Criminal Law - Jurisdiction practice and procedure - Judgment and punishment - Sentence - Factors to be taken into account - Purpose of sentence - Deterrence - Social Security fraud - General deterrence very significant - Relevance of an addiction to gambling.

Kovacevic v R (2000) 111 A Crim R 131; Martin v R (1994) 78 A Crim R 252; R v Cavallin unreported Court of Appeal of Victoria, 24 July 1996, followed

Respondent: Commonwealth Director of Public Prosecutions

Judgment ID Number: [2002] TASSC 43

1 This is a motion to review a sentence imposed in a court of petty sessions on 18 March 2002. The applicant pleaded guilty to 27 counts of knowingly presenting a false document contrary to the Social Security Act 1991 (Cth), ss1346 and 1350, and to five counts of knowingly obtaining payment of an allowance contrary to the same Act, ss1347 and 1350. Upon these charges the learned magistrate sentenced the applicant to 26 weeks' imprisonment to commence on 15 March 2002. A further order was made that the applicant be conditionally released from that sentence after 13 weeks.

2 The single ground of the motion to review that sentence is that it is manifestly excessive.

3 The applicant's offending related to the Newstart allowance. The offences were committed over a virtually continuous period of more than 2½ years between 23 April 1998 and 17 January 2001. The only time during that period in which no offence was committed was four weeks between 29 October 1998 and 25 November 1998.

4 The applicant's criminal conduct consisted of earning $54,579.21, but declaring only $626 of those earnings. In result, he obtained social security payments to which he was not entitled in the sum of $14,753.95.

5 One of the over-payments forming part of the matters of complaint was raised with the applicant by the Social Security Department on 7 September 2000. Notwithstanding this query the applicant continued to offend. In addition, on several occasions during the period of offending, the applicant received letters routinely sent by the Department of Social Security, reminding him of his obligation to correctly declare all income earned.

6 In March 2001, the commission of the offences was detected by the Social Security Department and in a telephone call on 10 April 2001, the applicant confessed his guilt. A plea of guilty was entered at an early stage.

7 The applicant was aged 33 years at the time of sentencing. He was then in employment. He had no dependants. Counsel for the applicant in the court of petty sessions detailed to the learned magistrate a somewhat deprived family background in which the applicant had been brought up. His father was described as a heavy gambler and a man who abused alcohol. He was violent towards the applicant's mother who died in 1996. The learned magistrate was told that the applicant subsequently became reconciled with his father who had meanwhile, suffered a head injury. The applicant provides support for his father and is the only family member in this State who is able to do so. However, in my view, there is little mitigatory weight in that state of affairs. In Maslen and Shaw v R (1995) 79 A Crim R 199 Hunt CJ at CL said at 209:

"It is only in circumstances where the hardship upon a prisoner's family is exceptional that it will operate in mitigation; the hardship must be sufficiently extreme - going beyond the sort of hardship which inevitably results to a family when the breadwinner is incarcerated - that a 'sense of mercy or of affronted common sense imperatively demands that [the sentencing judge] should draw back: Boyle (1987) 34 A Crim R 202 at 204 - 206 applying Wirth (1976) 14 SASR 291 at 294, 296. See also Mitchell [1974] VicRp 75; [1974] VR 625 at 631; T (1990) 47 A Crim R 29 at 40."

8 The main thrust of the plea in mitigation related to the applicant's addiction to gambling. The learned magistrate was told that the applicant commenced to gamble at age 17, and became addicted not long afterwards. The applicant spent virtually all his wages on gambling at poker machines. In 1994 he had so many debts he declared himself bankrupt. Soon after the offences were detected in March 2001, the applicant consulted "Relationships Australia" for assistance with his gambling addiction and a letter from that organisation tendered in the court below, enabled the applicant's counsel to submit that the prospects for rehabilitation were good.

9 With respect to the imposition of sentence for sustained social security fraud, general deterrence looms large in the exercise of the sentencing discretion. See Hrasky v Boyd [2000] TASSC 39 and the cases referred therein. In Kovacevic v R (2000) 111 A Crim R 131 a specially convened bench of five judges of the South Australian Supreme Court considered the principles involved in the imposition of sentence for offences involving social security fraud. The court said at 138:

"We agree that in cases of deliberate and sustained fraud, deterrence must loom large in determining the appropriate sentence. But other matters, especially rehabilitation must still be considered. We do not agree that deterrence must take priority over all other considerations, at least if that statement means that there is no scope for the court to be influenced by considerations of rehabilitation in finally arriving at the sentence to be imposed."

"In our view, in the more serious cases of sustained and deliberate fraud, deterrence is very important, imprisonment is likely to be required, but all mitigating circumstances and the rehabilitation of the offender must still be considered. Substantial mitigating circumstances, and in some cases considerations of mercy and leniency may lead to the conclusion that a sentence of imprisonment is inappropriate or that such a sentence is appropriate, but that imprisonment need not be served."

11 What then, is the relevance an addiction to gambling being the motivation for the commission of the offences? With respect to this issue, Southwell J said in Martin v R (1994) 78 A Crim R 252 at 257:

"Considerable reliance was placed by counsel for the respondent upon some observations of Vincent J in Novak (unreported, Supreme Court, Vic, 19 August 1993). His Honour there, in referring to evidence of the offender's addiction to gambling, said:

'It can in my view and in some circumstances constitute an important factor to be taken into account by a sentencing judge when assessing the degree of an offender's moral culpability and the extent to which a sentence should incorporate an element of general deterrence.'

I quote those words because they were, in effect, put forward as authority for the proposition that, generally, evidence of addiction to gambling should reduce the relative importance of the element of general deterrence. It should, I think, be noted that his Honour did not say that in all or most cases proof of addiction to gambling would reduce the importance of that element. In a number of cases in recent years, including the one to which the learned presiding judge has just referred (Moffat (unreported, Court of Criminal Appeal, Vic, 15 December 1992)), courts of appeal in Australia have underlined the importance of general deterrence in crimes of theft by persons in a position of trust, including some cases where the reason advanced to explain, but not to excuse, the crime, was addiction to gambling. As it seems to me, there is no logical distinction to be drawn, so far as evidence of addiction is concerned, between the commission of an armed robbery to obtain funds to feed on the one hand an addiction to heroin and on the other an addiction to gambling. The same can be said where the offence is not that of armed robbery but a theft in breach of trust. In the latter type of case at least, it would, in my opinion, be an unusual case where evidence of addiction to gambling will significantly reduce the importance of the element of general deterrence."

12 In R v Cavallin unreported Court of Appeal of Victoria, 24 July 1996, Tadgell JA, referred to the observation of Southwell J about there being no distinction to be drawn between an addiction to heroin and an addiction to gambling and said at page 5 - 6:

"No doubt that is in general rule, but his Honour's remarks cannot be usefully taken out of context. It is notorious that the availability of poker machines, as instruments of easy gambling, has dramatically increased in this State in the last few years. The nature and the full extent of the consequences to the community of that no doubt remain to be seen. It would be optimistic, however, in the short-term at least, to say that the courts will not see more and more cases of criminal activity which, to some extent, is associated with, or even a direct product of, poker machine gambling. Some of it, no doubt, will be the result of a pathological and, therefore, an obsessively addictive urge. I would acknowledge that some crimes resulting from what might be called a gambling disease will need to be dealt with accordingly. Perhaps that is what Southwell J had in mind. It is, however, in my opinion, important that the public does not assume that a crime which is to some extent generated by a gambling addiction, even if it is pathological, will, on that account, necessarily be immune from punishment by imprisonment."

13 See also R v Petrovic unreported Court of Appeal (Vic), 22 October 1988; R v Molesworth unreported Court of Criminal Appeal (NSW), 12 March 1999; Slowiak v R [2000] SASC 282; (2000) 116 A Crim R 232. Tadgell JA's remarks relate to the State of Victoria, but are equally apposite to the State of Tasmania. The Criminal Courts of this State are frequently told that the motivation for the commission of a crime or crimes is an addiction to gambling. I might add that with equal frequency, it is said that the motivation for crimes of dishonesty is an addiction to illicit drugs and for crimes of violence, an addiction to alcohol. In the latter two cases, although not irrelevant, the courts generally have refused to regard those addictions as circumstances of mitigation.

14 In DPP v Raddino [2002] VCSA 66 Chernov JA, with whose reasons for judgment the other members of the court agreed, referred to both Southwell J's observations and Tadgell JA's comments and noted at par26, that in appropriate circumstances, a gambling addiction might be treated as a mitigating factor, but more often than not it comes down to what weight should be given to such factor in the individual case. The judgment expressly acknowledged as correct, the proposition espoused by Tadgell JA that it is important the public does not assume that if there is a causal relationship between the commission of the crime and an addiction to gambling, even a pathological one, it will on that account, necessarily be immune from punishment by imprisonment.

15 In my view, the applicant's addiction to gambling has very little weight as a circumstance of mitigation. According to the applicant's counsel in the court of petty sessions, the applicant had been an addicted gambler for many years before the commission of these offences. During that time his addiction did not lead him to the commission of crime. The applicant took no step to cease offending prior to detection. This was not withstanding the query raised by the Department of Social Security in September 2000, and the several letters from the Department reminding the applicant of his obligation to declare income earned. Further, the applicant did not make any serious or sustained attempt to overcome his addiction until after the offences were detected.

16 Although the applicant had one prior conviction for an offence of dishonesty it was in 1988 and, as the learned magistrate noted, "of peripheral relevance". Apart from that, the material put before the learned magistrate showed that the applicant was generally of good character and a worthwhile contributor to the community. There was material indicating remorse, at least after the offences had been detected, and I accept the submission of Mr Brett, who appeared as counsel on this motion to review, that the prospects of rehabilitation were shown to have been good.

17 Notwithstanding the relevance of these mitigatory matters, the applicant persisted with his fraudulent conduct for a very substantial period of time and thereby dishonestly obtained a substantial sum of money. This unlawful conduct calls for the imposition of a penalty that will act as a general deterrent for the reasons articulated in the cases to which I have referred, and by the learned magistrate in his comments on passing sentence when he said:

"I observe that these offences are serious. They are difficult to detect. They are common place or prevalent and they result in an unauthorised diversion of funds from the Commonwealth to those are not entitled to receive them. As such they not only result in the payment of funds that have not been authorised, but offences of this type undermine public confidence in the Social Security system of this country."

18 The sentence imposed was not only within the proper exercise of the sentencing discretion, it was in my view one that was entirely appropriate to the circumstances of the case. The appeal is dismissed.