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Malota v Police [2004] WSCA 2 (17 December 2004)

IN THE COURT OF APPEAL OF SAMOA
HELD AT APIA

IN THE MATTER of an appeal pursuant to Section 164K
of the Criminal Procedure Act 1972 of Samoa.

BETWEEN

NILE MALOTA
of Vaitele-uta.
Appellant

AND

THE POLICE
Respondent

Coram: The Rt Hon Lord Cooke of Thorndon, President
The Rt Hon Sir Maurice Casey
The Rt Hon Sir Gordon Bisson

Hearing: 14 December 2004
Counsel: TRS Toailoa for the Appellant
R Schuster and M Hunter-Betham for the Respondent

Judgment: 17 December 2004

JUDGMENT OF THE COURT DELIVERED BY SIR GORDON BISSON

The appellant was employed by Polynesian Airlines Ltd as a Senior Accounts Receivables clerk. He was charged with offences under s.99 of the Crimes Ordinance 1961 alleging that he had made in the course of his work various wrong postings of debits or credits with "intent to defraud funds belonging to his employer, the Polynesian Airline Company Ltd."

After a defended hearing he was found guilty on 36 charges by Justice Vaai and sentenced to 3 years and 6 months imprisonment on each count to be served concurrently. The verdict was delivered on 17 May 2004 and the sentence imposed on 1 July 2004. Notice of Appeal was filed in Court and served on the Respondent on 13 July 2004 but the appellant did not file and serve the record within 6 weeks of filing his Notice of appeal. At the hearing in this Court Mr Toailoa applied under s.38 of the Judicature Ordinance 1961 for the non-compliance with the rules to be waived on the grounds that it was not wilful. Mr Toailoa explained that the difficulty in preparing the record was because of missing parts of the record. As Mr Schuster was not prejudiced, waiver was granted and the prosecution of the appeal proceeded.

On finding the appellant guilty on all 36 charges Justice Vaai, according to his summary read at the time said,

"Having considered the evidence and for the reasons given in my written decision I am satisfied that all the 36 informations have been proved beyond reasonable doubt. In reaching that conclusion I also express the view that the accused did not act alone but there were obviously others in the other sections involved which facilitated for instance the issuing of travel tickets on credit without proper authority and documentation. But the involvement of others does not diminish or exempt the criminal liability of the accused."

Unfortunately the written decision of his reasons is not available but the record does contain the closing submissions by prosecution and defence counsel before verdict was delivered. The prosecution relied on the evidence of the Internal Auditor Agnes Pouafe who testified that she conducted a routine audit of the Accounts Receivables Section or Debtors Section within the Finance Department of Polynesian Airlines Ltd. The staff members of that section were a supervisor, the appellant and one other. She discovered discrepancies which gave rise to the charges brought against the appellant. All three employees have been dismissed, one of whom is awaiting trial on similar charges to those brought against the appellant.

Mr Toailoa submitted that the various documents, such as invoices, credit notes and other records were admitted as original evidence only, and as such did not offer proof as to the truthfulness of their contents. Counsel for the respondent had no objection at the hearing to this submission (p122 of the transcript of proceedings). The respondent relied on the evidence of the auditor without independent evidence to prove that the entries were in fact made by the appellant. The only other prosecution witness was Mr Chris Healey who stated that the computer accounting system was only accessible using a secure username and password specific to each individual in the office. Once logged in, the individual’s username would appear on any transaction they had posted into the system. Mr Healey stressed that the company’s policy was that all passwords and usernames were to be kept confidential and secret. However, once the computer is logged in by an operator using his or her password anyone can use it and there was evidence called for the defence that about 7 or 8 workers from other sections would help out with postings on a regular basis. They had no passwords so would have to rely on the passwords of the appellant or the other two workers who had passwords. It was possible that some wrong postings had been done by them but the large number of wrong entries over a period of 3 years all in the name of the appellant made him a prime suspect. The Auditor knew nothing of these other workers but this evidence was not rebutted. Furthermore, Justice Vaai in the passage from his summary quoted above expressed the view that there were others involved.

When asked to point to a typical charge we were referred to Information s.28/03. The submissions of the Respondent on this appeal refers to this charge as follows,

Information number S28/03

"On 15 January 2001 the defendant wrongfully posted invoice number 982535 – originally made out to Leituala Poleki – to the account of United Airlines. The value of the invoice was $2398.00 and the effect of the defendant’s actions was that this amount was charged to the account of United Airlines and not to the account of the debtor, Leituala Poleki.

The invoice (Exhibit P.1) was made to support travel tickets that had been issued to Poleki Leituala, yet, it was posted to the account of United Airlines, a company which did not deal in credit travel.

"The Accounts Receivables Section computer records indicate that the defendant posted the invoice, as it is the defendant’s user identification that appears on the record of the transaction known as the Batch Edit List (Exhibit P.2)

The computer accounting system that is used in the Accounts Receivable section is run and maintained by Mr Chris Healey, Financial Assistant Consultant for Polynesian Airlines Limited.

This accounting system can only be accessed by members of the accounts receivable staff using passwords and usernames. Staff members are given their own usernames and passwords, which becomes their own private property and is not to be divulged to other staff members, pursuant to company policy.

Any entry or transaction carried out by a staff member who logs into the system automatically shows the staff member’s username above the particular transaction allowing the operator of the transaction to be identified.

The username of the defendant appeared in the record of this invoice being posted."

There were other instances of amounts owing being posted to United Airlines and to other entities such as the Health Department, Van Air Ltd, the US Post Office and the Cook Islands Post Office instead of to the correct debtor’s account. In respect of transactions of this nature Mr Toailoa submitted that these transactions did not result in the appellant’s employer being defrauded as charged. Singapore Airlines had one debtor substituted for another in the same amount. If a person was wrongly debited and paid the amount without checking its correctness that person was the one defrauded.

There was no evidence from any debtor in these transactions of a complaint about or non-payment of a wrong debit. The prosecution was brought by the Police but no Police witness was called to give evidence of any enquiries made of any debtor. The evidence of the auditor simply did not go far enough. The large number of errors in making postings would seem to indicate a practice or system used by one or more employees. It did not cause any loss to the employer, but the employee must have stood to gain in some way which has not been revealed and it is not for us to speculate. Further enquiries may disclose offences of another kind. We say no more.

We do not have the written decision of Justice Vaai so we do not know how he dealt with this closing submission of Mr Toailoa that there was in fact no fraud of Polynesian Airlines Ltd – it lost nothing. Furthermore the submissions of the respondent in answer to this appeal does not address what we regard as a crucial question. The respondent accepted that it had to prove that the appellant acted with the intent of defrauding his employer. But in relation to this element of the offence submitted "that the intent of the defendant to defraud his employer could be inferred strongly from the evidence of Agnes Pouafe."

In our view the point taken by Mr Toailoa in paragraphs 17 to 29 inclusive of his submissions that the employer suffered no loss, on the evidence, has not been satisfactorily answered by the respondent and in the absence of the reasons for Justice Vaai’s decision it would be unsafe to allow the convictions to stand. There were two charges relating to entries the appellant admitted that he had made but here again there was no proof of any resulting loss to his employer. The appellant succeeds on his ground of appeal "that the prosecution did not prove the charges beyond reasonable doubt." Accordingly all 36 convictions and the sentence of imprisonment are quashed and the appellant is acquitted on all charges.

Solicitors:
Toailoa Law Office for the Appellant
Attorney General’s Office for the Respondent