Lochore v Ministry of Social Development
[2020] NZHC 1363
•17 June 2020
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CRI-2020-419-000039
[2020] NZHC 1363
BETWEEN THOMAS LOCHORE
Appellant
AND
MINISTRY OF SOCIAL DEVELOPMENT
Respondent
Hearing: 15 June 2020 (at Hamilton) Appearances:
R Quin for Appellant
A S Alcock for Respondent
Judgment:
17 June 2020
JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie On 17 June 2020 at 12.00 midday
Registrar/Deputy Registrar Date:…………………………
Solicitors/counsel: Gordon Pilditch, Rotorua R Quin, Hamilton
LOCHORE v MINISTRY OF SOCIAL DEVELOPMENT [2020] NZHC 1363 [17 June 2020]
Introduction
[1] The appellant, Mr Lochore, appeals a decision of Judge Spear in the Hamilton District Court refusing to grant him discharges without conviction under s 106 of the Sentencing Act 2002 in respect of three charges – obtaining by deception, dishonestly using a document and benefiting from a social security fraud.1
[2] Mr Lochore argues that Judge Spear erred in his assessment of the gravity of the offending and the consequences that convictions will have on him, and that the Judge failed to give appropriate weight to his personal circumstances.
[3] The respondent submits that Judge Spear appropriately concluded that the consequences of the convictions were not out of all proportion for the gravity of the offending.
Factual background
[4] Mr Lochore applied for a Job Seeker Support Student Hardship benefit. He was sent a letter by the Ministry of Social Development (the Ministry) detailing his entitlement to the benefit and recording his obligation to advise the Ministry of any changes in his circumstances, including the start or end of any relationship, and whether he received any income or money he had not already declared from any source. The Ministry then commenced making the benefit payments to him.
[5] Sometime later, and after receiving relevant information, the Ministry commenced an investigation. It discovered that Mr Lochore was living in a relationship in the nature of a marriage, and that he had been receiving income from self employment and from the University of Waikato and scholarship benefits, also from the University of Waikato. Mr Lochore had not advised the Ministry of any change in his circumstances or of the fact that he was receiving income. The benefit overpayments to Mr Lochore totalled $9,850.00.
[6] Further, the Ministry found that Mr Lochore had assisted his partner, Ms Bull, to obtain benefits she was not entitled to. He had completed and signed a relationship status verification form where he had asserted that he was living with Ms Bull as her
1 Ministry of Social Development v Lochore [2020] NZDC 5155.
boarder. As a result, Ms Bull had been overpaid benefits totalling $70,837.00. Mr Lochore had benefited indirectly from these monies.
[7] Mr Lochore was charged. He promptly entered guilty pleas to the charges – obtaining by deception (a representative charge) contrary to ss 240(1)(a) and 241(a) of the Crimes Act 1961, dishonestly using a document contrary to ss 228(1)(b) and 241(a) of the Crimes Act, and benefiting from social security fraud, contrary to s 127A of the Social Security Act 1961.
[8] Mr Lochore has since repaid the overpayment of $9,850.00 made to him. He is jointly and severally liable for the sum of $70,837.65 together with Ms Bull for the overpayments that she received.
District Court sentence
[9] Judge Spear recorded the factual background to the offending and noted that Mr Lochore had entered guilty pleas to the charges. He noted that Ms Bull had pleaded guilty to the charges brought against her, that she had applied for a discharge without conviction, and that that application had been declined. She had been sentenced to five months community detention.
[10] The Judge noted Mr Lochore’s application for discharges without conviction. Mr Lochore had filed an affidavit detailing what he considered to be the likely consequences of his conviction and setting out his personal circumstances. The Judge recorded that Mr Lochore is obviously an intelligent man, now aged 34 years of age. Mr Lochore gave up work to go to University to obtain IT qualifications and in 2016 he graduated from the University of Waikato with a Bachelor of Computing and Mathematical Science with honours. The Judge considered that Mr Lochore would have been in no doubt at all that what he was doing was dishonest. Mr Lochore has two daughters, the eldest of whom is disabled and in a wheelchair. Mr Lochore separated from the childrens’ mother in about 2011 and they share custody. The Judge noted Mr Lochore’s explanation that when he first started his University studies, he went into a flat with four other young men, and his daughters were unable to stay with him. Then, for a period, he stayed at his grandmother’s house. His daughters could also stay with the grandmother. She became ill. Thereafter Mr Lochore formed a casual relationship with Ms Bull. It was Mr Lochore’s assertion that while he went
along with the fact that she was defrauding the Ministry, he did not directly benefit in a financial sense from her fraud; rather her fraud enabled the two of them to reside in a relationship with an increased income which would not otherwise have been available to them.
[11] The Judge assessed the seriousness of the offending. He accepted that the fraud committed by Mr Lochore for his own direct benefit could be considered as being of low to moderate seriousness, but considered that his assistance to Ms Bull to defraud the Ministry over an extended period put the overall offending into the moderately serious category. The Judge noted the amounts involved and the extended period of time over which the frauds were perpetuated.
[12] The Judge then turned to the likely consequences if convictions are entered. He noted an assertion by Mr Lochore that after he graduated, he had obtained work as an IT consultant, and that that work required him to have a security clearance, because he was often required to work on clients’ computer systems and their accounts, and because he needed access to private financial information. He noted Mr Lochore’s concern that if he is unable to obtain security clearances because of his convictions, it will be impossible to find work in his chosen field. He referred to a letter from Jessica McAleer, an employment consultant with Superior Personnel, to this effect. The Judge dismissed arguments for Mr Lochore that, if he was unable to work in his chosen field, his ability to obtain employment and to support his daughters by contributing to their care would be seriously diminished. The Judge considered that that was overstating matters, commenting that “someone with his obvious skills and aptitude towards working in the computer or IT area will, I am sure, have little difficulty finding work”. The Judge did not consider that the consequences of convictions were as high as was stated by Mr Lochore. Rather, he observed that Mr Lochore might have to adjust his sights as to the particular industries in which he might work.
[13] The Judge also noted that Mr Lochore has considered the possibility of doing a master’s degree in computer science. He referred to a letter Mr Lochore produced from a senior lecturer in the Department of Computer Science at Waikato, who explained that Mr Lochore wished to research the “natural language parsing” of court proceedings, and that, to undertake this research, Mr Lochore would require access to
Ministry of Justice data systems. Mr Lochore would need to undertake police vetting. The Judge commented that Mr Lochore could undertake research in another field.
[14] The Judge did not consider that the consequences or likely consequences of convictions outweighed the seriousness of the offending. Accordingly, he declined the application for a discharge. He went on to impose a sentence of 200 hours community work on all three charges.
The appeal
[15] An appeal against a refusal to grant a discharge is an appeal against conviction and sentence.2 As a result, this appeal is brought pursuant to s 232 of the Criminal Procedure Act. Relevantly, it provides as follows:
232 First appeal court to determine appeal
(1)A first appeal court must determine a first appeal under this subpart in accordance with this section.
(2)The first appeal court must allow a first appeal under this subpart if satisfied that,—
…
(c)in any case, a miscarriage of justice has occurred for any reason.
(3)The first appeal court must dismiss a first appeal under this subpart in any other case.
(4)In subsection (2), miscarriage of justice means any error, irregularity, or occurrence in or in relation to or affecting the trial that—
(a)has created a real risk that the outcome of the trial was affected; or
(b)has resulted in an unfair trial or a trial that was a nullity.
(5)In subsection (4), trial includes a proceeding in which the appellant pleaded guilty.
[16] Whether or not an offender should be discharged without conviction under ss 106 and 107 of the Sentencing Act requires an evaluative judgment, and is not a
2 Jackson v R [2016] NZCA 627, (2016) 20 HCRNZ 144 at [8]-[9]; Syme v R CA269/2016 at [11]-
[12].
matter of discretion. As a result, an appeal Court must reach its own conclusion on the merits.3
Submissions
[17] Mr Quin, appearing on behalf of Mr Lochore, submitted that Judge Spear incorrectly assessed the gravity of Mr Lochore’s offending. He noted that the overpayment of the student allowance and Job Seeker Support Student Hardship benefit has been repaid in full. He argued that in itself this was low level offending. He accepted that Mr Lochore is jointly and severally liable for Ms Bull’s debt to the Ministry, but noted that Mr Lochore does not accept that he was jointly responsible for his partner’s offending. He argued that Mr Lochore played a lesser role and that the Judge erred when he observed that Mr Lochore provided Ms Bull with “regular assistance”. He noted that the charge referred to a single false declaration signed on 23 June 2015, and that the summary of facts only referred to this single incident. Further, the charge was not representative. He also submitted that Mr Lochore did not receive any benefit from the overpayment made to Ms Bull, although he acknowledged that Mr Lochore benefited indirectly, in that he was able to continue his studies whilst still being able to provide for his daughters. He nevertheless argued that Mr Lochore’s role was such that this was also low-level offending.
[18] He then turned to the consequences of the convictions, arguing that Mr Lochore would be unable to continue to work in the IT field if convicted, and therefore would be unable to support his daughters. He advised me that Mr Lochore has not been able to obtain employment since the convictions were entered, and submitted that the Judge mistakenly assumed that Mr Lochore has skills in the IT field. He noted that in fact Mr Lochore’s skills are in project management and delivery, and that he has little or no technical IT skills. He submitted that this significantly limits the type of work Mr Lochore is able to undertake. He referred to an affidavit now filed from Ms McAleer confirming the difficulties Mr Lochore will face in obtaining employment if the convictions stand, and argued that this is a case where the consequences of the convictions flow from the convictions themselves, rather than the underlying conduct. In regard to Mr Lochore’s proposal to undertake a master’s degree, he accepted that
3 Blythe v R [2011] NZCA 190, [2011] 2 NZLR 620 at [12]-[13]; Gaunt v Police [2017] NZCA 590
at [10].
Mr Lochore could undertake research work in other areas, but noted that he has already made significant progress in his Ministry of Justice research, and that Mr Lochore would be forced to start from scratch with a new research topic and with supervision by some other supervisor.
[19] Ms Alcock, for the Ministry, argued that the offending was in the moderately serious category. She argued that the offending involved planning and premeditation, that it was over a period of some three and a half years, and that it resulted in a significant loss to the Ministry –$9,850.00 in relation to Mr Lochore personally, and some $70,837.00 jointly with his partner. It was also noted that Mr Lochore shows no remorse.
[20] Ms Alcock then turned to the consequences of convictions, and argued that there was no strong evidential foundation before Judge Spear which suggested that Mr Lochore’s employment would be detrimentally affected. It was argued that a number of the assertions made by Mr Lochore were speculative, and that it would be inappropriate for the Court to conceal the offending from future employers or the Ministry of Justice (in the event Mr Lochore proceeds with further research). It was submitted that any future employers should be able to make up their own minds whether or not to employ Mr Lochore with knowledge of his offending. It was also noted that Mr Lochore has previous convictions which may hinder his prospects in any event. Finally, it was argued that there is no disproportionate consequence arising out of the convictions, and the general consequence of the convictions, having regard to the gravity of the offending, are not out of all proportion.
Analysis
[21] Upon pleading guilty or being found guilty, an offender may apply for a discharge without conviction, as long as no minimum sentence is required.4
[22] Before a discharge without conviction can be ordered, the sentencing Court must be satisfied as to the matters set out in s 107 of the Act. It provides:
107 Guidance for discharge without conviction
4 Sentencing Act 2002, s 106.
The court must not discharge an offender without conviction unless the court is satisfied that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.
As can be seen, the section sets out a three-step test. A Court must consider:
(a)the gravity of the offending, taking into account all aggravating and mitigating factors of the offending and the offender;
(b)the direct and indirect consequences of a conviction – the Court must be satisfied that there is a “real and appreciable” risk of such consequences; and
(c)whether those consequences are out of all proportion to the gravity of the offending
If the Court is satisfied as to each of these matters, it must then go onto consider whether or not to exercise its residual discretion under s 106 of the Act.5 Relevantly, it provides as follows:
106 Discharge without conviction
(1) If a person who is charged with an offence is found guilty or pleads guilty, the court may discharge the offender without conviction, unless by any enactment applicable to the offence the court is required to impose a minimum sentence.
…
[23]I deal first with the gravity of the offending.
[24] Mr Lochore defrauded the Ministry for his own benefit of $9,850.00. While the amount is modest, the circumstances in which the fraud occurred are more concerning.
(a)Mr Lochore was sent a letter by the Ministry detailing his obligation to advise the Ministry of any change in his circumstances. He acknowledged that he was aware of this obligation. He then entered
5 R v Hughes [2008] NZCA 546, [2009] 3 NZLR 222 at [16]; DC (CA47/13) v R [2013] NZCA 255
at [43].
into the relationship with Ms Bull, in the nature of a marriage, which lasted from February 2014 to November 2017. He was also receiving income and scholarship payments from the University of Waikato and from self-employment. He did not advise the Ministry of these matters. This failure to inform was clearly intentional;
(b)the offending was over a lengthy period. Mr Lochore received overpayments of his students’ allowance over the period March 2014 to November 2014, and from January 2015 to November 2015. He also received overpayments of the Job Seeker Support Student Hardship benefit for the period November 2014 to January 2015, and for the period November 2015 to January 2016;
(c)the offending involved a degree of premeditation. Mr Lochore had to make a declaration as to his level and sources of income and his relationship status. As noted, he was aware of his obligations. He chose to ignore them. The offending was calculated and not spur of the moment.
Looking simply at Mr Lochore’s direct offending, I agree with the Judge that it was relatively low-level offending. It does however have to be considered along with the offending with Ms Bull.
[25] At first blush, it appears from the summary of facts that Mr Lochore’s role in the joint offending with Ms Bull was relatively minor – he signed a form where he asserted that he was living with Ms Bull as her boarder and that she was a single mother. However, this form was important – the Ministry continued paying Ms Bull the benefit when it received the form. Mr Lochore has deposed that he and Ms Bull did prior research on the relevant websites and concluded that as long as they were not in a marriage-type relationship, they could claim a benefit. Again, there was premeditation, and again the offending was prolonged. They initially only planned to live together for a short time, but it worked out well and they continued well past the point where they should have informed the Ministry. They were together for some three and a half years. The amount paid to Ms Bull was significant – just over $70,000. Mr Lochore accepts that he did receive a benefit from the overpayments to Ms Bull,
and that he knew she was not entitled to the benefits being paid to her and that she was obtaining an excess benefit by fraudulent means.
[26] There are mitigating features to both sets of offending. Mr Lochore entered guilty pleas to the charges at an early stage. He has repaid the amount he received personally – $9,850. I accept that Mr Lochore was motivated by his desire to be able to look after his daughters. As against these matters, it appears from the Provision of Advice to Courts report that Mr Lochore has a misguided sense of entitlement. He said that he had no other choice but to defraud the Ministry, to gain enough money to pay his expenses while studying at University. He stated that he “tried to keep as close as legal as he could and tried to keep a non-marriage like arrangement with the co- offender” and that defrauding Work and Income was “a risk to gain a better career and life for himself and his children and would have paid off if he had not got caught”.
[27] Mr Lochore has shown little remorse for his offending and even now does not seem to appreciate its significance.
[28] I agree with the Judge that, looked at in the round, Mr Lochore’s overall offending was moderately serious.
[29] I now turn to the consequences of the convictions for Mr Lochore. The consequences are said to fall into two areas – prejudice to his employment and prejudice to him undertaking further study for a master’s degree in computer science.
[30] Mr Lochore is self-employed. He has his own company. Mr Lochore has a bachelor’s degree in computer science, but his field of expertise is in project management and delivery. I have considered the affidavit from Ms McAleer. She has known Mr Lochore for some 10 years. She states that he has always demonstrated honesty and integrity in his work, that he is a hard worker, passionate about IT and that he takes his responsibilities seriously. She expresses the view that convictions for fraud will have a significant impact on Mr Lochore’s work and future career prospects, noting that her clients do not accept service from persons with fraud convictions, and that the convictions will make it “near impossible” for Mr Lochore to secure insurance, both for contract and full-time employment roles. She also notes that Mr Lochore will not be eligible for roles that require overseas travel, because he is likely to face
difficulty in obtaining visas and travel authorisations. She says that given the convictions, she is now unable to represent Mr Lochore and is not able to assist him to find work. She said however, that, if Mr Lochore is discharged, she is likely to be able to assist him to find a sustainable amount of work for the remainder of this year and into the future.
[31] To my mind the most significant consequence of the convictions is their possible effect on Mr Lochore’s employment prospects. There is however one additional factor which should be taken into account when considering this issue. Mr Lochore already has two other convictions, one for driving with excess breath alcohol in 2002, and the other for common assault in a domestic context, which occurred in 2017. Nevertheless, I accept that additional convictions for benefit fraud will be likely to affect Mr Lochore’s ability to obtain employment in any position where he has access to confidential material and, in particular, financial information.
[32] In relation to Mr Lochore’s proposed research for a master’s degree, he has provided a letter from Dr Te Taka Keegan, a senior lecturer at the Department of Computer Science at the University of Waikato. He notes that Mr Lochore has discussed with him the possibility of enrolling in a master’s degree and that Mr Lochore hopes to be able to use his skills to research data from the Ministry of Justice. To be able to undertake such research, Mr Lochore will require access to Ministry of Justice data system and personnel and that he will need to undertake police vetting before permission would be granted to access such material. It seems likely however that even if he is discharged without convictions, Mr Lochore will still be subject to police vetting if he wishes to access Ministry of Justice files. I was told by counsel that such vetting will disclose any discharges without conviction, and that itself would be likely to result in Mr Lochore being declined access to the files. If that assertion is correct (and it was not contradicted by counsel), I cannot see that there is any prejudice to Mr Lochore from the entry of convictions in regard to his proposed master’s degree. There is also force in the point made by the Judge that Mr Lochore could always pick a different research topic and I was also told by Mr Quin that Mr Lochore has not to date pursued further research.
[33] Finally, I turn to consider whether or not the entry of convictions will be a disproportionate consequence arising from the convictions. In this regard, I have
considered a number of other benefit fraud cases where discharges without convictions have been sought. While each case turns on its own facts, I have done so to try and ensure a degree of consistency in my approach to the issue of proportionate or disproportionate consequences.
(a)In Flavell v Ministry of Social Development,6 the offender received the unemployment benefit for a period of six months when she was employed. The overpayments totalled approximately $1,150.00. The offending was at the lower end of the spectrum and the offender promptly accepted responsibility and repaid in full. She also had an unblemished record. It was accepted that a conviction would affect her employment prospects in the public sector, and that she had already undertaken valuable work in the community. The District Court had refused to discharge the offender without conviction. The appeal was allowed by Courtney J and the conviction was quashed;
(b)In Edwards v Ministry of Social Development,7 the offender had been overpaid a student allowance and received rent reductions, totalling some $38,757.00. The District Court refused a discharge without conviction. Davison J on appeal considered that the offending was moderately serious. He took into account the offender’s personal and financial circumstances. The offender was contrite and she was of previously of good character. She also had a distinguished academic career and background and she wished to pursue advanced academic study in the future. The Judge found that the consequences of a conviction would be out of proportion to the gravity of the offending, and allowed the appeal;
(c)In Middleton v Ministry of Social Development,8 an offender had received the unemployment benefit between November 2010 and June 2011 whilst employed. The overpayments totalled some $5,300.00. The offending was considered to be moderately serious, as it occurred
6 Flavell v Ministry of Social Development [2015] NZHC 214.
7 Edwards v Ministry of Social Development [2018] NZHC 1404
8 Middleton v Ministry of Social Development [2014] NZHC 76.
after the offender had received advice about the consequences of failing to declare additional income. A discharge without conviction was declined in the District Court. On appeal, Lang J did not accept that a conviction would affect the offender’s employment prospects. The offender worked as a maintenance supervisor and the Judge considered that that position did not require him to occupy a position of trust. The Judge also declined to accept the submission that the offender, who was a British citizen, would struggle to obtain New Zealand citizenship. The appeal was dismissed;
(d)In Mycroft v Ministry of Social Development,9 the offender had obtained benefits over the period 2009 to 2012 totalling some
$13,300.00. She was caring for her terminally ill mother at the time. A conviction without discharge was declined in the District Court. On appeal, Brewer J noted the stress that the offender was under, but took the view that the offending was nevertheless premeditated and persistent. He also accepted that there was a real and appreciable risk that the offender might find it difficult to gain employment, but the Judge considered that that was inevitable, and not an exceptional consequence. The appeal was dismissed;
(e)Finally, in Sinclair v Ministry of Social Development,10 an offender received the unemployment benefit between July 2009 and October 2013 when he was employed. The overpayments totalled some
$19,200.00. It was noted that the offender was motivated by need rather than greed, and that his offending was characterised as being at the lower end. A discharge without conviction was declined in the District Court. On appeal, Woolford J accepted that a conviction would affect the offender’s employment prospects, but thought that this was not insurmountable, noting the offender had a good record and community support. The appeal against the entry of convictions was dismissed.
9 Mycroft v Ministry of Social Development [2015] NZHC 2520.
10 Sinclair v Ministry of Social Development [2015] NZHC 849.
[34] Returning to the present case, I have accepted that it is likely to be more difficult for Mr Lochore to find employment in any position which requires him to have access to confidential material, and in particular, to financial information. There is however no evidence to suggest that Mr Lochore could not find employment in other fields. As noted, Ms McAleer says that Mr Lochore has previously demonstrated honesty and integrity in his work, that he is a hard worker, passionate about IT, and that he takes his responsibilities seriously. If this is the case, it would seem that Mr Lochore should be able to find employment, notwithstanding the convictions, in areas where access to confidential and financial information is not necessary. If Mr Lochore were to apply for a position requiring access to such material, I agree with Ms Alcock that potential employers should be able to find out about Mr Lochore’s convictions, and the Court should not seek to sanitise the same.
[35] While I acknowledge that some employment difficulties may arise in certain areas of work, I consider that this will often be a consequence of convictions. In this case, I am not persuaded that this consequence is out of all proportion to the gravity of the offending. Mr Lochore should be able to obtain employment in other areas of work.
[36]The appeal is dismissed.
Wylie J
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