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State v Apkas [2019] PGNC 176; N7884 (17 June 2019)

N7884

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 39 of 2019

THE STATE

V

WANPIS APKAS

Waigani: Berrigan J
2019: 9, 20 May and 17 June

CRIMINAL LAW – Unlawful demand for payment – “Extortion” – with intent to extort - demand – in order to obtain compliance - unlawfully threaten.

Cases Cited:
Papua New Guinea Cases

The State v Akilo Parakua and Another (2011) N4199
The State v Molkawul No. 1 (2015) N6257

Overseas Cases

References cited
Section 390A of the Criminal Code (Ch. 262) (the Criminal Code)

Counsel:

Ms. T. Aihi and Ms. K. Kametan, for the State
Ms. P. Tamutai and Mr. Ules. J, for the Accused

DECISION ON VERDICT

17. June, 2019
    

1. BERRIGAN J: The accused is charged with one count of unlawfully demanding payment contrary to Section 390A of the Criminal Code (Ch. 262) (the Criminal Code), an offence which might commonly be referred to as “extortion”.

2. It is alleged that the accused “with intent to extort payment from MASIP Engineering and Consultant Limited demanded monies in the sum of ... K30,000 and in order to obtain compliance with the demand threatened that payment for seven outstanding projects will not be made and any future contracts will not be awarded to MASIP Engineering and Consultant Limited” (MASIP).

3. At the time the accused was a Field Engineer with Telekom PNG (Telekom).

4. It is not in dispute, and I find, that a total of K30,000 was paid into the accused’s personal bank account by MASIP, an electrical engineering company contracted by Telekom. The accused denies, however, that any unlawful demand for payment was ever made and says that the monies were received as a refund with interest for goods and assistance provided.

State’s Case

5. The principal witness in this case was Timothy Kapak. He gave evidence that he was the Managing Director of MASIP, an electrical engineering company, based in Mt Hagen, which provides contracting services to the power industry, including generator installation and the installation and servicing of electrical line and related work.

6. In about 2016 the company was contracted by Telekom to undertake work on mobile network towers at seven sites in Western Highlands Province. The company submitted its company profile as part of the tender process and was engaged through the accused, whom the witness identified in court. The company worked on the projects for about a year pursuant to a contract worth about K136,000.

7. In November 2017 the complainant received a phone call from the accused demanding K30,000. The accused told the complainant that if the monies were not paid, the company would be terminated and would not get any future work. He also told the complainant that the company’s outstanding payments would be delayed for a long time. At the time payment for seven (7) projects was outstanding.

8. For that reason, the complainant arranged for monies to be paid by MASIP to the accused. Bank records show that K15,000 was deposited into the accused’s personal bank account with Bank of South Pacific (BSP) by MASIP on 17 November 2017. A further K15,000 was deposited by the company on 23 November 2017. See the following bank records and related documents, admitted by consent:

(a) Exhibit A: Statement of Asher Waffi, Legal Officer, BSP dated 6 May 2019;
(b) Exhibit B: Search Warrant dated 31 May 2018;
(c) Exhibit C: Bank South Pacific Bank Statement in the name of Wanpis Apkas for Account Number 7008955788 for the period 29 September to 29 December 2017;
(d) Exhibit D: Customer Account Opening details in the name of Apkas Wanpis;
(e) Exhibit E: Purchase of Bank Cheque application - Cheque Number 1243134 dated 23 November 2017;
(f) Exhibit F: Bank South Pacific Bank Cheque Number 1243314 payable to Wanpis Apkas in the sum of K15,000 dated 23 November 2017;
(g) Exhibit G: Purchase of Bank Cheque application for Cheque Number 12433094 dated 17 November 2017;
(h) Exhibit H: Bank South Pacific Bank Cheque Number 1243094 payable to Wanpis Apkas in the sum of K15,000 dated 17 November 2017; and
(i) Exhibit I: Copies of Bank South Pacific deposit slips dated 17 November and 23 November 2017 both in the sum of K15,000.

9. Two further contracts were subsequently awarded to MASIP by Telekom in 2018. The complainant believed that this was because K30,000 was paid to the accused.

10. The complainant first met the accused in about June 2016 but he did not ask the accused to assist his technical team, nor did his team receive any assistance from the accused.

11. He also agreed that he met with the accused in a hotel in Mt Hagen in September 2017 but he did not ask the accused to provide two credit metres from PNG Power at Hohola. Credit metres read power consumption. The total cost of one, including installation, testing fees and servicing is between K5000 and K6000. Whilst the complainant also agreed that the accused did buy him two credit metres, he strongly denied that he asked for them or that the monies deposited to the accused’s personal bank account were in payment for the metres and/or any assistance.

12. Two officers from Telekom also gave evidence. Eddie Kaidang, Team Leader, Power Projects, has served with Telekom for 33 years. He said that the accused was attached to the Mobile Projects Team and was responsible for coordinating and overseeing mobile projects. Upon the approval of scope of works by PNG Power, the accused was responsible for engaging contractors, overseeing projects to ensure that work was done to both Telekom and PNG Power standards and, upon completion, releasing payment upon agreed terms.

13. The accused was the “link” between Telekom and PNG Power for the mobile projects. He was the person responsible for obtaining quotes from potential contractors and for submitting them to management for consideration, together with a memo of recommendation depending on the applicant’s experience and reputation. He agreed that the process for awarding contracts was lengthy and that it was practically impossible for one person to make a decision to award a contract but emphasised that in the case of mobile projects, the Manager for Mobile Projects would make the decision based on the recommendation from the Field Engineer responsible.

14. Telekom did not purchase or pay for materials used by contractors to conduct projects. Such costs were included in the quote or contract price.

15. Samson Kamalap, the Manager of the Telekom Mobile Projects Team confirmed that whilst the accused was not a member of the team, as such, he was responsible for assisting it. His roles and responsibilities included design and scoping, the conduct of site surveys with contractors, the submission of quotes for the procurement of contractors, overseeing work and certifying or commissioning the completion of work. He was also involved in the settlement of payments. Other than where a mobilisation fee was paid upfront, payment was only made when the work was commissioned.

16. He recalled that MASIP was engaged by Telekom to complete certain projects. The accused submitted the relevant materials as part of the tender process and was the officer responsible for liaising with the company and vetting its contracts.

17. He agreed that there were a number of steps and different officers within Telekom involved in the awarding of contracts, which could take between 1 and 2 months. He did not agree that the Field Engineer did not have any influence on who would be paid or when. Commissioning required both PNG Power and Telekom to certify completion of the project. The Field Engineer responsible for the site was responsible for signing off on behalf of Telekom. Without certification there could be no payment.

18. At the close of the State case the defence made an application to have the accused acquitted on the basis that there was no case to answer. Having heard and observed the witnesses and having regard to the documentary evidence tendered by the State, it was my view that applying the well-established principles outlined in The State v Roka Pep (1983) PNGLR 19 adopting and applying The State v Paul Kundi Rape (1976) PNGLR 96 the accused had a case to answer.

Defence Case

19. The accused gave evidence in his defence. He is an electrical engineer by profession and commenced employment with Telekom PNG in 2016 as a graduate engineer. He became a probationary Field Engineer in 2017. His duties included supervising and coordinating contractors for mobile projects and providing reports to his managers and team leaders.

20. The process involved in awarding contracts at Telekom was a lengthy one. His responsibility was just to get quotes for the Project Manager. The quotes then went through a number of senior officers and finally to a committee for approval before purchase orders were issued by Telekom’s Programme Manager and Contracting Officer.

21. He was the officer responsible for certifying the completion of works for projects he supervised.

22. He came to know the complainant when MASIP submitted its company profile and details as part of the tender process, for vetting by management. Two (2) contracts were awarded to MASIP in April 2017 and another five (5) in September 2017. He believed that the projects were completed in October or November 2017.

23. He first physically met the complainant in July 2017. The complainant approached him in Mt Hagen and invited him to his office. The complainant was conducting many other projects outside of Telekom and asked for the accused’s assistance.

24. He met the complainant again on 20 September 2017. The complainant called him and asked to meet at a hotel where the complainant asked him to provide two credit metres and materials. He purchased the items through his personal bank account No. 1014719205 at PNG Power in Hohola on the basis that the complainant would refund him from the projects.

25. A copy of a one-page document entitled “Account Transaction List” for a Kundu Standard Account No. 1014719205 showing a withdrawal at PNG Power, Hohola in the sum of K10,105.60 on 29 September 2017 was admitted, without objection, as Defence Exhibit 1. There is nothing to indicate the name in which the account is held but the accused says it is his and the State did not attempt to challenge this.

26. According to the accused the vetting and payment process following the submission of invoices at Telekom was lengthy, went through several senior officers and could take “between 2 to 3 months, 6 months or even a year”. He had no impact on when payment was made, and was only responsible for submitting the invoices.

27. Two separate payments were made by Telekom for the 7 projects. According to an email he was copied in on, the first payment was for K65,000 or more and was deposited to the company’s account on 15 November 2017.

28. He never threatened to stop payment to MASIP or to injure the complainant or his properties if he was not paid K30,000. He was a junior officer and did not have powers and authorities.

Assessment of witnesses

29. I found both of the State witnesses from Telekom to be credible and reliable. Both were very experienced officers. Their evidence was essentially about the systems and processes in place at Telekom, and the roles and responsibilities of the accused. It was largely uncontested.

30. More significantly, I also found the State’s principal witness, Timothy Kapak, to be credible and reliable. He gave a clear account of the telephone conversation he had with the accused. He answered without hesitation and did not falter under cross-examination. He was very open about the fact that he did not report the matter until he was approached by Telekom. He agreed with a number of propositions put to him by defence counsel in general terms but was consistent in his version of events.

31. I will return to key parts of his evidence below.

32. I found the accused to be an unimpressive witness. This is based on a combination of my assessment of his demeanour when giving evidence together with the content of that evidence.

33. He tried to distance himself from the roles and responsibilities of a Field Engineer. Some of the timeframes he provided for approvals and payments appeared inflated when compared to the evidence given by his two senior officers. He had detailed knowledge of the names and positions of senior officers involved in the approval and payment process at Telekom and yet struggled at times to answer simple questions about the factual allegations before the Court.

34. I will also return to some specific aspects of his evidence below.

35. Nevertheless, I make it clear that the accused gave evidence although he was not obliged to do so. By entering the witness box and giving evidence he did not take upon himself any obligation to prove anything in this trial.

Elements of the Offence

36. Section 390A of the Criminal Code provides as follows (emphasis added):

A person who, with intent to extort or gain any thing, payment, or compensation from any person –

(j) demands the thing, payment or compensation; and
(k) in order to obtain compliance with the demand –

1. causes or threatens to cause injury to any person or damage to any property; or
2. does or threatens to do any act which renders, or is likely to render any public road, bridge, navigable river or navigable channel, natural or artificial, impassable or less safe for travelling or conveying property; or
3. otherwise unlawfully threatens or intimidates any person,
   

is guilty of a crime.

37. As observed by Cannings J in The State v Akilo Parakua and Another (2011) N4199, there are a number of potential formulations available under s. 390A of the Criminal Code and the terms of the indictment will dictate what must be proven by the State.

38. Unlike the situation in Parakua, however, and contrary to the defence submission, it is not alleged in this case that the accused actually caused injury to persons and/or damage to property.

39. Having regard to the terms of the indictment, the elements of the offence in this case are that the accused:

(l) with intent to extort payment from any person;
(m) demanded payment; and
(n) unlawfully threatened or intimidated any person;
(o) in order to obtain compliance with the demand.

Demands payment

40. The first question to be determined is whether the accused demanded payment in the sum of K30,000 from MASIP.

41. The defence submits that there is no evidence of a demand in this case. It asks the Court to distinguish the case from: Parakua where the two accused demanded compensation in the presence of a group of their relatives who had come to town to support them; and from The State v Molkawul No. 1 (2015) N6257 in which the accused, a Police Station Commander, had written a letter of demand on official Royal Papua New Guinea Constabulary letterhead after taking the complainant to the police station.

42. It is worth observing here that not every demand will, of itself, be unlawful. Demands for payment are very often properly made, including for instance by financial services and the providers of goods and services. It is only when a demand is made together with the other elements proscribed that the conduct becomes criminal for the purposes of s. 390A of the Criminal Code.

43. Nor is it necessary for the demand to be made in any particular form. It is, of course, possible to imagine cases where a demand will be made through a gesture or other conduct. In any event, the question in this case is whether the accused orally demanded K30,000 during a telephone conversation with MASIP’s Managing Director in November 2017.

44. There was no issue in this case as to whether or not the complainant recognised the accused’s voice. According to both the complainant and the accused, the accused was responsible for supervising the complainant’s company’s work and the two were in regular contact via telephone call. The complainant was asked to confirm during cross-examination that the accused was the only person he dealt with regarding the contracts, and that at the time they had a good relationship. Similarly, the accused’s record of interview confirmed that communication often took place via telephone: Exhibit J, Question and Answer 44 to 49.

45. Rather, the accused denies entirely that there was ever any demand.

46. As stated above, I found the complainant to be a credible and reliable witness and I find that he did receive a phone call from the accused in November 2017 demanding payment of K30,000.

47. The fact that K30,000 was deposited to the personal bank account of the accused by MASIP only serves to strengthen my finding.

48. To be clear I don’t accept the accused’s evidence that there was never any demand. Nor do I accept his evidence that the complainant asked him to provide two credit metres, or that the complainant told him that he would refund the cost of the credit metres and/or other assistance and that he, the accused, simply accepted the arrangement.

49. The complainant was very open about the fact that the accused provided the two credit metres but maintained that he had not sought them or otherwise made any arrangements with the accused about them. The accused’s evidence about the credit metres was difficult to follow. It was unclear when the credit metres were actually provided to the complainant or for what purpose. The evidence from the Telekom officers, which was consistent with that of the complainant, was that the contractor was responsible for providing all materials under a contract. In examination in chief the accused said that two earlier projects had been delayed and so he had to provide the metres for the purposes of meeting “the deadline”. In cross-examination, despite being asked several times, the accused struggled to explain, however, why he did not tell his employers about the credit metres he purchased. Eventually he said he just wanted to get the job done. The suggestion that MASIP was behind schedule or needed the metres to complete the Telekom projects was not clearly put to the complainant.

50. The accused also struggled to explain with any consistency on what basis a total of K30,000 was paid. It was variously described as a refund for the credit metres, or for the credit metres “and materials”, as well a “refund” for other earlier assistance by the accused, as well as an unspecified amount of interest. At one point in the record of interview, the accused also referred to it as repayment of “capital” (Exhibit J, Question and Answer 58). In the record of interview other unspecified materials were purportedly purchased from “Hardwares, Esco, Brian Bell, and PNG Power Offices”: Exhibit J, Question and Answer 54. There was no evidence in the trial, however, about the other materials purchased at those locations or anywhere else.

51. In summary, I find the accused’s evidence that the monies were a refund of about K10,000 for the credit metres together with an unsolicited interest or other payment, for assistance and/or other materials, of almost K20,000 implausible.

52. I am satisfied beyond reasonable doubt that the accused demanded payment of K30,000.

Unlawfully threatens any person

53. The State must also prove that the accused unlawfully threatened a person.

54. The complainant gave evidence that at the time the demand was made the accused told him that unless the monies were paid the company would be terminated and would not get any future work, and that payments due to the company would be delayed for a long time. At the time payment for seven projects was outstanding. I accept his evidence.

55. The defence submitted that the complainant should not be believed because the first payment was made on 17 November and therefore after MASIP received its first payment of K65,000 on 15 November 2017.

56. Firstly, I find it difficult to believe that the accused now recalls that the first contractual payment of K65,000 or more was made to MASIP on 15 November when he could not recall at the time of his interview, almost a year ago, how much MASIP was paid or when the payments were made: see Exhibit J, Question and Answer 59, 66 and 67.

57. Putting that aside, the complainant gave evidence that the demand was received before the outstanding monies under MASIP’s contract had been paid by Telekom. By itself, it makes sense to me that the company would pay the demand once it had received payment itself. This is particularly so in this case, however, where the first payment from Telekom was only a partial payment and where the threat was directed not just to the payment of the existing contract but to the awarding of future contracts as well.

58. The defence also submits that the complainant should not be believed because the accused never had the authority to delay payment or prevent the awarding of contracts.

59. By all accounts, including the accused’s supervisors, the complainant and even the accused himself, the accused was the one responsible for coordinating and supervising mobile projects. He was the principal point of contact for potential contractors during the tender process, and was also responsible, with a representative from PNG Power, for certifying completion of projects for payment purposes. See also Exhibit J, Question and Answer 35 and 36. The accused clearly had the ability to influence whether or not MASIP would be recommended for future contracts and the timing of its payments.

60. That is not directly to the point, however. A person may make an unlawful threat even though they have no immediate ability to carry it out, for example, by putting an unloaded gun to another person’s head. The question for the purpose of s. 390A of the Criminal Code is not whether the accused intended to carry out the threat, as such, but whether he intended to obtain compliance with the demand by the threat, and in order to extort payment.

61. I have, however, considered the submission when assessing the complainant’s credibility in this case. The fact that he readily agreed in cross-examination that a field engineer would not have the power to singlehandedly determine these matters again went to support his credibility in my view. It is a fairly obvious point but, as the evidence of everyone concerned demonstrates, it does not mean that the accused did not have significant influence.

62. In my view the complainant’s evidence was convincing. He willingly agreed that he did not report the matter at the time and that he only did so in response to inquiries by Telekom. In response to a question from the Court he said that he didn’t report because he was “thinking it was a normal part of the work we do ... like appreciation” except for the large amounts involved and the threat of delayed payments and denied contracts. Or in other words, the unfortunate reality of doing and keeping business.

63. That is not to say that the complainant did not regard the statement as a threat. He clearly did. It is important to note here, however, that the test is not whether the complainant regarded it as a threat, but whether by an objective standard the accused “unlawfully threatened”.

64. I think the word “threaten” is well understood but for completeness its normal, natural meaning is to “make a threat” or “put at risk”. A threat is a “stated intention to inflict harm”: Oxford Paperback Dictionary & Thesaurus, Oxford University Press, 3^rd Edition, 2009.

65. This was clearly a statement of intention to inflict harm, damage or detriment on the company unless the demand for payment was paid, such that the company’s financial position and future work prospects would be damaged or put at risk.

66. In my view the offence of extortion is intended to capture this sort of conduct just as much as it is to capture someone who demands any thing, payment or compensation by threatening to physically injure a person or property.

67. The threat was also clearly unlawful. It was unlawful for the accused to threaten to stop or delay payments lawfully due under a contract, and to threaten to interfere in any way with future tender processes.

68. I am satisfied beyond reasonable doubt on the evidence before me that the accused unlawfully threatened a person, namely MASIP, in particular that payment for seven outstanding projects would not be made and that future contracts would not be awarded to it. It was an uncontentious fact at the trial that MASIP was an incorporated company and thus a person for the purposes of s. 390A of the Criminal Code.

In order to obtain compliance with the demand

69. I am further satisfied beyond reasonable doubt on the evidence before me that the accused unlawfully threatened MASIP in order to obtain compliance with the demand for K30,000.

With intent to extort payment from another person

70. Finally, the State must prove an intention on the part of the accused to extort payment from another person.

71. Applying its ordinary, natural meaning, “to extort” means “to obtain by force, threats or other unfair means”: Parakua applied. The test is a subjective one.

72. Having regard to the matters outlined above, I am satisfied beyond reasonable doubt that at the time the accused demanded monies in the sum of K30,000, and, in order to obtain compliance with the demand, unlawfully threatened the company, he intended to obtain payment by “force, threat or other unfair means” from a person, namely MASIP.

73. The evidence establishes that MASIP did pay the monies demanded. In this case I am satisfied that the monies were paid in compliance with the threat made by the accused, and not for any other reason.

74. It should be noted, however, that in general terms it is not necessary that the alleged target should actually give way to the threat or force, nor actually hand the thing, payment or compensation over to the person making the demand. The offence will be complete once for the purposes of extorting any thing, payment or compensation from a person, the demand is made, and in order to obtain compliance with the demand, the accused unlawfully threatens or intimidates any person (whether or not the same person).

Conclusion

75. The accused is found guilty of unlawfully demanding payment contrary to Section 390A of the Criminal Code.
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Public Prosecutor: Lawyer for the State
Tamutai Lawyers: Lawyer for the Prisoner