O'Hagan v Ministry of Social Development
[2015] NZHC 1833
•5 August 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2015-404-135 [2015] NZHC 1833
BETWEEN LAURA HELEN O'HAGAN
Appellant
AND
MINISTRY OF SOCIAL DEVELOPMENT Respondent
Hearing: 3 August 2015 Counsel:
D P H Jones QC for Appellant
R J Y See and S H Youn for RespondentJudgment:
5 August 2015
JUDGMENT OF BREWER J
This judgment was delivered by me on 5 August 2015 at 10:30 am pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors: Cook Morris Quinn (Auckland) for Appellant
Meredith Connell (Auckland) for Respondent
Counsel: David PH Jones QC
O'HAGAN v MINISTRY OF SOCIAL DEVELOPMENT [2015] NZHC 1833 [5 August 2015]
Introduction
[1] Judge C Ryan sentenced Ms O’Hagan to 40 hours’ community work in the District Court at Auckland on 24 April 2015.1 Ms O’Hagan had pleaded guilty to two charges of obtaining by deception and three charges of dishonestly using a document.2 Over a period of about 20 months, Ms O’Hagan acquired fraudulently just over $15,000. Ms O’Hagan wanted to be discharged without conviction. She now appeals against Judge Ryan’s refusal to do so.
Background
[2] Ms O’Hagan applied for the Domestic Purposes Benefit from around 1 July
2011. She continued to receive this benefit until 21 October 2013, at which time she began receiving non-beneficiary assistance. That assistance continued until
17 March 2014.
[3] As a result of the cross-matching of information between the Ministry of Social Development and the Inland Revenue Department, it was discovered that Ms O’Hagan had been working and receiving income from three different sources during the time she was receiving social security benefits. Ms O’Hagan was interviewed on 17 March 2014 and readily admitted her offending.
[4] The Judge summarised the offending as follows:
[4] The summary of facts records that you said that you did this because you “wanted the money”. I accept your counsel’s submissions that you were in financially difficult circumstances and needed money to defray the escalating costs and debts that you were struggling to pay as a solo mother of a small child.
[5] You also admitted to the Ministry during the course of the enquiry that you had been living in the nature of marriage with your child’s father, Mr Jeff Willetts from 3 August 2013 to 7 December 2013. The two of you initially took on a joint tenancy at 12 Mahana Place, Rotorua and then you moved to live at a place in Devon Street, Springfield, Rotorua. You continued to claim accommodation costs as if you were a single mother during this period.
1 Ministry of Social Development v O’Hagan [2015] NZDC 7336.
2 Crimes Act 1961, ss 240(1), 241(a) and 228(b).
[6] I accept that you separated from Mr Willetts, who you say has not been a great support to you, on 7 December 2013.
[7] However, on or about 17 June 2013, while you were still living with Mr Willetts, you completed a Work and Income review form stating that you were not working and had received no income in the last 52 weeks, ending
14 April 2013. That was incorrect and you knew that. Your benefit was continued with the information that you had provided.
[8] On 16 October 2013 while still living with Mr Willetts you completed a personal details form, a transitional condition to work grant form and a childcare and OSCAR subsidy application. You applied for the accommodation supplement but did not advise that you were living in the nature of a marriage with Jeff Willetts. The information that you provided was false and you knew that. You were given a grant and your childcare benefit was continued in a way that it would not have been had the truth been told to the Ministry.
[9] On or about 18 February 2014, you advised in a temporary additional support form that you were renting at the Mahana Place, Frankton, Rotorua address and you were paying $360 a week. You were not living at that address and you were not paying that amount of rent. Again, you told a lie to the Ministry. As a result of these forms misleading the Ministry until
17 March 2014 when the interview revealed all, you received a total of
$15,044.50 which you should not have obtained.
Discharge without conviction
[5] Section 106 of the Sentencing Act 2002 empowers a Court to discharge an offender without conviction and deems such a discharge to be an acquittal. However, s 107 provides:
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.
[6] There is, therefore, a three-step process which a Court should follow in deciding whether the criteria for a discharge without conviction have been met:
(a) Identify the gravity of the offending by reference to the particular facts of the case;
(b) Identify the direct and indirect consequences of a conviction; and
(c) Determine whether the direct and indirect consequences of conviction would be out of all proportion to the gravity of the offending.
[7] Judge Ryan, during her sentencing, went through this process. In assessing the gravity of the offending, the Judge recognised that she must take into account all relevant circumstances of the offence, the offender and the wider interests of the community. At the end of her analysis the Judge concluded that the consequences for Ms O’Hagan of convictions were not out of all proportion to the gravity of the offending as the Judge had identified.
Grounds for appeal
[8] I start by observing that I accepted an affidavit sworn by Ms O’Hagan in support of her appeal on 14 July 2015. It does not, as Ms See for the respondent submitted, add much to the material that was before Judge Ryan. It does update the material that was before the Judge, and in particular tells me about Ms O’Hagan’s current employment situation. I am entitled to receive affidavit evidence on an appeal if it is in the interests of justice to do so. I decided that in this case, because of the focus of the appeal, the affidavit has some relevance and it would be unjust for me to be blind to its contents.
[9] Ms O’Hagan’s personal situation is set out in the synopsis of submissions
filed by her counsel, Mr Jones QC:3
4.Ms O’Hagan is now 26 years old. She is a solo parent. At the time the offending commenced, her daughter was still an infant. Ms O’Hagan is no longer in a relationship with the father of her daughter. He responded poorly to the pregnancy and has provided little support for either Ms O’Hagan or their daughter since her birth.
5.Ms O’Hagan’s offending was prompted by her dire financial situation. Her pregnancy was unplanned and came at a time when she had only recently taken out a loan for a car. She was unable to commence work as soon as she had hoped after the birth of her daughter, something which increased her financial plight. The father of her child (who she continued to live with for a period of time) contributed little to the household.
6.At the time of the offending Ms O’Hagan was disconnected from her family members and felt “too proud” to ask for help. She was unaware of any other avenues for assistance, such as loan restructuring or facilities offered by Work and Income, that might have helped her situation. She has been committed to finding paid employment since the birth of her daughter and has found work in
3 Synopsis of submissions on behalf of the appellant, dated 16 July 2015.
areas such as hospitality. Currently she has a full-time position as a
Territory Manager at 2Degrees.
7.Ms O’Hagan accepts full responsibility for her actions. She was cooperative with the investigation and pleaded guilty to the charges at an early stage. She is currently repaying the debt she owes to Work and Income at a rate of $200 per month. She has paid more when her circumstances permit. Her current position will enable her to continue the current repayment schedule but also augment it so the debt is paid more quickly.
8.It is important to Ms O’Hagan that the debt is repaid out of money she has earned herself. She has responded to her situation by taking responsibility, doing what she can to demonstrate her remorse and paying the debt back as fast as her means allow her. It is part of her redemption to pay the money back from her own funds.
9.The pre-sentence report assessed Ms O’Hagan’s risk of reoffending as low. It was noted that these are her first convictions, and that Ms O’Hagan seemed genuinely regretful of her offending. The report writer considered that a discharge without conviction would support Ms O’Hagan’s career and allow her to repay Work and Income appropriately.
[10] I add that Ms O’Hagan voluntarily performed 150 hours’ of community work. The Judge deducted those hours from the sentence she would otherwise have imposed, hence the final sentence of only 40 hours.
[11] Mr Jones addresses, first, the finding of the Judge that the gravity of the offending was moderately serious. Mr Jones does not challenge that assessment but submits that the Judge did not give appropriate weight to Ms O’Hagan’s account of the depression which she suffered during and after her pregnancy. That is not surprising since there was no medical information before the Court to support that. The Judge did, however, accept that Ms O’Hagan’s pregnancy and the need to raise a small child were particularly difficult for someone “who had not planned for it, did not have a support network in place and who felt too proud to ask others for help”. Mr Jones submits that Ms O’Hagan’s further affidavit now puts before the Court evidence that was not before Judge Ryan and which should prompt greater recognition of this factor.
[12] The passages in the affidavit going to depression do not seem to me to add materially to the account which was before Judge Ryan. Ms O’Hagan deposes to becoming extremely depressed when she fell pregnant in 2010. At the insistence of
her midwife, Ms O’Hagan sought treatment for the depression and was on medication for several months. However, Ms O’Hagan deposes she stopped taking the medication before she gave birth and has not resumed it since. In Ms O’Hagan’s view, she was depressed both during her pregnancy and after she gave birth:4
I have not taken medication for depression since my daughter was born, but I have had medication for anxiety since the charges were laid against me. I explained to the doctor my history and he wanted to put me on a long term medication programme for depression which I did not want to do. I received medication for anxiety instead.
[13] In terms of the assessment of the gravity of the offending, what I take from the submissions of Mr Jones is that I can place greater emphasis on the effects of depression as a factor mitigating the gravity of offending than did the Judge.
[14] The second step in the process is to assess the consequences of conviction. The Judge accepted that Ms O’Hagan would face shame, embarrassment, stigma, risks to employment and difficulties travelling. The Judge pointed out that these consequences are common to all people who are convicted.
[15] With regard to Ms O’Hagan specifically, the Judge accepted that Ms O’Hagan had recently obtained a full-time position with a company and that her employment agreement allowed the employer to terminate the contract summarily for serious misconduct. Serious misconduct included theft and dishonesty. However, the Judge expressed uncertainty about whether Ms O’Hagan would lose her job if she were convicted. The Judge did accept that convictions would make it difficult for Ms O’Hagan to gain employment in industries where trust and honesty are essential.
[16] Mr Jones submits that the general prejudice to employment which the Judge identified can now, as a result of Ms O’Hagan’s further affidavit, be upgraded to a specific consequence. Ms O’Hagan deposes that she has recently been promoted in
her employment to a position as a Territory Manager. Mr Jones submits:5
4 Affidavit of Laura Helen O’Hagan in support of appeal against refusal to grant a discharge
without conviction, dated 14 July 2015, at para 5(e).
5 At para 31.
This part of the s 107 analysis should therefore not only recognise general risks to Ms O’Hagan’s employment opportunities in the future, but also recognise the following direct and indirect consequences of a conviction that are real and appreciable:
(a) Ms O’Hagan will lose her current employment, which is regular, steady and will allow her to develop her skills in sales and marketing. In turn, this will lead to better employment opportunities in the future.
(b) A conviction would mean Ms O’Hagan will find it very difficult to find employment elsewhere. She has little employment history and/or training. She would likely not receive any form of reference or endorsement in the circumstances.
(c) If Ms O’Hagan loses her current employment, she will once again be dependent on state benefits for welfare. She is financially independent now. It would be a truly retrograde step for her to return to benefit dependency. It is also far better for the wider community that Ms O’Hagan is able to look after herself and her daughter independently and make her own way in the world. Such is an integral part of an offender reintegrating with and contributing to the community in a meaningful way.
(d) If Ms O’Hagan’s income is reduced to a state benefit, that benefit will be docked to repay her debt to Work and Income. The level of repayment would be negligible compared to her current repayments. A reduced benefit amount will (at a personal level) cause further financial strain, as well as potentially impact upon her already anxious mental state. At a wider, public level, she will revert to being state dependent as opposed to independent and repaying her debt to society through her own hard work.
(e) Any compromised employment opportunities will also impact upon her daughter, in that it will adversely affect the family’s financial stability.
[17] I accept that there is a real and appreciable possibility that convictions will result in Ms O’Hagan losing her job.
[18] The third step in the process is to assess whether the consequences of conviction are out of all proportion to the gravity of the offending. On this point Mr Jones’s submissions are:
36.It is submitted that the sentencing Judge, when assessing the proportionality issue for Ms O’Hagan, was wrong to conclude the consequences of conviction were not out of all proportion to the gravity of the offending. The future of Ms O’Hagan is at issue and the options are stark. Convictions will result in her dismissal and a return to welfare dependency and a life she has fought to leave behind. Her debt will be virtually impossible to repay and the
financial pressure she and her daughter would be under would be significant. The stress may also aggravate her already anxious mental state.
37.On the other hand, a young woman who has shown her contrition in very real terms and is taking responsibility for her actions, paying her way and paying her debt, will be able to continue on the positive path she is carving out for herself and her daughter if a discharge is granted. Importantly, Ms O’Hagan has shown that – despite what she has done – she has a pro-social attitude to the wider community, as evidenced by her gainful employment, willingness to remedy her wrong by paying reparation and contributing to the community through volunteering.
38.She has been assessed by the probation officer as being a low risk of re-offending, and she has herself admitted that she has insight into what led to her offending and is committed to ensuring that such a situation does not happen again.
Decision
[19] I agree with Judge Ryan that the gravity of the offending is moderate. I accept that there are extenuating circumstances, particularly the depression to which Ms O’Hagan deposes. At the time of the offending she was less culpable than a person who was in good mental health and who was not struggling with a baby, reduced financial means and an unsupportive partner. I accept also that Ms O’Hagan has been making payments of reparation and wants to repay the money she acquired dishonestly as soon as she reasonably can. And, her voluntary performance of
150 hours’ community work shows a real appreciation of her position and associated
remorse. As Mr Jones submits, “she has done everything right”.
[20] The reason why I conclude, as did the Judge, that the gravity of the offending is nevertheless moderate is because of the nature and extent of the offending:
(a) It was premeditated and persistent. This was not passive offending. It was not a case of genuinely acquiring a benefit and then failing to advise of a change in circumstances. Ms O’Hagan took deliberate steps to defraud.
(b)It was not repeated offending of the same type, such as claiming falsely to be unemployed and then maintaining that claim at intervals. Ms O’Hagan represented falsely and variously that she was not
working, that she was not living in the nature of marriage and that she was paying rent at an address at which she was not actually living. On two occasions Ms O’Hagan chose not to advise all of her work and income and failed to advise the relationship in the nature of marriage.
(c) The offending persisted over a period of about 20 months. In that time Ms O’Hagan obtained by fraud, as she intended, just over
$15,000. Her offending stopped only because she was caught. This was not offending which had ceased because the offender called a halt to it, and which was discovered later.
[21] I consider that, with one modification, the consequences of the offending are those identified by Judge Ryan. The modification, relying on Ms O’Hagan’s further affidavit, is that convictions will bring a real and appreciable risk that she will lose her job.
[22] On the issue of whether the consequences of convictions for Ms O’Hagan are out of all proportion to the gravity of her offending, I find myself in agreement with Judge Ryan. Mr Jones’s submissions are persuasive. The picture he paints of a young mother who went through a bleak patch, who is now horrified by her offending and doing all in her power to make good, is compelling. I agree that it would be very unfortunate for the progress Ms O’Hagan has made to be extinguished if the risk of the loss of her job is realised. But that is not determinative of this issue.
[23] These are crimes of dishonesty involving fraudulently obtaining social security benefits. Even with the extenuating personal circumstances given full weight, they are of moderate gravity. Ms O’Hagan now has a position of responsibility and trust. Her contract with her employer has a provision which might enable her employer to terminate her employment summarily if it learns of her offending. Ms O’Hagan effectively invites the Court to join with her in keeping her offending concealed from her employer, even though it is offending of a kind which the contract the employer has with her specifies is relevant to her continued employment. The contract does not speak of convictions, it speaks of conduct.
[24] Mr Jones submitted that this does not matter. The law recognises that in appropriate cases offending can be kept secret. He instanced the Police diversion scheme and the clean slate legislation. He submitted that what matters here is an assessment of disproportionality of consequences for Ms O’Hagan. I agree to a point.
[25] As the Judge recognised, when a person commits offences of dishonesty it must be expected that they will face difficulty in securing or keeping employment where the employer wants to place trust in the honesty and integrity of the employee.
[26] In this case, Ms O’Hagan might lose her job. That would be hard on her. It might even be disproportionate in its hardship to the gravity of her offending when the extenuating personal circumstances are taken into account. But I do not accept that it would be out of all proportion. If it were, the scope that Parliament has given Judges to permit offenders to escape, in large part, the consequences of their offending would be wider considerably than recognised to date.
[27] The nature of offending, it seems to me, has to be considered when looking at the proportionality of consequences. Here, offences of dishonesty are directly relevant to the most severe consequence identified, the likely loss of employment. If Ms O’Hagan’s offending had been of a different nature, say she had quarrelled with the father of her child and assaulted him, then the analysis might well be different. But it was not.
[28] The appeal is dismissed.
Brewer J
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