�
spann spag="ang="EN-GB" style="font-size: 12.0pt">Exhibits P4 and
P5
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sp;
� P13 to P22
>
� &nbbsp;&&nsp;;
sp;
� D2 and P23
identialntial Report�
� p;&nssp;
� P26 �Purchase
Option Agreement�
an lang="EN-GB" style="font-size: 12.0pt; font-family: Symbol">� p; &nsp;
� P27
�AssignAgnt�
�
n>spaan spng="ang="EN-GB" style="font-size: 12.0pt"> � P40 and P41<
� &nnbsp;
� /span>
<As to the �pretended� purpose
of the agreement, it was as particularised which was was to secure a profit. The
division
of profits within the company N.R.G. (Vanuatu) Ltd, was set out in
the Memorandum and Articles (Exhibit P2).
Ngweevidence in chief
(13/12/96) indicated that Mr Swanson had said on 29th March 1996 th96 that �...
these people are
going to make money from this by trading between one
another and the profits that they are going to make out of this trading
program would be shared between themselves and by the brokers or agents and
of course by the customers, the countries
that are... whom the traders are
trading on their behalf.�
Securities trading profits were
also expected as itspires from Exhibits P23, P24 ( at pp 7 & 8) and P25
25
.
The evidence of Mr Ngwele
quoted directly above mat clear that the pretended purpose involving
dealing ling in securities
such as stocks and bonds. The reference in Exhibits
P40 and P41 to �deep discounts� shows that the pretended Trading Programs
involved taking advantage of fluctuations (variations) in the value of
various securities which could be bought cheaply
and sold at a high price,
thus making a profit.
Counsel for the Accused
tendered various advertisement from the Financial Times (20/12/96, Exhibits
D4 to D12) implying
that the Trading Program which the Accused had in mind
was at least somehow related to fluctuations in the value of securities.
I find as established facts
that the evidence in chief of Mr Ngwele substantiated all of the
representations pleaded as
particulars in Count 4.
In Count 5:
The Accused Peter H. Swanson is
charged with unlicensed dealing in securities, contrary to section 2 of the
Prevention of Fraud (Investments) Act (CAP 70).
Mr Swanson had no licence to
deal in securities. The securities in question wer ten Bank Guarantees.
(Exhibits P13
to P22).
Mr Swanson had the documents in
his possession, got them signed Ngwele and took them back.back.
He did this in the course of
carrying on business in accordance with his pre-incorporatontract of
26th of Maof March 1996
with N.R.G. (Vanuatu) Ltd, of which he purports to have
been the Executive Chairman/Treasurer. He was a promoter of that Company.
(See count 1).
As already found by way of
inference, Exhibits P23P24 are Swanson�s work. The signed letter of
20th of h of June 1996
by Swanson shows this (see first paragraph of Exhibit
P25).
Exh. P24 (at p.4 para. 2), it
was said that:
�The guarantees as received
fro Reserve Bank were tabled, transferred and assigned to... t... the New
Resources Group
(Vanuatu) Ltd.�
In the Exhibit (P24) it is
said at page 7 on 22nd of May 1996,
�... an assignment agreement
ising the guarantees was entered into...�
p>
No doubt Swanson was clearly
involved in this. He signed P26 and P27 .R.G. (Vanuatu) Ltd.span>
Clearly, this was a �dealing�
in �securities�. The guarantees were �securities� as defined in (s.1) of the
Prevention of Fraud (Investments) Act (CAP 70); that is, they are securities
of the government of Vanuatu�, which these guarantees were.
It was also clearly a �dealing�
which includes �any agreement for... disposing of secus�. Exhibits P26
and and P27 involved
an agreement for disposing of securities.
<
The dealing was in the
purported e of �carrying� on a business in dealing �in relation to thto the
said guarantees.
The terms of Exhibit P27
demonsd the fact that such dealing was part of a continuing exercexercise.
It cannot be said
that the assignment (Exhibit P27) was just a �one-off�
dealing which could not amount to carrying on a business of dealing.
It was
envisaged by Swanson that he and N.R.G. (Vanuatu) Ltd would continue to be
involved with the guarantees for some
time.
The evidence of Andresiama
who was then First Secretary, Ministry of Trade, Commerce and Industry, in
Exhibit P57
is admitted and agreed by both parties. His evidence shows that
Swanson has never had such a licence.
The fact that Swanson had a
dot headed �Directive, Instruction and Appointment� (Exhibitsibits P46 &
P27) does not
amount to a licence under the Prevention of Fraud
(Investments) Acts (CAP 70).
The evidence of Andrew Kausiama
indicated that Swanson was not an exd dealer.
<
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This is supported by the
necessary consent to prosecute which has been provided by the Attorney
General in Exhibit P1.
In Count 6:
The Defendant Swanson is
ch with forgery, contrary to section 140 of the Penal Code Acde Act [CAP
135].
Mr Ngwele�s evidence in
cross-examina(18/12/96) indicated that he made inquiries through
M Margaret Tamata who indicated
that Kathy Simon phoned the Reserve Bank
seeking for letterheads, between 25th and 28th March 1996 and that Margaret
Tamata (Secretary of the Research Department) supplied them.
The evidence of Mr Ngwele
(18/12/96) is that on 29th of March 1996 the guarantees come out of
Swanson�s brief case. He
said: �I clearly remember they came from
Swanson�s brief case�. Ngwele rejected the suggestion in
cross-examination that they came from red folder. The meeting of 29th March
1996 was
the first time Ngwele had seen the guarantees (Ngwele, 13/12/96).
p class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
He further gave evidence that
Mr Swanson said on 29th March 1996 �.at he took the liberty of
of
obtaining this blank letterheads in order to arrange for this instrument to
be typed�. He recognised that under cross-examination (20/12/96).
From the above facts, it can be
inferred that Swanson certadid �make� the documents. Its. It is no defence
that Swanson
did not actually type the documents.
As to the element of fy, a
document is �false� in that it �tells a lie about itself �. (R v. Dodge
and Harris (1971)2 All ER 1523).
The evidence is that Mr Swanson
�took the liberty� of obtaining the blank letterheads �in order to arrange
for this instrument
to be typed� (Ngwele�s evidence on 13/12/96).
At least about 25th March/29th
March 1996, the bank guaes were false in that they purported to
represent that that the
wording contained in them was the work of the Reserve
Bank of Vanuatu, brought into existence in accordance with the usual
and
proper work processes of the Reserve Bank. As the evidence shows above, this
is a �lie�.
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There is some reasonable
evidence from which it can be inferred that Swamade the false
documeocuments, whether or not
assisted by Sope and Olen. [s.30 of the Penal Code
Act (CAP 135)].
Mman gave evidence
(20/12/96) that the guarantees had been presented to him and Swansowanson, not
yet signed by the Governor
of the Reserve Bank.
�At the firs request Swanson
and Minister Sope came and asked me to sign in the first place as Prime
Minister�. He said
that Swanson said that he (Korman) should sign because the Council had
approve Government� decision to raise
a loan. Korman said he refused because
the Governor of the Reserve Bank had not signed them.
It can be inferred that Swanson
had the intent that the Prime ter should have acted on thon the basis that
the documents
had been prepared and worded in the Reserve Bank, brought into
existence in accordance with the usual and proper work processes
of the
Reserve Bank. That he should have acted on the basis of this �lie�.
There is, thus, a reasonable
inference that Swanson wanted Korman�s signature on the guarantees before he
approached Ngwele
to sign, thus putting more pressure on Ngwele. It was
suggested to Ngwele that a meeting was planned with Mr Sope on 28th of
March, 1996 but he failed to keep it. Ngwele denied that and there is no
evidence of a meeting scheduled for 28th March
and Mr Ngwele missing it. The
intent to misuse the forged documents can be inferred on that point.
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In Count 7:
The Defendant Swanson is
charith uttering Forged Documents, contrary to Section 141 of t of the Penal
Code Act (CAP 135).
The relevant episode occurr sometime between 25/3/96 and 29/3/96. [See commentary on the first element
of thef the previous
charge].
Mr Korman�sence shows some
uncertainties about dates, but the incident in question must have occe occurred
between the
time Kathie Simon and Mr Swanson got the Reserve Bank
letterheads (see Count 6 above) and the time Mr Ngwele signed the
guarantees.
Swanson knew the guarantees
were forged because he had forged them whether alone or with others (see
Count 6 above). The
relevant date was the first visit to the Prime
Minister�s Office, requesting him to sign.
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As to the dealith the said
documents as if they were genuine, the evidence for this is the evidence ence of
Mr Korman
referred to above in Count 6. The �dealing� was, as
particularised, that Swanson (and Sope) took the documents to the Prime
Minister, Mr Korman, and requested him to sign them as if they were real
Reserve Bank documents prepared according to
normal Reserve Bank procedures.
<
It is no defence that they were
later, on another occasion, signed by the Governor of the Reserve Bank and
also later
signed by the Prime Minister.
In Count 9an>
The Accused Peter H. Swanson is
charged with the offence of False Statement by Promoter, contrary to section
129(c) of
the Penal Code Act (CAP 135).
The 29th of March 1996 was the
date evidenced by Mr Ngwele when Exhibit P13 was signd when P40 & P41
were handed
over.
On 26th March 1996, Swanson
signed a contract witnessed by Kathy Simothe form of an �Executive
ive
Appointment� (Exhibits
P4; P5; P27).
Mr Gee, Solicitor (13/12/96)
gave evidence thahard Kaltonga was the principal promoter of the
compacompany. He said that
�my understanding was that Swanson was dealing with
the Minister in relation to this company and a thermal power project�.
As at 26/3/96, Swanson had a
fial interest in the establishment of the proposed company winy with an
executive salary
of USD75,000 per annum. (Exh. P4, clause 6). The question
of whether the Accused is a �promoter� is a question of fact. [see
Halsbury,
Vol. 7 page 28; see also Tracy v. Mandalay (1952)88 CLR 215 at 242].
It is established that Swanson
was a �promoter� of New ResouGroup (Vanuatu) Limited. Hid. His role as a
promoter was confirmed
by the ratification of Exhibits P4 and P5 at the
company meeting of 17/05/96, permitted under section 43 of the companies Act
(CAP 191) [See Exh. P27 item 2(a)].
<
In the nce of Mr Ngwele of
13/12/96 he said that on 29/3/96, at the end of the meeting, Swan Swanson handed
him the 17
page document. He says he later read it.
The handing over of a document
to one person amounts to �publication� [see the posiat common law in
rela relation to defamation
[Jones v. A.T.S. (1991) 23 N.S.W, L.R. 364 at
366, 367)]....
Trinciple can be applied
in relation to this offence under the law of Vanuatu. So at t at this point, the
handing over
of the statement to Mr Ngwele amounts to �publication� of the
statement of 17 page document to Mr Ngwele, in Exhibit P40.
The evidence of the expert
witnesses (Kuo, Halliday, Shockey) show that all the material particulars
pleaded are false.
Halliday and Shokey both used the term �fiction� about
the alleged Trading Program. Mr Shockey used the term �rubbish�. Exhibit
P40
substantiate the pretences alleged in Count 9. There is no contrary
evidence. There is a reasonable inference to
be drawn from the fact that the
Accused knew about the falsity of the 17 page document generally, and in the
particulars
pleaded.
In this count, the only proof
required is of an intent �to induce the Reserve Bank of Vanuatu to become an
investor�.
The evidence of Mr Ngwele
indicated that at the meeting of 29/3/96, Mr Swanson was askiat the
guarantees (Exs (Exh. P13
to P22) be signed. He told Ngwele that he needed to
take the documents to Australia the next day. The intention was that Vanuatu
would �participate in this scheme�, Vanuatu would �provide security�, that
�a bank guarantee to be issued by Vanuatu
was rather important�, and
�Vanuatu has already been slotted into a certain trading time frame�.
So quite clearly, it is
established that the reserve bank of Vanuatu was, thus, being asked to be an
�investor� in the
so-called �Trading Program� arrangements (Exh. P40 and
P41). On their face, the 10 Reserve Bank Guarantees potentially exposed
the
Reserve Bank of Vanuatu to the outlay of their value of USD$100 million.
There were an input into
the proposed scheme, and thus, an �investment�. [See Halsbury, Vol. 7 p. 7 para.
266].
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Mr William Edwho was the
only witness for the Defence testified that at the meeting of the 17th ofth of
May 1996, chaired
by Mr Kalpokas and attended by various people including
two Reserve Bank representatives and the Attorney General, the Attorney
General said repeatedly and in Mr Swanson�s presence that the scheme was
illegal. Mr Edgell said that the Attorney General
had said this five (5)
times in the course of the meeting. And Mr Swanson said that it was too
late, he has already his
instructions. On the same day, 17th of May 1996, Mr
Swanson went on to attend the inaugural board meeting of N.R.G. (Vanuatu)
Ltd. With the Attorney General�s warnings of the illegality of the scheme Mr
Swanson, as chairman of the board, completely
failed to pass them on to the
board members.
Furthermore, Mr Swanson
promptly went overseas wr Sope and proceeded to put the so-called
�Trading Prng Program� into
effect. Mr Edgell gave evidence that not even him
expected this to occur.
These circumstance suggest
positive and knowing dishonesty on Mr Swanson�s part.
In Cou:
The Accused Peter H. Swanson is
charged with the Offence lse Statement by Promoter, contrary to section
129(c)29(c) of
the Penal Code Act (CAP 135).
The findings and commentarie made in Count 9 are similar and be applied under Count 10, save that in
Count 10 E 10 Exhibit
P41 is in question, that is the statement of 3 page
document... �to induce the Reserve Bank of Vanuatu to become an investor�.
Exhibit P41 substaed the
pretences alleged in Count 10. There is no contrary evidence. There is,
here, indeed a reasonable
inference to be drawn from the fact that the
Accused knew about the falsity of the 3 page document generally, and in the
particulars pleaded.
VI - DIRECTIONS OF THE LAW
1 - Burden of Proof
This is a criminal trial in
the Prosecution brought initially ten (10) criminal chargeharges against
the Defendant. The
Prosecution abandoned Counts 2, 3, & 8 in its submission
on the basis that the Prosecution could not prove them beyond
reasonable
doubt and invites this Court to pronounce a �Not Guilty� verdict in respect
to each of these three(3) counts.
The Defendant is now facing only seven (7)
charges. It is, therefore, for the Prosecution to prove each and every
element
of the seven charges against the Accused. There is no burden
whatsoever on the Defendant. The defence need not prove or disprove
anything
at all.
2 - Standard of Proof &
Other Directions of Law to be given in this Case
This is a criminal juction
in which the Judge is both the Judge of law and the Judge of fact. It is the
he
duty of the
Judge to apply the law in full so that the Defendant should know
exactly what he has been tried on and so that if the Court
has misdirected
itself on any points of law, the Defendant would be able to appeal.
It is also the duty of the
Judge to sum up tidence, to give a resume of the facts, again so that
the defendant should
know what evidence has been considered by the court in
coming to the verdict eventually.
The function of a Judge as a
Judge of fact is to consider the evidenth care and to apply the lahe law as
the court stated
it to be, to these facts and eventually to come to the
verdict.
Before I can convict the
Defendant of any of the charges brought against him by the Prosecution, I
must be sure of his
guilt, nothing less will do. That is the same as saying
that if the Prosecution fails to discharge the very heavy burden that
rests
upon him on any or all of the counts as against the Defendant to whom any of
those charges have not been proved
is entitled to be acquitted. In other
words, if at the end of the day I am left with a reasonable doubt as to the
Defendant�s
guilt, then he would be entitled to the benefit of that doubt
and to be acquitted.
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In Vanuatu, th regarding
the burden and standard of proof is governed by statute under Section 8 of 8 of
the Penal Code Act CAP 135 which reads:
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Section 8(1): �No person
shall be convicted of any criminal offence unless the prosecution shall
prove his guilt according
to the law beyond reasonable doubt by means of
evidence properly admitted; the determination of proof of guilt beyond
reasonable doubt shall exclude consideration of any possibility which is
merely fanciful or frivolous.
(3): If the Prosecution has
not sved the guilt of the Accuseccused, he shall be deemed to be innocent of
the charges and
shall be acquitted forthwith.�
In this case before the Court,
I must bear in mind of the provisions of Section 6 of the Penal Code Act CAP
135 which states:
Section 6(1): �No person
shall be guilty of a criminal offence unless he intentionally does an act
which is prohibited
by the criminal law and for which a specific penalty is
prescribed. The act consist of an omission, or a situation which has
been
created intentionally
(2): No persoll be
guilty of a criminal offence unless it is shownshown that he intended to do the
very act which the
law prohibits; recklessness in doing that act shall be
equivalent to intention
(3): A person sha
considered to be reckless if:-
<
(a) knowing that there is a
risk that an emay result from his conductnduct or that a circumstance may
result from his
conduct or that a circumstance may exist, he takes that
risk, and
(b) it is unreasonable for
him to take it having regard to egree and nature of the rise risk which he
knows to be present.�
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In that respect, I have to
remind myseat where intention is required to be proved, the subjectivective
test is to be applied,
but not the objective test.
I muso bear in mind that:
�In all cases in which it is
necessary for the Accused to have knowledge of certain facts in order to
form a criminal
intention, the burden shall rest upon the prosecution to
prove that the Accused was aware of such facts�
(Section 11(2) Penal Code Act CAP 135).
In that regard, indeed, it is
to be reminded that where knowledge is required to be proved, the subjective
test is to
be applied, but not the objective test.
It is to be understood, that in
this case, I have also to remindlf that the test of dishoneshonesty (where
relevant) is
whether the Accused actually knew that his statements or
conduct were inconsistent with the normal standards of ordinary people.
I must also, in this case,
remind myself of Section) of the Penal Code Act CAP 135 that:
�In the absence of direct
evidence thereof, such know may be proved by inferencerence from other facts
or circumstances.�
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It follows then that proof of
any fact cainferred from the effect of that Section 11(3) of the PenalPenal
Code Act [CAP
135].
It is to be noted that there is
rule that any special direction should be given in relatiolation to the use of
circumstantial
evidence. It will, therefore, be for the trial judge in the
first instance to determine whether it should be given.
In order to have a clear
standing of the use of circumstantial evidence upon which the jury and,
in Vanuatu, ttu, the
Judge as the Judge of fact, is asked to infer a further fact
or facts, I cannot do better that state the opinion of Mr Justice
Dowson in
his leading judgment in the case of Shepherd -v- The Queen [1990] HCA 56; (1990) 170
C.L.R. 573 (at p.579) when he wrote:
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�Circumstantial evidence is
evidence of a basic fact or facts from which the jure jury is asked to infer a
further fact
or facts. It is traditionally contrasted with direct or
testimonial evidence, which is the evidence of a person who witnessed
the
event sought to be proved. The inference which the jury may actually be
asked to make in a case turning upon circumstantial
evidence may simply be
that of the guilt of the Accused. However, in most, if not all, cases, that
ultimate inference
must be drawn from some intermediate fact which depend
upon the evidence, usually a body of individual items of evidence, and
it
may itself be a matter of inference. More than one intermediate fact may be
identifiable; indeed the number will depend
to some extent upon how minutely
the elements of the crime in question are dissected, bearing in mind that
the ultimate
burden which lies upon the prosecution is the proof of those
elements. For example, with most crimes it is a necessary fact
that the
Accused was present when the crime was committed. It may be possible for a
jury to conclude that the Accused
was guilty as a matter of inference beyond
reasonable doubt from evidence of opportunity, capacity and motive without
expressly identifying the intermediate fact that the Accused was present
when the crime was committed.
On the other hand, it may
sometimes be necessary or desi to identify those intermedermediate facts
which constitute indispensable
links in a chain of reasoning towards an
inference of guilt. Not every possible intermediate conclusion of fact will
be of that character. If it is appropriate to identify an intermediate fact
as indispensable it may well be appropriate to
tell the jury that that fact
must be found beyond reasonable doubt before the ultimate inference can be
drawn.
But where to use the
metaphor referred to by Wigmore on Evidence, Vol 9 (Chadbourn ourn re. 1981),
[par 2497, pp. 412-414-
the evidence consists of strands in a capable rather
than links in a chain, it will not be appropriate to give such a warning.
It
should be unnecessary or confusing to do so. It will generally be sufficient
to tell the jury that the guilt of the
Accused must be established beyond
reasonable doubt and, where it is helpful to do so, to tell them that they
must entertain
such a doubt where any other inference consistent with
innocence is reasonably open on the evidence.�
In the present case the only
proper course for me as the Judge of fact to adopt, is to consider all the
evidence together
at the conclusion of the case. I should decide whether I
accept the evidence of a particular fact, not by considering the evidence
directly relating to that fact in isolation, but in the light of the whole
evidence, and that I can draw an inference
of guilt from a combination of
facts, none of which viewed alone support that inference I must make it
quite clear that
I cannot be satisfied beyond reasonable doubt of the truth
of an inference drawn from facts about the existence of which I
am in doubt.
The ultimate inference of guilt and the circumstances from which the
inference should be drawn, must refer
to any intermediate conclusion of fact
required to be established before the ultimate inference can be drawn.
The case before the Court
involves substantial circumstantial evidence. As the Judge of fact, it will
be a helpful direction
that guilt should be only a rational inference that
could be drawn from the circumstances: Peatcok v. the King [1911] HCA 66; (1911) 13
C.L.R. 619; Plomb v. The Queen [1963] HCA 44; (1963) 110 C.L.R. 234). This means to
my mind that I could not properly have made that inference unless I am
satisfied that, on the whole of
the evidence at the conclusion of the case,
there was no reasonable explanation consistent with the Defendant�s
innocence.
<
As the of fact, I have
the duty to look at the evidence upon each of those seven (7) chargeharges, in
this case, quite
separately in order to return quite separate verdicts on
each of them as against the Defendant. As I have said earlier, the
prosecution bears the burden of proving all the elements of the crime beyond
reasonable doubt, that means that the essential
ingredients of each element
must be so proved. It does not mean that every fact, every piece of evidence
relied upon
to prove an element by inference must itself be proved beyond
reasonable doubt. I may quite properly draw the necessary inference
having
regard to the whole of the evidence, whether or not each individual piece of
evidence relied upon is proved beyond
reasonable doubt, provided I reach my
conclusion upon the criminal standard of proof.
I have alsoear in mind
that it may be that the prosecution would have proved the Defendant�s guis guilt
to the required
standard upon one or more of the counts, or upon none at
all. It does not follow that if this Defendant is guilty on one count
that
he is guilty of all of them, not more than that if he is innocent of one
count that he is innocent of all.
I beso in mind that Counts
9 and 10 are alternatives to counts 2 & 3 respectively. Noy. Nonetheless as I
said earlier,
in its final submission, the Prosecution formally abandons
counts 2 & 3 and relies on counts 9 and 10 as alternative counts.
The
Prosecution must prove the alternative counts 9 and 10 respectively, and if
the Prosecution can prove them (alternative
counts), the Defendant would be
convicted on these alternative counts but if there is any doubt in respect
of one or
both counts, then I would have to acquit on one of the alternative
count or on both of them.
I must r myself that as
the tribunal of fact in this case, I am not bound to accept every wory word that
comes from every
witness. I must judge each witness� evidence with care.
That which I am satisfied with is the truth I can act upon. That which
I
find is untrue or unreliable I must reject. It may well be that a witness is
telling the truth about certain matters
and that his or her evidence is only
reliable on certain matters and not others.
Then I must reject those parts
f that particular witness�s evidence that I find is not trut true or is not
reliable. Unless
the witness�s credibility is so destroyed that his or her
evidence as to the rest is rendered unreliable, if I am satisfied
so that I
am sure that he or she is telling the truth as to the rest of his or her
evidence, I can act upon it. It is
for the tribunal of facts to decide upon
which evidence it will and can safely act, and on which it cannot.
In this case, I must bear also
nd that the evidence of Mr Maxim Carlot Korman presents soms some
inconsistencies as to
the dates, an accomplice warning is not necessary,
there is no evidence to that proposition. But it is appropriate for me to
remind myself that a special caution is required because as an elected
politician still in Parliament, he could have
a motive to protect his own
reputation.
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I must also remind myself that
no one is tried on what counsels say, whether it is in their opening or
closing address
to the Court. The evidence in the case is what comes from
the witness box and is given usually on oath or affirmation. Speeches
are
merely the arguments of one side or the other setting out their respective
case. As the judge of facts in this case,
I will nevertheless look at those
submissions with care to see to what extent they assist me in coming to my
final decision.
Where I agree with those parts of their submissions that I
believe assist, I will bear it in mind in coming to my decision.
Those parts
with which I disagree, I will ignore.
A further point of law to
remind myself of is whether a particular witness would normally be expected
to be cale called by
one party rather that the other is dependant upon the
circumstances of the particular case. In this case, the Defence argues
that
Mr Barak T. Sope should have been called as a prosecution witness, and that
the Prosecution is to be criticised
for not calling him. The Prosecution
submitted that it was agreed between counsels that during a meeting at which
Mr
Sugden and Mr Baxter Wright were present, Mr Sope was asked to provide a
prosecution statement but he declined. It is, furthermore,
put for the
Prosecution that the Prosecution obligation to call all credible witnesses
only applies to those called in
the committal, or of whom a proof of
evidence has been supplied to the defence. Since Mr Sope would never provide
a statement
to the Prosecution, there was never a statement of his provided
at committal or to the defence and the Prosecution could not
do so. The
Prosecution concluded that it is wrong for the defence to argue that some
inference adverse to the Prosecution
can be drawn from the fact that the
Prosecution did not call Mr Sope as a witness. Further the Prosecution
pointed out
that as a matter of law, Mr Sope could have been called by the
defence.
In that regard, I must remind
self of the following point of law:
�where certain witnesses
statements have never formed pf the Prosecution case, and, and have simply
been served on the
defence as unused material, the Prosecution are not under
any duty to call the makers of those statements as witnesses for
the Crown.
For a Judge to press the Prosecution to call such witnesses would, in
effect, be to require the Crown to act
as both Prosecution and defence:
R. v. Richardson, [1993] EWCA Crim 4; 98 C.R. App. R 174, CA. If prior to the close of the
Prosecution case, Counsel for the Crown decides that it is not proper to
pursue the Prosecution
and, accordingly, declines to call further
Prosecution witnesses, the trial Judge should not take over the role of
prosecutor
and call such witnesses: R. v. Grafton, CR App R 156, AC. (See
Archbold, 1995 at 4-291)�.
I must further say that if the
Prosecution could be criticised for not calling Mr Sope witness, the
same crie criticism
could be levelled at the Defence if I, as the Judge of fact,
concluded that it would be expected that the Defence rather than
the
Prosecution would call Mr Sope as a witness because he might be regarded as
having been in the Defence�s camp rather
than in the Prosecution�s camp.
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On that point, indeed, where,
for example witness might be regarded as having been in the camp of t of the
Accused, it
is unrealistic to expect the Prosecution to have called him:
Burdett (1820) 4B & Ald 95 at 123; 106 E.R. 873 at 884; O�Donnell v.
Reichard (1975) v. R. 916 at 920; Payne v. Parker (1976) 1
N.S.W.L.R. 191 at 201-202. References cited from the judgment of the
Honourable Hunt C.J. in R.v. Sandford (1994) 72 Crim. R. 160) (at
p.185).
I therefore direct my mind to
the fact I will determine the guilt of the Accused upon the evidence and
other materiaterial
placed before me without speculating upon what might have
been said if Mr Sope had been called to give evidence.
One further important point of
to consider in this case, is about the handwriting evidencedence. I must
caution myself
about the following points:
(i) That there is no expert
assistance as to comparison;
(ii) some of the material
is in the form of photocopies;
(iii) That Mrs Kathyn�s
evidence relating to Exhibits P54, P55, and P56 iP56 is that the signatures on
the above disputed
documents (Exh. P54, P55, P56) �look like his signature�.
(i.e. Swanson�s signature) but that she could not be sure. In effect,
Mrs
Simon�s evidence as to P54, P55 and P56 is only that it is �similar�.
(iv) That I scrutinise the
alleged interconnecting factors with cith care.
Then:
(A) If at this point I conti in the view that the comparison handwriting already indy in evidence other that
P54, P55 and
P56 is that of the Accused, I must be satisfied beyond
reasonable doubt.
(B) I may conclude that P54, P55 & P56 are in the writing of the Accused, I must best be satisfied also beyond
reasonable
doubt.
(C) If I am not satisfied that
it is the hand writing of the Accused, I must be then satisfied beyond
reasonable doubt
and I will set it aside and not use it in any way against
the Accused.
3 - Defendant exerchis
right to remain silent.
In this case, as in all
criminal cases that come before the Courts in Vanuatu, atclose of the
Prosecutsecution case, the
Defendant is informed of his or her rights either to
remain silent or to testify pursuant to the provisions of Section 88 of
the
Criminal Procedure Code Act CAP 136 which says:
The above warning was given and
exed to the Defendant. The Defendant chose to exercise his riis right not to
give evidence
and remain silent.
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VII - SSIONS AND/OR
SUGGESTIONS
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The followings are some of the
submissor suggestions.
1. The defence has suggested
that Mr Swanson may be seen as a �victim� rather than as an offender.
The evidence shows that Mr
Swanson is not a new comer in financing business. He described himself as
experienced in business
and a �financial specialist�. It is reasonable to
see a person such as Mr Edgell, or even possibly Mr Sope, as victim of a
sort. Mr Edgell�s evidence shows that he genuinely believed that trading
programs exist which can produce massive profits,
with no risks, like some
kind of a magic trick. Mr Edgell testified in effect that his understanding
of Trading Program
is that they do not need papers. They sat around table
and discuss about trading programs. And he knew about Trading Programs
through people who talked to him about.
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It is common ground to
understand that wer motives Mr Edgell and Mr Sope may have for
assistisisting themselves financially,
there can be no doubt that virtually all
the elected politicians of Vanuatu since Independence have desperately
wished
to improve the living conditions of the people of this Republic by
obtaining fundings of one kind or another for school, hospitals,
and other
important developments.
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The evidence of Mr Edgell shows
that there is on the part of such persons like him (Edgell) a perfectly
understandable
predisposition and vulnerability to acceptance of funding
proposals which have even some slight appearance of effectiveness.
There is nothing about Mr
Swanson to suggest that he possesses such vulnerability. On the contrary,
Exhibit P57 shows
clearly that Mr Swanson has experienced the hard knocks of
the Commercial World in that he was bankrupt between 1990 and 1993.
Furthermore, his passport movements do not suggest that he has anything like
the commitment to Vanuatu and its people
which is natural for persons such
as Mr Korman, Mr Ngwele, Mr Edgell and Mr Sope (See Exh. P10).
Finally, the surprising thing
is that, according to Mr Edgell who is the only defence witness, Mr Swanson
was present
in the meeting of 17th May 1996 chaired by Mr Kalpokas, when the
then Attorney General, Hon. Oliver Saksak, said four or five
times in the
presence of Mr Swanson that the Trading Scheme was illegal. The Attorney
General was the Senior Legal Adviser
in Vanuatu. It does not matter whether
his warnings were correct or otherwise.
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The astonishing in these
circumstances is that Mr Swanson, with the Attorney General�s warnings of
of
the illegality
of the scheme ringing in his ears, and as Chairman of the
Board meeting of the N.R.G. (Vanuatu) Ltd, attended the inaugural
board
meeting of the Company and, had completely failed to pass them on to other
board members. He further promptly went
overseas with Mr Sope and proceeded
to put the so-called �Trading Program� into effect, despite the Attorney
General�s
warnings of illegality of the Scheme.
In these circumstances, the
suggestion that Mr Swanson is a �victim� cannot be accepnd is, thus,
swiftly ftly rejected.
2. The Defence suggests that
there is no proof of Mr Swanson�s subjective desty
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This suggestion cannot be
sustained. At the end of the case, considering the whole evidence there is
no doubt that there
is a basis of an inference that Mr Swanson had in
respect to each of the 7 charges where it was relevant, a dishonest state
of
mind. The requisite mental state varies according to the terms of each
count, and the Court is considering each count
separately. The following
matters of evidence (at least) are a basis for such possible inferences:
(A) The non-existence of any
�Trading Program� as claimed by Mr Swanson (see evidence of Miss Kuo, Mr
Halliday and Mr
Shockey) is a fundamental pointer to dishonesty. The
evidence of these 3 expert witnesses are accepted as establishing the
non-existence of any �Trading Program� as claimed by Mr Swanson in Exhibits
P40 and P41. As Mr Shockey and Mr Halliday
testified, the Trading Program
was a �fiction�. (Evidence given on 17/12/96 and 20/12/96).
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(B) The failure anson to
tell the Governor of the Reserve Bank that he had in recent years been a
a
bankrupt (see Exhibit
P57 - �Admitted and agreed facts�), indicates
dishonesty. This was an important failure. A person acting honestly would
have revealed this. Swanson was asking to be entrusted with huge sum of
money. Any reasonable person in such circumstances
would realise that a
recent bankruptcy was not consistent with the degree of financial skill and
reliability which Swanson
claimed for himself. Swanson knew this and
deliberately omitted to mention his bankruptcy despite the fact that he was
representing himself to be a banker of long standing, a financial specialist
and a man of probity.
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(C) The degrehaste and
pressure with which Swanson conducted his presentation of 29/3/96 to the
he
Governor of the Reserve
Bank (Ngwele�s evidence on 13/12/96) is indicative
of dishonesty.
(D) Swanson�s apparent
reluctance to disclose documeon to Mr Ngwele for perusal and analysis
by Reserve Brve Bank Officers
indicates dishonesty (Ngwele, 1/12/96).
(E) Mr Sw�s apparently
keen interest when meeting Mr Ngwele on 17/4/96 in having access to theo the
secret computer code
of the Reserve Bank known as the �test keys� is a
pointer to dishonesty. Access to this Code was not even part of the alleged
�Trading Program�. It was an important step towards being able directly to
access or transfer the Bank�s entire reserves.
(Evidence of Ngwele,
13/12/96). The request by Swanson for the production of a list identifying
the names of the banks
where the reserves were held is suspicious and
indicates dishonesty (see Exhibit P44).
(F) Geoffrey Gee and Par
were appointed as the N.R.G. (Vanuatu) Limited Solicitors on 17th May, 1996
(E (Exhibits P6,
P27). However, although Geoffrey Gee and Partners were
appointed as Solicitors for the company, as stipulated, the two important
documents, respectively, the �Purchase Option Agreement� (Exhibit P27) were
executed only 6 days later. They were not
drafted by Mr Gee (See Evidence of
Mr Gee) and he has nothing to do with them. The two fundamental documents
(Exh. P26
and P27) were apparently not drafted by a lawyer but the use of
legal language in the two (2) documents is intended to look
impressive. The
�Purchase Option Agreement� (Exhibit P26) and the �Assignment Agreement�
(Exhibit P27) have therefore
the appearance of being fraudulent.
(G) The fact that the wording
of the guarantees makes reference to being governed by theform Custom
and PractPractices�
of the International Chamber of Commerce, Parts, whereas in
truth the guarantees are inconsistent with such �Uniform and Practices�
(see
evidence of Miss Kuo on 16 and 17 December, 1996) is a pointer to
dishonesty. Legitimate bank documents would not
include errors in describing
the International Chamber of Commerce (I.C.C.).
(H) The fact that the so-called
�Trading Program� promised ridiculous and impossible hight profits (see
evidence of Mr
Halliday, 17.12.96) indicates dishonesty.
(I) The fact that Mr Swanson
knew at least by 15/5/96 that Dowdell n a �watch list� (i.e. was was a
suspected criminal)
but still persisted with pushing the scheme after that,
is a pointer to dishonesty.
Dowdellconnected with the
the
17 page document which Swanson gave to Ngwele on 29/3/96 (Exh. P40). The two
names were
�Dowdell Dutcher and Associates, Inc� and �Christopher Olsen and
Associates�. It is a reasonable inference that once Swanson
realised that
Dowdell was on a �watch list� he switched over the Trading Program into the
hands of Barton, Jamison &
McMillan (Forrester) to avoid the smell
associated with Dowdell and Olsen. To continue the scheme in those
circumstances
was dishonest. If the people associated with the scheme in the
first instance were apparently dishonest, it was unlikely ever
to get any
better, and Mr Swanson must have known this.
(J) This point is cmed in
the Exhibits D2 and P23, and P24. In the first paragraph of P25, a letter of
of
20 June 1996
from Swanson to Ptak, signed by Swanson, he refers to having
assisted Sope �with a paper being presented to the Council Of
Chiefs (sic)
this day�. It can be inferred that Swanson wrote Exh. P24 (�Draft Report�)
and that this became, with some
amendments, Exh. P23 (also D2). In Exhibit
P24 at page 5, it becomes apparent - although it was never clearly stated-
that from inquiries in the United States there was a warning that Olsen and
Dowdell were crooked:
(�there red to be concerns
as to the Senior Bank Teller involved above Mr Olsen and Mr Dowdelowdell in that
a previous
program with which same had been involved had had problems�).
(K) It can be inferred from
this that Swanson knew about the 23 April that there was a sera serious
problem about the
integrity of persons connected with the very origin of the
�Trading Program�/guarantee scheme. It is a reasonable inference
that in
these circumstances only dishonest person would thereafter continue on with
the scheme as Swanson did.
(L) Furthermore, Mr Edgell (the
only Defence witness) testifiet at the meeting of the 17te 17th May 1996,
chaired by Mr
Kalpokas and attended by various people including two Reserve
Bank representatives and the Attorney General, the Attorney General
said
repeatedly and in Mr Swanson�s presence, that the scheme was illegal. Mr
Edgell said that the Attorney General said
that four (4) or five (5) times
in the course of the meeting.
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Mr Edgell testified also that
after Swanson had heard about the illegality of the scheme, he (Swanson)
said that it is
too late, he had his instructions already.
Further, Mr Swanson on the same
day of the 17th of May went on to attend the inaugural board meeting
of N.Rf N.R.G. (Vanuatu)
Limited. But with the Attorney General�s warnings of the
illegality of the scheme ringing in his ears, Mr Swanson, as Chairman
of the
board meeting, completely failed to pass them on to the other board members.
Furthermore, few days later, Mr
Swanson promptly went overseas with Mr Sopeproceeded to put the
so-called �Trading
Program� into effect. Mr Edgell said he himself was not
even expected this to occur. These circumstances are the clearest possible
evidence of dishonesty, arrogance and irresponsibility on Mr Swanson�s part.
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These circumstances demonstrate
therefore that the conduct of the Defendant Swanson is not the conduct of a
victim, but
that of a fraudster intent on putting his scheme into effect
regardless of anything even the likely illegality of the proposal.
3. The Defence suggest that
Mr Swanson must have believed in this scheme because otherwise there was no
point to the function
proposed for 27 June 1996
This suggestion cannot stand
and is, thus, rejecor the following reasons:
There is no reason to believe
that in truth US$10 million would have been sent by the 27tJune 1996.
If some mome money
was to have been sent, there is no basis for believing that it
would have been a result of trading in the fashion described
in Exhibits P40
and P41.
The evidence show beyond
reasonable doubt that therno �Trading Program� as described in Exhibits
P40 and0 and P41. The
Prosecution opened its case on the basis that it did not
know exactly what was intended; rather that since the so-called �Trading
Program� do not exist, there was clearly a scam of some kind involved.
Nonetheless, it is clearly possible for fraudulent
operators such as
Dowdell, Forrester and others, to pretend to subdivide and fraudulently sell
off supposed parts of
an original guarantee document. As mentioned earlier
it is no part of the prosecution case to prove exactly how the scam would
have worked.
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Mr Edgell gavt
illuminating evidence concerning so-called �Trading Programs�. Mr Edgell has
been an associate and
friend of Mr Sope for many years. He is also a friend
of Mr Swanson as he said in his evidence. Mr Edgell has an apparently
sincere and misguided belief, based on no real evidence, that trading
programs actually exist. He expressed some regret
that he was not personally
able at the present time to raise the sum of US$ 200,000 because if he had
that amount, he
could invest it in a 40 week trading program which would
result in a profit to him of US$ 1,500,000 within that period.
Thportunity, he suggested,
was currently available to him through the Port-Vila firm ofrm of Moores Rowland
and company.
Mr Edgell said he had obtained considerable information about
trading programs from Mr Andrew Munro and another gentleman of
that firm.
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This Court has not had the
advantage of hearing any explanation from Moores Rowland on this subject
(and there is no obligation
on the defence to call such evidence), but Mr
Edgell did say that Mr Sope had some business connection with this firm.
As mentioned earlier on, the
evidence of Mr Shockey, Mr Halliday and Miss Kuo establish beyond any
reasonable doubt that
there is no market such as described in P40 and P41
whereby on a riskless and regular basis, gigantic profits measuring hundreds
of percent can be made.
All banking experts and/or
financial specialists as Mr Swanson as he himself claimed to be, know
abou about the following
simple equations:
� &nbs; &nbbsp;&&nbp;
sp;
lpan lang="EN-GB" style="font-size: 12.0pt">RISK equals
RETURN;
� ;&nbssp; &nsp;
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LOW RISK equals
LOW RETURN;
� &n sp;
sspan span lang="EN-GB" style="font-size: 12.0pt">HIGH RISK equals
HIGH RETURN;
n lan-GB" ="font-size: 12.0pt">&pt"> nbsp;
BUT
<
� &nnbsp;
HIGH RETURN does
not equal LOW RISK; or
0">
� &nnbsp; &nsp;
s n>HIGH RETURN does
not equal NO RISK at all.
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