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State v Longai [2024] PGNC 430; N11088 (14 November 2024)

N11088

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 315 OF 2023

THE STATE

V

ANGELA LONGAI

Waigani: Berrigan J
2024: 14^th November

CRIMINAL LAW – PRACTICE AND PROCEDURE – Section 383A, Criminal Code – Misappropriation – Whether accused dishonestly applied monies belonging to the Community Health Workers Association to her own use – Not guilty.

Cases Cited
Havila Kavo v The State (2015) SC1450
Brian Kindi Law v The State [1987] PNGLR 193
Wartoto v The State (2019) SC1834

References cited
Section 383A of the Criminal Code

Counsel
G Goina, for the State
F Kirriwom, for the Accused

DECISION ON VERDICT

14^th November 2024

1. BERRIGAN J: The accused is charged with misappropriating K30,000 belonging to the Papua New Guinea Community Health Workers Association (CHWA), contrary to s 383A(1)(a)(2)(d), Criminal Code, between 28 and 31 July 2022.
   
2. The accused was the newly appointed National President of the Association. There is no dispute that the accused co-signed a cheque written by the Association’s Treasurer, Matyu Aufa in the sum of K30,000. Mr Aufa cashed the cheque and the monies were given to the accused’s husband, Joseph Ake. The State says both that the monies were intended to be used as consultant fees to conduct review work for the Association and that Joseph Ake was the intended consultant. It alleges, however, that there was no resolution as to the manner in which he was to be paid and that encashment did not follow proper processes such that when the accused cashed the cheque she dishonestly applied the monies to her own use.
   
3. The defence submits that on the State’s own case there was no dishonesty. The executives were fully aware that Mr Ake was the accused’s husband. A resolution was passed not only to engage Mr Ake as a consultant but also to pay him to commence work immediately in accordance with the work plan tabled by the accused at the meeting. The monies were paid and it was only later that the members of the executive committee “backflipped” on their decision when they realised that some members of the association disapproved of it and so “sent their president to the firing squad to take the fall for what was otherwise their combined decision”.
   
4. There is no dispute about the payment of the Association’s monies to Mr Ake. The issue is whether the accused acted dishonestly.
   

Findings of Fact

5. The accused was appointed to the office of President of the Association on 27 April 2022, together with newly appointed members of the executive, Gensa Gini as Senior Vice President, Margret Peter as Junior Vice President and Matyu Aufa as Treasurer. This followed elections in December 2021.
   
6. On 28 July 2022 the accused chaired a National Executive Committee meeting at Paddy’s Hotel in Port Moresby, which was called by James Amuna, the General Secretary of the CHWA of about 20 years, on direction of the Industrial Registrar, Ms Helen Saleu. Also present were the newly appointed executive, together with, at the invite of the accused, four others who attended as regional representatives, and the accused’s husband, Joseph Ake.
   
7. As General Secretary, Mr Amuna, was responsible for taking the minutes. At the meeting, however, the accused asked Mr Amuna to provide a financial report and an annual report. He had no reports or documents to produce. He says that was because the meeting was conducted at short notice. Regardless of whether or not that was the case, there is no dispute that shortly thereafter he left the meeting. He says that the accused asked him to leave. She says that he walked out. In either case he was not present to take the minutes.
   
8. There is some dispute about what, if anything, was resolved at the meeting. I will return to that below.
   
9. The next day the accused, her husband and Mr Aufa went to the bank. Mr Aufa wrote a cheque for cash in the sum of K30,000 from the Association’s account. He co-signed it with the accused, cashed it and gave the proceeds to Mr Ake, who gave Mr Aufa K1000.
   
10. Mr Aufa says that he reported the payment to Mr Amuna following which it appears it was communicated to other members of the Association. Not surprisingly Ms Saleu called in the executive to meet with her to explain what had happened. She directed them to prepare minutes of the meeting and reduce any resolutions into writing.
    
11. On 15 August 2022 the accused, Mr Gini, Mr Aufa and Ms Peter signed the minutes of National Executive Meeting No 1 of 2022 comprising three pages and attaching the Association’s Action Plan August to December 2022. On the same day the accused and other executives signed a letter to Ms Saleu setting out four resolutions extracted from the minutes, including the appointment of regional representatives, the provision of a report by the General Secretary and the standing down or reduction in salaries of other support staff, the adoption of the August to December 2022 Action Plan, which was attached, and the appointment of Mr Ake to implement the plan including the review and rewriting of the Constitution, the development of an organisational structure, the audit of membership, the implementation of the MOA with Provincial Health Authorities 2007 to 2009 and the development of an MOA 2022 to 2023. The minutes and letter were prepared by the accused.
    
12. On 18 August 2022 a complaint purportedly written on behalf of the financial members of the Association was directed to Ms Saleu alleging impropriety in the engagement of Mr Ake and the payment of K30,000 to him in a conflict of interest. It called for the accused to be referred for criminal investigation, amongst other things, and concluded that “Failure to consider and comply with our demands as stipulated will result in mass withdrawal of membership contribution to the National Association”. The State did not call or lead evidence from the maker of the letter.
    
13. On 7 September 2022 Ms Saleu wrote to the accused informing her of her findings in relation to the complaint, including that the engagement of her husband was a conflict of interest, and directing her to repay K30,000 by 31 November 2022.
    
14. On 12 September 2022 Gensa Gini, now Acting President, Ms Peter, Mr Aufa and Mr Amuna met and resolved to refer the accused to police for investigation.
    
15. On 13 September 2022 James Amuna referred the matter to the Fraud Squad for investigation.
    
16. On 28 October 2022 Mr Gini, Mr Aufa, Ms Peter and Mr Amuna met. According to the minutes Mr Amuna said that “the referral of the accused for investigation is done by the financial members throughout the country, adding that the National Executives and staffs are not party to this investigation and that any persons who accuse the above mention would be dealt with accordingly”. The motion was moved by Mr Aufa and seconded by Mr Amuna. On the motion of Mr Amuna, seconded by Ms Peter, the accused was disqualified as President for not attending the meeting.
    
17. At some point thereafter the accused challenged her removal pursuant to judicial review and was reinstated albeit the details are not clear. The outcome of those proceedings and whether or not she was reinstated has no bearing on whether or not she might be found guilty in these proceedings.
    

Consideration

18. The allegations in this case take place against a backdrop of infighting between essentially two groups within the Association, namely Mr Amuna, who is clearly hostile towards the accused, the other members of the executive who attended the meeting of 28 July 2022, namely Mr Gini, Mr Aufa and Ms Peter, and their supporters on one hand and the accused and her supporters on the other, who accuse the former executive of failing to keep proper records, accounts, hold meetings or maintain the industrial awards.
    
19. It is also apparent that neither the accused nor any of the newly appointed members had any experience as members of an executive committee. In addition, there was no proper handover by the former executive and no financial or other reports were available at the time the accused and the other members were appointed. There were no written policies or procedures in place governing the expenditure of the Association’s funds in accordance with s 54, Industrial Organizations Act. The most that Mr Amuna was able to say was that there must be a resolution at an executive meeting for amounts greater than K20,000.
    
20. Let me be clear. The conduct of the accused raises serious concerns. Regardless of whether or not she declared the conflict of interest, the accused’s husband was appointed as a consultant to the Association of which she was president, and in respect of which he, and therefore she as his wife, both stood to benefit from a large amount of Association money.
    
21. There was no proper documentation in support of his engagement. There was no proper procurement process. Given her conflict of interest the accused should have had no involvement whatsoever in recommending or supporting his engagement.
    
22. Having heard and observed the accused in court and having read the minutes and other documents prepared by her it is also clear that the accused took charge of and dominated the meeting of 28 July 2022.
    
23. In addition, neither the accused nor Mr Ake were able to explain in any detail the basis for the consultation fee, other than by reference generally to the proposed work products and his past success at securing more than K7.13m in lost allowances for employees at Port Moresby General Hospital. Neither were able to explain why K30,000 was payable upfront, which was not supported by any requisition, let alone why it was required so urgently, that is the very next morning following the meeting, nor why the cheque was drawn in cash, and for which no receipt or other record was issued, other than the accused’s repeated position that she and the members who had voted for her wanted the work to start immediately to amend the Constitution and update the MOA for the benefit of the members who had missed out on entitlements for years.
    
24. It is also relevant that at the time the K30,000 was paid it represented almost half the funds standing to the credit of the Association. The fact that Mr Ake gave Mr Aufa K1000 of the monies he received only adds to the suspicious nature of the circumstances albeit there was no evidence led to show that the accused was aware of that payment.
    
25. There was no clear evidence about how it came to be that the withdrawal was made the following morning. The accused did not explain and was not cross-examined about it. Mr Ake says that he was simply told by the accused that they were meeting Mr Aufa at the bank but then Mr Aufa called them and asked to be picked up from a bus stop, which they did. He said that Mr Aufa, like the other executives and persons who attended the meeting the night before were excited to have him start work straight away. He said that he remained in the car while the accused and Mr Aufa went into the bank. When Mr Aufa returned he gave Mr Ake K30,000 in cash and said words to the effect: “Brother I signed the cheque, you are the man, now you hurry up to start the work”. Mr Ake thought the money was already his by then and gave him K1000 cash “in the Melanesian way”. Mr Aufa’s evidence was that he was going into town to apply for his NID card which he needed and that the accused contacted him and said she would pick him up and that she and her husband drove to Laloki to pick him up to take him to NID but then took him to the bank and that he just did what he was told. As below, Mr Aufa is an unreliable witness for various reasons and it is very odd that even to this day Mr Aufa is yet to apply for or obtain his NID card.
    
26. Despite the clear irregularities outlined above, ultimately, the State has failed to establish beyond reasonable doubt that the accused acted dishonestly.
    
27. There is no dispute that the accused introduced Mr Ake as her husband to the executive at the meeting on 28 July 2022. The evidence establishes that the meeting resolved to appoint him as consultant and I agree with defence counsel that it appears that included an agreement for Mr Ake to be paid in accordance with the work plan, and for work to start immediately, or at least the State has not excluded the possibility that that was the accused’s understanding.
    
28. Mr Gini confirms that Mr Ake was appointed and that it was agreed that he should be paid. He may have said that the treasurer should check the balance before anything was paid but he also agrees that the accused distributed a workplan at the meeting, which on its face provides for a budget of at least K60,000 for work to commence the following day for revision of the Constitution as well as other work reviewing the organisational structure, updating the membership of the 2007 to 2009 MOA and developing the 2022 to 2023 MOA. There is no dispute that he signed the minutes and a separate letter to Ms Saleu confirming the resolutions on 18 August 2022. He says he did not check the documents before he signed them because he was the last one to sign. I find that very hard to believe. He was the senior vice president. The documents were provided to him by the accused, after serious issues had been raised and they had been summoned by Ms Saleu to explain what had happened. The only reason he could have for not reading the documents in any detail in those circumstances is that he understood what the accused was going to include in them and that in his view it was not controversial.
    
29. Mr Aufu denies that there was any resolution at the meeting but he was an unimpressive witness and his evidence is unreliable for various reasons. He gave two prior statements in November 2022, one to police and one a purported affidavit, expressly stating that all members of the executive agreed to the appointment of Mr Ake. I reject his evidence that the police statement was given in a rush or that it was bulky such that he could not read it before signing it. This is a two page statement taken by police. It contains the usual jurat certifying that it is true and given on the understanding that he would be liable for prosecution for stating anything that is false or misleading. It is an important document as he must have appreciated, particularly given the serious nature of the allegations, his role in giving the monies to Mr Ake, and the fact that he was one of those who resolved to refer the accused to police. What is more he gave another statement in almost identical terms the very same day.
    
30. His oral evidence was also contradictory and unimpressive. Whilst initially maintaining there was no agreement to appoint Mr Ake, when taken through the statement he did then agree that there was a resolution to engage Mr Ake and ultimately conceded that the executives did talk about payment commencing anytime from 28 July. He agreed that the work plan was distributed at the meeting by the accused. He agreed that he and the other executives were summoned by Mrs Saleu and told to reduce the resolutions into writing and that he signed both the letter and minutes of 15 August 2022 in that regard. Again, he says that he was given bulky documents to read and that he was in a rush. I do not accept his evidence. Again, by his own admission he was the person who wrote out the cheque. It was he who personally received K1000 from Mr Ake. He says he was the one who raised the alarm about the matter with Mr Amuna following which he and his fellow executives were summoned to meet the Registrar. It is implausible in those circumstances that he did not read the documents before signing them.
    
31. As for Ms Peter she denied that there was any resolution but she too agreed that the action plan was discussed and that she too signed both the minutes and the letter of 15 August 2022 after meeting with the Registrar. Her evidence as to why she did not read the documents was contradictory and implausible, namely that the documents were bulky, that she was in a rush to go the bank, yet she had the material for about 45 minutes, and that she was scared after seeing the Registrar and so just signed. I think there is some truth in her statement that she was “scared” about the allegations and her involvement in approving the payment and that colours her evidence.
    
32. My impression of both Ms Peter and Mr Aufa in particular is that they were careful to protect their own positions and the fact that they have since been retained as executives following the referral of the accused for investigation despite the fact that they too signed the minutes and resolutions.
    
33. I was initially concerned by the fact that the accused went out to meet the members to have them sign the minutes but I accept her evidence that she did so after she was directed by Ms Saleu to prepare the documents and that there was some urgency in this regard given the obvious concerns raised by Ms Saleu about the payment of the monies to the accused’s husband. I also accept that the accused was essentially locked out of the Association’s office by Mr Amuna and so that meeting there was not really an option.
    
34. The State has also failed to prove that there was no intention for the work to be performed at the time the monies were cashed by Mr Aufa. In spite of the complaint against the accused it appears that Mr Ake did start and continue to do some work even after the allegations were made against the accused albeit access to some of the Association’s documentation was constrained given the complaints against her.
    
35. It is also relevant that on 1 November 2022 the accused posted a notice of an urgent AGM in the newspaper, which was conducted over two days on 11 and 12 November 2022. According to the minutes and attached signatures, 79 members attended, passed various resolutions and elected an entirely new executive in the absence of Mr Amuna, Mr Gini, Mr Aufa and Ms Peter, who were either unaware of the meeting or advised not to attend. According to the minutes of the meeting, Mr Ake presented the revised Constitution and bylaws, which were adopted by the AGM. On 15 November the new executive wrote to the Secretary, Department of Labour and Industrial Relations, reporting on what it said was the first AGM in 28 years and advising him of various resolutions, which, despite everything that had happened, included a resolution to continue the engagement of Mr Ake.
    
36. The accused might rightly be described as obstinate. There were complaints and she had been told by Ms Saleu, also quite rightly, that the engagement of her husband was inappropriate and yet she persisted, openly with other members of the Association in that regard. The fact that a person persists in conduct, even openly, does not mean that it is not dishonest, but in the particular circumstances of this case it appears to me that, even now, the accused does not have any appreciation of the reason for and the nature of proper procedures for the procurement or engagement of a consultant and that it was, and remains, inappropriate for her to be involved in any way in that process.
    
37. In all the circumstances the State has failed to establish that at the time the monies were given to Mr Ake the accused acted dishonestly, or that she knew that she was acting dishonestly, or that she aided someone believing that they were acting dishonestly: Brian Kindi Lawi v The State [1987] PNGLR 183; Wartoto v The State (2019) SC1834 adopting and applying Havila Kavo (supra).
    
38. Accordingly, the accused must be acquitted.
    

Verdict accordingly.
________________________________________________________________
Public Prosecutor: Lawyers for the State
Public Solicitor: Lawyers for the Accused