Criminal law - Appeal against sentence - One count of defrauding the Commonwealth and two counts of making a false statement to a Commonwealth entity with the intention of dishonestly obtaining a gain from the Commonwealth - Whether total effective sentence of 2 years' immediate imprisonment unjust - Turns on own facts

Anderson v Western Australia [No 3] [2014] WASCA 190

De Faria v The State of Western Australia [2013] WASCA 116

R v Nguyen [2006] NSWCCA 369; 166 A Crim R 124

R v Sinclair (1990) 51 A Crim R 418

1 JUDGMENT OF THE COURT: The appellant was convicted after trial in the District Court of one count of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) and two counts of making a false statement to a Commonwealth entity with the intention of dishonestly obtaining a gain from the Commonwealth contrary to s 135.1(1) of the Criminal Code (Cth).

2 The offences related to an 11-year period between 21 September 1999 and 10 June 2011. During this period, the appellant submitted forms to the Commonwealth Service Delivery agency (Centrelink) in relation to Newstart Allowance, and later the aged pension, in which he failed to declare income from self-employment. The total amount defrauded was $84,459.

3 On 7 October 2016, the appellant was sentenced to a total effective sentence of 2 years' imprisonment. The sentences on the individual counts were 6 months' imprisonment on count 1, 1 year 1 month on count 2 and 11 months on count 3. The sentences on counts 2 and 3 were ordered to be served cumulatively and the sentence on count 1 was ordered to be concurrent. An order was also made that the appellant was to be released after serving 12 months' imprisonment on entering into a recognisance in the sum of $1,000 to be of good behaviour for the balance of the 2-year term.

4 The appellant seeks leave to appeal against his sentence. There are five grounds of appeal, which in essence assert that the total sentence imposed was unjust. He submits that the sentence is excessive having regard to his age and personal circumstances, the impact of his imprisonment on his wife and that the offending commenced as a result of the financial impact of a natural disaster.

5 The facts as found by the sentencing judge are as follows.

6 In 1999, the appellant was living and operating a business in Moora. Flooding in that year caused extensive damage to the town and resulted in the appellant losing his business. He then applied to Centrelink for Newstart Allowance. In doing so he failed to declare to Centrelink that he continued to be self-employed, providing roadside assistance as a contractor to the RAC.

7 The application form and subsequent review forms that the appellant was required to complete contained questions regarding whether he was employed and had any other sources of income or earnings. Review forms were completed at intervals of between two and 12 weeks. The appellant repeatedly stated that he had no employment of any kind and no other source of income and falsely declared the contents of the form to be true. Had the appellant declared his income he would have received a reduced amount of benefits.

8 Between 21 September 1999 and 23 May 2001, the appellant received a total of $7,022 in Newstart Allowance to which he was not entitled (count 1). Between 24 May 2001 and 12 January 2007 the appellant received a total of $45,299 in Newstart Allowance to which he was not entitled (count 2).

9 In late 2006, the appellant made an application for the transfer of benefits to the aged pension. Once again he was asked whether he had undertaken any employment and had any sources of income. He again falsely declared that he did not. As a consequence, between 13 January 2007 and 10 June 2011 he received a total of $32,138 in aged pension to which he was not entitled (count 3). As earlier noted, the total amount defrauded was $84,459.

10 When the fraud was discovered the appellant was required to make repayments by way of deductions from his continuing pension. These repayments were at the rate of $15.00 per fortnight. As at the date of sentencing the repayments had reduced the amount which the appellant owed to the Commonwealth by about $2,060. A reparation order was made for the balance then outstanding, being $82,399.66.

11 Prior to sentencing, both the prosecution and defence counsel filed written submissions. A report from a psychiatrist, Dr Victoria Pascu, was also obtained. Additional oral submissions were made by counsel on the sentencing date.

12 As at the sentencing date the appellant was aged 73 years, was married and the father of two adult daughters. His first wife, the mother of his daughters, died when his children were teenagers. He has been married to his second wife since 1992.

13 The appellant was born in Holland and migrated to Australia as a child with his family. After finishing school he completed an apprenticeship as a mechanic and worked for many years in the automotive industry. He started his own business as a mechanic in Moora and this later grew to include a car dealership.

14 In 1999, severe flooding in Moora caused damage to the appellant's business and resulted in the value of properties owned by him being reduced. He eventually lost his business and assets and was advised to apply for Newstart Allowance.

15 The appellant had been doing some contract work as a breakdown mechanic for the RAC since the 1980s. After he lost his business he contacted the RAC and asked for an expanded coverage area so he could make more money. He claimed that he initially did so in order to earn enough to pay the staff of his failed business. However, he did not declare the money he earnt either at that time or in the following 11-year period.

16 Dr Pascu reported that the appellant does not have any history of mental illness or major mental health problems requiring treatment. He had been recently diagnosed with type 2 diabetes and had been started on an oral medication. Dr Pascu expressed the view that following the events of 1999 the appellant developed a moderate depressive illness which has continued for many years untreated. Though it was not suggested that this had caused the offending, Dr Pascu suggested that this may have contributed to him not making the most appropriate decisions at the time. The appellant had no other significant health issues. He does not have any significant criminal record. Dr Pascu said that in her view he was at low risk of reoffending.

17 In his sentencing remarks, the sentencing judge said that the persistence and duration of this offending was an aggravating factor. He also noted that the amount fraudulently gained was substantial. However, he noted that some of the aggravating factors that are often seen in this kind offending were lacking here. His Honour made no specific reference to what those other factors were, though it can be inferred that he was referring to factors such as the use of multiple identities or false names.

18 His Honour referred to Dr Pascu's report. He also referred to other mitigating factors, including the appellant's prior good character, his history of work and support of his family. He made specific reference to the recent diagnosis of type 2 diabetes but said that there was nothing to suggest that that illness would make imprisonment harder for the appellant to endure.

19 The sentencing judge said that it was not possible to say that the appellant had shown any remorse, having regard to his plea of not guilty and to his continuing attempts to rationalise his conduct. His Honour recognised that the appellant was not to be penalised for his plea of not guilty, rather the lack of remorse was the absence of a mitigating factor.

20 Whilst the sentencing judge recognised that the offending in this case was not sophisticated he noted that the social welfare system was vulnerable to this type of fraud. His Honour referred to s 16A of the Crimes Act and the requirement that he not impose a more severe sentencing option unless he was satisfied that no less severe option was appropriate. He said that general deterrence is given special emphasis in respect of this kind of offending and that frauds of this kind threaten the basis of the welfare system and undermine community support for it.

21 The sentencing judge gave specific consideration to whether the sentence could be wholly suspended by ordering that the appellant be immediately released on a recognisance release order: s 20(1)(b) of the Crimes Act. He was not satisfied that having regard to the nature, gravity and extent of the offending that suspension was warranted.

22 In his draft grounds and written submissions the appellant asserts that the sentencing judge made an error in not making further inquiries about the magnitude of the damage caused by the Moora floods in 1999. This is a matter that was referred to in detail in Dr Pascu's report and was also mentioned in the written submissions of defence counsel. His Honour also made reference to it in his sentencing remarks when referring to the reasons why the appellant first applied for Newstart Allowance. There is no basis for any claim that there was a failure to put relevant material before the sentencing judge or that his Honour made any express error in respect of the facts.

23 There are five grounds of appeal. They have been drafted by the appellant and are not in conventional form. In essence the grounds assert that the total effective sentence is unjust having regard to the appellant's age and personal circumstances, the impact of his imprisonment on his wife and the circumstances which caused him to first apply for Newstart allowance. In respect of the latter factor he asserts that his lawyer failed to adequately present the mitigating circumstances and that the sentencing judge failed to take these circumstances into account.

24 The grounds could be understood as suggesting that the sentences for the individual counts were manifestly excessive or that the total effective sentence of 2 years is disproportionate to the total criminality. The basic assertion of the appellant is that he should not have been imprisoned at all.

25 The relevant legal principles for dealing with an appeal of this nature are well settled. An appellate court can intervene only if the appellant establishes a material error, either express or implied, by the sentencing judge. It cannot intervene merely because it would have exercised the sentencing discretion differently.

26 A sentence is manifestly excessive if it unreasonable or plainly unjust. To determine whether a sentence is manifestly excessive it is necessary to view it in perspective of the maximum penalty prescribed by law for the offence, the standard of sentences customarily observed with respect to that offence, the place that the criminal conduct occupies in the scale of seriousness of offences of the type and the personal circumstances of the offender.

27 The first limb of the totality principle requires a judge who is sentencing an offender for multiple offences to ensure that the total effective sentence bears a proper relationship to the overall criminality involved in all of the offences, viewed in their entirety and having regard to the circumstances of the case, including those referable to the offender personally.

28 The maximum term of imprisonment for an offence against s 29D of the Crimes Act was 10 years. The maximum term of imprisonment for an offence against s 135.1(1) of the Criminal Code (Cth) is 5 years.

29 With respect to social security offending the relevant sentencing principles are well known and were summarised by Mazza JA in De Faria v The State of Western Australia [2013] WASCA 116 [159]:

... Offences of this type are prevalent, relatively easy to commit and often difficult to detect. They have the tendency to undermine the integrity of the social security system. In cases involving sustained and deliberate fraud, general deterrence is a very important factor. In such cases, immediate imprisonment is the ordinary disposition, although each case must be decided on its own facts. See Nunn v Kinnon (1991) 4 WAR 459; R v Rossi (1988) 4 WAR 463; Kovacevic v Mills [2000] SASC 106; (2000) 111 A Crim R 131; Ralph v Nawrojee [2003] WASCA 5; Norton v The Queen [2003] WASCA 86; Payne v The Queen [2010] WASCA 177.

30 In his written submissions the appellant places some reliance upon De Faria. In that case a mother and daughter were both convicted of social security fraud after entering fast track pleas of guilty. The mother obtained $65,410.51 in payments to which she was not entitled over a 12 year period. The daughter made a number of false representations which assisted her mother in obtaining $30,924.92 of those payments. The mother received a total effective sentence of 3 years' imprisonment with an order that she be released after serving 12 months on entering into a recognisance in the sum of $10,000 to be of good behaviour for the balance of the sentence. The daughter received a total effective sentence of 2 years' imprisonment with an order that she be released after serving 12 months on entering into a similar recognisance. The grounds of appeal for the mother included grounds referring to her age (almost 69 years old at the time of sentencing) and the role she played in providing ongoing physical and emotional care for her husband. The appellant relied on this case because he mistakenly believed that the appeals against sentence had been allowed. In fact, they were dismissed. The case provides no support for the appellant.

31 As to the seriousness of these offences, though there are only three counts they represent a sustained course of dishonest conduct that continued over an 11-year period. The appellant was not the passive recipient of benefits to which he was not entitled; rather he made numerous false statements regarding his employment and income. It is difficult to see how financial hardship in 1999 justified the commencement of the offending, but it certainly did not justify it continuing over the following years. The total amount obtained was relatively large, recognising that this was spread over many years.

32 As to the appellant's personal circumstances, his age and state of health were relevant factors but they did not require a departure from the type of sentence that would usually be expected in a case of this nature. It is a regrettable fact that some people who commit social security fraud are elderly and are otherwise of good character. There were no health issues here that indicated that a term of imprisonment would be unduly harsh.

33 In regard to the standards of sentences customarily imposed in cases of this type, in De Faria Buss JA reviewed numerous cases dealing with social security fraud at [60] - [61] and noted that there was no sentencing tariff for such offences because of the great variation that is possible in the circumstances of the offending and the offenders. It is also necessary to bear in mind that other cases provide only broad guidance. However, there is nothing in the cases that support the claim that either the individual sentences or the total sentence imposed here was erroneous.

34 In the appellant's draft grounds and written submissions he refers to the adverse impact his imprisonment has had on his wife. He states that she has found it very difficult to cope without him. Unfortunately imprisonment often has an adverse impact upon the family of offenders. It is a factor which s 16A(2)(p) of the Crimes Act requires a court sentencing a federal offender to take into account. However, as at common law, hardship experienced by family members as a result of imprisonment of an offender must be exceptional before it can be given substantial weight: R v Sinclair (1990) 51 A Crim R 418, 430; R v Nguyen [2006] NSWCCA 369; 166 A Crim R 124 [21] - [27]; Anderson v The State of Western Australia [No 3] [2014] WASCA 190 [96] - [97]. The hardship to which the appellant points is not so exceptional as to call into question the correctness of the sentence originally imposed.

35 The total effective sentence of 2 years' imprisonment was clearly within the sound exercise of sentencing discretion. None of the draft grounds of appeal has a reasonable prospect of succeeding. In these circumstances leave to appeal must be refused with the consequence that pursuant to s 27(3) of the Criminal Appeals Act the appeal is taken to have been dismissed.