Lauina v Ministry of Social Development [2015] NZHC 1507 (30 June 2015)

Last Updated: 14 September 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2015-404-000052 [2015] NZHC 1507

BETWEEN	ISAAKO LAUINA Appellant
AND	MINISTRY OF SOCIAL DEVELOPMENT Respondent

_{CRI-2015-404-000067}

BETWEEN MARIA SIOLI Appellant

AND MINISTRY OF SOCIAL DEVELOPMENT Respondent

Hearing:	30 June 2015
Counsel:	JM Northwood for Appellant Lauina K Leys for Appellant Sioli NE Copeland for Respondent
Judgment:	30 June 2015

_{JUDGMENT OF ASHER J}

Solicitors:

JM Northwood, Auckland. K Leys, Auckland.

Meredith Connell, Auckland.

ISAAKO LAUINA v MINISTRY OF SOCIAL DEVELOPMENT [2015] NZHC 1507 [30 June 2015]

Introduction

[1] The appellants Isaako Lauina and Maria Sioli are married and until early this year lived together in Manurewa. They have since separated. Mr Lauina is 33 years old and unemployed. Ms Sioli is 31 years old and is employed as a factory worker.

[2] On 1 November 2010 they jointly applied for an accommodation supplement and temporary additional support. This was granted from 18 October 2010. On signing the application for benefit they both agreed to immediately advise the Ministry of Social Development if there were any changes to their circumstances that might affect their entitlement to benefit, including if they had changes to their income or financial circumstances.

[3] On 15 November 2010 Ms Sioli advised Work and Income that she was no longer working. On 8 February 2011 they jointly applied for a sickness benefit in respect of Mr Lauina. A sickness benefit hardship was granted on 22 February 2011. On the basis that they were both unemployed they received benefits from

20 November 2010 to 19 August 2013.

[4] In fact during that period Ms Sioli had worked for four employers on various dates starting on 20 November 2010 and finishing on 19 August 2013. This employment was never notified by either of the appellants to Work and Income.

[5] As a consequence of these omissions both Mr Lauina and Ms Sioli were charged with four counts of wilful omission (benefit fraud) under the Social Security Act 1964.¹ The maximum penalty on each charge is a term of imprisonment not exceeding 12 months and a fine not exceeding $5,000, or a combination thereof.

[6] Mr Lauina also faced an additional charge that was not faced by Ms Siolo. He had submitted a form on 16 May 2013 in which he stated that neither he nor his partner were working or receiving any income other than their benefit. In fact at the

_{time his partner, Ms Sioli, was receiving income.}

¹ Social Security Act 1964, s 127.

[7] As a consequence of these omissions, and in Mr Lauina’s case mis- statements, Mr Lauina received benefits that he should not have received of

$16,015.52, and Ms Sioli received benefits that she should not have received of

$16,015.00. When the employment came to light both of them immediately admitted their wrongdoing. They pleaded guilty to the charges at the first possible opportunity.

[8] On 30 July 2014 they appeared before Judge Zohrab in the Manukau District Court for the purposes of a sentencing indication. The Judge indicated, without reasons, a sentence of 400 hours community work.

[9] The appellants were represented by duty solicitors. At that point they formally entered pleas of guilty. Judge Zohrab then on the same day in a short judgment sentenced them each to 400 hours community work. He also ordered that they were to each pay reparation of $16,000.

[10] Ms Sioli’s reparation was to be paid at $20 per week which was an arrangement that was already in place in relation to her employer. Reparation by Mr Lauina was to be paid by arrangement with the Registrar, and I understand that there is a deduction made from his benefit in this regard. Mr Lauina’s counsel, Ms Northwood, thought that the deduction would be approximately $10 per week.

[11] The Judge did not set out what he regarded as the appropriate sentence of imprisonment that might otherwise apply, and made no reference to discounts for guilty plea or good character. He did, however, say this:²

How I reached the 400 hours’ community work was whilst the amount of reparation sought against each of you is $16,000 and that would ordinarily be met by way of a sentence of community work, the real impact upon the taxpayer is that the two of you have had the benefit of $32,000 which you should not have been entitled to. That would ordinarily be met by way of a sentence of community work and community detention. Given your personal circumstances I think the indication I have given is the appropriate response.

He noted that he appreciated that the sentence was a significant penalty, but that it was a significant amount of money obtained by fraud.

² Ministry of Social Development v Lauina [2014] NZDC 1 at [2].

Leave to appeal

[12] No appeal was filed in time. This was apparently because an incorrect procedure was adopted whereby there was an application made for a re-hearing. An extension of time for the filing of the appeal is granted without opposition from the Crown to 2 March 2015, by which date both notices of appeal had been filed.

[13] Leave is formally granted for the appeal to be filed out of time.

Grounds of appeal

[14] There are differences in the position of both appellants, which I will refer to. However, in essence in their written submissions at least, the appellants relied on the same two grounds of appeal. First it was argued that the sentencing Judge erred in basing his sentence on the combined amounts received by the appellants (approximately $32,000), rather than sentencing them individually for the amounts that they received ($16,000 each).

[15] As a second ground of appeal it was argued that in all the circumstances the sentences of 400 hours community work each were manifestly excessive.

Approach to appeal

[16] The approach to an appeal such as this is well settled. Section 250(2) of the Criminal Procedure Act 2011 states that the Court must allow the appeal if satisfied that for any reason there was an error in the sentence imposed on conviction or a different sentence should be imposed, but in any other case the Court must dismiss the appeal. The Court of Appeal has recently confirmed that this was not intended to change the previous approach of the Courts under the Summary Proceedings Act

1957.³

[17] The Court will not intervene if the sentence is within the range and can be justified by accepted sentencing principles. However, if the sentence is manifestly

_{excessive the Court will intervene. If the sentence is not manifestly excessive, even}

³ Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [26]–[27].

errors in the process by which the sentence was reached will not result in the appeal being allowed.

[18] In relation to this appeal I will carry out a fully reasoned sentencing process as the Judge has made no explicit reference to a starting point or deductions for guilty plea or good character.

Starting point

[19] The Ministry of Social Development in prosecuting these charges had an option of laying the charges under the Crimes Act 1961,⁴ or the Social Security Act.⁵

The maximum penalties that arise are significantly different. The maximum penalty under the Crimes Act is seven years, while under the Social Security Act it is one year. The Ministry has obviously formed the view that this offending is not of sufficient gravity to warrant the laying of the more serious charges.

[20] However, this is only relevant as a matter of broad background. I reject a suggestion that the Ministry’s decision is relevant in assessing culpability. The appellants have the benefit of that choice made by the Ministry in that they face a much reduced maximum penalty. The fact that the Ministry chose to treat the charges in this way should not be seen as an additional mitigating factor warranting some further deduction. The appellants will get the benefit of the Ministry’s decision by virtue of that greatly reduced maximum sentence, but the Ministry’s decision has no further relevance.

[21] There is no tariff decision, or indeed any in-depth discussion of sentencing principles from an appellate court, available in a sentencing such as this. Indeed, because of the fact that some charges in relation to what is commonly known as benefit fraud are charged under the lesser Social Security Act section, and others under the more serious Crimes Act section, it is difficult to see any particular pattern in sentencing. However, I have had a number of cases cited to me and I refer to

_three:

⁴ _{Crimes Act 1961, s 228.}

⁵ Social Security Act, s 127.

(a) Sinclair v Ministry of Social Development:⁶ there was receipt of an overpayment of $19,238.90 over four years. There were three charges under the Social Security Act. The District Court sentence was 120 hours community work. There was an appeal to the High Court against a refusal to discharge without conviction and no appeal against sentence. The appeal was dismissed. There was no consideration of the duration of the community work.

(b) Zafar v Ministry of Social Development:⁷ there the amount obtained fraudulently was $17,639.60 over an unspecified period. There were four charges of benefit fraud laid under the Social Security Act. The appellant suffered from a number of health conditions. A sentence of

85 hours community work was upheld on appeal as “quite

reasonable”.

(c) These sentences can be compared with Ataata v Ministry of Health,⁸ which involved a fraud of $18,950.20. The charges there were laid under the Crimes Act, because there was more active fraudulent activity on the part of the appellant. The District Court Judge there adopted a starting point of nine months’ imprisonment, then after noting aggravating and mitigating factors an end sentence of 100 hours community work, six months community detention and 12 months supervision. A reparation order was made. That sentence was upheld on appeal.

[22] I do not accept the submission that there was an error by the Judge in treating the real impact on the taxpayer as being the wrongful receipt of $32,000. Although each received only $16,000, they acted jointly in seeking benefits and must take joint responsibility for not notifying Work and Income about Ms Sioli’s work. They were partners, and jointly benefited from the money. Just as two parties to a burglary who might break into a house and take and retain particular items, will have their

_{culpability assessed on the basis of the total losses from the burglary, so should two}

⁶ _{Sinclair v Ministry of Social Development [2015] NZHC 849.}

⁷ _{Zafar v Ministry of Social Development [2014] NZHC 722.}

⁸ Ataata v Ministry of Health HC Auckland CRI-2010-404-479, 21 June 2011.

parties who jointly conduct benefit fraud who as a consequence received particular benefits, be liable for the total losses. Each can be seen as a party to the others’ fraud, and each must be held responsible for the total losses.

[23] In assessing the culpability of the offending there is nevertheless a distinction between the position of Mr Lauina and Ms Sioli. Ms Sioli was guilty of acts of in effect wilful omission in failing to disclose her work. Mr Lauina, while also facing those charges, faced the additional charge of making a false statement, which involved a proactive false act on his part, albeit just in the false filling in of a form. I see a distinction then between them in their culpability in relation to their offending.

[24] The Crown has suggested that a starting point of five to six months is appropriate. Neither Ms Northwood for Mr Lauina or Ms Leys for Ms Sioli disagree. Given the amount involved, the nature of the offending and the distinction between the position of Mr Lauina and Ms Sioli, I fix a starting point of six months’ imprisonment for Mr Lauina and five months’ imprisonment for Ms Sioli.

Personal factors

[25] In the hierarchy of sentences set out in s 10A of the Sentencing Act 2002, community work sits at fourth place below imprisonment, home detention and intensive supervision/community detention.

[26] Given that both the appellants are in their early 30s and have no relevant convictions, a discount for good character of up to 10 per cent would be appropriate. Clearly a 25 per cent discount for pleas of guilty is also appropriate. Those discounts in the round would have reduced the notional imprisonment starting point by up to one third to three and a half to four months’ imprisonment.

[27] There will be occasions when a short sentence of imprisonment is ordered for offending of this type under the Social Security Act. However, in the circumstances of this appeal given the amount involved, where both offenders have no relevant previous convictions, where both have accepted responsibility for their wrongdoing, and have entered pleas of guilty, and who both are paying reparation, imprisonment or indeed home detention would be too harsh a sentencing response, if there are

viable less severe sentencing options. A sentence lower in the hierarchy is appropriate.

[28] Neither the appellants, or indeed the Crown, argued that the Judge’s choice of community work was on the information that was before him at the time wrong. For reasons I return to later, I am satisfied that it is the correct sentence, if available. The issue is the length of the period. Counsel for Ms Sioli submits that the right sentence of community work, if it was available, would have been a sentence very considerably less than 400 hours. She did not put forward a definitive figure.

[29] There is a further factor relevant of Mr Lauina’s health, that was not known by the Judge, which I will refer to shortly. I am, however, going to first determine Ms Sioli’s appeal as that is more straightforward and sets something of a benchmark when I come to Mr Lauina’s position.

Sentence for Ms Sioli

[30] As I have outlined, a sentence of community work is clearly available for

Ms Sioli.⁹ It is stated at s 56(1):

56 Guidance on use of sentence of community work

(1) In considering whether to impose a sentence of community work, the court must give particular consideration to—

(a) whether the nature and circumstances of the offending make it appropriate for the offender [to be held accountable to the community by making compensation to it] in the form of work, in addition to, or instead of, making reparation to any person in respect of the offending; and

(b) whether the sentence is appropriate having regard to the offender's character and personal history, and to any other relevant circumstances.

...

[31] In my view the nature and circumstances of the offending make it appropriate that Ms Sioli be held accountable to the community by making compensation to it in

_{the form of community work. She is clearly a functioning member of our}

⁹ Sentencing Act 2002, s 55.

community and she has been paying, and continues to pay, reparation. Given that she has taken from the community it is appropriate that she put work back into the community. Her character and personal history as outlined to me by Ms Leys indicates that she is well suited to such community work. I have set out above why a more serious sentence is not required.

[32] The difficult issue given the lack of any tariff decision is the length of that period of community work.

[33] I have reached the view that the sentence of 400 hours community work imposed by the Judge was manifestly excessive. Even though this is fourth down in the hierarchy of sentences, the sentence of community work is going to impose a significant burden on Ms Sioli. She is working fulltime. She will have to do the work out of work hours. A sentence of 400 hours community work could well take her up to two years to complete. Given various mitigating factors of her good character, the early plea of guilty, and the reparation that she has paid and continues to pay, I consider that too harsh a burden.

[34] Nevertheless, I recognise that as the Judge said, this is serious offending involving a significant amount of money, obtained by way of fraud. I have concluded that the correct sentence of community work is 300 hours.

Sentence for Mr Lauina

[35] Before this Court Mr Lauina has filed an affidavit and a medical report. He suffers from severe tophaceous gout. He has not responded well to high doses of preventative medications and has the symptoms of severe arthritis affecting both upper and lower limbs, as well as joint deformity. He cannot use his hands. His doctor is of the view that the ongoing severe gout means that he has been and continues to be unable to undertake employment, now or in the foreseeable future. I accept Ms Northwood’s submission that he is not able to perform community work. Ms Copeland for the Crown does not contest that submission.

[36] I emphasise that this material was not before the District Court Judge and it

would seem that he was not made aware of Mr Lauina’s condition.

[37] Under s 56(2)(b) it is stated that community work is inappropriate if the Court is satisfied that for any reason it is unlikely that the offender would complete a sentence of community work. It is now clear that community work is not an available sentence.

[38] In these circumstances, it seems to me that the next sentence up in order of seriousness, namely community detention, is the appropriate sentence. This is Ms Northwood’s submission, and Ms Copeland does not disagree.

[39] Before I can order community detention I must obtain a pre-sentence report addressing the issue of the suitability of the proposed address.¹⁰ I therefore cannot allow the appeal in relation to Mr Lauina at this point, and I must adjourn it for consideration when I have such a report.

[40] However, I think it appropriate that at this point I set out the length of community work that I would impose should that sentence be available. I refer to the matters that I have already mentioned about the early guilty plea and good character of both appellants. It seems Mr Lauina is paying reparation of $10 a week, and thus his position is different from that of Ms Sioli who is paying twice that amount from her own earnings.

[41] A further point of distinction is the one already made about the additional charge faced by Mr Lauina, and the higher notional starting point that I have fixed.

[42] Although I have not reached a final view on the period of community detention, and will receive further submissions when the adjourned hearing take place and I will have the benefit of the report, my provisional view is that a sentence of four months community detention would be appropriate. I take into account the fact that this will not in fact be the hardship that might be expected for Mr Lauina, as it appears he is rather home-bound at the moment in any event. Indeed, I am informed by Ms Northwood that he was unable to come to court today because of the

_{effects of gout on his mobility.}

¹⁰ Section 26A(1).

Result

[43] The appeal in relation to Ms Sioli is allowed. The sentence of 400 hours community work is quashed and a sentence of 300 hours community work is imposed in substitution.

[44] Mr Lauina’s appeal is adjourned for a hearing before me at 9 am, Friday

14 August 2015.

...................................

Asher J