Supreme Court of SA|1995-08-18|Before: Perry J

For the reasons which I have already given, I perceive a difficulty in upholding the conviction on the footing that every one of the individual instances of dishonest obtaining which find expression in the 59 counts following count 1 of the complaint are to be regarded as having been made out.

When it comes to penalty, it is necessary to have regard to what conduct must be taken to have been proved beyond reasonable doubt. Here, for the reasons I have indicated, I am satisfied that the overwhelming majority of instances of dishonest obtaining particularised in the various counts was proved beyond reasonable doubt. But it would not be right to exclude the possibility of a failure to prove a few instances beyond reasonable doubt, particularly in those instances not coupled with advertisements.

During the course of his remarks on penalty, the learned Special Magistrate said: "You obtained those benefits by fraudulent means. It was in my view a deliberate and calculated course of fraud. Due to those factors I think the offending must be regarded as one of the more serious examples under the WorkCover legislation. You have materially little to show for the amount you have obtained. Your financial position obviously is still very modest. Although you live in your own house it is mortgaged to the hilt. I am told that the situation has deteriorated because you had to take a second mortgage in order to underwrite the cost of some other legal proceedings, unrelated to these. There is, in your present circumstances of unemployment and modest overall financial position, a poor prospect of recovery. In fact Mr Gabrynowicz has pointed out that as a consequence of the orders I will have to make today there is a very real

probability you will have no choice but to go bankrupt."

He went on to say that the offending was rightly categorised as being more in the nature of "greed than need". However, he then distinguished a line of authority to which he had been referred, concerning the punishment of social security offenders. As to that, he said: "They provide some guidance but I think that the distinguishing factor between social security offending and offending under legislation such as WorkCover is that social security offending involves the cheating of a government agency. Courts always seem to take a very severe view of that."

He went on to refer to what he described as "changed circumstances" since the offences were committed. He drew attention to the facts that the defendant had married, had responsibility for a five year old son of his wife through another relationship and that his wife was pregnant with another child to be born in a matter of weeks.

He referred also to the fact that the defendant had been unable to return to the work force regularly since his dismissal by GMH, and had undertaken a TAFE course which was likely to lead to a certificate in "quality assurance". He went on to say: "I am told by your counsel that your social outlook has changed to a more positive one. I think that there are some prospects for you leading a more useful life. After giving careful consideration to all the matters which have been put to me today I conclude that there are good reasons to suspend a sentence of imprisonment. I should add I have of course taken into account the absence of any offending of any significance during your adult life."

In my opinion, and with respect to the learned Special Magistrate, those remarks are in part erroneous.

In the first place, I think that it is right to draw an analogy between this type of offending and social security cases.

In an unreported decision involving WorkCover fraud, namely, WorkCover Corporation v Jelfs, 8.5.95, judgment 5088 (available on SCALE), Cox J thought the two to be comparable: see at page 3: "I was taken to the recent decisions in this Court which

emphasize that deterrence is the paramount consideration for social services frauds, and I accept Mr Rice's argument that

a worker's compensation fraud of the present type, that is, for weekly payments to a worker or for income maintenance

reimbursements to an employer, is not distinguishable in type from a social services fraud.

The cases upon which Mr Rice relied particularly were R v Cameron and Simounds (1993) 171 LSJS 305, The Commonwealth v Hammond (1993) 178 LSJS 92 and R v Loveridge (1994) 178 LSJS 234. Those cases were of systematic frauds, in at least two of those cases by the use of fictitious claimants, made under the social services legislation over a lengthy period of time and the Supreme Court put great emphasis upon the obligation on sentencing courts to impose penalties that would deter potential wrongdoers from engaging in that kind of persistent public fraud. It did not avail the respondents in those cases that they had no previous convictions. As I have said, the paramount factor which a sentencing court is obliged to take into account in these cases is deterrence, deterrence of the particular offender from further wrongdoing but deterrence, especially, of others who might be minded to take the same dishonest path."

With respect to Cox J, I agree with those observations.

The cases establish that the imposition of a penalty other than an immediate custodial term where there is a deliberate, systemic defrauding over a period of time, is exceptional. Furthermore, insofar as an even more serious view is to be taken where the victim is a government agency, I cannot see that there is any difference between WorkCover Corporation and a government agency, or between an exempt employer and WorkCover. It would be a strange result if there was one tariff for Workcover fraud and another when the employer is exempt. What is important is that the effective operation of the scheme of compensation for employees who suffer work related injuries, which finds expression in the Act, and which is for the benefit of the community at large, is placed at risk when a worker cheats the system deliberately by embarking on a course of blatant fraud and deception in an endeavour to obtain payments and benefits when the worker knows that no proper basis for the asserted claim exists.

Such offences are difficult to detect, and when uncovered, deterrence must be at the forefront of the sentencing process.

In my opinion, none of the personal circumstances of the defendant amounted to good reason in this case to suspend the sentence of imprisonment, given the seriousness of the offending and the need for deterrence. The suspension of the term of imprisonment imposed indicates a failure by the learned Special Magistrate to recognise the seriousness of the offending and the need for deterrence, and gives rise to appealable error.

This was, on any view of the matter, a serious case. The attempt by the defendant to suborn witnesses, his lies when in the witness box and the attitude displayed by him in the conduct of his defence, as noted by the learned Special Magistrate, were unquestionable circumstances of aggravation.

I remind myself of the traditional reluctance of the appellate courts to entertain appeals by the prosecution against penalty. Most of the authorities, such as the recent decision of the High Court in Everett v R [1994] HCA 49; (1994) 68 ALJR 875 concern cases where it is necessary for the prosecution to obtain leave to appeal. Here, there is an appeal as of right. But there is still an element of double jeopardy, and the allowing of appeals against sentence by the prosecution or the complainant in summary matters must be confined to clear and exceptional cases.

During the course of argument on the appeal as to penalty, reference was made to the order made under s120(3) of the Act that the defendant "make good" the loss suffered by GMH. As I have indicated, the amount ordered to be paid to the Registrar for transmission to GMH was $12,022.88.

I would construe the section to mean that any order for reimbursement should be confined to a "loss" which has been proved beyond reasonable doubt.

At one stage I invited counsel to supply to me a list of the payments made which were associated with days off which coincided with or immediately followed the placing of advertisements by the defendant. That list indicates that a total sum of $2,253.28 being payments or benefits, is associated with those occasions. But on reflection, I consider that proof beyond reasonable doubt extends beyond that amount, and for the reasons which I have given, extends to the rump of the payments and benefits in question.

The law is not so helpless as to be unable in that situation to adopt a practical and commonsense approach. In my opinion, in a case such as this, it is open for the Court to order reimbursement of an amount in a round figure which represents what may safely be regarded as the total of benefits and payments which have been proved to have been obtained dishonestly, having regard to the appropriate standard of proof.

Adopting that approach, I would vary the amount of the loss to be reimbursed to $10,000. I add that although there is no appeal by the defendant as to that, pursuant to s42(5)(a) of the Magistrates Court Act 1991, it is open to me to "confirm, vary or quash the judgment the subject of the appeal and if the court thinks the interests of justice so require, it may vary or quash any other judgment given in the same or related proceedings".

During the hearing before me, reference was also made to the substantial costs, $48,000, which the defendant was ordered to pay.

Whether, as was suggested to the learned Special Magistrate, and repeated before me, the defendant can obtain relief in bankruptcy is open to question. "Penalties or fines" imposed by a court in respect of an offence against the law are not provable in bankruptcy (Bankruptcy Act 1966 (Commonwealth) s82). If not provable, their enforcement otherwise would, presumably, not be affected by bankruptcy.

The enforcement provisions of Part IX, Division III of the Criminal Law (Sentencing) Act 1988 apply to orders for the payment of "pecuniary sums" (which presumably are "penalties or fines" within the meaning of s82 of the Bankruptcy Act). Furthermore, in the Criminal Law (Sentencing) Act, the expression "pecuniary sums" includes "compensation" and "costs" (see s3(1)).

But whatever may be the position in that regard, and whether or not the defendant can seek relief in bankruptcy, or by the exercise of the ameliorative procedures to be found in Part IX, Division III of the Criminal Law (Sentencing) Act (see, for example, ss65 and 67), those considerations do not deflect me from the view that in this case the term of imprisonment should not have been suspended.

I allow the appeal against sentence to the extent that the order suspending the sentence should be quashed and in lieu thereof there be substituted an order that the term of eleven months imprisonment take effect as a custodial term of imprisonment. The defendant is to surrender himself to the Adelaide Magistrates Court for the purpose of carrying into effect that order, within seven days of today. Having regard to the time taken with the appeal process, I vary the order for time to pay the amounts which are now $10,000 under s120(3) of the Act and $48,000 by way of costs from three to six months commencing from 31 May 1995, being the date upon which the defendant was sentenced. The other orders made by the learned Special Magistrate are confirmed.

Workers Rehabilitation and Compensation Act 1986

Workers Rehahilitation and Compensation Act 1986

Magistrates Court Act 1991

Criminal Law (Sentencing) Act 1988

REhabilitation and Compensation Act 1986s 120(3), referred

Telecommunications Regulations 1975

Poisons and Controlled Substances Act 1981

Misuse and Trafficking Act 1985

(Bankruptcy Act 1966

Workers Rehabilitation and Compensation Act 1986

Workers Rehahilitation and Compensation Act 1986

Magistrates Court Act 1991

Criminal Law (Sentencing) Act 1988

REhabilitation and Compensation Act 1986s 120(3), referred

Telecommunications Regulations 1975

Poisons and Controlled Substances Act 1981

Misuse and Trafficking Act 1985

(Bankruptcy Act 1966

DENNIS WEINEL v DARKO FEDCHESHEN No. SCGRG 95/1204, SCGRG 95/1381 Judgment No. 5216 Number of pages - 38 Criminal law and procedure - duplicity - Dietrich principle - penalty - workers' compensation (1995) 65 SASR 156 [1995] SASC 5216 (18 August 1995)

In advancing this ground of appeal the defendant referred to the decision of the High Court in Dietrich v R [1992] HCA 57; (1992) 109 ALR 385. The statement of principle for which that case is authority is best identified in the following passage from the joint judgment of Mason CJ and McHugh J (399): "In view of the differences in the reasoning of the members of the court constituting the majority in the present case, it is desirable that, at the risk of some repetition, we identify what the majority considers to be the approach which should be adopted by a trial judge who is faced with an application for an adjournment or a stay by an indigent accused charged with a serious offence who, through no fault on his or her part, is unable to obtain legal representation. In that situation, in the absence of exceptional circumstances, the trial in such a case should be adjourned, postponed or stayed until legal representation is available. If, in those circumstances, an application that the trial be delayed is refused and, by reason of the lack of representation of the accused, the resulting trial is not a fair one, any conviction of the accused must be quashed by an appellate court for the reason that there has been a miscarriage of justice in that the accused has been convicted without a fair trial."

Without setting out at length the passages in the reasons of the learned Special Magistrate to which that criticism is directed, in my opinion, the criticism is misconceived. The passages identify the process by which the learned Special Magistrate, having regard to the circumstantial evidence, regarded the test as satisfied. In doing so, his process of reasoning was in accordance with the authorities, such as Shepherd [1990] HCA 56; (1990) 170 CLR 573, as to the evaluation of circumstantial evidence. In this case, as will be seen, that evidence was overwhelming.

DENNIS WEINEL v DARKO FEDCHESHEN No. SCGRG 95/1204, SCGRG 95/1381 Judgment No. 5216 Number of pages - 38 Criminal law and procedure - duplicity - Dietrich principle - penalty - workers' compensation

At a glance

Court

Decision date

Before

Source

Judgment (31 paragraphs)

Parties

Legislation Cited (20)

Cases Cited (15)

DENNIS WEINEL v DARKO FEDCHESHEN No. SCGRG 95/1204, SCGRG 95/1381 Judgment No. 5216 Number of pages - 38 Criminal law and procedure - duplicity - Dietrich principle - penalty - workers' compensation (1995) 65 SASR 156 [1995] SASC 5216 (18 August 1995)