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Police v Key [2016] WSSC 149 (17 August 2016)

SUPREME COURT OF SAMOA
Police v Key [2016] WSSC 149

IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

BETWEEN:

P O L I C E
Informant

AND:

FALIMA KEY, female of Alamagoto.
Defendant

Counsels:
L Su’a-Mailo and L Sio for Informant
A Su’a and T Tuioti for Defendant

Hearing: 15-17 June 2016

Decision: 17 August 2016

JUDGEMENT OF TUATAGALOA J

• I reserved judgment at the end of the evidence and this is that judgment in writing.

The Charges:

• The Defendant, Falima Key is charged with 15 counts of theft as a servant contrary to s.161(1)(a) and s.165(e) and 14 corresponding charges of false accounting contrary to s.198(1) (a) all of the Crimes Act 2013.

The Evidence:

• The defendant was employed as cashier by Samoa Breweries Limited (SBL). As cashier she received orders and payments from customers. She is alleged to have stolen payments made by customers to SBL and have falsified the customers’ accounts by way of adjustments.
• The defendant is presumed innocent until proven guilty and she is not obligated to give evidence or to prove her innocence. It is the prosecution that must provide evidence to prove that the defendant is guilty beyond reasonable doubt. In this case the defendant did not give evidence.
• The prosecution called 8 witnesses, 5 of whom are or were employees of Samoa Breweries Limited (SBL) and 3 are customers. The evidence by the prosecution:

Accounting System

• Savaii Fiu was the Accountant in 2014 and he also looked after and maintained the accounting system (SageAccPac) used by the company. He said every employee has his/her own password and username to access the system. Under the SageAccPac are various modules and except for him who has access to all the modules the employees have access to only the modules specific to their job. For example, Susana Tagaloa in accounts receivable will have access to the AR module. Falima Key as cashier has access to the Receipting module. He and the senior accountant at the time, Nicola Schuster also had access to the Receipting module. He was not sure whether Susana Tagaloa had access to the Receipting module but he knows that Susana post payments to customer accounts at the end of each day.
• Trevor Naioca (financial controller) said Receipting is part of the AR module and that Susana should have access to the same modules that the cashiers access because it is part of her role. He said that the defendant and Ana Paniani were the cashiers in 2014. He confirmed Savaii Fiu’s evidence that employees can only access the modules particular to their roles and duties. He and Savaii said there were no training for the employees on the accounting system used (SageAccPac).

Role of cashier

• The witnesses Susana Tagaloa, Trevor Naioca and Ana Paniani said the cashier receive orders from the customers, the order is then given to accounts receivable department for approval, when approved the cashier would then give the order to distribution (they called it a ‘pick slip’), the distribution department would ‘ok’ the order in terms of supply and would then raise the invoice for the order. When payment (as invoiced) is received the cashier enters the payment on computer and the receipt is printed out, signed and stamped by the cashier and given to the customer. The payments are entered on the system by Falima which is posted at the end of the day by Susana to customers’ accounts.
• Susana Tagaloa said that once payment is entered on the system it can no longer be deleted but both Trevor Naioca and Savaii Fiu said that it can be deleted but the receipt number will still appear with the word ‘deleted’.

Adjustments

• The adjustments were to the customers’ accounts. The adjustments made it looked like that customers’ have paid off their accounts but which payments were never received by the company. None of the employees who gave evidence knew whether any cash or payment was received for the adjustments made.
• The evidence by the employees of SBL is that any adjustments to be made must be authorized by either the financial controller (Trevor Naioca) or the CEO and such adjustments always carry a reference CN (credit note) or DN (debit note). The adjustments on the customers’ accounts (EXH P1 – P4) are not referenced with CN or DN but with AD.
• Savaii Fiu said the AR (accounts receivable), AP (accounts payable) and Receipting modules all have a sub-module to do adjustments. He said any adjustments are always made under the AR and AP modules and would always appear with reference CN or DN. Even though, he has never used the adjustment sub-module under Receipting Savaii said the unauthorized adjustments referenced with ‘AD’ seemed to have been made from the adjustment sub-module under Receipting. Savaii was asked how he would know given that he himself has never used this adjustment sub-module and his simple answer was, because the sub-module for adjustments under Receipting appears as ‘AD’. However, he did not say how or what the adjustment sub-module under the AR and AP modules appear as on the system.
• Susana Tagaloa said she only access the AR module for her job to do the posting and to update payments received to customers’ accounts. She said part of her job in updating customers’ accounts involve making adjustments to customers’ accounts but only when authorized. When those adjustments are made there is always a reference of CN or DN. She said when she first came across these adjustments she did not know what they were who or where they came from.
• The company’s financial controller, Trevor Naioca said that receipting is part of the AR module and that Susana should have access to all modules the cashier has access to. He also does not know whether any cash was received of the adjustments made.
• The witnesses from SBL all said they have never accessed or used the adjustment sub-module under Receipting because they did not know how to use it. The evidence is that 5 people had access to the Receipting module – Falima Key, Susana Tagaloa, Ana Paniani, Savaii Fiu and Nicola Schuster.
• Trevor Naioca and Savaii Fiu said there were no training for the employees on the accounting system used (SageAccPac) that it was on the job training as they work.

Customers

• Courtney Stevenson of On the Rocks Bar whose account with SBL is one of the accounts adjusted. Courtney said that he has paid off all the invoices of 2014 and as far as he knows he has no outstanding invoices for 2014 with SBL. He said he made the payments to Falima Key who was cashier at the time and was given receipts. Courtney was not able to provide the receipts of payments he had made of 2014 invoices.
• Andy Ripley of Eden’s Edge Bar/Restaurant and Mailemalo Eneliko Pa’u of Seana Bar/Nightclub also said they have no outstanding from 2014. They have paid them off and payments were always made to Falima who issued them with receipts. Andy provided 5 receipts of payments he made in 2014 and except for receipt UC22383 to the amount of $1,727.40 the other 4 receipts do not appear on his account statement (EXH P1). Mailemalo of Seana provided receipt UC21847 to the amount of $2,879.03 paid by ANZ chq# 135499 on 28 April 2014 is not noted on the account statement (EXH P3).
• The receipts of payments made by the customers do not refer to the Invoice that payment was received for. None of the receipts tendered as evidence correlated to payments made noted on the customers’ statements. The witnesses Susana Tagaloa and Trevor Naioca in evidence said if the customer does not say which invoice payment made is to pay, company policy is payment will be allocated to pay for old invoices first.

Other evidence:

Statement by the defendant:

• Jane Si’a who was the Administration Officer and was also looking after the company’s legal affairs evidence is mainly on an interview she did of the defendant regarding this matter. She interviewed the defendant twice on the unauthorized adjustments and deletion of batches. She said the defendant admitted in her statement (EXH P6) to deleting batches and adjusting accounts which she also acknowledged as the reasons for her termination (EXH P7). The defendant in her statement (EXH P6) provided an explanation or reasons why she would delete. She would do so when payments are receipted wrongly especially when she is busy and the customer accounts are almost the same. The example she gave was the Vailima Distributor and Avamua Distributor but not the customer accounts in this case. She said the Vailima Distributor account is VD001 and the Avamua Distributor account is VD003. The ‘adjustment’ the defendant referred to in her statement is when she deleted the receipts on the system and entered a new receipt batch list to correctly allocate the payments. These ‘adjustments’ are different from the adjustments alleged against the defendant. There was no evidence of the deleted batch list referred to in the statement provided by the customer. As to the adjustments made to the customers’ accounts the defendant by way of her statement said that she does not access the AR-Adjustment and she did not get or receive any money from those accounts. The alleged statement does not carry an admission by the defendant of her taking money and /or making the adjustments alleged against her. At best the alleged statement by the defendant is hearsay evidence.
• Jane Si’a also produced a printout of leave (EXH P8) said to have been taken by the defendant in 2014. This is to correlate with the dates of unauthorized adjustments and to show that the defendant was at work. I find this piece of evidence lacking and unreliable. Firstly, the printout of leave does not say or have the defendant’s name anywhere on the printout or the company’s letterhead or name anywhere. Secondly, the prosecution should have also provided the printout of leave taken by the witness Susana Tagaloa in 2014 to show that she was not at work as she said and the defendant was. As far as the court is concerned the printout could be from anywhere and for someone else other than the defendant.

The Law:

Theft as a servant: s.161(1)(a) & s.165(e)

• While section 161 defines theft, it is section 165 which actually creates the offence and provides a penalty. Section 165 creates six (6) different offences of theft differentiated by the nature of conduct or by the value of property stolen. In this case the defendant is charged with theft as a servant.

“161. Theft or stealing – (1) Theft or stealing is the act of:

Dishonestly taking any property with intent to deprive any owner permanently of that property or of any interest in that property; or.....”

“165. Punishment of theft – A person who is convicted of theft is liable as follows:

(e) if any property stolen by a clerk or servant which is owned by his or her employer or is in the possession of his or her employer, to imprisonment for a term not exceeding 10 years;”

• Theft under s.161(1)(a) is the dishonest ‘taking’ of any property with intent to deprive the owner permanently of that property. Section 161(3) provides that for tangible property (which would include money), “theft is committed by a taking when the offender moves the property or causes it to be moved”. This is similar to s.219(4) of the Crimes Act 1961 (NZ). In Adams on Criminal Law (1992) at [CA219.02] on s.219(1)(a) of the Crimes Act 1961(NZ) which is similar to our s.161(1)(a) the learned authors on the meaning of ‘taking’ said:

“The common law required that the thing should be ‘taken and carried away’. The ‘taking’ consisted in the physical act of seizing the thing. The ‘carrying away’ consisted of moving the thing taken.

• The elements of the offence which the prosecution must prove beyond reasonable doubt are:
  1. The defendant was an employee of the owner;
  2. The defendant took the property without the owner’s consent;
  100. The defendant did so dishonestly;
  4. With Intention to permanently deprive the owner (either within the normal meaning or extended meaning in s.161(2).
• ‘Property’ is defined in s.2 of the Crimes Act 2013 to mean “real and personal property, and any estate or interest in any real and personal property, money, electricity and any debt, and anything in action, and any other right or interest.”

False Accounting: s.198(1)(a)

• The corresponding charges of falsifying accounts are brought under section 198(1)(a) of the Crimes act 2013. It is an offence either to obtain some benefit or to cause loss by making a false accounting entry.

“198. False accounting – A person is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain by deception any property, privilege, service, pecuniary advantage, benefit, or valuable consideration, or to deceive or cause loss to any other person:

(a) Makes or causes to be made, or concurs in the making of, any false entry in any book or account or other document required or used for accounting purposes; or....”

• The offence encompass three intents: (i) the intent to obtain by deception any property, privilege, service, pecuniary advantage, benefit or valuable consideration; or (ii) intent to deceive any person; or (iii) intent to cause loss to any other person.^[1]
• The prosecution must prove beyond reasonable doubt the following elements of false accounting:^[2]
  1. The defendant must have made, or caused to be made, or concurred in the making of a false entry
  2. Such entry must have been made in a book, account, or other document required or used for accounting purposes.
  100. The defendant must have had one of the intentions in paragraph [10] above. The prosecutions verbally confirmed that the intention was to cause loss.
• ‘Deception’ is defined under s.172 (2) of the offence of obtaining by deception. For the purposes of this offence the meaning provided in s.172(2)(c) is relevant to the circumstances of the alleged offending which is:

“(c) a fraudulent device, trick, or stratagem used with intent to deceive any person”.

• ‘Document’ and ‘obtain’ are defined under s.159 of the Crimes Act 2013 and will be referred to later in this judgment. However, ‘accounting purposes’ is not defined by the Act. The New Zealand case of Jew v Police^[3] Chisholm J said at para.[45]:

“The words ‘accounting purposes’ are to be interpreted in the context of the charge before the court and with reference to the organization whose accounting purposes are under scrutiny”.

Relating the evidence to the elements of theft: s.161(1)(a) & s.165(e)

• There is no dispute that the defendant at the time of the offending was working as cashier for the complainant, Samoa Breweries Limited (SBL) at the time.

The defendant took the property, i.e. money without the owner’s (SBL) consent

• The prosecution relied on the evidence of their customers Courtney Stevenson (On the Rocks), Andy Ripley (Eden’s Edge Bar), Mailemalo Eneliko Pa’u (Seana) and Café Seles Bar/Restaurant whose payments the defendant is alleged to have stolen. The customers’ evidence was that payments were always made to the defendant, Falima Key who issued them with receipts.
• The evidence of Susana Tagaloa for the prosecution is that once payment is entered on the system and the computer prints out the receipt the payment entered cannot be deleted from the system. The evidence of Trevor Naioca (financial controller) and Savaii Fiu is that it can be deleted but the receipt number would still appear on the system but with the words ‘deleted’ next to it.
• According to the customers they were given receipts of payments they made. Yet they could not provide all the receipts relating to the orders they claimed to have paid. The receipts provided by the customers do not refer to the Invoice number that payment made was to pay and the dates on the receipts do not correlate to the dates of the invoices on their account statements. According to the evidence such payments once entered would be on the system. Even if deleted, the receipt number according to Trevor Naioca and Savaii Fiu would still appear on the system but with the words ‘deleted’. A printout of the deleted batch could still then be printed out. Such batch was not produced by the prosecution. There was also no print-out of payments entered on the system to support or confirm the evidence by the customers of payments they claimed to have made.
• The prosecution case is that the defendant took or stole money paid by the customers to Samoa Breweries Limited. Yet there is no evidence pointing to a physical taking of the money by the defendant. None of the employees who gave evidence knew if any cash was received of the adjustments made. The defendant at paragraph 2 of her statement (EXH P6) said she did not receive or get any money from customers’ accounts.
• I find the evidence lacking to be able to draw an inference beyond reasonable doubt that the defendant took the money paid by the customers.
• I do not need to go to the rest of the elements of the offence of theft because I find that the prosecution has failed to prove the element of ‘taking’ beyond reasonable doubt.

Relating the evidence to the elements of false accounting: s.198 (1)(a)

• The offence is committed when the defendant adjusted the accounts with the intention to cause loss or to deceive or to obtain any money, benefit advantage etc. As long as the defendant had one of the intentions at the time of making the adjustments whether she actually received any money or that loss was caused to the company or that any person was deceived does not matter.
• The prosecution case is that the defendant ‘adjusted’ the customers’ accounts on the system without authorization. The adjustments offset any outstanding owing by the customers which money said to have been paid but was never received by the company.
• I accept the following evidence that:
  1. Each employee has his/her own username and password which they could use to access the system and the modules specific to their jobs.
  2. Susana Tagaloa, Ana Paniani, Savaii Fiu and the defendant could access the Receipting module.
  100. The AR, AP and Receipting modules all have sub-module to do adjustments.
  4. The entries made to the customers’ accounts by way of adjustments were not authorized.

The defendant must have made, or caused to be made, or concurred in the making of a false entry;

• The accounting system used by SBL is called SageAccPac. Every employee has his/her own username and password to access the system and the modules specific to their jobs.
• The employees did not have training on the system prior to using it. Savaii Fiu said the employees had on the job training as they go along. The employees all said they have never accessed or used the adjustment sub-module under the Receipting module because they did not know how to use it. The employees don’t know who made adjustments or under which module it was made.
• The evidence is that five of the witnesses had access to the Receipting module used by the cashier - Falima Key, Savaii Fiu, Susana Tagaloa, Ana Paniani and Nicola Schuster.
• Susana Tagaloa said she makes adjustments to customers’ accounts under the AR module but only when authorized and the adjustments would always carry a reference of CN (credit note) or DN (debit note). She does not recognize the adjustments made because they are not referenced with a CN or DN.
• Savaii Fiu who looked after the accounting system at the time said that the AR (accounts receivable) module which Susana access has the Receipting module which defendant as cashier access. The AR and Receipting modules each, has a sub-module to do adjustments. Although he has access to all modules on the system he has never used the adjustment sub-module in the Receipting module. Even though he has never used the adjustment sub-module under Receipting Savaii said the unauthorized adjustments referenced with ‘AD’ seemed to have been made from the adjustment sub-module under Receipting . Savaii was asked how he would know given that he himself has never used this adjustment sub-module and his simple answer was because the sub-module for adjustments under Receipting appears as ‘AD’. However, he did not say how or what the adjustment sub-module under the AR and AP modules appear as on the system.
• Savaii said he has never given his password to anyone but that the defendant may have picked up on his password when he had entered his password in the presence of the defendant. I find this part of his evidence questionable and not believable. Susana Tagaloa said that she had given her password to the defendant when she is not at work or not in the office to enter post mix prices for McDonald or to prepare the report that is required at the end of the day. I also find this part of Susana’s evidence to be convenient and for her benefit. There was no evidence by Savaii that he showed Falima how to use the adjustment sub-module under Receipting.
• The only compelling evidence against the defendant is the list (EXH P5) of adjustments made and the username of the person alleged to have made the adjustments. The evidence is that every employee has his/her own username and password to access the system. This document showed the defendant’s username to three adjustments, one adjustment by Savaii Fiu’s username and 27 adjustments by Susana Tagaloa’s username. The document showed that three adjustments to the customers’ accounts of Eden’s Edge, On the Rocks and Seana made under the username of the defendant.
• I find that there was no need for the defendant to use the usernames and passwords of the other employees because they all have their own username and password to access the system. There is also no need for her to use the others usernames to make adjustments because there is a sub-module under Receipting that she can access to make adjustments. I am not satisfied beyond reasonable doubt that the defendant had used the usernames of the other employees. I find that no one else could have used the defendant’s username except herself and the same go with the other usernames, that is, only those people could use their own username and password.

Such an entry must have been in a book, account, or other document required or used for accounting purposes.

• The payments made by customers are entered on the computer and are then posted to their accounts. The customers’ accounts records the payments made and the balances (if any) owing by the customers. The evidence is the unauthorized adjustments were made to the customers’ accounts on the computer.
• As I mentioned earlier ‘document’ is defined under s.159 of the Crimes Act 2013. I find that ‘computer’ on which the company’s accounting system is accessed come under the definition of ‘document’.
• The accounting system (SageAccPac) used by SBL required the use of a computer to enter and store information obviously for their accounting purposes.

The defendant must have had one of the intentions in paragraph [10] above.

• All that is needed is proof of falsification (adjustment) of a document and that the defendant intended at the time of falsification to cause loss or to deceive or to obtain a benefit etc. Whether or not the defendant obtained or received any money is not a requirement.
• There are two intentions that can be drawn or inferred from the actions of the defendant when making the unauthorized adjustments. They are the intention to deceive and the intention to cause loss to the company. I find either one of those intentions to have been present.
• I find that the prosecution has proven beyond reasonable doubt the offence of false accounting in relation to three charges – S3732/15 (Eden’s Edge), S3727/15 (On the Rocks) and S3710/15(Seana Bar).
• The court pursuant to s.32 of the Criminal Procedure Act 1972 amended the dates of the above information to correlate with the dates as on EXH P5. They are - S3732/15 to “11 March 2014”, S3727/15 to “11 March 2014” and S3710/15 to “6 May 2014”.

Conclusion:

• I find the defendant not guilty of the charges of theft as a servant and those charges are dismissed against the defendant.
• I find the defendant guilty of false accounting only in relation to three charges – S3732/15, S3727/15 and S3710/15. The rest of false accounting charges are dismissed.
  

JUSTICE TUATAGALOA

^[1] See commentary in Adams on Criminal Law at [CA260.01]
^[2] Police v Gianno [2015] WSSC 198 (24 December 2015)
^[3] HC, Christchurch CRI-2010-409-97 (22 Dec 2010)