Gibbs v Ministry of Social Development

[2016] NZHC 2676

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2016-404-000324 [2016] NZHC 2676

BETWEEN

ALLAN TREVOR GIBBS

Appellant

AND

MINISTRY OF SOCIAL DEVELOPMENT Respondent

Hearing:	7 November 2016
Counsel:	S D Withers for Appellant G A Campbell for Respondent
Judgment:	7 November 2016

ORAL JUDGMENT OF DOWNS J

Solicitors/Counsel:

S D Withers, Auckland.

Meredith Connell, Auckland.

GIBBS v MINISTRY OF SOCIAL DEVELOPMENT [2016] NZHC 2676 [7 November 2016]

The case

[1]      This is a sentence appeal in relation to benefit fraud.  On 8 September 2016

Judge Ronayne sentenced the appellant to a term of two years and three months’

imprisonment.1  The Judge also imposed reparation of almost $60,000.

[2]      The background is simple.  On 27 November 2007, the appellant applied for and   was   granted   a   sickness   benefit,   accommodation   supplement,   disability allowance, and an additional allowance for temporary support.  All of the benefits were granted on the condition the appellant advise the Ministry of Social Development if his circumstances materially changed.

[3]      Between January 2008 and April 2013 the appellant had a variety of jobs, but he did not tell the Ministry of them.   Consequently, he received overpayments of

$97,002.82.  The appellant was caught when the Inland Revenue Department shared information with the Ministry of Social Development.

[4]      The appellant was interviewed on 3 October 2013.  He said that he had told the Ministry about one of his jobs, but not the balance because he was too far into debt.

[5]      The appellant was charged on 15 April 2014.   He entered guilty pleas on

2 May 2016.  The sequence in between was examined at some length by the Judge below.   I need not do so.   It is sufficient to observe on any analysis, the pleas of guilty were not entered promptly.

[6]      The appellant is 65 years old.   He has a history of fraud.   In 1992 he was convicted of 29 charges of using a document for pecuniary advantage.  In 2000 he was convicted of like-offending and also altering a document with intent to defraud. That too was benefit fraud.   In 2005 the appellant was convicted of offences of making a false statement and misleading a Social Welfare officer.  The appellant also has historical convictions for theft as a servant and using a document for a pecuniary

advantage.

1      Ministry of Social Development v Gibbs [2016] NZDC 17447.

[7]      The  Judge  adopted  a  starting  point  of  two  years  and  three  months’ imprisonment, which he uplifted by six months in light of the appellant’s recidivism. The Judge then applied discounts totalling six months: two months for what the Judge described as the appellant’s “mental health issues”; two months to reflect the appellant’s repayment of $37,160 to the Ministry; and two months in recognition of the appellant’s  guilty pleas.   As  observed,  the Judge also  ordered  reparation  of

$59,842.82.

The arguments

[8]      The appellant  contends  his  sentence is  manifestly excessive.    He invites attention to allegedly inadequate discounts for mental health, guilty pleas and his voluntary repayments.  That said; the appellant devoted most of his attention to the reparation order.  He submitted in conjunction with the term of imprisonment, the result was a crushing sentence.   The phrase is mine but the sentiment is the appellant’s.

[9]      No challenge is brought to the starting point.  That I suspect is because it is consistent with those adopted in the authorities.   For example, in Ransom v R the Court of Appeal upheld a starting point of two and a half years’ imprisonment in relation to offending of a similar nature and value.2    Similarly, in Whitelaw v R the defendant  was  convicted  of  benefit  fraud  with  overpayments  of  approximately

$76,000 over seven years.3  The Court of Appeal upheld a starting point of two years’

imprisonment as possibly conservative, given the defendant had not been fraudulent from need.

Analysis

[10]     I am not persuaded the Judge erred in relation to any of the discounts vis-à- vis the term of imprisonment.  Turning first to “mental health issues”, there were two reports before the Judge—one from Dr Duff and a second from Dr Heed, both of whom are psychiatrists.   Each noted the appellant has suffered not insignificant

depression, or at least a depressive order.  Dr Duff was also of the view that there is

2      Ransom v R [2010] NZCA 390, (2010) 25 CRNZ 163.

3      Whitelaw v R [2012] NZCA 438.

some  evidence  the  appellant  suffers  a  personality  disorder.    However,  neither clinician advanced the view there was a nexus between the appellant’s difficulties and the offending.   The Judge allowed five per cent under this head, but in the absence of a nexus, the appellant may well consider himself fortunate.

[11]     In terms of the appellant’s pleas of guilty, by any measure, they were late. Again, there is no need to elaborate upon the sequence (between when the appellant was charged and when he ultimately pleaded guilty) to settle that proposition.

[12]     The Judge also afforded a five per cent discount for the appellant’s voluntary repayments of $37,160.  Voluntary repayments can demonstrate remorse, but making required reparation is not typically seen as a demonstration of remorse, or as warranting a separate discount.  Credit may be given where the repayment of money is in genuine effort to atone, but not where it is the result of authority’s actions recovering assets.   In this case the appellant was not required by law to make the payments he did.  But on the other hand, he was merely repaying money which in a sense he was never entitled to in the first place.  That is not to conclude the source of the  repayment  was  tainted,  because  it  wasn’t.    It  is  rather  to  make  a  global assessment of the appellant’s financial circumstances.

[13]     The Judge’s approach here was arguably parsimonious, but I need not resolve this issue.   That is because the overall sentence was within range, and as I have observed, the appellant was fortunate to have a deduction in relation to mental health when there was no correlation between that factor and the offending.

[14]     This brings me to the real issue in the case, namely whether the reparation order of almost $60,000 has resulted in a manifestly excessive sentence.  Here the respondent   invites   my   attention   to   the   prospect   the   appellant   may   enjoy re-employment upon release from prison, and to the fact the Judge was informed if that were so the appellant would be able to pay $500 per fortnight, or $13,000 per annum—in part from employment and in part from his superannuation.

[15]     Under s 12 of the Sentencing Act 2002, there is a presumption in favour of reparation unless special circumstances make it inappropriate, or it would cause

undue hardship.   Unsurprisingly, undue hardship requires something more than ordinary hardship. The mere fact a reparation order has been imposed on an offender also sentenced to imprisonment does not give rise to undue hardship.4    However, orders which cannot possibly be met should be avoided, and the amount to be repaid by  way  of  reparation  should  be  realistic  given  the  financial  resources  of  the offender.5    Where there is no realistic prospect payment will be made within a few years, an order should not be made for the full amount sought.6

[16]     I consider the Judge erred here. At the age of 65, the appellant is now serving his first term of imprisonment.  When he is released, even if he is re-employed or gains other employment, he will have little if any savings.  While views about age at which one should retire are changing, on anyone’s measure, to start with little if any assets and indebtedness of $60,000 at 65 could be crushing.  Moreover, there is risk in creating a set of conditions which will merely result in the appellant committing further offences. Viewed in the round, I am satisfied that the order would give rise to undue hardship and should be cancelled.  I am also satisfied the order is unrealistic given the appellant’s circumstances.  On this issue, the appeal is allowed.

[17]     In allowing the appeal to this extent but otherwise dismissing it, it should not be thought the appellant has escaped punishment.  He is serving a not insignificant term of imprisonment.   He is, as  I have observed, 65  years old.   The term of imprisonment  is  his  first.     The  appellant  has  already  repaid  approximately

38 per cent of the monies he stole. And significantly, the quashing of reparation does not affect the ability of the Ministry of Social Development to recover the monies by other means under the Social Security Act.

……………………………..

Downs J

4      R v Creek CA199/06, 17 August 2006; R v Pender [2007] NZCA 465 at [28].

5      R v Bailey CA306/03, 10 May 2004 at [25]; R v Brown CA267/92, 26 November 1992 at 5.

6      Guinness v Police [2015] NZHC 883 at [15]; Ruka v Department of Social Welfare [1997] 1

NZLR 154 (CA) at 156.