The Queen v Stewart

[2009] NZCA 89

IN THE COURT OF APPEAL OF NEW ZEALAND

CA802/2008
[2009] NZCA 89

THE QUEEN

v

ERIC BARRY STEWART

Hearing:24 February 2009

Court:William Young  P, Chisholm and Heath JJ

Counsel:S J Shamy for Appellant

S B Edwards for Crown

Judgment:25 March 2009 at 10 am

JUDGMENT OF THE COURT

AWe extend time for the filing of the second appeal.

BWe allow the appeal, quash the sentence of three years’ imprisonment and substitute a sentence of 18 months’ imprisonment.

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REASONS OF THE COURT

(Given by William Young P)

Introduction

[1]       Following a lengthy trial in the District Court at Timaru in 2007 before Judge Abbott and a jury, the appellant was found guilty of defrauding the ACC scheme.  He was subsequently sentenced to three years’ imprisonment.  He filed an appeal against his conviction and sentence but when this was heard in May last year, only the conviction was challenged.  On 2 September 2008, this Court delivered a judgment recording that the appeal was dismissed: R v Stewart [2008] NZCA 341.

[2]       Subsequently the appellant filed in this Court what purports to be an appeal against sentence, and an associated application for an extension of time for filing the appeal.  This is the appeal which is now before the Court.  Issues as to whether bail ought properly to be granted (associated with whether this was an illegitimate second appeal) were, in the end, superseded when the Supreme Court, having given the appellant leave to appeal against the dismissal of his conviction appeal, granted him bail pending the hearing of that appeal.

Background

[3]       The fraud charges against the appellant covered the period 10 April 1992 to 20 February 2004 and each alleged the fraudulent use of medical certificates on ACC forms.  Counts 1 – 57 were laid under the former s 229A of the Crimes Act 1961 and counts 58 and 59 under the new and corresponding s 228. 

[4]       Up until late 1989 the appellant had been employed as a butcher.  At that time, he was diagnosed with bilateral tenosynovitis of the wrists.  He was subsequently treated for this condition and returned to work in April 1990.  On 13 December 1991 he was issued with a medical certificate which referred to recurring problems with his tenosynovitis condition and he made a further claim for ACC benefits.  While this claim was being assessed, he left work (on 10 April 1992) and associated with this he submitted a C15 medical certificate, which declared he was fully unfit for work.  With the exception of a brief return to work on a trial basis and a longer period when he operated a doughnut stand, the appellant remained off work for the entire period relevant to the case.

[5]       The appellant’s position throughout was that he suffered chronic pain associated with his wrists to such an extent that he was unfit for work.

[6]       The medical certificates which were the subject of the charges evolved over time.  They all certified the appellant as being unfit for work and, to a greater or lesser extent, gave the reasons for this as well as details of his relevant physical limitations or restrictions.

[7]       The jury found the appellant guilty of the fraud charges that spanned the period between 26 October 1995 and 20 February 2004, and not guilty of the other 25 counts laid under s 229A (covering the period from April 1992 until August 1995).

[8]       The Crown case was that the appellant had deliberately misrepresented the extent of his disability in his dealings with the ACC and, more importantly, to his general practitioner (Dr Small) and other doctors who reported to the ACC.  Although the Crown sought to portray the appellant as a cynical malingerer who had quite deliberately and dishonestly decided to live off the ACC system, the legal premise upon which the Crown case depended was more limited and subtle – that he had dishonestly exaggerated the extent of his disability and minimised his capacity; this to avoid the risk that the ACC might terminate or reduce his payments.  On the case as presented, it was not necessary for the Crown to show that the appellant was fit for work, was aware of this and had therefore dishonestly obtained benefits to which he knew he was not entitled. 

The Judge’s sentencing approach

[9]       The Judge’s sentencing remarks are lengthy.  In them, the Judge reviewed the factual history of the case and prior sentencing decisions.  He was critical of the decision of the appellant and his wife to transfer their home into a trust a few months before the trial began, as it seemed that the purpose of this was to defeat a claim by the ACC for restitution of the money paid out to the appellant during the relevant period.  The only aspect of the remarks, however, which is of real significance in the present context is the conclusion by the Judge that the “net overpayment” made by the ACC was approximately $171,000 which was the total paid by the ACC to the appellant during the period covered by the charges.

[10]     Although the Judge did not order reparations, it is clear that he was of the view that the appellant had received some $171,000 to which he was not entitled.

The ACC review decision

[11]     On 29 October 2008 (ie nearly two months after this Court delivered its decision on the first appeal), Mr John Greene, an ACC reviewer, held that the ACC had not correctly suspended the appellant’s weekly compensation on 27 September 2005.  Implicit at least in this decision is the view that throughout the relevant period the appellant was entitled to the ACC payments which he received.  Mr Greene summarised his decision in the following way:

I quash ACC’s decision.  Mr Stewart has been convicted of ACC fraud and is currently serving a sentence of imprisonment.  However, neither the fact of that conviction, nor the fact that he misled ACC, establishes that he has regained his pre-accident capacity for work as a butcher.  He has not been assessed as having vocational independence.  Accordingly, there was no proper basis for ACC to suspend Mr Stewart’s weekly compensation.

[12]     This was perhaps a surprising decision.  Under s 117 of the Injury Prevention, Rehabilitation and Compensation Act 2001, the ACC was entitled to suspend the appellant’s entitlements if not satisfied, on the basis of the information in its possession, that the appellant was entitled to receive those entitlements.  On the face of it, it might have been thought reasonably clear that the ACC was entitled to act as it did under s 117.  We say this because:

(a)The ACC was entitled to conclude that the appellant had been lying about the extent of his disability since August 1995;

(b)There was a distinct lack of medical evidence based on a truthful account by the appellant of his symptoms supporting the continuing right to entitlements.

[13]     Be that as it may, the ACC has chosen not to appeal.  So in effect, the appellant has established his entitlement to weekly compensation.  The marked inconsistency between the approach taken by the reviewer and that of Judge Abbott, who proceeded on the basis that the appellant had defrauded the ACC of $171,000, encouraged the appellant to lodge the second appeal.  As is probably already apparent, we do not regard the reviewer’s decision as itself a controlling consideration.  It does, however, highlight a related question as to whether the Judge ought to have proceeded on the basis that the loss to the ACC associated with the appellant’s fraud was $171,000.

Jurisdiction

[14]     The critical facts are as follows:

(a)The original notice of appeal filed in 2007 recorded that it was an appeal against conviction and sentence and the contention that the sentence was manifestly excessive.

(b)An amended notice of appeal filed on 8 May 2008 recorded that the appeal was against conviction and sentence but did not specify any grounds referable to a sentence appeal.

(c)On the same day the appellant’s submissions were filed and contained no submissions addressed to sentence.

(d)On 21 May 2008 there was a discussion between counsel for the appellant and counsel for the Crown in the course of which there was mention of the possibility that further medical investigations might show that the appellant had been entitled to ACC entitlements during the period covered by the convictions.  Crown counsel’s notes record her making a comment to the effect that the issue of entitlement:

[W]ouldn’t make a difference to conviction appeal but it might to a sentence appeal (which you haven’t filed).

(e)These notes also record the following remarks:

In terms of appeal next week, you have in mind to simply note the issue to the CA – you would have to seek leave to pursue a separate sentence appeal out of time (which the Crown may well oppose) (sentence appeal can’t be dealt with next week as the results etc won’t be available).  Mr S wants adjournment – in my view the issue is irrelevant to the conviction appeal – I will oppose any adjournment.

(f)The appeal was called before this Court on 28 May 2008.  One point that is clear is that the sentence appeal was not pursued although counsel for the appellant believes that he told the Court that if further investigations relevant to entitlement came out a certain way, there might be a sentence appeal subsequently filed.

[15]     There is scope for debate as to where this left the first sentence appeal.  The worst view (from the point of view of the appellant) is that it was dismissed.  It is elementary that this Court does not have jurisdiction to entertain a second appeal.  In the particular circumstances of this case, however, we see no need to explore this topic in detail.  This is because of the recall jurisdiction discussed in R v Smith [2003] 3 NZLR 617 (CA).

[16]     In the extremely unusual circumstances of this case, it would be right to exercise the recall jurisdiction, if that be necessary, to clear the way to consider the current appeal.  Otherwise the appellant’s right to appeal against his sentence will have been lost through inadvertence.  The contemporaneous notes made by Crown counsel make it reasonably clear that the appellant’s counsel was seeking to retain the option of pursuing a sentence appeal later.  The members of the panel who heard the first appeal do not recall that point having been made at the hearing, but it is possible that there was some misunderstanding.  And, although we do not see the decision of the ACC reviewer as itself a decisive consideration (as we have already made clear), this decision did highlight an aspect of the case which counsel would appear to have overlooked as to the sentencing approach taken by the Judge.  There is also the reality that the appellant has now been released on bail.  If the sentence stands, and his appeal to the Supreme Court is dismissed, he will be required to return to prison for what will be his third admission to prison, which would not be appropriate if the Judge did in fact sentence him on the wrong basis, an issue to which we now turn.

Did the Judge sentence on a wrong basis?

[17]     As is apparent from the judgment of this Court dismissing the conviction appeal there was a real sense in which the Crown and the defence were at cross purposes as to the nature of the fraud alleged against the appellant.  Although the Crown portrayed the appellant as a cynical malinger, the legal basis was, as we have explained, much narrower.  The upshot is that the jury’s verdicts of guilty against the appellant cannot be fairly regarded as turning on the conclusion that he was, at the relevant time, fit for work.

[18]     On this basis, the loss to the ACC occasioned by the appellant’s fraud was the value of the opportunity to make an informed decision whether to continue making payments.  That opportunity could, of course, be valued by reference to the payments made if the Court were satisfied, to the criminal standard of proof, that had such an informed decision been made, ACC would have stopped making payments to the appellant.  We think it clear that this is what the Judge thought.  Otherwise he would not have proceeded on the basis that the loss to the ACC was $171,000.  But, for reasons we are about to explain, we consider that it would be inappropriate to regard this implicit conclusion as a finding of fact under s 24 of the Sentencing Act 2002.

[19]     For reasons already explained, it was not implicit in the jury’s verdicts that the ACC had been defrauded of $171,000.  There is nothing in the sentencing remarks to suggest that the Judge was intending to make a finding of fact which went beyond the strict terms of the jury’s verdicts.  If he had intended to do so, we are sure that he would have put the appellant on notice and given him the opportunity to produce submissions and lead evidence.  This did not happen.

[20]     That being so, we are satisfied that the Judge sentenced the appellant on a basis which was not available to him.

Disposition

[21]     We have been told by counsel that if the appellant’s sentence is reduced to 18 months’ imprisonment, that will in effect mop up the time which he has served in prison.

[22]     In the circumstances of this case, we are satisfied that the sentence of 18 months’ imprisonment is sufficient to mark the criminality of the appellant’s conduct.

[23]     Accordingly, we extend time for the filing of the second appeal, quash the sentence of three years’ imprisonment and substitute a sentence of 18 months’ imprisonment.

Solicitors:
Crown Law Office, Wellington