GIBBS v MINISTRY OF SOCIAL DEVELOPMENT [2016] NZHC 2676

GIBBS v MINISTRY OF SOCIAL DEVELOPMENT [2016] NZHC 2676 [7 November 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCRI-2016-404-000324[2016] NZHC 2676BETWEEN ALLAN TREVOR GIBBSAppellantAND MINISTRY OF SOCIALDEVELOPMENTRespondentHearing: 7 November 2016Counsel: S D Withers for AppellantG A Campbell for RespondentJudgment: 7 November 2016ORAL JUDGMENT OF DOWNS JSolicitors/Counsel:S D Withers, Auckland.Meredith Connell, Auckland.The case[1] This is a sentence appeal in relation to benefit fraud. On 8 September 2016Judge Ronayne sentenced the appellant to a term of two years and three months'imprisonment.1 The Judge also imposed reparation of almost $60,000.[2] The background is simple. On 27 November 2007, the appellant applied for and was granted a sickness benefit, accommodation supplement, disabilityallowance, and an additional allowance for temporary support. All of the benefitswere granted on the condition the appellant advise the Ministry of SocialDevelopment if his circumstances materially changed.[3] Between January 2008 and April 2013 the appellant had a variety of jobs, buthe did not tell the Ministry of them. Consequently, he received overpayments of$97,002.82. The appellant was caught when the Inland Revenue Department sharedinformation with the Ministry of Social Development.[4] The appellant was interviewed on 3 October 2013. He said that he had toldthe Ministry about one of his jobs, but not the balance because he was too far intodebt.[5] The appellant was charged on 15 April 2014. He entered guilty pleas on2 May 2016. The sequence in between was examined at some length by the Judgebelow. I need not do so. It is sufficient to observe on any analysis, the pleas ofguilty were not entered promptly.[6] The appellant is 65 years old. He has a history of fraud. In 1992 he wasconvicted of 29 charges of using a document for pecuniary advantage. In 2000 hewas convicted of like-offending and also altering a document with intent to defraud.That too was benefit fraud. In 2005 the appellant was convicted of offences ofmaking a false statement and misleading a Social Welfare officer. The appellant alsohas historical convictions for theft as a servant and using a document for a pecuniaryadvantage.1 Ministry of Social Development v Gibbs [2016] NZDC 17447.[7] The Judge adopted a starting point of two years and three months'imprisonment, which he uplifted by six months in light of the appellant's recidivism.The Judge then applied discounts totalling six months: two months for what theJudge described as the appellant's "mental health issues"; two months to reflect theappellant's repayment of $37,160 to the Ministry; and two months in recognition ofthe appellant's guilty pleas. As observed, the Judge also ordered reparation of$59,842.82.The arguments[8] The appellant contends his sentence is manifestly excessive. He invitesattention to allegedly inadequate discounts for mental health, guilty pleas and hisvoluntary repayments. That said; the appellant devoted most of his attention to thereparation order. He submitted in conjunction with the term of imprisonment, theresult was a crushing sentence. The phrase is mine but the sentiment is theappellant's.[9] No challenge is brought to the starting point. That I suspect is because it isconsistent with those adopted in the authorities. For example, in Ransom v R theCourt of Appeal upheld a starting point of two and a half years' imprisonment inrelation to offending of a similar nature and value.2 Similarly, in Whitelaw v R thedefendant was convicted of benefit fraud with overpayments of approximately$76,000 over seven years.3 The Court of Appeal upheld a starting point of two years'imprisonment as possibly conservative, given the defendant had not been fraudulentfrom need.Analysis[10] I am not persuaded the Judge erred in relation to any of the discounts vis-à- vis the term of imprisonment. Turning first to "mental health issues", there were tworeports before the Judge—one from Dr Duff and a second from Dr Heed, both ofwhom are psychiatrists. Each noted the appellant has suffered not insignificantdepression, or at least a depressive order. Dr Duff was also of the view that there is2 Ransom v R [2010] NZCA 390, (2010) 25 CRNZ 163.3 Whitelaw v R [2012] NZCA 438.some evidence the appellant suffers a personality disorder. However, neitherclinician advanced the view there was a nexus between the appellant's difficultiesand the offending. The Judge allowed five per cent under this head, but in theabsence of a nexus, the appellant may well consider himself fortunate.[11] In terms of the appellant's pleas of guilty, by any measure, they were late.Again, there is no need to elaborate upon the sequence (between when the appellantwas charged and when he ultimately pleaded guilty) to settle that proposition.[12] The Judge also afforded a five per cent discount for the appellant's voluntaryrepayments of $37,160. Voluntary repayments can demonstrate remorse, but makingrequired reparation is not typically seen as a demonstration of remorse, or aswarranting a separate discount. Credit may be given where the repayment of moneyis in genuine effort to atone, but not where it is the result of authority's actionsrecovering assets. In this case the appellant was not required by law to make thepayments he did. But on the other hand, he was merely repaying money which in asense he was never entitled to in the first place. That is not to conclude the source ofthe repayment was tainted, because it wasn't. It is rather to make a globalassessment of the appellant's financial circumstances.[13] The Judge's approach here was arguably parsimonious, but I need not resolvethis issue. That is because the overall sentence was within range, and as I haveobserved, the appellant was fortunate to have a deduction in relation to mental healthwhen there was no correlation between that factor and the offending.[14] This brings me to the real issue in the case, namely whether the reparation order of almost $60,000 has resulted in a manifestly excessive sentence. Here therespondent invites my attention to the prospect the appellant may enjoyre-employment upon release from prison, and to the fact the Judge was informed ifthat were so the appellant would be able to pay $500 per fortnight, or $13,000per annum—in part from employment and in part from his superannuation.[15] Under s 12 of the Sentencing Act 2002, there is a presumption in favour of reparation unless special circumstances make it inappropriate, or it would causeundue hardship. Unsurprisingly, undue hardship requires something more thanordinary hardship. The mere fact a reparation order has been imposed on an offenderalso sentenced to imprisonment does not give rise to undue hardship.4 However,orders which cannot possibly be met should be avoided, and the amount to be repaidby way of reparation should be realistic given the financial resources of theoffender.5 Where there is no realistic prospect payment will be made within a fewyears, an order should not be made for the full amount sought.6[16] I consider the Judge erred here. At the age of 65, the appellant is now servinghis first term of imprisonment. When he is released, even if he is re-employed orgains other employment, he will have little if any savings. While views about age atwhich one should retire are changing, on anyone's measure, to start with little if anyassets and indebtedness of $60,000 at 65 could be crushing. Moreover, there is riskin creating a set of conditions which will merely result in the appellant committingfurther offences. Viewed in the round, I am satisfied that the order would give rise toundue hardship and should be cancelled. I am also satisfied the order is unrealisticgiven the appellant's circumstances. On this issue, the appeal is allowed.[17] In allowing the appeal to this extent but otherwise dismissing it, it should notbe thought the appellant has escaped punishment. He is serving a not insignificantterm of imprisonment. He is, as I have observed, 65 years old. The term ofimprisonment is his first. The appellant has already repaid approximately38 per cent of the monies he stole. And significantly, the quashing of reparation doesnot affect the ability of the Ministry of Social Development to recover the monies byother means under the Social Security Act...Downs J4 R v Creek CA199/06, 17 August 2006; R v Pender [2007] NZCA 465 at [28].5 R v Bailey CA306/03, 10 May 2004 at [25]; R v Brown CA267/92, 26 November 1992 at 5.6 Guinness v Police [2015] NZHC 883 at [15]; Ruka v Department of Social Welfare [1997] 1 NZLR 154 (CA) at 156.