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State v Stevens [2003] FJHC 130; HAA0033J.2003S (5 September 2003)

IN THE HIGH COURT OF FIJI
AT SUVA
APPELLATE JURISDICTION

CRIMINAL APPEAL NO: HAA0033 OF 2003

Between:

THE STATE
Appellant

And:

WILFRED LESLIE STEVENS; and
ILIKIMI NAITINI aka GEORGE SPEIGHT
Respondents

Counsel: Mr. P. Ridgeway for State
Mr. M. Raza for Respondents

Hearing: 29th August 2003
Judgment: 5th September 2003

JUDGMENT

The Respondent was acquitted by the Suva Magistrates’ Court of the following charge:

Statement of Offence

MAKING A PAYMENT OUTSIDE FIJI TO OR FOR THE CREDIT OF A PERSON RESIDENT OUTSIDE FIJI: Contrary to Section 8 and Paragraph 1(1) Part II, Fifth Schedule of the Exchange Control Act, Cap 211.

Particulars of Offence

WILFRED LESLIE STEVENS did between 7th and 21st March 1995 being then a resident in Fiji make a payment of $21,000 outside Fiji to or for the credit of a person resident outside Fiji, namely the Wattle Group of companies in Australia, without obtaining the permission of the Reserve Bank of Fiji.

At the trial in the Magistrates’ Court, there was an additional count against Ilikimi Naitini, a.k.a. George Speight which read as follows:

Statement of Offence

MAKING A PAYMENT OUTSIDE FIJI TO OR FOR THE CREDIT OF A PERSON RESIDENT OUTSIDE FIJI: Contrary to Section 8 and Paragraph 1(1) Part II, Fifth Schedule of the Exchange Control Act, Cap 211 and Section 21 of the Penal Code, Cap 17.

Particulars of Offence

ILIKIMI NAITINI a.k.a. GEORGE SPEIGHT did between 7th and 21st March 1995 in Fiji aid and abet the commission by Wilfred Leslie Stephens of the following offence, namely the making by the said Wilfred Leslie Stephens, a resident in Fiji, of a payment in an amount of $21,000 outside Fiji to or for the credit of a person resident outside Fiji, namely the Wattle Group of companies in Australia, by arranging for remission of the said sum to the said group without obtaining the permission of the Reserve Bank of Fiji.

To this count, the 2nd accused pleaded guilty on the 28th of February 2002. The summary of facts read (to which the 2nd accused agreed) as follows:

“In 1995 a financial organisation based in Queensland, Australia called the Wattle Group invited investments from the public not only from Australia but also from outside Australia. The Wattle Group was at all material times resident in Australia but not resident in Fiji, as was its parent company, Qantun Investment Pty. Limited. In Fiji, the Wattle Group was represented by the 2nd accused, operating under the business name Speight and Associates. The 2nd accused was at that time resident in Australia. Speight and Associates was at all material times not resident in Fiji.

2. In March 1995 the second accused was physically present in Fiji, while remaining a resident of Australia.

3. Between 7th and 21st March 1995 the second accused was introduced to the first accused, who was a Fiji resident. The first accused, having decided at the request of the second accused to invest in the Wattle Group and the scheme of investment having been explained to him by the second accused, signed an agreement for investment of moneys by him in the Wattle Group and gave the second accused the sum of twenty one thousand Fijian dollars (F$21,000) for the purpose of making such investment.

4. The second accused, pursuant to his agreement with the accused, and acting on his behalf, invested the sum of F$21,000 on behalf of the first defendant in the Wattle Group in Australia.

5. No exchange control approval was sought or given for the above transactions.”

In mitigation the 2nd accused said that he was assisting the 1st accused, and that he did not know that Reserve Bank approval was needed. He was discharged without conviction.

The trial in respect of the 1st accused proceeded on the 30th of April 2003. The former 2nd accused gave evidence that on the 7th of March 1995 he had signed an agreement with the 1st accused, which he tendered. That agreement was that Geoffrey Robert Dexter, trading as “The Wattle Group” undertook to invest sums of money for the 1st accused and to return to him between 5% to 7.5% of the principal amount every month. The 2nd accused said that he invested $21,000 of the 1st accused’s money in the Wattle Group and confirmed the investment by letter of 21.5.95. That letter was also tendered. That letter reads:

“Dear Mr. Stephens,

Attached is the latest summary for your investment funds which were placed with the Wattle Group via George Speight & Assoc. as your Funds Manager. As you know your funds were taken personally by myself out of the country in the form of $21,000 Fijian dollars and converted into Australian currency at an exchange rate of F$1.00 = AUS$0.94 giving a total of $19,530 Australian dollars. This amount was placed as your investment on 21 March 1995 and has since earned a total of $1,950 in interest. Refer to the attached summary for the figures.”

A further letter was tendered, dated 12th July 1995, which read inter alia:

“Dear Wilfred,

Attached is the latest summary for your investment funds which were placed with the Wattle Group via George Speight & Associates as your Funds Manager ...............

Yours sincerely,

George Speight.”

In examination-in-chief the 2nd accused said that he had received the funds and invested it to the Wattle Group. However in cross-examination he said:

“A. The $21,000 given to me by the accused remained in Fiji. While an equivalent amount from my account in Australia was paid to Wattle Group on the accused’s behalf ....

1. The above is the truth.
   
1. The money paid to me by the accused did not leave Fiji. I paid from my funds in Australia on an equivalent sum to Wattle Group on Accused’s behalf.”
   

PW2, Rigamoto Motufaga a Reserve Bank Officer gave evidence that a $21,000 overseas transfer needed Reserve Bank approval and that in this case no such approval had been sought. In cross-examination he said – “Payment of $5000 that does not leave Fiji is not payment out of Fiji.”

The Respondent’s caution interview was then tendered. In that interview the Respondent admitted giving the 2nd accused $21,000 to invest with the Wattle Group. The following questions and answers are relevant:

“Q18: At which place did you give him this money?

A: At his room at the Travelodge.

Q19: In which currency did you give him the money?

A: Fijian currency.

Q20: Where did you get this $21,000 from?

A: The money came from my son’s savings account NBF, CML Insurance early withdrawal, some of my savings too. (with all documents given to CID/SUVA).

Q21: Did you have the information that he will take this money to Australia for investment?

A: Yes. As he informed me that he was going to take it to Australia. I asked how. He told me that it was none of my business. I pointed out to him that I could apply to have it taken to Australia as I have nothing to hide as it was not black money. He again stress to me it was none of my business.

Q22: Did you know that permission of Reserve Bank is required before any money is taken out of Fiji?

A: Yes, that’s why I keep on asking him question of how he is taking the money after I have given him the money.

Q23: Was permission taken from Reserve Bank before this $21,000.00 was taken out of Fiji? If not why?

A: I don’t know as the money was in his hands then and the contract sign.”

Later in his interview the Respondent said that the money was later refunded to him because he was not satisfied with his investment. The interview was not disputed and there was no cross-examination about it.

The defence made a submission of no case to answer, saying that the $21,000 had never left Fiji. The prosecution replied that the value or equivalent had been paid on the Respondent’s behalf in Australia and that this was sufficient to prove payment out of Fiji.

The Court ruled that the prosecution had to show payment out of Fiji and that PW1 had said on oath that he had not paid the $21,000 to the Wattle Group but had spent it on his own personal use. The learned Magistrate then ruled:

“In my view, this $21,000 given by the accused to PW1 was not paid outside of Fiji, by PW1, as mandated by section 8 of the Exchange Control Act Chapter 211. In my view, the section has not been violated by the above transaction. Even PW2, the Manager of the Exchange and Control Unit of Reserve Bank stated in court today, that the above transaction is not “payment outside of Fiji” as required by section 8 above-mentioned.”

The learned Magistrate then found that an essential ingredient of the charge was missing and acquitted the Respondent.

The appeal

The ground of appeal is as follows:

“That the learned Magistrate erred in holding that an arrangement whereby a resident acquires an off-shore credit in exchange for providing an on-shore credit to a non-resident does not contravene Section 8 of the Exchange Control Act.”

The petition asks that the finding of no case to answer should be set aside and the case remitted to the Magistrates’ Court for continuation of trial.

The sole ground of appeal is therefore whether the transaction described by the first accused was a payment out of Fiji. Section 8 of the Exchange Control Act provides:

“Except with the permission of the Minister, no person resident in Fiji shall, subject to the provisions of this section make any payment outside Fiji to or for the credit of any person resident outside Fiji.”

The facts are not materially in dispute, although it is apparent that PW1 (the 2nd accused) introduced the story of keeping the original $21,000 in Fiji and simply making a transfer from his account in Australia to the Wattle Group, for the first time in cross-examination. He made no mention of it in the two letters he wrote the Respondent, nor did he tell the court this version of the “transfer” on his own plea of guilty, nor did he mention it in examination-in-chief. So surprising is this version of the facts, that the learned Magistrate might with good cause, have decided not to accept it, preferring instead the more consistent account in the letters and examination-in-chief. There was certainly sufficient evidence as to the Respondent’s own intention to transfer the money abroad in his caution interview. Although section 8 of the Exchange Control Act creates an offence of strict liability, the caution interview’s contents are helpful to establish that the Respondent firstly, wanted to transfer the money abroad and secondly, knew he was required to obtain Reserve Bank approval for such transfer.

However, the learned Magistrate did not refer to the compelling evidence of the interview, or to the letters tendered by PW1 (the 2nd accused). Instead he appears to have accepted the evidence of PW1 in cross-examination and found (in error) that this was not a transfer abroad according to the evidence of PW2. He erred in three ways, in this regard.

Firstly, this was a submission of no case to answer. It is now trite law that the court must ask itself (in the magistrates’ court) whether on the uncontradicted evidence of the prosecution a reasonable tribunal might convict. This was not the appropriate time to accept one version of the facts over another. There were two versions of the facts before the court, and it should have asked itself whether a conviction was possible on either version. Clearly the version available on the documents tendered showed that the funds were taken out of the country by PW1. Taken with PW1’s plea of guilty to the section 8 offence, there was a clear prima facie case that the Respondent who was resident in Fiji and made a payment outside Fiji to the Wattle Group of Companies through the agency of the 2nd accused. That was the first error.

The second error was that he found that a payment can only be made if the same money handed to an agent in Fiji, finds its way to the person resident abroad. As State counsel submitted, such a finding would render section 8 of the Exchange Control Act meaningless because financial business is never done in that way. If a person in Fiji, pays a bank in Fiji a sum in excess of $5000, and asks for the money to be credited to the account of a person in Australia, the bank will tell him or her that the transaction will be done by telegraphic transfer and that Reserve Bank approval is required. The scope of the section is not limited to those persons who physically smuggle money out of the country by stuffing bank notes into their suitcases. It applies to all persons and agencies who are able to transfer funds by electronic device. In the case of the latter, the money physically does not leave the country, the same or equivalent amount is simply transferred from the agency abroad to the recipient abroad. This is precisely what PW1 said he did (in cross-examination). Even on this version of the facts, a prima facie case was made out.

Lastly, the learned Magistrate appears to have erred in finding support for PW1’s later version of the facts in the evidence of PW2. In cross-examination (although counsel for the Respondent told me from the bar table that he did not ask the question, the learned magistrate had asked it), PW2 said:

“Payment of $5000 that does not leave Fiji is not payment out of Fiji.”

I do not read this statement as a declaration that the $21,000 in this case did not leave Fiji. It appears (and it is not clear) that the witness was asked whether, if money in excess of $5000 did not leave Fiji, it was a payment out of Fiji for the purposes of section 8 of the Exchange Control Act. His answer was, quite rightly, that if payment is not made out of Fiji, the money has not left the country. That statement has limited relevance to this case. On PW1’s cross-examination version, he effected the transfer of the equivalent amount to the Wattle Group in Australia. The facts were that the payment was made out of Fiji in a way which is no different from the way in which payments are made out of Fiji by banks daily. Indeed, PW2 appears to have explained the telegraphic transfer procedure in re-examination.

Clearly the finding that there was no prima facie case cannot stand. It is quashed, as is the acquittal.

Result

The order for acquittal is set aside and substituted with a finding that there was a case for the Respondent to answer. The case is remitted to the same Magistrate to continue with the hearing.

Nazhat Shameem
JUDGE

At Suva
5th September 2003