Winterstein v Housing New Zealand Corporation
[2012] NZHC 723
•18 April 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2012-404-000050 [2012] NZHC 723
BETWEEN VAILEI WINTERSTEIN Appellant
ANDHOUSING NEW ZEALAND CORPORATION
Respondent
Hearing: 16 April 2012
Counsel: S Youn and N Leader for Appellant
E M FitzHerbert for Respondent
Judgment: 18 April 2012
JUDGMENT OF POTTER J
on sentence appeal
In accordance with r 11.5 High Court Rules
I direct the Registrar to endorse this judgment with a delivery time of 2.30 p.m. on 18 April 2012.
Solicitors: Public Defence Service, Auckland – [email protected]
Meredith Connell, Auckland – [email protected]
WINTERSTEIN V HOUSING NEW ZEALAND CORPORATION HC AK CRI-2012-404-000050 [18 April
2012]
Introduction
[1] On 17 October 2011 the appellant Ms Winterstein entered guilty pleas to the following charges:
(a) Seven charges of using a document with intent to obtain a pecuniary advantage under s 228B of the Crimes Act 1961;
(b)Two charges of using a document with intent to obtain a pecuniary advantage under s 229A(b) of the Crimes Act 1961.
[2] The charges under s 228B relate to offending from 2003 onwards, while the charges under s 229A(b) relate to offending prior to that date. Section 229A was repealed with effect from 1 October 2003.
[3] Each of these charges carries a maximum penalty of seven years imprisonment.
[4] The appellant was sentenced by Judge Aitken1 to 12 months imprisonment. She has been in custody since the date of sentencing, that is for nearly three months.
Grounds of appeal
[5] The appellant says the Judge erred in imposing a sentence of imprisonment and that a sentence of home detention should have been imposed. The appellant submits that the Judge erred by:
(a) Not imposing a sentence of home detention which would have been the least restrictive outcome available pursuant to s 8(g) of the
Sentencing Act 2002;
1 Housing New Zealand v Winterstein District Court Auckland CRI-2011-004-014410, 19 January
2012.
(b)Failing to apply the Court of Appeal judgment in Ransom v R2 which held that a non-custodial sentence is available in benefit fraud cases;
(c) Failing sufficiently to take into account relevant personal circumstances of the appellant when considering a sentence of home detention.
Background
[6] The appellant is a tenant of a Housing New Zealand Corporation property at
8 Benghazi Road, Panmure, Auckland. She has resided there since 18 March 1997.
[7] The charges concern the appellant’s applications for income-related rent for the property. Income-related rent is calculated with reference to the tenant’s household income and other circumstances. The system relies on tenants to honestly and accurately provide information about their household income and personal circumstances. Where a tenant is eligible for income-related rent, the Crown funds the difference between the income-related rent and the assessed market rent for the tenancy.
[8] On the following dates, the appellant signed and submitted applications for income-related rent:
28 November 2001;
26 November 2002;
8 December 2003;
4 December 2004;
2 December 2005;22 December 2006;
18 December 2007;
9 December 2010.
30 January 2009; and
[9] When completing the applications, the appellant deliberately failed to declare that her husband was residing with her at the property, for the purpose of receiving a
lesser rent than she was otherwise entitled to. As a consequence, she obtained
2 Ransom v R [2010] NZCA 390.
benefits in the amount of $85,437.00. The appellant admitted the facts and stated that she did not declare her husband because of their financial struggles and because she knew her rent would go up.
[10] The appellant is a 50 year old Samoan woman currently residing with her husband, two adult daughters, her de facto son-in-law and two infant grandchildren. She has been a reliable and well-regarded employee working as a cook for the last 12 years. She enjoys strong support from her family and is a committed Church member.
[11] It is assessed in the pre-sentence report that she does not pose any physical threat to society and the likelihood of her re-offending is minimal. The report writer also considers that the appellant is motivated to address the underlying causes of her offending.
Sentencing decision
[12] Judge Aitken first considered the circumstances surrounding the offending. The appellant and her husband had been married for 30 years so this was not a new relationship that the appellant failed to declare to Housing New Zealand. She noted an explanation given by the appellant that when they moved into the property 15 years ago the house was not in a good state of repair. The appellant maintained that renovations assured by Housing New Zealand had never been undertaken so she claimed some justification for her dishonest declarations.
[13] The Judge noted the offending spanned over ten years and that the appellant had spent money on travel to Samoa while at the same time defrauding Housing New Zealand (which of course means the taxpaying community at large). The Judge found that appalling.
[14] The Judge noted the appellant and her husband were both in fulltime employment, that the appellant was an honest and trustworthy employee and a committed member of her Church.
[15] The Judge said that because offending of this kind undermines the welfare process, which depends on honesty and trust because this type of fraud is very difficult to detect, such offending must be taken seriously.
[16] The Judge said that the offending required a sentence of imprisonment. In fixing a starting point, she referred to Harris v Ministry of Development3 where benefit fraud was perpetrated over a period of nine years in an amount of $81,000. The starting point there adopted was two years imprisonment. The Judge also referred to Ransom v R where a starting point of two and a half years imprisonment was taken in respect of benefit fraud of approximately $128,000.
[17] The Judge considered there were no aggravating factors personal to the appellant. She expressed the view that it was not principled to regard the appellant as a first offender because she had been offending for nine years, but she acknowledged that for at least 40 years of the appellant’s life she did not commit any offences. The Judge said she regarded the appellant as an upstanding and decent member of the community who had made a significant contribution to the community particularly through her church work. She was prepared to acknowledge that the appellant was remorseful.
[18] Taking into account all the appellant’s personal circumstances the Judge applied what she described as a “generous reduction” of six months from the starting point.
[19] The Judge allowed a further discount of 25 per cent for the guilty plea which she accepted was entered at the earliest opportunity. That reduced the sentence to thirteen and a half months. The Judge then rounded down the sentence to one year which she described as a “lenient outcome”. She said she was mindful of s 16 of the Sentencing Act that the Court should not impose a sentence of imprisonment unless satisfied that the principles and purposes of sentencing cannot be achieved by a
sentence other than imprisonment. The Judge concluded:4
3 Harris v Ministry of Social Development HC Rotorua CRI-2010-463-22, 28 May 2010.
4 Housing New Zealand v Winterstein at [22].
The key purpose and principle of sentencing someone for this sort of fraud is deterrence and accountability. There is also the very important principle of consistency with others. In other words, treating everyone the same where they commit the same sort of offending and it is in light of those principles that I have reached the view that I must impose a term of imprisonment rather than a sentence of home detention. I have been as lenient as I can and in my view, on all of these charges, the least restrictive sentence is one of one year’s imprisonment.
[20] The Judge ordered that the appellant pay reparation, referring to payments at
$20 a week which apparently Ms Winterstein had been voluntarily paying until she was sentenced.5
[21] The Judge inserted an addendum to her sentencing notes that she had taken into account Ms Winterstein’s personal circumstances, in particular that she has no dependent children. She said this was not a situation where the appellant has young dependent children akin to the circumstances described in Ransom.
Approach on appeal
[22] The approach taken to appeals under s 121(3) of the Summary Proceedings
Act 1957 is set out in Yorston v Police:6
(a) There must be an error vitiating the lower Court’s original sentencing discretion: the appeal must proceed on an “error principle”.
(b)To establish an error in sentencing it must be shown that the Judge in the lower Court made an error whether intrinsically or as a result of additional material submitted to the appeal Court.
(c) It is only if an error of that character is involved that the appeal Court should re-exercise the sentencing discretion.
[23] In relation to an appeal against imprisonment as opposed to home detention the Court of Appeal said in James v R:7
5 I am advised that the appellant made ten payments of $20 each, a total of $200 on account of reparation.
6 Yorston v Police HC Auckland CRI-2010-404-164, 14 September 2010 at [13]-[15].
[A]n appeal against a refusal to grant home detention does not provide an opportunity to revisit or review the merits. The question is whether Judge Tuohy erred in exercising his sentencing discretion: that is, did he apply an incorrect principle, give insufficient or excessive weight to a particular factor, or was he plainly wrong? ... [T]he decision about whether home detention will meet [the objectives of deterrence and denunciation] in a particular case is a strictly evaluative exercise. It is a matter of judgment for the sentencing Judge to determine whether home detention is an adequate response to the seriousness of the offending.
[24] In Manikpersadh v R the Court of Appeal accepted that:8
… the choice between home detention and a short sentence of imprisonment is the exercise of a fettered discretion, with appellate review focusing, as in other sentencing appeals to this Court, on the identification of error, if any, in the court below.
[25] In R v D9 the Court of Appeal said that in considering the issue of whether imprisonment is necessary or whether home detention is sufficient, in cases that are close to the dividing line the Court should give weight to the view of the sentencing Judge. I observe that must be particularly so, when the sentencing Judge has also been the trial Judge and has the advantage of a close knowledge of the case.
Relevant statutory provisions
[26] Section 16(1) of the Sentencing Act 2002 provides:
16 Sentence of imprisonment
(1) When considering the imposition of a sentence of imprisonment for any particular offence, the court must have regard to the desirability of keeping offenders in the community as far as that is practicable and consonant with the safety of the community.
(2) The court must not impose a sentence of imprisonment unless it is satisfied that,—
(a) a sentence is being imposed for all or any of the purposes in section 7(1)(a)to(c), (e), (f), or (g); and
(b) those purposes cannot be achieved by a sentence other than imprisonment; and
7 James v R [2010] NZCA 206, (2010) 24 NZTC 24,271 at [17].
8 Manikpersadh v R [2010] NZCA 452 at [12].
9 R v D(CA253/2008); [2008] NZCA 254 at [66].
(c) No other sentence would be consistent with the application of the principles in section 8 to the particular case.
[27] Section 8(g) provides that the Court “must impose the least restrictive
outcome that is appropriate in the circumstances”.
[28] Section 10A of the Sentencing Act establishes a hierarchy of sentences in which a sentence of home detention lies immediately next to imprisonment as the second most restrictive sentence.
Appellant’s submissions
[29] The appellant’s submissions focussed on consistency, least restrictive sentence and previous good character. She submits that because the Court of Appeal in R v Ransom held that home detention would adequately respond to the sentencing goals of accountability, denunciation and deterrence, the sentence of imprisonment was inconsistent with case authority. The appellant cites Te Weri v Ministry of Social Development,10 where a sentence of imprisonment was overturned and replaced by home detention for fraud committed over ten years.
Least restrictive sentence
[30] The appellant notes that the prosecution did not oppose a sentence of home detention at the time of sentencing and the pre-sentence report also recommended a sentence of home detention. This shows, the appellant submits, that imprisonment was not the least restrictive outcome the Judge could have imposed in the circumstances.
Previous good character
[31] The appellant submits that the period of the offending is an aggravating feature of the offence that should be taken into account when determining the
10 Te Weri v Ministry of Social Development HC Napier CRI-2010-441-49, 25 November 2010.
starting point. It should not have been taken into account when considering whether the appellant was a first offender, of previous good character.
Respondent’s submissions
[32] The respondent essentially submits that where the sentencing approach followed is consistent with previous case law, the sentence reached will be consistent also. The respondent submits that the Judge did consider and apply the principles of R v Ransom and she made specific reference to the case by distinguishing it from the present circumstances. As the final sentence was reached following an approach that accords with Ransom, the outcome is also consistent.
[33] The respondent distinguishes Te Weri v Ministry of Social Development on the ground that the sentencing Judge in that case had only taken into account the amounts involved in the offending when imposing imprisonment, which did not follow the “principled and nuanced approach” set out in Ransom. Therefore, Brewer J rightly allowed the appeal based on that error of law. The respondent submits that more than just the amount was considered here, and there is no error of law.
Least restrictive outcome
[34] The respondent submits although R v Ransom stated that home detention may address the purposes and principles of sentencing in benefit fraud cases that requires a case by case analysis and is not an automatic entitlement. Therefore, the Judge did not err in rejecting that home detention was sufficient in the circumstances of this case.
Previous good character
[35] The respondent submits that the Judge did pay regard to the appellant’s good character, as illustrated in the 25 per cent reduction for the appellant’s mitigating circumstances and the rounding down that occurred at the end of the sentencing analysis.
Authorities
[36] The case upon which the appellant principally relies and which the Crown acknowledges is the leading judgment relevant in this case, is Ransom v R. Ms Ransom was in receipt of a Domestic Purposes benefit from June 1997 to April
2008. She was married at the end of 1997. On 11 occasions between April 1998 and April 2007 she signed forms to continue receiving the benefit but failed to disclose that she was married. As a result she received payment of benefits totalling nearly
$128,000 unlawfully.
[37] She entered guilty pleas following a sentencing indication that the Judge would call for a home detention appendix if she pleaded guilty. The sentencing Judge considered the aggravating factors included the large sum of money unlawfully received, the long period of the offending and that fact she did not see her actions as “criminal”. The Judge determined on the basis that the amount involved was so significant, imprisonment must be imposed as opposed to home detention. He sentenced Ms Ransom to 18 months imprisonment.
[38] On appeal the Court of Appeal considered the purposes of the sentence of home detention which was introduced as a stand-alone sentence by the Sentencing Amendment Act 2007. Referring to the judgment of the Court of Appeal in R v Hill,,11 the Court noted that society’s interests may be better served in some cases by the imposition of restrictions on liberty through home detention, as there are acknowledged advantages including low rates of reconviction and re-imprisonment, high compliance rates and positive support for offenders’ reintegration and rehabilitation.
[39] The Court in Ransom reviewed similar cases involving benefit fraud, both before and after the 2007 amendment. The Court held that the Judge should not have ruled out a sentence of home detention solely on the grounds that the fraud was too serious. The Court said:12
… whether home detention or imprisonment is the appropriate sentencing option in cases of this kind requires a more detailed and nuanced analysis than that. The cases we have cited above show that offending of equivalent seriousness has been held amenable to home detention in the past. …
We have concluded that a sentence of home detention will, in conjunction with one of community work, adequately respond to the sentencing goals of accountability, denunciation and deterrence.
[40] The Court quashed the sentence of imprisonment and imposed a sentence of nine months home detention, commenting that ordinarily 12 months home detention would have been imposed to respond to the offending, but there was the need to take account of the time Ms Ransom had spent in prison (approximately two and a half months).
[41] In the subsequent case of Te Weri v Ministry of Social Development13 Ms Te Weri omitted to disclose her relationship status and over a period of about ten years received approximately $121,000 in benefit payments unlawfully. The Judge focused on the amount of the fraud in imposing a sentence of 20 months imprisonment rather than home detention.
[42] On appeal Brewer J found that the sole focus on the amount of the fraud was an error in principle as the analysis needed to be more “detailed and nuanced”. He said that as the Court must have regard to the desirability of keeping offenders in the community and must not impose a sentence of imprisonment unless satisfied that the sentencing purposes of deterrence and denunciation cannot otherwise be achieved. Home detention and community work responded adequately to the sentencing goals of accountability, denunciation and deterrence. He quashed the sentence of imprisonment and substituted a sentence of seven months home detention (again allowing for time spent in custody from what would have otherwise been 12 months home detention) and 150 hours community work.
[43] Beedell v Ministry of Social Development14 is another case that followed the decision in Ransom. Judge Aitken referred to it in her sentencing decision but did not analyse it when considering the issue of home detention. In Beedell Dobson J
noted that in considering whether home detention should be imposed the following
factors are relevant:15
Clear and genuine remorse for the offending. Absence of prior convictions.
Early guilty pleas entered.
Genuineness of attempts to repay benefits over-claimed.
[44] The Judge held that a term of imprisonment was not required in this case for deterrent purposes.
[45] One of the decisions referred to by the Court of Appeal in Ransom is Werahiko v Ministry of Social Development16 which has close similarities factually with this case. In Werahiko the offending involved receipt of benefits exceeding
$85,000 during a period in excess of ten years. The offending was characterised in the District Court sentencing as “prolonged and deliberate”. Following pleas of guilty Ms Werahiko was sentenced to a term of imprisonment of one year.
[46] She appealed against that sentence on the grounds that the Judge erred in not imposing a sentence of home detention. On appeal the High Court set aside the sentence of imprisonment and imposed a sentence of four months home detention which took into account that Ms Werahiko had already spent about two months in custody. The Court referred to Ms Werahiko’s remorse and the unlikelihood of her reoffending. Heath J said:17
In light of the Judge’s findings that Ms Werahiko was unlikely to offend again and that she was remorseful for what had occurred, I am satisfied that the Judge ought to have imposed a term of home detention. I am satisfied also that a term of home detention would respond adequately to the sentencing goals of denunciation and deterrence. In determining whether home detention is appropriate, the Court of Appeal has made it clear that mitigating circumstances taken into account in determining the finite
15 At [18].
16 Werahiko v Ministry of Social Development HC Rotorua CRI-2008-463-55, 5 September 2008.
sentence will also be relevant to the question of whether home detention should be imposed: Hill at para [36].
Analysis
[47] I acknowledge that in sentencing the appellant Judge Aitken identified at the start of her judgment that the issue was whether a sentence of imprisonment must follow or whether a sentence of home detention could be imposed. However, having then referred to the facts and the personal circumstances of the appellant she moved immediately to say18 that a sentence of imprisonment was the sentence she must pass on the appellant. She acknowledged Ms Winterstein’s otherwise good character but said this offending must be met by a term of imprisonment.
[48] She then turned to set the starting point, referring to the judgment of Harris as authority for a starting point of two years imprisonment.19 She referred to Ransom in the context of setting the starting point, noting that in that case the benefit fraud amounted to about $128,000 and the starting point was two and a half years imprisonment. Having adjusted the sentence from the starting point for mitigating factors and rounded down to reach a sentence of imprisonment of one year, the Judge then went on to say that the key purpose and principle of sentencing for this sort of fraud is deterrence and accountability and that consistency with other sentencing was also a very important principle. She said in the light of those principles she reached the view that a term of imprisonment rather than a sentence of home detention was required.
[49] The Court is required by s 16 of the Sentencing Act to have regard to the desirability of keeping offenders in the community as far as that is practicable and consonant with the safety of the community. Further, by s 8(g) the Court must impose the least restrictive outcome that is appropriate in the circumstances in accordance with the hierarchy of sentences and orders set out in s 10A. Accordingly the Court should not impose a sentence of imprisonment unless the less restrictive
sentence of home detention, listed next to imprisonment in the hierarchy in s 10A,
18 Housing New Zealand v Winterstein at [10].
19 Harris was not one of the decisions considered by the Court of Appeal in Ransom though decided about three months earlier.
would be inadequate to achieve the sentencing principles of accountability, denunciation and deterrence in the particular case.
[50] In Ransom and Te Weri the Court found that the principles of deterrence, denunciation and accountability were adequately met by a sentence of home detention. That does not mean that home detention is appropriate for every situation of benefit fraud. As the Court plainly stated in Ransom, the analysis must be undertaken on a case by case basis. However, it is difficult to see how the offending in this case requires more deterrence or denunciation than in the cases of Ransom and Te Weri. The amount in issue is significant, but significantly less than in those two cases. The period over which the benefit fraud was carried out is approximately the same. Ms Winterstein pleaded guilty at the first possible opportunity and the Judge accepted that she showed clear and genuine remorse. She has no prior convictions and was regarded as an honest and well respected member of the community contributing to the community, particularly through her involvement with her church.
[51] Essentially, the only factual difference is the one noted by Judge Aitken in the addendum to her judgment in seeking to distinguish the case of Ransom, that Ms Winterstein does not have dependent children. She does have adult daughters and grandchildren living with her and responsibilities as a wife, mother and grandmother. The fact that Ms Winterstein does not have dependent children does not make home detention a less appropriate or adequate response to the purposes of deterrence, denunciation and accountability.
[52] I consider the Judge erred in failing to give sufficient weight to the mitigating circumstances including importantly:
Absence of any previous convictions. Early guilty pleas.
Genuine remorse.
Genuine (if limited by her imprisonment) attempts to repay benefits over- claimed.
[53] It is clear that Ms Winterstein does not pose any physical threat to the community at large and the assessment of the probation service is that she is unlikely to reoffend in like manner.
[54] While the Judge clearly took into account these mitigating features in allowing the generous discount she did from the starting point of two years, she did not take sufficient account of them in considering whether a sentence of home detention would provide an adequate response to this offending. The Court of Appeal judgment in Ransom is authority that a sentence of home detention is, depending on the circumstances of the particular case, an appropriate response to benefit fraud offending in the nature of Ms Winterstein’s offending. In accordance with the dictates of s 16 it is desirable to keep Ms Winterstein in the community.
[55] The sentence of imprisonment will therefore be quashed. I turn to consider the appropriate sentence to be imposed. I consider a sentence of about eight months home detention would be appropriate in the circumstances of this case but allowance must be made for the period of approximately three months the appellant has spent in prison. I therefore impose a sentence of four months home detention.
[56] In addition I impose a sentence of 100 hours community work.
Result
[57] The appeal against sentence is allowed. The sentence imposed in the District
Court is set aside.
[58] Ms Winterstein is sentenced to four months home detention on the following terms:
(a) On release from prison she is to go directly to 244 Queens Road, Panmure to await the arrival of the probation officer and the electronic monitoring company.
(b)She is to reside at 244 Queens Road, Panmure for the duration of the sentence of home detention.
(c) She is not to leave that address without the prior written permission of her supervising probation officer.
(d)She is not to undertake any employment without the prior permission of her supervising probation officer.
(e) She is not to consume alcohol or any illegal substance while subject to the sentence of home detention.
[59] I also impose a sentence of 100 hours community work.
[60] Those sentences are imposed on the count relating to the most recent offending on 9 December 2010. Two months home detention is imposed on the remaining counts, to be served concurrently.
[61] Ms Winterstein is to recommence payment of reparation by instalments of not less than $20 per week not later than one month following her release from prison.
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