Fitzgerald v Ministry of Social Development HC Christchurch CRI 2010-409-180

[2010] NZHC 1827

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CRI 2010-409-000180

DIANE ISABEL FITZGERALD

Appellant

v

MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:         14 October 2010

Counsel:         G B Henderson for Appellant

C J Boshier for Respondent

Judgment:      14 October 2010

JUDGMENT OF FOGARTY J

[1]      The appellant appeals against a sentence imposed by the District Court Judge S G Erber on 2 June, sentencing her to one year and four months imprisonment on one charge of omitting properly to inform the Social Welfare Department of her living circumstances and seven other charges of dishonestly using a document or a variance of that crime.

[2]      Over a period of roughly 20 years she had received from Social Welfare

$104,000 to which she was not then entitled.  The offending was not continuous but very frequent.   She has been in receipt of a domestic purposes benefit and non- beneficiary assistance for various periods since 1986.   She has been in receipt of various additional benefits during these periods.

[3]      She had an obligation to advise the Ministry of changes in her circumstances affecting her entitlements to benefits, including changes to her living situation, such

FITZGERALD V MINISTRY OF SOCIAL DEVELOPMENT HC CHCH CRI 2010-409-000180  14 October

2010

as starting or ending a relationship similar to marriage.  Over the past 20 years she has lived, for various periods, with a man in the nature of a marriage while in receipt of the DPB and non-beneficiary assistance and not advising the Ministry of her change in circumstances.

[4]      An analysis of her offending resulted in an overpayment of benefit totalling

$104,007.98.  She is now 60 years old.  She has no previous convictions.  She has supportive children who fear for her in prison.  She has had to tell her employer, a large hospital, of the offending.

[5]      In the District Court, Mr Williams, for the Ministry of Social Development, argued that under these circumstances a sentence of a term of imprisonment is called for in accordance with s 16 of the Sentencing Act 2002.   He submitted a clear message must be sent to the community that such conduct will be met with the ultimate sanction available to the Courts (imprisonment).  He submitted that the need for deterrence was paramount in benefit fraud offending of this magnitude, that the community must be left in no doubt as to the position taken in offending of this nature.

[6]      Before  the  District  Court,  Mr  Rapley,  for  the  appellant,  was  seeking  a sentence of home detention.   The Department of Corrections’ pre-sentence report had recommended community detention and supervision.

[7]      Judge  Erber  wrote  a  very  careful  decision.    He  acknowledged  that  the probation  officer’s  report  was  sympathetic to  her  and  that  she  had  no  previous convictions and that her motivation to comply with a community based sentence was high.  He recorded Mr Rapley submitting that the cases relied upon by the Ministry were distinguishable and that there were no tariffs in these cases.   He records the prosecutor as submitting that a term of imprisonment should be imposed.

[8]      Turning then to his own analysis he commenced:

[6]       Mr Rapley would have told you Ms Fitzgerald that the Court is bound by the Sentencing Act.   I must consider the purposes of sentence, which in these particular cases are clearly denunciation and deterrence, and the principles of sentence which for the purpose of this case firstly that I

must impose the least restrictive penalty available but I must also consider the seriousness of the charges and the seriousness of the degree of offending.

[7]       Now the aggravating features of this case are very easy to see.  You got away with $104,000.  This was a fraud committed over a period of 20 years, although as I say it was not continuous.  It involved you in making over 120 dishonest omissions in signing various documents to continue receiving the particular benefits.  It is a significant breach of trust because the system here in this country relies on the expectation of honest disclosure.

[9]      He considered all the cases signified that a starting point of two and a half years was indicated, but took two years and allowed a one-third deduction for a prompt plea of guilty.

[10]     Finally, he turned to the question of home detention:

[13]      I am obliged now to turn my mind to the question of home detention. I have a discretion here.   I may not impose a sentence of home detention unless I am of the view that a sentence of imprisonment would otherwise be justified.  That is clearly the case here.  I have to have regard to the purposes and principles of sentence which are set out in s 7 and s 8 of the Sentencing Act and I must balance the interest of you with those of the community. Having done this and considered it carefully since yesterday I consider that deterrence and denunciation outweigh the interests of you in the particular circumstances.   The aggravating features which I have mentioned do not allow the amelioration of the rigors of imprisonment.    It is very important that there should be clear denunciation and clear deterrence.  This is very sad for the family and it gives me no pleasure to reach that conclusion but that is what is it is. (sic)

[14]     On all of the charges to which you were liable to seven years imprisonment you are sentenced to imprisonment for one year and four months.  Home detention is declined.

[11]     Two months after this decision the Court of Appeal released its decision in the case of Ransom v R [2010] NZCA 390. The facts are similar. Ms Ransom had been in receipt of a DPB from 1997 to 2008 and during that period she also received supplementary allowances. On 11 occasions during that period she failed to disclose that she was married. During the period of offending she received the sum of

$127,989.59.

[12]     She was sentenced to a term of imprisonment in the District Court by Judge Roberts.  He noted the importance of the obligation on those receiving benefits to make full, frank and open disclosure.  He declined home detention saying:

Sentencing consistency is important and a consistent message must go to you and to other beneficiaries who seek to abuse this system that significant defalcation will be met by sentences of imprisonment.

[13] The Court of Appeal rejected this reasoning. It distinguished a lot of the earlier cases as being pre the Sentencing Amendment Act 2007 which introduced the sentence of home detention as a discreet sentencing option. As in the earlier judgment of the Court of Appeal in R v Hill [2008] 2 NZLR 381, this bench of the Court of Appeal re-stated the explanatory note to the Criminal Justice Reform Bill which says that the purpose of this reform was to arrest the sharp increase in prison population in recent years, the increase being no longer sustainable neither financially nor socially.

[14]     The Court of Appeal emphasised that the duty to impose a deterrent penalty does not necessarily require imprisonment citing a very early case:   Katoa v Department of Social Welfare (1991) 7 CRNZ 44.

[15]     The Court of Appeal concluded:

[41]     In our view, Judge Roberts appears to have ruled out a sentence of home detention solely on the grounds that the fraud was too serious.  With respect, whether home detention or imprisonment is the appropriate sentencing option in cases of this kind requires a more detailed and nuanced analysis than that.  The cases we have cited above show that offending of equivalent seriousness has been held amenable to home detention in the past. In light of Judge Roberts’ error in approach, we must reconsider what sentence should be imposed.

[42]     We have concluded that a sentence of home detention will, in conjunction with one of community work, adequately respond to the sentencing goals of accountability, denunciation and deterrence.  While the remorse expressed by Ms Ransom is not as fulsome as one may have liked and there is no real ability to repay the dishonestly obtained money, the need for her to care for  her child, the benefits of ensuring that her husband return to paid employment (something we were assured by Mr Laurenson he would do if the appeal were successful) and her acceptance of responsibility by entering pleas of guilty persuade us that home detention is an appropriate sentence and responds adequately to the sentencing goals to which we have referred.

[43]     Put in terms of s 16 of the Sentencing Act, which determines the circumstances in which imprisonment should be imposed, it is desirable to keep Ms Ransom in the community and that approach is consonant with the safety of the community.

[16]     However, the postscript of the Court should also be noted:

[47]     As indicated above, a significant factor in our decision to allow the appeal and substitute a sentence of home detention has been our concern that, since Ms Ransom went to prison, her husband, Mr Hall, has had to give up work in order to care for their six year old child, who has considerable behavioural  difficulties,  which  have  been  exacerbated  by  his  mother’s absence from the family home.  Mr Hall is now himself, as a consequence of her  imprisonment,  on  a  social  welfare  benefit.    We  were  assured  by Mr Laurenson, when Mr Hall was in court at the hearing of the appeal, that Mr Hall was very confident that he would be able to go off the benefit and return to work if his wife could come home and serve a sentence of home detention.  We expect Mr Hall to do everything possible to return to work promptly.

[17]     Ms Boshier argued that Judge Erber’s reasoning can stand alongside that of Ransom.  She said that his reasoning was not like Judge Roberts indicating that there had to be a sentence of imprisonment.

[18]     I reserved the case for further consideration.   Ms Boshier’s submission is literally true.   The Judge did positively turn his mind to the prospects of home detention.  However, I am of the view that paragraph [13] of his judgment, set out above, does not reflect the requirement of a “more detailed and nuanced analysis”. It does not refer to s 10A, or s 16(2), nor the purpose of the 2007 reforms.  It does not reflect the accumulating jurisprudence in the Court of Appeal that it is Parliament’s intention that the community’s expectation of deterrence and denunciation can be accommodated with the sentence of home detention.

[19]     There are now numerous cases of significant dishonesty to the detriment of the community which are being addressed by way of the sentence of home detention.

[20]     What has tipped the balance of the merits of this appeal in favour of the appellant is my view of the importance of where possible sentencing like alike. Although all sentences of home detention are discretionary, just as with all sentences under the Act, we still strive to treat like cases alike, as a basic element of achieving justice.

[21]     I cannot  maintain  a  distinction  of  material moment  between  the  case  of

Ransom and this case.   The Court of Appeal in Ransom did not think they were

changing the law.   Rather, they were, in their minds, changing a misapprehension and policy position on the part of the prosecution as to the law.  I do not think the Court of Appeal intended the Ransom decision to be confined by its ‘postscript’.

[22]     Accordingly, although Judge Erber could not have known it, his judgment has to be compared now with the later Court of Appeal judgment.  In that context, this Court on appeal must intervene for the two judgments cannot stand side by side. The appellant is entitled to the approach of the Court of Appeal.

[23]     Accordingly, I intend to allow the appeal when a suitable sentence of either community detention or home detention can be identified.  I prefer the latter.  I will receive submissions on this at 4 pm today.

[Judge heard further submissions from counsel.]

[24]     I grant leave to appeal.  The late appeal is excused by the late and unexpected arrival of the judgment in Ransom.  I take into account the fact that the appellant has served nearly four and a half months of a prison sentence.  Taking into account that she got a slightly shorter term of imprisonment than that imposed in Ransom but otherwise trying to follow as closely as possible to the Ransom sentence, she is sentenced to six months home detention to commence tomorrow to be the sentence on charge CRN No. 09009503848.   On the other using a document with intent to defraud charge and the five dishonesty using a document charges she is convicted and discharged.   On the misleading a social welfare officer by wilful omission charge she is sentenced to 75 hours community work.

[25]     In respect of the home detention sentence, she is to travel immediately to

342 Memorial Avenue, Burnside, Christchurch, after release from prison tomorrow, and to remain at that address to await the arrival of the monitoring company and the probation officer.  She is to reside at 342 Memorial Avenue, Burnside, Christchurch, at all times unless an absence from that residence has been authorised by a probation officer, and to comply with all the requirements of home detention.

Solicitors:

G B Henderson, Christchurch, for Appellant

Raymond Donnelly & Co, Christchurch, for Respondent