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Police v Schmidt [2020] WSSC 31 (26 June 2020)

IN THE SUPREME COURT OF SAMOA
Police v Schmidt & Ors [2020] WSSC 31


Case name:
Police v Schmidt & Ors


Citation:


Decision date:
26 June 2020


Parties:
POLICE (Informant) v LAAULIALEMALIETOA LEUATEA SCHMIDT, male of Alamagoto (First Defendant); APULU LANESELOTA POLU, male of Saleimoa (Second Defendant); MARTIN SCHWALGER, male of Aleisa (Third Defendant); HEATHER TUPEA SCHMIDT, female of Alamagoto (Fourth Defendant); and TU’ITU’I AIOLUPO, female of Palisi (Fifth Defendant)


Hearing date(s):
Hearing: 25th – 29th June, 01- 22 July 2019
Submissions: 29 November & 06 December 2019


File number(s):



Jurisdiction:
CRIMINAL


Place of delivery:
Supreme Court of Samoa, Mulinuu


Judge(s):
Justice Nelson


On appeal from:



Order:
(i) Information S1385/17 of using a forged document against the second defendant – guilty
(ii) Information S1579/17 of using a forged document against the first and second defendants – not guilty
(iii) Information S1580/17 of forgery against the first second and third defendants – not proven beyond reasonable doubt, not guilty
(iv) Fifty (50) charges in relation to illegal trading between the defendants and customers of LPA – not proven beyond reasonable doubt, not guilty.
(v) Information S1581/17 of theft against the first second and third defendants – not proven beyond reasonable doubt, not guilty.
(vi) Forty-eight (48) charges in relation to unauthorised hire of trucks to Vailima Breweries – not proven beyond reasonable doubt, not guilty.


Representation:
M S William, K S Li and Q Sauaga for Prosecution
A J F Perkins QC for First Defendant
K Raftery QC for Second Defendant
L H Schuster for Third, Fourth and Fifth Defendants


Catchwords:
international trade – international export – business associates – nonu trade – business partnership – shareholders – change of directors – forgery – using a forged document – obtaining by deception – causing loss by deception – theft – theft in a special relationship


Words and phrases:
nonu juice business venture – complainant & defendants prominent members of the community – no case to answer submission made


Legislation cited:
Companies Act 2001;
Crimes Act 2013 ss. 161; 162; 162(a); 162(b); 165; 171(1)(a); 171(1)(d); 172(1)(a); 172(1)(d); 193; 194; 195; 195(1); 195(1)(b); 195(1)(c);


Cases cited:
Attorney General v Kolio [2008] WSSC 7;
Constitution of the Independent State of Samoa, Part II Article 9(3);
Ex parte Charles Windsor (1865) Cox C.C.Cas. 118-123, 124;
Kenny’s Outlines of Criminal Law 17th Edition; page 354, paragraph 387;
Moors v Police [1964] WSLR 1;
Police v Lavea [2017] WSSC 146;
Police v Siaosi [2012] WSSC 40;
Police v Tevaga [2016] WSSC 192;
R v Clarke (1946) NZLR 522;
R v Galbraith (1981) 73 Cr App R 124;
R v Ritson (1869) 1 C.C.R.200;
R v Walsh [2006] NZSC 111; [2007] 2 NZLR 109;
The King v Clark [1946] NZLR 522;


Summary of decision:

IN THE SUPREME COURT OF SAMOA


HELD AT MULINUU


BETWEEN:


P O L I C E
Prosecution


AND:


LAAULIALEMALIETOA LEUATEA SCHMIDT male of Alamagoto,
First Defendant


AND:


APULU LANESELOTA POLU male of Saleimoa,
Second Defendant


AND:


MARTIN SCHWALGER male of Aleisa.
Third Defendant


AND:


HEATHER TUPEA SCHMIDT female of Alamagoto.
Fourth Defendant


AND:


TU’ITU’I AIOLUPO female of Palisi.
Fifth Defendant


Counsel: M S William, K S Li and Q Sauaga for prosecution
A J F Perkins QC for first defendant
K Raftery QC for second defendant
L H Schuster for third, fourth and fifth defendants


Hearing: 25 – 29 June 2019, 01 – 22 July 2019


Submissions: 29 November & 06 December 2019


Decision: 26 June 2020


DECISION OF NELSON J

At the outset I must thank counsels and the parties for their patience. As everyone will be aware, recent pandemics firstly the measles and more recently the Covid-19 necessitated the sporadic closure of the courts and its support offices since Christmas which has adversely impacted on many aspects of our work including the timely issue of decisions. The delay is regretted and the court extends its apologies to those affected.

Background

  1. The juice of the morinda citrifolia tree, known in Samoan as ‘nonu juice’, has been a traditional medicine of this country since time immemorial. At the core of these proceedings is the story of two men who set out to make great wealth by purchasing processing and selling nonu juice to lucrative markets in the Peoples Republic of China and elsewhere where demand for such products has soared. In a health conscious disease plagued world perhaps now more than ever. This was however a journey that turned sour quicker than a nonu seed.
  2. The first defendant (“Laauli”) is a successful politician, businessman and former Speaker of the Samoan Parliament. The second defendant (“Apulu”) is a business associate, the third defendant (“Martin”) is Laauli’s cousin, the fourth defendant (“Heather”) is Laauli’s wife and the fifth defendant (“Tuitui”) is Laauli’s secretary.
  3. The complainant is Peseta Vaifou Tevaga (“Peseta”) also a successful businessman and Member of Parliament. He has known the first and fourth defendants for many years and the first defendant described their relationship as close friends (“o se uo mamae foi ia te a’u”). The complainant only became acquainted with the second and third defendants in the course of this matter and he does not know the fifth defendant.

The undisputed facts

  1. In 2009 the first defendants District and Territorial Constituency was identified by a group of entrepreneurs as a prime nonu growing area of the country. This marked the beginning of the first defendants foray into the nonu trade and in this endeavor, he recruited the services of the second and third defendants. Partnership arrangements were entered into by the District initially with Reef Shipping Company Limited and subsequently Pure Pasefika Company Limited (“Pure Pasefika”) and a five hundred (500) acre nonu farm was established under the auspices of the first defendant. The first defendants home village of Sasina was to be used to pilot the nonu project. Everyone in the area and beyond was encouraged to grow nonu.
  2. The first defendant was actively involved in promoting the development of nonu not only within the District but also on a national level. He perceived it as the agricultural future for his district and the country and clearly wanted to play a significant role in its establishment and development. All parties no doubt also saw the tantalising financial rewards waiting to be reaped.
  3. In about July 2011 the first defendant and the complainant, following a Commonwealth Speakers meeting in London, visited the Peoples Republic of China as part of a trade delegation promoting Samoa and the nonu products of Pure Pasefika. According to the complainant, they agreed that upon their return they would form a company to export nonu juice to China and other overseas markets.
  4. In fact nothing further was done until the following year when on 25th October 2012 the parties incorporated Local Partners Limited (“LP Limited”) as a private company under the Companies Act 2001. Their evidence was this was incorporated in order to bid for local construction projects and the 2013 and 2014 Business Licenses of the company records it was licensed “to carry out the business of architectural and engineering activities and related technical consultancy”.
  5. Because they were both Members of Parliament they engaged in the sham so often used by Parliamentarians in this country that the shareholding of the company was to be held in the names of their nominees: for the complainant, his son Leiataua Danny Schwenke (“Danny”) as a 50% shareholder and director and for Laauli the third defendant Martin as a director and 50% shareholder. As explained by Danny in his evidence (page 22 transcript of 01/07/19) the business was effectively his “dads and Laauli’s business” and he and Martin were merely holders of shares and offices. The “L” stood for Laauli and the “P” for Peseta. In due course LP Limited lodged unsuccessful bids for a number of local and Government projects but otherwise did not actively trade or operate.
  6. The company lawyer and solicitor was Ms Maiava Visekota Peteru (“MVP”) a sole practitioner who was to play a crucial role in events that were later to unfold. There was no formally appointed company secretary or manager which accounts for the shabby in some instances non-existent state of its documentation and the lack of compliance by the directors and the company with statutory obligations. Such as in relation to keeping proper records (e.g. a share register and confirmed minutes of directors meetings) and following proper procedures for transfers of shares and calling directors and shareholders meetings. Had this been done alot of the uncertainty surrounding the meetings, resolutions and activities of LP and its successor in title LPA would not have arisen. The failures of Ms Peteru and the Companies Registry to properly discharge their functions and duties created and later contributed to a highly unsatisfactory state of affairs.
  7. For reasons not relevant to the present inquiry, by early 2013 the Sasina nonu project was in difficulty. The first and second defendants were heavily invested in the project and the first defendants credibility with his Constituency, the public and the Government of Samoa was on the line. A substantial quantity of nonu had been purchased and processed at great cost and was being stockpiled but Pure Pasefika was encountering problems securing overseas markets and complying with the import and licensing requirements of countries such as China. To the extent that Pure Pasefika was forced by a combination of factors including internal shareholder disputes into receivership.
  8. The first and second defendants devised a plan to salvage the situation: they would take over the operation by bidding for the assets of Pure Pasefika using the corporate vehicle LP Limited and they would bring in the complainant for these purposes. According to the first defendant, initially the second defendant Apulu was not keen on a new partner but he eventually relented.
  9. A meeting was accordingly held in the first defendants Parliamentary office at Mulinuu on 21 January 2013 attended by the complainant, Danny Leiataua and the first second and third defendants. It was agreed the name of LP Limited would be changed to Local Partners and Associates Limited (“LPA”) to accommodate a request by their Chinese distributor and further that the shareholding would be rearranged to Leiataua Danny Schwenke 35%, the second defendant Apulu 32.5% and the third defendant Martin 32.5%. Also that Apulu would become an additional director. These changes were recorded in a formal minute of LPA signed by Martin dated 05 February 2013 filed on 06 February 2013 with the Companies Office at the Ministry of Commerce, Industry and Labour (“MCIL”): see Trial Bundle ‘A’ Tab 16.
  10. It was also agreed the company would place a bid of SAT$1 million for Pure Pasefika. This however was rejected by the New Zealand Receivers for Pure Pasefika so at a further meeting (date unknown) a bid of SAT$1.5 million was approved by the directors. This was accepted and as the parties had no funds, on 04 March 2013 they applied to the Samoa National Provident Fund (“NPF”) for a SAT$2 million loan to finance the purchase: see Trial Bundle ‘A’ Tab 18. The evidence of the parties was the extra $0.5 million was required as working capital and to pay off the complainants $102,000 overdraft at National Bank of Samoa in order to free up the complainants 1 acre Vaitele property for use as further security for the loan. The first, second and third defendants took the view that their contribution to the security package was their equity and hard work expended in building up the reputation business and physical assets of Pure Pasefika which the NPF also took as security - this being the 1 acre property at Vaitele and nonu factory located thereon, the ten or so company trucks and vehicles and the companys nonu stock, fixtures and fittings: refer Trial Bundle ‘C’ Tab 11 for Inventory as at 02 April 2013.
  11. The loan application was granted and on 25 March 2013, LPA opened company account number 200688107 (“the LPA account”) with Westpac Bank (subsequently became Bank South Pacific Samoa Limited) designating the main signatory to be the second defendant Apulu but cheques to be countersigned by either Danny or the third defendant Martin. The relevant letter of instruction to the Bank was signed by the three directors Apulu, Danny and Martin: refer Trial Bundle ‘D’ Tab 2.
  12. Settlement of the purchase was carried out on 05 May 2013 following which surplus loan monies were deposited to the LPA account. The complainants evidence was all parties duly inspected the factory property noting the presence of all the companys assets in particular the vehicles and the many stockpiled barrels of nonu juice. At that stage everyone was happy and ready to launch their new venture. In the words of the first defendant at page 11 of his evidence of 15 July 2019:
  13. But the spirit of bonhomie was fleeting and proved only to be the calm before a storm.

The 29 May 2013 meeting: Complainants evidence

  1. As identified by the parties, this is a pivotal event or non-event depending on whom one believes in this matter. I therefore deal with it as well as a number of other distinct issues under their own headings.
  2. According to the complainant not long after taking possession of the factory, things began turning sour when his son Danny reported to him that Laauli had taken the company vehicles and most if not all the barrels of nonu juice inclusive of the 2 x 20 foot shipping containers of the company to his ‘Maota o Samoa’ property situated nearby. Further that it was only Apulu and Martin who were signing company cheques. This aroused his suspicions “that something was going to happen in the company” (“e iai le masaloga ia te au pe e iai se mea o le a tulai mai i le kamupani”: page 35 of his evidence 25/06/19) and led him to make enquiries at MCIL about the shareholding of the company. There he discovered that the record showed Martin held 35% of the shares and Danny and Apulu 32.5% each. Contrary to the agreement with Laauli and the others at their 21 January 2013 Mulinuu meeting.
  3. In this regard the evidence of MCIL Deputy Registrar of Companies Alataua Tuliaupupu was that sometime in 2013, Apulu came to their office and complained that the shareholding recorded in their online system was incorrect. It showed Martin holding 35% of the shares instead of 32.5% and Danny 32.5% instead of 35%. After reviewing the file she accepted these were erroneous and corrected the record to reflect the Board Resolution of 21 January 2013 as communicated to them on 06 February 2013. She confirmed this in an email dated 27 June 2013 to Apulu referencing their discussion that morning and apologizing for the error: see Exhibit “D-4” for the defence.
  4. Deputy Registrar Tuliaupupu also said there was a further error in the online system as to the date of Apulus appointment. It showed 25 October 2012 whereas it should have been as per the documents submitted 06 February 2013. In point of fact it should be 21 January 2013 the date of the Board Resolution.
  5. The complainant says that as a result of his misgivings, a company meeting was held at the LPA office at Vaitele on 29 May 2013. He said he asked Danny to call the meeting. Present were him and Danny and the first second and third defendants. The meeting took about two hours and four matters were discussed. The first two were Dannys resignation as director and his appointment as a replacement.
  6. On the resignation the complainants evidence was (page 4 transcript of 26/06/19):
  7. Further that the other two directors Apulu and Martin agreed to the complainant replacing Danny as director.
  8. It was also his evidence confirmed in cross examination to Mr Perkins that the first defendant said nothing about this and raised no objection to the other issues canvassed at the meeting (pages 27 and 28 transcript of 27/06/19). Even though one would expect that given the first defendants intimate involvement in this entire matter that he would have something to say about Dannys qualms and resignation and the appointment of the complainant as a director/shareholder. Especially considering that he Laauli was not a director or shareholder of record of the company.
  9. The third issue discussed according to the complainant was the matter of shareholding in the company. He said he proposed the shares revert to the original position whereby he holds 50% and Martin holds 50% and it would be up to Martin how he divides his shareholding. To this he says the directors and Laauli agreed. They also agreed to the fourth issue – viz that he would co-sign company cheques with either Martin or Apulu.
  10. As evidence of these agreements the complainant pointed to a number of documents attached to Tab 17 Trial Bundle ‘A’ submitted by the prosecution:
  11. As these documents are central to the issue of whether or not there was a 29 May 2013 meeting, it is essential they receive detailed consideration. Care must be taken in this regard because it is apparent from the evidence that these documents were only lodged with the Companies Office on or about 15 September 2015 some two years after their purported execution. The evidence of MVP was that she had a great deal of trouble registering them online with the Companies Office and that it was only when the complainant personally visited the MCIL Office in 2015 that they were able to be registered: see also her statement to the Police dated 06 November 2015 produced as part of Exhibit “D-8” for the defence. Counsel however was unable to explain why it took two years and three months for such very basic but essential information to be uploaded onto the companys records. The exchange below with cross examining counsel is illuminating (transcript 04/07/19 page 15):
  12. Caution is also required because the evidence indicates MVP has misplaced her file on this matter and these documents were registered at MCIL by the complainant on the eve of his launching civil proceedings against the first defendant wherein he maintains he was at all material times by consensus a 50% shareholder and a director of LPA. On this the complainants evidence was (transcript 27/06/19 page 38):

It appears the company officers themselves kept no copies or a record of these very important company decisions.

  1. In relation to document (a) prima facie prepared by MVP this purports to record Dannys resignation as a director (which it does) and the complainants appointment as his replacement (which it does not). It also purports to transfer Dannys shares to the complainant which it cannot given the provisions of the Model Rules which LPA was supposedly according to the company solicitor MVP governed by, such as for example rules 9 and 12 which provide:
  2. There is also no evidence the requirements of clause 21 as to ‘Transfer of shares’ were complied with.
  3. The document itself is witnessed by MVP and dated Friday 31 May 2013 two days after the supposed meeting of Wednesday 29th May. The evidence of the complainant was that he went with Danny to see MVP. He did not explain why if these matters were so critical he left it until two days later to instruct the company lawyer. The lawyers evidence is slightly different. She said the complainant attended her office “on his own to instruct and advise about what he was unhappy about and he did mention this meeting on 29th May that he had already made it known that he was taking over from his son”: (transcript 04/07/19 page 3). He said the document was prepared by the lawyer and executed by them in her presence.
  4. At that meeting he also advised her of the other matters agreed upon at the 29th of May meeting. She advised him a director was required to attend before her to confirm this and execute the necessary document which led to him visiting Martin at his home that evening requesting his attendance before the lawyer. To which Martin agreed.
  5. On the day he was supposed to meet Martin and the lawyer, he visited the lawyers office to find no Martin, only Laauli. He had not spoken to Laauli since the 29 May meeting. He explained to Laauli in a two-minute meeting that Martin was required in order to confirm the 29 May matters to which Laauli replied:
  6. When Laauli left he instructed MVP to prepare the necessary document. Whereupon he again visited Martin to advise he was to attend the lawyers office to sign the document. To which Martin again agreed.
  7. As a result, on 14 June 2013 he attended the lawyers office with Danny and Martin and signed document (b) the Notice to the Registrar of Companies of a Resolution of the LPA Board prepared on 13 June but executed on 14 June 2013. This Notice refers to a Resolution at a meeting of the Board on 29 May 2013:

The Notice was signed by Martin and the complainant but unlike document (a) was not witnessed by MVP.

  1. Martin through his counsel has disputed signing the document. MVP however in her evidence was adamant that the parties attended her office on 14 June 2013 and executed the document in her presence, Martin himself writing in the date “14/06/13” and initialing the crossed out “13/06” date at her request. No handwriting evidence was called but Martins signature appears the same as his signature on other uncontested documents produced to the court.
  2. MVPs testimony concerning the 14 June Resolution was that the complainant came to see her around the end of May 2013 expressing discontent about shareholding in the company. From transcript 03/07/19 pages 8 & 9:
  3. It is a bit difficult to follow but it seems counsel is saying the end of May meeting resulted in document (a) of 31 May 2013. Her evidence continued as to what led to document (b) the Board Resolution of 14 June 2013:
  4. This account is markedly different to the evidence of the complainant who while agreeing he met Laauli at the lawyers office on 13 June 2013 (transcript 26/06/19 page 14) said he went to the office expecting to meet with Martin but was surprised to find Laauli: see paras 33 & 34 supra.
  5. There is also conflict with the complainants evidence in other areas. For example according to MVP, at the end of May meeting with the complainant it became clear there were tensions within the company. So she suggested mediation. From the 03/07/19 transcript page 19:
  6. As to the meeting itself which she said took not two minutes but an hour, her further evidence was:

The complainants evidence did not address any of these matters.

  1. From her answers in cross examination, clearly it did not seem to concern MVP that what was under discussion by Laauli and Peseta involved the loss of the shareholding of a third party not present viz the second defendant Apulu who by her own evidence worked “two doors away” from her office. Or incredibly that this was not reflected in any way in document (b) or anywhere else. Or even verified by a simple phone call to Apulu. It comes as no surprise she was unable to register these changes online with the Companies Office.
  2. The end result of all this according to MVP was document (b) the Notice to the Registrar of Companies dated 14 June 2013 signed by both Martin and the complainant in her presence.
  3. The complainant says document (c) the fee invoice dated 25 June 2013 prepared by MVP for her services is further evidence of a 29 May meeting (indirectly because it does not refer to such a meeting) and establishes the veracity of documents (a), (b) and (d) because it invoices and refers to the services rendered for those matters.
  4. The Fee Note has a number of significant features: firstly while the complainant tried to portray it as a company document (“the bill was given to me and its under the company”: transcript 26/06/19 page 17) it clearly is not. It is addressed to the complainant personally and refers to instructions given by the complainant. MVP herself acknowledged (transcript 04/07/19 page 28) that she regarded the complainant as the client. It was also the complainant who settled the invoice and there is no evidence he sought reimbursement from the company despite being the main bank account signatory as from 26th June 2013.
  5. Secondly while MVP’s evidence was that the second to last line of the first paragraph of the Invoice (“meeting with your partner”) referred to the 13 June meeting with Laauli, it is also possible since no names are mentioned that this in fact referred to meeting with Pesetas co-shareholder Martin on 14 June to rearrange the company shareholding.
  6. The final document relied on by the complainant as evidence of a 29 May company meeting is document (d) the 26 June 2013 letter to the Westpac Bank appointing him the main signatory for the LPA account. The complainants evidence was MVP prepared this and it was signed by everyone on 26 June 2013 at the LPA office. This was not part of the 14 June document as per the complainants instructions (paragraph 34 supra) and why it took almost one-month post - 29 May for this to be effected was not explained. It would seem however to be also consistent with the fact that the evidence showed (see Bank statement of the LPA account forming part of Trial Bundle ‘B’ Tab 3) that by this time, monies were beginning to flow into the company account from sales under the previously undisclosed according to the complainant, trading name Samoa Nonu Delights and that the complainant had become anxious to protect his investment.

The 29 May meeting: Danny’s evidence

  1. Danny’s evidence unsurprisingly is along the same lines as his father. He confirmed establishment of LP Limited later LPA and said (transcript 01/07/19 page 8):
  2. Further that following drawdown of the NPF loan in April 2013 he noticed the “barrels trucks and containers” had been moved to the first defendants Maota-o-Samoa property. In addition apart from signing “four or five cheques” initially he was no longer being asked to co-sign company cheques. He raised these issues with his father who called the 29th May meeting. At some stage, he also found out from his father his shareholding according to MCIL records was 32.5% not 35% as originally agreed.
  3. As to the calling of the meeting, initially in examination in chief he said “I think it was my dad” who called the meeting. However in clarification to the court his answer changed to the following (transcript 01/07/19 page 29):
  4. At the meeting he advised the others about why he was resigning as a director which they accepted without comment or response plus they agreed to all the other changes proposed. Concerning the directorship and the shareholding as well as the complainant becoming the principal signatory for company cheques. He reiterated several times that the meeting was a short one and at the end of his evidence described the circumstances of the meeting as thus:

The 29 May meeting: The other documents

  1. There were a number of other documents produced in the course of the case which have a bearing on whether there was a 29th May company meeting as claimed by the complainant and his son. These require to be also considered.
  2. The first is a letter dated 31 March 2014 from the complainants then solicitor Te’o Richard Faaiuaso (“RTF”) produced as Exhibit “D-2” for the defence. The complainant said he consulted RTF in March 2014 about problems he was having with LPA, in particular the hire of six company trucks by Vailima Breweries Limited (“Vailima”). He was concerned that hire proceeds were being paid to the first defendant and his Maota Samoa bank account rather than to the company and further that two of the trucks were being offered for sale from the Maota Samoa yard at Vaitele.
  3. As a result RTF wrote to the mortgagee NPF alerting them to the situation and requesting inter alia replacement security from the other “shareholders” and discharge of the mortgage over the complainants one-acre property. The letter contained the following passages:
  4. A further letter dated 13 May 2014 (Exhibit “D-3” for the defence) was penned again on the complainants instructions by RTF to the Prime Minister as Minister for NPF and begins with the following statement:
  5. The complainants answer to both these letters (transcript 27/06/19 pages 33-39) is they were written by the lawyer not him and they were written at a time before MCIL registered the changes in shareholding. This was only done over one year later in October 2015 when he personally attended to it.
  6. A further relevant document is the Minutes of a meeting at the NPF on 03 April 2014 (Trial Bundle ‘A’ Tab 20) involving all parties. The Minutes were taken by NPF solicitor Tanya Toailoa and its accuracy was not disputed. On page 2 is recorded the following statement from the complainant “changed shares from Danny to Peseta” and on page 3:

Suggesting that the complainant was still a minority shareholder in the company. It was also put to the complainant to explain Dannys presence at the meeting if in fact he was no longer a director/shareholder.

  1. The complainants answer was Danny attended the meeting at the invitation of the NPF and that the NPF had been advised previously by letter of the 29th May resolution. However, no such letter or any evidence that the NPF was aware of such resolutions was produced.
  2. The final document to be considered is another letter dated 16 September 2015 from the complainants then lawyer Olinda Woodroffe to LPA customer Mr Garry Vui of Nonu Samoa Enterprises advising in the opening paragraph:
  3. The prosecution submit this is further evidence of a shareholding change as per the 29th May meeting. The obvious difficulty with that is the letter also refers to Danny as a director when according to the 29 May “resolutions” he resigned and was replaced by his father. Furthermore there is no reference in the correspondence to Peseta being a director of the company. The reference in the second paragraph to “the abovenamed shareholder and director of LPA” is clearly a reference to Peseta the shareholder and Danny the director from whom they received their instructions.
  4. The prosecution also seek to rely on a number of other documents: in their Closing Submissions at paragraph 6.22 they refer to a letter dated 14 October 2014 also from Olinda Woodroffe to MCIL attaching the 14 June 2013 Resolution and purportedly referring to Pesetas 50% shareholding and the 50% shareholding of Apulu and Martin. The Submission refers to this being introduced into evidence by Deputy Registrar of Companies Alataua Tuliaupupu (transcript 02/07/19 pages 13-14). A perusal of the transcript however shows the date of the letter was 14 October 2015 not 14 October 2014. I have also been unable to find anywhere in the documents produced in this trial a copy of such correspondence. It is not in the final bundles submitted by the prosecution. In any event it does not assist the prosecution because by 14 October 2015, the supposed change in shareholding had been registered with MCIL by the complainant personally.
  5. The second document relied on by the prosecution is the handwritten notes of a meeting between the NPF solicitors and the complainant on 17 January 2014 (Trial Bundle ‘A’ Tab 19) where the complainant was referred to by NPF solicitor Leslie Petaia as “the major shareholder” of LPA. This of course is correct. The complainant through Danny owned 35% of the company making him the major shareholder. This cannot be a reference to a 50% shareholding for that would not make him a majority shareholder, only a co-owner. The document does not in my view assist the prosecution.
  6. A further document relied on by the prosecution is an undated letter from Apulu to Mr Petaia of the NPF received by them on 19 May 2014 (added at trial to Trial Bundle ‘A’ Tab 50). The letter is copied to both the complainant and Laauli as “directors” of LPA.
  7. The difficulty with this evidence is that one of the few things that emerges clearly from this time period is the fact that the first defendant was never a director of the company. The author himself mis-styles himself as “Managing Director” there being no evidence he was ever formally appointed to such a position. Significantly, Martin who was then still a “director” was not copied.
  8. The prosecution also make reference to another document from the NPF files, viz a copy of the 26 June 2013 letter to Westpac confirming the complainant as the main signatory of the company bank account. The letter is date stamped as received by the NPF on 15 July 2013 and stapled to the letter is a copy of the 31 May 2013 Notice of change of directors/shareholding. The prosecution submit this is evidence that on 29th May the company resolved to approve all of these changes. Conspicuous by its absence in the NPF files is a copy of the 14 June Board Resolution.
  9. I have made reference previously (paragraph 29 pp) to the problems in relation to the Notice including its failure to appoint the complainant as a director. As noted by Mr Perkins “the document that would logically refer to his appointment doesn’t and the document that does refer to it isn’t part of the document received by NPF.”

The 29 May meeting: Analysis

  1. The core evidence of this meeting is that of the complainant and his son Danny. Yet there are many inconsistencies between their accounts. Beginning with the calling of the meeting (complainants evidence transcript 26/06/19 page 4):

Compare Dannys evidence paragraph 50 above that he called the meeting because “there’s some stuff I want to discuss”; to the duration of the meeting - complainant testified repeatedly it took two hours whereas Dannys evidence was it was a “short meeting” - paragraph 51 supra; to the pattern of the discussion at the meeting - the complainants evidence in chief and cross examination suggests Danny did most of the talking whereas Dannys evidence (transcript 01/07/19 pages 16 and 17) was “me and my dad walked in and we told (them) that I will be resigning from the company and I gave the reasons why I was leaving”; and further that the complainant played a significant role in what was said at the meeting.

  1. I also do not accept given the entirety of the circumstances of this matter that the first second and third defendants would without comment or opposition unquestionably accept such drastic restructuring of the directorship and shareholding in the company. Having seen and heard the players in this drama I do not find it credible that the main protagonist Laauli would be meekly submissive to the proposals put forward by the complainant and Danny. Especially since this would amount to relinquishing control over his dream project. Having seen the first defendant perform under examination and cross examination he does not for one minute strike me as the silent or compliant type.
  2. The supposed duration of the “meeting” also impinges on its credibility. If the complainant and his son are to be believed on the content of the “meeting” it would have taken no more than ten or fifteen minutes, not two hours as insisted upon by the complainant.
  3. There are other compelling reasons for doubting the veracity of the complainants testimony. The first relates to the documentary evidence discussed above in paragraphs 53-60. Specifically the two possibly three letters written by the complainants then solicitor RTF almost one year after the alleged meeting wherein the complainant is referred to as a 35% shareholder. The complainant himself admitted these letters were written on his instructions and I am not persuaded sufficient grounds have been made out for ignoring the matters stated therein.
  4. In addition there are the uncontested Minutes of the meeting with the NPF on 03 April 2014 wherein the complainant holds himself out to be a minority shareholder as against the second and third defendants, a representation made to the companys mortgagee the NPF. Other documentary evidence to the contrary was also submitted by the prosecution but I have dealt with these in paragraphs 60-66 above.
  5. There are other unsatisfactory areas of the complainants testimony. For example in relation to certain company cheques issued by LPA the first being cheque number 0001 dated 19 April 2013 for $10,000 (see Exhibit “D-1” for the defence) drawn on the newly established LPA account with Westpac Bank. The complainant accepted this was cashed by him as verified by his signature on “D-1” but said it was to fund purchase of kava intended for Apulu to sell on a pending trip to China. He was adamant this was the only company cheque he ever received. He denied it was issued as a result of his request for funds or that he requested and received a further LPA cheque for $3,000 in June 2013 also drawn on the LPA account. He also denied there were other LPA cheques issued for kava purchases.
  6. In a green Accounting Book produced by the defendants as part of their documents and purporting to be a monthly cashbook record of incomings and outgoings submitted to the company accountant Pala Lima (“PL”) of the Pala Lima Accounting Firm for compilation of the company accounts, there however appears inter alia for the months of April, May and June 2013 the following entries:
APRIL 2013 – LOCAL PARTNERS & ASSOCIATES
Date
Particulars
Chq #
WSPAC
Bank
SCB
Bank
VAGST
Goods
Purchases
Bank
Fees
Directors
Fees
Apr 19
P.T
000001
10,000




10,000

T.M (LP)
-0002
10,000




10,000

Laauli
-0003
10,000




10,000
20
Kava & exps
-0004
7,000


7,000



MAY 2013 C/PMTS
Date
Particulars
Chq #s
WSPAC
Goods Purchase
NPF Loan RPmt
Accounting Fee
O/Seas Trvlng Exps
May 02
Kava Purchases
000005
4,000
4,000



07
Global Travel (tckt LP to HK)
-0006
5,047



5,047
08
Cash – trip exps
-0007
1,500



1,500
30
SNPF L/Rpmt
-0012
24,541

24,541


31
Pala Lima
-0014
12,000


12,000


JUNE 2013 C/PMTS
Date
Particulars
Chq #s
WSPAC Bank
NPF R/Pmt
Directors Fees
June 28
SNPF Loan Rpmt
-0023
24,541
24,541


PV (crossed out) Directors fees
-0024
3,000

3,000

LLS
-0025
3,000

3,000

ALP
-0028
3,000

3,000

  1. The ordinary and natural interpretation of these entries is they show cash payments to the three main players in the venture of $10,000 each on 19 April 2013 and $3,000 each on 28 June 2013 recorded by the accountant for audit purposes as “directors fees”. The Book shows separately the kava purchases of $7,000 on 20 April 2013 and again $4,000 on 02 May 2013. Coinciding with a travel ticket on 07 May 2013 marked “tckt LP to Hong Kong” representing Apulu Lance Polus China trip and on 08 May 2013 his “trip expenses”.
  2. This documentary record accords with the evidence of the first defendant on these matters. On this issue his evidence as supported by the documentation was clearly the more cogent and reliable. I also do not accept that the complainant, who impressed me as being a competent competitive businessman and one very careful with his financial dealings, would not recall the purpose of such a substantial first cheque from his new business venture. For reasons best known to him he was less than candid with the court.
  3. The evidence of his son Danny does not save him. Dannys evidence itself suffers from numerous shortcomings. First and foremost is that the complainant is his father and he was an intricate part of his fathers entanglement with the defendants; a father he described as his “mentor and guide” and on whose behalf he held the LPA directorship and shares. His was the original “unhappiness” that led to whatever transpired at the LPA offices on 29th May 2013 but as explained in his evidence, he did not raise the reasons for such “unhappiness” with his fellow directors/shareholders, only his dad. These matters were put to him in cross examination by Mr Rafferty (transcript 01/07/19 page 24 pp) and his responses were far from convincing. He remembers well the events of the 29th of May and the subsequent critical days of 31st May and 14th June but not much else. His evidence was peppered with the phrase “I don’t remember” especially in cross examination. He too is asking the court to accept as credible the fact that at the 29th May meeting the first second and third defendants accepted without question the wholesale changes proposed by him and his father.
  4. There is only one area where his evidence rang true and that is at the very end where he narrates a believable account of the 29th May “meeting” - refer paragraph 51 above. Therein I believe lie the seeds of what truly occurred on the 29th of May when he said that when he was speaking to the others he was “standing the whole time” and possibly so was his father. While the first second and third defendants were seated at a desk offering no comment or response. His further evidence was:
  5. In our custom and tradition irrespective of the occasion it is the height of rudeness at any meeting to speak to a seated matai or individual whilst one is standing unless one is delivering an oratorial address or a formal “lauga” (speech). I believe that what probably happened on this day is the complainant and his son were agitated and dissatisfied with what they perceived to be occurring and called a meeting of sorts. That in this state they visited the LPA factory and vented their frustrations in complete disregard of meeting procedures and customary protocol. And more probably than not, afterwards promptly left.
  6. It is also quite possible the first defendant is correct that no formal meeting as such was called or convened and that these issues were dealt with via ad hoc conversations between the complainant and the first defendant: refer paragraph 80 below. This is to some extent supported by the complainants own evidence that there were many meetings called to address his various concerns: transcript 27/06/19 page 17 in cross examination.
  7. In the final analysis I am left in reasonable doubt as to what actually occurred on 29th May but I am left in no doubt about the fact that there was no agreement by the first second and third defendants to the proposals made. Perhaps the defendants thought these matters would blow over as with many of the complainants complaints. The first defendants more credible version of events recites the nature of the relationship with the complainant and the dissatisfaction voiced by him relating to various issues and how things began to deteriorate to the extent that the complainant was personally visiting and making enquiries of their first and only customer at the time Wilex Samoa Co. Ltd. Some excerpts from the first defendants evidence transcript 15/07/19 pages 20, 21, 24 and 25 illustrate the situation:
  8. There is also the evidence of MVP to be factored in. While unsatisfactory in many respects, she did testify that at the complainants request she organised a meeting on 13 June 2013 in her office between herself, the complainant and the first defendant wherein she tried to mediate their dispute: see paragraph 38 above. The complainant did not admit to such a meeting other than to concede he had an unexpected two minute encounter with Laauli at Maiavas office but the first defendant agreed they met at her office although he differed with MVP on the outcome (transcript 15/07/19 page 26 pp). Significantly they both agreed (paragraph 41 supra) that at the meeting “the complainant was trying to persuade” the first defendant to return to the original proposal of a 50/50 split in shareholding. Something that is consistent with all of MVP’s written statements to the Police in 2015 and 2018 (Trial Bundle ‘A’ Tab 17 and Exhibit “D-8” for the defence).
  9. If there had been agreement on such matters on 29 May 2013 a further meeting would have been unnecessary. It would only have been a matter of documenting what was agreed upon. Notably, the evidence of MVP is more consistent with the scenarios I have referred to above for the 29th of May.
  10. I also do not overlook the fact that the complainant was billed and paid for the services of MVP. Something for which he sought no reimbursement from the company. This is strong evidence that all these matters occurred at his instigation and not necessarily as a result of any agreements reached by the directors and shareholders of LPA.

The 14 June 2013 Board Resolution

  1. On the view I have taken of the facts thus far I have come to the conclusion that while a meeting of sorts may have occurred on 29 May 2013 definitely nothing was settled or agreed upon. I have also found there was a subsequent meeting on 13 June 2013 at MVP’s office wherein she attempted to resolve the differences between the complainant and the first defendant. The impact of the 14 June 2013 Board Resolution now falls to be considered.
  2. In this regard there is considerable conflict in the evidence adduced. The complainants version is the Resolution formally solidified what was agreed upon two weeks earlier at the 29th May meeting and that it was executed on 14th June by the third defendant Martin as Laauli’s representative. Why there was a two week delay was not explained. For her part MVP was adamant the document reflected what was agreed upon the day before in her office and that Martin not only initialed and signed the document in front of her but was fully aware of its contents. I have already canvassed the difficulties and inconsistencies between MVP’s evidence and the complainant in this regard: paragraph 38 pp.
  3. Laauli’s version is there was no agreement reached either on 29th of May or 13th of June. He accepted MVP reached out to him on 13th June on the complainants instructions but he was in no position to agree to anything in the absence of his partners. From the 15/07/19 transcript pages 27 and 28:
  4. Adding to the confusion is the evidence of Police Sergeant Kalati Tusani who at one time was investigating a forgery complaint lodged by the third defendant in relation to the Board Resolution. In the course of inquiries he interviewed MVP on two occasions: the first leading to her statement dated 06th November 2015 (Exhibit “D-8” for the defence) and the second to a statement dated 11th November 2015 (also part of “D-8”). In her second statement MVP stated that “The signing of the resolution was to be arranged between Mr Schwalger and Peseta Vaifou” contrary to her oral evidence to the court. The Sergeants evidence relevantly was (transcript 18/07/19 pages 33 and 34):

The officers evidence remained unchanged despite vigorous cross examination by Mr Williams.

  1. This is testimony from a very experienced Police officer who has no vested interest in the present proceedings. He has no relationship to any of the parties and he struck me as a competent and truthful witness. I have no reason to doubt this evidence.
  2. On the other hand there are reasons for doubting the accuracy and reliability of the evidence of MVP. Not only was she intricately involved in this matter but she seems to have acted on a number of occasions in the interests of and upon the sole instructions of the complainant. She also expressed her own doubts about her recollection on the key issue of the first defendants agreement to return to a 50/50 split (transcript 04/07/19 page 5):

And on page 6 – “I agree because memory within two hours something happens fades and continues to fade so yes as a lawyer I was cautious and fully aware of the fallibility of memory.”

  1. As to accuracy and reliability with due respect to Senior counsel she admitted not following the appropriate procedures in relation to the Model Company Rules adopted for the governance of LPA and to basic errors such as “500,000 shares” as opposed to “50,000 shares” in the Board Resolution document itself. There is also the matter of her failure to consult with Apulu two doors down from her when his shareholding would have been egregiously affected by the 13th June “agreement” as well as the issue of who explained the contents of the Resolution to the third defendant prior to execution. Her Police statement dated 23rd October 2018 (Trial Bundle ‘A’ Tab 17) page two thereof says she explained (“I explained”) the contents of the document to the third defendant whereupon he voluntarily signed the document. Whereas she testified otherwise: in examination in chief “I basically just advise him this is the document, are you aware of the reason for the document, and he nodded and then he signed it” (transcript 03/07/19 page 13). Which she clarified in cross examination as follows (transcript 04/07/19 page 8):
  2. It is also concerning that her Fee Note of June 2013 while referring to the preparation of the 31st May resignation document for Danny makes no mention of attendance to preparation of the 14th June Board Resolution or to attendances on the Resolution signatories Peseta and more significantly Martin for execution of the document. It instead refers to an attendance on Danny who is not party to the Resolution. Fundamental matters that operate to adversely affect the validity and credibility of her evidence.
  3. Counsels evidence is in my assessment heavily tainted by unreliability and uncertainty and I am not confident it can be safely relied upon. Given the conflicting nature of the other evidence, I am not satisfied the Board Resolution document dated 14 June 2013 is sound evidence of the appointment of the complainant as a replacement director for his son or of any agreement to return the company shareholding to the original 50/50 situation as between the complainant and the first defendant through Martin. Neither can I find beyond reasonable doubt that Martin with full knowledge properly executed the document in the presence of MVP. To say nothing of the fact that the document itself purports to refer to agreement at a meeting that in my view did not occur in the manner propounded by the complainant and his son.

The trading name: ‘Samoa Nonu Delights’

  1. There is no dispute that as from 26 June 2013 the complainant became the main authorised signatory of the LPA Westpac account with Martin or Apulu as co-signatory. There seems equally no dispute that LPA’s first regular customer in 2013 was Wilex Samoa Co. Ltd (“Wilex”) and that on 21st June 2013 Wilex paid the sum of $13,355 as a deposit for an 8,000 litre nonu juice order, deposited into the LPA account on 24th June 2013. The $18,000 balance of the order was invoiced on 10th September 2013 and the same day was paid into the LPA account. The invoices for this and all other Wilex orders showed the payee as not LPA but ‘Samoa Nonu Delights’ (“SND”).
  2. The documents pertaining to this order are contained in Trial Bundle ‘B’ Tab 3. These documents when read together with the statement of Tagaloa Eddie Wilson Managing Director of Wilex (Trial Bundle ‘B’ Tab 2) and the LPA account bank statements show there were subsequent Wilex orders but only one other payment was made into the LPA account. Specifically a second progress payment of $10,000 for goods supplied in November 2013 invoiced on 07th February 2014 and paid into the account on 11th February 2014.
  3. The complainant said when he originally inquired about these orders Apulu told him it was for Wilex. After two or three orders and the late arrival of payments he made enquiries of the Wilex Managing Director about the orders and was shown the relevant paperwork: transcript 26/06/19 page 19. He was shocked to discover these were in the name of ‘SND' a name which the company had never authorised. This was the first time he had seen or heard of this name.
  4. As a result in October 2013 he called a company meeting. This was attended by Apulu and Martin but he could not recall whether the first defendant was present. When questioned about the name Apulu and Martin advised him it was only a trading name. He instructed them to cease use of the name because “it was not recorded under the NPF loan.” To which there was no or any adequate response but he later discovered they were continuing to use the name for LPA business transactions.
  5. Laaulis version of events is contained in the transcript of 15 July 2019 at pages 37 & 38:
  6. He said when he found out the complainant had been making enquiries with Wilex he became concerned about the reputation of their newly established venture coming on the heels of the recently failed Pure Pasefika. In his words from the transcript of 15/07/19 pages 22 and 23:
  7. The first defendant went on to describe how at this time LPA was struggling financially. Their only customer was the slow paying Wilex but they had to meet their loan and other commitments. To the extent they had to sell one of the trucks for $70,000 which was deposited to the LPA account on 26 June 2013. He said the complainant was becoming more and more obstructive, refusing to sign company cheques answer phone calls or turn up for arranged meetings. A review of the LPA bank statements for this period shows a flurry of cheques in July 2013 but a dramatic downturn in August, September and October 2013.
  8. According to him this led to a discussion with the company accountant PL and on his recommendation the following company Resolution dated 11 October 2013 was drawn up by Apulu and executed by the directors:

“LOCAL PARTNERS & ASSOCIATES
10 IFILELE ROAD, VAITELE INDUSTRIAL ZONE, PO BOX 1321, APIA, SAMOA, MOBILE PHONE: (0685) 7775356, 7271631
Trading as Samoa Nonu Delights


11th October 2013
The Board of Directors


Notice of Resolutions


Following its meeting of 10th October 2013, the Directors hereby give notice of its following resolutions:


Adopt SAMOA NONU DELIGHTS as the company’s Trading Name given difficulties in connecting its main product – Nonu Juice and the Company name as it struggles to secure orders and attention in the domestic and overseas markets.


To set up a new Cheque Bank Account under SAMOA NONU DELIGHTS used as the company’s Trading Name to operate the business, given the difficulties in operating the current LPA account with the Westpac Bank due to shareholders conflict.


Accept Laauli Polataivao Schmidt as consultant and advisor and in the direct decision making and operations of the company.


Accept the use of trucks for the Vailima Brewers Carting deal to generate some revenue for the company given difficulties and irregularity of orders as its main source of income. Under the management of Maota o Samoa, as they are funding all of the operation cost i.e., petrol, drivers’ salaries, truck refurbishment, maintenance etc.


All profits from Vailima Cheques will be deposited into the SAMOA NONU DELIGHTS Account (after all expenses have been paid to Maota o Samoa).


Signed:
Apulu Lance Polu Martin Jonathan Schwalger
DIRECTOR/ DIRECTOR /
SHAREHOLDER (32.5%) SHAREHOLDER (32.5%)

cc: Peseta Vaifou, Danny Schewenke
Papalii Petaia, SNPF, Legal Officer”

  1. Although copied to the complainant and his son as well as the NPF all three parties denied receiving copies of the Resolution. Laaulis evidence was it was left to Apulu to serve those copied but since the court never heard from Apulu this aspect remains unclarified.
  2. Consequent upon this Resolution:
  3. Relevant bank statements (Trial Bundle ‘D’ Tabs 8 and 10) show that the SCB accounts were used from inception and throughout 2014 and 2015. They also show that apart from three deposits to the LPA account in February 2014, one being the $10,000 progress payment from Wilex referred to in paragraph 93 above and the other two being for sales to Life Health Limited on 27th February 2014 no other payments were made into the LPA account. Clearly the company was now using the SCB accounts for its financial activities and it openly continued to do so throughout 2014 and 2015.
  4. Loan payments however to NPF were not being made on time due to the late arrival of funds. Arrears were accumulating as a result of which a meeting was held with NPF on 03rd April 2014 as referred to at paragraph 57 supra. All the relevant actors were present. It is clear from discussions at the meeting that by this time everyone was fully aware of the use of the SND trading name even in the face of the complainants continuing objections.

The Vailima hire contract

  1. One of the matters raised by the complainant at this meeting and on other occasions (see paragraph 53 pp above) was the issue of company trucks being hired by Vailima Breweries but the proceeds not being paid into the company account. There is indeed no record of any Vailima payment being deposited into the LPA account.
  2. Laauli’s testimony in relation to the background and hirage of the trucks is found in the transcript 16/07/19 pages 3 to 5:

On why the operation was run through Maota-o-Samoa:

“DC: What arrangements were made regarding who would run this operation do you understand what I mean by that?
Def: Sa matou talatalanoa ina ua ou iloa lava e le talia e Peseta le fautuaga na avatu, ona matou tatalanoa loa lea ma Apulu ma Martin I le faatulagana poo le a le auala sili e faatautai ai le run ina o loli a le Vailima?
Ia na matou malilie loa lea o le a faaaoga pea le arrangement lea na ou faia I le Maota I le amataga e faaaoga ai loli ia mo le vailima mo le LPA. O le arrangement lena sa faatulaga e le Maota o Samoa le tauavega o le operation atoa o le handle ina o le lisiina o taavale e aafia ai ma la’u taavale I le taimi muamua.
We discussed when I know that Peseta don’t accept my advice about this, so we discussed with Apulu and Martin on how to operate. So we discussed it is best to use the arrangement that we used first with the Vailima to conduct tis operation. So that operation was handled by the Maota o Samoa as it was done before with my truck.
DC: and why was that decision to run up through Maota o Samoa?
Def: Sa matou faia le faaiuga ona o luga o tulaga nei. Ona o le faatulagana o loli e ave e tele mea e tatau ona prepare. E fai le compliance a le Vailima e tatau ona fai lelei pa puipui I autafa, o tapoleni, ualesi o safety gears ma mea uma o taavale, o mea uma na e tatau ona matou provide ina ia mafai ai ona ofi loli i totonu o le Vailima. E tatau foi ona up to the standard le taavale, e tatau ona fou pa’u, lelei maa, mama ma faapipii uma tulaga tau tekonolosi i Ualesi ma leitiō faaaogaina I le kiliva system. Ia ina ia atoatoa mea na e tatau ona matou faatupe uma. Na faatupe uma e le Maota o Samoa le tulaga lea aua o le taimi lea e leai ma se matou seleni o iai. Atoa ai ma le utuina o taavale, aua e le faapea e fai loa le aso maua le tupe, e faatali mo le vaiaso, lua vaiaso faatali faatoa maua le siaki ia faatoa totogi. O nisi o le aufaigaluega avetaavale a le Maota o Samoa na omai e taumafai e fesoasoani ina ia ave loli ia. O le faatulagana na o le starting capital ma le expense, o mea uma na gafa ma le Maota o Samoa. Ma o le auala lena lau afioga na finagalo ai ia Martin ma Apulu e sili ai ona faaalu pea le polokalame I lalo o le Maota o samoa ina ia mafai ona matou tali atu I le manaoga o le Vailima ma ia faaaoga taavale.
We make this decision because of the condition. Because this arrangement with Vailima we need to provide all things that need to be done first before we give the truck like the compliance the fence around the truck and tarpaulin and all safety gears, as long as we have all those then we can give the truck. As well as the installation of new tyres, new batteries, radios for collection. And for doing that we have to provide all those stuff so Maota o Samoa paid for all those items. And also petrol for these trucks because the agreement was –we wait by the end of the week then we get the cheque. Some of the Maota o Samoas employees came and drive these trucks. So the arranging of the starting capital that was the responsibility of the Maota o Samoa. So that is why Martin and Apulu agreed for these operations to go under the Maota o Samoa.
DC: You may have answered this but where were the drivers for these trucks coming from?
Def: O avetaavale a le Maota o Samoa. E toatasi a si tama lea na totoe ai I le LPA. i le Pure Pacifica lea sa faigaluega ai o ia lena sa faaaoga ifo foi.
From the Maota o Samoa plus another person left from the Pure Pacifica.
DC: So was this another reason why Maota was being in used to operate the trucks?
Def: O lea lau afioga
That is correct.
DC: Did you speak with Pala Lima about what you had in mind with the trucks?
Def: Ia sa ou faamatala iai le system lea o le a fai
Yes I explained the system to him.
DC: So how was the accounting done?
Def: Na fai lea ia te a’u e faamaumau uma tulaga o tupe maua mai le kamupani. A maea ona aveese uma tulaga o expenses lea e feagai ma le Maota i taavale ona taumafai laia e faafoi pea tupe o totoe poo tupe faasili, faafoi pea I totonu o le tupe o loo taua ai le kamupani a le LPA.
So he told me to record all the cash received for the company. And then when we deducted all expensed for Maota Samoa and any cash left then we can return to the LPA company.
DC: So all the invoices that were issued to Vailima and all the expenses associated with the trucks, where did those documents go?
Def: O mea uma lava na faaaoga, invoice, purchase order ma mea sa fetuunai uma ma le Vailima sa alu uma I le Maota o Samoa.
All invoices and purchase orders were under the Maota o Samoa.
DC: And where did they go after the Maota o Samoa, where did they go from there?
Def: A maua mai loa le siaki ona ave loa lea I tulaga masani, aveese tulaga tau tupe sa faaoga I le vaiaso, o le tupe faasili e toe ave I totonu o le account lea na fuafua mo le Samoa Nonu Delights LPA.
Once we received the cheque we less all the expenses and remaining balance goes to LPA.
DC: And who did all those calculations?
Def: O la’u aufaigaluega o le Maota o Samoa o Tu’itu’i ma lo’u toalua.
My employees at Maota o Samoa Tuitui and my wife.”
  1. And on the benefit derived by the company from page 8 of the same transcript:
  2. The defence produced the LPA financial statements for the years 2013, 2014 and 2015 (Exhibits “D-5” and “D-6”) in support of this testimony. These substantiate the billing arrangements and figures referred to by the first defendant.

The charges: Overall

  1. The defendants face various charges in various capacities. They range from forgery under s.194 of the Crimes Act 2013 to using a forged document under s.195 to obtaining by deception under s.172(1) (a) to causing loss by deception under s.172 (1)(d) to theft under s.161 and theft in a special relationship under s.162. For convenience I will follow the prosecution sequencing of charges in their Closing Submissions.
  2. There seems little argument as to the legal ingredients of the charges. Debate was focused instead on the application of the facts to the charges. Accordingly I address any relevant legal aspects in the context of the individual charges.

The SCB savings account

  1. Information S1385/17 is against Apulu alone and alleges that on 28th April 2014 at Maluafou he did knowingly use a forged document viz the 2013 LPA Business License with the notation “Trading as SND” in order to open the companys SCB savings account contrary to s.195(1) of the Crimes Act 2013.
  2. Section 195(1) provides:
  3. The elements therefore that the prosecution have to prove here are:
  4. As noted in paragraph 102 supra the evidence establishes that Apulu opened the SCB savings account. Furthermore that for these purposes he produced to the Bank a copy of the false 2013 Business License: see the evidence of Fonofili Arisi (transcript 05/07/19 pages 15-17) the SCB Maluafou Branch supervisor who dealt with Apulu and who authorized the opening of the account. She said that initially Apulu did not have all the required documents but after she explained what was needed he returned the next day with inter alia a copy of the necessary “LPA Trading as SND” 2013 Business License.
  5. Counsel for Apulu has argued that in order for a document to be a forgery, the alteration to it must be a “material” one; and that materiality is a question of fact and not of law. He relies on the old New Zealand Court of Appeal authority of R v Clarke (1946) NZLR 522. There is also the more recent authority of R v Walsh [2006] NZSC 111; [2007] 2 NZLR 109 where the New Zealand Supreme Court touched on the issue.
  6. I am satisfied that the addition of a trading name to a business license is in fact a material alteration for it introduces into the document a new perspective and element not previously present. I also note that a “false document” pursuant to s.193 is a document:
  7. Forgery is by definition under s.194 the making of a false document and s.195 makes it an offence to use a forged or false document. The alleged alteration in my view brings the document well within the definition of a “false/forged document.”
  8. I also cannot accept counsels argument that the document relied on by the Bank to open the account (relevant to the “using” aspect of the offence) was in fact the other document they required, viz a letter from MCIL confirming the PSSF (“Private Sector Support Facility”) grant: - see Trial Bundle ‘A’ Tab 31 page 6. That clearly refers to the ‘PSSF’ component of the account name as opposed to ‘SND’. The Bank obviously required to be satisfied as to the legitimacy of both matters before they could open an account in the name of ‘SND PSSF’ as requested.
  9. Having due regard to all the relevant evidence including the expert evidence from DataTorque by their report dated 24 February 2017 to MOR Chief Executive Officer Avalisa Viali (see Trial Bundle ‘A’ Tab 28) referred to in Ms Vialis evidence transcript 05/07/19 at page 3, the irresistible inference is that Apulu altered the 2013 LPA Business License issued by the Ministry of Revenue by adding the words “Trading as SND” in order to open the savings account and a copy of the altered document was provided by him to the SCB. As noted by the prosecution without such a document the account could not be opened. He knew the document was false as it was not in a form approved or issued by the MOR and he knew the document would be acted upon as if it were the genuine article. In doing so Apulu committed the offence of using a forged document contrary to s.195 (1) of the Crimes Act 2013. The date of the account opening being 06th November 2013 accords with the uncontested evidence presented and I invoke the courts power of amendment pursuant to s.93 of the Criminal Procedure Act 2016 to alter the date of the offending but subject to that amendment find Apulu guilty as charged.

The SCB cheque account

  1. Information S1579/17 is against Laauli and Apulu and alleges the use of the same document on 28th April 2014 at Maluafou to open the companys SCB cheque account knowing the document to be false and causing the SCB to use and deal with it as genuine contrary to ss.195 (1) (b) and (c) of the Crimes Act 2013.
  2. There is no doubt from the evidence Apulu also facilitated the opening of the SCB cheque account. Unlike the savings account however the Bank evidence through their Assistant Manager Loans Ms Siai Maiava and Bank Clerk Ms Naomi Magasiva of the New Accounts Division was that upon receipt of Apulus written request on 28th April 2014 the Bank through Ms Magasiva after inspection of the Bank records advised Apulu that the 2013 Business License on file had expired and a replacement was required: refer statement of Ms Magasiva to the Police (produced by consent) at Trial Bundle ‘A’ Tabs 36 and 37. According to her statement within two weeks Apulu returned with a copy of the LPA 2014 Business License. There is no evidence this license had been tampered with.
  3. Based on this the SCB cheque account was opened in accordance with the approval by Ms Maiava. The signatories on the account were as per the application Apulu and Laauli: Trial Bundle ‘A’ Tabs 39 and 40. The Bank records show that the account became operational on 01 May 2019.
  4. The difficulty with this evidence is that MCIL records (Trial Bundle ‘A’ Tab 41) show that the 2014 Business License was only renewed by Apulu on 14th May 2014 some two weeks after the account began operating. What the evidence and the Bank records do not show is who approved the account on 01 May 2019 in the absence of the 2014 Business License and upon what document if any did they rely. The prosecution case is the Bank must have relied on the falsified 2013 Business License to open the account as that is all they had and this amounts to the first and second defendants using of a false document contrary to ss 195(1)(b) and (c).
  5. The evidence of the Bank officers suggest that the falsified 2013 Business License played no role in the opening of the cheque account. Ms Maiava’s evidence was she only sighted Apulu’s letter of application dated 28th April 2014 and based on the prior existence of the SCB savings account she approved opening of a cheque account and passed the letter on to the New Accounts Division to confirm all the necessary documentation was in order and to open the account. She seemed to be saying her approval was “subject to” this check being carried out. And presumably if there was a problem that the matter would be referred back to her. At least that is my interpretation of her evidence refer transcript 10/07/19 at pages 19 and 20 where she said:

And further at page 23 in re-examination where she said:

“Wit: I didn’t mention on the letter that I looked at the original documents. I only said that I okay the cheque account to open based on relevant documents when the savings account was opened in 2013. I only look at all other documents when the clients requested for an overdraft, that’s where we looked at, that’s how we – you know – that’s when I looked at but for opening a cheque account it’s the customer services, they are the ones that they look at whether its relevant to open or not. Even for when I said okay to open a cheque account but it’s their decision to have a look whether the documents are relevant because they can say no, you have to provide this and this and this. Even though I said okay but it’s them that have to look at all the documents required whether it’s okay to open.
HH: And after you got the letter and referred it on did anything come back to your or no?
Wit: No.”
  1. The witness was adamant the only document she sighted was the application letter and she never saw and therefore never relied upon the falsified 2013 Business License. The issue of supporting documentation was the responsibility of the New Accounts Division.
  2. In this regard the evidence of the absent Ms Magasiva who has since left for overseas becomes critical as she was the one charged with ensuring all the necessary paperwork was in order and opening the account. That she carried out this task is evident from her Police statement and the fact that she rejected the 2013 Business License and advised Apulu a current business license was required. Subsequent to and contrary to that advice someone at SCB appears to have bypassed this pre-requisite and on 01st May 2014 or possibly 05th May 2014 in the absence of the 2014 Business License approved the account. Whom that person was is not clear as the various notations on the bottom of the account application form including the crossed out words “Hold for.....business license account” (Tab 40) were not put to the witnesses or otherwise explained. It is therefore not possible to say if and to what extent the approver of the account on 01 or 05 May relied upon the falsified Business License or whether he/she relied upon some other information, document or documents.
  3. In the absence of such evidence I am not satisfied beyond reasonable doubt that the SCB necessarily relied upon the falsified 2013 Business License for the purposes of opening the cheque account. All that can be said with a reasonable degree of certainty is that the original “approver” of the account Ms Maiava did not sight or seem to rely on the falsified Business License and that the eventual approver of the account and the basis of such approval remains a mystery.
  4. Even if I were prepared to draw the inferences sought by the prosecution they would only extend at most as far as Apulu as there is no evidence to suggest the first defendant Laauli was aware that a false document was being used by Apulu in 2014 to open the SCB cheque account.

The 11 October 2013 Board Resolution

  1. Information S1580/17 is against Laauli Apulu and Martin and alleges that the company Resolution dated 11th October 2013 (refer paragraph 99 above) is a forgery, a false document concocted and generated by those defendants sometime between 11 October 2013 and 19 April 2017 for the purpose of justifying the illegal activities of the defendants in relation to the trading name SND and the hiring of the Vailima trucks under the umbrella of Maota-o-Samoa all contrary to s.194 of the Crimes Act 2013.
  2. S.194 provides:
  3. R v Walsh cited earlier usefully discusses the offence and the practical difficulties sometimes encountered in its application. From paragraph 8 of the judgment at [2007] 2 NZLR 114:
  4. This reflects the same principles applied by our own Court of Appeal in Moors v Police [1964] WSLR 1 when it held:
  5. Although an old authority Moors remains good law and as noted by my brother Vaai, J in Police v Siaosi [2012] WSSC 40:
  6. Some recent applications can be found in Police v LaveaPolice v Tevaga [2016] WSSC 192. In the latter case the present complainant was the defendant and the defendants were the complainants. Just another step in what has become a long drawn-out saga of litigation involving the same adversaries.
  7. The prosecution argue that no meeting took place on 10 October 2013 and no such resolutions were passed by the Board of Directors. The complainant and his son testified they were never present at any such meeting and no copy of this document was provided to them or anyone else prior to April 2017 when it surfaced as part of the Police investigation.
  8. However it is significant that the complainant also said (paragraphs 95 and 96 supra) that when he found out from Wilex about the use of the SND name he called a meeting of the company which was held at the LPA office. This was in October 2013. From the transcript of 26/06/19 page 22:
    • Pros so when you found out that the name Samoa Nonu Delights was been used, did you speak to anybody about it?
    • Wit ia, sa ou valaaua loa le fono ua o’u le manatua ia le aso ao lea oute manatua o le lua poo le tolu oka Wilex faatoa ou manatu loa lea e lelei le valaau o le fono ona o lea ua ou vaai ua ese le igoa lea ua faaaoga.
    • Yes, I called a meeting but I can’t recall the day but I still recall it was the second or the third order of Wilex. Then I thought I must call a meeting to discuss the issue of the change of company name
    • Pros: Can you remember where it was you called the meeting?
    • Wit: sa fai ile ofisa lea ale LPA
    • It was held at the office of the LPA
    • Pros: at the LPA office, but when?
    • Wit: masalo poo se vai mea o Oketopa se taimi faapena aua o lea e fuafua i oka ia sa sapalai
    • I think it was around October according to the orders supplied
    • Pros: so it’s October 2013?
    • Wit: ia, ile 2013
    • Yes, in 2013
    • Pros: you told us that you called the meeting?
    • Wit o lea lava
    • Yes
    • Pros: and who attended that meeting?
    • Wit: sa iai Lance ma Martin ae ua galo ia te au pe sa iai Laauli, but sure o Lance ma Martin sa matou i ai.
    • Lance, Martin were there but I can’t recall whether Laauli was there
    • Pros: so you do remember it was you, Lance and Martin?
    • Wit: o lea lava
    • Yes
    • Pros: but you don’t recall whether Laauli was there?
    • Wit: ia, oute le’o manatua
    • Yes, I can’t remember
    • Pros: what was the purpose of you calling the meeting, why did you want the meeting?
    • Wit: o le mafuaaga se’i ou fesiligia, po’o le a le mea ua faatau ai sua o le nonu i lalo o lea kamupani e le’o se igoa lea o le kamupani, trading o le LPA
    • The reason why was because I wanted to know why the nonu juice was sold under a different company name instead of LPA company name
    • Pros: and did you ask them at the meeting why they had changed the name of the company?
    • Wit: na ou fesili iai ile fonotaga lena, aisea ua faaaoga ai le igoa lea o le Samoa Nonu Delights e faatau ai sua o le nonu ae le’o le igoa lea o le kamupani
    • I questioned them during the meeting as to why the name Samoa Nonu Delights was been used for trading of the nonu juice instead of the correct name of the company
    • Pros: did they say anything to you when you asked them about it?
    • Wit: na fai mai ea pe a faaaoga le igoa lea e faatau ai, ou fai atu iai e leai, aua le faaigoa ile igoa lea, e taofi
    • Their respond was that, why can’t they use this name for trading/selling, and I said no, I didn’t want to use this name
    • Pros: so you told them they couldn’t use that name?
    • Wit: ia sa ou taofia aua nei toe faaaoga leaga e le’o iai se igoa faapea nai lalo o le loan a le NPF
    • Yes, I stopped them from using that name as it was not recorded under the NPF loan
    • Pros: and when you told them to stop using that name because it wasn’t the name of the company did Martin or Lance respond to that at all?
    • Wit: sa leai se tala na fai mai
    • They didn’t say anything
    • Pros: do you recall how long that meeting lasted for?
    • Wit: o le meeting na fai lava ile taeao masalo poo se mea o le lua itula sa matou feiloai ai
    • The meeting was held in the morning I think it was about two hours, we met there.
    • Pros after that meeting, were you aware whether that name Samoa Nonu Delights was used again?
    • Wit: ia, faatoa ou toe iloa foi lea mulimuli, o lea foi o lo’o faaaoga pea le igoa lea, Samoa Nonu Delights
    • Yes, I found out later that they were still using the name Samoa Nonu Delights
    • Pros: how much later on, did you find this up?
    • Wit: ole oka lona tolu sa toe faaaoga ai, o le oka lava lea a Eddie Wilson
    • They used the same name for the third order, and it was Eddie Wilson’s order.”
  9. Furthermore he is sure of the attendance of the two company directors Apulu and Martin at this meeting. They of course are the signatories to the Resolution in question.
  10. While I accept the document does “conveniently” address the trading name and other issues such as the disputed shareholding the essential problem for the prosecution is they are forced to rely on the evidence of the complainant and Danny. Witnesses whose credibility has been found wanting in relation to other crucial aspects of the present proceedings. Furthermore the complainants own evidence referred to above confirms that in October 2013 the issue of the trading name was very much a live and contentious one.
  11. There is the added difficulty that on the facts as I have found them to be, Danny resigned as a director on 31 May 2013 and there was no valid appointment of the complainant in his place. Leaving Martin and Apulu as the only directors. As such there would no reason for either the complainant or his son to participate in any directors meetings.
  12. The first defendants evidence of problems with the complainant and that he sought the advice of his unfortunately now deceased accountant is plausible and finds support in the prosecution case. For example in the complainants own evidence that he had a great mistrust of Apulu leading him to inter alia approach Wilex and subsequently other LPA clients checking on orders; in MVP’s evidence denied by the complainant that she tried to mediate the dispute between Laauli and the complainant; in the letters written on the complainants instructions by his lawyers; and so forth.
  13. The Resolution can reasonably be taken to represent the steps taken by Laauli and the company directors who together held the majority shareholding to resolve the impasse created by the complainants behaviour and to generate income for the struggling company. It could also have been a response to the complainant forbidding the companys use of the SND name. The prosecution have not proven beyond reasonable doubt the document was anything more than this or that it was a forgery pursuant to s.194.

Trading with customers

  1. There follows as part of the prosecution case some fifty (50) charges relating to dealings between the defendants and the various clients of LPA/SND. For every payment made it is alleged that Laauli and Apulu by using the name SND obtained funds by deception as this was not the authorised or registered trading name of the company and they therefore jointly and individually committed the offence of obtaining by deception contrary to s.172(1)(a) of the Crimes Act 2013. In respect of each such transaction they are also jointly and individually charged with causing loss to LPA by use of the said deception in breach of s.172(1)(d). There is a third charge for each payment alleging that having received such monies they failed to account therefor to all the directors of the company in particular the complainant and thereby committed the crime of theft by a person in a special relationship contrary to s.162. The charges that involve the fourth and fifth defendants reflect the role that they allegedly played in the collection banking and distribution of these payments.
  2. The foundation of these charges is the fact that SND was not a validly authorised trading name of LPA and therein lay the deceit being perpetrated by the defendants. To the extent that customers were deceived into believing they were dealing with a separate entity known as ‘SND’ and not LPA. The evidence of the various customers was indeed that they thought this was the name of the company they were dealing with. But also that the name was not significant to them only the product: see for example Eddie Wilson transcript 08/07/19 pages 30 and 31; Gary Vui transcript 09/07/19 pages 8 and 9; Jessie Shi transcript 09/07/19 at page 14.
  3. The prosecution contend that funds were deliberately diverted away from LPA wherein the complainant had some measure of control as a director 50% shareholder and account signatory and into the SCB accounts of SND which were under the exclusive purview and control of the defendants. This caused loss to LPA and was the fraud perpetuated by the defendants in particular the first and second defendants.
  4. Having heard and considered all the evidence including the documentary evidence and having observed the various parties and witnesses giving testimony I have to come to the conclusion that the defendants version of events is to be preferred. It accords with other independent evidence such as for example that of Eddie Wilson and the other customers of the company as to the complainants incessant questioning of various orders, the evidence of MVP the complainants lawyer in June 2013 contradicting numerous critical portions of the complainants evidence, the letters written by the complainants other legal advisors detailing his status in the company, the financial records of the company as compiled by the company accountancy firm, et al. It does not suffer from the inconsistencies and anomalies of the testimony of the complainant and his son and as a whole is a plausible version of events. It explains more satisfactorily many things and more particularly why the Wilex payments were initially channeled into the LPA account but subsequently post the 03rd April 2014 NPF meeting where it became abundantly clear SND was only a trading name, into two other specially created accounts in order to lessen the complainants interference with the financial operations of the company. Clearly the complainants priority was clearance of the NPF loan and release of his security, I do not doubt that. But his method of trying to attain this and the deterioration of relationships within the company resulted in a chaotic state of affairs that the first second and third defendants had to manage and still keep the company afloat.
  5. In assessing these matters I give considerable weight to the MOR evidence (see paragraph 102 supra) that according to their records the 2014 and 2015 Business License Renewal Forms listed ‘SND’ as the companys trading name. The explanation given by the Ministry Officer was this was not sufficient to generate the addition of the trading name to the Business License as a formal letter or email instruction from the company was required. I found this unconvincing and nothing was tendered to show where in the law or the MOR Regulations is it required there be such an accompanying formal letter or email. The fact that the Business Licenses still described the nonu companys business as “architectural and engineering activities” is illustrative of a very casual attitude by the MOR to such important matters. It is more likely the truth that insertion of the trading name was simply overlooked. What this evidence however demonstrates is there was a clear understanding by the company that SND was as a matter of fact the LPA trading name for the reasons outlined by the first defendant to the complainant and this was consistent with its business practices.
  6. It is trite to state that in all criminal proceedings the onus of proving a charge is on the prosecution who bring it. And the standard required by law is proof beyond reasonable doubt. There is no onus on a defendant to prove anything for he has a fundamental right under Part II article 9(3) of the Constitution of Samoa to be “presumed innocent until proved guilty according to law.”
  7. In this matter the prosecution have not proven beyond reasonable doubt that the defendants or any of them by their use of the trading name SND did thereby deceitfully obtain funds from LPA customers to the detriment and loss of LPA. Neither were they required to account to the complainant who was a minority shareholder of LPA and who has not been proven to have been validly appointed a director of the company.
  8. The evidence tends to indicate that all funds from sales were in fact properly accounted for to LPA: see the testimony of PL’s daughter Ala Lima of Pala Lima Accounting Firm transcript 19 and 20/07/19 and Exhibit “D-15” for the defence which comprises the LPA financial statements for the years 2013, 2014 and 2015 none of which were seriously challenged by the prosecution. It is also not possible to reconcile the roughly $2.6m in 2015 the defendants are charged with misappropriating and diverting and the approximate $2.9m in sales from essentially the same customers for the year, there being no suggestion by the prosecution these sums were mutually exclusive. It is somewhat incredulous that such extraordinarily large sums of money were paid and retained by the company in cash but there is no evidence such a practice was illegitimate or unlawful for present purposes.
  9. There was also evidence that payments for the NPF loan were coming back on track towards the end of 2015 before matters were derailed by the commencement of legal proceedings by the complainant: see the evidence of Sine Lafaialii Manager Legal for the NPF who testified that some $1.2m was paid towards the loan over the 2013-2015 period (transcript 08/07/19). Again further evidence that the SND income was being properly applied towards LPA commitments contrary to the prosecution assertions.

Theft of $220,000: the Nonu farm purchase

  1. Separate from the above charges but mixed in amongst them is Information S1581/17 against Laauli Apulu and Heather. It alleges that in the month of July 2015 these defendants jointly and individually stole from LPA cash cheques to the value of $220,000 and did thereby commit the crime of theft contrary to ss 161 and 165 of the Crimes Act 2013.
  2. S.165 deals with the penalty whereas s.161 with the ingredients of the offence:
    • 161. Theft or stealing – (1) Theft or stealing is the act of:
    • (a) dishonestly taking any property with intent to deprive any owner permanently of that property or of any interest in that property; or
    • (b) dishonestly, using or dealing with any property with intent to deprive any owner permanently of that property or of any interest in that property after obtaining possession of, or control over, the property in whatever manner.
    • (2) An intent to deprive any owner permanently of property includes an intent to deal with property in such a manner that:
    • (a) the property cannot be returned to any owner in the same condition; or
    • (b) any owner is likely to be permanently deprived of the property or of any interest in the property.
    • (3) For tangible property, theft is committed by a taking when the offender moves the property or causes it to be moved.
    • 165. Punishment of theft – A person who is convicted of theft is liable as follows:
    • (a) in the case of a theft by person in special relationship under section 162, to imprisonment for a term not exceeding 10 years; or
    • (b) if the value of the property stolen exceeds $1,000, to imprisonment for a term not exceeding 7 years; or
    • (c) if the value of the property stolen exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 2 years; or
    • (d) if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding 1 year; or
    • (e) if the property stolen is property stolen by a clerk or servant which is owned by his or her employer or is in the possession of his or her employer, to imprisonment for a term not exceeding 10 years; or
    • (f) if the property stolen is property in the possession of the offender as a clerk or servant, or as an officer or employee of the Government of Samoa or of any local authority or public body, or as a constable, to imprisonment for a term not exceeding 10 years.”
  3. The prosecution case here relates to two cheques drawn on the SCB cheque account one dated 21 July 2015 for $20,000 and the other dated 22 July 2015 for $200,000. Both were signed by the first and second defendants cashed by Heather and together with an $80,000 cash cheque from Bargain Wholesale Ltd was deposited by Heather on 22 July 2015 to the loan account of Maota-o-Samoa: see Trial Bundle ‘B’ Tab 25. The prosecution say that the cheques were the property of LPA and in the absence of an authorising Board Resolution were dishonestly appropriated by the defendants acting individually and collectively to the Maota-o-Samoa account belonging to and under the control of the first defendant.
  4. The defendants response is that this was the first of three monthly payments for an $800,000 purchase by LPA of a $6.8m Nonu Farm belonging to the first defendants mothers estate. To establish the legitimacy of this purchase the defence produced the relevant Agreement for Sale and Purchase between the Estate and LPA dated 01st July 2015 (providing for a first installment payment of $220,000 on 22 July 2015), an Assignment of the registered Lease from the Estate to LPA as the farm is located on a 27-acre leasehold from Government at Aleisa plus a current valuation of the Leasehold and nonu crop thereon at $6,895,000. They also pointed to inclusion of the purchase in the Cash Receipts and Payments Schedule for 2015 appended as part of the 2015 Financial Statements Exhibit ‘D-15’ Tab 1 pages 10 and 10A.
  5. The defence documents establish that while there is an element of insider trading on the part of the first defendant in the Nonu Farm purchase there is no doubting the assets value to LPA and the apparent bona fides of the transaction. There is certainly enough present to cast more than a reasonable doubt on the allegation of theft or a dishonest taking on the part of the defendants to the detriment of the company. This charge cannot be sustained.

The Vailima charges

  1. The final batch of charges relate to the use and hirage of the company trucks by Vailima Breweries. There are forty-eight (48) charges in total against the first defendant alleging that he had possession of the LPA trucks in circumstances that required him to deal with and account to all directors of LPA in accordance with their requirements and his failure to do amounted to theft by a person in a special relationship in breach of ss162(a) and (b) of the Crimes Act 2013.
  2. Again these charges are premised on the fact that one of the directors of the LPA Board was the complainant to whom no account was given concerning dealings with the trucks or the hire proceeds. All the complainant knew was that hire monies were not being paid into the LPA account to which he was principal signatory but instead into a Maota-o-Samoa account administered by the first defendant. There is no dispute all hire payments were indeed deposited to the Maota-o-Samoa account and that Maota-o-Samoa invoiced Vailima for the hire. Further that on a number of occasions in 2014 Vailima cheques were endorsed over to Petroleum Products Supplies Ltd (“PPSL”) to pay for petroleum supplies.
  3. As previously noted the court is not satisfied beyond reasonable doubt on the evidence presented in this trial that the complainant was ever validly appointed to replace his son as a director of LPA. As such no obligation accrues on the first defendant or any of them to account to the complainant who at most was only a shareholder. It can also be safely inferred from the evidence that given the close relationship between the first defendant and the second and third that the latter two as directors were well aware and approved of the Vailima hire arrangement. This was expressly done according to Laauli as outlined in his testimony at paragraph 106 supra. This also accords with the Resolution of 11 October 2013 which relevantly provides:
    • “Accept Laauli Polataivao Schmidt as consultant and advisor and in the direct decision making and operations of the company.
    • Accept the use of trucks for the Vailima Brewers Carting deal to generate some revenue for the company given difficulties and irregularity of orders as its main source of income. Under the management of Maota o Samoa, as they are funding all of the operation cost i.e., petrol, drivers’ salaries, truck refurbishment, maintenance etc.
    • All profits from Vailima Cheques will be deposited into the SAMOA NONU DELIGHTS Account (after all expenses have been paid to Maota o Samoa).”
  4. This evidence establishes the first defendant was authorised to hire out the trucks in accordance with the arrangements reached with Vailima. An arrangement which according to the accounts of the company ultimately benefited LPA to the tune of some $70,000. None of these charges have been made out.

No case submission

  1. Counsel will recall that at the close of the prosecution case a no case to answer submission was made by the defendants in respect of a number of charges. After considering the matter I ruled there was a case to answer following withdrawal by the prosecution of some of the charges. This was based on application of the normal legal principle that applies in such situations viz that the question is whether the prosecution case taken at its highest can constitute proof beyond reasonable doubt of the relevant charges. This is the locus classicus expounded in R v Galbraith (1981) 73 Cr App R 124 as applied in many cases in this jurisdiction. In Attorney General v Kolio [2008] WSSC 7 the Court of Appeal put the test thus:

Conclusions

(i) Information S1385/17 of using a forged document against the second defendant – guilty
(ii) Information S1579/17 of using a forged document against the first and second defendants – not guilty
(iii) Information S1580/17 of forgery against the first second and third defendants – not proven beyond reasonable doubt, not guilty
(iv) Fifty (50) charges in relation to illegal trading between the defendants and customers of LPA – not proven beyond reasonable doubt, not guilty.
(v) Information S1581/17 of theft against the first second and third defendants – not proven beyond reasonable doubt, not guilty.
(vi) Forty-eight (48) charges in relation to unauthorised hire of trucks to Vailima Breweries – not proven beyond reasonable doubt, not guilty.

Postscripts

It is as in all criminal cases always tempting for defendants (with the possible exception of Mr Polu who has been found guilty of one charge) to regard “not guilty” findings as a complete and utter vindication of their actions. I would caution the defendants particularly the outspoken first defendant against this. As noted above, in every criminal trial the prosecution bears as it must the burden of proving beyond reasonable doubt that a crime has been committed. That is our law. In this case there was evidence of criminal activity but the correctly rigorous standard of proof required by the law could not be attained. It is an issue of evidence and credibility thereof and whether it was sufficient to meet these tests. The court has found with one exception that they did not. Nothing more than that should be made of it.


I wish to also take this opportunity to formally record my thanks to all counsels involved in these proceedings. This was an emotionally charged trial with dominant personalities on both sides conducted in a very public and sometimes hostile atmosphere. Notwithstanding this counsels brought to their respective roles courtesy civility and a standard of behaviour befitting their role as advocates and officers of the law. They behaved in all manner appropriately and professionally and were of great assistance to the court in particular with the voluminous documentary evidence that this proceeding entailed. For that I congratulate and thank all counsels and in particular for the comprehensive briefs filed on behalf of their respective clients. I would expect no less from members both temporary and permanent of the Samoa Law Society.


JUSTICE NELSON


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