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State v Merimba [2022] PGNC 153; N9604 (5 May 2022)

N9604

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


CR(FC) 313 & 314 OF 2019


THE STATE


V


PAUL WAGHI MERIMBA


Waigani: Berrigan J
2022: 21st April and 5th May


CRIMINAL LAW – SENTENCE – Forgery – 460(2)(a) of the Criminal Code – Uttering - S 463(2) of the Criminal Code.


Cases Cited:


Lawrence Simbe v The State [1994] PNGLR 38
The State v Alex Tongayu (2021) N8975
The State v Karepen (2019) N7840
The State v Kelen Kopen and Roland Tom, unreported, 2016
The State v Lapun Mesa Pati (2018) N7186
The State v Lawrence Pukali (2014) N5560
The State v Niso (No 2) (2005) N2930
The State v Terep (No 2) (2022) N9526
The State v Tardrew [1986] PNGLR 91
The State v Solomon Junt Warur (2018) N7545


References Cited


Sections 19, 462(1), 462(2), 462(3)(b)(i) of the Criminal Code.


Counsel


Ms T Aihi, for the State
Mr J Haiara, for Paul Waghi Merimba


DECISION ON SENTENCE


5th May, 2022


  1. BERRIGAN J: The offender was convicted after trial of one count of forgery, contrary to s 462(1) of the Criminal Code; one count of forgery, contrary to s 462(1)(3)(b)(i) of the Criminal Code; and one count of uttering, contrary to s 463(2) of the Criminal Code.
  2. In 1976 the complainant, Sir Mathias Merimba, and the offender, his younger brother, Paul Waghi Merimba, incorporated Mendikwae Ltd. Both were directors and held 50% of the company with 1 share each. At the time of the offence the company was worth almost K100 million. In January 2015 the complainant increased the share capital of the company to 100 shares. He allocated 60 shares to himself and 10 shares each to his wife and two of his children. The remaining 10 shares were allocated to the offender. The changes were made without the knowledge or agreement of the offender and in the absence of consideration. The effect of the changes was to reduce the offender’s shareholding in the company from 50% to 10%, or by about K40 million.
  3. The offender was unhappy upon discovery of the changes. He forged the complainant’s signature on a document falsely purporting to be the minutes of a Mendikwae Ltd Board of Directors meeting held on 10 May 2016, resolving to return the shareholding of the company to himself and his brother equally. He also forged a “Notice of Change of Shareholder (Share Transfer)” form, (Form 13 under the Companies Act, 1997) and signed it as director on behalf of Mendikwae Ltd on 10 May 2016 falsely stating that a total of 40 shares had been transferred to him by the complainant and the complainant’s wife and children for cash, when there was no such transfer of shares in consideration for cash or at all, and neither the company nor the persons named authorised any such transfer. The offender uttered the notice of change of shareholder (share transfer) form by lodging it with the Investment Promotion Authority (IPA).
  4. At trial I rejected the offender’s defence under s 23(2) of the Criminal Code. Whilst the offender may well have believed that he was entitled to reclaim the 40% of his shareholding that had been removed from him, he knew that it was wrong for him to forge and utter false documents to do so. As I said at the time, however, whilst his belief may have been irrelevant to his criminal responsibility, it is highly relevant on sentence.

Allocutus


  1. On allocutus the offender said: Your Honour, me and my brother, Mathias Merimba, we started our business in Goroka, Eastern Highlands Province in the year 1976, at that time we were running the business, there was no problem, we didn’t encounter any problem for almost 40 years. In the year 2015, there was no board of directors meeting, I saw that 40% was removed from me and given to Mathias Merimba’s son. I saw that and I was upset. For the 40 years that we ran the business I have shared the business partnership with him. He did not inform me before taking that 40%, so I went on my own and I wanted to recover that 40% and I increased it to 50% so I went there and in history that’s the first time I made a mistake. I don’t have any grudges against him, I only wanted to get back my 40%. So I made a wrong and I am sorry about it and I ask the Court to please have mercy on me. Thank you.

Sentencing Principles and Comparative Cases


  1. The maximum penalty for forging the minutes of the board of director’s meeting of 10 May 2016 on Count 1 of the indictment is three years of imprisonment. The maximum for forging the notice of change of shareholding (share transfer) form on Count 2 is 14 years, as it purported to be, or was intended by the offender “to be understood to be or to be used as a transfer or assignment of.. a share in” a corporation for the purposes of s 462(3)(b)(i) of the Criminal Code. Contrary to submissions, the maximum for uttering that document is also 14 years: s 463(2) of the Criminal Code.
  2. Defence counsel acknowledged in aggravation that the value of the property the subject of the forgeries, namely the shareholding was very high, being worth more than K40m, and that the offender was in a special position of trust. He also acknowledged that the offence required some planning and premeditation. He emphasised, however, that the offending was not done out of greed but a desire to restore his former shareholding, and that the offender did not ultimately benefit. Upon discovery by the complainant he was removed as a director and all of his shareholding removed without his authority or consent. The complainant and other shareholders lost nothing as the shares were not theirs in the first place. This was not an offence affecting public confidence. The offender has expressed remorse. He has been labelled a criminal, and suffered damage to his reputation, integrity and standing as a leader in the community. He asked the Court to take into account the offender’s age, and that this is his first offence, is of prior good character, and is unlikely to commit any similar offences in the future.
  3. Defence counsel submitted that sentences of 3 years, 7 years and 3 years, were appropriate on Counts 1, 2 and 3, respectively, to be served concurrently. Having regard to the totality principle he submitted that a term of 7 years was excessive, and that the sentence should be wholly suspended. He referred to the cases helpfully set out in The State v Lapun Mesa Pati (2018) N7186 by Kaumi AJ.
  4. The State submitted in aggravation that the offender is an elder and leader in the community, and that the offences are prevalent. In mitigation, the offender is a first-time offender, has expressed remorse and is very old. It noted the offender’s deteriorating health condition and the very strong support expressed by community leaders and ward councillors. It submits that sentences of 1 to 2 years, 5 to 7 years, and 2 to 3 years, respectively on each count, to be served concurrently. It does not oppose suspension.
  5. The State asked the Court to consider the sentences imposed in The State v Niso (No 2) (2005) N2930; The State v Kelen Kopen and Roland Tom, unreported, 2016; The State v Karepen (2019), N7840; The State v Lawrence Pukali (2014) N5560; and The State v Terep (No 2) (2022) N9526. I have summarised these cases in the attached table, together with that of The State v Alex Tongayu (2021) N8975.
  6. Section 19 of the Criminal Code provides the Court with broad discretion on sentence. Whilst guidelines and comparative cases are relevant considerations, every sentence should be determined according to its own facts and circumstances: Lawrence Simbe v The State [1994] PNGLR 38.

Consideration


  1. Forgery and uttering are serious and prevalent offences. In aggravation, the value of the property affected by the offences in this case was very high, and the offender’s conduct breached his position of trust as a director of the company. The offences clearly required some planning and premeditation.
  2. Certainly, the offender should not have taken the law into his own hands. He is an intelligent and experienced man and he well knew that his conduct was wrong. If he could not have resolved the matter with his brother directly, then he should have commenced legal proceedings, as he eventually did. Perhaps he did not think it would ever come to that.
  3. Ultimately, however, the mitigating factors in this case far outweigh the aggravating ones. The offender was not motivated by greed. He had been a director and a 50% shareholder in the company with Sir Mathias for forty years at the time of the offending, and his shareholding had been reduced from about K50 million to K10 million without his knowledge and consent, and without any consideration being paid to him at the time. The offender did not seek to profit from his conduct but to restore himself to his former position.
  4. The State Prosecutor provided a victim impact statement from the complainant’s son, Louis Joseph Merimba, who is now a director and shareholder in the company. Mr Louis Merimba says that he was deeply betrayed, disgusted and angered by the offender’s conduct, which has splintered the family and left daily interactions within it tense. The court case is taking a physical, mental and emotional toll on all concerned. It is his father and his father alone who has supported the family for many years. He calls for a severe sentence to be imposed on his uncle for the stealing of his father’s life work.
  5. It is regrettable that the dispute between Sir Mathias and Paul Waghi Merimba over the company they started many years ago has developed into a bitter rift within the broader family. I understand from the evidence at trial that attempts at mediation have failed. It is also regrettable that the State did not obtain a statement from the complainant, Sir Mathias, for the purpose of these proceedings. I distinctly recall him saying towards the end of his evidence that perhaps he should return to Port Moresby and try to resolve the matter with his brother.
  6. In any event, it cannot be said that either Sir Mathias, Mr Louis Merimba, or the other shareholders have suffered financially as a result of the offender’s conduct. They now hold the shares previously held by the offender, and upon discovery of the offences, it was the offender who was stripped entirely of his remaining shareholding and his directorship in the company, albeit that he is now challenging those matters through civil proceedings. It was unclear at trial to what extent consideration had subsequently been provided for the offender’s shares.
  7. Apart from the financial implications, the impact of the offending on the offender has been and will continue to be very grave. The offender has been convicted of serious offences. The Courts have long recognised that this in itself is a punishment: Supreme Court Reference No 2 of 1981; Re s 19(1)(f) of the Criminal Code [1982] PNGLR 150. That is particularly so in this case where the offender’s conviction represents a serious fall from grace for a man who, according to all the materials before me, has a long and distinguished record as a leader, philanthropist and peace maker.
  8. The offender is a first-time offender and is of prior good character. He lives with his wife and two children at Garamarou Village, at the border between the Yongmul and Asaro Valleys in Eastern Highlands Province. He has fifteen children from his previous wives, and supports a large and extended family. In addition he enjoys wide support from his community.
  9. A long-time former employee of Mendikwae Ltd, John Bapka, worked with the offender at the company. The offender supported numerous developments in the District while a Member of Parliament, including the Sir Joseph Nombri Kundiawa General Hospital, and plays an important role in the community through his charity work and role in maintaining peace, including for instance by resolving a very serious tribal fight in 2010.
  10. A journalist and close personal friend of more than twenty years, Mr Zachery Per, says that the offender is a role model to many. He is a caring husband, father, grandfather and great grandfather. He is also a prominent and hardworking businessman who has generously given to many communities, schools and churches in the Eastern Highlands and Chimbu Provinces. He is commonly known as “Chief Wagi”, and his leadership has ensured peace and harmony in the community, sometimes at risk to his own life. In the 2017 elections, for instance, he personally drove his vehicle into the middle of a crowd which was attacking a rival candidate and his supporters with rocks, shot guns and arrows. He got out of the vehicle, which was badly damaged, and begged the crowd to stop or take his life. Peace was restored as a result and no lives lost. The offender has expressed his deep regret to Mr Per over this case, and explained that he felt overwhelmingly betrayed when his shareholdings were removed.
  11. The President of the Mitnande Local Level Government, Mr Peter Gabrame Konia, has also known the offender for twenty years. He describes him as an exceptional leader who has been instrumental in resolving countless tribal conflicts through peaceful means. Both he and his brother, Sir Mathias, funded three primary schools in the Kundiawa-Gembogl District between 1981 and 1983, and a further one in 1985, which was opened by the late Sir Michael Somare. Despite his age, the offender was runner up to the sitting member William Onglo in the 2017 elections, reflecting the strong respect his people have for him. The offender is an accomplished leader in Parliament and at the community level. The offender continues to serve on the District Development Authority board, and is leading work on the road link between Simbu and Eastern Highlands Provinces. Mr Konia says that he and many others in the community are saddened to learn of his convictions, which do not reflect the man he knows.
  12. Probation Services also spoke to Gila Paul, the Gembogl Village Court Chairman, Albert Nagmai, Ward 10 Councillor, and John Kolop, Ward 7 Councillor of Karamagalo, all of whom spoke of the great respect with which the offender is held in the community, his great leadership and ongoing work.
  13. Pastor Peter Aglum, who is the nephew of both Sir Mathias and Paul Waghi Merimba, speaks highly of both men as pioneering businessmen and fine leaders. He says that the dispute between the two brothers has greatly saddened the people of Kundiawa Gembogl as they love them both.
  14. Finally, Mr Micah Bonny Safatigi, the offender’s grandson says that he regards both Sir Mathias and Paul Waghi as his role models and inspiration. He says that he has been very worried in the lead up to the sentence that supporters from each side of the family might come to blows but this has been avoided as the offender has continued to emphasise that there must be no dispute or violence over what is happening in court.
  15. In addition, the offender’s advanced age is a special factor in mitigation. He is 74 years of age. He survived a plane crash many years ago and continues to require treatment and medication from time to time. This case has been on foot for several years since he was charged in April 2019. Observing him during the course of the trial, and again on sentence, it is clear to me that his health is deteriorating.
  16. The offender exercised his right to trial. I make it clear that that is not a matter of aggravation. It simply means that he is not entitled to any discount that might have been available to him had he pleaded guilty: The State v Solomon Junt Warur (2018) N7545.
  17. The offender cooperated with police. He expressed remorse on allocutus, which I accept as genuine.
  18. This is not a case affecting the public or the public confidence.
  19. I have found the determination of an appropriate sentence difficult. A review of the cases in the schedule attached reveals that sentences rarely exceed two or three years, even where they would attract the 14-year maximum. It appears that the State does not usually seek to invoke the greater maximum, even where it would be available. It is also apparent that unlike this case, the comparative cases have been motivated by greed, and often involved very large amounts of money. In most cases the sentences have been suspended.
  20. The recent decision in Terep is similar to this one but much more serious in my view. The offender was convicted following trial. He was a trained accountant and forged the minutes of a company board meeting removing the complainant as joint shareholder and director. He was convicted of forging, and of uttering the document to the IPA, and sentenced to 12 months imprisonment on each count, to be served concurrently, wholly suspended, and fined K1000.
  21. Having regard to all of the matters outlined above, I impose a sentence of six months of imprisonment on Count 1, one year of imprisonment on Count 2, and one year of imprisonment on Count 3. Whilst I am mindful of the mitigating factors I am obliged to bear in mind the maximum of 14 years invoked by the State in this case. Furthermore, despite the particular circumstances of this case, it remains a serious matter for a person to forge an instrument intended to be relied on as genuine by the IPA for the purpose of transferring shares in a registered company. The sentences imposed appropriately reflect the nature of the offence in view of the maximum and the need for general deterrence in the circumstances of this case.
  22. The sentences arise out of the same transaction and are to be served concurrently. I understand that no time has been spent in custody to date.
  23. There is no doubt that the offender would suffer excessively in prison given his age. The offender is not a risk to the community. Furthermore, he is deeply remorseful and there is no risk that he will reoffend in the future. In the circumstances I intend to wholly suspend the sentences: see The State v Tardrew [1986] PNGLR 91.
  24. Before closing let me make clear that nothing I have decided in this case has any bearing upon the issues for determination in the civil proceedings. Those are separate matters before another judge.
  25. This criminal trial has now concluded. Community and family members have spoken of their great respect for both Sir Mathias Merimba and Paul Waghi Merimba. The offender has respected the court process at all times and emphasised the need for his supporters to respect it and for that he is to be commended. Family members and supporters on both sides must continue to do the same.
  26. I make the following orders.

Orders


(1) The offender is sentenced on Count 1 of the indictment to six months of imprisonment in light labour to be served at Bomana Correctional Institution.
(2) The offender is sentenced on Count 2 of the indictment to one year of imprisonment in light labour to be served at Bomana Correctional Institution.
(3) The offender is sentenced on Count 3 of the indictment to one year of imprisonment in light labour to be served at Bomana Correctional Institution.
(4) The sentences are to be served concurrently.
(5) The effective sentence of one year of imprisonment is wholly suspended upon condition that the offender enter into his own recognisance to keep the peace and be of good behaviour for a period of one year.
(6) The offender’s bail monies and any sureties deposited by the offender’s guarantors are to be immediately refunded.

Sentence accordingly.
___________________________________________________________
Public Prosecutor: Lawyers for the State
Haiara’s Legal Practice: Lawyers for the Offender


FORGERY AND UTTERING


SCHEDULE OF SENTENCES


Case
Particulars
Sentence
Kali Mari v State (1980) SC175
Appeal against sentence of 18 months for uttering by fraudulent alteration, by K1,000.00, of the credit balance shown in a bank passbook. The appeal was upheld as the trial judge erred in finding that the offence was an intelligent, pre-mediated cunning plan. It was better categorised as naive.
1 year imposed
Public Prosecutor v Tardew [1980]
PNGLR 91
Appeal by the Public Prosecutor against suspension of 54 months of five-year concurrent sentence for eight offences for forging and uttering four cheques worth a total of K82,202.73. The offender was the operations manager of the National Computer Centre, which printed government cheques for the Department of Finance. Sentence confirmed. Appeal against suspension upheld. Offender committed to custody.
5 years imposed
The State v Doreen Liprin (2001) SC673, Amet CJ , Kapi DCJ (as he then was), Los J
The prisoner, a bank teller was found guilty of forging and uttering a bank withdrawal slip and misappropriating K6000 from her employer. The National Court sentenced her to 1 year each for forging and uttering and 3 years’ for misappropriation, to be served concurrently, wholly suspended on condition of restitution within 2 months. See Amet CJ’s comments re suspension in the case of offences involving smaller amounts.
On appeal the sentence was varied to the 9 months’ already served, with further orders for restitution over 2 years with community service.
State Roland Tom, Kaleu Kopen CR No 774/2005, Salika DCJ
The trial judge found that Roland Tom conspired with Kalen Kopen, an employee of the Lands Department, to defraud the complainant of his property, that they uttered a false contract of sale, and falsely pretended to the NHC that the contract was genuine.
Effective sentence of 4 years
State v Louise
Paraka (2002) N2317, Kandakasi J
The prisoner was charged with two (2) counts of forgery and a further two (2) counts for uttering two (2) cheques worth K6, 000.00, offences contrary to s.462 (1) and s.463 (2) of the Code. The prisoner pleaded guilty to all the charges. The Prisoner was a claimant together with others as previous customary landowners in a compensation claim made against the State in respect of the land upon which the Holy Trinity Teachers College stands. The claim was settled by the State paying K800,000.00. Out of the settlement proceeds, the Prisoner received a cheque for K1,700.00, but he changed the figure 1 to 4 making the cheque to read K4,700.00. He also did the same with another cheque made in favour of a Paul Akil for K1,150.00 which came into his possession and changed it to read K4,150.00. The cheques were cashed. In the process, the Prisoner benefited by K6,000.00.
3 years imposed, wholly suspended upon restitution.
State v Niso (No 2) (2005) N2930, Gavara-Nanu J
The prisoner was convicted following trial of conspiring with one Soni Harvies and other unknown persons to defraud the Bank of Papua New Guinea of K500, 000.00. He then forged a Westpac Bank (PNG) Ltd cheque account application form in the name of one Raymond Mell. The prisoner knowingly and fraudulently uttered a false document purporting to be a Westpac Bank (PNG) Ltd cheque account application form in the name of Raymond Mell. He then applied to his own use and to the use of others K500, 000. 00.
3 years, 6 months’ imprisonment for conspiracy; 1 year, 3 months’ imprisonment for forgery; 1 year 3 months’ imprisonment for uttering; 7 years 6 months’ imprisonment for misappropriation. Sentences for first, second and third counts to be served concurrently with the sentence for the fourth count. Effective term of imprisonment 7 years 6 months’ imprisonment less time spent in custody
The State v Raka Benson (2006) N4481, Cannings J
The offender pleaded guilty to two counts of forgery and two counts of uttering. He forged the signature of the authorised signatory on a bank withdrawal slip, then presented it at the bank and withdrew K500.00. He later forged the same signature on another bank withdrawal slip, presented it at the bank and withdrew K1,500.00. The bank account belonged to a school and the offender was deputy governor of the school’s controlling board. By the time of the trial he had repaid most of the money.
Count 1, 6 months, to be served consecutively with count 2, 6 months; count 3, 12 months to be served consecutively with count and count 4, 12 months. Effective sentence of 18 months, wholly suspended.

State v Lengade (2012) N4690, Makail J
The offender pleaded guilty to one count of forgery and one count of uttering documents whereby he falsely represented to the National Forest Authority that he was Andrew Aopo and sought to claim Nambawan Super savings of Andrew Aopo.
1 year imposed of which 3 months suspended.
The offender, a lawyer, was found guilty following trial of one count of falsely promising that he would pay K405,600.00 in exchange for 2,535 grams of gold nuggets with the intent to defraud; and one count of forging a Bank South Pacific Cheque in the amount of K170,000.00, contrary to s s.462(3)(b) of the Criminal Code for which a maximum of 14 years applies.
2 years and 5 years, respectively, in light labour, to be served concurrently.
State v George Steven CR (FC) 184/14, 2017, unreported Salika DCJ
The offender forged the signature of his former wife on a land transfer document. He was found guilty after trial and sentenced to 3 years of imprisonment, which was wholly suspended on condition that title be returned to his wife.
3 years imposed, wholly suspended on conditions
The State v Max Karapen (2019) N7840, Salika DCJ
The prisoner lodged four forms at the Investment Promotion Authority office containing false information which purported to remove the sole shareholder and director of Moitaka Development Corporation Limited and purportedly appointed the offender and four others as shareholders and directors in his place. The IPA registry records were updated to effect the changes. Sometime later the prisoner wrote to the lawyers representing the company in civil proceedings containing several false representations, including a direction to terminate the proceedings to recover against the Education Department for use of land belonging to the company. The false instruments were uttered in support of that letter.
7 years on each of the forgery counts and 2 years on the uttering count, to be served concurrently.
State v Alex Tongayu (2021) N8975, Berrigan J
The offender, the Director, Business Registration at the IPA, forged the signature of the Minister of Trade Commerce and Industry on two instruments of appointment purporting to appoint the offender to the position of Chairman of the Securities Commission and Registrar of Companies, positions he previously held.
Worst type of offence. Maximum of three years’ imposed, one year of which suspended.
The State v Terep (No 2) (2022) N9526, Wawun-Kuvi AJ
The offender was convicted following trial. He was a trained accountant and forged a meeting minute removing the complainant as 50% shareholder and director of the company. He was convicted of forging and uttering.
12 months’ imprisonment on each count, to be served concurrently, wholly suspended. He was fined K1000.

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