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Fiji Independent Commission Against Corruption (FICAC) v Bakani [2014] FJHC 572; HAC026.2009 (6 August 2014)

IN THE HIGH COURT OF FIJI
AT SUVA
CRIMINAL JURISDICTION
CRIMINAL CASE NO: HAC 026 of 2009

BETWEEN:

FIJI INDEPENDENT COMMISSION AGAINST CORRUPTION (FICAC)
PROSECUTION

AND:

1. KALIVATI BAKANI
2. KENI DAKUIDREKETI
ACCUSED PERSONS

Counsel : Mr.Blanchflower M, (SC), Ms. Yang E.
and Ms. Puleiwai F for FICAC
Mr. Keene B, QC, Ms. Cole Minstructedby Howard Lawyersfor the 2ndAccused

Dates of Hearing: 23rd June 2014 – 28th July 2014
Date of Summing Up: 1st August 2014
Date of Judgment: 6th August 2014

JUDGMENT

1. Mr. KeniDakuidreketi (KD)is been charged by the Fiji Independent Commission Against Corruption (FICAC) on the following five (5) counts of "Abuse of Office" contrary to section 111 of the Penal Code.
   

Second Count

Statement of Offence (a)

ABUSE OF OFFICE: Contrary to Section 111 of the Penal Code Cap 17.

Particulars of Offence (b)

KENI DAKUIDREKETI between about 31st March 2004 and 21st September 2004, at Suva in the Central Division, while being employed in the Public Service as the Director of the Native Land Trust Board and Chairman of Vanua Development Corporation Limited, in abuse of the authority of his office, did an arbitrary act for the purpose of gain, namely, facilitated a loan of $2,000,000.00 FJD to be made by the Vanua Development Corporation Limited to PacificConnex Limited, which was prejudicial to the Native Land Trust Board and indigenous Fijians.

Fourth Count

Statement of Offence (a)

ABUSE OF OFFICE: Contrary to Section 111 of the Penal Code Cap 17.

Particulars of Offence (b)

KENI DAKUIDREKETI between about 16th November 2004 and 29th November 2004, at Suva in the Central Division, while being employed in the Public Service as the Director of the Native Land Trust Board and Chairman of Vanua Development Corporation Limited, in abuse of the authority of his office, did an arbitrary act for the purpose of gain, namely, facilitated a loan of $900,000.00 FJD to be made by the Vanua Development Corporation Limited to PacificConnex Limited, which was prejudicial to the Native Land Trust Board and indigenous Fijians.

Sixth Count

Statement of Offence (a)

ABUSE OF OFFICE: Contrary to Section 111 of the Penal Code Cap 17.

Particulars of Offence (b)

KENI DAKUIDREKETI between about 28th February 2005 to 28th April 2005, at Suva in the Central Division, while being employed in the Public Service as the Director of the Native Land Trust Board and Chairman of Vanua Development Corporation Limited, in abuse of the authority of his office, did an arbitrary act for the purpose of gain, namely, facilitated a Government Grant of $1,000,000.00 FJD disbursed to Vanua Development Corporation Limited through the Native Land Trust Board to be used as security for a loan provided to PacificConnex Limited by Dominion Finance Company Limited, which was prejudicial to Native Land Trust Board and indigenous Fijians.

Eighth Count

Statement of Offence (a)

ABUSE OF OFFICE: Contrary to Section 111 of the Penal Code Cap 17.

Particulars of Offence (b)

KENI DAKUIDREKETI between about 27th April 2005 and 3rd July 2007 at Suva in the Central Division, while being employed in the Public Service as the Director of the Native Land Trust Board and Chairman of Vanua Development Corporation Limited in abuse of the authority of his office, did an arbitrary act for the purpose of gain, namely, facilitated a Government Grant of $1,000,000.00 FJD disbursed to Vanua Development Corporation Limited through the Native Land Trust Board to be used as security for overdraft and loan facilities provided to PacificConnex Limited, later renamed PacificConnex Investment Limited, by the Australia and New Zealand Banking Group Limited, which was prejudicial to Native Land Trust Board and indigenous Fijians.

Tenth Count

Statement of Offence (a)

ABUSE OF OFFICE: Contrary to Section 111 of the Penal Code Cap 17.

Particulars of Offence (b)

KENI DAKUIDREKETI between about 23rd September 2005 and 29th September 2005, at Suva in the Central Division, while being employed in the Public Service as the Director of the Native Land Trust Board and Chairman' of Vanua Development Corporation Limited, in abuse of the authority of his office, did an arbitrary act for the purpose of gain, namely, facilitated a loan of $1,000,000.00 FJD to be made by the Vanua Development Corporation Limited to PacificConnex Limited, then renamed PacificConnex Investment Limited, which was prejudicial to Native Land Trust Board and indigenous Fijians.

2. After a full trial, with five (5) Assessors, they unanimously found the accused 'NOT GUILTY' as charged, for the offence of 'Abuse of Office for the purpose of gain', but, found 'GUILTY' only for the 'Abuse of Office'.
   
3. As it was already informed to the Assessors, (Chapter 1, paragraph 8 in the Summing Up) pursuant to section 237 (2) of the Criminal Procedure Decree No. 43 of 2009, I am not bound to conform the opinions of the Assessors when delivering the final judgment of court.
   
4. The Summing Up to the Assessors identified the following distinct elements in respect of all five charges.
   • The accused
   • Being in the Public Service
   • Did an arbitrary act
   • In abuse of authority of his office
   • For a purpose of gain and
   • Such act was prejudicial to the rights of another.
     
5. Section 111 of the Penal Code, on which all the above charges rest upon is as follows:
   

"Any person who, being employed in the public service, does or directs to be done, in abuse of the authority of his office, any arbitrary act prejudicial to the rights of another, is guilty of a misdemeanour.

If the act is done or directed to be done for purpose of gain, he is guilty of a felony, ... "

On a plain reading of the section indicates that the original version of 'Abuse of Office' is a misdemeanor. It is extended to be a felony with a maximum sentence of 3 years imprisonment, with the additional element, 'if the act is done or directs to be done for the purpose of gain.' At the end of the day, this court has three options in respect of those charges. First, to find the accused NOT GUILTY as charged and secondly, to find him 'GUILTY', as charged. The third option is, to find him 'GUILTY' only for 'Abuse of Office', in case the prosecution fails to prove the element of 'purpose of gain' beyond reasonable doubt. This element, as quite understood, is a matter of fact. Therefore, in fairness to the accused, this court thought it fit and proper to put all the above options to the assessors. Section 160 coupled with section 163 (Division 6 of the Criminal Procedure Decree, No. 43 of 2009), provides the facility to go for a minor offence included in the charge. The opinions of the Assessors rest on the 3rd option.

6. Before I turn to see whether the Prosecution did prove their charges beyond reasonable doubt, my first task would be to demonstrate the reasons for the conclusion of the 1st element of each charge; Mr. KD was "a person employed in the Public Service", as a specific direction was given to the assessors to that effect. In the light of R v Cosford [2004] UKHL 2; [2013] 2 Cr. App. R. 8 (at page 88) and the pure legal nature of the issue, this court thought it fit to consider this element as a distinct legal issue. Counsel of both sides did concede to this approach.
   
   • (i) The defence did not contest Mr. KD's role as a member of NLTB. According to Exhibit 1, Mr. KD was appointed a member of NLTB in terms of section 3 (1) of the Native Land Trust Act (Cap 34), with effect from 14th December 2001, as a nominee of FAB. This appointment had been extended for 3 more years with effect from 14th December 2004. (Exhibit 252 (i) to (vi), Agreed Statement and attachments of Mr. RatuMeli Bainimarama).
     
   • (ii) Section 4 of the Penal Code, among other definitions, provides the following definition to a "person employed in the public service":
     

"Person employed in the public service" means any person holding any of the following offices or performing the duty hereof, whether as a deputy or otherwise, namely_

(i) any civil office including the office of President the power of appointing a person to which or of removing from which is vested in the State or in the President in a Minister or in any public Commission or Board; or

(ii) any office to which a person is appointed or nominated under the provisions of any Act or by election; or

(iii) any civil office, the power of appointing to which or removing from which is vested in any person or persons holding an office of any kind included in either of paragraphs (i) or (ii)

(iii) According to Public Service Act,

""Public Service" means the service of the Crown in any capacity in respect of the Government of Fiji other than in a Military capacity"

(iv) Application of limb (ii) to Mr. KD's appointment in NLTB would make it clear that as far as NLTB Directorship is concerned, he held a "public office" or employed in the "public service", from 14th December 2001 to 13th December 2007. The issue arose with his Chairmanship/Directorship in VDCL.

(v) It was submitted by the prosecution, that the court should take into account the unique characteristics of VDCL, when considering the nature of Mr. KD's Chairmanship in VDCL. The following paragraph from Qarase v FICAC [2013] FJCA 44; AAU66.2012 (30th May 2013) was sighted to support their point.

"GCC endorsed the incorporation of FHL as a private limited liability company to be the investment vehicle of the indigenous people in Fiji, and to accelerate and broaden their participation in commerce and industries. The initial shareholding was restricted to NLTB, FAB and Provincial Councils". "Although Counsel for the Appellant was referring to FHL as an ordinary private company, it was not so as seen from the above facts. It was a unique company though incorporated as a private company. There was a specific purpose in establishing same...These are special characteristics which are not found in mere private companies.

(vi) The reasons for the incorporation of VDCL, and its objectives, were led in evidence by the prosecution.

• Exhibit 11 - NLTB Board Paper No: 31/2003;

paragraph 2.

The main objective of VDC is to invest the funds it receives from NLTB to generate additional revenue for the Board. Additional revenue is needed to, among other things, finance initiatives the Board wants to undertake for the benefit of landowners. They may include a reduction in poundage to increase distributable funds to landowners.

Also if well-endowed financially NLTB can enjoy greater autonomy in its operation. Another objective of VDC is to properly manage landowners' Investments in the Trust Fund. Between $9-12m is usually in the Trust Fund at any time. If managed professionally, earnings on this Fund can increase.

• Exhibit 03 - VDCL's Memorandum of Association;
  

2 (i)"to be the Commercial vehicle for Native Land Trust Board as trustee for the Fijian landowners as stipulated under NLTA Cap 134".

• Exhibit 10 - NLTB Board Paper No: 030/2003; paragraph 2.6
  

The Board has also approved for the establishment of its commercial vehicle, Vanua Development Corporation Ltd (VDCL) to spearhead investment opportunities that would create more wealth in return for the financial viability of the Board leading to the possible reduction of the current 15% poundage.

• Exhibit 9 - NLTB Minutes dated 18^th December 2003, paragraph 7.10.3&4, VDCL's paid-up capital of $7.7 million comprised of the following amounts.
  

"Authorized capital to be $20m and the paid up capital to be $7.7m comprising:

• $1m provided as interest free loan to NLTB by Government.
• The equivalent of the market value of 543,501 $1 A class shares owned by the Board in FHL.
• The equivalent value of cost of the investments currently held by NLTB which had been funded with a Special Fund created in 1999 (Refer to Section 6 above for details.)
• The equivalent value of cost of investments currently in the Trust Fund that were financed with lease monies from Schedule A & B land.
  

FAB to be requested to approve the transfer of funds in the Trust Fund which belongs to it as equity in VDC.Moreover that they be approached for a grant or interest free loan of $1m as additional equity of VDC."

(vii) Defence took up a totally different approach in addressing this issue. Whilst quite correctly conceding Mr. KD's role in NLTB, they strongly disputed that Mr. KD was in the 'Public Service' in the capacity of VDCL Chairman. Their simple argument is that when Mr. KD is a Director/Chairman of a private company registered under the Companies Act 1983, he is not employed in the "Public Service". Even if it were so, they argued that Mr. KD's appointment by the NLTB Board Resolution on 18th December 2003 was never a valid one. (Exhibit 9)

"That the following persons be appointed to the Board and the director's fee shall be $10,000 Chairman and $6,000 for Directors. Similar conditions currently applicable to NLTB Board members should also apply.

Chairman : KeniDakuidreketi (NLTB Board)

Director : Nalin Patel (G Lal& Company)

Director : Daniel Whippy (Carpenters Fiji Ltd)

Director : IsoaKaloumaira (Fijian Trust Fund)

Director : KalivatiBakani (NLTB)"

(viii) This argument was formulated with the assistance of VDCL's Articles of Association, Exhibit 4. It was said that a Chairman of a private Company must be a Director first and according to VDCL's Articles, Directors can be appointed either by the existing Directors or its shareholders. Whereas NLTB was neither a Director nor a shareholder of VDCL, defence stressed that there is no legal power at all for NLTB to appoint a Director and thus, the Penal Code definition; "a public Board having power to appoint" does not apply to NLTB. They continued to say that since Mr. KD's initial appointment to VDCL was never valid, it was unlawful for an Interim Minister who has nothing to do with VDCL Board of Directors or its Shareholders to replace the Directors.

(ix) Defence relied on Articles 72 and 73, Number of Directors and Power of Directors to appoint others,to support this contention.

Following the invalid NLTB resolution dated 18th December 2003 (Exhibit 9), it was said that, technically there were eleven (11) Directors (Mr. Bakanibeen in both) as the first seven appointees were never retired.

(x) Prosecution's counter argument, that Section 182 of the Companies Act covers any defect in appointments or qualifications of Directors was responded by the defence saying that it is completely irrelevant to a charge of "Abuse of Office".

(xi) When the defence pointed to all the relevant Articles of VDCL's Articles of Association related to "Appointment of Directors" as it was identified by them to be the proper legal procedure to be adopted, Article 97 of the same was never cited nor considered. Surprisingly, the prosecution also followed the same course. Article 97 is as follows:

Acts of directors Valid in Spite of Defective Appointment
All acts done by any meeting of the Directors or of a committee of Directors or by any person acting as a Director shall, notwithstanding that it is afterward discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director.

Even though Section 182 of the Companies Act is also in the same context, in the light of this article, defence would definitely have to revisit their whole argument based on the validity of the appointment of Mr. KD to VDCL as a Director or its Chairman.

(xii) Nevertheless, in terms of Section 4 of the Penal Code definition, "person employed in the public service" means;

• any person holding any of the following offices or
• performing the duty hereof.
  

(xiii) "Following offices" in the first part of the section refers to the appointments and/or removals described in (i) (ii) (iii) limbs. The defence argument mainly focuses only this aspect. The second part of the introduction, "performing the duty hereof," they say does not apply to VDCL. The section elaborates two distinct steps; holding a public office after been appointed pursuant to (i) (ii) and (iii) limbs or performing the duties thereof. The mode of "appointment" may matter to the first part, but, what matters to the second part is the nature of the duty performed. The 'Public Office' can be 'civil' in accordance with limbs (i) and (iii) or 'any office' according to limb (ii).

(xiv) One of the first English authorities which defined "Public Office" is Rv Bembridge, (1783) 3 Doug 327; 99 E.R. 679. In which, Lord Mansfield decided;

"that a man accepting an office of trust concerning the public, especially if attended with profit, is answerable criminally to the King for misbehavior in his office; this is true, by whomever and in whatever way the officer is appointed."

(xv) In R v Whitaker [1914] UKLawRpKQB 173; (1914) 10 Cr. App. R. 245; [1994] 3 K.B. 1283, Lawrence J observed that:

"A public officer is an officer who discharges any duty in the discharge of which the public are interested, more clearly so if he is paid out of a fund provided by the public. If taxes go to supply his payment and the public have an interest in the duties he discharges, he is a public officer."

(xvi) R v. Bowden [1996] 1 Cr. App. R 104; [1996] 1 W.L.R. 98 is a recent case which the English Court of Appeal endorsed the decisions of Bembridge (supra) and Henly [1834] EngR 882; (1828) 5 Bing N.C.91; 130 E.R. 995 (Best CJ) and quoted the view of Bembridgeas follows:

"Even though it was civil case, a public office is correctly defined as embracing everyone who is appointed to discharge a public duty, and receives compensation in whatever shape whether from the Crown or otherwise"

(xvii) R v Cosford and Others(supra) amply demonstrates the evolution of the interpretation of "Public Office" starting from Bembridge (supra) in 1783 by Lord Mansfield and held that;

"Whether the prison is run directly by the state or indirectly through a private company paid by the state to perform this function does not alter the public nature of the duties of those undertaking the work: the responsibilities to the public are identical."

(xviii) It is quite clear that VDCL stemmed out for a specific purpose, to be the "commercial vehicle" of NLTB to invest NLTB's funds to generate additional funds to NLTB to finance the initiatives the NLTB Board wants to undertake for the benefit of the native landowners of Fiji. VDCL's "paid up capital" of $7.7 million was fully comprised of NLTB funds, may it be its own funds or Trust Funds. There is no dispute that NLTB is a "Public Board" created in accordance with Native Land Trust Act. The accused, Mr. KD assumed duties in VDCL as the Chairman, whilst holding the aforesaid "Public Office" in NLTB. And, in fact VDCL was asked to submit their financial reports to NLTB for their inspection. (Exhibit 92 and Exhibit 133). After all, VDCL knew about "the responsibility in and amongst the Board to protect the interest of the land owners as they are ultimately the shareholders of the company". (Exhibit 187; page 89) VDCL, in their first Board Meeting on 21st January 2004, wanted to ensure that a Declaration was executed by the current shareholders confirming that they held the shares in trust of NLTB. (Exhibit 14) Even at the later stages, the position of it does not seem to be changed or misunderstood by VDCL or its members. Mr. Bakani's letter to Minister of Information, Communications and Media Relations dated 12th May 2006 says that;

"PacificConnex as we have highlighted in the past is a company that is majority owned by the Native Land Trust Board through its commercial arm Vanua Development Corporation Limited. Although its proposal is to benefit the indigenous landowners of this country, it has had to wait 12 months to get a reply to its application, whereas Digicel was able to get theirs within a matter of days after a business licence was approved to them."

(xix) In this background, I conclude that irrespective of the mode of appointment, or appointing body, if any person, whilst holding an office of trust concerning the public andperforms a duty of public nature, and receives a grant or remuneration whether directly from the State or otherwise,pursuant to section 4 of the Penal Code, he holds a "Public Office".

(xx) Hence, the contention of defence that "For the purpose of the offence of Abuse of Public Office, the power to appoint is what determines whether you are person is employed in the public service". (paragraph 2.30 of the Closing Submissions of Mr. KD) is misconceived. The prosecution proved it beyond reasonable doubt, nor that the defence disputed, that Mr. KD held the Chairmanship of VDCL during the period in issue. It is on the above premise of factual and legal background, this court decided that Mr. KD held a 'public office' as the Chairman of VDCL in all material times mentioned in the five charges.

7. Before proceeding any further, it is worth to have a clear overview of the emergence of PCX and its subsequent involvement with NLTB and VDCL.
   
   • (i) The first appearance of PCX was on 29th February 2000 under the name of 'SASHA Limited'. (Exhibit 219)
     
   • (ii) Then on 14th January 2004 the name of 'SASHA LIMITED' was changed by a Special Resolution to PacificConnex Limited. (Exhibit 222)
     
   • (iii) The 2nd VDCL Board Meeting Minutes dated 11th February 2004 reflects the first discussion in relation to PCX offer to have a joint venture with 51% shares to VDCL. (Exhibit 21)
     

Pacific Connex Ltd (PCL) – Mr. Ballu

Khan (Chairman & CEO) of this company has made an offer for a joint venture partnership to Vanua Development Corporation. PCL will be involved in IT development locally and offshore. The offer involves the following.

• A 51% stake in PCL;
• The appointment of two Directors on the Board of PCL;
• Capitalization of the Company to the tune of US$1m.
  

The Board resolved to approve in principle the offer of a joint venture with PacificConnex Ltd. Further discussions are to be carried out by KD & NP. KD & IK are to be Directors on the Board of PCL, representing VDCL.

NP, KD and KB declared their interest prior to discussions of this offer.

(iv) It was while the internal formulations in paragraphs (v) and (vi) weretaking place within PCX, Mr. Ballu Khan made a presentation to NLTB Board on 12th March 2004 on the 'credentials' of 'PCX' and 'Tui Consulting' to canvas as to why they be given the opportunity to implement NLTB's IT system based on MySAP. Following are some excerpts of Mr. Khan's presentation. (Exhibit 31)

• Mr. Ballu Khan in response explained that the up-front cost would be borne by PacificConnex that is to implement the solution for NLTB. PacificConnexwould only get paid once the Solution is implemented.
  
• The terms and conditions of the contract between NLTB and PacificConnex would be such that if PacificConnex does not perform then NLTB gets redress.
  
• The $4.6 million is borne up front by PacificConnex who in turn will recoup the amount over a period of time. Such deals are normally of 8 year terms, it is 11 years in this case.
  

"TUI Consulting was formed in 1997. The challenge then was to find something unique. TUI is a traditional name in New Zealand. It means Chief and signifies Leadership in Fiji. TUI Consulting has no debt; always operated on its own cash flows. TUI Consulting is not a shareholder in Pacific Connex."

"Member Dakuidreketi contributed that one of the biggest problems in NLTB is its IT System and appreciated Management in coming up with a proposal that takes a bold step now to resolve that problem."

(v) The allotment of shares as at 24th March 2004 shows that TUI Management Services Limited (TMSL) had 9,899 shares and Mr. Ballu Khan had 99 shares of PCX.(Exhibit 225)

(vi) According to Exhibit 239, Howards Lawyers (as in most of Mr. Ballu Khan's company documentation reflect as Solicitors) by their letter dated 6th April 2004, had advised Fiji Islands Trade and Investment Bureau that the company name of TUI Management Service Limited to be changed as a shareholding company of PCX and be replaced with Pacific Management Services International Limited.

(vii) Despite certain concerns over the cost factor on NLTB's 'IT ROADMAP', PCX managed to get NLTB's IT contract and the Business Solution Agreement between NLTB and PCX was signed on 31st of March 2004. (Exhibit 36)

(viii) On the very same day, 31st of March 2004, PCX sent their first loan proposal of $2 million to Mr. KD of VDCL. The following excerpts are worth reproducing; (Exhibit 38). [Even though this letter is unsigned, both parties relied upon it and raised questions with the witnesses.]

Dear Keni,
Re: LOAN PROPOSAL

1. Background.

PacificConnex (PCX) has been formed by the Vanua Development Corporation (VDC) and Ballu Khan of TUI Management Services Limited to provide IT Services to Fiji based Public and Private Sector organizations.

Immediate Funding Requirements.

To fund the initial setup costs, TUI Management Services Limited has already provided $490,000 and will provide an additional $510,000 in cash to capitalize PCX on behalf of Vanua. This will fund immediate operational costs.

PCX requires further funding of $2,000,000 to buy SAP software, databases and other infrastructure for the Native Land Trust Board, the first customer of PCX.

Offer

PCX would welcome Vanua, as the major shareholder, to share some of the funding responsibilities with TUI Management Services to protect and enhance its investment in PCX.

(ix) VDCL Board Meeting Minutes dated 7th April 2004 contains Board discussions on PCX Agreement. (Exhibit 39)

PacificConnex Limited (PCX)

Agreement – to be finalized and forwarded to all directors for review and comments. It was agreed that the agreement be signed by Wednesday 14th April 2004, before the launching on the 19th.

The 51% VDCL share in PCX will initially be treated as a loan and then converted to grant later. Important to note this in the agreement before it is signed.

Correction to be made in Capital Fund for PCX from US$1m to F$1m

(x) VDCL Board Meeting Minutes dated 23rd June 2004 shows that the PCX loan request of $2 million been approved and Agreement was signed to that effect on 14th July 2004. (Exhibit 45)

8. This sequence of events highlights certain facts.
   
   • (i) A company called PCX emerged only on 14th January 2004;
   • (ii) When Mr. Khan told NLTB Board on 12th March 2012 that:
     
     • "TUI Consulting is not a shareholder in PCX", a company called"TUIManagement Services Limited" was holding shares in PCX.
       
     • VDCL Board by 11th February 2004 had already received and discussed about an offer of Mr. Ballu Khan for a joint venture partnership between VDCL and PCX and approved it in principle.
       
9. After "Ballu Khan Presentation" to NLTB, especially after the same day events on 31st March 2004, signing of Business Solution Agreement between NLTB and PCX and Loan request of PCX, following issues emerge.
   
   • Is VDCL involved with Mr. Ballu Khan in forming PCX according to Mr. Jaeger's letter?
   • Is it how Mr. Khan made his appearance before NLTB and Why did PCX request a $2 million loan even before the alleged 'Joint Venture' is been signed with VDCL?
     

In the backdrop of above concerns (paragraphs 8&9), the following queries are left to be answered;

• Has VDCL Board Members been updated what was going on within NLTB and PCX.
• Or everything happened as a mere coincident?
  

10. Leaving this initial stage aside, if we are to forward, the following transactions were brought to the attention of court.
    

(i) First VDCL Loan to PCX of $2 million given on 14th July 2004. [Count 1] (Exhibit 59)

(ii) Two separate loans from Merchant Finance by PCX amounting to $310,000 (Motor Vehicle loan) and $392,000 (Hardware lease Finance) [Exhibit 114 page 3 at paragraph (b) (vii) coupled with Exhibit 251, WBC/7 pages (4) and (7) or original pages 21 and 24] obtained in August 2004. (Exhibit 136)

(iii) PCX was given $1 million loan by Dominion Finance for working capital requirements on 20th September 2004, to be repaid in 4 months. (Exhibit 71)[Count No. 6]

(iv) In November 2004, PCX had managed to secure a "further $450,000 from the Westpac Bank". (Exhibit 75; 2 (a) (i), Exhibit 136)

(v) A $900,000 loan was granted to PCX by VDCL on 21st December 2004, (Exhibit 79, Exhibit 83) making the Exposure Level of VDCL to PCX to 39%.

(vi) FDB loan of $3.6 million to PCX on 21st April 2005.

(vii) ANZ granted an Overdraft facility of $1 million to PCX on 27th April 2005.

(viii) VDCL 3rd loan to PCX amounting to $1 million on 28th September 2005.

11. Apart from Merchant Finance and Westpac loans (ii) and (iii) VDCL is been involved in all the other financial facilities, either directly offering the loans or being a Guarantor by providing security to those financial facilities.
    
12. In support of their case theory, prosecution argued that by all this time accused had the 'knowledge' about the real financial crisis that PCX underwent to the extent of handling their day to day operational costs, but continued to support PCX requests, especially pertaining to 5 charges, without providing true and accurate information about PCX to NLTB or VDCL.
    
13. The defence countered this argument saying that PCX was a start-up company and the accused at all times honestly believed that what he did was for right reasons as he never had any bad or improper motive. It was said that as long as the Board believed that they are going to spend the Board's money for the benefit of the Fijians, however wise or foolish the decisions may be, they cannot be criminally responsible for their acts. Referring to the 'gain to PCX" as reflect in charges, defence argued that the 'gain' was not meant for the accused and not even to his family members or a business venture with his interests, but to PCX, where he has no financial interest and a majority of which is owned by VDCL. It was highlighted by the defence that none of the charged decisions were accused's individual decisions, but collective Board decisions, where the Board thought that they are taking rational business and investment decisions, according to their mandate in decision making process, but not a result of the whims and fancies of the accused.
    
14. Apart from Count No. 8, in which the defence raised the issue of the legality of the 'CHARGE' given to ANZ, the defence approach towards all the charges was very plain and straight forward. Firstly, they challenged the element of 'Public Office', to which I have already responded. Secondly, it was purely the 'state of mind' of the accused when acting in the capacity of VDCL Chairman. If the accused did act without "any improper motive or with an honest belief that he is following the due process and acting for the right reasons", defence argued that he is not abusing his authority of office and not doing anything in arbitrary manner. That is how the state of mind of the accused at the material timesbecame the focal point of all five charges. As viewed by their Lordships in Naiveli v State [1995] FJSC 2 at p.3,
    

"what differentiates something done in abuse of office from something not done in abuse of office in many cases will be the state of mind of the accused".

15. It is in this context, this courtthought it is necessary to pursue what NLTB, Mr. Saukawa, Mr. Boila, Mr. Whippy, Mr. Patel, ANZ Bank Officials and PCX Board itself said on PCX affairs, as transpired during the trial.
    

(i) PCX Board Members (all 5) resolved the Dominion Finance $1 million loan proposal and further resolved to negotiate a further $1 million loan on similar terms and conditions. (Exhibit 72 - 21st September 2004)

(ii) Mr. Dario Jaeger, CFO of PCX informed PCX Board Members on 24th September 2004(Exhibit 73, 3.1 – Corporate Report) that despite raising $1 million form Dominion Finance, ongoing funding of PCX continued to be a concern.

(iii) Mr. Jaeger's response dated 18th /19th November 2004 to Mr. Saukawa, over Mr. Whippy's queries, says that PCX does not have any audited financial statements as it has not been trading long enough. (Exhibit 83)

(iv) NLTB Board Meeting Minutes dated 21st December 2004 (Exhibit 92 paragraph 4.3.3) shows the concerns of Board Member RatuTimociVesikula about the "Board's role as a Trust and its involvement in thecompanies VDCL and PCX, in particular the risk involved even though the Board owned the said two companies";

(v) Mr. Ballu Khan himself informed PCX Board on 23rd February 2005 (Exhibit 100, paragraph 5.3) that refinancing proposals have been given to 'Colonial Bank', who are currently analyzing it and other commercial Banks will also be approached for refinancing purposes.

(vi) NLTB Board Meeting Minutes dated 5thMay 2005 (Exhibit 133, paragraph 21.4.2) says that NLTB Chairman raised concernsof "PCX affairs seemed to be cloudy especially in the movement of huge sums of money".

(vii) PCX Board Papers for 26th May 2005 (Exhibit 136) reflect that $3.6 million FDB loan had been used to pay $2.2 million to Tui Consulting, $0.5 million to Merchant's Finance, $0.5 million to Westpac, ($3.2 million been used for loans) and only $400,000 left for cash flows.

(viii) Referring to Exhibit 143, VDCL Board Meeting Papers for 13th July 2005, Mr. Patel said that he was concerned about the borrowings of PCX.

(ix) Then comes Mr. Whippy's letter dated 9th August 2005 to Mr. KD, the accused over his concerns about VDCL and PCX dealings. (Exhibit 148) Following are some excerpts of it.

"In PCX's first year of operation the loss is incredible which cast doubts about our ability to recognize opportunities and manage investments. What corrective measures, if any, are being suggested? What are the goals of PCX? Are these achievable? What are we doing about it? More importantly, if we continuously do not question on-going requests for additional borrowings in relation to achieving realistic objectives, the integrity of the Board will be brought into question. The credentials of our Board is impeccable and it will certainly be embarrassing to see this tainted.

It is a possibility that external auditors may question the viability of PCX as a going concern in view of unfavourable debt ratios and the extent of its borrowings. At its present rate assuming that the level of income and expenditure does not change, this could become a likely event. What is our contingency plan if this becomes real?

Normally 70% debt and 30% equity is industry average but depending on market value of assets, 1 to 1 is the highest any lender would lent at. If PCX needs cash the shareholders should contribute more capital instead of borrowing. If Tui Consulting believes in this business then they must put the money in."

(x) The e-mail from Mr. Boila (PW5) to Mr. Saukawa (PW6) dated 23rd September 2005 raised concerns of further VDCL loans to PCX and assignment of NLTB contract with PCX. (Exhibit 157)

"Subject: Additional PCX Loan

Aisake,

As per our discussions on the above topic, from NLTB's point of view, further loan to PCX will increase exposure to VDC.

Auditors normally conduct impairment loss assessments in order to evaluate returns on current investments. Further loan to PCX can increase provisions of "loss on investments". In NLTB's books if assessment of investments in PCX at the end of the year is not in NLTB & VDC's favour. We are talking about more than $3m loss adjusted against NLTB's 2005 surplus.

Also important to note that it is not wise to keep assigning PCX contract with NLTB as security over the loan. Profit margin to PCX on NLTB project was not much and assigning future funds against current loans will affect operational cash flows for PCX, which in turn affect PCX's support for NLTB SAP system.

For Considrations.

Vinaka.

Boila."

(xi) It was said in evidence by Mr. Saukawa that when PCX was getting into the 3rd quarter of 2005, the expected government businesses were not turning up, except two sign-ups with Vinod Patel and SCA Hygiene and then PCX thought '3G wireless licence' as a good business prospect that it can fit in.

(xii) The PCX Directors were informed on their 20th October 2005 Board Meeting (Exhibit 169, page 3) that the PCX revenue level remains below budget and PCX entirely depends on NLTB contract. They were advised that cost cutting measures being implemented to reduce the overheads.
(xiii) The Diary Note of ANZ Bank dated 19th January 2006 contains following remarks: (Exhibit 183)

• Management has confirmed refinance with Colonial National Bank is being arranged and they anticipate completion by 23/01 by when settlement should conclude.
  
• Since inception, we are aware that PacificConnex (PCX) has struggled to develop core cash flows associated with establishment of its operation, and this is evidenced via continued default in arrangements.
  
• The company has continued to seek financing on an ad hoc basis from various sources and we estimate current borrowing to be circa $6m, majority arranged via Fiji Development Bank.
  
• In the absence of cash flow, our principal reliance has been in respect to the cash cover provided, in support of the Guarantee provided by Vanua Development Limited (100% owned by NLTB).
  

(xiv) Finally, Mr. Whippy's comments dated 20th January 2006 (Exhibit 179) about PCX's request for $100,000 loan to pay their legal fees says that:

"All cash advances, borrowings and guarantees should not be provided until PCX can demonstrate the following:

(i) PCX is a profitable business and able to generate positive cash flows on existing business assignments.
(ii) PCX provide audited financial statements for 2004.
(iii) PCX provide financial statements for 2005 plus minutes of Board Meetings.
(iv) Are other shareholders providing similar advances."

16. When the concerns of his own Board Members and outsiders and PCX itself were in this nature, certain things which need more attention cropped up in evidence.
    

(i) When Mr. Ballu Khan gave an undertaking to NLTB Board on 12th March 2004(Exhibit 31)that the MySAP upfront cost of $4.6 million will be borne out by PCX itself, in the presence of the accused, how did he view the $2 million loan request of PCX on 31st March 2004(Exhibit -38)?

(ii) Did the accused agree with the contention that PCX is a brain child of VDCL and Mr. Ballu Khan as Exhibit 38, the PCX Loan request claimed?

(iii) Why and how the PCX loan request came into light on 31st March 2004, even before the Joint Venture between VDCL and PCX signed?

(iv) Why Dominion Finance been chosen to deposit the $1 million Government grant without other institutions like Credit Corp been approached? Is selection of Dominion only a coincident?

(v) If PCX was in a financial crisis, why PCX wanted to buy 9 vehicles, 6 Honda CRV, 2 Nissan X-trails and 1 Toyota Rav 4? (Exhibit 140)

(vi) How did three security 'items',

• Deed of Assignment/Guarantee of NLTB
• Personal Guarantee of Ballu Khan and
• Deed of Collateralization, missed out

leaving only "Bill of Sale as described in the Schedule" from VDCL Board Meeting Papers for 13th July 2005 in relation to "PCX loan with Credit Corporation Limited? (Exhibit 143)

(vii) When seeking approval of VDCL for $350,000 loan to PCX by Credit Corporation, (Exhibit 143) why the Credit Corporation Loanfor purchase of vehicles did not bring to VDCL's attention?

(viii) Why PCX audited Financial Reports for year 2004 were delayed till 28th of Feb 2006, for almost 14 months.

(ix) How did Mr. Jaeger inform Mr. Saukawa that "Ballu and I have signed the loan agreements. Please send the letter to me at Clark Street" in his mail answering to Mr. Whippy's queries, pending Mr. Whippy's decision over $900,000 loan request of PCX?

(x) Is the sole reason for accused to extend his support to PCX financial requirements through VDCL, even after the 'Exposure in PCX' reached 91.46% at one point, that PCX will clear off all its debts once PCX equity has been raised from overseas investors who will have a stake at PCX 3G wireless network?

(xi) Why the accused relied on majority of Directors in passing PCX financing requests, without listening to the concerns of Mr. Patel and Mr. Whippy?

(xii) Why the accused did not respond to Mr. Whippy's letter which was personally addressed to him, and left Mr. Bakani to respond to it?

17. Whilst concerns over VDCL & PCX dealings of connected persons or parties remained as stated above, it is relevant to see how Mr. Bakanipotrayed the picture about PCX.
    
1. (Exhibit 47 - p.36 – NLTB Board Papers for 24th June 2004)
   
   • The Board of VDC continues to meet regularly, and has quite a number of joint venture proposals on its plate.
     
2. (Exhibit 66, VDCL Board Meeting Paper for 26th August 2004)
   
   • The Board of VDC continues to meet on a monthly basis.
   • It continues to receive a wide number of proposals which are being considered. VDC is looking forward to funding by Government in 2005, and beyond.
   • The VDC Board is looking at recruiting and Administration/Research Officer.
   • PCX is actively marketing its services and expects to hear the outcome of some of its tenders during the month of August and September. It held its first Board Meeting on 16/07/04. VDC is represented on PCX by KD, IsoaKaloumaira and KalivatiBakani.
     
3. (Exhibit 77, NLTB Board Papers for 28th October 2004)
   
   • PCX continues to market its services and expects to hear some results of bids soon. According to press reports, PCX's bid for the Government IT Tender was unsuccessful. However, we have made representations and hope that the decision would be made in our favour.
     
4. (Exhibit 97 – NLTB Board Papers for 24th February 2005)
   
   • There are a number of interesting developments on the horizon for VDCL and PCX which will allow the companies to achieve their aim without having to continually request for capital from government.
     
5. (Exhibit 133 – NLTB Board Meeting Minutes dated 5th May 2005)
   
   • Investment portfolio has increased by 59.75% i.e. from $5,269,071.97 to $8,433,355 as at 31.3.2005.Nearing completion proposals are Victoria Wines and Spirits and Vinod Patel/BHP Lysaght. The Board of VDCL is acutely aware of the need to diversify.
     
6. (Exhibit 143, VDCL Board Papers for 13th July 2005)
   
   • All of PCX facility will be cleared off once equity has been raised from Overseas investors who will have a stake at the PCX 3G wireless network.
     
7. (Exhibit 151; Internal Memo dated 10th August 2005)
   
   • Para 5. The Board of VDCL should await the finalization of the 2004 Accounts before a report is tabled for its information. This should be at the next Board meeting. The Directors of VDCL are asked to have faith in their counterparts representing VDCL in PCX and be assured that the best interests of both companies are being taken care of. You are all encouraged to contact me (9995-880) if you have any issues that you may have about PCX, VDCL or indeed NLTB.
     
8. (Exhibit 156 – NLTB Board Meeting Minutes dated 26th August 2005, Board Paper No: 016/2005)
   
   • That it was the first time, that audit be also made on the two Companies, VDCL and PCX. VDCL so far had shown a profit of $191,640 while PCX is still going through minor account adjustment. Audited accounts for both the companies will be tabled in the next Board meeting.
     
9. (Exhibit 159; VDCL Board Papers for 28th September 2005)
   
   • "PCX has for the year and a half signed 3 major deals basically with NLTB, SCA Hygiene and currently Vinod Patel. PCX offered NLTB substantial savings in their contract by drastically reducing it by $2.9m from the initial $18.9m to $16.040m. This arrangement was offered to NLTB subject to NLTB assisting PCX on the refinancing of the implementation costs of the NLTB system to a tune of $7.5m. Unfortunately this did not transpire as FDB only refinanced $3.6m leaving a balance of $3.9m outstanding. It is because of this reason that PCX had to resort to acquiring funds from other sources like Dominion Finance [$1m] then ANZ and Unity Finance [$1m] to be able to finance the NLTB implementation costs.
     
10. (Exhibit 175 – NLTB Board Meetings dated 3rd November 2005)
    
    • The business relationship between NLTB and PCX is the first of its kind in Fiji. Most of the Accounting Standards and Treatment has to be referred back to Australia for confirmations.
    • The Accounting Treatment on the initial set up cost of the new NLTB IT System i.e. whether it is an asset to NLTB or expense to PCX.
    • PCX will show a loss in its 2004 operations due to the first $1million payment by NLTB in 2004 was treated as income for 2005 by the Auditors, Price Waterhouse Coopers."
      
11. (Exhibit 187; NLTB Board Papers for 23rd February 2006)
    
    • The performance of VDCL for the year 2005 could be classified as moderate with a lot of proposals received and analyzed thoroughly by the Board. The capabilities of the current Board members should also be acknowledged because whilst there is the urge to have VDCL's existence felt in the market there is also the responsibility in and amongst the Board to protect the interest of the landowners as they are ultimately the shareholders of this company. This responsibility becomes paramount when proposals are analyzed.
      
    • There were mixed results in the PCX front as the delay in the issuance of the mobile wireless licence impacted a lot on the business decisions made by the PCX Board and management. PCX had to bear all the upfront costs of this major project.
      
12. (Exhibit 201, NLTB Board Meeting Pack for 22nd June 2006)
    
    • A development worth reporting is that PCX has been issued with a provisional approval to operate a mobile telephone network. However a second provisional approval has also been given to Digicel.
      
18. It is, at least on most of the times, these comments were made by Mr. Bakani, either to the VDCL or NLTB, in the presence of the accused. Do these remarks, reflect the true and accurate over-view of financial mayhem that PCX was experiencing from its inception? Whilst been well aware of this PCX financial situation why the accused did not come forward to disclose what he sees and hears in PCX side? Was it because he genuinely and honestly believed that he is acting for right reasons or was he acting with any "improper motive"?
    
19. These are some of the issues arise from the evidence transpired during the trial. Did the accused have any knowledge about the exact "financial situation", if not the "financial crisis", that PCX was going through from its inception? When dealing with this aspect of "knowledge", the following decided case authorities shed a lot of light.
    
20. Lord Denning MR, inCiaMaritima San Basilio SA v Oceanus Mutual Underwriting Association (Bermuda) Ltd. The Eurysthenes [1976] 3 All ER 243 at 251, [1977] QB 49 at 68):
    

"And when I speak of knowledge, I mean not only positive knowledge, but also the sort of knowledge expressed in the phrase "turning a blind eye". If a man, suspicious of the truth, turns a blind eye to it, and refrains from inquiry – so that he should not know it for certain – then he is to be regarded as knowing the truth. This "turning a blind eye" is far more blameworthy than mere negligence. Negligence in not knowing the truth is not equivalent to knowledge of it."

The Roskill LJ commented on actual knowledge as:

"I add the word "believed" to cover the man who deliberately turns a blind eye to what he believes to be true in order to avoid obtaining certain knowledge of the truth."

21. In the case of Agip(Africa) Ltd v. Jackson [1992] 4 All ER 385, [1990] Ch 265, Millet J analyzed 'knowledge' in following terms;
    

"Knowledge may be proved affirmatively or inferred from circumstances. The various mental states which may be involved were analyzed by Peter Gibson J in [SocieteGenerale pour Favoriser le Developpement du Commerce et de I'Industrie en France SA (1982) [1992] 4 All ER 161 at 235, [1993] 1 WLR 509 at 576-577as comprising. "(i) actual knowledge; (ii) willfully shutting one's eyes to the obvious; (iii) willfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; and (v) knowledge of circumstances which would put an honest and reasonable man on inquiry." According to Peter Gibson J, a person in category (ii) or (iii) will be taken to have actual knowledge, while a person in categories (iv) or (v) has constructive notice only. I gratefully adopt the classification but would warn against over refinement or a too ready assumption that categories (iv) and (v) are necessarily cases of constructive notice only. The true distinction is between honesty and dishonesty. It is essentially a jury question. If a man does not draw the obvious inferences or make the obvious inquiries, the question is: why not?"

22. The 'issue' of 'knowledge' is best explained in the above citations. If the existing circumstances show either affirmatively or can be inferred through circumstances that the accused had actual knowledge of the facts or he willfully shut his eyes to the obvious truth or did not make queries, either willingly or recklessly, as expected from a honest and reasonable man, it is the obvious conclusion that he had the 'knowledge' of the existed situation. If somebody continues to exist, within a given scenario, as if like he does not have any 'knowledge' of what is happening around him, whilst everybody else can see the reality, he is undoubtedly having some 'improper motive' to do so. The simple question is as to why he maintained a stoic silence?
    
23. Coming back to this case, as described earlier, the accused could not have been a stranger to his role as the Chairman of VDCL, the "Office" he held in trust of the "Public". It is, indeed, needed at this point of time to properly distinguish the responsibility of a 'Director' who holds a 'Public Office'. His powers and responsibilities as a 'Public Officer' fundamentally derives out of 'public trust'. The 'concept' of 'public trust' is the main elementary component of a functional society. It is the main argument of the 'Social Contract Theory', the philosophical foundation of the modern nation State. The 'Social Contract Theory', which has been contributed by several schools of thoughts, including great philosophers from Socrates to Thomas Hobbes, John Locke and Rousseau expounded that people's moral, political, legal or likewise obligations are dependent upon a contract or an agreement between the people and State. The society surrenders their rights and moral obligations to the State and in return anticipatesprotecting them through good governance. This 'Social Contract' is founded by 'Public Trust', so does the functions of governance been carried out through 'Public Officers'. Thus, it is the concept of 'Public Trust' distinguishes the parameters of the responsibilities of a 'Public Officer'.
    
24. Apart from the 'Public Trust', the accused had a 'Fiduciary Relationship' towards NLTB and VDCL, even though he was wearing the hat of Director in PCX as well. A paragraph from ApenisaTuikoroNaigulevu, Civil Action No. 598 of 2007, JusticeScutt's reference is worth reproducing.
    

"A fiduciary relationship rises where one person has undertaken to act for another in a particular manner in circumstances giving rise to a relationship of trust and confidence. The distinguishing feature of such a relationship is the fiduciary's duty or loyalty. Thus he must act in good faith, he must not profit from his position and he must not place himself in a position where his duty and his interest may conflict: para 6-05 (30th edition – cited in Lawlor v. NBF Asset Management Bank [2001]FJHC 122 (17 August 2001), at 4."

25. Coming back to the point once again, whether or not the accused possessed any 'knowledge' of what was happening within the boundaries of PCX, this court has to answer it affirmatively. Indeed, he must be quite privy to what existed in PCX compound as he was absent only once in ten Board Meetings of PCX held in 2004 and 2005. Then, while possessing the requisite 'knowledge' of 'negative financial status' of PCX, why did he contribute or facilitate on each and every instance of charges, to achieve what PCX anticipated? Why he did not share his 'knowledge' about PCX with NLTB or VDCL? Why he did not break the shackles at least when Mr. Whippy raised his concerns?
    
26. Being a very high competent businessman (according to Mr. Patel) for over decades, did he fail to understand that from its very first business deal with NLTB, PCX was running the show on borrowings through various financial institutions including VDCL, without a proper cash flow? Was he mindful that when PCX was expecting NLTB's first payment in January 2005 as its only income, its borrowings ran up closer to $5 million? Why he did not tell VDCL and NLTB that PCX's original IT scheme is not a success and PCX is moving towards the '3G Wireless Mobile Licence' as an alternative way out?
    
27. It is with all these rational questions, this court has to decide whether the acts of the accused to facilitate the financial facilities of five charges (5) were rational and business investment oriented decisions with a honest belief or not. The answer is quite straight forward. The accused was acting with a 'improper motive' in all material times. It is that improper motive amounts to an abuse of the authority of his office. His actions clearly demonstrate that he simply acted according to his own free will or rather arbitrarily, without honouring to his 'fiduciary duty' towards VDCL and NLTB or the objectives and values of those institutes. The result of the actions of the accused, no doubt have prejudiced the rights of NLTB and Indigenous Fijians. Whatever the money lost, approximately around $5 million, would have been used for the betterment of the concerned parties, had it not been wasted as a result of the accused's arbitrary acts which amounted to abuse of authority of his office.
    
28. The next question arises is as to why the accused acted with an improper motive in such arbitrary manner? Is it for nothing? The moment the acts of facilitation of the accused come out with an 'improper motive' it is reasonably understood that the expected outcome cannot be 'proper'. That is what had happened in this instance. Approving and endorsing of financial assistance requests from PCX, one after the other, had undoubtedly resulted 'gains' to PCX. It managed to survive, continue and may have overcome with its financial hardships at least for the time being. It is mainly, if not solely, because VDCL was continuously pumping money to PCX without been bothered whether PCX is paying back the loan installments and interests of already secured loans. The 'gains' PCX received or achieved by the acts with the improper motives of the accused, cannot justify with simple terms of "why the accused act criminally to provide a gain to PCX, when VDCL held 51%of its shares." Unfortunately, the assessors did not get this point.
    
29. Finally, on elements of the charges, the issue raised by the defence, in relation to Count No. 8, on the 'charge' pertaining to ANZ guarantee for PCX $1 million loan or Overdraft facility, remains unanswered. Defence argued that in terms of section 98 of the Companies Act, the "Charge" has to be registered at the Registrar of Companies within 42 days and as the ANZ failed to do so, then taking off VDCL's $1 million Term Deposit is illegal and could be required to pay back to VDCL liquidators. The crux of this argument is that then it cannot be considered as a 'loss' to VDCL and thus, does not prejudice the rights of NLTB or Indigenous Fijians.
    
30. I do not agree with this argument. Firstly, the "prejudice" stipulated in section 111 of the Penal Code, does not restrict only to a 'monitory prejudice'. Then it is not imperative to show a 'monitory loss' to have a charge of 'Abuse of Office' to be successful. On the other hand, ANZ had a 'Guarantee' by VDCL (Exhibit 130) and 'Surety Acknowledgement' signed by the accused himself on several times. (Exhibit 200 and 212) This shows the intention of VDCL and explains why they did not pursue any legal action against ANZ. And, there is no evidence to say that ANZ acted maliciously in this recovery process, as they relied on their Solicitor's advice and executed the 'Charge' almost after 2 years of the financial facility been granted to PCX, at the end of all the availableoptions been explored. Thus, this argument fails.
    
31. One of the last defence arguments is that PCX failed to continue with their expected course of business and thus failed in loan repayments due to the Military intervention in December 2006. On the face of it, this argument does not carry any weight. The VDCL loans, $2 million loan was due in July 2006, $900,000 loan was due in November 2006, $1 million loan was on a monthly roll over, payable at any time since September 2005 and ANZ's loan facility had already been reaching 2 years by the time the alleged military intervention took place. The accused himself had written a letter to ANZ regarding VDCL's Term Deposit on 21st December 2006 and in fact signed the Surety Acknowledgment according to the renewed ANZ facility on 30th January 2007. (Exhibit 212). In this context, this argument is not logical at all.
    
32. In the light of the above discussed factual and legal basis, I conclude that prosecution did manage to prove all the elements in all five (5) charges against the accused beyond reasonable doubt with the evidence tendered to court, both oral and documentary. The prosecution and defence cases and their arguments were discussed in an abstract manner, as those apply to all the charges and the elements in general. Defence did fail to create any reasonable doubt over the prosecution case. Thus, I am not inclined to accept their version.
    
33. For the sake of completeness of the Judgment, I wish to make a note about the failure of the accused to offer evidence when his defence was called at the end of the prosecution case. I directed the assessor; "That is his right. He is entitled to remain silent and say that the prosecution have not proved their case against him to the required standard. You must not assume he is guilty because he has not given evidence". Then the assessors were further directed; "However you will have to appreciate that the accused has not given evidence at this trial to undermine, contradict or explain the evidence put before you by the prosecution".
    
34. At the end of the prosecution case, the learned defence counsel informed court that the accused will make an unsworn statement from the dock, in terms of section 231 (2) (c) of the Criminal Procedure Decree. When it was informed to him that the said provision is no more in existence and amended by Criminal Procedure (Amendment) Decree No. 12/2010 (Section 4), the learned counsel decided not to call the accused to the witness box. The accused remained silent.
    
35. The English Law in this aspect now governs by section 35 of Criminal Justice and Public Order Act 1994, after the Criminal Evidence Act 1898, section 1 (b) was repealed.
    

Section 35 (2) – Where this subsection applies, the court shall, at the conclusion of the evidence for the prosecution, satisfy itself (in the case of proceedings on indictment, in the presence of the jury) that the accused is aware that the stage has been reached at which evidence can be given for the defence and that he can, if he wishes, give evidence and that, if he chooses not to give evidence, or having been sworn, without good cause refuses to answer any question, it will be permissible for the court or jury to draw such inferences as appear proper from his failure to give evidence or his refusal, without good cause, to answer any question.

Section 35 (3) – Where this subsection applies, the court or jury, in determining whether the accused is guilty of the offence charged, may draw such inferences as appear proper from the failure of the accused to give evidence or his refusal, without good cause, to answer any question.

Section 35 (4) – This section does not render the accused compellable to give evidence on his own behalf, and he shall accordingly not be guilty of contempt of court by reason of a failure to do so.

36. Murray v DPP [1994] 1 WLR 1, is one of the first instances where House of Lords discussed this issue after the 1994 Act. Lord Slynn in page 11 made the following remarks.
    

"If there is no prima facie case shown by the prosecution there is no case to answer. Equally, if parts of the prosecution case had so little evidential value that they called for no answer, a failure to deal with those specific matters cannot justify an inference of guilt.

On the other hand, if aspects of the evidence taken alone or in combination with other facts clearly call for an explanation which the accused ought to be in a position to give, if an explanation exists, then a failure to give any explanation may as a matter of common sense allow the drawing of an inference that there is no explanation andthat the accused is guilty."

37. Before the CJPC Act 1994 came into operation, somewhat similar approach had been taken by the English Courts in this regards. Bathurst [1968] 2 QB 99, is a good example for that.
    
38. In our jurisdiction there is no such specific legal provision to be taken into account if the accused does not offer evidence at the end of a strong prima facie prosecution case. Nevertheless, it is common sense that if and when some relevant fact in issue is within the specific knowledge of any person, it is he who has to come out with that. For instance, the circumstances under which a person acts and thinks are exclusively with in his knowledge. An accused person, of course, enjoys a statutory right to remain silent in a criminal trial when the defence is called and has no burden cast upon him to prove anything. Yet for all, if the prosecution made out a strong prima facie case against the accused with highly incriminating evidence about his conduct,and when offering explanations to such circumstances are in his own power, he risks the consequence of adverse inferences been drawnabout his conduct, if he does not do so.
    
39. In conclusion, I act in terms of section 237 (4) of the Criminal Procedure Decree and overturn the opinions of the Assessors. The accused is found 'GUILTY' to all five charges of 'Abuse of Office' for the purpose of Gain' contrary to section 111 of the Penal Code as charged.
    
40. As a final note I must thank Mr. Keene, QC, Mr. Blanchflower, SC, and their learned juniors for the co-operation extended to court during this lengthy trial with high professional standards.
    
41. Mr. KD is found 'GUILTY' to 2nd, 4th, 6th, 8th and 10th Counts separately and convicted accordingly.
    
42. That is the judgment of Court.
    

JanakaBandara
Judge

At Suva
Office of the Fiji Independent Commission Against Corruption for the State
Howards Lawyers for the Respondent