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State v Kalaut [2022] PGNC 445; N9808 (4 August 2022)

N9808

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NO. 32 & 33 OF 2021
BETWEEN:
THE STATE

AND:
SYLVESTER KALAUT
AND:
BOB VISIKELA KERRY

Waigani: Manuhu, J.
2022: 1^st, 2^nd, 3^rd & 4^th August

CRIMINAL LAW – Particular offence – Misappropriation – No case to answer submission - Dishonesty – Consideration of evidence.

Cases Cited:
The State v Lasebose Kuriday (1981) N300
Yuants Kaman (1993) N1177
The State v Mumbi Kaniku & Helen Ove (2017) N6565

Counsel:
C. Langtry, for the State.
D. Dotaona, for the Accused.

4^th August, 2022

1. MANUHU, J: The accused, Sylvester Kalaut and Bob Visikela Kerry, were indicted on 7^th March 2022 for allegedly misappropriating a sum of K948,815.67 the property of the State. It was alleged that they, without authority, gained access to a Police Suspense account number 1001492891 with BSP and misappropriated the said amount which were funds specifically intended for pensioners.
   
2. At the close of the prosecution’s case, a no case to answer submission was made by defence counsel. The law on no case to answer submission is well settled. If there is no evidence on any element of the offence, the accused would be discharged. The Court also has the discretion to stop the trial where the evidence “is so dubious or tainted or so obviously lacking in weight or credibility, or has been so discredited in cross-examination, that no reasonable tribunal could safely convict on it”: The State v Lasebose Kuriday (1981) N300.
   
3. In this case, the element of dishonesty is worthy of consideration. It was submitted by the prosecution that there is prima facie evidence of dishonesty when:
   • (a) the accused diverted funds which were for a specific purpose,
     • (b) the accused defied directives from Commissioners Gari Baki and David Manning,
     • (c) the accused lacked authority to change signatories and withdraw funds from the Suspense Account,
     • (d) a detriment has been caused to pensioners.
       
4. The prosecution’s submission is supported by evidence but in order to establish the element of dishonesty, the actual application, use or expenditure is where the smoking gun can be found. If there is no smoking gun, there is no dishonesty. Procedural breaches would raise eye brows but they may not be enough to establish the element of dishonest intent. In the case of Yuants Kaman (1993) N1177, for instance, in his decision on verdict, Woods, J said:
   

“The whole operation of this Grants and Subsidies Appropriation with no proper controls, no accountability nor acquittal, with no guidelines, no costing, no records and no receipts suggests such gross mismanagement of public monies that persons responsible should be removed from any office or position of responsibility, however this is not necessarily criminal misappropriation.”

5. Woods J found Kaman not guilty after finding that there was no evidence that he used the funds and building materials that were purchased with those funds. See also The State v Mumbi Kaniku & Helen Ove (2017) N6565.
   
6. In this case, I hinted during the testimony of prosecution’s witness Ipai (who investigated and compiled a report) that how the funds were used is critical in this case. With due respect, the prosecution focused on procedural breaches and gave little or no attention to the actual use or expenditure, maybe because the expenditures were, after all, genuine.
   
7. The funds in question were used to pay gratuity to two police offices, a nationwide pension audit, nationwide human resource management awareness and, travelling allowances and advances.
   

8. The Ipai Investigation Report shows that funds totaling K48,546 from the Suspense Account were used to pay gratuity to two police officers. There is no evidence that, at the relevant time, the officers concerned were not entitled to gratuity payments. I note that the officers concerned have not been charged. It gives the impression that the two officers were entitled to the payments they received.

9. Funds totaling K519,863.83 from the Suspense Account were also used to carry out a nationwide pension audit. The Audit Report was tendered into evidence by the defence. It was not disputed that over K300,000 was saved by the Police Department after the audit found that some of the pensioners were already deceased. The audit exercise obviously benefitted the Police Department. There is no evidence that it benefited the accused.

10. Also, funds totaling K153,000 from the Suspense Account was used to conduct a human resource management awareness throughout the country. Nobody queried the utility of the awareness. There is no evidence that the awareness benefitted the accused in any way. There is no evidence that the exercise was unnecessary and wasteful. The awareness appears to benefit the Police Department.

11. Funds from the Suspense Account were also used to pay for travelling allowances and advances. Officers who travelled for the audit and awareness exercises would be entitled to travelling allowances. The accused would be entitled to travel allowances if they travelled with other officers to Provinces. There is no evidence of any complaints on the payments of traveling allowances.

12. The accused were heads of the Human Resource Division in the Police Department. Apart from complaints on procedural breaches, lack of authority and defiance of directives, as I have said, no one said anything bad or negative about the expenditures. The expenditures appear to fall within the normal activities of their division, let alone the Police Department.

13. In the circumstances, I find that there is no evidence at this stage that the accused acted dishonestly when they authorized funds from the Suspense Account to be used as outlined above. Even if there is evidence of dishonesty, no reasonable tribunal would be able to convict the accused in all the circumstances.

14. I find ultimately that the accused have no case to answer. I find them not guilty. They are discharged forthwith. Their bail moneys shall be refunded.

Orders accordingly.
________________________________________________________________
Public Prosecutor: Lawyer for the State
Dotaona Lawyers.: Lawyer for the Accused