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State v Lavai [2020] PGNC 363; N8660 (22 October 2020)

N8660

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 150 - 156 OF 2020

THE STATE

-v-

ANGELA LAVAI

Kokopo: Batari J
2020: 14^th, 22^nd October

CRIMINAL LAW – Sentence – stealing – offender clerk – stole K219,032.49 property of employer – sentencing guide - mitigating factors – alternative to imprisonment – considerations of – restitution – part of – discretion to order – alternative to imprisonment – use of - sentence of four years suspended on terms appropriate – Criminal Code s. 372 (1) (7)(a).

Cases Cited:

David Kaya and Philip Kaman v The State (2020) SC 2026
Doreen Liprin v The State [2001] PNGLR 6
State v Tardrew [1986] PNGLR 91
The State v Frank Kagai [1987] PNGLR 320
The State v Welford [1986] PNGLR, 531
Wellington Belawa v The State [1988-89] PNGLR, 496

Counsel:

Ms J Batil with Mr A Bray, for the State
Ms JM Ainui, for the accused

DECISION ON SENTENCE

22^nd October, 2020

1. BATARI J: Angela Lavai, on 14/10/20 you were convicted of stealing, pursuant to s. 372 (1), (7)(a) of the Criminal Code after you pleaded guilty. This is your sentence.
   
2. Between 1/4/2010 and 11/8/16 you were employed by Papindo Trading Ltd at its Kokopo Branch, as administrative clerk responsible for daily reports of sales and expenditures and payment of staff wages. You would collect data from the staff wage-timesheet and inflated the wage amounts for each fortnight into the Daily Settlement Report. You would then prepare the staff pay packets. From the inflated amount collected for staff pay, you deducted and kept the extra amounts. During the period in question, you stole in total, K219,032.49.
   

1. SENTENCE: FACTORS FOR CONSIDERATION
   

3. To assist in deliberating your punishment, I have ordered from the Community Based Corrections (CBC) Office, a Pre-Sentence Report (PSR) and Means Assessment Report (MAR). The CBC reports compiled by Senior Provincial Probation Officer; Mr Nigel Amos are commendably comprehensive. They will be read into the records. Both counsel have made references to pertinent matters therein in respect of their submissions on appropriate penalty.
   
4. The often-cited case of, Wellington Belawa v The State [1988-89] PNGLR, 496 sets out several factors recognized by the Supreme Court to guide the discretion of the sentencing authority on misappropriation convictions. In my view, the guidelines have wider application to such like-offences as, stealing in this case. I will adopt the same approach bearing in mind, the suggested starting points of sentence were pitched against the then maximum sentences of five years and 10 years in s. 383A of the Criminal Code. The maximum sentences have now increased to 50 years and life imprisonment under s. 383A (1A) amendment.
   
   1. The amount taken
      
5. The major factor under this head is concerned with proportionality of punishment to the amount taken. Belawa’s case suggests where the amount misappropriated is between:
   
   1. K1 and K1,000, a jail term should rarely be imposed.
   2. K1,000 and K10,000, a jail term of up to two years is appropriate.
   3. K10,000 and K40,000 two to three years imprisonment is appropriate.
   4. K40,000 and K150,000, three to five years imprisonment is appropriate.
      
6. The Supreme Court then did not suggest any sentencing range for amounts over K150,000. In the most recent case of, David Kaya and Philip Kaman v The State (2020) SC2026 (Batari, Mogish, Berrigan, JJ), the Supreme Court suggested the term of five years to seven years is appropriate where the amount is between K100,00 and K500,000.
   
7. I make these observations on the foregoing:
   
   1. The suggested sentencing ranges are now out-of-date due to passage of time;
   2. The scale of penalties was set consistently with the sentence of five years for amounts below K2,000.00 and 10 years for K2,000.00 and upward;
   3. Section 383A (1A) has sorted fraud cases into four types of seriousness. So, a review of the guidelines in Belawa is necessary to realign sentences for the different categories, in line with the new sentencing variables as suggested in, Kaya and Kaman v The State.
      
8. The penalty for stealing under s. 372 of the Criminal Code, is subject to 12 variables, commensurate with the value of the thing stolen or the way in which the thing was stolen. These variables fall into four categories of seriousness as follows:
   
   1. Stealing, commonly known as stealing simpliciter – three years imprisonment, s. 372 (1).
   2. Stealing with the common maximum penalty of seven years imprisonment. In this category are: stealing from the possession of another person etc., (8 types - s. 372(5)); stealing as a public servant, (2 types - s. 372(6)); stealing from employer as clerk or servant (2 types - s. 372(7)); stealing as company director or officer (s. 372(8)); stealing property in possession of the offender (4 types - s. 732 (9)); stealing property of the value of K1,000.00 or upwards (s. 372(10)); stealing rented fixture or chattel in excess of K100.00 value (s. 372(11)); repeated stealing offender (2 types -s. 372 (12)).
   3. Stealing an aircraft – 14 years maximum penalty (s. 372 (4)).
   4. Stealing a testamentary instrument (s. 372 (2)) and stealing a postal item during transmission (s. 372(3)) – maximum penalty of life imprisonment.
      
9. In this case, K219,032.49 was taken. This is a very substantial amount in a stealing case. It calls for a greater punishment. The maximum imprisonment term under s. 372(1) (7) (a) for this type of stealing is seven years. Kaya and Kaman v The State suggests the term of five years to seven years is appropriate where the amount is between K100,000 and K500,000 in a misappropriation case against the prescribed maximum sentence of 10 years. So, setting the range for stealing on a slightly lower scale, a term of three years to six years would be appropriate. The maximum of seven years will be reserved for amounts over K500,000.
   
   2. The degree of trust in the offender including his or her rank
      
10. You occupied a position of trust when you committed the offence. In determining the degree of culpability based on the repository of the trust held, viz, the greater the degree of trust and the higher rank, the greater the degree of culpability, it is clear your position was not high ranking. Still, your employer trusted you with daily dealings of the company finances, not an insignificant role in the overall scheme of the company operations. You breached your position of trust albeit, on a low level, your repeated actions showed a high degree of guilt.
    
    100. The period over which the fraud or thefts have been perpetrated
         
11. Under this head, a chain of dishonest acts spanning over a period implies a confirmed state of “guilty mind”. Conversely, stealing money or credit in a one day “spur of the moment” is unlikely to repeat the act. In this case, there was a trail of falsified accounting records for over six years. It was proof of a confirmed state of guilty mind to defraud the employer. This is not a simple stealing offence or one-off incident. It had become a routine calculating scheme until discovered and your evil enterprise halted.
    
    4. The impact of the offence on the public and public confidence
       
12. Maintenance of public interest, trust and confidence in the formal sector employment under public or private law is the basic consideration here. This factor may be of little or no relevance to your case. But a good relationship of trust between employer and employee is essential for reliable, quality outcomes. When employment is bolstered by strong relationship of trust between employer and employee, master and servant, the organization prospers as a result and there is growth in the local and national economy and more people are employed.
    
13. That means business houses should be able to trust the services of their paid employees. Stealing from business houses has also become too frequent. The impact may not be apparent or immediate. But business houses create employment for the ordinary Papua New Guineans. Stealing from the employer is against the very basis of people’s right to employment and their source of income. Such conduct as seen in this case, is a threat to the lawful transaction of commerce. When business houses closed doors due to dishonest employees syphoning off company properties, workers are put at risk of losing employment, ordinary law-abiding citizens are affected when their only source of livelihood cease to exist.
    
    5. Motive: How money or property dishonestly taken was used
       
14. There is little emphasis before the Court on this aspect. In a carefully prepared submission, diligent counsel would pay some attention to the motive for committing the offence. For instance, the gravity of the dishonest conduct may be reasonably explained where the stolen money, goods, or credit was out of necessity to feed a desperately poor family, medical expenses, or some other worthy cause. If the offender smokes, drinks or gambles, that would point to fraudulent gains being put to wastage and other worthless cause: Belawa’s case.
    
15. You gave some explanation when you spoke of the pressure to meet the family needs and other social obligations. In paragraph 13.3 at page 7 of the PSR, you lamented stealing from the company under persistent pressure from ongoing marital causes, exacerbated by naggings and constant requests from your unemployed husband and relatives for financial assistance with school fees, custom work, medical needs, etc.
    
16. That all sounds too familiar. The notorious fact in a communal Papua New Guinea traditional society is, that one employed member of the family, clan or tribe is expected to extend the benefit of his or her pay-packets to everyone. I sometimes think, this has been, aside from greed, the main underlying cause for the escalation of fraud and corruption cases particularly in urban areas where the only breadwinner turns to stealing under pressure to sustain family members including grown up children and other extended relatives.
    
17. This is an undesirable social affliction but, a genuine concern the Court should consider on the balance of probability with the onus on the offender to give reasonable explanation on the financial difficulties that caused him or her to steal out of necessity.
    
18. To put your case into perspective, you were on a K362.39 fortnightly salary; your unemployed husband who was constantly absence from the family home on some dubious travels depended on your financial support; you had two children in school; the third is married with a child and still living with you; payment of school fees with arrears yet to settle. The pressure on your meagre salary to support your family and under which you faltered to commit the offence is explained and understood in that light. Unfortunately, a deliberate theft against your employer became systematic over the period in question and that is a very serious matter.
    
    6. The effect upon the offender himself or herself
       
19. It is trite, that loss of employment and shame are the usual afflictions on those who steal. There is also lesser opportunity for future employment because a person convicted of stealing is often frowned upon as dishonest and untrusting. It is also common, no law-abiding person in the community approves of anyone who thrives on stealing from others. The offender is usually shunned and experiences stigma and distress. These factors have personal punitive effects which may be considered. In your case, I also take into account, the dent on your good character and self-esteem as a result of your wrongdoing.
    

Restitution

20. Restitution is a common mitigating factor because it restores the victim to the position he or it was in before the commission of the offence. The restitution factor carries more weight if this is made early and before detection or arrest. It goes a long way to addressing the harm and is indicative of genuine remorse and unqualified recognition of wrongdoing: The State v Welford [1986] PNGLR, 531 per Wilson J at p. 256.
    
21. In Belawa, Barnett J said at p. 507; ".. depending on the circumstances of the restitution, (it) may demonstrate remorse and that the prisoner is unlikely to repeat the offence."
    
22. I think the circumstances which his Honour had in mind, include but not limited, to conduct where the prisoner takes the first step to admit his offence, makes restitution prior to his arrest and pleads guilty early following the commission of the offence. This is conduct consistent with genuine contrition and unreserved acknowledgment of wrongdoing.
    
23. You have offered to repay the amount you stole from your finish pay entitlement, your superannuation fund with NASFUND and your bail money refund, a little over K93,000 all up. You have also offered to repay the balance over 84 months or seven years by monthly installments of K1,200. Restitution is a relevant consideration for suspension of sentence to be decided with other factors that have not been included in reducing the sentence from the maximum penalty. I will return to this aspect in the latter part of this judgment.
    

(B) OTHER RELEVANT FACTORS

1. Custody
   

24. You were remanded for sentence on 14 October 2020, a remand period of one week in addition to seven days pre-trial custody. The period may be deducted from the head sentence.
    
    2. Assistance to the Police
       
25. Co-operation with the police by admission of wrongdoing is a mitigating factor because of the time and expenses saved to the State in investigating a difficult case or because it has led to the arrest of the others or the main perpetrator. This factor also supports remorse.
    
    100. Plea of guilty
         
26. You have pleaded guilty early, consistent with your admissions to the police and has shorten Court time to deal with your case. It is settled sentencing policy, that a plea of guilty should result in some discount in practical terms. The outcome in the sentence ought to reflect the advantage in pleading guilty. That advantage can be an incentive itself to plead guilty.
    
27. I will take your guilty plea into account in an apparent fashion so that you must know that your guilty plea has been well appreciated and considered by the Court. This would also encourage other accused persons who genuinely want to plead guilty must do so early, knowing it will help them in their punishment. The discount for your guilty plea will be seen in the term I will shortly impose within the range of three years to six years.
    
    4. Personal circumstances
       
28. Your prior good family background and personal circumstances are canvassed in the PSR. Relevantly, you are supporting an unemployed husband with three children two of whom are in school and the eldest married with a child. Your elderly father is also under your care. Following your charge and whilst waiting for your case, you have usefully pre-occupied your time, sewing and selling merry blouse to maintain your family. This is your first offence. It is submitted, the children’s education may be affected by your incarceration. But then, you should have considered their future wellbeing when you embarked on your evil enterprise.
    
    5. Remorse
       
29. I accept that your expression of remorse is genuine because it followed your early admissions to the police and plea of guilty.
    
    6. Matters of mitigation special to the prisoner: None
       

(C) SENTENCING OPTION: ALTERNATIVES TO IMPRISONMENT

30. I have determined that a term of imprisonment be imposed. Whether the whole or part of the sentence is suspended depends on the circumstances warranting that option.
    
31. In State v Tardrew [1986] PNGLR 91 the Supreme Court has set out three broad considerations in which it may be appropriate to suspend a sentence:
    
    1. whether it will promote general deterrence or rehabilitation of the offender;
    2. whether it will promote repayment or restitution of stolen money or goods;
    3. whether imprisonment would cause an excessive degree of suffering to the offender, for example because of bad physical or mental health.
       
32. The list is not exhaustive. The following practical approach is also relevant and useful when debating the option of alternatives to imprisonment:
    
    1. A pre-sentence custody period is considered sufficient to have driven home to the offender at personal level, the gravity of his or her conduct and the severe restrictions on the rights and freedoms of choices in prison;
    2. If restitution, rehabilitation and reformation have real chance of accomplishment outside prison, the court may take the risk to subject the offender to appropriate measures designed to influence his or her future behavior through community work orders, supervision, treatment or preventive confinement;
    3. The offender is not a threat to the community and shows the potential to redeem his or her past through restorative justice;
    4. The offender is a recommended suitable candidate for probation orders by the Probation Officer.
       
33. In this case, the Probation officer recommends that Angela is a suitable candidate for probation. I am satisfied the recommendation is not overly assessed. The appraisal that Angela is not a threat to society is based on: the non-violent nature of her offence; her attitude after the commission of the offence in admitting her offence and pleading guilty; pre-occupying herself, sewing and selling clothes to sustain her family; willingness to redeem her wrongdoing with the offer to repay the amount she took. That was not a lame offer when taken together with the offer to part with monies she is lawfully entitled to. Too she is now an active leader at her local Church and her short time in custody has no doubt given her valuable lessons and driven home to her at personal level, what she did was serious, and that crime does not pay.
    
34. There is indeed, a strong case to avoid imprisonment. The offender is already on the path of rehabilitation. I am satisfied, suspension of sentence would promote rehabilitation of the offender and payment of restitution. In cases like this one, it is not an act of leniency, but an order made in the community interest: see, The State v Frank Kagai [1987] PNGLR 320.
    
35. In, Doreen Liprin v The State [2001] PNGLR 6, Amet CJ said at p. 11:
    

“I believe it is time to consider seriously whether offences of misappropriation of amounts of this kind warrants custodial sentences. I do not believe so. I believe the Court should be seriously designing alternatives to imprisonment that will achieve the purposes of retribution, restitution and rehabilitation in alternative ways than imprisonment.”

36. Where the offender has made an offer to make restitution, such offer has often been taken as a relevant consideration for suspension of sentence if, an alternative to imprisonment will meet the sentencing objectives as averted to in, Doreen Liprin v The State (supra). The Court must be satisfied the offender has the means and ability to repay the monies stolen and he or she required time and opportunity outside prison to make full restitution.
    
37. In this case, you have proposed to repay the amount taken by installments over a period of seven years. The offer is in my view, unrealistic albeit, genuine. It will cause more hardship and harm to you than necessary.
    
38. I have in that regard, considered whether to order full restitution of the amount taken. I am mindful, that a restitution order in a criminal proceeding is dependent on the means and ability of the offender to pay and whether an alternative to imprisonment as a condition of restitution will meet the sentencing objectives of restorative justice. I also keep in mind; the criminal process is not concerned with debt collecting or payment in lieu of imprisonment or payment to avoid imprisonment. The court has discretion to order full restitution, part-restitution or no restitution. The victim has resort in a civil suit to recover its loss.
    
39. I note, the victim company is obstinate in its demand for full settlement. The management was uncooperative and unforthright with the CBC officer. It paid Angela a meagre salary and were uncompromising. The management did not say, the theft has caused the company huge financial dent, the ship is sinking, so to speak. Papindo Trading Company Ltd is not an SME or a struggling business venture. It is common fact, Papindo is a thriving company as demonstrated by its chain of business locations that has permeated the length and breadth of this nation. So, one may ask, what is K200,000 to a trading giant? This is a pertinent question because the Court must also consider the victim impact statement. There is nothing before the Court on that aspect as I have averted.
    
40. I am inclined to order restitution. Given your personal circumstances, I do not propose to order full restitution. I am disposed to consider the issue of restitution based on genuineness of the offer and the value of sacrifices flowing on therefrom. Where the offender does not have or adequate means and ability to repay the monies or value of the property taken but has offered to forgo any entitlement lawfully due to him or her on account of previous employment and has in addition shown genuine offer to pay full restitution through his or her current endeavors, that is a powerful statement of genuine offer, remorse and unqualified recognition of wrong doing.
    
41. In that case, the sentencing objectives of restitution, rehabilitation and reformation will have a real chance of accomplishment outside prison with appropriate measures designed to influence the offender’s future behaviour. The sentence that I propose to impose should serve both personal and public deterrence aspects of sentencing. It should also warn others who might be like minded, they will expect the same treatment if convicted.
    
42. I have turned to sentencing precedents in similar type stealing in s. 372 of the Criminal Code with the maximum sentence of seven years. The common range is four to seven years with four and five years being the most common where the offence involved substantial amount of money as in this case. In most cases the sentences were wholly suspended.
    

(D) CONCLUSION

43. The amount of money taken in a breach of trust over a long period of time is substantial, warranting a long term of incarceration. The guilty plea at the earliest opportunity, supported by substantial mitigating factors in remorse, cooperation with police and good background warrant substantial reduction from the prescribed maximum penalty. I am of the view that a term of imprisonment is warranted. I propose to impose four years imprisonment.
    
44. I am satisfied; you can be usefully punished with alternative orders to imprisonment. I do not consider you to be a threat to the society and that you should be given the opportunity to payback some of the monies you stole. At the same time, an alternative to imprisonment should help you in your rehabilitation. Such punishment should be beneficial to you, the community and the victim.
    
45. You have little means and ability to make full restitution. But you have offered to forgo your entitlements. I am inclined to consider that offer favorably, I think you should in addition pay a nominal amount towards restitution, consistent with your genuine offer. The victim company will not be disadvantaged. It has recourse in a civil suit for the balance of its claim.
    
46. The sentence of the court is as follows:
    
    1. You are sentenced to four years imprisonment IHL.
       
    2. The sentence is wholly suspended conditional upon restitution orders that:
       
       • (i) Your final entitlements of K13, 841.24 is forfeited to the victim company;
       • (ii) Your superannuation savings with Nambawan Super of K76,511.47 is to be released forthwith and paid by cheque to Papindo Trading Co Ltd;
       • (iii) Within 12 months or by 23 October 2021 you pay Papindo Trading Co. Ltd, in full, K20,000.00 in partial restitution.
         
    3. You shall be released forthwith to serve your sentence on probation on the usual terms under the Probation Act for four years, in addition you shall;
       
       • (i) Within 48 hours, report to the Probation Officer;
       • (ii) Enter into your own recognizance in the sum of K1,000 cash surety to keep the peace and be of good behaviour, in default 12 months imprisonment;
       • (iii) Perform unpaid community work at a work site to be nominated and supervised by the CBC Office for a total of 300 hours;
       • (iv) Not to leave your place of abode or Kokopo or East New Britain Province during your probation period;
       • (v) Have a satisfactory Probation Report submitted to the National Court Registry as required;
         
    4. The CBC Office shall file with the National Court Registry at Kokopo six monthly reports on the progress of your responses to the probation orders with the first report due on or about 22 April 2021.
       
    5. You shall appear in court on the first call-overs for the months of April and October 2021 for reviews of the restitution orders.
       
    6. In the event of a breach of any of the orders herein, you shall be arrested and imprisoned to serve the balance of your suspended sentence.
       

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Public Solicitor: Lawyers for the Accused