SC2333

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCRA NO 15 OF 2018

BETWEEN

MAX KARAPEN
Appellant

AND

THE STATE
Respondent

Waigani: Makail, Berrigan and Tusais, JJ
2022: 25th July and 14th December

CRIMINAL LAW – Appeal against conviction – Three counts of forgery – One count of uttering – Elements of offence of forgery – Elements of offence of uttering – Alteration of company records – Removal of company director and shareholder – Defence of honest claim of right – Criminal Code – Sections 23, 462(1)(b) & 463(2) 

Cases Cited:
Rolf Schubert v the State [1979] PNGLR 66
Ombusu v The State [1996] PNGLR 335
Hariki v The State (2007) SC1320
Guli v The State (2022) SC2272
Kane v State (2022) SC2201
Rolyn Yugari v The State (2018) SC1691
The State v Alex Tongayu (2021) N8810

Legislation cited
Criminal Code

Counsel
Mr. L. Giyomwanauri, for the Appellant
Mr. R. Luman, for the Respondent 

DECISION ON APPEAL

14th December, 2022

1.	BY THE COURT: The appellant was convicted of three counts of forgery, and one count of uttering, contrary to s 462(1)(b) and s 463(2) of the Criminal Code (Ch. 262) (the Code), respectively.  

2.	The complainant, Mek Onguglo, was the sole shareholder and director of a company, Moitaka Development Corporation Limited (MDCL), which was registered with the Investment Promotion Authority (IPA) in 1998.  The purpose of the company was to bring services to the 8 Mile community where the complainant resided. MDCL was the registered proprietor of a State lease on which it built the Moitaka Primary School which was operated by the Department of Education for several years until a dispute arose between it and Mr Onguglo.  Civil proceedings WS 305 of 2011 were instituted by the complainant and MDCL against the Education Department claiming outstanding rentals for the use of the land for the school. 

3.	The State alleged at the trial that the appellant forged three IPA forms, namely Forms 13, 15 and 16, purporting to be: a notice of change of shareholders from the complainant to the appellant and four others; a consent and certification to the changes by the director of the company; and a notice of change of directors and particulars of directors from the complainant to the appellant and four others, respectively.  It alleged that the forms were lodged with the IPA on 24 June 2013 and that as a result the IPA’s records were changed to remove Mr Onguglo as the sole shareholder and director of the company, and appoint the appellant and four others as shareholders and directors in his place.  The appellant was registered as the Chairman of the company’s Board of Directors. The changes were made to the IPA’s records without the knowledge and consent of Mr Onguglo. 

4.	It was further alleged that the appellant then wrote to Young & Williams Lawyers, the lawyers representing MDCL and the complainant in WS 305 of 2011, falsely representing that he was the new Chairman of the Board of Directors of MDCL.  The letter stated that the Board of Directors had resolved on 2 July 2013 not to pursue the claim against the Education Department and instructed Young and Williams Lawyers to discontinue proceedings WS 305 of 2011. The State alleged that by doing so the appellant uttered the false company extract.

5.	It was the appellant’s case that he believed that the complainant obtained the land by fraud. The land and the school should belong to the 8 Mile community. He made the changes to the company records following a resolution at a peace mediation involving members of the 8 Mile community. He acted out of public interest as a concerned citizen and representative of the 8 Mile community.  He was aware, however, that the complainant did not know of or consent to the changes.  Furthermore, that the complainant maintained that he and his company had title over the land and that under no circumstances would he relinquish his rights, and that any challenge had to go to court.

6.	The learned trial judge convicted the appellant on all counts.

Grounds of Appeal

7.	The grounds of appeal were poorly drafted and for the most part abandoned at the hearing.  Counsel for the appellant tried to substitute an entirely new set of new grounds without notice and without seeking leave to amend the notice of appeal. It is well establish that a notice of appeal may only be amended in special circumstances: see Rolf Schubert v the State [1979] PNGLR 66; Ombusu v The State [1996] PNGLR 335; Hariki v The State (2007) SC1320; Guli v The State (2022) SC2272.  No application was made, no exceptional grounds were demonstrated, and we refused to consider the alternative grounds.  

8.	The essential questions remaining on the appeal are whether the verdicts on Counts 1 to 3 on the indictment are unsafe or unsatisfactory in the absence of each of Forms 13, 15 and 16 the subject of the charges.  Furthermore, whether the trial judge erred in rejecting the appellant’s claim that he acted in an honest claim of right when uttering the IPA company extract to Young & Williams Lawyers.   

Counts 1, 2 and 3 - Forgery
9.	There was no dispute at the trial that the company records were altered to remove the complainant as sole shareholder and director of the company.  The evidence that this was done without the knowledge and consent of the complainant was overwhelming. The complainant gave evidence that he did not know of or consent to the changes. The appellant himself admitted that the complainant did not consent to the changes.  The issue was whether the appellant forged IPA Forms 13, 15 and 16 to effect the changes.   

10.	To establish the offence of forgery the prosecution must establish beyond reasonable doubt that the accused:

(i) made a false document;
(ii) knowing it to be false; and
(iii) 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: Kane v State (2022) SC 2201; Rolyn Yugari v The State (2018) SC1691; The State v Alex Tongayu (2021) N8810.

11.	We find no error in the trial judge’s finding that the appellant set out to remove the complainant as the sole director and shareholder of the company, that he knew that the complainant had not agreed to his removal from the company, and that the appellant knew that he had no right to alter the company records, regardless of what was agreed at the community meeting. It is his Honour’s finding that the appellant made the forms the subject of Counts 1, 2 and 3 that we are troubled by. 

12.	The learned trial judge found that the appellant did not dispute his involvement in the forgery and uttering of the Forms 13, 15 and 16.  With respect to the learned trial judge that is not correct. 

13.	The appellant did not admit to signing on behalf of the appellant or making on behalf of the company any of the forms the subject of Counts 1 to 3. He denied all knowledge of the forms. His evidence was that he had taken a bundle of other documents to the IPA and was assisted by Mr Awang, IPA Lawyer. The documents included a report by a police officer who purported to conduct a community mediation at which it was agreed by representatives of the 8 Mile community that the complainant should be removed from the company.  The appellant denied ever filling out the necessary forms and said it was all done by IPA officers with the approval of Alex Tongayu, the Registrar of Companies, who must have consulted the Solicitor General and the Police Commissioner.

14.	The appellant’s evidence was vague and unconvincing but the State was unable to produce the forms the subject of the forgery charges.  It was unable to identify the person responsible for making the changes to the IPA’s computer system.

15.	Alex Tongayu, the Registrar of Companies, gave evidence that upon receiving a complaint from the complainant he conducted an investigation at the IPA. He found that changes had been made to the records of the company without proper supporting material, including a resolution by the shareholders to support the change of directors, together with instruments showing the purported transfer of shares from the complainant to the newly appointed shareholders, which instruments must be lodged by the IPA with the IRC for the payment of stamp duties.  Forms 13, 15 and 16 could not be found.  Mr Tongayu formed a view that the changes were fraudulently made and caused the records to be changed back to reflect the complainant as the sole director and shareholder of the company.  He provided all relevant documents to the police investigator.  He was asked to identify the records he provided to police, but they did not include the relevant forms.  The documents produced in court did not include the subject forms. 

16.	Whilst Mr Tongayu gave evidence that the process usually required that the relevant forms be lodged at the front counter, together with supporting evidence, and that those materials be properly vetted, he conceded that in this case the proper process was not followed.   He was not able to say who at the counter dealt with the lodgement.  He was not able to identify who entered the changes into the IPA’s system.  He identified two officers who were responsible for checking and processing the forms, namely Awong Asang and One Leva.  Their contracts were not renewed by the IPA as a result of their involvement in this matter and they did not give evidence at the trial to explain how the changes were made to the IPA’s records.  

17.	In all of the circumstances it is our view that whilst the process normally required Forms 13, 15 and 16 to be submitted to the IPA to initiate such changes, the State’s evidence did not exclude the possibility that the changes were entered directly into the IPA’s computer system and without the creation or use of any forms, albeit we find no error in his Honour’s finding that the changes were made at the direction of the appellant.  

18.	In other words, it is possible that there were never any forms.  To be clear, it is not the case that the absence of the forms was of itself necessarily fatal to the charges. For instance, if the appellant had made admissions that he made the forms as the complainant or on behalf of the company, then it would have been open to the trial judge to convict in all of the circumstances. 

19.	Furthermore, whilst desirable, it is not the case that a handwriting expert is required to give evidence in every case in which forgery is alleged.  It will depend on the nature of the alleged forgery and the totality of the evidence.  The question in every case is whether the totality of the evidence is sufficient to meet the requisite standard.  We do not understand the Supreme Court’s comments in Kane v The State, supra at [44] to [47] to suggest otherwise.  

20.	In the circumstances, we conclude the State failed to establish beyond reasonable doubt that the appellant “made a false document” in each case or that he aided, counselled or procured another person to do so for the purposes of s7(1)(b)(c) and (d) of the Criminal Code.  We uphold the appeal and quash the convictions on Counts 1, 2 and 3.

Count 4 - Uttering

21.	With respect to Count 4, the appellant contends that his Honour erred in rejecting his claim that he acted in the exercise of an honest claim of right when uttering the company extract.  

22.	Section 463(2) of the Criminal Code creates the offence of uttering:
“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.”
23.	Section 23(2) of the Criminal Code creates the defence of honest claim of right: 
“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.”
24.	The principles regarding an honest claim of right pursuant to s 23(2) of the Criminal Code are well established:  see Wartoto v State (2019) SC1834 and Kaya v The State (2020) SC2026.  It is not necessary to repeat them here.

25.	For our purposes two matters are of particular importance. The first is that the defence is only available with respect to “an offence relating to property”.  Secondly, the accused must honestly believe that he or she is entitled to do what he or she is doing with respect to the property the subject of the charge.  In the case of an alleged forgery or uttering of a document, the property the subject of the charge is the false document: R v Hobart Magalu [1974] PNGLR 188; State v Merimba (2022) N9481 at [85], [94] and [95].    The false document for the purposes of Count 4 was the company extract.  

26.	The learned trial judge rejected the appellant’s defence of honest claim of right.  He found that having regard to the appellant’s education and experience he knew that the peace meeting resolution did not give him the authority or right to alter the company records.  He was advised that the company owned the land on which the school was located and that the company was owned by the complainant.  If he believed that the complainant obtained the land by fraud he was at liberty to report the matter to the police or initiate civil proceedings against the complainant, instead he took the law into his own hands.  

27.	We find no error in the trial judge’s rejection of the appellant’s claim of right. Regardless of whether any forms were used, the appellant knew that the company extract was false, that there had been no transfer of shares by the complainant and no company resolution effecting the changes in directorship.  It was in those circumstances that he uttered the false company extract to Young & Williams Lawyers with the intention that they rely on it as giving him authority to direct them to stop the proceedings when he well knew that he had no such authority. Regardless of whether the appellant believed the complainant acted fraudulently in obtaining the land, he knew that he was not entitled to use the company extract to hold himself out as the new Chairman of the company or to instruct Young & Williams to withdraw the proceedings on that basis. 

28.	The appeal against Count 4 is dismissed.  

CONCLUSION

29.	There was no appeal against sentence.  The learned trial judge sentenced the offender to 7 years of imprisonment on Counts 1 to 3 and 3 years on Count 4, to be served concurrently.  As the appeal against convictions on Counts 1, 2 and 3 are quashed and the appeal against conviction on Court 4 is dismissed, the conviction and sentence for Count 4 are affirmed and the appellant will serve 3 years of imprisonment for Court 4.  

30.	We make the following orders:

(1)	The appeal against conviction for forgery on Counts 1, 2 and 3 is upheld and the convictions and sentences quashed.
(2)	The appeal against conviction for uttering on Count 4 is dismissed and the sentence of 3 years of imprisonment is affirmed. 
(3)	The appropriate warrant of commitment shall issue.
(4)	Bail monies shall be refunded upon production of relevant receipts.
________________________________________________________________
Public Solicitor:     	Lawyer for the Appellant
Public Prosecutor:   	Lawyer for the State