Middleton v Ministry of Social Development
[2014] NZHC 76
•19 March 2014
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CRI-2013-463-000056 [2014] NZHC 76
BETWEEN RICHARD MIDDLETON Appellant
ANDMINISTRY OF SOCIAL DEVELOPMENT Respondent
Hearing: 5 February 2014
Appearances: R Gowing for Appellant
S-L Tapsell for Respondent
Judgment: 19 March 2014
JUDGMENT OF LANG J [on appeal against conviction]
This judgment was delivered by me on 19 March 2014 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
MIDDLETON v MINISTRY OF SOCIAL DEVELOPMENT [2014] NZHC 76 [19 March 2014]
[1] Mr Middleton pleaded guilty in the District Court to a charge of obtaining benefits under the Social Security Act 1964 by deception.1 On 18 July 2013, Judge Ingram convicted Mr Middleton and discharged him. The Judge declined an application by Mr Middleton for an order under s 106 of the Sentencing Act 2002 (“the Act”) that he be discharged without conviction.2
[2] Mr Middleton appeals against the Judge’s decision. He contends that the
Judge ought to have discharged him without conviction.
The facts
[3] There was no dispute regarding the facts. Between 25 November 2010 and
26 June 2011, Mr Middleton was in receipt of an unemployment benefit. During the same period, he accepted casual employment on several occasions as a supervisor overseeing maintenance work for an industrial company. The periods of engagement varied in length from between one day to several weeks. Each job was governed by a separate contract. Generally speaking, Mr Middleton worked a 12 hour shift, and would on occasion work for up to 12 days on end before having a day off.
[4] During this period, Mr Middleton received unemployment benefits to which he was not entitled totalling $5,319.46. He repaid that sum in full approximately a week before he was sentenced.
The hearing in the District Court
[5] Mr Middleton acted for himself at sentencing. Prior to the hearing, he filed an application for discharge without conviction. This contained a detailed summary of the circumstances in which he had accepted employment, and also set out the reasons why the Judge ought to discharge him without conviction. A significant portion of his submissions was devoted to the difficulties Mr Middleton had encountered in endeavouring to communicate with the Ministry of Social Development (“the Ministry”). He contended that the overpayments occurred as a
result of this, and noted that the Ministry has now put in place a number of initiatives
1 Crimes Act 1961, s 240(1)(a).
2 Ministry of Social Development v Middleton DC Whakatane CRI-2013-087-000297, 18 July
2013.
that make it easier for clients to make contact with the Ministry. These include the ability to accept calls from cellphones, and the provision of facilities to allow clients to communicate with the Ministry via its website. Mr Middleton submitted that, had those methods been available in 2010, he would have been able to contact the Ministry easily and his offending would not have occurred.
[6] Mr Middleton concluded his application as follows:
24.The defendant submits that the direct and indirect consequences of a conviction on this charge would be out of proportion to the gravity of the offence, in that a conviction noted against the defendant would be likely to make it even more difficult for the defendant to obtain employment, would compromise the defendant’s ability to conduct his affairs in a free and unrestricted manner and would further impact upon the defendant’s credibility and reputation;
[7] The Judge rejected this submission for the following reasons:3
[2] Mr Middleton has applied for a s 106 discharge without conviction on the basis that the consequences of conviction would be out of proportion to the gravity of the offence. In substance, his application is based on the premise that he may find it more difficult to obtain employment in what is already a tight job market for a man in the latter years of his working life. Whilst I accept that that proposition is correct, I do not consider that Mr Middleton’s difficulties in obtaining employment outweigh the gravity of the offence. It carries a maximum of seven years.
[3] On the positive side of the ledger, however, he has paid back the money that was owed and did so promptly. I accept that he has dealt with the matter as responsibly as he possibly can. It is certainly unusual in my experience for a defendant to present to Court on a charge of this nature saying, “I have paid it all,” before disposition of the charge. Mr Middleton, in my view, is entitled to substantial credit for paying it all back, for entering a guilty plea and for dealing with the matter as responsibly as he has.
[4] I do not accept that is an appropriate case for a s 106 discharge. If I did that would be in essence a carte blanche to anyone in the community to borrow money from the ministry, pay it back after the event and simply say, “No I don’t accept that I’ve done any wrong. I should be given a discharge without conviction when I have knowingly breached my obligations to the department.”
[5] Mr Middleton’s complaints about how difficult it is to get in touch with the department do not bear any examination at all, he could simply have written a letter. He is an educated man and I do not accept that the difficulties that he has claimed in making telephone contact with the department in any way go to mitigate the offence with which he has been
3 Ministry of Social Development v Middleton, above n 2.
charged. He just needed to write a letter and none of this would have happened.
[6] For those reasons I do not accept that this is an appropriate case to discharge him under s 106 Sentencing Act 2002. I do, however, accept that having done what he had done in the circumstances in which this offending occurred, that the interests of justice do not require any further penalty to be imposed, essentially because he has paid all the money back immediately and accepted responsibility for what he has done. He has led a blameless life to date and I can see no reason for anything further to be imposed than simply the conviction. That by itself will be punishment enough.
Relevant principles
[8] Section 106(1) of the Act permits the Court to discharge an offender without conviction unless any enactment applicable to the offence requires the Court to impose a minimum sentence. It is common ground that the penalty for the offence to which Mr Middleton pleaded guilty did not require the Court to impose a minimum sentence.
[9] Section 107 of the Act provides as follows:
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.
[10] In considering whether to grant an offender a discharge without conviction, the Court needs to undertake a three-step balancing exercise.4 First, the Court must assess the gravity of the offending. Secondly, it must identify the direct and indirect consequences of a conviction. Thirdly, it must determine whether those consequences would be out of all proportion to the gravity of the offending. That exercise will generally determine whether or not the discretion conferred by s 106 should be exercised in favour of the offender.5
[11] Mr Middleton contends that the Judge did not adequately undertake the balancing exercise required by ss 106 and 107. He submits that, had the Judge
4 R v Hughes [2008] NZCA 546; [2009] 3 NZLR 222 at [16], [67] and [81]-[84].
undertaken that exercise correctly, he would have exercised his discretion in Mr
Middleton’s favour.
Approach on appeal
[12] Although a discharge without conviction under s 106 amounts to the exercise of a judicial discretion, the discretion may only be exercised in accordance with the judicial assessment required by s 107. This is a general appeal conducted by way of rehearing,6 and the Court is therefore required to undertake that assessment itself in order to determine whether or not the Judge’s ultimate decision was correct.7
The balancing exercise required by s 107
Gravity of the offending
[13] The offending in the present case occurred over a reasonably significant period, although it did not occur throughout that period. Rather, it occurred sporadically. The Judge was clearly correct, however, to reject Mr Middleton’s explanation that the offending was caused in large part by his inability to contact the Ministry. Mr Middleton would have had ample opportunity during periods when he was not undertaking work for his employer to visit the Ministry’s offices or contact the Ministry in some other way.
[14] The amount that Mr Middleton obtained as a result of his offending could properly be described as modest. The gravity of the offending is also reduced by the fact that Mr Middleton accepted responsibility for his offending at a relatively early stage. He repaid the amount by which he had been overpaid, and also pleaded guilty to the charge that he faced.
[15] Mr Middleton’s culpability is increased to a certain extent, however, by the fact that between September 2008 and April 2009 he failed to disclose the fact that he had worked for four separate employers whilst continuing to receive the unemployment benefit. As a result, he was overpaid the unemployment benefit in
the sum of $3,681.38 during this earlier period.
6 Summary Proceedings Act 1957, s 115(4) and 119(1).
[16] Mr Middleton called into question the weight that I should attach to this issue in an affidavit that his counsel filed following the hearing. In this affidavit Mr Middleton challenged a statement in the agreed summary of facts to the effect that the Ministry had sent him a warning letter in respect of these omissions on 23
February 2010. Mr Middleton annexed a copy of the letter to his affidavit, and maintained that it did not amount to a warning. Rather, the letter explained how the Ministry had become aware of his additional income using information it had received from the Inland Revenue Department. It also explained that his entitlement to receive a benefit could be affected if he derived income above a certain level from any other source.
[17] After I received Mr Middleton’s affidavit I permitted the Ministry to file an affidavit in response, and Mr Middleton then filed a further affidavit in reply. It is not necessary for present purposes to traverse the issues raised in these affidavits. I accept Mr Middleton’s assertion that the letter dated 23 February 2010 did not amount to a warning about the consequences of failing to advise the Ministry of any change to his sources of income in the future. The evidence discloses, however, that the Ministry wrote a further letter to Mr Middleton on 12 March 2010. The letter was written in response to a query raised by Mr Middleton about matters contained in the letter dated 23 February 2010. The important feature about the letter dated
12 March 2010 for present purposes is that it concluded with the following paragraph:
Finally, please remember that while you are receiving income support you must tell the Ministry of any changes to your circumstances that might affect your entitlement or the rate of benefit you receive. If you do not do this and you receive overpayments of income support, you could face a monetary penalty or prosecution.
[18] I consider that this paragraph placed Mr Middleton firmly on notice of the fact that he needed to advise the Ministry immediately in the event that he was to receive any income from another source in the future. Mr Middleton’s failure to disclose his employment as a maintenance supervisor after having received the letter dated 12 March 2010 adds to the gravity of his offending.
[19] Having regard to these factors, I would categorise the overall gravity of Mr Middleton’s offending as being moderate. The fact that it occurred after Mr Middleton had received advice about the consequences of failing to declare additional income means, however, that his offending was not at the lowest end of the scale.
The direct and indirect consequences of conviction
[20] In support of his appeal, Mr Middleton filed an affidavit in which he set out his work experience since 1989. From 1989 to 2001 he practised as a lawyer, initially as a staff solicitor and then as a barrister. Between 2007 and 2010, he worked as an adviser and trust specialist for a trustee company. Then, in 2010 and
2011, he undertook the employment that gave rise to the present offending. Mr Middleton explains that he holds a qualification that is a requirement for any supervisor in charge of a maintenance crew working on certain industrial sites. This has enabled him to obtain the casual employment work that led to the charge being laid against him.
[21] Mr Middleton does not say that the existence of a conviction will provide a barrier to him from continuing to work in any capacity. Rather, he says only that he is aware from his numerous applications for work over the past few years that all employers require an applicant to disclose any criminal convictions.
[22] I accept that the existence of the present conviction may well provide a barrier to Mr Middleton obtaining work in the future as a lawyer or as an adviser to a trustee company. It would appear, however, that in recent times Mr Middleton has chosen a career path in the maintenance industry rather than in those fields. In the absence of any evidence to the contrary, I do not accept that the existence of a conviction would necessarily be a barrier to him continuing to work in that particular field. Such work would not require him to occupy a position of trust and, on the information presently available, it is difficult to see how his employer could be at risk from any dishonest act on his part. Moreover, one would expect Mr Middleton’s employer to be aware of his ability as the supervisor of a maintenance crew. Mr Middleton will also have the opportunity to explain the circumstances that led to the
conviction, and will be able to emphasise the fact that the Judge saw fit to convict and discharge him without further penalty.
[23] I therefore conclude that, although the existence of a conviction will provide a barrier to Mr Middleton undertaking some forms of work in the future, I do not consider there is a significant risk that he will be prevented from continuing to work as a maintenance supervisor as he has done in recent years.
[24] Mr Middleton also points to the fact that, although he is a New Zealand resident, he is not a New Zealand citizen. He is a British citizen, and holds a British passport. Mr Middleton’s son is due to commence living in Australia this year, and Mr Middleton says he will visit his son there from time to time in the future. Mr Middleton therefore wishes to apply for New Zealand citizenship to make it easier for him to travel into and out of New Zealand. Mr Middleton says he is concerned about the effect a conviction will have on his ability to obtain New Zealand citizenship.
[25] In the absence of any evidence on the point, I am not satisfied that there is a real risk that the present conviction will disqualify Mr Middleton from obtaining New Zealand citizenship. He will no doubt have the opportunity to make full submissions to the relevant authorities when he applies for citizenship. Even if the application was declined, this would not prevent Mr Middleton from travelling to and from Australia using his present passport.
Are the direct and indirect consequences of conviction disproportionate to the gravity of the offending?
[26] The most significant consequence of a conviction for Mr Middleton will be the fact that he will be likely to have difficulty in obtaining employment in the future as a lawyer or trustee adviser. I consider, however, that a prospective employer in the legal profession and trustee industry should be entitled to know of the fact of, and circumstances surrounding, Mr Middleton’s convictions. Lawyers and those working for trustee companies are in a position of trust in relation to their clients, and Mr Middleton’s offending involved, in some respects, a breach of trust. The fact that Mr Middleton will need to disclose the existence of a conviction to prospective
employers in these fields would not, in my view, be a consequence out of all
proportion to the gravity of Mr Middleton’s offending.
[27] For the reasons I have already expressed, I do not accept that there is a real risk that Mr Middleton will be unable to work in the future in the maintenance field. The existence of the conviction would therefore not be disproportionate to the consequences of a conviction in relation to that type of employment.
[28] I also consider it important that the relevant immigration authorities should be aware of the fact that Mr Middleton has a conviction for obtaining an unemployment benefit by deception. That may or may not result in his application for citizenship being declined. Either way, I do not see the consequences as being disproportionate to the gravity of the offending. There is no suggestion that a conviction will result in Mr Middleton being deported from New Zealand, or that he will lose his status as a New Zealand resident.
Result
[29] It follows that, like the Judge, I do not accept that a conviction would be out of all proportion to the gravity of Mr Middleton’s offending. It was therefore not appropriate for him to be discharged without conviction.
[30] The appeal against conviction is accordingly dismissed.
Lang J
Solicitors:
Gowing & Co Lawyers Ltd, Whakatane
Crown Solicitor, Rotorua