Wu v Accident Compensation Corporation
[2021] NZHC 3028
•12 November 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2021-404-000363
[2021] NZHC 3028
BETWEEN CHENG-YIN WU
Appellant
AND
ACCIDENT COMPENSATION CORPORATION
Respondent
Hearing: 8 November 2021 Counsel:
CG Farquhar for Appellant TCT Riley for Respondent
Judgment:
12 November 2021
JUDGMENT OF DOWNS J
This judgment was delivered by me on Friday, 12 November 2021 at 11 am.
Registrar/Deputy Registrar
Solicitors/Counsel:
Crown Solicitor, Manukau. CG Farquhar, Auckland.
WU v ACCIDENT COMPENSATION CORPORATION [2021] NZHC 3028 [12 November 2021]
ACC fraud
[1]Cheng-Yin Wu defrauded the Accident Compensation Corporation (ACC) of
$234,738.21. Judge B A Gibson imposed a sentence of 12 months’ home detention.1 Mr Wu appeals. He contends the sentence is manifestly excessive. An appeal in this context must be allowed if the appeal Court is satisfied there is an error in the sentence and a different one should be imposed.2 Or, in short, if the sentence is manifestly excessive.3
Background
[2] Mr Wu is an acupuncturist. Between September 2017 and March 2019, he submitted ACC electronic payment forms for treatment he had not provided. ACC paid Mr Wu $234,738.21 believing he had provided the treatment.
[3] In February 2019, ACC told Mr Wu it was investigating him. Over the next two or three weeks, Mr Wu created false clinical notes to support the claims he had made. Mr Wu met ACC staff 11 March 2019. He initially said a person assisting him must have made errors when submitting the claims. But, Mr Wu then acknowledged he had submitted false claims. He said he did so to cover business costs and poor income. Mr Wu also acknowledged he had manufactured false clinical notes to support the claims. Mr Wu provided ACC a spreadsheet of his false claims two days later. Mr Wu confirmed his admissions at meetings on 27 May and 6 August 2019.
[4] On or about 25 August 2020, ACC laid two representative charges: one of dishonesty using a document;4 and a second of forgery.5 Mr Wu pleaded guilty 12 January 2021. Mr Wu repaid ACC in full the day before sentencing.
Sentencing
[5] Judge Gibson adopted a starting point of four years’ imprisonment. He deducted 25 percent for the pleas of guilty, five percent for previous good character,
1 Accident Compensation Corporation v Wu [2021] NZDC 14618.
2 Criminal Procedure Act 2011, s 250(2).
3 Tutakangahau v R [2014] NZCA 279.
4 Crimes Act 1961, s 226(1)(b); maximum penalty, seven years’ imprisonment.
5 Section 256(1); maximum penalty, 10 years’ imprisonment.
and 20 percent for reparation. The Judge declined a further discount based on personal circumstances. The Judge commuted the provisional sentence of 24 months’ imprisonment to 12 months’ home detention. The Judge said he did so “by a very thin margin”.6
Argument and analysis
The four-year starting point
[6] On behalf of Mr Wu, Ms Farquhar, contends the starting point is based on factual errors and in any event, too high.
[7] It is common ground the summary of facts contained an error. It described the offending as beginning May 2017, when it actually began September 2017. That said, the summary of facts was agreed as correct at sentencing. In the recent decision of Herlund v R,7 the defendant pleaded guilty to a host of sexual offences. The summary of facts said the offending began at a time when Mr Herlund was in prison. The Court of Appeal said:8
We do not consider that there is anything in these points. Mr Herlund accepted the summary of facts when he entered his guilty pleas. He did not seek to challenge it through a disputed facts hearing, pursuant to s 24 of the Sentencing Act. This Court has held that, where counsel have reached agreement regarding the factual summary on which a guilty plea is to be entered, sentencing must proceed on the basis of that summary, and any appeal against sentence must similarly be decided by reference to the facts contained in the summary. We can see no reason to depart from this approach.
[8]The Court added the error “was of no great moment” on the facts.9
[9] These observations address this point and as in Herlund, the error is not material. That Mr Wu defrauded ACC over 18 months as against 22 months does not change the calculus.
6 Accident Compensation Corporation v Wu, above n 1, at [19].
7 Herlund v R [2021] NZCA 71.
8 At [42].
9 At [43].
[10] The next aspect is a little more difficult. The Judge appears to have interpreted the summary of facts to mean Mr Wu gave ACC the false clinical notes intending to deceive it. However, Mr Wu had already told ACC the notes were bogus. In fairness to the Judge, the summary of facts is needlessly long, and not especially well framed.
[11] For this reason, and because Ms Farquhar invites attention to the case law, I explore further. The leading case in this area is R v Varjan.10 Varjan establishes the unremarkable proposition that sentencing for fraud turns on the facts. Courts should consider:11
… the nature of the offending, its magnitude and sophistication; the type, circumstances and number of the victims; the motivation for the offending; the amounts involved; the losses; the period over which the offending occurred; the seriousness of breaches of trust involved; and the impact on victims.
[12] In Mitha v Police,12 the defendant stole $350,000 over seven months. He was the victim’s financial controller. The case had two interrelated unusual aspects. The defendant did not spend the stolen money. Instead, he banked it, expecting to fund his father’s upcoming medical expenses. On appeal, Panckhurst J adopted a starting point of three years’ imprisonment.
[13] In Fitzmaurice v Police,13 a priest stole a little under $150,000 from his parishioners. The offending occurred for five years. The defendant had a gambling addiction. On appeal, Panckhurst J adopted a starting point of three years’ imprisonment.
[14] In Mackley v Police,14 the defendant stole $173,000 from her employer to fund her lifestyle. The offending spanned 10 months. Gendall J upheld a starting point of three and a half years’ imprisonment.
10 R v Varjan CA97/03, 26 June 2003.
11 At [22].
12 Mitha v Police HC Auckland cri-2006-404-000266, 28 September 2006.
13 Fitzmaurice v Police [2013] NZHC 494.
14 Mackley v Police [2014] NZHC 1561.
[15] In Proctor v Police,15 the defendant stole $481,000 from her employer. The offending spanned three years. Cull J upheld a starting point of four and a half years, in part because the offending had some sophistication.
[16] Contrary to Ms Farquhar’s submission, this case law suggests Mr Wu’s lawyer at sentencing—not Ms Farquhar—was correct to accept a four-year starting point as available. Mitha is, as Panckhurst J observed, “somewhat out of the norm”. Fitzmaurice involved a greater breach of trust, but less money than that taken by Mr Wu. Mackley also involved less money—and a shorter offence period. Proctor involved more serious offending than Mr Wu’s, but Ms Proctor had a higher starting point. It is also important to remember sentencing is more art than science, especially in a multifactorial setting like fraud.
[17] This leaves two related points. First, Ms Farquhar argues the Judge was wrong not to adopt a lower starting point because Mr Wu committed the offending, at least in part, to impress (and help) his girlfriend. Mr Wu said this in an affidavit before the District Court, and in a psychological report, again before that Court. The Judge referred to this aspect. He said:16
In any event the offending was detected and you admitted on 6 August 2019, when you were contacted and interviewed by staff from the Accident Compensation Corporation integrity services, that you had been submitting false invoices for treatments that had not taken place. You said that you did that to cover business expenses of your own practice and your personal costs but it became apparent that what you were using the monies for was effectively lifestyle matters as you had entered into a relationship with a woman and substantial amounts of money were apparently spent on her.
[18] No authority is cited for the broad proposition a defendant is less culpable if he or she commits fraud to impress another. This is unsurprising. The offending still reflects choice. Moreover, while it is possible to conceive a defendant’s infatuation with another mitigating the gravity of an offence, the obvious constellation is when a young person, impulsively steals something of little value to impress the object of his or her affection. This case is some distance from the hypothetical. Mr Wu is a 26-year-old healthcare provider. He defrauded a public body of a lot of money. The
15 Proctor v Police [2016] NZHC 2656.
16 Accident Compensation Corporation v Wu, above n 1, at [4].
offending was anything but impulsive. It spanned 18 months. So, that Mr Wu might have been infatuated does not diminish the seriousness of what he did. Ms Farquhar responds the case is like Mitha. I disagree. Mr Mitha’s father was very ill. No one suggests that was true of Ms Wu’s girlfriend.
[19] Second, Ms Farquhar argues the Judge wrongly believed Mr Wu committed the offending to fund his lifestyle. While the Judge did say this,17 he also said Mr Wu used the money on his girlfriend. This, as observed, does not diminish culpability.
Other discounts?
[20] Ms Farquhar accepts the discounts totalling 50 percent were appropriate. However, she contends the Judge should have given Mr Wu a discount “of at least 10 percent” because of his co-operation with authorities. As will be recalled, Mr Wu acknowledged the offending in his first interview and thereafter. Mr Wu provided ACC with a spreadsheet containing every fraudulent invoice. He also told them where the information could be found on his computer and where that computer was.18
[21]In R v Strickland, the Court of Appeal observed:19
An offender who confesses other offending to police, especially in circumstances where conviction on those other offences might not otherwise have followed, or where the offender’s co-operation saves the authorities considerable time and work, is entitled to have that co-operation taken into account when the sentence is fixed.
[22] This submission must be assessed in light of the significant discounts the Judge gave, including 45 percent for the guilty pleas and reparation. It must also be assessed in light of the facts. Mr Wu’s candour occurred in the context of an already live investigation. This is not a case in which the defendant informed the authorities of offending of which they were ignorant. Nor is it a case in which the defendant informed the authorities of offending by a co-defendant. Consequently, while it was
17 Accident Compensation Corporation v Wu, above n 1, at [14].
18 Mr Wu also gave ACC the false clinical notes he had created to conceal the offending.
19 R v Strickland [1989] 3 NZLR 47, (1989) 4 CRNZ 632 (CA) at 51. See also Lowenstein v Police [2020] NZHC 78, in which a 10 percent discount was given for the defendant’s Police co-operation.
open to the Judge to afford additional discount, even if he had given another, say, 10 percent, this would not have affected the ultimate sentence. I return to this shortly.
[23] Anja Isaacson is a registered clinical psychologist. She provided a report to the District Court. Ms Farquhar argues Ms Isaacson’s report demonstrates clear linkage between “emotional deprivation” and the offending. Mr Wu told Ms Isaacson while he was well provided for by his father, “he was raised according to traditional Asian values that included respect for elders, high expectations to succeed and intolerance of failure”. Ms Isaacson says, “Mr Wu’s fear of reproach from his parents
... hindered his ability to seek help from his support network” when dealing with “the woman he was pursuing”. Ms Isaacson also says, “Mr Wu committed the offences because he was “desperate to maintain a façade of success to others and impress a woman whom he was infatuated with”.
[24] The Judge was not persuaded this background mitigated culpability. I am not either. Ms Isaacson’s observations need to be read in context. Ms Isaacson said Mr Wu does not present “with issues of significant substance abuse, antisocial attitudes, problem gambling or emotional/psychological disturbance”. Ms Isaacson said Mr Wu “presented with fundamentally prosocial values and attitudes and his background appeared evident of generally prosocial adaptive functioning”. In other words, Ms Isaacson identifies nothing of significance beyond Mr Wu’s desire to impress (and help) his girlfriend. This I have already addressed.
A manifestly excessive sentence?
[25] This is the most important question, irrespective of methodology. Ms Farquhar contends a sentence of six months’ community detention plus intensive supervision should have been imposed. I disagree, even if the Judge were wrong not to further discount the sentence for Mr Wu’s assistance to the authorities. The short point is this: a sentence of community detention and intensive supervision would not adequately reflect the gravity of the offending. As the Judge said, offending of this nature “is in effect taking money from the New Zealand taxpayer”.20 The offending also involved
20 Accident Compensation Corporation v Wu, above n 1, at [8].
a breach of trust, because the operation of the ACC scheme is reliant on trust. Home detention was needed to underscore the seriousness of what Mr Wu did.
Result
[26]The appeal is dismissed.
……………………………..
Downs J
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