BETWEEN : BRADLEY DALE COOPER (also known as PETER SIMON SERVEND)

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Criminal law - Compensation order - Relevance of capacity to pay - Whether open to make a compensation order - Turns on own facts

Sentencing Act 1995 (WA), s 109, s 110, s 112, s 114, s 115, s 117, s 119, s 119A

Second Respondent : State Director of Public Prosecutions

Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321

House v The King [1936] HCA 40; (1936) 55 CLR 499

R v Braham [1977] VicRp 11; [1977] VR 104

R v Grein [1989] WAR 178

2 McLURE JA: On 31 October 2005 the appellant was convicted in the District Court at Fremantle on his own plea of guilty of wilfully and unlawfully damaging by fire a medical practice building the property of Santhiramini Devi Sinnathamby. Dr Sinnathamby is the first respondent in the appeal. The State of Western Australia is the second respondent.

3 The appellant was sentenced on 31 October 2005 by O'Brien DCJ who imposed an intensive supervision order for the offence, commonly described as arson. On the same date the sentencing Judge, on the application of the prosecution on behalf of Dr Sinnathamby, made an order under s 117 of the Sentencing Act 1995 (WA) requiring the appellant to pay compensation to Dr Sinnathamby in the sum of $101,000. The appellant sought leave to appeal against the compensation order. The draft grounds of appeal in the Appeal Notice were that:

"1. The learned sentencing Judge erred in fact in finding that the victim had suffered a loss in the amount of $101,000.00 and subsequently making a compensation order in that amount.

1.1 The learned sentencing Judge misapprehended the facts and alternatively was misled by the material put by the victim in support of her claim for a compensation order."

4 On 11 March 2006 Roberts-Smith JA granted leave to appeal on those grounds ("the original grounds") and ordered that the parties have leave to adduce further evidence in the appeal.

5 The grounds of appeal in the Appellant's Case go beyond the original grounds of appeal. The grounds in the Appellant's Case are as follows:

"Ground 1

The learned sentencing Judge's discretion miscarried when she found the First Respondent had suffered a loss in the amount of $101,000 and subsequently made a compensation order pursuant to the Sentencing Act 1995 for the said amount such that there was a miscarriage of justice:

i) Having found the Appellant's [sic] had no capacity to pay the order, Her Honour should have exercised her discretion in all the circumstances to refuse to make an order;

ii) Further and in the alternative, Her Honour should have declined to make an order on the basis it would more appropriately be dealt with in civil proceedings.

Ground 2

The First and/or Second Respondent misled the learned sentencing Judge by placing material before the Court that purported to justify the making of a compensation order in the sum of $101,000, which order was incorrect and unfair to the Appellant:

i) The First Respondent provided material to support the quantum of her loss to the Second Respondent, who placed such material before the learned sentencing Judge;

ii) This material was factually wrong concerning the quantum of the compensation order sought."

6 Ground 2 corresponds in substance with the original grounds. The appellant does not have leave to appeal on ground 1. Moreover, it emerged during the course of oral submissions that the grounds of appeal were drafted without reference to the documentary material in support of the compensation order that was provided by the office of the Director of Public Prosecutions ("DPP") to the Court and to the appellant's then counsel in advance of the hearing on 31 October 2005. At the hearing of the appeal the appellant applied to replace ground 2 with a ground that the sentencing Judge "erred in making an order for $101,000 which was based upon the supposed shortfall when the material before her cast doubt upon the making of that figure".

7 The background is as follows. By letter dated 27 October 2005 from the DPP to the District Court, which letter was copied to the appellant's counsel, the DPP advised that the State would be requesting an order for compensation when the appellant appeared for sentencing on 31 October 2005. The letter enclosed a copy of Dr Sinnathamby's compensation request together with details of her financial loss and documents in support of the application. In her compensation request Dr Sinnathamby described her loss in the following terms:

"The damage to my surgery was substantial. I've obtained 2 quotes to rebuild the surgery, copies are enclosed. I've also estimated the costs to replace the contents in the surgery, copies of the estimate are enclosed.

Costs to rebuild: approximately $120,000

Replace contents: estimate $42,000

Total: approximately $162,000

The insurance has paid: $43,440.57 for the building and $17,531.37 for the contents. Total payment received is about $61,000. Copies of letters from the insurance company are enclosed.

There is a shortfall of approximately $101,000."

8 The two quotations to rebuild the surgery were for the amounts of $113,982 and $129,000. Also enclosed was a letter dated 17 August 2005 from insurance brokers to Dr Sinnathamby (or, more correctly, her nominee) which materially stated:

"I refer to our various recent telephone conversations and as you know, your Insurer, QBE Commercial Insurance has appointed an assessor who you have been dealing with and has ascertained that both your Buildings and Contents are under insured.

From a practical point of view the assessor is dealing with the Buildings side of your claim first. I have now received correspondence from QBE who confirm the following:

- $51 761 (agreed with assessor by your representative Mr Robert Donofrio)

4. Under Insurance Clause limits under insurance to 80%

9 In September 2005 Dr Sinnathamby received the sum of $43,440.58 from her insurer in settlement of the building damage portion of her insurance claim.

10 Dr Sinnathamby also received the sum of $17,531.37 from her insurer in settlement of the contents portion of her insurance claim. There was no challenge in the appeal to Dr Sinnathamby's claim that the cost to replace the contents was $42,000. The only issue in the appeal concerned the cost to rectify the damage to Dr Sinnathamby's surgery caused by the fire.

11 It is apparent from the transcript of the proceedings on 31 October 2005 that the appellant's counsel had received and considered the material supplied by the DPP in support of the foreshadowed claim for compensation. After hearing the plea in mitigation, the sentencing Judge gave the appellant's counsel the opportunity to make submissions on the application for the compensation order. The exchange was as follows:

"O'BRIEN DCJ: What about the compensation order, Mr Hockton? I mean, there's not much really that can be said about it, but I'm giving you the opportunity if you want to say something.

HOCKTON, MR: No. There appears to be underinsurance.

O'BRIEN DCJ: I beg your pardon?

HOCKTON, MR: There appears to have been underinsurance. I saw the amounts that have been paid out by the insurance companies and wondered why the amounts were different than the amounts paid out by the insurance company, because they are excessively different, and that appears to be the 101,000. I note there's a letter there saying that there has been gross underinsurance. There's not much I can say other than that but I note that ---

O'BRIEN DCJ: A compensation, frankly, given Dr Cooper's financial position, isn't going to give much joy to the victim in this matter.

HOCKTON, MR: No... "

12 The only additional material relied on by the appellant in the appeal were quotations said to have been obtained by Crawford & Co on behalf of QBE Insurance in relation to Dr Sinnathamby's building claim. The quotations were from Construct Services for $33,347 and Maunder Builders for $33,875. Dr Sinnathamby addressed these quotations in an affidavit sworn on 4 September 2006 which was filed pursuant to leave granted by Roberts-Smith JA. Her uncontradicted evidence is that she did not accept the quotations from Construct Services or Maunder Builders because they did not cover all the damage caused by the fire which needed to be repaired. She supports that statement with a comparison of the work the subject of those quotations and the quotations she obtained which had been placed before the sentencing Judge. As matters transpired, she did not engage the services of any of the builders who had provided quotations prior to sentencing. She subsequently engaged another builder to do the repair and other work for a total contract price of $152,848 of which approximately $40,000 related to work to improve the building which was unrelated to the damage caused by the appellant. Thus, the uncontradicted evidence before this Court demonstrates that the actual shortfall between the loss and the amount received from the insurer was approximately $93,876. As the application made by the prosecution was for the shortfall, it is unnecessary to determine whether the first respondent would be entitled to claim the full amount of her loss, in which event she would be obliged to account to her insurer for the amount paid by it under the insurance policy.

13 The first particular of ground 1 is to the effect that the sentencing Judge, having found that the appellant had no capacity to pay the compensation order, should in the exercise of her discretion have refused to make the order. In support of that submission, the appellant relies on R v Grein [1989] WAR 178 which concerned the former statutory regime for restitution and compensation in s 717 and s 719 of the Criminal Code (WA).

14 In Grein the sentencing Judge had made an order for restitution of funds that the offender had obtained by false pretences and that were still in his possession at the time of sentencing, but refused to make a compensation order for the balance of the funds obtained by false pretences. Under the former s 703 of the Code, orders for restitution and compensation were included in the definition of "sentence". Malcolm CJ (with whom Wallace and Nicholson JJ agreed) said of the former regime (at 188):

"The obvious purpose of ss 717 and 719 of the Code is to provide a simple and summary procedure to assist in the recovery of property by way of restitution, or by way of compensation for loss suffered by the victims of crime ... Speaking generally, it is obviously desirable that if, in the course of a criminal trial resulting in a conviction or from the matters put before a sentencing judge, whether following a conviction after trial or upon a plea of guilty, material is put forward upon which it is possible to make an order for restitution or compensation, such an order normally should be made. There are, however, circumstances where it would not be appropriate to make an order. First, an order for restitution of property should not be made unless the court is satisfied upon the balance of probabilities that the convicted person or a third person does have relevant property in his or her possession, as defined. Secondly, the consequences of non-compliance with the relevant order may be such that the discretion should be exercised against making it."

15 The first point made by the Chief Justice necessarily follows from the conditions that had to be established before a person could obtain restitution under s 717 of the Code. The Chief Justice went on to deal with the consequences of non-compliance which, by virtue of former s 682A of the Code, could result in enforcement by resort to the default provisions under the then Justices Act 1902 (WA) which provided for imprisonment in default of payment. That being the case, the Court observed that default may lead to the convicted person serving a greater term of imprisonment than would otherwise be appropriate in all the circumstances. The Chief Justice continued (at 190):

"In my opinion, in the absence of any evidence to suggest that there were reasonable grounds for suspecting that the respondent was in a position to make payment of any further compensation, no useful purpose would be served by making a compensation order. Where there is no prospect of recovery, the only effect of such an order would be to make the respondent liable to an additional term of imprisonment in the event of default."

16 The sections of the Code construed in Grein have been repealed and the relevant law is now contained in Pt 16 of the Sentencing Act which deals with "reparation orders". A reparation order is defined in s 109 to mean a compensation order or a restitution order made under Pt 16.

17 Section 110 sets out the principles relating to reparation orders and materially provides:

"(1) A reparation order is in addition to and not part of the sentence imposed on an offender.

(2) A sentence must not be reduced because a reparation order is made.

...

(6) Despite subsection (1) an offender may appeal against a reparation order as if it were part of the sentence imposed on him or her."

18 Section 112 of the Sentencing Act identifies the facts that a court may take into account in deciding whether to make and if so the terms of a reparation order. The appellant in this case must be taken to have consented to the prosecution relying on the documents supplied to the appellant and the Court. It is unnecessary to determine whether s 15 of the Sentencing Act (which applies when imposing an order in addition to sentence) also applies to an application for a reparation order under Pt 16 of the Act.

19 In deciding matters in connection with the making of a reparation order, the standard of proof is the civil standard, being the balance of probabilities (s 114). Further, the making of a reparation order does not preclude civil proceedings being taken against an offender for any injury, loss or damage (s 115(1)) but the victim can only recover an amount equal to the amount (if any) by which the award made in the civil proceedings exceeds the compensation order to be paid under the Sentencing Act (s 115(2)).

20 Section 117 of the Sentencing Act is the source of the Court's power to make a compensation order in favour of a victim. It materially provides:

"(1) A court sentencing an offender may make a compensation order in favour of a victim of the offence.

(2) Such a compensation order is an order that the offender must pay an amount of money set by the court to the victim as compensation for -

(a) the loss of, or damage to, the victim's property; and

(b) any expense reasonably incurred by the victim,

as a direct or indirect result of the commission of the offence.

(3) In fixing the amount of money to be paid under a compensation order for loss or damage to property, it does not matter whether that loss or damage was reasonably foreseeable by the offender."

21 Section 119 deals with the means of enforcing a compensation order. If it is unpaid for a specified time, the person in whose favour it is made may enforce it by lodging a certified copy of it and an affidavit stating to what extent it has not been complied with, with a court of competent jurisdiction. When lodged, the order is to be taken to be a judgment of the court and may be enforced accordingly. The Civil Judgments Enforcement Act 2004 (WA) then applies (see s 5 of that Act). The enforcement provisions under the now repealed Justices Act have never applied to compensation orders under Pt 16 of the Sentencing Act (s 155(1)(b) of the Justices Act).

22 Under s 119A, there is limited power to order imprisonment. Section 119A materially provides:

"(1) This section applies if a court that makes a compensation order is of the opinion that the offender concerned has, or ought to have, the means to pay the compensation.

(2) If this section applies the court may in addition to making the compensation order, order that if the offender does not pay the compensation before a date set by the court the offender is to be imprisoned until the compensation is paid, but in any event for not longer than the period determined under subsection (3) or a shorter period set by the court."

23 Unlike the former statutory regime under the Code, a term of imprisonment as a consequence of default in payment of a compensation order can only be imposed if the Court is of the opinion that the offender has or ought to have the means to pay.

24 The clear purpose of the provisions of the Sentencing Act relating to the making of a compensation order is to benefit the victim rather than to provide additional punishment for the offender. Part 16 of the Sentencing Act provides a victim of crime with a summary procedure in the nature of civil proceedings for the recovery of compensation for their loss without being put to the additional trouble and expense of independent proceedings. That being the case, it cannot be wrong in principle to make a compensation order under s 117 against an offender who is without means. This construction of Pt 16 is consistent with the legislative purpose for the inclusion of s 119A by the Sentencing Legislation Amendment and Repeal Act 1999 (WA). In the second reading speech for that Act, the Minister said:

"[T]he court will be able to order compensation even if it believes that a defendant has no means to pay. This will at least save victims the problem of having to sue if they want to take action or if the offender later comes into money. It also allows for an order for imprisonment until compensation is paid. This would be used when it is believed that the offender has the means to pay ... "

25 It is unnecessary for the purpose of this appeal to determine whether an offender's means is an irrelevant consideration in the exercise of the Court's discretion to make a compensation order under s 117 of the Sentencing Act.

26 There remains for consideration the test to be applied in determining whether there has been an appealable error in the grant of the compensation order. When a compensation order was by definition part of the sentence, the Court in Grein applied the well-known test applicable to an appeal from the exercise of a sentencing discretion. In particular, an appellate court is only entitled to intervene if a material error of fact or law is discerned in the sentencing Judge's reasons or if error can be inferred because the result is unreasonable or unjust: Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 at 324 - 325. However, the manner in which an appeal against the sentencing discretion is determined applies to all appeals against an exercise of discretion: House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504 - 505.

27 It was clearly open to the sentencing Judge in the exercise of her discretion under s 117 to make the compensation order notwithstanding her finding that it was beyond the appellant's financial capacity to pay at the time it was imposed. That being the case, the appellant has failed to demonstrate a material error.

28 The second particular of ground 1 is of unhelpful generality and was not clarified in oral or written submissions. I infer from the appellant's reliance on R v Braham [1977] VicRp 11; [1977] VR 104 that he contends that the present case involved a complicated or extensive investigation into the conditions of the exercise of the discretion such as to require or justify the court refusing to make a compensation order. This ground is entirely without foundation, particularly having regard to what was in effect a concession by counsel for the appellant at the hearing before O'Brien DCJ that there were no grounds (or that the appellant did not wish to advance any grounds) for opposing the compensation order. The conduct of the appellant's counsel is not a ground of challenge to the compensation order.

29 The first particular of ground 1 is reasonably arguable but the second is not. Accordingly, I would grant leave to appeal in relation to particular (i) but dismiss the appeal, and I would refuse leave in relation to particular (ii).

30 The second ground of appeal in the Appellant's Case is without merit. The nub of the argument appears from pars 10 - 12 of the appellant's written submissions as follows:

"10 Quotes for repairs to the building were received by the First Respondent's insurers, which quotes were less than the amount the insurers actually paid out.

11 The First Respondent's insurers paid out to her concerning damage to both the building and contents ...

12 In view of para's 10 & 11 above, there was no basis to claim a shortfall."

31 The statements in pars 10 and 11 provide no arguable basis for the assertion in par 12. At their highest, the quotations obtained by the insurer would, in the absence of explanation from the first respondent, have justified a refusal to make a summary order. I turn to the proposed amended ground, the thrust of which is that the sentencing Judge ought not to have made the compensation order because of the prima facie inconsistency between the assertion in the insurance brokers' letter that Dr Sinnathamby had agreed the building repairs with her insurer in the sum of $51,761 (to which had to be added the costs for the removal of debris) and her claim that the cost to rebuild approximated $120,000, a figure supported by the two quotations she provided to the DPP.

32 There are a number of problems with the proposed amendment. First, notwithstanding that the alleged inconsistency was apparent on the face of the documents provided to the appellant's solicitor in advance of the hearing, the appellant by his counsel in effect conceded there was no basis for opposing a compensation order for $101,000. Secondly, the uncontradicted evidence is that the first respondent's estimate of the costs to be incurred in repairing the fire related damage to the surgery has been largely substantiated by subsequent events. Thirdly, there is no necessary inconsistency between what the first respondent's representatives agreed with the insurer and her estimate of the costs to rebuild based on the work the subject of the quotations she provided to the DPP. The discrepancy may be accounted for by reference to the terms of the insurance policy or because the agreed figure reflected a commercial compromise. That being so, it is of particular significance that the first respondent had no notice of the proposed amendment and thus no opportunity to answer the claim by way of further affidavit evidence. In the circumstances the proper course is to refuse leave to amend.

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