Walker v Ministry of Social Development

[2014] NZHC 1386

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI 2013-092-006984 [2014] NZHC 1386

BEVERLY ANN WALKER Appellant

v

MINISTRY OF SOCIAL DEVELOPMENT Respondent

Hearing:	17 June 2014
Counsel:	H Leabourn for Appellant H Musgrave for Respondent
Judgment:	19 June 2014

JUDGMENT OF SIMON FRANCE J

[1]      Mrs Walker appeals a sentence of 21 months imposed for a sustained course of benefit fraud.1   The total unlawfully obtained benefit was $109,000 over 10 years. The appeal grounds are the lack of credit for mitigating factors, and the refusal to impose a sentence of home detention.

Facts

[2]      Mrs Walker and her husband have been married for 46 years and have four adult children.  It seems that for a brief period in the late 1990s the couple separated. During this time, Mrs Walker applied for and obtained a benefit.  Initially it was the unemployment benefit and then it became a sickness benefit.  The couple reunited

but Mrs Walker did not advise the Ministry and continued to receive the benefit. The

1      Ministry  of  Social  Development  v  Beverly  Walker  DC  Auckland  CRI-2013-092-006984,

4 February 2014, Judge Gittos.

offending  was  discovered  when  Mr Walker,  unaware  this  had  been  happening unlawfully, applied for national super when he turned 65.

[3]      When interviewed Mrs Walker said she had not advised the Ministry because she needed extra money for medical expenses, but primarily because of gambling and alcohol addictions.  She did not herself control the family finances because she had twice previously “cleaned her husband out” because of these addictions.

[4]      Mrs Walker wrote a letter to the Court detailing her life at home when young and then as a ward of the State.  She was married when 18 years old and gave birth to her first child shortly after.  It seems her gambling and alcohol issues took over when she was around 40 years of age.  Mrs Walker says with assistance of a family member she overcame her drinking problem about six years ago, but her gambling persisted seemingly until around the time of her arrest.

Sentencing

[5]      The Judge took a starting point of two years and four months’ imprisonment. He allowed a 25 per cent discount for an early guilty plea accompanied by full disclosure,  and  indicated  that  a  “significant  further  credit”  was  appropriate  for Mrs Walker’s offending free life prior to embarking on this course of dishonest conduct, and generally in recognition of her life circumstances and her efforts to move on from tough early years.  Unfortunately the Judge omitted to actually return to this and give credit, and it is common ground on the appeal that some should now be given.

[6]      Having  settled  on  21 months  (starting  point  less  25 per cent)  the  Judge considered the issue of home detention.  The Judge identified “something of a trend” in appellate authorities towards granting home detention.  However, regard was also had to Wilson v Ministry of Social Development where Toogood J had observed the home detention outcome in the Court of Appeal decision in R v Ransom was strongly

influenced by the need for the defendant to care for a young child.2    Judge Gittos

identified that as a feature of many of the trend cases earlier identified.  In this case

2      Wilson    v    Ministry    of    Social    Development    HC    New     Plymouth    CRI-2011-443-37,

2 November 2011; Ransom v R [2010] NZCA 390, (2010) 25 CRNZ 163 (CA).

his Honour felt it would send “entirely the wrong message” if fraud on this scale, used to support a gambling and drinking habit, could escape a sentence of imprisonment:

If a deterrent sentence is not imposed in a case like this then one wonders in what circumstances it really could be.

Appeal

[7]      As noted, it is common ground that some further discount was intended by the sentencing Judge and should now be given.  Allowing 10 per cent prior to the guilty plea credit would result in a further reduction of two months.

[8]      The key issue is that of home detention.   I begin by observing there have been in recent years several appellate decisions concerning offending of this type and level.  It is useful to briefly summarise them:

(a)       Ransom3  – $128,000 over 10 years: 18 month sentence quashed in

Court of Appeal, and replaced by sentence of home detention;

(b)Harlen4  – $120,000 over five years, four months: 15 months’ imprisonment with leave to apply for home detention upheld by Court of Appeal;

(c)       Beech5  – $86,000 over seven years:   15 months’ imprisonment with

leave to apply for home detention upheld by Court of Appeal;

(d)Werahiko6 – $86,000 over 10 years: one year’s imprisonment replaced on appeal to High Court with a sentence of home detention;

(e)       Davey7   –  $110,000  over  seven  years;  17  months’  imprisonment

imposed in High Court;

3      Ransom v R, above n 2.

4      R v Harlen (2001) 18 CRNZ 582 (CA).

5      R v Beech CA 314/01, 6 December 2001.

6      Werahiko v Ministry of Social Development HC Rotorua CRI-2008-463-55, 5 September 2008.

7      Davey     v    Ministry    of    Social    Development    HC    Palmerston North     CRI-2009-454-47,

15 December 2009.

(f)      Te  Weri8   –  $122,000  over  11  years:  20   months’  imprisonment

replaced on appeal to High Court with a sentence of home detention;

(g)      Fitzgerald9   –  $104,000  over  20  years:  16  months’  imprisonment

replaced on appeal to High Court with a sentence of home detention.

Other cases were also referred to me where home detention has or has not been imposed.

[9]      The starting point is that the Sentencing Act 2002 requires a Court to impose the least restrictive sentence available.  In the particular area under discussion, the primary question  is  whether a  sentence of home detention  constitutes  sufficient denunciation, deterrence and accountability given the offending involved and any aggravating personal factors such as previous convictions.  As illustrated by the list of cases already given, resolution of this issue in the area of benefit fraud is not unaffected by authority.  The inevitable impact of the numerous authorities in which, on appeal, home detention has been substituted as the appropriate sentence is highlighted by the decision in Fitzgerald, where Fogarty J made these observations:

[19]     There are now numerous cases of significant dishonesty to the detriment of the community which are being addressed by way of the sentence of home detention.

[20]      What has tipped the balance of the merits of this appeal in favour of the appellant is my view of the importance of where possible sentencing like alike.   Although all sentences of home detention are discretionary, just as with all sentences under the Act, we still strive to treat like cases alike, as a basic element of achieving justice.

[21]      I cannot maintain a distinction of material moment between the case of Ransom and this case.  The Court of Appeal in Ransom did not think they were changing the law.   Rather, they were, in their minds, changing a misapprehension and policy position on the part of the prosecution as to the law.  I do not think the Court of Appeal intended the Ransom decision to be confined by its “postscript”.

8      Te Weri v Ministry of Social Development HC Napier CRI-2010-441-49, 25 November 2010.

9      Fitzgerald   v   Ministry   of   Social   Development     HC   Christchurch   CRI-2010-409-180,

14 October 2010.

[10]     I also, with respect, consider this factor of consistency to be integral to the legitimacy of a sentencing system.   Discretion exists because circumstances will always vary, but a broad consistency is still necessary.  As Fogarty J notes, there are now numerous cases of significant benefit fraud where home detention has been the outcome.   The implication is that the nature of the offending presently being considered – sustained fraud over a number of years causing losses in the low six figures – does not of itself tell against home detention.  In my view there must be some added feature that tips the scale, otherwise precedent and consistency dictate the outcome.

[11]     There are, of course, many ways in which other factors may come into play. Two recent examples of this are Huirua and Aupouri.10     In Huirua, although the quantum was less than many of these - $53,000 over four years – the defendant had a previous  conviction  for  benefit  fraud.    Understandably home  detention  was  not thought to meet the Act’s purposes.   In Aupouri, the final sentence was two years three months.  Brewer J noted, however, that home detention would not anyway have been an option because of the level involved – $200,000 – and the fact the fraud was active rather than passive, occurred over a period of 17 years and there was no

remorse.

[12]     The  range  of  factors  that  might  lead  a  Court  to  steer  away  from  home detention will be varied, but in my view something more than the mere fact of offending at the current level is required.

[13]     In the present case the only aspect of the offending which appeared to be seen as  aggravating  was  that  Mrs Walker  acted  to  feed  her  gambling  and  drinking addictions.     The  Judge  treated  this  as  aggravating  and  it  was  suggested  by Ms Musgrave that this motivation was worse than a situation where the money is expended on general household expenses, children or matters such as that.   The difficulty with this is that if one accepts these were true addictions, the reasoning

assumes a level of choice that may be unrealistic.   In this case, I do not see it as

10     Huirua v Ministry of Social Development [2013] NZHC 2785; Aupouri v Ministry of Social

Development [2013] NZHC 581.

taking  the  matter  out  of  the  situation  where  home  detention  is  an  acceptable sentence.

[14]     Responding to some recent cases that might be seen as saying that what will tip the balance in favour of home detention are compelling personal circumstances, the appellant now proffers evidence from her family about the numerous ways in which Mrs Walker has assisted with grandchildren.  What is thereby disclosed is a not unfamiliar pattern in today’s society.  However, perhaps marking it out here are the serious health issues facing one grandchild, and the on-going health issues of her husband.

[15]     I have noted these factors but do not need particularly to give them weight.  I prefer to look at the matter from the other viewpoint.  Considering as I do that the features of the offending do not mark it out from the numerous other cases where home  detention  has  been  the  sentence,  I  see  nothing  in  Mrs Walker’s  personal circumstances that make home detention inappropriate.   She has no previous convictions, is assessed as at a low risk of re-offending, acknowledged her guilt immediately and has not sought to deflect or deny personal culpability.  There is no particular or enhanced need for denunciation or deterrence.

Further evidence on appeal

[16]     Before concluding, it is necessary to address one issue that arose on appeal. As noted, evidence has been filed by the appellant consisting of affidavits from herself, her husband and her son.  The purpose of the evidence is to convey three items of information:

(a)      the family can make a reparation payment of $10,000, in addition to the existing regular payment that has already been arranged with the respondent.  The affidavits explain why the issue of reparation did not arise at sentencing;

(b)the role Mrs Walker plays in the family and particularly in relation to her disabled grandchild; and

(c)       Mr Walker’s health needs.

[17]     The respondent objects to admissibility on the basis it is not fresh.   As it happens the information is not particularly needed for me to resolve the appeal. However,  I do not  generally accept that on  a sentence appeal  of this nature,  a rigorous application of these rules is required.  The reality is that if the information is truly significant, it will meet the admissibility test whether “fresh” or not.

[18]   Concerning reparation, I intend to allow the appeal independent of its availability.  Accordingly, I do not consider it appropriate on an appeal to now make an order. The respondent is aware of the information.

Conclusion

[19]     The appeal will be allowed.   I do not consider the offending differs from Ransom or several other of the cases.   The legislation makes home detention an option and it sufficiently denounces and punishes Mrs Walker.  I do not repeat the general home detention authorities that emphasise the punitive aspects of such a sentence.

[20]     The adjustment previously referred to for mitigating factors brings the end sentence to 19 months’ imprisonment.  That would normally accord with 10 months’ home detention.  Mrs Walker has served nearly five months in jail so I quash that sentence and impose a sentence of home detention of five months.  The following conditions apply:

(a)       on 23 June 2014 to be at 80 Hokianga Street,11 Mangere and await the arrival of a Probation Officer and G4S Security Officer;

(b)to reside at 80 Hokianga Street, Mangere and not to move without written approval of a Probation Officer;

11     A change in family circumstances necessitated a results judgment and a grant of bail prior to the release of these reasons.

(c)       to abstain from the use of alcohol and illicit drugs, for the duration of this sentence of Home Detention;

(d)to  attend  an  assessment  for  alcohol  and  drugs  programme  to  the satisfaction of a Probation Officer;

(e)       to  attend  and  complete  any  other  programme  as  directed  by  the

Probation Officer.

Simon France J

Solicitors:

Meredith Connell, Crown Solicitors, Auckland