Matthews v Housing New Zealand HC Auckland CRI 2011-404-3

[2011] NZHC 497

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI 2011-404-3

BETWEEN  JUNE MATTHEWS Appellant

ANDHOUSING NEW ZEALAND Respondent

Hearing:         2 May 2011

Appearances: R Brown for appellant

H Ifwersen for respondent

Judgment:      18 May 2011

JUDGMENT OF ALLAN J

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 1 pm on Wednesday 18 May 2011

Solicitors:

PDS Manukau, [email protected]

Crown Solicitor Auckland, [email protected]

JUNE MATTHEWS V HOUSING NEW ZEALAND HC AK CRI 2011-404-3 18 May 2011

[1]      On 6  September 2010  the appellant  pleaded  guilty to  one  representative charge of using a document, contrary to s 228(b) of the Crimes Act 1961, an offence punishable by a maximum penalty of seven years imprisonment.

[2]      On 18 October 2010, Judge Epati heard an application by the appellant for discharge without conviction pursuant to s 106 of the Sentencing Act 2002.   The Judge refused to  grant  a discharge and remanded the appellant for sentence on

30 November 2010.   At sentence Judge Mathers imposed a sentence of 60 hours community work and directed the appellant to pay reparation of $2,500 at a rate of

$20 per week, commencing on 8 December 2010.

[3]      The  appellant  now  appeals  against  Judge  Epati’s  decision  to  refuse  a discharge without conviction.   There is no challenge to the sentence imposed by Judge Mathers in the event that this Court declines to grant a discharge on appeal.

Factual background

[4]      Since about July 1999 the appellant had been a tenant of a Housing New Zealand residential property.  Her rent was income-related.  In order to determine the appropriate rent, the Corporation relies on honest and accurate information from tenants about their household income and personal circumstances.  Where there is a difference between income-related rent and the assessed market rent, the Crown funds the difference.

[5]      In  October  2007,  July  2008,  and  June  2009,  the  appellant  signed  and submitted applications for an income-related rent in which she omitted to disclose that her husband was living at the property with her.  She did so in order to benefit from  a  lower  rent  than  would  be  the  case  if  she  disclosed  the  truth.    As  a consequence of the offending, she obtained benefits of about $3,153.

[6]      The appellant had formed a relationship in 2005, had married in August 2007 and separated in 2009.   During the course of the marriage, the appellant and her

husband would live together at the rented residence for some days each week, but her husband also maintained a separate residence elsewhere.

The District Court decision

[7]      Judge  Epati  noted  the  seriousness  of  the  offence  by  reference  to  the maximum penalty prescribed.  He then considered the principal basis upon which the discharge application was advanced, namely that the appellant’s prospects of obtaining registration  as  a social  worker might  be hindered  in  the  event  that  a conviction was entered.   The Judge distinguished between cases in which conviction would operate as a complete bar (where a discharge might well be considered), and cases where the entry of a conviction was merely a matter which would be taken into account by a registration board.  In such cases he said it was usual for the Court to leave the decision to the body concerned.

[8]      The Judge then moved to the appellant’s prior record and expressed surprise that she should seek a discharge in the light of her earlier convictions.  The appellant is now 49 years of age.  In 1977, at the age of 15, she was dealt with by the Youth Court for shoplifting.  The following year she appeared on a charge of burglary by night, and  a further charge of theft.    In  1983,  when  21  years of age,  she was convicted of shoplifting.   In 1994, she was convicted on three charges of using a document to obtain a pecuniary advantage.   On that occasion she was fined and a sentence of supervision was imposed.   The amount involved seems to have been small, reparation of $103.30 was ordered.

[9]      Against that background, Judge Epati considered the offence was too serious to justify a discharge, noting that there were three separate false declarations.   He said  that  there  was  an  early guilty plea  and  an  expression  of  remorse,  but  the proffered reparation, which would take three years to implement, was, he considered “far too long, and in my respectful opinion, it is not a viable consideration for me to consider”.   Accordingly, he refused a discharge.   It is from that decision that the appellant now appeals.

Discharge without conviction – legal principles

[10]     The jurisdiction of the Court to discharge without conviction is conferred by ss 106 and 107 of the Sentencing Act 2002 which respectively provide:

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.

(2)      A discharge under this section is deemed to be an acquittal. (3)     A court discharging an offender under this section may—

(a)       make an order for payment of costs or the restitution of any property; or

(b)       make any order for the payment of any sum that the court thinks fair and reasonable to compensate any person who, through, or by means of, the offence, has suffered—

(i)       loss of, or damage to, property; or

(ii)      emotional harm; or

(iii)     loss or damage consequential on any emotional or physical harm or loss of, or damage to, property:

(c)       make  any  order  that  the  court  is  required  to  make  on conviction.

(3A)     If the court is considering making an order under subsection (3)(b), it may order a report to be prepared under section 33 as if the court were considering imposing a sentence of reparation.

(4)       Despite subsection (3)(b), the court must not order the payment of compensation in respect of any emotional harm, or loss or damage consequential on emotional harm, unless the person who suffered the emotional harm is a person described in paragraph (a) of the definition of “victim” in section 4.

(5)       Despite subsection (3)(b), the court must not order the payment of compensation in respect of any consequential loss or damage described in subsection (3)(b)(iii) for which the court believes that a person has entitlements under the Injury Prevention, Rehabilitation, and Compensation Act 2001.

(6)       When determining the amount of compensation to be paid, the court must take into account any offer, agreement, response, measure, or action as described in section 10.

(7)       Nothing in section 320 of the Injury Prevention, Rehabilitation, and

Compensation Act 2001 applies to sentencing proceedings.

107      Guidance for discharge without conviction

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.

[11]     The application of these sections was recently discussed by the Court of Appeal in R v Hughes.[1]    There, the Court noted that, despite the heading to s 107, “Guidance for discharge without conviction”, the provisions of the section are mandatory.   In consequence, no Court may exercise its discretion under s 106 to discharge without conviction unless it is satisfied that the consequences of a conviction would be out of all proportion to the gravity of the offence.  As was said in Hughes:[2]

…  Section  107  thus  provides  a  gateway  through  which  any  discharge without conviction must pass.  It stipulates a pre-condition to exercise of the discretion under s 106.

[1] R v Hughes [2009] 3 NZLR 222.

[2] At [8].

[12]     Importantly, the Court also pointed out that a decision as to whether the test under s 107 has been met is not a matter of discretion.  Rather, it is a matter of fact requiring judicial assessment and so is subject to appeal on normal appellate principles:  R  v  Rajamani.[3]      In  consequence,  the  approach  mandated  in  Austin, Nichols & Co Inc v Stichting Lodestar applies:[4]

Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

[3] R v Rajamani Austin,[2008] 1 NZLR 723 at [5].

[4] Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].

[13]   In Hughes, the Court of Appeal confirmed that the criminal law disproportionality test discussed in such cases as Fisheries Inspector v Turner[5]and Police v Roberts[6] had not been departed from in s 107. The Court said in Hughes[7]:

In summary, the parameters within which the disproportionality principle operates have not been changed by s 107.    Application of the disproportionality test  under  s  107  requires  consideration  of  all  relevant circumstances of the offence, the offending and the offender, and the wider interests of the community, including the factors required by the Sentencing Act to be taken into account under ss 7, 8, 9 and 10.  Having taken account of those factors, the Judge must determine whether the s 107 test is met and whether it is appropriate that he or she makes an order under s 106 to deal with the offender.

[5] Fisheries [1978] 2 NZLR 233 (CA)

[6] Roberts [1991] 1 NZLR 205 (CA).

[7] At [41].

[14]     The appellant does not carry an onus to establish that the disproportionality test has been met.   Rather, in terms of s 107, the Court may discharge without conviction “… if satisfied” that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.  As explained in R v

Leitch,[8]  the need to be “satisfied” simply involves the exercise of judgment by the

Court; it is inapt to import notions of burden and standard of proof.

[8] R v Leitch [1998] 1 NZLR 420 at 428.

[15]     In Hughes, the Court of Appeal confirmed the continuing applicability of the three-step approach suggested in Turner and in Roberts:

(a)      Identification of the gravity of the offending by reference to the facts of the particular case;

(b)      Identification of the direct and indirect consequences of a conviction;

(c)      Determination of whether the direct and indirect consequences of conviction would be out of all proportion to the gravity of the offending.

[16]     It is not essential that the Court be satisfied that the identified direct and indirect consequences would inevitably or probably occur.   It is sufficient if the

Court is satisfied that there is a real and appreciable risk that such consequences would occur.[9]

[9] Iosefa v Police HC Christchurch CIV-2005-409-64, 21 April 2005 at [34] and Alshamsi v Police HC Auckland CRI-2007-404-62, 15 June 2007.

[17]     It is necessary to consider whether, in the light of the gravity of the offending and  the  nature  and  seriousness  of  the  consequences  of  the  offending,  the consequences of a conviction would be out of all proportion to the gravity of the offence.  In the course of the necessary assessment, all of the facts of the individual case must be considered.  But the words “out of all proportion” suggest an extreme situation that speaks for itself: Roberts.

[18]     Although from case to case judges have expressed themselves differently, there is general judicial acceptance that discharges without conviction will be rare and that the test is difficult of achievement: see for example Daniels v Police.[10]

Discussion

[10] Daniels v Police HC Wellington CRI 2008-485-19, 22 May 2008.

[19]     The first step is to assess the gravity of the offending.  The Judge correctly took into account the maximum penalty prescribed by law, and the circumstances.  In reality, there were three separate offences, not just one.   There was an attendant degree of premeditation, in that Ms Matthews must on each occasion have turned her mind to precisely what she was doing when she completed the form required by the Housing Corporation each year.  The financial loss sustained by the respondent was not insignificant, the net result being that the taxpayer funded the difference between her assessed rent and a market rental.

[20]     Accordingly, this case is to be judged alongside those where benefit fraud is established.  In general, benefit fraud involving more than minimal sums will be met by a sentence of imprisonment, or at least by a starting point fixed on that basis. Several examples of custodial sentences in cases involving sums of less than $10,000

are summarised in Barakat v Police.[11]   In each case the starting point was 12 months

imprisonment or more.

[11] Barakat v Police HC Palmerston North CRI-2008-454-35, 14 August 2008.

[21]     I accept however that in appropriate cases it will be proper to stop short of imprisonment.  A helpful recent example of that is the decision in Ransom v R.[12]   In Ransom the Court of Appeal held, allowing an appeal in a case of benefit fraud involving $120,000, that a sentence of nine months home detention, coupled with a sentence of community work, was appropriate.

[12] Ransom v R [2010] NZCA 390.

[22]     In determining the gravity of the offence for the purposes of s 106 of the Sentencing Act, it is necessary to take into account both aggravating and mitigating factors.    A  further  aggravating  factor  not  already  mentioned  is  Ms  Matthews’ previous record, to which I will return in the course of discussing Ms Brown’s submissions.  But it is necessary to take into account also mitigating factors such as the   guilty plea, an expression of remorse,  an  offer of amends and the Court’s

assessment of how likely it is that the offender will reoffend.[13]

[13] Delaney v Police HC Wellington CRI-2005-485-28, 22 April 2005.

[23]     Ms Brown submits that Judge Epati’s analysis of gravity was flawed, in that he failed to take into account the age of her previous convictions and the fact that some of them were committed at a time when she was within the jurisdiction of the Youth Court.  The most important of the previous convictions for present purposes are those in 1994 for using a document for pecuniary advantage.  At that time the appellant was 32 years of age and so by no means still in her formative years.

[24]     Ms Brown accepts that the Court will more readily grant a discharge to a first offender of good character than to a recidivist, because the former is less likely to reoffend.   However, she says that in this case there is a great deal to suggest that Ms Matthews has made a significant effort to turn her life around and to make a future for herself and for her son.   She has completed a university degree and obtained work as a social worker.  As will appear, she has applied for registration in that capacity.  Ms Brown points out also that by reason of a very early sentence of borstal training, Ms Matthews is unable to take advantage of the provisions of the Criminal Records (Clean Slate) Act 2004, so that is a burden which she must carry

with her.

[25]     There would, I think, have been a great deal to be said for Ms Brown’s submission had the appellant’s criminal record been confined to youthful indiscretions, but the fraud offences in 1994 deprive her point of much of its substance.

[26]     The second  step  in  the  analysis  is  concerned  with  an  assessment  of  the consequences of a conviction.   The Court is concerned here with Ms Matthews’ application to be registered as a social worker by the Social Workers Registration Board, pursuant to the Social Workers Registration Act 2003.  Under s 47 of that Act, the Board may refuse registration where there are grounds on which a reasonable person would conclude that the subject is not a fit and proper person to practise social work, and may reach that conclusion where the subject has been convicted in New Zealand or overseas of an offence punishable by imprisonment for three months or more.  But separately, the Board is also entitled to refuse registration where it is satisfied on reasonable grounds that the subject is not of good character and reputation, irrespective of the existence of a conviction.

[27]     Ms Brown argues that a conviction will enhance the risk, in this case, that the Board may refuse registration to the point where there is a real and appreciable chance that that may occur.

[28]     The Board is aware of the fact of the charge against the appellant, but seems not to have been advised of the outcome to date.   Although positive about the appellant’s application on the merits, it has decided to await the outcome of the Court hearing before making a final determination.   A conviction is not a bar to registration, but it is undoubtedly a matter which the Board will wish to take into account.   In the same way, a discharge without conviction would be taken into account by the Board, which would obviously need to be fully appraised of the factual background to the offending, and the relevant aggravating and mitigating factors.

[29]     I accept that the Board may be somewhat more disposed to take a lenient view if the appellant is discharged without conviction, but there is nothing to suggest that it would refuse her application simply by reason of the fact of a conviction.  It is

more likely to want to consider all of the relevant circumstances, including the conviction itself.

[30]     It must be borne in mind also that a refusal of registration does not of itself prevent Ms Matthews from obtaining employment as a social worker, although I accept without difficulty the proposition that registration will enhance her employment prospects.

[31]     It is to be remembered that the appellant has historic convictions for offences involving fraud, committed at a time when she was 32 years old.  The Board will presumably obtain a copy of the appellant’s overall criminal record, and will assess the most recent offending in the context of that record.

[32]     The Court has been provided with certain e-mail correspondence passing between various representatives of the board.   From that correspondence it seems clear that a conviction will not necessarily prevent registration.  In one e-mail there is an indication “… that even if found guilty it would not necessarily stop her becoming a member, but we would need to discuss it with her at that time”.

[33]     In a number of cases the Court has discussed the relevance of the existence of an independent body charged  with determining the suitability of individuals for particular employment.   Where a conviction is an absolute bar to the particular occupation that may well be a significant factor.  Otherwise, if (as here) it is simply a matter likely to be taken into account by the independent body, the Court will often enter a conviction on the footing that it is in the public interest that that body is best able to make a decision with the benefit of full disclosure.   The fact that the conviction may act as a barrier to gain entrance to an occupation is not a determinative  factor,  it  is  merely  a  factor  to  be  considered  in  the  balancing

exercise.[14]

[14] Liang v Police HC Wellington AP38/02, 16 April 2003.

[34]     Mr Brown is critical of Judge Epati’s decision in that he failed to articulate

the  “real  and  appreciable  risk”  test,  or  to  analyse  sufficiently  the  impact  of  a

conviction on Ms Matthews’ employment prospects.  However, this is not a case in which a conviction would represent an absolute bar

[35]     There is  a particular  concern  with  the Judge’s  reference to  the need  for “clear” consequences rather than the identification of a “real and appreciable risk” of the consequences of a conviction occurring.   However, I consider that the Judge’s reference to the consequences being “unclear” is no more than a reference to the fact that this is not a case in which a conviction will operate as a complete bar to professional registration.

[36]     In her final ground of appeal the appellant is concerned about the Judge’s failure to take into account in the balancing exercise, the significant losses already sustained by her in consequence of the offending.  She has lost the home in which she lived with her son for 10 years.   Moreover, the Judge declined to take into account regular reparation payments which he considered would take too long.

[37]     As earlier indicated, I accept that Delaney is authority for the proposition that the gravity of the offending must be assessed in the light of all relevant factors, including mitigating factors.  In reality however, the Judge reached his decision on the footing that it was not in the public interest to grant a discharge in a case of sustained benefit fraud, where it could not be shown that a conviction would operate as a total bar upon registration in the appellant’s chosen occupation.  The question on appeal is whether that represented an appropriate balancing of the relevant factors.

[38]     I am satisfied that it was.   There is no suggestion that employment would become impossible for Ms Matthews if she is not discharged.   She says in her affidavit that a conviction would negatively impact, not only on her registration, but also on her employability as a social worker in New Zealand, and would mean that she is less likely to be employed.  That is probably correct, but the same is true of virtually anyone with a criminal conviction for offending of this sort, or indeed, for any serious offence.

[39]     This case is not unlike the recent decisions in Oliva v Police,[15] and Modise v Police.[16]   Each case involved charges of limited domestic violence.  In each case the appellant had no previous convictions, and there were employment consequences.  In Modise the appellant was employed by the Department of Corrections as a prison

guard at Mt Eden Prison, and in consequence of a conviction he might lose his employment by reason of a re-organisation at Mt Eden.

[15] Oliva v Police HC Auckland CRI-2010-404-086, 22 June 2010.

[16] Modise v Police HC Auckland CRI-2010-404-514, 25 March 2011.

[40]     In the case of Oliva the appellant was, as here, involved in social work, and was concerned that a conviction would be a barrier, both to the obtaining of formal qualifications and to employment in the area.

[41]     In each case the Judge considered that the consequences of a conviction would not be out of all proportion to the gravity of the offending.  In my view each of those offences was less serious than here; further, each appellant had a clean record, whereas Ms Matthews plainly does not.  In each case there was a real and appreciable risk of difficulty in ongoing employment in the appellant’s chosen employment field.  But those circumstances were not sufficient to justify a discharge without conviction.

[42]     I am satisfied that the consequences of a conviction in this case were not disproportionate to the gravity of the offending, and that accordingly Judge Epati reached the right conclusion when he refused to discharge the appellant.

Result

[43]     For the foregoing reasons the appeal is dismissed.

C J Allan J