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State v Ralewa (No 2) [2022] PGNC 341; N9803 (28 July 2022)

N9803

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR 204 OF 2021

BETWEEN:
INDEPENDENT STATE OF PAPUA NEW GUINEA

AND:
ROBERT RALEWA
(No 2)

Waigani: Wawun-Kuvi, AJ
2022: 5^th & 31^st May, 28^th July

CRIMINAL LAW-SENTENCE-Convicted following trial-Misappropriation, 383A(1)(a) Criminal Code-Misappropriation of trust monies- Monies in the sum of K931, 800.00-sentence of 7 years imprisonment

Cases Cited

State v Lamo [2022] PGNC 64; N9500
State v Lavai [2020] PGNC 363; N8660
Kaya v State [2020] PGSC 145; SC2026
State v Lohia [2019] PGNC 265; N8042
State v Warur [2018] PGNC 438; N7545
State v Tiran (No. 2) [2018] PGNC 301; N7375
State v Poholi [2016] PGNC 41; N6214
State v Tokunai [2015] PGNC 133; N6039
State v Niso (No 2) [2005] PGNC 26; N2930
Lawrence Simbe v The State [1994] PNGLR 38
Wellington Belawa v The State [1988-1989] PNGLR 496
The State v Tardrew [1986] PNGLR 91
Goli Golu v The State [1970] PNGLR 653

Legislation

Criminal Code Ch 262
Criminal Justice (Sentences) Act 1986

Counsel

Ms Comfort Langtry, for the State
Ms Edward Sasingian, for the Offender

DECISION ON SENTENCE

28^th July, 2022

1. WAWUN-KUVI, AJ: Robert Ralewa (offender) is a 57-year-old male from Hula, Rigo District in the Central Province. He is the father of the famous singer, song writer and producer Bradley Ralewa better known as BRad.
   
2. Robert Ralewa owned his own company which he named ARJAY Corporation Limited (ACL).
   
3. He was also employed as the Chief Executive Officer (CEO) of Asian Pacific Insurance Brokers Limited (APIBL). He was also a shareholder.
   
4. Asian Pacific Insurance Brokers Limited was an Insurance Brokerage. They sourced clients and linked them with underwriters or insurance companies. Clients would pay their insurance premiums into a trust account created by APIBL. APIBL would then pay the premiums to the insurance companies. The insurance companies would authorize a commission to be paid to APIBL from the trust account.
   
5. In 2016, an internet banking facility was created for APIBL. The offender was listed as the sole master user or person authorized to have the account credentials. The internet banking facility enabled online banking transactions for APBIL’s operating account and trust account.
   
6. Prior to 2016 the company operated by a cheque system which required the signatures of the offender and Director of APIBL one Watt Kil Kiddie. The method of cheque payments did not cease upon the creation of the internet banking facility.
   
7. The offender transferred K58, 500.00 from the trust account into ACL’s account.
   
8. The sum of K873, 300.00 was initially transferred from the trust account into APIBL’s operating account. The offender then transferred it from the operating account into ACL’s account.
9. In total he had transferred K931, 800.00 from the trust account into ACL’s account. He used the money for his own personal benefit.
   
10. These are the facts in which the offender was convicted, I must now decide the appropriate penalty.

The Charge

11. The offender was convicted following a trial for the charged of Misappropriation under section 383A(1)(a) of the Criminal Code.

Penalty

12. The maximum penalty is 10 years imprisonment by operation of section 383A(2)(c) and (d) of the Criminal Code. That is the monies applied, were subject to a trust, direction or condition and the value of the monies exceeds K2, 000.00.
    
13. The maximum is reserved for the worst case: see Goli Golu v The State [1970] PNGLR 653.

Guidelines

14. Sentencing guidelines do not curtail the discretion of the sentencing court but assist the court in arriving at an appropriate sentence. Each case is decided on its own peculiar set of circumstances: Lawrence Simbe v The State [1994] PNGLR 38.
    
15. The guidelines in Belawa v The State [1988]^[1], have been applied over the years. They are:

“(1) where the amount misappropriated is between K1 and K1,000, a gaol term should rarely be imposed;

(2) where the amount misappropriated is between K1,000 and K10,000, a gaol term of up to two years is appropriate;

(3) where the amount misappropriated is between K10,000 and K40,000, two to three years imprisonment is appropriate;

(4) where the amount misappropriated is between K40,000 and K150,000, three to five years imprisonment is appropriate.”

16. Recently, the majority in Kaya v State [2020]^[2] in considering the amendments to section 383A of the Code, the need for increased sentences and the sentencing trends, suggested the following scale:

(a) K1 and K1000 a gaol term should rarely be imposed;

(b) K1,000 and K10,000, a gaol term of up to two years is appropriate;

(c) K10,000 and K40,000, two to three years of imprisonment is appropriate;

(d) K40,000 and K100,000, three to five years of imprisonment is appropriate;

(e) K100,000 and K500,000, five to seven years’ imprisonment is appropriate; and

500,000 and K999,999.99, seven to 10 years of imprisonment is appropriate, bearing in mind that the maximum under s. 383A(2) should be reserved for the worst types of offending involving amounts less than K1 million.

17. It can be concluded that for an offence involving K150, 000.00 and K999, 999.00, the penalty range wound be between five to ten years’ imprisonment. The factors in Wellington Belawa v The State [1988-1989] PNGLR 496 would then assist to determine the appropriate sentence.

Submissions

State’s submissions

18. The State submits for a term of imprisonment between 7-10 years. The State contends that no part of the sentence should be suspended as the amount is significant, the offender has not made any restitution and has no means to restitute.
    
19. In mitigation it was submitted, that the offender is a first-time offender and he had prior good character.
    
20. The State submits that in aggravation, the Court considers that, there was a serious breach of trust, the substantial amount of money that was misappropriated and the prevalence of the offence.
    
21. In considering the factors in Wellington Belawa v The State [1988-1989], the State has submitted that the amount taken was significant, there was a high degree of trust given to the offender, the fraud was perpetrated over a year indicating that this was not a spur of the moment act, that the monies were applied to the offender’s personal use, that the victim has to obtain a loan to offset some of the monies taken, there was no restitution, the offender has not expressed any genuine remorse and that the offence has caused the offender his employment and may likely affect any future employment.
    
22. The State refers the Court to the following cases:
    
23. State v Warur [2018]^[3], Berrigan J: The offender pleaded guilty to misappropriating K811,969.53. The offender was a Sergeant in the Correctional Services. He was the Communications Officer. The offender incorporated a company and placed fictional orders on behalf of the Correctional Services. No goods were supplied to the Correctional Services and the offender used the money for his own personal benefit. The fraud was perpetrated over a period of almost 4 years. The offender was sentenced to 7 years imprisonment.
    
24. State v Tiran (No. 2) [2018]^[4], Miviri, AJ (as he then was); The offender was convicted following a trial. She conspired with others and submitted a proposal for a coconut planation in Manus to the Department of Planning and Monitoring. As a result, K500, 000.00 was paid. The offender applied the monies to her own use and that of others. She was sentenced to 6 years imprisonment.
    
25. State v Poholi [2016]^[5], Salika, DCJ (as he then was); The offender was convicted following a trial on one count of conspiracy and one count of misappropriation of the sum of K688, 000.00. He was employed as Human Resource Benefit Remuneration Officer with the Bank of South Pacific. For over a year, the offender conspired with another officer and cash BSP Debit Vouchers on the pretext of making payments for expatriate BSP staff. He was sentenced to 3 years for the conspiracy conviction and 5 years for misappropriation. The sentence was made concurrent.
    
26. State v Tokunai [2015]^[6], Salika, DCJ (as he then was); the offender was convicted of misappropriating K1.4 million. He submitted a project proposal to the Department of Planning and Monitoring for the reconstruction of the Malaguna Catholic Church. The project was approved, and monies were paid into the offender’s company account. The offender used the proceeds of the cheque and did not build the church. He was sentenced to 7 years imprisonment.
    
27. State v Niso (No 2) [2005]^[7], Gavara-Nanu, J: The offender was convicted following a trial for conspiracy, forgery, uttering and misappropriation. The offender was a senior clerk with the Bank of Papua New Guinea. The offender conspired with others and created a bogus account. The sum of K500, 000.00 was paid into the account. The offender misappropriated the sum. He was sentenced to 7 years and 6 months for the misappropriation conviction.
    
28. The cases submitted are like the present case in that they involve sums of money K500, 000.00 and above. That the offence was perpetrated over some time and the offenders were trusted.

Defence submission

29. The defence submit for a sentenced between 7 to 8 years imprisonment. That the sentence be wholly suspended as the offender is forfeiting his claim for any entitlements owed to him by the victim.
    
30. It was submitted that the Court take a similar approach as it did in State v Lamo [2022]^[8] where the offender did not have any means to restitute, and the sentence was partially suspended.
    
31. Additionally, it was submitted that the Court has the power to order that restitution be deducted from the final entitlements of an offender. That the Court adopt the approach in State v Lavai [2020]^[9] where the Court ordered for the offender’s lawful entitlements to be paid as restitution.
    
32. In mitigation, it is submitted that the offender has no prior convictions, he expressed remorse, the offence is nonviolent, APIBL is still operating, there is no permanent loss of business, there is no recommendation for imprisonment from the Probation Officer, the offender was suffering financially because he was not getting paid according to the Shareholders Agreement, he is now homeless because the Bank repossessed his home, he is the sole breadwinner and he is willing to repay the monies from his outstanding entitlements.
    
33. In considering the Belawa principles, it is submitted the monies were the offenders entitlement and salary, the victim suffered no permanent loss of business, there nothing tangible to demonstrate the loss suffered by the victim, there is nothing before the Court to demonstrate the impact on public confidence, the offender’s motive was to be paid for his services, the offender has greatly suffered and has been without employment since he left the victim company and his family continues to suffer.
    
34. The defence also rely on the case of State v Warur [2018]^[10].

Comparative cases

35. State v Lohia [2019]^[11], Berrigan J: The offender pleaded guilty to misappropriating K1, 008, 314.07. The offender was employed with ANZ Bank and over a period of 22 months used his access and knowledge of the bank’s systems and credited his account and his associates’ accounts. The 10-year maximum was applied as some of the monies were misappropriated prior to the amendments to the Criminal Code. The offender was sentenced to 8 years imprisonment.
    

Personal Antecedents

36. The Offender is married and has five children. His wife is from the Northern Province. His oldest children are all adults except for the last child who is 10 years old. His oldest son was the famous singer, song writer and music producer Bradley Ralewa professionally known as B-rad. He is deceased.
    
37. Both his parents are deceased. He has six siblings. The offender is the fourth in the family.
    
38. The offender grew up in Morobe Province where his father worked as a clerk for the Menyamya District.
    
39. The offender completed Grade 10 at the Menyamya High School in 1981. In 1982 he attended the University of Papua New Guinea and did Matriculation (Preliminary Studies). In 2020, the offender obtained a Bachelor’s degree in Business Management.
    
40. He started employment in 1983 with Travelodge Hotel as a Finance and Accounting Assistant. From 1985 to 1990 he worked with QBE(PNG) Ltd, from 1990 to 2000 he was the Executive Manager for AON Risks Service, from 2000-2002 he joined Pacific International Assurance Ltd as its Executive Manager. In 2002 he joined Asian Pacific Insurance Brokers Ltd. He was employed until 2018.
    
41. He is presently unemployed.

Pre-Sentence Report

42. The Probation Officer obtained information from the offender, his wife, his son, and his daughter. The former Managing Director of Asian Pacific Insurance Brokers Ltd was also interviewed.
43. The offender maintained his innocence and stated that the money rightfully belonged to him.
    
44. His wife Prosephine Robert provided a statement of how the offender gained employment with APIBL and his conditions of employment. She says that since he lost his employment, the bank has foreclosed on their home and their children have been unable to go to school. Her concern is for the future of their 10-year-old daughter. She states that her husband was treated for hypertension.
    
45. Shyane Ralewa is the offender’s son. He speaks of his father’s good character and the hardship his father has faced since being arrested for the offence.
    
46. Prisca Ralewa is the offender’s daughter. She also makes a statement similar to her brother.
    
47. The Probation Officer did not interview any members of the offender’s community, extended family members, former colleagues, or congregation members.
    
48. The offender had provided references from a Mr. John Goviro- Overseer of PNG Renewal Church Incorporation and Mr. Yuanes Petrus, Chairman of the Oro Community Development Association. The letters are addressed as “to whom it may concern”.
    
49. The letter by Yuanes Petrus was written prior to conviction and does not carry any weight. Mr. John Goviro has known the offender for almost 27 years and speaks of his contributions to the PNG Renewal Church Incorporation. The church has its roots from the Anglican Church. He states that the offender is a pillar in their church.
    
50. Watt Kiddie was the former Managing Director of APIBL. He stated that the money misappropriated by the offender was trust money. He asks for a custodial sentence.
    
51. The Probation Officer states that the offender is not a threat to his community but does not make any recommendations as to Probation. The offender has no means to make any form of restitution.

Allocutus

52. I have heard the statement by the offender and much of it is still based upon his claim of innocence. He pleads with the Court to consider his suffering and that of his family since being arrested and convicted for the offence.

Affidavit filed by Offender

53. In support of his sentence hearing, the offender has filed an affidavit.
    
54. He speaks of his efforts in following up for his final entitlements. He states that he is owed K2, 470, 269.86 by APIBL. And says that he authorizes APIBL to deduct the monies he took as restitution.
    
55. He states that as a result of his loss of employment the Bank foreclosed on his home, and he has been previously diagnosed with high blood pressure. In January 2021 he faced more pressure and stress when his son Bradley Ralewa passed away.

Aggravating Factors

56. The offender applied monies to his own use, the monies were trust monies, the monies came into his possession because of his employment, and he abused the trust placed on him, the amount taken was significant and the offence was committed over a period of time. The fact that the offender was paying himself through the internet facility while he was still signing cheques for his pay indicates a higher degree of dishonesty.
    
57. The offence is prevalent.

Mitigating Factors

58. In mitigation is that the offender is a first-time offender and has had prior good character.

Consideration:

59. The offender is an educated person. He has a Bachelor’s degree in Business Management. He has been handling matters that relate to finance and insurance since his first employment in 1983. He is not a simple villager or an unsophisticated person who has no comprehension of the procedures and process to enable him to claim for his entitlements. This was not APBIL’s monies to use as it pleases, but monies held in trust. They were insurance premiums paid for the purpose of insurance. The offender clearly knew all of this because in his own words he is an insurance man. This demonstrates the level and extent of his dishonesty.
    
60. In applying the Belawa factors, I consider that a significant amount of money was taken, there was a serious breach of trust, the offence occurred over a period of 12 months, the monies were for personal use, the company is no longer in operation, there has been no restitution and the offender is unemployed and is unlikely to gain employment again in the insurance field because of the conviction.
    
61. His lack of employment prospects is a direct result of his own decision to venture down the part of taking insurance premiums. As an insurance man, he would have known that upon discovery of his actions, there would be slime to zero chances of him being employed in the insurance industry again.
    
62. As identified, the only mitigation factor is that he is a first-time offender and has prior good character.
    
63. Dishonesty offences which include misappropriation are not only prevalent but also increasing in Papua New Guinean society.
    
64. I have given due consideration to the antecedents of the offender, the circumstances of the offence, the sentencing trend, the aggravating and mitigation factors and all of the foregoing and find that that the appropriate penalty is 7 years imprisonment.
    
65. I have given due consideration as to whether any part of the sentence should be suspended. There is very little in the material before me that supports suspension of the sentence. I have considered the categories in State v Tardrew [1986]^[12] and find that the offender’s case does not fall within any of the categories. The offence is prevalent, and the offender has continued to maintain his innocence. There can be no rehabilitation if there is no acknowledgement of wrongdoing. Additionally, there was no expression of remorse. Suspension in this regard will not achieve the purpose of deterrence.
    
66. The offender also has no means to restitute.
    
67. The defence had relied on State v Lavai [2020]^[13] as the case authority for the ordering of restitution from the offender’s final entitlements. This was misconceived. Batari, J clearly stated^[14]:

“I am inclined to order restitution. Given your personal circumstances, I do not propose to order full restitution. I am disposed to consider the issue of restitution based on genuineness of the offer and the value of sacrifices flowing on therefrom. Where the offender does not have or adequate means and ability to repay the monies or value of the property taken but has offered to forgo any entitlement lawfully due to him or her on account of previous employment and has in addition shown genuine offer to pay full restitution through his or her current endeavors, that is a powerful statement of genuine offer, remorse and unqualified recognition of wrong doing.” [Emphasis mine].

68. State v Lavai was a guilty plea. Here the offender was convicted following a trial. In Lavai, the offender had available to her, her final entitlements and superannuation. This is distinct from the offender’s case. The company APIBL is no longer in operation. The money taken was only held in trust to be paid to underwriters or insurance companies. According to law, the insurance companies still must pay the insured as long as the insured paid the monies. These matters are not as straight forward as in Lavai and no doubt require civil litigation to resolve. Lavai refers to lawful entitlements that are readily available to the offender to meet restitution.
    
69. Apart from the offender and his wife stating that he suffers from high blood pressure or hypertension, there are no medical reports confirming the diagnosis or any long-term adverse effects on the offender. I am not satisfied that imprisonment would cause any excessive suffering to the offender.
    
70. In State v Judy Guina Lamo, the offender had also pleaded guilty and expressed genuine remorse. Her former colleagues had pleaded for a non-custodial sentence and members of her community were interviewed and spoke of her prior good character. This case is distinguishable in that regard.
    
71. No part of the will be suspended.

Orders

72. The Orders of the Court are as follows:
    1. The Offender is sentenced to 7 years imprisonment.
    2. The Offender shall serve the term of his imprisonment at the Bomana Correctional Institution in light labor.
    3. Bail is refunded.
       

___________________________________________________________________________
The Public Prosecutor: Lawyer for the State,
, The Public Solicitor: Lawyer for the Defence

^[1] PGSC 6; [1988-89] PNGLR 496 (1 December 1989)
^[2] PGSC 145; SC2026 (9 October 2020)
^[3] PGNC 438; N7545 (26 October 2018)
^[4] PGNC 301; N7375 (20 July 2018)
^[5] PGNC 41; N6214 (2 March 2016)
^[6] PGNC 133; N6039 (18 June 2015)
^[7] PGNC 26; N2930 (15 November 2005)
^[8] PGNC 64; N9500 (25 February 2022)
^[9] PGNC 363; N8660 (22 October 2020)
^[10] Refer to note 3
^[11] PGNC 265; N8042 (8 October 2019)
^[12] PNGLR 91
^[13] Refer to note 9
^[14] At paragraph 40