Kaulave v Ministry of Health HC Auckland CRI 2011-404-0124 [2011] NZHC 776 (14 July 2011)

Last Updated: 2 August 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CRI 2011-404-0124}

BETWEEN ILEANA KAULAVE Appellant

AND MINISTRY OF HEALTH Respondent

CRI 2011-404-0125

AND BETWEEN KAUFONONGA FEHOKE Appellant

AND MINISTRY OF HEALTH Respondent

Hearing: 12 July 2011

Counsel: V Letele for Appellants

Z R Johnston for Respondents

Judgment: 14 July 2011 at 2:00 PM

_{JUDGMENT OF KEANE J}

This judgment was delivered by on at 14 July 2011 at 2pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Crown Solicitor, Auckland

ILEANA KAULAVE V MINISTRY OF HEALTH HC AK CRI 2011-404-0124 14 July 2011

[1] On 13 April 2011 Kaufononga Fehoke and Ileana Kaulave were each sentenced in the District Court, Manukau, to 70 hours community work for their part in a series of offences, involving false benefit claims on the Ministry of Health between July 2005 - August 2008, instigated by Kelei Ataata, the principal offender, the result of which was that the Ministry was defrauded of $21,250.

[2] The benefit they claimed is paid by the Ministry of Health to assist principal caregivers of physically or intellectually disabled persons, like Mrs Ataata, who has dependent twins who are intellectually disabled. It is paid to those, like Ms Fehoke and Ms Kaulave, who are neither family members nor living with the principal caregiver, who assume short term care of a disabled person in order to give the principal caregiver a measure of relief.

[3] Ms Fehoke over four years, and Ms Kaulave in one year, made claims on the Ministry for caring for Ms Ataata's twins for a month a year, in the main during July. They at no stage provided that care and they passed the benefits they received to Ms Ataata herself. She retained $18,950. She paid to Ms Fehoke $1,500 and to Ms Kaulave $800.

[4] By the date of sentence Ms Ataata, who had admitted to six offences, four false benefit claims and two false declarations, had been sentenced in the District Court for her part as principal offender. On 16 November 2010 she was sentenced to

100 hours community work, six months community detention, 12 months supervision, and required to make reparation of $18,950. That sentence had been sustained on appeal to this Court.

[5] Ms Fehoke, Ms Ataata's principal co-offender, who had claimed over the four years 2005 - 2008 benefits for caring for one twin that came to $7,933, and for the other $8,529, in all $16,462, was for sentence for eight fraudulent claims expressed in two consolidated charges of fraudulent use of a document.

[6] Ms Kaulave, whose claims were confined to a single year, 2009, and who claimed for one twin, $2,128, and for the other $2,660, in all $4,788, was for sentence for four offences. Two, of fraudulent use of a document, were for the

fraudulent claims she made. The other two, of making false declarations on 6

October 2009, resulted from her dishonest responses to a Ministry audit that followed soon after.

[7] Both sought on sentence a discharge without conviction on the ground that they had only offended to assist Ms Ataata, indeed that they had been orchestrated by Ms Ataata and for her own benefit. They had co-operated in the Ministry investigation, they said, and they had each admitted their part. They had attended a restorative justice conference that the Ministry did not attend. They had repaid the sums they accepted they had received.

[8] The consequences of a conviction, they each contended, would be so severe as to be out of all proportion to the gravity of their offences. A conviction would prejudice their employment and each has dependents. Ms Kaulave's conviction might prejudice her husband's residence application. A conviction would be disproportionately shaming for them, within their families, and as members of their church.

[9] The Judge did not accept that they were entitled in law to a discharge without conviction. The fraud in which they played a part had lasted, he said, five years. The loss to the Ministry had been significant. They had themselves benefited. He was not convinced that the consequences of conviction they identified were inevitable. Nor did he consider them out of all proportion to the gravity of their offending.

[10] On this appeal, Ms Fehoke and Ms Kaulave contend that when assessing whether the consequences for them of a conviction would be out of all proportion to their offending, the Judge did not make, or did not make correctly, the three phase assessment s 107 of the Sentencing Act 2002 calls for. Thus, they contend, his decision to decline them a discharge without conviction under s 106 ought to be quashed as wrong in principle.

Scope of appeal

[11] Ms Fehoke and Ms Kaulave have exercised their right of general appeal against conviction and sentence, under s 115 of the Summary Proceedings Act 1957, and such an appeal is by way of rehearing.1

[12] On an appeal this Court may make such order as it thinks fit.2 It may confirm, set aside or amend a conviction.3 It may quash any sentence and impose instead any able to be imposed, whether more or less severe, where that imposed was beyond jurisdiction, or was clearly excessive or inadequate or inappropriate, or the Court is

'satisfied that substantial facts relating to the offence or to the offender's character or personal history were not before the Court imposing sentence'.4

[13] Consequently, this Court comes under a duty to review the merits of the case for itself. An appellant must show that the decision under appeal does involve some material error. But this Court is not obliged to defer to the Court under appeal. Nor is this Court confined within the boundaries of the decision under appeal.5

Discharge without conviction

[14] Section 106 of the Sentencing Act permits a sentencing Court to discharge without conviction a person who has been found guilty, or pleads guilty, unless the offence is one that carries a mandatory minimum sentence.6 A discharge is deemed to

be an acquittal.7 But the Court may make any order it is required to make on

conviction and may require payment of a sum of money for a variety of purposes.8

[15] The power to discharge under s 106 is subject to s 107, which prohibits a discharge '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'. That calls for}

1 _{Section 119.}

2 _{Section 121(1).}

3 _{Section 121(2).}

4 _{Section 121(3)(b).}

5 _{Austin, Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141 (SC).}

6 _{Section 106(1).}

7 _{Section 106(2).}

8 Section 106(3).

a threefold inquiry into how serious the offence is, into how serious the consequences are, and into whether the latter is 'out of all proportion' to the former.

[16] That, the Court of Appeal has said recently in R v Hughes, is 'not a matter of discretion. It is a matter of fact requiring judicial assessment'.9 It is unhelpful, the Court said, to characterise the test in terms of its relative stringency; 'the test is the test'.10 Whether it is met can only be answered after taking into account all the relevant circumstances of the case. These include, the Court said:11

all relevant circumstances of the offence, the offending and the offender, and the wider interests of the community, including the factors required by the Sentencing Act to be taken into account under ss 7, 8, 9 and 10.

[17] Finally, the Court confirmed, the offender carries no onus to establish disproportionality. It is for the Court to be 'satisfied' about that in the exercise of its responsibility under the Sentencing Act 2002; and s 11 requires the sentencing Judge to consider, before entering a conviction and imposing sentence, the lesser alternatives including a discharge without conviction.

[18] In Blythe v R12 the Court of Appeal added this gloss. An application for discharge without conviction, it said, must first survive scrutiny under s 107, on the three phase analysis called for. The Court must then consider, under 106, and as a distinct matter of discretion, whether to exercise the power to discharge. That is when the purposes and principles of the Sentencing Act come into play.

Fehoke appeal

[19] The sentencing Judge, Ms Fehoke submits on this appeal, overstated the gravity of Ms Fehoke's offending and understated the consequences of a conviction for her.

[20] The only reason, Ms Letele submits, that Ms Fehoke completed the claim forms, was that Ms Ataata asked her to. They are close friends. Ms Fehoke was

9 _{R v Hughes [2008] NZCA 546 at [11].}

10 _{At [23].}

11 _{At [41].}

12 Blythe v R [2011] SZCA 190.

aware that Ms Ataata was struggling financially, and that the twins absorbed much of her resources. Ms Fehoke, Ms Letele says and I accept, only partly completed the claim forms in her name and signed them. She speaks little English. The forms were largely completed, Ms Letele submits and I accept, by Ms Ataata.

[21] Ms Fehoke, Ms Letele confirms, does not dispute that she received from the Ministry $16,462. But, Ms Fehoke does contend that she gave all that she received to Ms Ataata. She only received $1,500 herself because Ms Ataata gave that back to her in appreciation and she took it back only to avoid offence. That is a decision she now regrets.

[22] Ms Fehoke, Ms Letele submits, was when spoken to open and honest. She said then, however, that when she completed the claim forms for Ms Ataata she did not know what she was doing. That, Ms Letele submits, was her honest belief at the time; a belief inconsistent with a full dishonest intent and consistent at most with carelessness or perhaps recklessness.

[23] The primary consequence of a conviction for Ms Fehoke, Ms Letele submitted on sentence, was that it might place her then job in jeopardy. She was then employed in a retirement village as a laundry worker, but she also assisted residents. A conviction for dishonesty, had Ms Fehoke's then employer become aware of it, Ms Letele then said, might have resulted in Ms Fehoke being dismissed.

[24] Since then, Ms Letele says, Ms Fehoke has quit that job for reasons unrelated to her conviction. She now has a six month contract as a factory worker but she continues to fear that she will be vulnerable to dismissal if her employer comes to learn of her conviction.

[25] The Judge also, Ms Letele submits, failed to recognise that Ms Fehoke, this offending apart, is a woman of good character. She has been a steward of her church for more than ten years. Her church is a large part of Pacific Island life and of her own life. A conviction for her must result in disproportionate shame, embarrassment, and humiliation.

Kaulave appeal

[26] That essentially is the same argument that Ms Letele advanced on this appeal for Ms Kaulave, who is married to Ms Ataata's brother.

[27] Ms Kaulave also, Ms Letele says, agreed to assist Ms Ataata only because she understood her to be struggling financially. She did not offend for her own gain. She too passed to Ms Ataata all that she received, $4,788. When spoken to, Ms Kaulave believed that Ms Ataata had given her $300. She agreed that it might have been $800 once Ms Ataata said that herself. She did not intend to mislead.

[28] The Judge underrated the risk to Ms Kaulave if her conviction became known to her employer, Ms Letele submits. He underrated especially the consequence for her family. Ms Kaulave was then, and is still, employed as a fish packer. Of greater significance is that she is her family's principal source of income. Her husband is not yet a resident. If she lost her work that would affect her whole family. Her conviction could prejudice her husband's application for residence.

[29] Ms Kaulave, as the Judge was told, Ms Letele says, is a Sunday school teacher. Like Ms Fehoke, her church is at the centre of her life and that of her family. The Judge failed to take into account, she submits, the extent to which a conviction would be disproportionately embarrassing and shameful.

Conclusions

[30] The Judge was right to decline to discharge Ms Fehoke and Ms Kaulave without conviction. Their offences called at least for convictions to be entered. They actually, as the Judge concluded, called for more. They called for sentences reflecting the extent to which each had played a part in a fraud that continued over five years.

[31] Each claimed falsely to have cared for Ms Ataata's intellectually disabled children, in order to give Ms Ataata respite. Each then passed what they received in their bank accounts to Ms Ataata herself except for what she gave back to them.

Each knew that she had not cared for Ms Ataata's children. Each must have known that she had no right to claim. Each, when she paid the money over to Ms Ataata, must surely have known that Ms Ataata had no such right either. That must have been so whatever difficulties each has with English.

[32] The claims each made, it is no less significant, resulted in a significant loss to the Ministry over the five years that the fraud continued, $21,250. Ms Fehoke may only have received $1,500 and Ms Kaulave $800. Ms Ataata may have largely reaped the benefit of their offending. But that cannot distract from the losses each caused the Ministry, Ms Fehoke $16,462 and Ms Kaulave $4,788.

[33] On the evidence, as the Judge also rightly found, neither suffered any consequence of conviction out of all proportion to the gravity of their offending. There was not then and is not now any cogent evident of risk to the employment of either. Ms Fehoke, indeed, is even less vulnerable now. She is no longer employed in any position of trust. She, like Ms Kaulave, has become a factory worker. There is nothing to suggest that their present employers have any interest in the subject.

[34] Ms Kaulave's concern that her conviction might have an adverse effect on her husband's residency application is also less than cogent. The Immigration Department is unlikely to deny her husband's application solely on the ground of her conviction. But that, in any event, is a matter for the Department. It is not one to be resolved in the ordinary exercise of the jurisdiction of the District Court.

[35] There was no evidence on sentence, before the convictions were entered, and there is none now since the convictions were entered, that Ms Fehoke and Ms Kaulave have suffered within their church community any loss of status or any untoward humiliation. There is none that Ms Fehoke has ceased to be a steward or Ms Kaulave a teacher.

[36] The oddity on sentence, I should add finally, is that the Judge was neither invited to, nor did he, make any distinction between Ms Fehoke, who offended over four years, and Ms Kaulave, who offended within one year. The Judge was invited to assess their culpability on the basis of their gains.

[37] That was an incomplete measure of their relative culpability and could have given rise to an issue of disparity. It is not, however, an issue that arises on this appeal. There is no suggestion that if Ms Kaulave's conviction were proper 70 hours community work was manifestly excessive for her. Ms Fehoke may well have been fortunate that she was sentenced to the same number of hours.

[38] These appeals will be dismissed. The convictions entered and the sentences imposed will stand.

P.J. Keane J