Sinclair v Ministry of Social Development
[2015] NZHC 849
•28 April 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2014-404-000440 [2015] NZHC 849
BETWEEN IAN GREGORY SINCLAIR
Appellant
AND
MINISTRY OF SOCIAL DEVELOPMENT Respondent
Hearing: 28 April 2015 Appearances:
M Kan for Appellant
S Elliott and S Youn for RespondentJudgment:
28 April 2015
JUDGMENT OF WOOLFORD J
This judgment is delivered by me on Tuesday, 28 April 2015 at 4.00 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Solicitors: Meredith Connell, Auckland
Counsel: M Kan, Auckland
IAN GREGORY SINCLAIR v MINISTRY OF SOCIAL DEVELOPMENT [2015] NZHC 849 [28 April 2015]
Summary
[1] The appellant, Mr Ian Sinclair, appeals against the decision of Judge Aitken in the District Court to refuse a discharge without conviction.
Background facts
[2] Mr Sinclair was convicted on 25 November 2014 of two charges of making a false statement and once charge of making a wilful omission, both under s 127 of the Social Security Act 1964.1 These charges carry a maximum penalty of $5000 and/or
12 months imprisonment.
[3] Mr Sinclair began receiving the unemployment benefit in December 2008. He failed to tell the Ministry of Social Development when he obtained part-time work in July 2009, and then submitted two re-applications for the unemployment benefit in 2011 and 2012, in both of which he said he was not working. The Ministry of Social Development has calculated that he had received $19,238.90 by way of overpayment during the period between July 2009 and October 2013. When Mr Sinclair was interviewed on the matter in June 2014, he stated that he was aware of his obligations, but had been struggling to make ends meet so had not advised the Ministry of his employment.
District Court decision
[4] In her sentencing decision, Judge Aitken found that the offending was prolonged and relatively significant, stretching over three years. She acknowledged that Mr Sinclair’s work was in the nature of casual employment, that he had struggled financially and that the offending was motivated by need rather than greed. While it was not very serious, she was of the view that the length of time and amount of money taken placed the offending beyond the lowest level of the scale.
[5] Judge Aitken then considered Mr Sinclair’s circumstances, and noted that he
had no prior dishonesty convictions. He suffered a major depressive episode in
2008, but considered himself recovered by 2010. She accepted he was incredibly
1 Ministry of Social Development v Sinclair DC Auckland CRI-2014-004-007585, 25 November
2014.
remorseful and was making every attempt to pay the money back. Taking these considerations into account, she said that the gravity of the offending was “closer to the lower end of the scale than the midpoint”.
[6] While sympathetic to the application for discharge without conviction, Judge Aitken found there needed to be a real and appreciable risk that the convictions would come to the attention of a future employer and that they would adversely impact future employment. Although she thought there would be a real risk that a conviction would make it more difficult for Mr Sinclair to obtain full-time employment, she did not think that was disproportionate to the offending. The offending was characterised as a conscious, not one-off, choice that was not causative of or a consequence of his illness.
[7] Judge Aitken considered that any effect on future travel was only speculative, and that with the support of his Church and community there was unlikely to be a relapse into depression based on the conviction. She therefore declined the application for discharge without conviction. Instead, she sentenced Mr Sinclair to
120 hours community work with the ability to convert the community work into training.
Submissions
Appellant’s submissions
[8] Counsel for Mr Sinclair submits that the case falls at the lowest end of the scale, because he was under significant financial and emotional pressure, and the lingering effects of a depressive episode in 2008. He was entitled to some income assistance from the Ministry and his undeclared job was only casual employment with irregular hours.
[9] Counsel submits that Mr Sinclair immediately accepted his offending, started to repay the amount and rather than funding any extravagant lifestyle by offending, was merely surviving at a subsistence level. Counsel submits that Mr Sinclair has never been before the courts, and has made significant contributions to the
community through his work for LIFE Church and the Christian Fellowship for the
Disabled.
[10] Counsel also submits that there is a real and appreciable risk that he will not be able to obtain full time employment because of his convictions. Mr Sinclair has been unable to find full-time employment since recovering from his depressive episode in 2008, despite his qualifications. He submits that a conviction would harm his chances of employment as employers will not look behind his conviction. Counsel points to the evidence of a Work and Income recruitment agency to support the view that coupled with his other disadvantages, such as a lack of full-time employment in the past few years, this creates an almost insurmountable barrier to future employment.
[11] Counsel submits that the general stigma of a conviction is a penalty in and of itself, and that Mr Sinclair suffers intense shame.
[12] Counsel further submits that convictions would harm Mr Sinclair’s ambitions to travel abroad in the future, as he would need to declare them in the future when applying for visas. This might impact a desire to find employment abroad, since Mr Sinclair is struggling to find employment here.
[13] Counsel submits that, ultimately, the main area of challenge is to Judge Aitken’s balancing of the consequences outlined against the gravity of the offending. Counsel submits that the extreme difficulties faced by Mr Sinclair in entering the workforce are out of all proportion to the lower end of the scale offending, considering the desperate context of the appellant’s financial situation.
Respondent’s submissions
[14] On behalf of the Ministry of Social Development, counsel submits that the offending was moderately serious. Although Mr Sinclair did suffer from a depressive episode, counsel notes that by his own admission he had mostly recovered by 2010, and that much of the offending occurred after this date. Counsel therefore rejects the argument that the appellant was still suffering the lingering effects of his depressive episode.
[15] Counsel submits that although Mr Sinclair may have been under some financial pressure, he was not supporting a family or other dependents, as many other beneficiaries are in these types of cases.
[16] Moreover, counsel submits that the offending does not fall at the lowest end because of the breach of trust involved in being dishonest, and the Ministry of Social Development’s particular reliance on benefit recipients to be honest. Counsel points to the multiple failures to disclose, the financial loss incurred and the impact on the community as the ultimate victims as evidencing the seriousness of the crime.
[17] Counsel submits that the consequences advanced by the appellant are prospective, and general consequences of conviction rather than specific negative outcomes. Although there is a real and appreciable risk that a conviction would have some impact on Mr Sinclair’s general employment prospects, he does not work in a profession in which a conviction would prevent furthering that career and the nature of his offending goes to an issue (trust) that employers should have the ability to assess for themselves.
[18] Counsel submits that Mr Sinclair’s health is not likely to impact his
wellbeing further, and that there is no real, genuine future need to travel.
[19] Taking into account the gravity and consequences, a conviction would not be out of all proportion to the offending. Although there are some inevitable consequences of convictions generally, including implications for employment and embarrassment, and the standard is only a “real and appreciable risk” that such consequences will occur, the proposed consequences are merely speculative. The effects will not be more than speculative.
Law
Approach to appeal against sentence for a discharge without conviction
[20] Section 106 of the Sentencing Act 2002 provides that the court has discretion to discharge an offender without conviction, if the test in s 107 is satisfied. That test provides:
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.
[21] For the court to be satisfied, there only needs to be a “real and appreciable”
risk that such consequences will occur.2
[22] Meeting the s 107 test gives the court a discretionary power to discharge under s 106, which is usually granted where the test is satisfied.
[23] An appeal against a refusal of discharge is by way of rehearing. The court hearing the appeal makes a new assessment in accordance with its own opinion.3
The Court of Appeal in R v Hughes concluded that as the s 107 test was not discretionary, an appeal against the court’s decision on this matter was not an appeal against discretion.4 An appeal against discretion would only arise if the court held that s 107 was satisfied but nonetheless chose not to discharge the offender.
[24] The approach to be followed in applying the s 107 test is set out in Z v R
where Arnold J held:5
...[w]hen considering the gravity of the offence, the court should consider all the aggravating and mitigating factors relating to the offending and the offender; the court should then identify the direct and indirect consequences of conviction for the offender and consider whether those consequences are out of all proportion to the gravity of the offence; if the court determines that they are out of all proportion, it must still consider whether it should exercise its residual discretion to grant a discharge...
[25] What this approach requires is that the court must first determine the seriousness of the offence, having regard to both the aggravating and mitigating factors of the offence and also to those factors which apply to the offender. The Court should then determine the direct and indirect consequences of conviction specifically to the offender and determine if they are out of all proportion with the
offending.
2 Papuni v Police [2013] NZHC 1958 at [12].
3 R v Hughes [2008] NZCA 546; [2009] 3 NZLR 222 at [11].
4 At [11].
5 Z v R [2012] NZCA 599, [2013] NZAR 142 at [27]
Analysis
[26] I now review the considerations set out by Arnold J in Z v R in the context of this case.
Gravity of the offending
[27] The offending in question is evidently reasonably serious. Almost $20,000 of benefit fraud over a period of years is inescapably premeditated. Notwithstanding that over a period of years the sum taken was not a substantial amount to live on, and may not have helped the appellant achieve more than a basic lifestyle, it still involved prolonged offending against the Ministry of Social Development.
[28] Counsel for Mr Sinclair refers to the offending as “inadvertent”. As acknowledged by Judge Aitken and by Mr Sinclair himself, this is not the case. The offending stems from deliberate and intentional failure to declare income on multiple occasions. While not sophisticated, and far less serious than much long-term beneficiary fraud, the offending was significantly more than minimal.
[29] Aside from a careless driving conviction, this is Mr Sinclair’s first time before the courts. He is evidently a large contributor within his church and community, and has support from that community. However, although Mr Sinclair was facing difficult financial circumstances, and was clearly under financial pressure, this is the circumstance faced by many people who are on benefits.
[30] There is nothing which suggests that his prior history of depression caused or influenced the offending, and his good character, although placing the offending in context, does not undermine the relatively long-term nature of the offending in question.
[31] Although many of the alleged aggravating factors highlighted by counsel for the Ministry are nothing more than general features of this particular type of crime, I agree that the case lies at the lower end of the scale of offending, but not at the
lowest end. This can be contrasted with Flavell v Ministry of Social Development.6
6 Flavell v Ministry of Social Development [2015] NZHC 214.
In that case, Ms Flavell sought a discharge without conviction in relation to
$1,159.30 which she had received in overpayment, having wilfully omitted to disclose that she had obtained employment. No false records or further applications were submitted. The overpayment period had been about six months. Courtney J described the “early acceptance of responsibility, repayment in full and unblemished
record” of Ms Flavell as making the offending at the lower end of the spectrum.7
Mr Sinclair’s situation is clearly well outside the scope of Ms Flavell’s offending.
Direct and indirect consequences of a conviction
[32] Three possible consequences of a conviction have been highlighted: the effect on Mr Sinclair obtaining employment, his “shame” and possible health effects and his future travel plans. I will consider the relevant case law relating to these consequences before evaluating their seriousness.
(a) Employment prospects
[33] Counsel for Mr Sinclair submits that it will be harder to gain full-time employment with a conviction, and that this will add to his general difficulty in achieving work in the past few years. Clearly, it is a general feature of convictions that they make it harder to obtain work, and Mr Sinclair will have to contend with this in being evaluated in job applications and interviews.
[34] Applications for discharge without conviction are often made on the basis that it will make it harder for those convicted to find or maintain employment. In Nash v Police Mallon J observed that general consequences, including effects on employment, insurance and immigration, could all be weighed in the balance in assessing whether a discharge was necessary.8
[35] Although evidently, the Court can take judicial notice of the general impacts of conviction on obtaining employment, it has also been acknowledged that to warrant a discharge under the test in Z v R specific proof of the consequences of
conviction is typically necessary. This is confirmed by the recent comments of
7 At [7].
8 Nash v Police HC Wellington CRI-2009-485-7, 22 May 2009 at [19].
Moore J in KCW v Police in relation to a submission that an appellant’s employment prospects would be harmed by a conviction:9
The difficulty with that submission is that Mrs W can point to no particular or specific detriment. As this Court has previously observed, it is not unusual for those who seek a discharge without conviction to do so on the basis that a conviction will make it more difficult for them to secure employment.
[36] In that case, Moore J could not see that the impact on the appellant’s wider employment prospects would be jeopardised by conviction any more than for anyone else in her position. This reinforces that the consequences specific to the offender must be considered, and that actual evidence of the effects of a conviction or the particular reason it is unfair in this instance.
[37] In this instance, although clearly a conviction will be to his detriment in any job application Mr Sinclair may make, there is no evidence that it will be a bar Mr Sinclair entering a specific career or vocation. Although it may affect Mr Sinclair’s full-time employment prospects, it will not be as insurmountable as his counsel has sought to portray. His record is good, he is well supported by his community, and it appears he is getting some work experience through volunteering in graphic design. Although there is a real risk of these convictions damaging his employment prospects, it is not preventative of any specific pathway, and only amounts to a general prejudice.
(b) Health Effects and Shame
[38] Counsel’s submissions as to the health effects and shame suffered by Mr Sinclair appear to amount to an argument that Mr Sinclair has been sufficiently punished through the stigma of conviction. Counsel points to Han v Police and Alshamsi v Police as demonstrating that the general stigma of a conviction is a penalty in and of itself that the Court can consider in assessing the potential effects
of the convictions.10 While excerpts from these cases do highlight that the inherent
punishment in entering a conviction is part of the overall calculation of proportionate consequences, in neither case was the general effect of the conviction a dominant
9 KCW v Police [2015] NZHC 459 at [50].
10 Han v Police [2012] NZHC 791; Alshamsi v Police HC Auckland CRI-2007-404-000062, 15
June 2007.
factor in allowing a discharge. The context of each case was substantially different
to Mr Sinclair’s position.
[39] This is a consideration better assessed in relation to determining whether the consequences are disproportionate to the offending, rather than assessing the consequences of conviction. I will therefore return to this submission below.
[40] Apart from the heading, no submissions specifically deal with the health impacts on Mr Sinclair. However, I consider that specific medical evidence or testimony would need to be adduced to demonstrate that this is a significant factor warranting a discharge. On the current evidence, although Mr Sinclair has a history of depression, there is nothing to indicate that a conviction would particularly aggravate this tendency.
(c) Travel
[41] Counsel for the appellant points to Papuni v Police as support for the proposition that a general interest in travelling is sufficient to create a real and appreciable risk. However, in Papuni, Duffy J specifically stated that:11
Ms Cottrell’s evidence satisfies me that there is a real and appreciable risk that a conviction will preclude Mr Papuni from travelling to the countries that he has visited in the past in order to participate in dance competitions and events.
[42] This is very factually different from the current circumstances. A general interest in travelling can be contrasted with a general interest in travelling to dance competitions, which the appellant in that case had in the past attended at an international level. I do not consider that this case establishes as a broad proposition that a desire to travel generally will be sufficient to qualify as a real and appreciable risk as a consequence of the convictions.
[43] In Brunton v Police, Clifford J observed that travel difficulties are a universal consequence of a conviction, and that, in the absence of specific evidence, they will
not provide an adequate basis for a discharge.12
11 At [33].
12 Brunton v Police [2012] NZHC 1197.
[44] Mr Sinclair’s general desire to travel will not be completely stopped by convictions for benefit fraud. Different countries will have different standards that they apply in assessing whether someone with a conviction can enter. Although I accept that Mr Sinclair may find it harder to obtain employment abroad with his conviction, future travel appears to be a remote possibility at this point.
Balancing the consequences
[45] Counsel for the Ministry submits that Linterman v Police indicates a relatively high threshold is set for the consequences of a conviction to be out of all proportion to the seriousness of the offending.13 In that case, the appellant was a
23 year old student who alleged that a drink-driving conviction would preclude her from pursuing a Masters degree in law at her preferred university. The Judge considered that although the offending was “not a bad instance” and Ms Linterman was an “exemplary person who has made a mistake she is not likely to repeat”, the consequences were not burdensome enough to meet the statutory standard.14
Counsel for the Ministry submits that the offending in Linterman was similar or
slightly more serious than the offending in this case, but the consequences were far more serious and more definite than those here. He submits that this indicates that the discretion to discharge should not be utilised here.
[46] Although the facts of Linterman are not overly similar to this case, counsel is correct that it demonstrates the balancing necessary in determining whether the outcomes for an individual are disproportionate. Importantly, in this context, it emphasises that remorse and being a positive member of the community do not necessarily mean that a conviction is disproportionate.
[47] Considering Linterman, and the cases discussed above, I am not satisfied that the direct and indirect consequences of the offending are disproportionate to the offending. There is no particular evidence of any effect on Mr Sinclair’s health. Although I accept that there will be some impact on Mr Sinclair’s future travel plans, there is also no evidence of particular desired or required travel that would be
harmed or limited by these convictions. Restricted ability to travel forms part of the
13 Linterman v Police [2013] NZHC 892.
14 At [17].
general consequences of offending, which are not so disproportionate to committing crimes to warrant a discharge.
[48] As outlined above, the benefit fraud committed was not minimal, and involved deliberate offending in circumstances which, although unfortunate, were not out of the ordinary for many benefit recipients. This type of offending, over an extended period, has been treated seriously by the courts and warrants some sanction.
[49] While I do not undervalue the potential effect on Mr Sinclair obtaining full- time employment, I consider this to be essentially no more than the general consequences of committing a crime. Any detriment that occurs in seeking a job with a conviction is not out of all proportion to the significance of even low-level benefit fraud. There will always be some difficulty obtaining employment with a criminal conviction, and it is not a case in which a conviction is an ultimate barrier to graphic design jobs generally.
[50] Although to some extent this is likely to add to Mr Sinclair’s existing difficulties in obtaining full-time employment, Mr Sinclair can also point his potential employers to the low-level penalty imposed on him, and the comments of this Court and the District Court Judge that he is incredibly remorseful, has been a positive member of his community and appears to have significant support from that community.
[51] This is not an extreme or disproportionate outcome following benefit fraud offending.
Conclusion
[52] I am not satisfied that the Court’s discretion should have been exercised to allow Mr Sinclair to be discharged without conviction. The appeal is dismissed.
……………………………….
Woolford J
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