N11483

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS (POC) NO 2 OF 2025

IN THE MATTER OF SECTION 32, 63 AND OTHER RELATED PROVISIONS OF THE PROCEEDS OF CRIME ACT 2022

BETWEEN
ACTING PUBLIC PROSECUTOR
Plaintiff

AND
KATHLEEN RUTH JAMES
First Defendant

RESTRAINING ORDER

WAIGANI: BERRIGAN J
12 SEPTEMBER 2025

PROCEEDS OF CRIME ACT – APPLICATION FOR RESTRAINING ORDER – Section 35, Proceeds of Crimes Act – Application heard ex parte.

PROCEEDS OF CRIME ACT – APPLICATION FOR RESTRAINING ORDER - Section 32, Proceeds of Crimes Act, 2022 – Meaning of “serious offence” - Meaning of “suspicion” – Application may be made on hearsay evidence - Suspicion that the defendant committed serious offences and that the property is the property of the suspect or is the proceeds of the offence(s) and is subject to the suspect’s effective control held on reasonable grounds – No undertaking as to damages required - Application granted.  

The Acting Public Prosecutor applied to restrain property pursuant to s 32 of the Proceeds of Crimes Act 2022. An affidavit was filed by a police officer in support stating that he suspected that Kathleen Ruth James committed offences of obtaining monies by false pretence and misappropriation. Having reviewed materials obtained by ICAC under search warrant he suspects that Kathleen Ruth James is married to the Honourable Don Pomb Polye who was the Minister for Higher Education, Research, Science and Technology and Sports at the relevant time. Furthermore, that the company, Karma Investment Ltd, of which the suspect is sole director and shareholder, received a total of K1.757m from the PNG Sports Foundation (PNGSF) between 6 February 2024 and 6 May 2024 pursuant to contracts for goods and services which were never delivered. Instead, the funds were applied to the personal bank account of the suspect and on one occasion to a bank account to which her husband is the sole signatory.

Held 

(1)	Given the mandatory terms of s 35(2) of the Proceeds of Crimes Act 2022 and the nature of the application, the application was heard ex parte upon the request of the Acting Public Prosecutor.
(2)	Suspicion is a conjecture or surmise where proof is lacking or a slight opinion without sufficient evidence but held on some factual basis: The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 adopting George v Rockett (1990) 170 CLR 104, citing Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948 and Queensland Bacon v Rees (1966) 115 CLR 266, 303. 
(3)	There are reasonable grounds to suspect that the defendant has committed the offences alleged. The offences are “serious offences” as defined: ss 3 and 32 of the Proceeds of Crimes Act 2022. There are reasonable grounds to suspect that the property sought to be restrained in the defendant’s personal bank account is the property of the defendant. There are reasonable grounds to suspect that the property to be restrained in the bank account of Karma Investments Limited is property which is subject to the effective control of the defendant and is the proceeds of the alleged offences: s 32 of the Proceeds of Crimes Act 2022. 

Application granted.

Cases cited
The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 
George v Rockett (1990) 170 CLR 104
Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948
Queensland Bacon v Rees (1966) 115 CLR 266, 303

Counsel	
T Kametan for the plaintiff

DECISION

1.	BERRIGAN J: The Acting Public Prosecutor has commenced proceedings against Kathleen Ruth James seeking orders for restraint, forfeiture and pecuniary penalty. The Acting Public Prosecutor now moves a motion seeking orders pursuant to s 32 of the Proceeds of Crimes Act 2022 (POCA) to restrain:

a)	all funds standing to the credit of BSP account No 0000318038 in the name of Kathleen Ruth James as at the date of this application (including any interest on that account); and
b)	all funds standing to the credit of BSP account No 0000244588 in the name of Karma Investment Limited as at the date of this application (including any interest on that account).

Ex parte hearing

2.	The Plaintiff seeks to have the motion heard ex parte pursuant to s 35(2) of the POCA which provides:

35.         PUBLIC PROSECUTOR MAY APPLY FOR A RESTRAINING ORDER.
(1)   The Public Prosecutor may apply to the Court for a restraining order.
 
(2)   An application for a restraining order shall be heard ex parte if the Public Prosecutor requests the Court to do so.	
 
3.	Section 35(2) is in mandatory terms. Given the nature of the application it is also appropriate in my view. Accordingly, the application is heard ex parte.

Application for restraining order under s 32
4.	The substantive application is made under s 32, POCA:

32.         RESTRAINING ORDERS ON PEOPLE SUSPECTED OF COMMITTING SERIOUS OFFENCES.

(1)   The Court shall order that –
(a)   a property must not be disposed of or otherwise dealt with by any person; and
(b)   a property must not be disposed of or otherwise dealt with by any person except in the manner and circumstance specified in the order; and
(c)   the Public Prosecutor applies for the order; and
(d)   there are reasonable grounds to suspect that -
(i)           a person has committed a serious offence; and
(ii)         the offence was committed before, on or after the day the application was made; and
(e)   the requirements in Subsection (3) have been met; and
(f)   the Court is satisfied that the police officer who made the affidavit mentioned in Subsection (3) holds the suspicion or suspicions mentioned in the affidavit, on reasonable grounds.
 
(2)   The order must specify, as property that must not be disposed of or otherwise dealt with, the property mentioned in the application for the order, to the extent that the Court is satisfied that there are reasonable grounds to suspect that the property is any one or more of the following:
(a)   all or specified property of the suspect; and
(b)   all property of the suspect other than specified property; and
(c)   specified property of another person (whether or not that other person's identity is known) that is subject to the effective control of the suspect; and
(d)   specified property of another person (whether or not that other person's identity is known) that became tainted property because of the offence.
 
(3)   The application for the order must be supported by an affidavit of a police officer stating -
(a)   that the police officer suspects that the suspect committed the offence within the seven years preceding the application, or since the application was made; and
(b)   if the application is to restrain property of a person other than the suspect - that the police officer suspects that –
(i)     the property is subject to the effective control of the suspect; or
(ii)  the property is proceeds of the offence; and
(c)   the grounds on which the police officer holds the suspicions.
 
(4)   The reasonable grounds referred to in Subsection (l)(d), need not be based on a finding as to the commission of a particular serious offence.
 
(5)   The Court shall make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.
 
(6)   The Court may specify that a restraining order covers property that is acquired by the suspect after the Court makes the order, but if the Court does not make that specification in the order, property acquired by the suspect after the Court makes the order is not covered by the order.	

5.	A “serious offence” is defined under s 3 of the POCA as “an indictable offence or a foreign indictable offence for which the maximum penalty is death or imprisonment for at least three years or an offence prescribed in the regulations”.

6.	The application must be supported by an affidavit of a police officer in accordance with s 32(3), POCA. 

7.	An “application for a restraining order or an interim restraining order may be made by the Public Prosecutor on the basis of hearsay evidence and the Court can be satisfied that the suspicion of the police officer is held on reasonable grounds even if it is based on hearsay evidence”: s 276, POCA.

8.	The application in this case is supported by an affidavit of a police officer, Detective Constable Jeremiah Kalap, of the Royal Papua New Guinea Constabulary, currently attached to the National Fraud and Anti-Corruption Directorate (NFACD), stating that he suspects that the suspect, Kathleen Ruth James, committed several offences:  obtaining goods by false pretence in an unspecified sum contrary to s 404(1)(a), Criminal Code and four counts of misappropriating K250,000, K250,000, K628,924.72 and K628,924.72, respectively, belonging to the State, contrary to s 383A(1)(a), Criminal Code. 

9.	The offences alleged are indictable offences. An offence against s404(1)(a) attracts a maximum penalty of five years of imprisonment. The misappropriation offences are offences against s 383A(1)(a)(2)(d) of the Criminal Code and attract a maximum of ten years of imprisonment in each case. The offences are therefore “serious offences” for the purpose of s 3, POCA.

10.	DC Kalap sets out the basis of his suspicion(s) in his affidavit which is supported by documentary materials obtained by the Independent Commission Against Corruption (ICAC) under search warrant. 

11.	It is suspected that the offences took place within the last seven years: see s 32(1)(d)(ii). In addition to the property held in the suspect’s personal bank account it is suspected that the property in the account of Karma Investments Ltd is subject to the effective control of the suspect and is the proceeds of the offences for the purpose of 32(3)(a)(b)(c), POCA. 

12.	In summary, having reviewed materials obtained by ICAC under search warrant DC Kalap believes that the suspect, Kathleen Ruth James, is married to the Honourable Don Pomb Polye, who was the Minister for Higher Education, Research, Science and Technology and Sports at the relevant time. Furthermore, that the company, Karma Investment Ltd, of which she is sole director and shareholder, received a total of K1.757m from the PNG Sports Foundation (PNGSF) between 6 February 2024 and 6 May 2024 pursuant to contracts for goods and services which were never delivered. Instead, the funds were applied to the personal bank account of the suspect and on one occasion to a bank account to which her husband is the sole signatory.

13.	In particular, DC Kalap believes that Karma Investments Limited was incorporated and registered on 20 September 2023 and is solely owned and directed by the suspect. Its principal activities are recorded as real estate, renting and business services.

14.	The suspect, through her company, Karma Investment Ltd entered into four contracts for the provision of services to the PNGSF namely an: Agreement for Services for PNG Sports Social Survey and Mapping for an unspecified sum; Agreement for Services for Procurement of Sports Equipment and Consumables for K500,000; Agreement for Services for International Procurement of Sports Equipment for Oiyarep Stadium – Mendi, SHP for K650,000; and Agreement for Services for International Procurement of Sports Equipment & Consumables for Satellite Venues - Mendi, SHP for K850,000.

15.	Invoices totalling K1,757,849.44 were issued between 2 January 2024 and 3 May 2024 by Karma Investment Ltd, following which cheques were drawn from the account of PNGSF in favour of Karma Investment Ltd totalling K1,757,849.44 and deposited to the BSP account in its name, of which the suspect is the sole signatory.  In particular: cheque number 717078 dated 2 January in the sum of K250,000; cheque number 717079 dated 2 January 2024 in the sum of K250,000; cheque number 081759 dated 3 May 2024 in the sum of K628,924.72; and cheque number 081760 dated 2 May 2024 in the sum of K628,924.72. 

16.	Thereafter the monies were transferred from Karma Investment Ltd’s account to the suspect’s personal BSP bank account number 0000318038 and on one occasion, on 5 June 2024, to BSP account number 15325712 in the name of Sabath In, in the sum of K100,000, to which the sole signatory is the suspect’s husband.  Between 1 March and 31 December 2024 numerous transfers were made from the suspect’s personal bank account totalling K473,846.39. Monies were also transferred to the bank accounts of the suspect’s children. 

17.	As at 2 September 2025:

a)	BSP account number 0000318038 in the name of Kathleen James had a balance of K120,611.97; and
b)	BSP account number 0000244588 in the name of Karma Investment Ltd had a balance of K180,712.93.

18.	Whilst not stated in the affidavit I accept that the funds are currently subject to a freezing direction by the Police Commissioner under s 22 of the Act. 

19.	Where a statute prescribes that there must be “reasonable grounds” for a state of mind, it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. It is not necessary for the court to entertain the relevant suspicion or belief itself. It is only necessary for it to be satisfied that there are reasonable grounds for entertaining the suspicion or belief. The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 at [110 to 113] adopting George v Rockett (1990) 170 CLR 104 at [7] and [8].

20.	Suspicion is a “state of conjecture or surmise where proof is lacking” or a “slight opinion without sufficient evidence”: The State v Paul Paraka (Decision on Admission of Bank Records), supra, adopting George v Rockett (1990) 170 CLR 104 at [14], citing Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948 and Queensland Bacon v Rees (1966) 115 CLR 266, 303. There must, however, be some factual basis for the conjecture, surmise or opinion: George v Rockett at [14]. 

21.	A suspicion is of a lower standard than a belief as to which the High Court in George v Rockett said at [14]:

“The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.”

22.	The reasonable grounds to suspect that a person has committed a serious offence need not be based on a finding as to the commission of a particular serious offence: s 32(4) POCA.  The offences alleged in this case are expressly identified in DC Kalap’s affidavit. 

23.	It appears to be alleged that the entire scheme was fraudulent, hence the suspect obtained all of the monies from PNGSF by false pretence. The misappropriation offences correspond with the amounts paid by PNGSF to Karma Investment Ltd. It is unclear whether it is alleged that the suspect committed each of the misappropriation offences at the time the monies were applied to Karma Investment Limited’s account, by aiding, counselling or procuring the offences, or at the time the monies were applied to her personal bank account. It matters not for the purposes of this application. There are a number of ways the misappropriation offence(s) could have been characterised.

24.	I am satisfied that there are reasonable grounds to suspect that the suspect has committed the serious offences alleged. I am satisfied that there are reasonable grounds to suspect that the property sought to be restrained in her personal bank account is the property of the suspect. I am further satisfied that the property sought to be restrained in the bank account of Karma Investment Limited is subject to the effective control of the suspect and is the proceeds of the alleged offence(s): s 32 of the Proceeds of Crimes Act 2022. 

25.	Before making a restraining order, the Court may require the State to give an undertaking about the payment of damages or costs, or both, in relation to the making and execution of the order, pursuant to s 48, POCA. The undertaking is given by the Attorney-General. None is provided at this stage. It does not appear to me that one is required given that the monies will be held securely by a reputable bank and that there is provision for the Court to make such ancillary orders pursuant to s 50 of the Act if necessary or appropriate.

26.	Accordingly, being satisfied that the Acting Public Prosecutor applies for the order, and that: there are reasonable grounds to suspect that the suspect has committed a serious offence or offences, before this application was made; and that the requirements in 32(3) have been met, namely that the application is supported by an affidavit by a police officer stating that he suspects that the suspect committed the offences within seven years preceding the application; and the application is to restrain property both of the suspect, and of Karma Investment Ltd, in respect of which the property is suspected of being the proceeds of the offences alleged and subject to the effective control of the suspect; and that DC Kalap holds the suspicions on reasonable grounds for the reasons set out in his affidavit, I make the following orders:

Orders

(1)	Pursuant to section 32 and 35(2) of the Proceeds of Crime Act 2022 (the Act) the application is heard ex parte.

(2)	Pursuant to section 32 of the Act, the property specified in the schedule must not be disposed of or otherwise dealt with by any person, being namely:

a.	all funds standing to the credit of BSP Account No 0000318038 in the name of Kathleen Ruth James as at today’s date, including any interest on that account; and
b.	all funds standing to the credit of BSP Account No 0000244588 in the name of Karma Investment Limited as at today’s date, including any interest on that account.

(3)	Subject to section 57 of the Act, this order shall operate until further order.

(4)	Notice of this order is to be given to:

a.	Kathleen Ruth James at her residential address;
b.	Karma Investment Ltd at its registered office; and
c.	BSP Financial Group Ltd (BSP) at its head office in Port Moresby.

(5)	Time for sealing is abridged to the time of settlement by this Court which shall take place forthwith.
_______________________________________________________________
Lawyer for the plaintiff:		Public Prosecutor