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State v Sarahu [2025] PGNC 189; N11317 (4 June 2025)

N11317

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

CR (FC) 212 OF 2023

STATE

V

PETER SARAHU

GOROKA: WAWUN-KUVI, J
9, 12-16 MAY, 4 JUNE 2025

CRIMINAL LAW-TRIAL-MISAPPROPRIATION- MENS REA-HONEST CLAIM OF RIGHT- Whether the accused was dishonest?

Funds were deposited into the Seventh Day Adventist Aviation for flight services for the constituency of Unavi Local Level Government in Lufa District, Eastern Highlands Province for the year 2020. The accused was the President of the Unavi Local Level Government. Using the funds held with Seventh Day Adventist Aviation, the accused chartered several flights to and from Goroka to the District. With permission from the District Administrator and LLG Manager he had SDA Aviation give him K15,000.00. In total, K31, 939.00 of the funds were used by the accused. The State charged him with misappropriation, alleging that he accessed the funds and applied it to his own use and the use of another. The accused says that all funds including the K15,000 were put to the use of the Unavi people.

Held:

1. A claim of right under s 23(2) of the Criminal Code entails a belief as to the right to property or money in the hands of another. The defence removes criminal responsibility or liability for an act involving property carried out in the exercise of a genuine claim of right and without any intention to defraud: Kaya & Kaman v State [2020] SC2026 following Wartoto v The State [2019] SC1834.
   
2. The accused has no obligation to exclude the defence of an honest claim of right. To require him to exclude the defence, would amount to shifting the burden of proof: Wartoto v The State [2019] SC 1834 and Kaya & Kaman v State [2020] SC2026
   
3. Once the evidence presents a viable case of honest claim of right for consideration, the prosecution bears the legal onus of negativing beyond a reasonable doubt: Wartoto v The State [2019] SC 1834 and Kaya & Kaman v State [2020] SC 2026.
   
4. There is no dispute that the accused as president was entitled to use the funds to charter flights.
   
5. There is nothing in the prosecution’s evidence which shows that the charter of the flights by the accused were for his personal benefit.
   
6. As for the K15,000 refund, he had obtained the approval of the District Administrator and the District Manager. There was no charge or allegation of conspiracy. The K15, 000 was used to transport ward members and their constituents by road back to Unavi during the COVID-19 pandemic when all flights were grounded and they were stranded in Goroka.
   
7. The evidence fairly raises an honest claim of right. The prosecution has not discharged its burden to negate it. A verdict of not guilty is returned.
   

Cases cited
Japele v State [2023] PGSC 100; SC2454
Kaya v State [2020] PGSC 145; SC2026
Ikalom & Anor v The State (2019) SC1888
Wartoto v The State [2019] SC1834
Francis Potape v The State (2015) SC1613
Kavo v The State [2015] SC1450
Pari and Kaupa v The State [1993] PNGLR 173
Brian Kindi Lawi v The State [1987] PNGLR 183
John Jaminan v The State (No 2) [1983] PNGLR 318
State v Amoko-Amoko [1981] PNGLR 373
State v Nataemo Wanu [1977] PNGLR 152
Sebulon Wat v Peter Kari [1975] PNGLR 325.
R v Hobart Magalu [1974] PNGLR 188
Magr v R [1969-70] PNGLR 165
State v Namaliu [2020] PGNC 75; N8284
State v Felix Luke Simon (2020) N8183
State v Emma Ombu Karakabo (2012) N4897
State v Bruno Tanfa Chilong (2009) N3578
State v Henry Gorea [1996] PNGLR 141
Tiden v Tokavanamur-Topaparik [1967-1968] PNGLR 231

Counsel
J Norma for the State
K Pilisa for the accused

VERDICT

1. WAWUN-KUVI, J: The prosecution charges Peter Sarahu (accused) of Maimafu Village, Lufa, Eastern Highlands Province, with dishonestly applying to his use, monies in the amount of K31, 939.00, the property of the Independent State of Papua New Guinea contravening 383A(1)(a)(2)(d) of the Criminal Code.
   
2. In support of the charge the State alleged that the Unavi Local Level Government of Lufa District is accessible by plane only. It has nine (9) wards. The accused is the president, and the complainants are the ward members. There are six airstrips at LLG. There was a council meeting in December 2019 where the accused and the ward members had a meeting to discuss the provincial grants for 2020. An amount K48, 000 was to be placed with Seventh Adventist Aviation for flight services to and from Goroka for ward members business. State alleges that sometime between April 2020 and July 2021, accused used his position to apply the monies to his own use and the use of another. He used funds totaling K39, 939.00 without approval.
   

Onus of Proof

3. The State bears the burden of proving its case beyond reasonable doubt and disproving any defence properly raised beyond a reasonable doubt.
   

The Elements

4. The Supreme Court in Kavo v The State [2015] SC1450 and Wartoto v The State [2019] SC1834 identified the following elements for misappropriation under section 383A(1)(a):
   • (1) application
   • (2) to own use or the use of another
   • (3) property
   • (4) belonging to another dishonestly.

The Evidence

5. The prosecution called five ward members of Unavi LLG, namely, Steven Balebu, Eka Asause, Samuel Seke, Jack Planner Aniga and Korren Kutsie. It tendered several documents exhibited from S1 to S17.
   
6. The accused gave sworn evidence in his defence.
   

Issue(s)

7. There is no dispute that the accused chartered flights and that he caused to be withdrawn K15, 000 from the SDA Adventist Aviation.
   

The Law

8. The accused invokes the defence of an honest claim of right under Section 23(2) of the Criminal Code. Consequently, the only element in dispute is dishonesty.
   
9. In determining whether there was dishonesty I start off by considering the defence of an honest claim of right under s 23(2) of the Criminal Code. I take this approach for two reasons: (1) dishonesty is a common element in both the charge of misappropriation and the defence of an honest claim of right, and (2) an honest claim of right is a complete defence.
   
10. A claim of right under s 23(2) entails a belief as to the right to property or money in the hands of another. The defence removes criminal responsibility or liability for an act involving property carried out in the exercise of a genuine claim of right and without any intention to defraud: see and Kaya & Kaman v State [2020] SC2026 following Wartoto v The State [2019] SC1834.
    
11. In Wartoto v The State [2019] SC1834 later adopted and followed in Kaya & Kaman v State [2020] SC2026, the Supreme Court established the following principles:
    
    • The evidence must be sufficient to support an honest claim of right. Once established, the legal burden or the onus is on the prosecution to negate the claim: Magr v R [1969-70] PNGLR 165 and Francis Potape v The State (2015) SC1613.
    • Given that it is an excusatory defence, the prosecution must disprove or exclude it beyond any reasonable doubt: John Jaminan v The State (No 2) [1983] PNGLR 318.
    • The Court must make findings of fact on the evidence and decide whether it accepts that the accused possessed an honest belief.
    • Depending on the assessment, the conclusion could be that the evidence was either convincing or unconvincing, and the proponent could not refute it. The mere assertion by the accused of an honest belief is not sufficient. It requires further scrutiny. Such evidence may be unconvincing, as demonstrated in cases such as R v Hobart Magalu [1974] PNGLR 188 and The State v Henry Gorea [1996] PNGLR 141. However, in cases like State v Bruno Tanfa Chilong (2009) N3578 and State v Emma Ombu Karakabo (2012) N4897, the prosecution could not disprove the compelling evidence of an honest claim of right.
    • Once the Court accepts that the accused acted under an honest claim to the property without an intent to defraud, he is entitled to an acquittal as the defence is a complete defence.
      
12. Additionally:
    • The claim must be honest. It does not need to be reasonable: see Tiden v Tokavanamur-Topaparik [1967-1968] PNGLR 231 and Sebulon Wat v Peter Kari [1975] PNGLR 325.
    • However, an unreasonable claim is less likely to be believed as being genuine or honest: see State v Felix Luke Simon (2020) N8183
    • The claim must be for a legal entitlement, not a moral one: see Ikalom & Anor v The State (2019) SC1888 adopting MacLeod v R [2003] HCA 24; (2003) 214 CLR 230 and State v Felix Luke Simon (2020) N8183 applying R v Pollard [1962] QWN 13, 29; R v Bernhard [1938] 2 KB 264, 270; and Harris v Harrison (1963) Crim LR 497.

Consideration

13. The evidence sufficiently established that the accused was entitled to use the funds held with SDA Aviation for flight charters in his capacity as president. The State, while accepting that he is entitled to use the funds held with SDA Aviation, contends that he used all the funds for his benefit, depleting the account and leaving no money for the other ward councillors.
    
14. The State called several ward members to testify, but aside from Steven Balebu, none of them verified the accounts themselves. They repeated what Steven Balebu told them. They were not shown the flight manifests to confirm if any of the individuals were related to the accused, and no evidence was presented to establish the accused's relationship with those on the manifest.
    
15. Furthermore, the State did not call any witnesses from SDA Aviation, and no financial documents were submitted as part of its case. The State failed to provide evidence on the funds held with SDA Aviation, the extent of the accused's usage of those funds, or the specific purpose for which they were used. In a case where an individual is entitled to use the funds, such as in this instance, it was insufficient for the State to merely present the manifests and ask the Court to infer guilt.
    
16. The State also did not call witnesses from the district administration, the district development authority, or the local government office, nor did it provide any documentary evidence regarding the purpose of the funds.
    
17. The State did not call the other councillors who had airstrips in their wards to give evidence; instead, it called only two. The other councillors that were called had no airstrips, and their wards were accessible by road, contrary to the State's allegations.
    
18. The State did not provide the meeting minutes because it could not produce the author of those minutes to confirm its authenticity. Even if it was tendered and even if I accept that it was agreed that ward councillors were to use the funds, these were State funds that were allocated for a purpose. Whatever the resolution, it had to be consistent with the purpose for which the money was allocated. As previously discussed, the State did not present any evidence on the source of the funds.
    
19. The extent of the State’s evidence is limited to Steven Balebu, who expressed frustration after being informed that there were no funds left to charter a plane. He then shared this information with the other ward councillors, who subsequently reported the accused to the police. The arresting officer contacted SDA Aviation for documents but did not inquire with the District or LLG about the funds and whether those charter flights were consistent with the purpose of the funds.
    
20. In his evidence, the accused stated that on one of the flights, he brought the mining warden to the LLG to address the people about the mine in Lufa. On another flight, he brought then-Governor Peter Numu with the mining warden. The flight manifest marked as S11 supports the accused's evidence. When Mr. Norma cross-examined him about the other passengers accompanying Governor Numu, he clarified that they were police officers escorting the governor. The State lacked evidence to rebut this.
    
21. Regarding the flight chartered by Gilbert Kusiamo, the accused explained that he approved the charter because Kusiamo had assisted in bringing the mining warden, and the coffee bags belonged to the people in the LLG. Again, there was no evidence to disprove this claim.
    
22. The State did not present the other flight manifests to its witnesses and did not cross-examine the accused on those manifests. It appears that the crux of the State's case was that he should have left some funds for the other ward councillors.
    
23. Considering that the accused was the president and was authorized to use the funds, and since there is no evidence indicating that the flights served the personal interests of the accused or his relatives, I am not convinced that the State has met its burden of proof.
    
24. On the allegation that the accused misappropriated K15,000.00, both the State's evidence and the accused's version show that it was the District Manager who wrote the letter for the refund, not the accused. The accused explained that during the COVID-19 pandemic when flights were grounded, he and several ward councillors, along with their constituents, found themselves stranded in Goroka. He approached SDA Aviation to seek a refund, but the accountant declined his request and instructed him to obtain approval. He then went to the District Office. The District Administrator and the Manager authorised the refund. The LLG manager sent a letter granting permission to withdraw the money, which he used to hire vehicles and provide food money for the ward members and their constituents.
    
25. The State did not charge the accused with conspiracy or make any allegations in that regard. Based on the available evidence, it appears that the accused withdrew the funds with proper authorisation from the District and LLG Office. The State did not present any evidence to disprove this claim, which was adequately raised in the evidence.
    
26. Finally, the State failed to provide evidence on how it derived K31,939.00, as identified by Mr. Pilisa. Additionally, while the State claimed that funds were allocated in 2019 for the 2020 fiscal year, most of the submitted manifests were from 2021. Logically, government funds are allocated for a fiscal year. The documents were obtained by the Arresting Officer who cannot explain them. Without any evidence from SDA Aviation, the LLG Office and the District Office, I can only conclude that all the manifests, except for two, fall outside of the allegations.
    
27. The burden of proof always rests with the State, and the accused is not required to prove his innocence. It was the State's responsibility to call relevant witnesses and produce pertinent evidence.
    
28. The prosecution has not negated the accused claim of right. Given that it is an exculpatory defence, a verdict of not guilty is returned.
    

Orders

29. The Orders of the Court are:
    • (1) The accused, having been charged with one count of misappropriation contrary to section 383A(1)(a)(2)(d) of the Criminal Code is acquitted and is discharged from the indictment.
    • (2) Bail and any paid sureties are refunded.
    • (3) The CR(FC) file is closed.
    • (4) The BA file is closed.

________________________________________________________________
Lawyer for the State: The Public Prosecutor
Lawyers for the accused: Pilisa Lawyers