
    
46. He joined the Department of Works on 12 February 1975. During his tenure as Secretary he used his own workforce to procure QPR using epoch and FF3 documentation to purchase QPR and then install it using department labour. Maintenance funding was available for this purpose under the recurrent budget. It was available for only a year and if unused went back to Consolidated Revenue. As such it was impossible to accumulate enough funding to go for tender. Under the Department’s budget, capital works funding was available for a specific project. If funding was available it was possible to go out to public tender. It was not possible to go to tender under the recurrent budget.
47. His responsibility as the Chief Executive Officer of the Department was to look at the best possible way to address road maintenance problems in the country. Pothole patching was one of them. Up to 2015 the Department was responsible for maintaining more than 4000 kms of road across PNG. He used the same method under the recurrent budget as had been used and continues to be used by the Department to fund road maintenance.
48. The maintenance of potholes is extremely important. It is an emergency matter that the Department needed to address on a daily basis. On 12 January 2010 there was a major accident on the highway from Ume to the junction involving two buses which occurred because the buses collided trying to avoid the potholes and many lives, twelve or thirteen, were lost. “It is human life you cannot measure”. So he wanted to get the best material possible and QPR was the best that was available. The report into the bus accident was prepared by Brian Alois, an engineer with the Department of Works, and Chairman of the Institute of Engineers, PNG: Defence Exhibit 1, Minute dated 15 January 2010 from Brian Alois to the Secretary, Department of Works, “Umi Bridge Crash Site Report”. The report recommended that maintenance is an essential matter and that pothole patching is next to an emergency and that we needed to continue to patch all potholes as a preventative measure. If we don’t it will graduate into a bigger problem and will require additional cost. At the time of the accident both sides of the road were in very bad condition.
49. Many other roads, the Magi Highway, Hiritano Highway, Highlands Highway and others are all in dire straits and need maintenance.
50. During his time as Secretary, the Department procured pothole patching materials from about four suppliers: Global, Dekenai, Shorncliffe, and Hebou. Only Road Stoa could provide a product that could be transported across the country and kept for long time. At the time the Department did not have the equipment to do quality checks on QPR and other products. QPR was a standalone product compared to the others. It was durable and could be transported long distances. It was made in the United States and transported to PNG. It could last for years. The local products could not last the distance. Once made they had to be used. Once opened they started to lose their quality. QPR is easy to apply to many kilometres of road in one day. QPR was introduced to him by the supplier and from the descriptions provided he realised it was the product he was looking for. It could reduce potholes and will last three to four or five years. The other products turn to water when it rains. They are so unreliable and cannot be used. It was his duty to produce a good road for the people of PNG. The supplier’s representative from Road Stoa, John Cholai, an engineer, came to his office and showed him a pamphlet. He thought it was good and so decided to do empirical tests in the field. He has no personal relationship with John Cholai but he knows him as they are both members of the Institute of Engineers.
51. The results of the empirical tests were that all 16 provinces came out recommending that this is the product that they can use. In fact the Works Manager from Wewak urged that the Department use QPR.
52. In terms of price, QPR is K300 per kg. The other products run to K607 per kg.
53. Local products involve a long process to patch a pothole. An emulsion has to be applied. The products have to be pre-heated. Works has to start at 4 am to heat the product for three to four hours using a kerosene burner. The product has to be applied whilst it is still hot. If it loses heat it has to be reheated. The labour cost is very high. It requires five men. By comparison QPR is very easy. You just take it from the truck. It does not require heating. To apply you just sweep out the debris and put it in without emulsion. It has its own. You don’t have to tap it in. You just leave it there so that the tyres of the vehicles will smooth it out. It stitches up the seams of the potholes and will not break when it rains.
54. The Managing Director of Road Stoa is Anne Kopuma, from Bougainville. He has met with her personally. He receives no personal benefit from the transaction other than personal satisfaction.
55. Under cross-examination he agreed that as a public servant with the Department of Works since 1975 he was very familiar with the government financial process and with the processes of obtaining funding and expending public funds for the Department. He was familiar with the PFMA, Financial Instructions, and Financial Management Manual. It was his responsibility as Secretary to ensure that the legislation was complied with.
56. In January 2011, he signed off on several documents relating to a contract with Road Stoa. As part of the PFMA requirements such contracts of significant value, greater than K100,000, require three quotations. But after they did the tests from 2009 to 2011, QPR was the only product that had the quality. It was not comparable to others.
57. He did not agree that Part 11 of the Financial Management Manual, Division 2, Paragraph 8 provides that any major procurement greater or equal to K100,000 should go to public tender. The figure was outdated. It increased to K300,000 and recently to K500,000. At the time at his level it was K300,000. It was not a major works contract. It did not require a public tender. When maintenance funding is available by way of warrants quarterly there is not enough money to go to tender. Tender takes a long time, 8 months, and by the time it is ready, the money has gone back to Consolidated Revenue. The total value of QPR was K9,594,860.79 over three years but that figure cannot be used to say that it should go to public tender. The recurrent budget is limited to only one year. He agreed that Part 11 of the Public Finance Manual, paragraph 19, provides that no attempt must be made in terms of splitting of contracts. However, whilst that is correct for capital works projects it is not possible to go to public tender for maintenance.
58. The product was acquired so that the Department could use it in the provinces. They were province specific small projects. They were assisted by the Department of Justice and Attorney General to come up with a document to avoid using Epochs and FF3 but they wanted to be transparent and come up with a small contract which is province specific and each would have that money to spend.
59. He agreed that as S 32 officer his limit to approve an FF3 was K300,000. Each of the 44 contracts that he signed with one supplier were for less than K300,000. The invoices delivered were for less than K300,000. It was not done to split the total expenditure into 44 contracts. It was specifically done per province under the recurrent budget.
60. The QPR was purchased in 2011 after the tests were done. He did not agree with Mr Sarua that no tests were done. As to the objections raised by Mr Asinimbu, First Assistant Secretary, Operations, they were only speculation by him. He did not have time to go to the provinces. He was a desk bound engineer. As to the objections raised in his memo: “He does not know what is talking about”. Mr Asinimbu is FAS, Operations but he does not have the final say. “I am an engineer too”. The comments are not technically correct and it was his duty to reject the advice.
61. He did not agree that the Department was purchasing premix from local suppliers at about K80 per kg. He did not agree that QPR cost almost 6 to 7 times more. K80 was a figure plucked from the air. No itemised costing was produced.
62. He agreed that the Department made its own premix but not in his time. He agreed that several objections were raised by the finance officers as to the payments raised. It did not amount to splitting of contracts, it was contract specific.
63. As to the suggestion that most of the provinces did not request it, it was expedient to organise it from headquarters.
64. The 42 contracts for work over three years was a commitment to getting the job done. It was the State who gave him that mandate. It was not in breach of the PFMA and the Manual because it did not go for public tender. He made the commitment on behalf of the government of PNG for the right purpose.
65. As to the resistance from finance officers to process the claim that was at the tail end of the process. He told them that the small contracts had to be honoured. They are always slow to process and that was the purpose of the memo he wrote to them. It was a reminder not just to process Road Stoa but other claims as well. The contractors have to move on and be financially sufficient. The query by the finance officers was only in relation to processing the claims. It was not do with acquiring the product. He agreed that the finance officers have a duty to ensure the finance processes were followed. He did not specifically state they should process all claims for Road Stoa. It was a generic statement. But he agreed he wrote the memo and at the time the only premix was Road Stoa. It was written after the queries were raised by the finance officers in relation to the claims.
66. The Road Stoa contract was not in breach of the PFMA or the Manual. That applied to major contracts. The contracts were in line with the budget available for maintenance. Three quotations were not obtained because QPR was the only quality product available to acquire. The suppliers available at lesser cost did not have quality. Empirical tests were done.
67. As to the proposition that he abused his office, the contracts were within K300,000 and he was able to organise the limits. These were not capital works. It was not possible to go to the CSTB because they did not have funding for K9.5m up front.
68. In re-examination he said that he understood that splitting contracts is when you have one contract and you don’t have the funding available so you split the contract and try to avoid going to public tender but in the case of maintenance splitting does not apply. The cost of K80 quoted by Asinimbu is a figure plucked from the air. You cannot get anything for K80 in this country. Asinimbu’s objection was that we could get premix in PNG but they were of lesser quality. Asinimbu’s recommendations were of very poor quality. Other products had been supplied for 10 years or more. The Department used the same process, FF3, to purchase premix directly from local suppliers. No Secretary was ever taken to court like him before. The case is questioning his authority and jurisdiction as the head of the Department to simply arrange for maintenance. He estimates that over 10 years Hebou has been paid millions of dollars, much more than K9m, as much as K30m or K50m. If he was still Secretary today he would buy QPR because of its quality, cost, durability and efficiency. He does not know the Managing Director personally. He obtained no benefits.
69. Gilbert Kapi is a civil engineer who has been with the Department for 18 years. He was Provincial Works Manager from 2008 to 2012. He is currently the First Assistant Secretary for Donor Projects. Regular suppliers of premix were Shorncliffe, Hardware House and the Department produced their own with emulsion bitumen mixed with sand and aggregate. Bitu Pack was supplied by Hardware House in Kavieng but it was not suitable and they did not continue to buy it. He started working in 2002 and they used Shorncliffe. After that there was no recurrent funds so they stopped and did not get premix products, instead reverting to all kinds of means, like gravel, or emulsion. Between 2003 and 2013 in some cases they used gravel patch which just comes off, and in some cases they used a big contract and it got worse. In other cases they used hand patching with bitumen and put glass aggregate on top but that is not a good approach as when vehicles run over it, it comes off.
    
70. He was sent a product from Road Stoa in New Ireland where he was the Provincial Works Manager and asked to test it because there were no lab facilities available for testing. It was very easy to place and didn’t need to be compacted. It self-compacted with vehicles driving over it. With other products they had to pack it and prepare it. This one they just applied, levelled it up with a tool and ran over it with a truck and it was compacted. The casual workers liked it because it was easy to spread unlike other products where you need a bit more effort. If you put it on a good base it stays. It didn’t come off like the other products when vehicles run over it. It seals quickly and stays there. They told the Department they wanted more so they could patch a lot more potholes but they only got one container. As an engineer he would recommend the Road Stoa product. The quality of local products is not consistent.
    
71. He was familiar with the financial regime in the public service. There is a recurrent budget and a capital works budget. Recurrent budget is to keep the office going and conduct routine maintenance on the roads. The recurrent budget would come in dribs and drabs on a quarterly basis and was not very regular. Capital works, or PIP as it is now called, funds big projects that can extend for 2 or 3 years or even more. PIP Funds are provided every year until the project is completed. Recurrent goes back to Consolidated Revenue and then starts again.
    
72. During his 18 years with the Department either regime could be used for the procurement of pothole patching materials. If it was a big contract it could be purchased under PIP. Generally, pothole patching is routine maintenance so it is recurrent budget. He cannot recall an instance where pothole patching materials were procured through PIP. Pothole patching is included as part of major road projects.
    
73. Pothole patching materials varied a lot in price. It was about K300 per kilogram. Shorncliffe was about K600 per kilogram. As to the engineer who said it cost K80 per kg, those products were sold in Road Stoa bags so it has to be converted to kg, and the cost of transportation has to be included.
    
74. Under cross examination he agreed that he had no idea as to how the procurement of the Road Stoa product was done. It was not necessary for his supplies division to procure materials for road maintenance. Sometimes bulk purchases were made at regional office or headquarter level. He was not directly involved with those procurements. For the trial he received about 850 bags in a 20 foot container from headquarters. Each bag was about 20 kgs. The accused told him the product cost K300 per kg. He did not know how much a bag cost. He just received the container. He is from Ambunti District, East Sepik. It is a different district from that of Mr Luma.
    
75. Under re-examination he said that the Department was still using FF4 and the s. 32 process as normal to procure pothole patching materials through the recurrent budget. The Department stopped buying premix products. It just purchases bitumen now. Products are purchased using a pro forma contract agreement for the provinces. The Secretary signs up to K500,000. It is not new. There are no public tenders.
    
76. John Cholai is an engineer with about 30 years of experience in the aviation sector. He is a telecommunications engineer but through his work with airports has experience with flexed pavements. He runs his own business and does consultancy and project management.
    
77. He was the company representative for Road Stoa at the relevant time. He was asked by his friend Anna Kopuma to promote QPR and demonstrate its use, especially to engineers and other organisations. His main customers were the Department of Works engineers in Port Moresby and Central. He also did some demonstrations for engineers in Lae and at Taurama. He thinks he dealt with the accused at Department of Works but he did not ever meet with him.
    
78. He was also country manager for Origin Energy. One of his managers was driving down from Goroka after work and he tried to avoid a large pothole and had an accident and died. When he heard about the product he had a conviction to help by promoting the product. It is so easy to use if you deal with it straight away.
    
79. The outcome of the trials was quality repairs. The longer the product stays in the ground the stronger it becomes. You just take a bag and put it in a truck and just patch it. So easy to use. Put it on a pothole and pat it down and it is ready to use. Vehicles can go over it immediately, and as time goes on it becomes stronger and stronger. It adheres to concrete, footpaths and steel. He saw the way other products were used at Nadzab and Jacksons Airports. Both for concrete and flexible pavements. The contractors were Hornibrooks. The different kind of premix was not of the same standard. QPR requires less effort especially for potholes. A lot of roads have potholes. The primary purpose of patching is to patch before it becomes a big problem. It will become a big problem if you don’t deal with it straight away. The Hornibrooks product requires a lot of work, labour, materials – mixing it up with equipment. Need 10 people with trucks etc. By comparison QPR is convenient and cost effective. Anyone can use it. When you add it all up, QPR is cost effective. QPR has longer durability. It stays in the road.
    
80. In cross-examination he said a 20 kg bag was sufficient for demonstration purposes. He agreed he had no civil works experience but it was part of his training and part of his work at airports, and he has basic understanding of civil works and the application of products. He trained in that in Singapore, Terminal 11 – and did a lot of work there on flexible and fixed products. So that is when he saw the quality of QPR and the need for it. Engineers struggle to maintain the country’s roads. As a leader you have to look for innovative products. Give them a trial and see if it saves costs.
    
81. He disagreed that it was more cost effective to get a K80 bag locally versus a K300 bag. You had to look at quality of the product, and all the costs involved. QPR adheres to the road. It is a permanent fix.
    
82. In response to a question from the bench, he was not aware of the price of QPR per kilo.
    

ASSESSMENT OF WITNESSES

83. Having heard and observed the State witnesses I find them to be witnesses of truth. This assessment is made following a consideration of both their demeanour when giving evidence and the content of their evidence, individually and in the context of the evidence as a whole.
    
84. Philip Alan’s evidence was given in a direct and clear manner. I accept that his report accurately reflects the outcome of his audit inquiries. Mr Alan readily agreed in cross-examination to a number of propositions including the powers of the Secretary. He agreed that the cost of USD17.4 per bag did not include transport, insurance, taxes or mark up, and that it might reach K300 when those matters were included. I note his views regarding compliance failures. Ultimately it remains for this Court to determine whether such failures occurred and the effect, if any on the outcome of these proceedings.
    
85. Philip Eludeme’s evidence was not challenged. It was the accused’s evidence that tender by the CSTB was not required, not that the CSTB had been involved in any way.
    
86. Joseph Asinimbu was an impressive witness. He gave his evidence in a direct and straightforward manner. He has been open about his objection to the manner in which QPR has been procured since at least 2011 and his evidence was consistent with that position. As FAS Operations responsible for overseeing the maintenance of roads at the time he was best placed to know the practices and procedures regarding the purchase of premix and its cost. He was open about the breakdown of his relationship with the accused following their disagreement over QPR. He made it clear that he was not questioning the quality of QPR per se but maintained that it was too expensive, especially compared with local products and should have gone through the tenders board. He agreed that other premixes required some preheating, although he disagreed about the cost of that additional work.
    
87. I also accept Hans Sarua’s evidence. It is consistent with Mr Asinimbu and Mr Alan’s evidence. I accept his evidence that QPR was never tested by the Technical Division. The accused’s evidence was that empirical testing was conducted in the field.
    
88. As for Evoa Miao, Bosco Laufa and Iru Gokai, I accept their evidence that certain companies were sometimes contracted to provide pothole patching as part of road works contracts. This was consistent with the evidence of the defence witness and Provincial Works Manager, Gilbert Kapi. Furthermore, I accept the evidence of all three finance officers that they queried the procurement of QPR. The accused does not dispute this.
    
89. Whilst the evidence of Gilbert Kapi and John Cholai as to the application and effectiveness of QPR was almost identical, I also find them to be honest and credible. I accept their evidence that they considered QPR to be a good product. Their evidence as to the cost of QPR is of limited value, however, for the reasons discussed further below.
    
90. Having heard and observed the accused I am unable to accept him as a witness of truth. I make this assessment having regard to both the content of his evidence and his demeanour whilst giving his evidence. I will return to his evidence in more detail below.

SUBMISSIONS - “Competency” and related issues

91. At the hearing of submissions on verdict defence counsel raised for the first time a number objections going to what he referred to as the “competency” of the proceedings.
    
92. He relied on Toami Kulunga v Geoffrey Vaki (2014) as authority for his submissions. Firstly, that was a case concerning contempt of court before the Supreme Court and really has no direct application here where the procedures governing criminal proceedings are well established and, for the most part, provided for under the Criminal Code. Secondly, as the Supreme Court said in that case any such objections should have been made prior to arraignment in any event.
    
93. That is particularly so here. Both the Criminal Practice Rules for Fraud Matters and the interests of efficient criminal administration require that any such matters should have been flagged at the pre-trial stage so that they could have been dealt with at an appropriate time, in an efficient manner, with prior notice to both the Court and the State, prior to arraignment.
    
94. Essentially, whilst not articulated in these terms, defence counsel is seeking to quash the indictment, which is governed by s 558 of the Criminal Code. That provision specifically provides that such matters should be raised prior to plea.
    
95. To the extent that defence counsel is raising “jurisdictional” issues, then adopting the language of the Supreme Court in Kulunga v Vaki, the accused’s not guilty plea and the absence at that stage of any challenge is regarded as acquiescence to the jurisdiction of the court. Furthermore, for the reasons outlined below, the arguments are misconceived and without merit.
    
96. Defence counsel contends that the proceedings offend against s 37(2) of the Constitution which requires that:
    

“Except, subject to any Act of the Parliament to the contrary, in the case of the offence commonly known as contempt of court, nobody may be convicted of an offence that is not defined by, and the penalty for which is not prescribed by, a written law.”

97. In particular, it is submitted that the splitting of contracts is expressly prohibited under Part 11.9 of the Financial Management Manual which states that:
    

“Splitting Contracts: No attempt must be made to circumvent or by-pass the limits on the powers given under PFMA or other limits laid down in the Manual by splitting contracts, requisitions or purchase orders”.

98. Furthermore, that there is no offence of “splitting of contracts” contained in the Criminal Code, nor any applicable penalty prescribed. The defence goes on to say that the prosecution case is therefore “based on flawed logic, unconstitutional, and hence malicious”.
    
99. The issue of malice was withdrawn by counsel and rightly so. An allegation of malice on the part of the prosecution is a very serious allegation and one that is made far too often and far too lightly in submissions on verdict by defence counsel when they would be better advised to focus on the legal and factual issues at hand. The prosecution’s case might be defective, it might even be misconceived, but that does not mean it is malicious, such that is taken without reasonable cause and for an improper purpose.
    
100. The accused has been charged with abuse of office contrary to s 92 of the Criminal Code. The prosecution has particularised the alleged abuse as the approval of 44 minor works contracts to Road Stoa without complying with procurement requirements. In support of its case the State alleges, amongst other things, that the accused deliberately split the monies payable to Road Stoa into 44 contracts to avoid the need to seek approval from the Central Supply and Tenders Board, and that this was prohibited under the Finance Management Manual. The splitting of contracts is one part of the factual matrix upon which the State relies to establish the offence.
     
101. The offence alleged, however, remains that of abuse of office contrary to s 92 of the Criminal Code. That is an offence known to law, and for which there is a prescribed penalty. Whether or not the State has established each of the elements of that offence beyond reasonable doubt is a separate matter and well within the jurisdiction of this Court to determine.
     
102. I decline to refer the matter to the Supreme Court for interpretation as requested. No issue of Constitutional interpretation arises here.
     
103. Defence counsel also submits that this Court is bound to have regard to orders made in OS (JR) No 14 of 2014 Joel Luma v John Kali and The State (2016) N6337. It is submitted that the court in that case held that the accused was wrongfully terminated from office following the same allegations, and that the Court dismissed the allegations. Furthermore, that without success in the civil proceedings the prosecution cannot make out its case here.
     
104. The submission is misconceived, misplaced and misleading. Those were civil proceedings. The issues for determination in those proceedings were different to those before me, and the findings in that matter are not binding on me. Nor I might add did the learned trial judge find that the allegations were unproven. On the contrary, the learned trial judge found that the truthfulness of the allegations was still “open to speculation” and refused to reinstate the accused to his former position despite finding that there were failings in the manner in which the accused was dismissed. I make it clear, however, that I am in no way influenced by those findings. This criminal case will be determined on the evidence and legal issues before me.
     
105. Defence counsel also submits that the proceedings should have been brought under the Leadership Code. The accused is no longer a leader under the Constitution but in any event, the availability or otherwise of proceedings under the Leadership Code is beside the point. There is nothing precluding the bringing of criminal proceedings in respect of allegations which might also warrant proceedings under the Leadership Code, or vice versa.
     
106. Defence counsel further submits that the allegation of splitting of contracts is an administrative allegation that must be dealt with by a civil court before it can be dealt with in the criminal jurisdiction and furthermore, that this Court has no jurisdiction to hear a civil matter.
     
107. The defence relies on Simon Sia v Peter Numa (2019) N7779. It is of no assistance to the accused. In that case the learned trial judge was sitting in the National Court convened under Part XVIII of the OLNLLGE to hear an election petition challenging the outcome of an election on the basis of undue influence and attempted undue influence under section 215 of the OLNLLGE and section 102 of the Criminal Code. As the trial judge correctly pointed out he could not, sitting in his civil jurisdiction, hear charges under the Criminal Code. By comparison, I am sitting in the criminal jurisdiction and I do have power to determine charges under the Criminal Code.
     
108. Defence counsel also relies on Wartoto v The State (2015) SC1411 to argue that a criminal court cannot assume jurisdiction arising out of a breach of a civil law against a public office holder unless it is a very clear case such as misappropriation under s 383A of the Criminal Code.
     
109. That is not what Wartoto stands for. It held that it is against good order and the due administration of justice for civil proceedings to intervene in criminal cases. No such issue arises here. I am hearing a criminal case, not a civil case. My decision will not interfere with criminal proceedings. Nor will it interfere with any civil proceeding, pending or otherwise.
     
110. Moreover, there is no requirement that disciplinary, administrative or civil proceedings take precedence over criminal matters arising out of the same or similar facts. Civil proceedings are not precursors to criminal proceedings. The suggestion is perverse.
     
111. Civil and criminal proceedings are conducted in separate jurisdictions. They deal with different legal and factual issues, to different standards, and for different purposes, depending upon the nature of the proceeding.
     
112. To give a very simple example, if a public servant allegedly causes serious injury and damage whilst driving under the influence of alcohol whilst on duty he might find himself facing any or all of the following at any one time: criminal prosecution for his alleged crimes against the State; civil proceedings for damage and injury by the individuals affected; and disciplinary and/or administrative charges by his employer.
     
113. Defence counsel further submits that the accused is alleged to have acted contrary to both the PFMA and s 92 of the Criminal Code and that this offends against s 42(2) of the Constitution which requires that a person who is arrested or detained shall be informed promptly of the reasons for his arrest or detention and of any charge against him, and that it is unclear whether he is being asked to defend an allegation about splitting contracts or abuse of office.
     
114. The nature and purpose of this submission is not clear. No record of interview has been tendered in this case and this submission is not made in an attempt to have any part of it excluded. It has not been submitted that the proceedings should be permanently stayed as an abuse of process and there is no basis for such a submission. The accused has received the full protection of the law. No prejudice has been demonstrated and the accused cannot have been in any doubt or uncertainty as to what was alleged against him. That was made clear on arraignment and during the course of his evidence.
     
115. Defence counsel further submits that the indictment is defective as to time. The submission goes in part to the substantive case against the accused regarding the recurrent budget, and the accused’s financial authority, and are dealt with below.
     
116. Defence counsel also submits that the prosecution should have brought 44 separate indictments, and that each of these should have been confined to the financial year in which the procurement took place.
     
117. There is no need for separate indictments. Even if, as the defence suggests, there were many distinct offences, they might properly be joined pursuant to s. 531 of the Criminal Code in a single indictment.
     
118. Whilst not articulated in these terms, however, it appears that the defence is raising the issue of duplicity.
     
119. I set out the applicable law in State v Solis Ima (2020) N8676 at [73] to [77]:
     

“The rule against duplicity can be traced back to the 17^th century at a time when there was “severe technicality and precision with respect to pleadings generally”: Walsh v Tattersall [1996] HCA 26; (1996) 188 CLR 77 at 105.

The rule against duplicity prohibits the prosecution alleging two or more offences in a single charge: Walsh v Tattersall [1996] HCA 26; (1996) 188 CLR 77 applying DPP v Merriman [1973] AC 584. The State v Yawijah (2019) N7767.

Where a charge is duplicitous the prosecution is expected to apply to amend the charge, see R v Radley (1974) 58 Cr App R 394. In some instances it may be necessary to prefer an additional charge.

Whether or not a charge is duplicitous is always a question of degree: Walsh v Tattersall, supra. The question as to whether an accused has committed one or more offences is best determined by applying common sense in deciding what is fair in the circumstances: Merriman (supra). Per Lord Morris at p 593:

"It is furthermore a general rule that not more than one offence is to be charged in a count in an indictment...The question arises - what is an offence? If A attacks B and, in doing so, stabs B five times with a knife, has A committed one offence or several? In many different situations comparable questions could be asked. In my view, such questions when they arise are best answered by applying common sense and by deciding what is fair in the circumstances. No precise formula can usefully be laid down but I consider that clear and helpful guidance was given by Lord Widgery C.J. in a case where it was being considered whether an information was bad for duplicity: See Jemmison v. Priddle [1972] 1 Q.B. 489 at p. 495. I agree respectfully with Lord Widgery C. J. that it will often be legitimate to bring a single charge in respect of what might be called one activity even though that activity may involve more than one act. It must, of course, depend upon the circumstances.”

And at p. 607 Lord Diplock said:

"The rule against duplicity, viz. that only one offence should be charged in any count of an indictment . . . has always been applied in a practical, rather than in a strictly analytical, way for the purpose of determining what constituted one offence. Where a number of acts of a similar nature committed by one or more defendants were connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the eighteenth century, to charge them in a single count of an indictment."

120. In summary, the rule against duplicity prohibits the prosecution alleging two or more offences in a single charge: Walsh v Tattersall [1996] HCA 26; (1996) 188 CLR 77 applying DPP v Merriman [1973] AC 584. See The State v Yawijah (2019) N7767. The question as to whether an accused has committed one or more offences is best determined by applying common sense in deciding what is fair in the circumstances: Merriman (supra).
     
121. Returning to the present case, the issue should have been raised prior to arraignment.
     
122. Ultimately, however, the question is one of fairness. In this case the allegation concerns a number of different acts of a similar nature, namely the arbitrary approval of 44 minor works contracts, in favour of one beneficiary, in the abuse of the authority of the accused’s office as Secretary of the Department of Works, to the prejudice of the State. Having regard to the common nature of the alleged abuse the acts might fairly be regarded as forming part of the same alleged criminal transaction or enterprise. Accordingly, it was proper to charge them in a single count of the indictment alleging abuse of office, extending over a period of three years.
     
123. The other argument the defence raise in this context is that if 44 separate charges had been laid it would be obvious that there was no abuse of process. That is an argument that goes to the substantive merits of this case and is considered below.
     
124. Finally, it is well established that pursuant to s 525 of the Criminal Code, where a person is committed for trial, the Public Prosecutor, or any State Prosecutor, has an absolute power to consider the evidence, and at his/her discretion, indict on a charge “of any offence that the evidence appears to warrant”. That power is not subject to any direction or control from or by anybody: The State v Ngasele (2003) SC731; see also the discussion in Review Pursuant to Constitution Section 155(2)(b); Application by Herman Joseph Leahy (2006) SC855 at [149]. That power has been affirmed in several cases, including: The State v Jack Gola and Mopana Aure [1990] PNGLR 206; The State v Jason Dongoma (2000) N2038; The State v Michael Nama and Others (1999) N1884; The State v John Koma (2002) N2176; The State v Douba (2018) N7627; The State v Louise Paraka (2002) N2317.
     
125. The accused was committed to stand trial on one count of misappropriation and one count of abuse of office. The State has decided to proceed with one count of abuse of office contrary to s 92 of the Criminal Code. That is a criminal offence known to the written law. The indictment is not defective and the court does not lack jurisdiction. The objections were raised belatedly, without notice and without merit. Whether or not the State has established its case beyond reasonable doubt is a matter properly before this Court.

SUBSTANTIVE SUBMISSIONS

126. The State submits that the contracts were in breach of the PFMA, the Financial Instructions and the Finance Management Manual. In particular, that the approval of the contracts was in breach of s 39(8) of the Act. The value of the contracts was over K5 million and therefore a “major procurement” and subject to the process stipulated in Parts 11 and 13 of the Financial Management Manual. The procurement was deliberately “split” into multiple contracts to fall within the accused’s K300,000 approval limit as Secretary under s 32 of the Act, such splitting being prohibited by Part 11.19 of the Financial Management Manual. The use of the certificate of inexpediency was inconsistent with s40(3)(b) of the PFMA. The Provincial Works Managers were not aware of the purchase prior to it being made. The product was untested, and similar products were available at lesser cost locally. The accused’s conduct was an arbitrary abuse of his authority.
     
127. It is the accused’s case that his conduct was not an attempt to circumvent procurement requirements. By approving the purchases as FF3 officer he was using the same process that had been used in the past to purchase local products. The invoices were specifically organised by province and he was authorised to approve them within his financial limit. A tender process was not required because the contracts were for maintenance and not major works. Maintenance funding was available under the approved annual recurrent budget. It was not possible to go to tender because of the time involved. Unspent funding had to be returned at the end of the year to Consolidated Revenue pursuant to s 27 of the PFMA. By the time the process was complete the money available for maintenance would have gone back to the recurrent budget. He sought assistance from DJAG to make the process transparent through the minor works contracts. The field tests were positive and he was entitled to override Mr Asinimbu. Pothole patching was an emergency issue, as demonstrated by the January 2010 report into the Umi bus crash, and he needed to act preventatively.
     

UNDISPUTED FINDINGS OF FACT

128. The following findings of fact are not in dispute or are apparent from the documentary evidence.
     
129. The accused was a qualified engineer and a long-term employee of the Department of Works, from 1975. He was Secretary of the Department from sometime before 2009 up until he was terminated from office in relation to this matter.
     
130. On 8 September 2009 the accused in his capacity as Secretary, as s. 32 officer under the PFMA, approved eight payment requisitions in favour of Road Stoa for the supply and shipment of QPR to the provinces of Enga, Morobe, Madang, West Sepik, East Sepik, Western Highlands, Milne Bay and Central in the sums of K199,100, K191,400, K195,800, K197,560, K196,735, K198,550, K198,000 and K184,800 respectively, totalling K1,561,945. In support of the requisitions were attached invoices dated 28 July 2009, and accompanying faxes from Road Stoa in response to instructions from the accused. No contracts or certificates of inexpediency were attached to the requisitions. See Exhibits G15, 16, 17, 18, 19, 20, 21 and 22.
     
131. It appears that an invoice was submitted by Road Stoa on or about 22 December 2009 in the sum of K204,600 for Bougainville. It is unclear what happened to the invoice or whether it was paid. See G24.
     
132. On 18 March 2010 the accused approved as s. 32 officer, three payment requisitions in favour of Road Stoa for the supply and shipment of QPR to Eastern Highlands, Western Province and Bougainville, each in the sum of K191,400 totalling K574,200. In support of the requisitions were attached invoices dated 22 December 2009. No contracts or certificates of inexpediency were attached to the requisitions. See Exhibits G14 (and G26 which is a copy of G14), G23, and G25.
     
133. On 4 March 2011 the accused as s. 32 officer, in his capacity as Secretary, approved 16 payment requisitions in favour of Road Stoa for the supply and shipment of QPR to the provinces of Central (twice in two separate amounts), Milne Bay, Oro, Morobe, Madang, East Sepik (twice in two separate amounts), Southern Highlands, Enga, Western Highlands, West New Britain, New Ireland, Manus, West Sepik, and Bougainville in the amounts of: K283,500 and K168,000; K295,000; K297,000; K285,500; K296,500; K284,000 and K251,000; K286,000; K282,000; K280,000; K287,000; K289,000; K261,000; K237,500; and K226,000, respectively, totalling K4,309,000. See Exhibits E, G12, F, G1, G2, G3, G4, G13, G5, G6, G7, G8, G9, G10, G11, and G24.
     
134. In each case the requisitions approved in 2011 were supported by a Department of Works “Minor Works Profoma (sic) Contract” executed by the accused as Secretary of the Department of Works on 14 January 2011. In each case the documentation included a bid document from Road Stoa approved by the accused.
     
135. In each case the requisitions were also supported by certificates of inexpediency approved by the accused as Secretary of the Department on 14 January 2011. The certificates refer to the quotation received from Road Stoa compared to the “Department Estimate”. In each case the Road Stoa estimate was less than the Department estimate. The “reason considered for expedient (sic) to invite tenders” is given as: “Only source of suppliers of new Permanent Quality Pavement Repair (QPR) Product with an improved performance characteristic as compared to the existing temporary cold bitumen products to effectively manage potholes on the main sections of the National Roads in Papua New Guinea”.
     
136. On 5 May 2011 Joseph Asinimbu, FAS Operations, wrote to the Secretary, copied to the Prime Minister and the Minister for Works, objecting to the purchase of QPR, Exhibit I, on the basis that: it was an abuse of the procurement process to split the contracts to avoid the CSTB and procured from one supplier; a similar procurement had taken place in previous years without his knowledge and without request from the provinces, resulting in bags since hardening and no longer fit for use; premix could be obtained from local suppliers rather than from America; local suppliers could be asked for quotations which he estimated would be less than K100 per bag; he had seen the product used in some provinces and it performed and failed like other pre-mixes; the abuse of certificates of inexpediency; no official request from the provinces; no copy of the Minister’s memo purportedly approving the purchase; and the absence of need for the product on the part of the Department given that 90% of roads now fell under the National Road Authority.
     
137. On 16 August 2011 Philip Alan wrote to the Secretary, Exhibit A, advising that 20 Road Stoa claims were non-compliant and should be withdrawn because: the Minister for Works had no authority to approve the contracts; the value of the contract was greater than K5.4m and required a public tender; the contracts were split in breach of the PFMA, the certificate of inexpediency was not justified, not being a natural disaster, defence emergency, health emergency or situation of civil unrest; there was strong dissent by subordinates; and ethical issues generally.
     
138. No assistance has been provided in the analysis of the documentary evidence.
     
139. According to my analysis, in total the accused approved contracts with Road Stoa to the value of K6,445,145 between September 2009 and March 2011. A summary of the records is set out in the following table:
     

140. On 20 December 2011 the accused wrote to Margaret Malala, Assistant Secretary, Finance and Budgets directing her to immediately process payments for “premix under pro-forma contracts” on the basis that: Provincial Works Managers were “begging to have the material on site”; the CSTB had been unable to meet for three weeks to consider the Department’s submission; and no legal clearance was required as the contracts fell within his K300,000 jurisdiction.
     
141. Further findings of fact are set out below.
     

ABUSE OF OFFICE

142. Section 92 of the Criminal Code creates the offence of abuse of office:

(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.”

143. It is important to note that the State has not alleged that the accused acted for the purposes of gain. It proceeds under s. 92(1) only.
     
144. To prove the offence of abuse of office under s. 92(1) the State must establish beyond reasonable doubt that the accused:
     
     1. Whilst employed in the Public Service;
     2. In abuse of the authority of his or her office;
     100. Did or directed to be done any arbitrary act;
     4. Prejudicial to the rights of another.
        
145. Abuse of office is a little used offence in this jurisdiction. Before proceeding further it is helpful to understand the nature and purpose of the offence.
     
146. Section 92 codifies the ancient common law offence of misconduct in public office. As I said in The State v Yawijah (2019) N7767 at [11]:
     

“[T]he provision recognises that those who are entrusted to exercise the power and authority of public office must be accountable to the public. The offence involves, broadly speaking, a wilful abuse of the authority of office that amounts to an abuse of the public trust: see Attorney General’s Reference No 3 of 2003 [2004] EWCA Crim 868 (UK).”

147. The Supreme Court of Canada in R v Boulanger [2006] 2 SCR 49 explained the rational for the offence as follows:
     

“The crime ... is both ancient and important. It gives concrete expression to the duty of holders of public office to use their offices for the public good. This duty lies at the heart of good governance. It is essential to retaining the confidence of the public in those who exercise state power ... The purpose of the offence ... can be traced back to the early authorities that recognize that public officers are entrusted with powers and duties for the public benefit. The public is entitled to expect that public officials entrusted with these powers and responsibilities exercise them for the public benefit. Public officials are therefore made answerable to the public in a way that private actors may not be.”

148. Like the common law offence, s 92 of the Criminal Code is cast in broad terms. “[T]he circumstances in which the offence may be committed are broad and the conduct which may give rise to it is diverse”: Attorney-General’s Reference (No 3 of 2003) [2004] EWHC 2020; [2005] 1 QB 73 at [61].
     
149. It applies to any member of the Public Service recognising that an abuse of office may occur at any level, albeit in general terms, the more senior the official the more serious the offending.
     
150. Similarly, the conduct captured extends to any arbitrary act, prejudicial to the rights of another, provided that it is done in abuse of the authority of the office held.
     
151. Prosecutions have been brought in similar jurisdictions for the wilful refusal of officials to act without reasonable excuse, and for the misuse of official information, showing partiality in the exercise of power, concealing conflicts of interest, fraud and the alleged misuse of public resources.[1]
     
152. I have only been able to find one case dealing with the offence in this jurisdiction.
     
153. In The State v Hevelawa (No. 1) (2017) N6815, 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.
     
154. Whilst the offence is by its nature broad, it is also clear that, like the offence at common law, s 92 is not an offence of strict liability. It requires a wilful abuse of the authority of the office held. What this requires on the part of the accused will depend upon the particular circumstances of the alleged offending. By splitting the offence into s 92(1) and (2), the Code makes clear, however, that whilst an abuse conducted for the purposes of gain is more serious, that is not an essential element of the offence generally.
     
155. It must also be borne in mind, however, that s 92 creates a criminal offence.
     
156. Having regard to the rationale behind the offence, the English Court of Appeal in Attorney General’s Reference No 3 of 2003 (supra) said that there must be a serious departure from proper standards before the criminal offence is committed. The conduct must amount: “to an affront to the standing of the public office held. The threshold is a high one requiring conduct so far below acceptable standards as to amount to an abuse of the public’s trust in the officer holder”.
     
157. In R v Chapman [2004] UKHL 3; [2015] 2 Cr App R 10 the Lord Chief Justice said:
     

“There are ... two ways that the jury might be assisted in determining whether the misconduct is so serious. The first is to refer the jury to the need for them to reach a judgment that the misconduct is worthy of condemnation and punishment. The second is to refer them to the requirement that the misconduct must be judged by them as having the effect of harming the public interest.”

158. Similarly, the Victorian Court of Appeal in R v Quach (2010) 201 A Crime R 522 at [46] said in respect of the common law offence of misconduct, said that:
     

“[The] misconduct [must be] serious and meriting criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects”.

159. As observed by the Supreme Court of Canada in R v Boulanger (supra) the conduct “must be sufficiently serious to move it from the realm of administrative fault to that of criminal behaviour”.
     
160. To my mind those principles are equally applicable in this jurisdiction. As observed by the Supreme Court in Potape v State (2015) SC1613 at [46]:
     

“Not every wrong known to law is a crime. With regard to wrongs known to public law which involve wrongs committed by public officials in the course of discharging their statutory functions, there are different types of wrongs that are attendant with their own practices and procedures designed to ascertain guilt and which provide due process and a fair trial. Each have different standards of proof and for which different redress or sanctions are available at law, commensurate with the nature and seriousness of the wrong and degree of culpability. The more serious the wrong, the higher the degree of culpability, the higher the standard of proof, the more stringent the procedural requirements designed to afford fair trial and the more severe the sanction. We suggest four categories of wrongs which are set out below in order of seriousness, as follows:

(1) Criminal offences- Of the wrongs known to public law, a criminal offence is the most serious of them all and it is punishable by a fine (enforceable by term of imprisonment) or term of imprisonment. The source of this wrong is the written law which prescribes the offence and penalty and the procedures by which guilt is ascertained. Only the Courts of law have the power to deal with breaches of the penal laws.

(2) Quasi-criminal offences -Breach of statutory duties for which there is a strong element of compulsion to obey or perform those duties. Prosecution lies before a statutory tribunal or authority. Some of these wrongs may be criminal in nature or character but fall short of a defined offence. The standard of proof in respect of some of those breaches is close to the criminal standard of beyond reasonable doubt. Breach of provisions of the Leadership Code is an example. The penalty ranges from a reprimand, an administrative fine or loss of public office through to dismissal from office.

(3) Disciplinary offences- Then there are those purely disciplinary wrongs which are punishable by an administrative fine, restitution, demotion, transfer or dismissal from public office. The standard of proof is much lower and closer to the civil standard.

(4) Civil wrongs- actions in tort and contract that are largely found at common law. The tort of misfeasance in public office is amongst those actions available in tort: see Dunlop v Woolahra Municipal Council [1982] 2 AC 172, Henley v Mayor of Lyne (1928) 1030 ER 995. Some examples of actions founded on breach of statutory duties that give rise to a private action in tort or contract are found in the Wrongs (Miscellaneous Provisions) Act (Ch 297). The remedy lies in private law by way of declaratory relief, injunctions and damages or restitution. The standard of proof is on the balance of probabilities.

It would be wrong for the Courts of law to find or impute criminality to wrongful actions that fall under the second, third and fourth categories and invoke the full force of the criminal law to punish wrongs which are lacking in criminality.”

161. In my view, having regard to the above authorities, to establish the offence, the abuse of the authority of office must be so serious that it is worthy of condemnation and criminal punishment having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those objects. The conduct must fall so far below acceptable standards as to amount to an abuse of the public’s trust in the officer holder: R v Quach (2010) 201 A Crime R 522; Attorney General’s Reference No 3 of 2003; and R v Chapman [2004] UKHL 3; [2015] 2 Cr App R 10 adopted; R v Boulanger [2006] 2 SCR 49; and Potape v State (2015) SC1613 considered.
     

Employed in the Public Service

162. Returning to the present case, the accused does not dispute and I am satisfied beyond reasonable doubt that he was employed in the Public Service at the relevant time between 1 January 2009 and 31 December 2013. He was the Secretary for the Department of Works.
     

Did or directed to be done any arbitrary act

163. The indictment particularises the arbitrary act in this case as the approval of 44 Minor Works Contracts with Road Stoa Limited, valued at a total of K9,594,860.70.
     
164. The accused does not dispute that he approved numerous contracts with Road Stoa Limited between the years 2009 and 2011.
     
165. Philip Allan’s undated report, Exhibit C, refers to 19 claims totalling K5,447,500 and a further 21 claims totalling K5,650,315, constituting 40 claims totalling K11,097,815. The indictment refers to a total of 44 contracts at a value of K9,594,860.79. The State, however, tendered only 27 requisitions approved by the accused in Exhibits E, F and G1-26 (G-26 is a duplicate).
     
166. I note that Mr Alan’s report, which was not elaborated on in evidence, states that in many cases supporting documentation was missing but that the ledger report indicated additional payments to Road Stoa. This was potentially very important evidence going not only to the extent of the alleged offence but to the accused’s intention if it was in fact shown that payments were made in the absence of any documentation. Without the ledger report itself or additional detail, however, I will consider only the exhibits set out above.
     
167. Contrary to the State’s submissions, only the 2011 claims were supported by written contracts and certificates of inexpediency.
     
168. It is clear on the evidence that the accused approved 16 written contracts in favour of Road Stoa in 2011.
     
169. I also find that, regardless of whether or not they were in written form, the accused also approved 11 contracts with Road Stoa in 2009 and 2010. He did so when he approved the requisitions and thus accepted Road Stoa’s offer via invoice to provide QPR.
     
170. The next question is whether or not the approval of the contracts was arbitrary.
     
171. According to its ordinary meaning, “arbitrary” means: “1. (of an action, a decision, a rule, etc.) not seeming to be based on a reason, system, or plan and sometimes seeming unfair. 2. (formal) using power without restriction and without considering other people”: Oxford English Dictionary.
     
172. The State submits that the contracts were in breach of the PFMA, the Financial Instructions and the Finance Management Manual. Whilst authorised by s117 and s 64C of the Act, respectively, neither the Financial Instructions nor the Manual appear to have the force of law in their own right and neither were tendered by the State. Thus, they are not before me.
     
173. Nevertheless, there is evidence from both the State and the accused that at the relevant time the accused, as Secretary of the Department, had authority to approve requisitions for the expenditure of Department monies up to a limit of K300,000 pursuant to s 32 of the PFMA. It is also not in dispute that it was not permissible to deliberately break up or “split” a large procurement into multiple contracts to avoid the requirements of the PFMA.
     
174. Furthermore, pursuant to s 40 (1) of the PFMA: “tenders shall be publicly invited and contracts let for the purchase or disposal of property or stores or the supply of works and services the estimated cost of which exceeds the prescribed amount”. “Stores” means goods and chattels of any kind that are or are intended to be the property of, or in the possession or under the control of, the State: s 1. The Minister could waive the requirement in the event of natural disaster or if otherwise inexpedient: s 40(3)(c). The requirements did not apply to procurements in respect of which the CSTB certified that the inviting of tenders was impracticable or inexpedient: s 40(3)(b).
     
175. I am satisfied beyond reasonable doubt that the approval of all the contracts between 2009 and 2011 by the accused was arbitrary for several reasons.
     
176. First and foremost, the accused failed to comply with the procurement requirements under the PFMA.
     
177. Section 40 is in broad terms and clearly applies to “stores”, which include pothole patching materials such as QPR. Regardless of whether or not the materials were purchased for individual provinces there was one beneficiary, Road Stoa, which stood to gain a very substantial amount of the Department’s monies, well above the accused’s financial limit. As such a tender process was required.
     
178. In addition, the contracts approved in 2009 and 2010 were not properly reflected in written contracts.
     
179. The contracts approved by the accused in 2011 were recorded in “Minor Works Profomo (sic) Contracts”. I do not accept the accused’s evidence, however, that the contracts were the result of advice from the Department of Justice and Attorney General. There is no evidence to support this and it is not borne out by the contracts themselves. The contracts are poorly drafted, contain obvious typographical errors and do not correctly reflect the nature of the transactions. There is no such thing as a “profomo” contract, and the purchase of QPR was not a “minor work” but the supply and delivery of goods. The terms of the contracts suggest that there had been a tender process when there was none. The contracts refer to “bid” and “tender” in different places.
     
180. Furthermore, the certificates of inexpediency approved by the accused in support of the 2011 contracts were clearly inconsistent with the PFMA. The certificates had not been issued by either the Minister nor the CSTB pursuant to ss 40(3)(b) and (c) of the PFMA as required. The ongoing and routine maintenance of potholes, even on a preventative basis, whilst very important, cannot in my view be regarded as an emergency rendering a proper tender process inexpedient. More importantly, however, the accused had no authority under the Act to issue such a certificate.
     
181. Furthermore, none of the procurements were made through, or even with the knowledge of the Operations Division responsible for maintenance, following requests by Provincial Works Managers, in response to need, in the usual manner, and from the cheapest supplier at the time. Whilst there is some evidence that contractors were responsible for providing premix as part of road maintenance contracts, the product was not procured in this way either.
     
182. Nor was QPR tested by the Department in a structured way. I accept, however, that it does not appear that local premixes were formally tested either, other than by use and experience over time.
     
183. The approvals were also arbitrary for being unfair to other potential suppliers of similar products, and to the State in procuring the best product available having regard to a range of factors including quality, cost and value for money following a rigorous tender process.
     
184. In addition, the contracts involved an arbitrary use of the accused’s power as Secretary for being made in an autocratic manner. The First Assistant Secretary Operations, responsible for such purchases, and aware of the Department’s pothole patching needs, was not consulted prior to the approval of any of the contracts. It is further demonstrated by the fact that his opposition to the contracts in May 2011, albeit after the event, was completely ignored.
     

Prejudicial to the rights of the State

185. Evidence as to the comparative cost and quality of QPR and local products is limited and inconclusive.
     
186. According to Exhibits E, F and G1 to 26, the cost of QPR to the Department of Works in PNG was K300 per bag in 2009 and 2010, and K330 per bag in 2011. According to the contracts, this price was exclusive of the cost of shipping from Port Moresby to the province. The cost quoted by the producer on its US website was USD17.44 per bag, about PGK47.14 in 2009/10 and PGK37.11 in 2010/11.
     
187. No documentary evidence was produced by the State in the form of an invoice or otherwise as to the cost of the various local premixes available at the relevant time. It appears from the evidence of Joseph Asinimbu, the FAS, Operations, who was responsible for overseeing the purchasing of road maintenance materials and would be aware, and from the evidence of Philip Alan, who made enquiries at the relevant time, that local suppliers were selling premix for between K40 and K80 per bag.
     
188. It is unclear how prices of local premix compared to QPR per kilogram. The State witnesses provided the cost per bag of local premixes. Mr Cholai was not aware of the price of QPR per kilo. Mr Kapi ultimately agreed that he was not aware of the cost himself and was not involved in the procurement.
     
189. I do not accept the accused’s evidence that the cost of a local product was K607 per kilogram compared to K300 per kilogram when labour and other costs were factored in. Regardless of bag size this is inconsistent with the “Department estimate” contained in the certificates of inexpediency which he authorised in 2011. Those estimates vary from between K360 up to almost K400 across the certificates.
     
190. I prefer the evidence of Mr Asinimbu.
     
191. Mr Asinimbu agreed that local products required preheating but said that the Department assessed the additional cost involved at K40.
     
192. On a pure bag by bag comparison QPR was a more expensive product at K300 to K330 per bag compared to a maximum of K80 for the local product.
     
193. The State failed to lead evidence as to the volume and value of local premix usually procured over a similar period. Thus, it is unclear how this compares with the volume and value of QPR procured. By the accused’s own evidence, however, he did not dispute that QPR was not procured in response to requests from the provinces, only that it was “expedient” to organise it from headquarters.
     
194. Evidence as to the comparative performance, storage and durability of QPR is also inconclusive.
     
195. Provincial managers who Philip Alan surveyed expressed mixed views about the quality of QPR. Some managers thought it was good or of high quality. Others did not. Some provinces did not receive any QPR and others did not respond.
     
196. According to internet reviews, the source and veracity of which is unknown, 21.5% of reviewers rated it 1, 4.7% a 2, 7.5% a 3, 17.8% a 4 and 48.6% a 5. The views are hearsay.
     
197. I accept the evidence of Mr Asinimbu and Mr Sarua that the product was not tested in any formalised way prior to procurement. A methodological field test in West New Britain, the extent and details of which is not clear, found that it performed at its maximum capacity on potholes less than 1m x 1m at thicknesses between 25 mm and 100 mm. It did not perform well on repairs with bare subgrade. It was reported as brittle.
     
198. I do not accept the evidence of the accused that the product was tested in

all 16 provinces before procurement in 2011 was conducted. He gave no detail as to who or how the testing was conducted, and it is inconsistent with the evidence of Mr Asinimbu and Mr Sarua, who would have been aware if such testing had taken place.

199. I accept Mr Asinimbu’s evidence as the officer responsible for overseeing road maintenance, and having direct experience of it and local premix products, that in his view it “performed and failed” much like the other premixes available.
     
200. In summary, the evidence shows that QPR was a more expensive product than those locally available on a strict bag to bag comparison. It also appears that if the cost of additional labour is factored in, about K40 per bag, QPR remains about three times more expensive per bag. It is unclear whether the bags are the same size. It is not possible to say how the price compared per kilogram. Evidence as to QPR’s comparative quality is inconclusive.
     
201. Ultimately, however, the question of prejudice is not about whether QPR was a better or worse product, or a more or less expensive product, than the alternatives locally available.
     
202. The accused’s actions were prejudicial to the State because they committed very large amounts of scarce financial resources to products which had not gone through the normal procurement processes, or a transparent and accountable tender process to consider those matters, together with the actual needs of the Department for pothole patching material. That was the prejudice to the State. The State was entitled to have its monies applied in accordance with the purpose for which they were intended following a proper procurement process, prescribed by law. This is particularly so given that on the undisputed evidence of Mr Asinimbu, the Department handed over responsibility for 90% of the maintenance of roads to the National Road Authority in 2010 or 2011. The accused as Secretary would surely have been aware of that, but there was no evidence from the State establishing when that decision was made or when the handover actually took place.
     
203. I am satisfied beyond reasonable doubt that the approval of the contracts in favour of Road Stoa was prejudicial to the rights of the Independent State of Papua New Guinea.
     

In abuse of the authority of his office

204. There can be no doubt that the contracts were approved in the exercise of the accused’s authority as the Secretary of the Department.
     
205. For the reasons stated above the approval of the contracts was arbitrary and prejudicial. The most critical question in this case is whether the conduct of the accused was done in a wilful abuse of the authority of his office, or whether as he contends, he acted in the best interests of the State to address the urgent and dangerous issue of road maintenance facing the country.
     
206. Abuse as a verb means :-1. To make bad use of something or to use too much of something that it harms your health. 2. To use power or knowledge unfairly or wrongly for instance she abused her position as principal by giving jobs to her friends or he felt they had abused his trust by talking about him to the press. 3. To treat a person or animal in a cruel or violent way for instance he had abused his daughter. 4. To make rude or offensive remarks about somebody.” Oxford Advanced Learners Dictionary new 8^th Edition.

“Authority” as a noun means:- “1. The power to give orders in a position of authority. 2. The power or right to do something. Oxford Advanced Learners Dictionary new 8^th Edition.

See Hevelawa (supra).

207. As outlined above, the 11 contracts approved in 2009 and 2010 failed to comply with the normal procurement process through the Operations Division in response to need. They did not comply with tender requirements given their size.
     
208. The accused was a career public servant, he was the Secretary of the Department and he had a duty and obligation in accordance with his office to ensure that its scare resources were applied in accordance with the systems and processes in place, in the public interest.
     
209. On one hand I find it difficult to believe that the accused did not appreciate the need to comply with the procurement process and did not deliberately act to avoid it. Why else would he keep the procurements of a product he says was of such high quality and value, and of such need to the Department, from his FAS Operations otherwise? The monies involved were considerable, K1.5m in 2009 and another K0.5m in 2010. I find it almost inconceivable that a person in the position of the accused would think it was appropriate for such large amounts of money to be committed without a tender process and without documentation in a formal contract, or would not at least consult his Operations, Finance and Legal teams before doing so.
     
210. On the other hand, there is evidence that premix had been procured without tender in the past. It is, as the accused suggests, possible that over time the monies expended on local premix, albeit on a piecemeal fashion, had been very large. The State did not lead evidence to make clear the process involved, and there was no evidence as to the volume or value of premix procured in the normal course through that process for comparative purposes.
     
211. In this case the accused approved eight contracts in 2009 and a further three in 2010, but all were to different provinces, and all for amounts, which whilst still very large, were less than K200,000.
     
212. In the circumstances the State has failed to exclude the possibility that the accused genuinely believed at that stage that he was authorised in the exercise of his office as Secretary to procure QPR from one supplier within his financial limit on a province by province basis. In the circumstances, I cannot be satisfied beyond reasonable doubt that the accused deliberately ignored the procurement processes or set about to circumvent them.
     
213. The approval in 2011 is a very different matter, however. It was a deliberate, planned and very serious abuse of the authority of the accused’s office.
     
214. It is clear that by this stage the accused had turned his mind to the procurement requirements. This is evident from the fact that the accused issued certificates of inexpediency on the same date, and in support of, the contracts he executed on 14 January 2011, to dispense with the need for a tender process.
     
215. Contrary to his evidence, there would be no need for any such certificate if a tender process was not required. The certificate of inexpediency was a deliberate attempt by the accused to circumvent the tender requirements contained in the PFMA.
     
216. By his own admission, the accused was familiar with the PFMA and the Financial Manual and related instructions. I have no doubt that he knew that he had no authority to issue the certificates of inexpediency, which could only be issued by the CSTB itself. Nor do I accept his evidence that he regarded the procurement of QPR as an emergency. No such basis is identified on the face of the certificates other than that Road Stoa was the only local supplier of QPR.
     
217. Nor do I accept the accused’s evidence that the contracts could not have been approved under the recurrent budget using a tender process. Tender requirements were not limited to capital works as stated by the accused. Section 40(1) makes it clear that tender through the CSTB is also required for “the purchase and disposal of property and stores.” Furthermore, even assuming that there may have been a period of months required to complete the tender process, that was simply a matter to be factored in and planned for, as it is for any large procurements. I have no doubt that the accused would have appreciated that given his experience and position.
     
218. Even if the accused believed that was not the case, that did not justify his conduct. The accused wilfully abused the authority of his office, his power and position as Secretary, to execute the contracts on behalf of the Department.
     
219. It is clear to me that the accused deliberately structured the contracts according to his financial limit as Secretary to avoid the procurement requirements. This is evident from the fact that the contracts in 2011 fall just below his limit in each case.
     
220. It is also clear from his direction to Margaret Malala, Assistant Secretary, Finance and Budget, in December 2011, Exhibit J, albeit made some months later, that “there is no need for legal clearance for pro-forma contracts which fall within the ambit of my jurisdiction at K300,000”.
     
221. It is further evident when regard is had to the fact that the accused approved, on the same day, two contracts for Central, one to the value of K283,500 and one to the value of K168,000, and a further two contracts for East Sepik, to the value of K284,000 and K251,000. This was clearly done to circumvent the tender requirements.
     
222. I don’t accept the accused’s evidence that his memo was a general instruction to the Finance Division to speed up the processing of claims. On its face the direction is given in respect of “premix under pro-forma contracts” and the only such products were those of Road Stoa.
     
223. Furthermore, the memo contains a number of false statements by the accused.
     
224. The matter was never referred to the CSTB as the accused well knew. The CSTB has no such record and the accused does not suggest otherwise, saying only in evidence that tender through the CSTB was not required. The statement that “CSTB has not met for the last three weeks to deliberate on our submission owing to the uncertainties relating to the chairmanship of the CSTB as well as the Executive Officer” was an outright lie in his capacity as Secretary to compel the Department’s Finance Division to make the payments to Road Stoa.
     
225. By the accused’s own admission in evidence, Provincial Works Managers were not “begging” for QPR, it was simply “expedient” to organise procurement of it from head office.
     
226. Whist this direction was given later in 2011 it is relevant to my finding that the accused acted in the intentional abuse of his office when he approved the contracts in January.
     
227. Furthermore, even giving the accused the benefit of the doubt in relation to the 2009 and 2010 contracts, there is no doubt in my mind that the decision by the accused not to inform the FAS Operations of the 16 contracts in 2011 until after they had been executed by him was a deliberate attempt to conceal his conduct because he was aware it transgressed procurement requirements. There can be no other explanation. It was only after queries were raised by other officers that he sought support from Mr Asinimbu.
     
228. It is well established that intention at the time of any alleged offence is a question of fact to be determined by the trial judge. It may be inferred by examining the accused’s conduct prior to, at the time and subsequent to the act constituting the offence: The State v Raphael Kuandande [1994] PNGLR 512; Ikalom v State (2019) SC1888.
     
229. Having regard to all of the above facts and circumstances, I am satisfied beyond reasonable doubt that the accused wilfully abused the authority of his office as Secretary of the Department of Works to approve the Road Stoa contracts executed in 2011. There is no other rational inference.
     
230. Contrary to defence submissions, s 92(1) of the Criminal Code does not require proof of dishonesty. Dishonesty, whilst it might have been proven here for the reasons outlined above, has a particular legal meaning, and is not an element of the offence. Nor does s 92(1) require proof of intention to gain. Nor must there be a conflict of interest.
     
231. Salika DCJ (as he then was) in The State v Hevelawa (No. 1) found that the accused had abused the authority of their office by approving the contracts when there was a clear conflict of interest and acted dishonestly. Whilst that constituted the abuse in that case, the decision is not authority for the proposition that there must be a conflict of interest in every case before s 92(1) applies. As above, the offence is broad in nature. What constitutes an abuse will depend upon the office held by the accused and particular circumstances of the alleged offending.
     
232. Finally, the question remains whether the abuse of the authority of office was of such seriousness that it warrants criminal punishment.
     
233. The accused was the Secretary of the Department of Works, responsible for overseeing its administration. He was the principal custodian of the State monies entrusted to his department to perform its function. It was his duty to ensure that its scarce financial resources were applied in accordance with established procurement processes for the provision of goods, works and services in the public interest. The nature and extent of the abuse, by the most senior person in the Department, including the deliberate efforts to avoid the procurement process, the concealment and structuring of contracts, the unauthorised use of certificates of inexpediency, and the value of the contracts involved, was so serious, and fell so far below acceptable standards as to amount to an abuse of the public’s trust worthy of condemnation and criminal punishment.
     
234. Accordingly, I am satisfied beyond reasonable doubt that the abuse of authority was of such seriousness that it warrants criminal punishment.
     

Variance with Indictment

235. It is the case that I have found that the accused approved 16 contracts valued at K4,309,000, and not 44 contracts valued at K9,594,860.79, in abuse of the authority of his office, as averred in the indictment. Neither the number of contracts nor the value of those contracts is an essential element of the offence. The accused has been aware at all times of the nature and extent of the allegation. The evidence has sustained only part of that allegation. There is no prejudice to the accused in that finding.
     
236. In conclusion, the State has proved beyond reasonable doubt that the accused in abuse of his office approved 16 minor works contracts in favour of Road Stoa Limited to a value of K4,309,000, without proper procurement process, prejudicial to the rights of the Independent State of Papua New Guinea.
     

Verdict: The accused is guilty of abuse of office contrary to s. 92(1) of the Criminal Code.
________________________________________________________________
Public Prosecutor: Lawyers for the State
Napu and Company: Lawyers for the Accused

[1] See David Lusty, Revival of the common law offence of misconduct in public office, (2014) 38 Crim LJ 337 for a comprehensive consideration of the history and application of the offence of misconduct in office across several common law jurisdictions.