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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
CR (FC) NOS 154-163 OF 2021
THE STATE
V
CECILIA PAKULE & JULIUS PAKULE
Madang: Cannings J
2022: 16th, 17th, 18th November, 21st December,
2023: 26th May, 21st July
CRIMINAL LAW – offences – forgery, Criminal Code, s 462 – fraudulent uttering of false document, Criminal Code, s 463 – obtaining goods by false pretence, Criminal Code, s 404 – misappropriation, Criminal Code, s 383A.
The two accused were each charged with one count of forgery under Criminal Code, s 462(1) (count 1 on indictment), one count of uttering under Criminal Code, s 463(2) (count 2), one count of conspiracy to defraud under Criminal Code s 407(1)(a) (count 3) and one count of obtaining goods by false pretence under Criminal Code s 404(1)(a) (count 4). The second accused was also charged with one count of misappropriation under Criminal Code s 383A(1)(a) (count 5). At the trial the State abandoned the conspiracy charge. The forgery, uttering and false pretence charges related to the role of each accused as director of a company, Core Pacific Drilling (PNG) Ltd with a similar name to that of another company, United Pacific Drilling (PNG) Ltd, owned and controlled by the estranged husband of the first accused and brother-in-law to the second accused. The State alleged: in count 1, that the second accused forged the company profile of United Pacific Drilling (PNG) Ltd by creating a near-replica of that company profile and publishing it on a website in the name of Core Pacific Drilling (PNG) Ltd; in count 2, that the second accused knowingly and fraudulently uttered the company profile of Core Pacific Drilling (PNG) Ltd, which was a false document and under count 4, that the second accused, by falsely pretending to the sole shareholder and director of United Pacific Drilling (PNG) Ltd that he had secured a contract for that company, obtained consumables and equipment owned by that company worth K555,106.07, with intent to defraud. The State invoked s 7(1)(b) of the Criminal Code to allege that the first accused, being a director of Core Pacific Drilling (PNG) Ltd and sister of the second accused, was aware of the operations of Core Pacific Drilling (PNG) Ltd and by omitting to inform her estranged husband of those operations, enabled the second accused to commit the offences the subject of counts 1, 2 and 4 and was also guilty of those offences. The State alleged in count 5 that the second accused dishonestly applied K5,000.00 from the operating account of United Pacific Drilling (PNG) Ltd, by paying that sum to his wife, for no lawful reason.
Held:
(1) The elements of the offence of forgery under s 462(1) in count 1 are that a ‘document, writing or seal’ has been ‘forged’ by the accused. To determine whether a document has been forged, it must be proven, by virtue of s 460(2), that the accused has made a false document, knowing it to be false, with intent that it may be used or acted on as genuine either to the prejudice of any person or with intent that a person, in the belief that it is genuine, be induced to do or refrain from doing any act.
(2) The elements of the offence of uttering under s 463(2) in count 2 are that a false document or writing or a counterfeit seal, has been uttered by the accused, knowingly and fraudulently.
(3) The elements of the offence of obtaining goods by false pretence under s 404(1)(a) in count 4 are that the accused by a false pretence, obtained from another person, any chattel, money or valuable security, with intent to defraud.
(4) The elements of the offence of misappropriation under s 383A(1)(a) in count 5 are that the accused has applied, to their own use or use of another person, property, belonging to another person, dishonestly.
(5) The second accused was not guilty of count 1 (forgery) as the company profile he created for Core Pacific Drilling (PNG) Ltd was not a false document. It was what it purported to be. It did not purport to be a company profile for United Pacific Drilling (PNG) Ltd. It followed that the first accused was also not guilty of count 1.
(6) The second accused was not guilty of count 2 (uttering) as the document that he uttered (company profile for Core Pacific Drilling (PNG) Ltd) was not a false document. It followed that the first accused was also not guilty of count 1.
(7) Both accused were found not guilty of count 3 (conspiracy) as the charge was abandoned.
(8) The second accused was not guilty of count 4 (obtaining goods by false pretence) as he did not obtain ownership of the goods he had by false pretence acquired. It followed that the first accused was also not guilty of count 4.
(9) The second accused was not guilty of count 5 (misappropriation) as there was evidence that he had an honest claim of right to the K5,000.00 he diverted to his wife, giving rise to a defence under s 23(2) of the Criminal Code that was not excluded by the State. The element of dishonesty was not proven.
(10) Both accused were entirely acquitted.
Cases Cited
The following cases are cited in the judgment:
Age v The State [1979] PNGLR 589
Brian Kindi Lawi v The State [1987] PNGLR 183
Havila Kavo v The State (2015) SC1450
Kane v The State (2022) SC2201
Kaya & Kamen v The State (2020) SC2026
The State v Ima (2020) N8676
The State v Tomande (2019) N8030
Wartoto v The State (2019) SC1834
Counsel
D Ambuk, for the State
R Saulep, for the Accused
21st July, 2023
1. CANNINGS J: The two accused, Cecilia Pakule and Julius Pakule, are siblings. They are each charged with:
2. Julius Pakule is also charged with:
3. They pleaded not guilty. At the trial the State abandoned the conspiracy charge (count 3).
4. The forgery, uttering and false pretence charges (counts 1, 2 and 3) relate to their roles as directors of a company, Core Pacific Drilling (PNG) Ltd, with a similar name to that of another company, United Pacific Drilling (PNG) Ltd, owned and controlled by Dr Thomas Kainge, who is the estranged husband of Cecilia Pakule and brother-in-law to Julius Pakule. Dr Kainge is the person who brought these matters to the attention of police.
5. The State alleges:
6. The State invoked s 7(1)(b) of the Criminal Code to allege that Cecilia Pakule, being a director of Core Pacific Drilling (PNG) Ltd and sister of Julius Pakule, was aware of the operations of Core Pacific Drilling (PNG) Ltd and by omitting to inform Dr Kainge of those operations, enabled Julius Pakule to commit the offences the subject of counts 1, 2 and 4 and was also guilty of those offences.
7. The State further alleges:
UNDISPUTED FACTS
8. Several undisputed facts have emerged from the evidence:
Cecilia Pakule and Dr Kainge are both medical doctors. They met at university, formed a relationship and entered into a customary marriage. They have two children, one of whom, Nimel Kainge, was a State witness in this case. They worked as doctors for many years and established businesses together, including in Madang, where they established a bakery business. They have been estranged for several years. These days Dr Cecilia Pakule is a doctor at East Sepik Provincial Hospital, Wewak. Dr Kainge no longer practises as a doctor. He is engaged full time in business in Madang, including being managing director of United Pacific Drilling (PNG) Ltd. He also owns and controls other businesses including Equiplant Hire Ltd. He resides in Madang.
United Pacific Drilling (PNG) Ltd was an established business in the geology and exploration sector when Dr Kainge purchased all shares in the company from its previous owners in 2015.
Julius Pakule is a geologist. He graduated from the University of Papua New Guinea with a BSc (Geology) in 2008. He has worked in the mining sector for various companies since graduation. He was raised in the home of Dr Kainge and Cecilia Pakule. They paid for his education, including his university education. He helped Dr Kainge in the running of United Pacific Drilling (PNG) Ltd, soon after Dr Kainge acquired the company. He later left his employment with Newcrest Mining and the Lihir Gold project and worked full-time with United Pacific Drilling (PNG) Ltd.
In 2017 Cecilia Pakule and Julius Pakule established Core Pacific Drilling (PNG) Ltd. They are each a shareholder and a director.
Julius Pakule created a company profile for Core Pacific Drilling (PNG) Ltd and loaded it on the internet. It is similar to the company profile for United Pacific Drilling (PNG) Ltd, which had been previously loaded on to the internet.
In August 2018, at a time when Julius Pakule still had access to the accounts of United Pacific Drilling (PNG) Ltd, he withdrew K5,000.00 from the operating account of United Pacific Drilling (PNG) Ltd and used it for his family’s purposes.
In December 2019 Julius Pakule secured a contract for Core Pacific Drilling (PNG) Ltd with Water PNG Ltd worth K1 million to undertake drilling for a water project at Tari, Hela Province. He arranged for drilling equipment and various consumables to be shifted from the Madang yard of United Pacific Drilling (PNG) Ltd to Tari for the purpose of that project.
In late 2019 Cecilia Pakule and Julius Pakule had a series of meetings with Dr Kainge and other family members at Madang Resort Hotel to discuss the affairs of United Pacific Drilling (PNG) Ltd and Core Pacific Drilling (PNG) Ltd and to try to resolve the issues and poor relationships that had developed. Those meetings were unsuccessful.
Dr Kainge took his complaints to the police soon afterwards. A criminal investigation ensued. Cecilia Pakule and Julius Pakule were charged. They were committed for trial in 2021.
COUNT 1: FORGERY OF UNITED PACIFIC DRILLING (PNG) LTD COMPANY PROFILE
9. The charge is laid under s 462(1) of the Criminal Code, which states:
A person who forges any document, writing or seal is guilty of an offence that, unless otherwise stated, is a crime.
Penalty: If no other punishment is provided–imprisonment for a term not exceeding three years.
10. The elements of the offence are that:
11. To determine whether a document has been forged, it must be proven, by virtue of s 460(2), that the accused has:
(i) made a false document;
(ii) knowing it to be false;
(iii) with intent that it may be used or acted on as genuine;
(iv) either to the prejudice of any person or with intent that a person, in the belief that it is genuine, be induced to do or refrain from doing any act.
(Kane v The State (2022) SC2201.)
12. The allegation is that Julius Pakule forged the United Pacific Drilling (PNG) Ltd company profile, which was published on a website on the internet, by creating a near-replica for Core Pacific Drilling (PNG) Ltd and publishing it on a website on the internet.
13. The evidence in support of the charge is in the form of images of the two company profiles as published on websites on the internet. The company profiles are very similar in terms of the words and format and font used and photographs that are displayed.
14. Julius Pakule gave evidence that he with the assistance of an Australian web designer created the United Pacific Drilling (PNG) Ltd website and used it as the basis for the Core Pacific Drilling (PNG) Ltd website.
15. As to the elements of the offence, the document in question is the company profile for United Pacific Drilling (PNG) Ltd and the question is whether it has, by publication of a near-replica of that profile in the name of Core Pacific Drilling (PNG) Ltd, been forged. Has Julius Pakule made a false document?
16. I answer that question in the negative. The Core Pacific Drilling (PNG) Ltd company profile, though looking very similar to the United Pacific Drilling (PNG) Ltd company profile, is what it says it is: the company profile for Core Pacific Drilling (PNG) Ltd. It does not purport to be the company profile for United Pacific Drilling (PNG) Ltd or any other company. It is not a false document. It is not a forgery of the United Pacific Drilling (PNG) Ltd company profile.
17. This means that the state of knowledge of Julius Pakule and his intention in creating the company profile for Core Pacific Drilling (PNG) Ltd become irrelevant.
18. The State has failed to prove that Julius Pakule forged the company profile of United Pacific Drilling (PNG) Ltd. He is not guilty of count 1. It follows that Cecilia Pakule is also not guilty of count 1.
COUNT 2: UTTERING OF CORE PACIFIC DRILLING (PNG) LTD COMPANY PROFILE
19. The charge is laid under s 463(2) of the Criminal Code, which states:
A person who knowingly and fraudulently utters a false document or writing, or a counterfeit seal, is guilty of an offence of the same kind and is liable to the same punishment as if he had forged the thing in question.
20. The elements of the offence are that:
21. There is a definition of “utter” in s 1(1) of the Criminal Code:
“utter” means–
(a) use or deal with; or
(b) attempt to use or deal with; or
(c) attempt to induce any person to use, deal with, or act on,
the thing in question.
22. There is a definition of “fraudulently” in s 463(1):
In this section, “fraudulently” means with an intention–
(a) that the thing in question shall be used or acted on as genuine, whether in Papua New Guinea or elsewhere, to the prejudice of some person, whether a particular person or not; or
(b) that some person, whether a particular person or not, will, in the belief that the thing in question is genuine, be induced to do or refrain from doing some act, whether in Papua New Guinea or elsewhere.
23. The allegation is that Julius Pakule uttered a false document, the company profile for Core Pacific Drilling (PNG) Ltd, by publishing it on a website on the internet, and did so knowingly and fraudulently.
24. The allegation obviously fails, as it was found in count 1 that the company profile for Core Pacific Drilling (PNG) Ltd is not a forgery. It is not a false document. This is an essential element of the offence.
25. The State has failed to prove that Julius Pakule uttered a false document. He is not guilty of count 2. It follows that Cecilia Pakule is also not guilty of count 2.
COUNT 3: CONSPIRACY TO DEFRAUD UNITED PACIFIC DRILLING (PNG) LTD OF BUSINESS
26. This charge was abandoned by the State. Both accused are found not guilty of count 3.
COUNT 4: OBTAINING UNITED PACIFIC DRILLING (PNG) LTD CONSUMABLES AND EQUIPMENT WORTH K555,106.07 BY FALSE PRETENCE
27. The charge is laid under s 404(1)(a) of the Criminal Code, which states:
A person who by a false pretence or wilfully false promise, or partly by a false pretence and partly by a wilfully false promise, and with intent to defraud ... obtains from any other person any chattel, money or valuable security ... is guilty of a crime.
Penalty: Imprisonment for a term not exceeding five years.
28. The elements of the offence were explained by Berrigan J in The State v Ima (2020) N8676. The State must prove that the accused has:
29. “False pretence” is defined by s 403(1) of the Code: a representation made by words or otherwise of a matter of fact, past or present, that is false in fact and that the person making it knows to be false or does not believe it to be true. The false representation must be to material existing facts and not a promise to do something in the future or a representation by the representor as to the existence of an intention to do something in the future (Age v The State [1979] PNGLR 589).
30. To “obtain” any chattel, money or valuable security, the accused must obtain ownership and not merely possession of it: Amaiu v The State [1979] PNGLR 576; The State v Tomande (2019) N8030. The property must be obtained as a consequence of the false pretence.
31. Whether there was an intention to defraud is a question of fact to be determined in the circumstances of the particular case.
32. The allegation is that Julius Pakule in December 2019 secured a contract for Core Pacific Drilling (PNG) Ltd with Water PNG Ltd worth K1 million to undertake drilling for a water project at Tari, Hela Province. Core Pacific Drilling (PNG) Ltd did not have the necessary drilling equipment to undertake the project, so he falsely pretended to Dr Kainge that he had arranged contracts for United Pacific Drilling (PNG) Ltd on the Highlands Highway in Jiwaka Province and in Wewak, East Sepik Province. He then arranged for drilling equipment and various consumables to be shifted from the Madang yard of United Pacific Drilling (PNG) Ltd, to Tari, for the purpose of that project.
33. Evidence in support of the charge was in the oral testimony of Dr Kainge, who said that he was unaware of the Tari project or that it was a project for Core Pacific Drilling (PNG) Ltd. Julius Pakule deceived him. He did not authorise the use of United Pacific Drilling (PNG) Ltd’s assets for the Tari project.
34. Five employees of United Pacific Drilling (PNG) Ltd (Morgan Mike, Michael Konge, Kali Koupa, Abi Nick and Nimel Kainge) gave evidence that they also were unaware of the Tari project. They were also unaware of the existence of Core Pacific Drilling (PNG) Ltd. The consumables and equipment were loaded on to trucks at the United Pacific Drilling (PNG) Ltd yard in December 2019 and they thought they were heading to a project on the Highlands Highway in Jiwaka Province. Instead, they were diverted to Tari and still they did not know that it was a project for Core Pacific Drilling (PNG) Ltd. They were confused about what was going on, and there were delays with their pays.
35. Julius Pakule gave evidence that Dr Kainge was fully aware of the Tari project and that it had been awarded to Core Pacific Drilling (PNG) Ltd. United Pacific Drilling (PNG) Ltd could not get the contract for that project as the company could not raise the performance bond insisted on by Water PNG Ltd. Julius Pakule said that United Pacific Drilling (PNG) Ltd was going nowhere and the bank was threatening to foreclose on the loan that had been obtained to purchase the company. His motivation in establishing Core Pacific Drilling (PNG) Ltd was to assist the family in ensuring that the assets and goodwill of United Pacific Drilling (PNG) Ltd were put to good use. It was for the benefit of everyone to set up Core Pacific Drilling (PNG) Ltd.
36. On the question of Dr Kainge’s knowledge of the Tari project, I find it difficult to accept Julius Pakule’s evidence, which is at odds with the evidence of the employees of United Pacific Drilling (PNG) Ltd, all of whom seemed honest witnesses. It is clear from Dr Kainge’s evidence that he was, and still is, genuinely angry with Julius Pakule and with Cecilia Pakule over the establishment of Core Pacific Drilling (PNG) Ltd. He is upset about what he regards as the unauthorised and deceitful use of his company’s assets for the benefit of Core Pacific Drilling (PNG) Ltd.
37. I prefer Dr Kainge’s evidence as to his state of knowledge of the Tari project. I find that Julius Pakule arranged the contract with Water PNG Ltd for the Tari project, and did not tell Dr Kainge about it and did not ask or obtain authorisation from Dr Kainge for use of the assets of United Pacific Drilling (PNG) Ltd. I find that Julius Pakule did not tell the employees of United Pacific Drilling (PNG) Ltd what was happening before the assets were taken out of the yard of United Pacific Drilling (PNG) Ltd. Even when the equipment and consumables arrived at Tari, the true position was not made clear to the employees.
38. As to the elements of the offence, I find that the State has proven beyond reasonable doubt the first, third elements and fourth elements.
39. As to the first element, I am satisfied that Julius Pakule falsely pretended that he was organising a project for United Pacific Drilling (PNG) Ltd on the Highlands Highway. He made a representation by words and conduct of a matter of material fact that was false, which he knew to be false.
40. As to the third element, I am satisfied that the false pretence was made in relation to chattels (the consumables and equipment to the value of K555,106.07.
41. As to the fourth element, the only reasonable inference to draw from the conduct of Julius Pakule is that he was acting secretly and deceptively and with intent to defraud Dr Kainge and United Pacific Drilling (PNG) Ltd.
42. I am not satisfied of the second element – that Julius Pakule “obtained” the chattels the subject of the charge – as there is clear evidence that the chattels were returned to United Pacific Drilling (PNG) Ltd. Julius Pakule and Core Pacific Drilling (PNG) Ltd had the use of the chattels and used them to perform the contract with Water PNG Ltd. But to “obtain” them, it must be proven that the accused acquired ownership not just possession or use of the chattels.
43. Element 2 has not been proven. It is an essential element of the offence. The charge is not proven. The preferable charge might have been misappropriation under s 383A of the Criminal Code. But there is no alternative charge on the indictment.
44. The State has failed to prove that Julius Pakule committed the offence charged in count 4 of the indictment. He is not guilty of count 4. It follows that Cecilia Pakule is also not guilty of count 4.
COUNT 5: MISAPPROPRIATION OF K5,000.00
45. The offence with which Julius Pakule is charged alone is created by s 383A (misappropriation of property) of the Criminal Code, which states:
(1) A person who dishonestly applies to his own use or to the use of another person—
(a) property belonging to another; or
(b) property belonging to him which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person,
is guilty of the crime of misappropriation of property.
(1A) Notwithstanding Subsection (2), an offender guilty of the crime of misappropriation shall be sentenced —
(a) to imprisonment for a term of 50 years without remission and without parole, if the property misappropriated is of a value of K1 million or upwards, but does not exceed K10 million; and
(b) to life imprisonment if the property misappropriated is of a value of K10 million or upwards.
(2) An offender guilty of the crime of misappropriation of property is liable to imprisonment for a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 years:—
(a) where the offender is a director of a company and the property dishonestly applied is company property; or
(b) where the offender is an employee and the property dishonestly applied is the property of his employer; or
(c) where the property dishonestly applied was subject to a trust, direction or condition; or
(d) where the property dishonestly applied is of a value of K2,000.00 or upwards.
(3) For the purposes of this section—
(a) property includes money and all other property real or personal, legal or equitable, including things in action and other intangible property; and
(b) a person's application of property may be dishonest even although he is willing to pay for the property or he intends to restore the property afterwards or to make restitution to the person to whom it belongs or to fulfil his obligations afterwards in respect of the property; and
(c) a person's application of property shall be taken not to be dishonest, except where the property came into his possession or control as trustee or personal representative, if when he applies the property he does not know to whom the property belongs and believes on reasonable grounds that such person cannot be discovered by taking reasonable steps; and
(d) persons to whom property belongs include the owner, any part owner, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender's application of the property, had control of it.
46. Count 5 charges an offence under s 383A(1)(a), which provides:
A person who dishonestly applies to his own use or to the use of another person ... property belonging to another ... is guilty of the crime of misappropriation of property.
47. The elements of this offence, as stated by the Supreme Court in Havila Kavo v The State (2015) SC1450, are that the accused has:
48. The question of whether the accused applied the property “dishonestly” is a question of fact for the trial judge to determine, based on the facts of the case and according to the ordinary standards of reasonable and honest people (Brian Kindi Lawi v The State [1987] PNGLR 183).
49. It is incumbent on the State in cases where there is some evidence that the accused acted with an honest claim of right (a legal entitlement to the property, not just a moral entitlement) to exclude that defence (Wartoto v The State (2019) SC1834, Kaya & Kamen v The State (2020) SC2026).
50. The allegation is that in 2018 when Julius Pakule was employed as manager of United Pacific Drilling (PNG) Ltd, with full access to the office and its facilities and to the accounts of the company, he withdrew K5,000.00 from the company’s operating account and paid it to his wife, Mapune Yon.
51. There is uncontentious evidence that at the relevant time Julius Pakule was employed as manager of the company and that he had full access to the office and the accounts and withdrew K5,000.00 from the operating account and gave it to his wife.
52. Significantly, Julius Pakule gave evidence that he did that as a matter of necessity as the financial affairs of United Pacific Drilling (PNG) Ltd were in a mess, there was little income coming in, the employees including himself were not getting their pay on time and he knew that he was entitled to the money as he had not been paid.
53. As to the elements of the offence, I find that the State has proven elements 1 to 4 beyond reasonable doubt: Julius Pakule applied to the use of his wife, property belonging to United Pacific Drilling (PNG) Ltd.
54. As to element 5, dishonesty, I pause to consider the defence of honest claim of right under s 23(2) of the Criminal Code, which provides:
A person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by him with respect to any property in the exercise of an honest claim of right and without intention to defraud.
55. This defence was not expressly raised but there is evidence that the accused acted with an honest claim of right to the sum of K5,000.00 without an intention to defraud. The State has failed to exclude this defence beyond reasonable doubt. It has failed to prove that Julius Pakule acted dishonestly, which is an essential element of the offence.
56. Julius Pakule is not guilty of count 5.
VERDICT
57. The following verdicts are entered:
The first accused, Cecilia Pakule:
count 1: forgery, s 462(1): not guilty;
count 2: uttering, s 463(2): not guilty;
count 3: conspiracy to defraud, s 407(1)(a): not guilty; and
count 4: obtaining goods by false pretence, s 404(1)(a): not guilty.
The second accused, Julius Pakule:
count 1: forgery, s 462(1): not guilty;
count 2: uttering, s 463(2): not guilty;
count 3: conspiracy to defraud, s 407(1)(a): not guilty;
count 4: obtaining goods by false pretence, s 404(1)(a): not guilty; and
count 5: misappropriation, s 383A(1)(a): not guilty.
__________________________________________________________________
Public Prosecutor: Lawyers for the State
Saulep Lawyers: Lawyers for the Accused
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