Tsega v Housing New Zealand Corporation [2013] NZHC 2263 (2 September 2013)

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This judgment was delivered by me on 2 September 2013 at 2:00 pm pursuant to Rule 11.5 High Court Rules.

[1] On 13 June 2013 in the District Court at Auckland, Judge BA Gibson sentenced the appellant to four months’ home detention. The sentence was imposed as a consequence of the appellant pleading guilty to seven charges of using a document for pecuniary advantage. The maximum penalty for that offence is seven years’ imprisonment.

[2] The appellant now appeals his conviction and sentence. The appeal against conviction is brought on the basis that the District Court Judge should have discharged the appellant without conviction pursuant to s 106 of the Sentencing Act

2002. The appeal against sentence focuses on disparity with the sentence of community detention and community work handed down against the appellant’s wife with whom he was jointly charged and who had in addition two similar charges for related offending.

[3] The pre-sentence report records that the appellant came to New Zealand from Ethiopia in June 2001 as an asylum seeker. He was granted residency in 2009. He met and married his wife in New Zealand and they have a six year old daughter.

[4] The appellant and his wife were tenants of Housing New Zealand (HNZ) from approximately 26 July 2001. The amounts of their rental payments were influenced by the levels of their incomes. In order to determine the appropriate rent, HNZ relied on their honesty in providing information about their household income and personal circumstances. From 2003 through to 2010, on seven occasions, the appellant and his wife signed and submitted documents to HNZ for the purpose of obtaining reduced rental. They deliberately failed to declare their true incomes. As a consequence of the offending, the appellant and his wife obtained reduced rental in the amount of $33,470.14.

[5] The District Court Judge set a starting point for both the appellant and his wife of 18 months’ imprisonment. He did so with reference to Hogan v Ministry of Social Development1 and Beedell v Ministry of Social Development.2 In the Judge’s view, the offending was deliberate, continued over a lengthy period of time and is in a category involving breach of trust due to the reliance of HNZ on the honesty of persons seeking access to public funds. As a result, he held that sentencing in this area has to have a deterrent aspect and be sufficient to instil responsibility while denouncing the conduct.

[6] The District Court Judge reduced the starting point by three months for the appellant and his wife because they do not have previous convictions. He gave each a full discount of 25% for their pleas of guilty so that an end sentence of 11 months’ imprisonment was reached for each. The Judge accepted readily that the least restrictive outcomes appropriate to the case would be sentences of less than imprisonment.

[7] From this point, although he regarded the culpability of the appellant and his wife as being equal, his treatment of them diverged. The appellant’s wife was employed and her income was the only significant income coming into the household. The Judge did not want to inflict on the family the very real consequences which would follow if the wife was unable to keep working. He sentenced the wife to four months’ community detention, 100 hours’ community work and ordered her to make reparation of $5,000 at the rate of $45 per month.

[8] The appellant was not working and, having rejected his application for a discharge without conviction, the Judge imposed the sentence of four months’ home detention. He decided not to make a reparation order because the appellant was not

2 Beedell v Ministry of Social Development HC Wanganui CRI-2010-483-000009, 11 February

[9] On the application for discharge without conviction, the Judge first considered the gravity of the offending. He considered that to be significant. It occurred over a relatively long period of time and the sum defrauded was in excess of $30,000. The Judge took into account also the breach of trust inherent in this type of offending.

[10] He w	The as ma (a)	Judge then turned to the direct or indirect consequences of a conviction. de aware of the following: The appellant is a student studying for a bachelor of computer systems
		degree at Manukau Institute of Technology. He had a year of study left to complete the degree.
	(b)	The appellant’s work as a taxi driver had had to finish because his licence was revoked by the New Zealand Transport Agency (NZTA).
		There were two grounds for this. The first was that he had a number of traffic infringements and the second was that he had been charged
		with the offences for which he was being sentenced. The NZTA considered that the appellant was not a fit and proper person to be the
		holder of the licence necessary for the driving of a taxi. On this point, the Judge was of the view that it would be wrong not to enter
		convictions so as to prevent the NZTA from taking the offending into account. The Judge thought that the NZTA should know of the
		offending and felt that even if a s 106 discharge was granted, the NZTA could still take into account the appellant’s pleas of guilty to
		the charges.
	(c)	The appellant has a position of prominence in the Ethiopian
		community in Auckland. He argued that convictions would reflect on his character and lower his standing within that community. The
		District Court Judge did not consider that to be a reason for avoiding a conviction.

[11] Overall, the District Court Judge ruled that the consequences of conviction for the appellant did not outweigh the gravity of the offending.

[12] On 26 July 2013, Woolford J granted an application by the appellant for leave to adduce fresh evidence on the appeal. That evidence is an affidavit by the

Convictions would delay his ability to apply for citizenship for another three years.

Home detention prevents him from working. He has been able to work on a casual part-time basis since the suspension of the sentence of home detention as a consequence of the filing of his appeal. A letter (not an exhibit but not objected to) from the appellant’s employer confirms that the appellant is casual staff and that:

The necessity for good character in order to be a member and office holder of the Ethiopian Community of Auckland Inc. A letter dated 10 August 2013 from the President of the Ethiopian Community of Auckland says:3

To be a member of the Ethiopian community the person must be an Ethiopian origin and 18 years and over with good character in other words the applicant needs to have good attitude, behaviour and clean from any criminal activities. Hence I am currently concern about

[the appellant’s] situation and worried that we may lose this key and supportive man from serving our community if he convicted with criminal charge.

[13] Against this expanded background, the appellant addresses, first, the refusal by the District Court Judge to grant a discharge without conviction. The first submission is that the Judge erred in law by failing to take into account relevant considerations. The considerations are submitted to be the appellant’s immigration status and his standing in the Ethiopian community.

[14] The next submission is that the Judge erred in law by failing to assess the consequences of a conviction. The appellant contends that the Judge failed to consider the effect of convictions on the current and future employment prospects of the appellant. It is argued further that the Judge placed too much weight on the fact of traffic infringements in considering the revocation of the appellant’s taxi licence by the NZTA.

[15] It is submitted also that the District Court Judge erred in law by “failing to exercise his discretion” when considering the appellant’s future and current employment prospects. I am a little puzzled by this submission, but it seems to be related to the earlier submission that the Judge failed to take proper notice of the effect of convictions on the appellant’s employment prospects.

[16] The appellant submits, further, that it is in the interests of justice that he be discharged without conviction. Again, this is linked to likely difficulty in gaining future employment in his chosen career.

[17] So far as the appeal against sentence is concerned, the main submission is that it is unjust for the appellant to be treated more harshly than his wife. It is pointed out that the appellant now has work on a casual basis. The effects of home detention on the appellant’s study plans are also highlighted.

[18] The appellant takes issue with the starting point of 18 months’ imprisonment. It is submitted that this starting point was put forward by the informant at a time when it was thought that the amount of the fraud was $46,388. It was realised later

that the actual amount was $33,470.14. Therefore, it is submitted, the Judge should not have followed the starting point contended for by the informant.

[19] Finally, Ms Watkins for the appellant submitted orally that consideration should be given for the fact that the amount defrauded was not for the sole benefit of the appellant.

[20] Section 106(1) of the Sentencing Act 2002 gives the Court a discretion to discharge without conviction a person who has pleaded guilty to an offence. Such a discharge is deemed to be an acquittal.

[21] Section 107 of the Act requires consideration of three factors: (a) The gravity of the offence;

[22] The leading case in this area is Z v R,4 a decision of the Court of Appeal. The

... when considering the gravity of the offence, the court should consider all the aggravating and mitigating factors relating to the offending and the offender; the court should then identify the direct and indirect consequences of conviction for the offender and consider whether those consequences are out of all proportion to the gravity of the offence; if the court determines that they are out of all proportion, it must still consider whether it should exercise its residual discretion to grant a discharge ...

[23] The District Court Judge did not go through the step-by-step analysis required by the statute and by the common law I have just set out. However, I also

have some material before me which was not before the District Court Judge. Accordingly, I will apply the test myself to determine the outcome.

[24] I assess the gravity of the offending as being at a medium level for offending of this type. It involved repeated acts of dishonesty spread over a period of years. There is a significant breach of trust because of the relationship between beneficiary and benefactor. However, the sum defrauded, although significant, was not as great as has been seen in other cases. The personal circumstances of the appellant do not lessen the gravity of the offending. He is an adult male granted access to New Zealand as a refugee and afforded the financial support of the community in which he has sought asylum. He has no other convictions but given the period of time that he has spent in New Zealand and the period of time in which he was offending, his otherwise positive character attributes do not lessen significantly the gravity of the offending.

[25] I draw a distinction between consequences of conviction and consequences of sentence. It is the consequences of conviction which I have to consider. I see these

Delaying by three years his ability to apply for New Zealand citizenship. I accept also that the fact of convictions might adversely impact upon his application for citizenship. Without citizenship, the appellant cannot travel

The appellant’s ability to regain his taxi driver’s licence will be adversely affected by the entry of convictions. However, it is not the absence of convictions which is a prerequisite to the NZTA granting a licence. It is character which is significant and the fact that charges have been admitted can be taken into account by the NZTA regardless of whether there is a deemed acquittal through the operation of s 106 of the Sentencing Act.

I accept that convictions would adversely affect the appellant’s chances of future employment. That is only common sense. Employers, particularly those who grant employees access to computers, would naturally be wary

It seems that the appellant’s standing in the Ethiopian community would be adversely affected by the entry of convictions. However, since the information before me is that standing in the community is based upon the possession of good character, whether or not there are convictions as a result

[26] The analysis is not one of simple disproportionality. The test is whether the direct and indirect consequences of conviction would be out of all proportion to the gravity of the offence. This means that the balance must be tilted firmly towards disproportionality. The issue is whether the consequences I have identified are out of all proportion to the offending as I have discussed it.

[27] In my view, they are not. If a person, over a period of years and on seven separate occasions, breaches trust and defrauds the social welfare system of $33,000, there will be consequences. These will naturally include lowering the offender in the esteem of the community and, in particular, in the esteem of those members of the community with whom he engages in fellowship. If the offender is studying for, or is engaged in, an occupation which puts trust in the honesty and integrity of its employees, then employment prospects will be affected adversely.

[28] Perhaps the one factor which separates the appellant from most others convicted in similar circumstances is his status as a refugee. This is not a case where his offending would render him liable to deportation if convictions are entered. At most, convictions will make it more difficult for him to gain New Zealand citizenship after the three years delay which will be imposed. I cannot say whether a discharge without conviction would cause the immigration authorities to ignore the

admitted offending. But even if it would, I do not see this factor as tipping the balance to the required degree.

[29] Overall, the consequences identified for the appellant are the natural consequences of his offending. What he seeks is to be sheltered from them. This would involve the Court taking an action for the purpose of removing the appellant’s character from appropriate scrutiny by the taxi industry, the IT industry and the immigration authorities. The Court is always reluctant to conceal an offender’s conduct from bodies whose task, or interest, is to take it into account. With offending of this gravity, there would have to be some extraordinary factor present before those natural consequences would be judged sufficiently disproportionate to meet the test.

[30] In short, my finding is that the consequences of convictions are not disproportionate to the gravity of the offending, let alone out of all proportion to the gravity of the offending.

[31] The District Court Judge was well aware of the need to impose the least restrictive sentence on the appellant. He was also obliged to consider the appellant and his wife against their individual circumstances. It is not objectionable in sentencing to treat offenders with similar culpability differently because of their different circumstances.

[32] Offending of this sort would usually call for a short period of imprisonment. I do not accept that, on the cases, the 18 months starting point adopted by the District Court Judge was outside the band available to him. It matters not that the starting point was contended for by the respondent while it was under the mistaken impression that the sum defrauded was higher than it actually was. It is the Judge’s decision whether or not to accept the submission, and he did so knowing the amount that had actually been defrauded. The reductions that the Judge made were appropriate. The 11 months final position was unexceptional. Given the gravity of the offending, it would not be usual for a Judge to conclude that the least restrictive form of sentencing went below home detention. In this case the Judge,

pragmatically and with mercy, took into account the consequences of removing the appellant’s wife from her position as sole breadwinner for the family. He cannot be faulted for this, and it was a decision that benefited the appellant as a member of the household.

[33] Likewise, the Judge cannot be faulted for regarding the appellant differently. I take into account the evidence I now have that home detention will delay the appellant completing his university studies and will prevent him from engaging in casual part-time employment now available to him for up to 10 hours a week. But those factors are not sufficient to make a sentence of home detention clearly excessive or inappropriate. I note also that the sentence of four months’ home detention is one or two months less than the normal commutation of a sentence of

BETWEEN	ZENEBE SEIFU TSEGA Appellant
AND	HOUSING NEW ZEALAND CORPORATION Respondent

Hearing:	27 August 2013
Counsel:	CC Watkins for Appellant HJ Musgrave for Respondent
Judgment:	2 September 2013

High Court of New Zealand Decisions

Tsega v Housing New Zealand Corporation [2013] NZHC 2263 (2 September 2013)