GRAY v CTH DPP No. SCGRG-98-1630 Judgment No. S33 [1999] SASC 33

2 In the Magistrates Court and on the hearing of the appeal, the appellant was represented by Mr Ey of counsel. After hearing submissions, the learned magistrate sentenced the appellant to be imprisoned for a period of 10 months with respect to the two counts of imposition. In relation to the remaining counts, the appellant was sentenced to be imprisoned for a further period of 10 months. Such sentences were expressed to be cumulative, making a total head sentence of 20 months. Pursuant to s20(1)(b) of the Crimes Act 1914, the magistrate ordered the appellant to be released after serving six weeks upon entering into a recognisance in the sum of $500 to be of good behaviour for a period of three years. The magistrate also ordered the appellant to make reparation in the sum of $18,571.20.

3 The circumstances leading up to the prosecution of the appellant are as follows:

4 On 18 February 1986 and 10 May 1988 the appellant untruly represented in an Entitlement Review form with respect to an invalid pension claim that she had not been employed in the previous 12 months. She had, however, been employed on a full-time basis with K-Mart since 16 November 1984.

5 On 27 May 1991 the appellant falsely stated in a letter to the Department of Social Security that as from 1 June 1991 she would be taking a temporary position of 12 hours per week for which she would receive $100 per week. She had, however, been in receipt of WorkCover payments since 18 October 1990.

6 The appellant was in receipt of an invalid pension from about January 1976 in the name of Gray as a result of a back injury sustained in an accident in 1974. She subsequently commenced work at K-Mart where she used the names of Lymberopoulos and Lymberis. Initially this work was casual but it became full-time from 26 November 1984. Salary payments were thereafter made into an account in the name of Lymberis.

7 The appellant suffered a work-related accident at K-Mart in June 1987. She returned to work at K-Mart in August 1987. She suffered a respiratory reaction in July 1989. She left K-Mart and thereafter went on to WorkCover. She was awarded a lump sum payment from WorkCover on 18 October 1990. This was calculated to reflect a back payment to 24 July 1989. Thereafter she continued to receive weekly payments of Work Cover. Between 8 August 1985 and 9 May 1991, however, the appellant continued to obtain payments of her invalid pension although she was not entitled to those payments as a result of her employment with K-Mart and her WorkCover payments.

8 The appellant's offending took place over a period of about six years although it was not continuous. The actual offending periods were: 8 August 1985 to December 1985, a period of four months; 9 July 1987 to October 1988, a period of 15 months; 5 January 1989 to August 1989, a period of seven months and 11 October 1990 to 9 May 1991, a period of seven months. This makes a total of two years and nine months.

9 The overpayment incurred as a result of the offending was $18,571.20. The appellant has made full restitution. The appellant did not have any prior record but, as the magistrate said, she was significantly deprived of the mitigating factor of good character due to the repetitive nature of the offending over a long period of time.

10 The principal issue raised on the hearing of the appeal was delay. Mr Ey submitted that the magistrate had failed adequately to take into account the issue of delay, particularly that between the date of the last offence and the date upon which the charges were laid. As a result she had erred in failing to make an order for the appellant's immediate release.

11 The matter had an extensive history prior to sentence being imposed. A chronology is annexed to the affidavit of Freda Propsting who appeared for the Commonwealth Director of Public Prosecutions at the hearing in the Magistrates Court. That chronology indicates that there was a delay of about 19 months between the detection of the offending and the laying of the charges against the appellant. There was a further delay in excess of two years between the appellant's first appearance in the Magistrates Court and sentence. This involved some 23 appearances in court by the appellant.

12 Mr Ey, in his argument on appeal, acknowledged the accuracy of the chronology but emphasised a number of matters. The last offence committed by the appellant was in about May 1991. The appellant's offending was detected in about August 1994. The brief was received in the office of the Commonwealth Director of Public Prosecutions on 22 March 1996. An information containing 86 counts was filed in the Adelaide Magistrates Court on 31 May 1996 with the first return date being 13 June 1996. The summons was not served and the appellant eventually appeared in court for the first time on 11 July 1996. There were a number of adjournments thereafter pending the resolution of the appellant's application for legal aid. At the beginning of November 1996, Mr Ey became involved in the matter. Thereafter, discussions and negotiations took place which appeared to continue throughout 1997. Part of those discussions related to the provision of further documentation by the DPP. The appellant was also endeavouring to raise a loan to repay the overpayment. Eventually the matter was resolved between the DPP and the appellant's advisers, as a result of which on 6 January 1998 a new information was filed in the Adelaide Magistrates Court. That information was returnable on 22 January 1998. The appellant pleaded guilty on that date. There were, however, a number of adjournments thereafter, some of which related to adjournments pending the outcome of a Full Court appeal relating to the appellant, the outcome of which would facilitate her effort to make restitution. Sentence was finally imposed on 24 November 1998.

13 In the course of his submissions, Mr Ey referred to the decision in R v Todd (1982) 2 NSWLR 517 at 519, wherein Street CJ said:

"Moreover, where there has been a lengthy postponement, whether due to an interstate sentence or otherwise, fairness to the prisoner requires weight to be given to the progress of his rehabilitation during the term of his earlier sentence, to the circumstance that he has been left in a state of uncertain suspense as to what will happen to him when in due course he comes up for sentence on the subsequent occasion, and to the fact that sentencing for a stale crime, long after the committing of the offences, calls for a considerable measure of understanding and flexibility of approach - passage of time between offence and sentence, when lengthy, will often lead to considerations of fairness to the prisoner in his present situation playing a dominant role in the determination of what should be done in the matter of sentence; at times this can require what might otherwise be a quite undue degree of leniency being extended to the prisoner."

14 Debelle J in Kernich v DPP Cwth [1997] SASC 6050; (1997) 68 SASR 454 at 459 referred to this passage with approval and went on to say:

"The observations apply with even greater force when there has been an exceptional delay of this kind, and in that period of delay the offender has taken substantial and successful steps towards his own rehabilitation".

15 Debelle J allowed the appeal in Kernich to the extent that he confirmed the sentence of imprisonment but directed the appellant to be released conditionally upon entering into a bond in his own recognisance to be of good behaviour for a period of three years.

16 In David v Marcelline (Duggan J, 10 May 1991, SASC 2850, unreported) Duggan J had occasion to review a sentence imposed with respect to 29 offences against the Social Security Act 1947. In that case, there was a delay of approximately two and a half years between the commission of the last offence and the laying of the charges. That delay appeared substantially to be attributable to the prosecuting authorities. In the intervening period the offender had made some progress towards rehabilitation. Duggan J took the view that the delay in that case, and its consequences, should have resulted in the immediate release of the appellant from the sentence of imprisonment imposed.

17 Each of these decisions was referred to the learned sentencing magistrate in the course of submissions. The prosecutor also referred her to R v Cameron and Simounds (1993) 171 LSJS 305. In that case, both offenders had been involved in a deliberate course of fraudulent conduct over a long period of time. The court emphasised the need for a deterrent penalty in such cases. King CJ said (at 306):

"The crimes committed are serious crimes. The social security system is the method by which society provides an income to those of its members who, due to misfortune, are not able to provide an income for themselves.

Parliament determines the conditions and the level of benefits, and no doubt, in doing so, determines not only what is necessary to meet the needs of welfare beneficiaries but also what society, through the taxpayer, can sustain in that regard. Abuse of the social security system jeopardises the system itself and therefore the welfare of all those who depend for their livelihood upon the system. It is the duty of the court to protect the social security system against this type of abuse by making orders which operate as an effective deterrence. Not only does a fraudulent abuse of the system jeopardise the system itself by placing an undue burden upon the taxpayer, and therefore, on society at large, but it also is a great injustice to all those welfare recipients who abide by the system, conduct themselves honestly and have to subsist on what is by no means a handsome income, namely the benefit prescribed by law as appropriate in the circumstances. It is a great injustice to those people if others are able with impunity to double their incomes by a fraud.

For these reasons the courts have a great responsibility to protect the integrity of the social security system by imposing punishments for deliberate and sustained fraud which are likely to operate as a deterrent to others who may be tempted. It is necessary to acknowledge and to appreciate that recipients of social security benefits are, almost without exception, subject to great financial pressures. They are obliged to maintain themselves and to provide for their needs on an income which is by no means handsome. Therefore, there must always be a temptation to enhance that income, and if it appears that that can be done without running the risk of substantial punishment, it is likely that others will be tempted to follow in the fraudulent course. It is necessary for the courts to send, and consistently send, a clear signal to all who might be so tempted, that sustained and deliberate fraud upon the system will mean going to gaol."

18 The magistrate made very careful and detailed remarks as to penalty. She commented that there seemed to be no satisfactory explanation for the dilatoriness in bringing the prosecution and also referred to the delay leading up to the finalisation of these matters.

19 Mr Ey, in the course of his submissions provided the magistrate with a number of medical reports which indicated that the appellant suffered from a longstanding asthmatic condition, as well a psychological report. Those reports indicated that the appellant would not cope well within a prison environment. The magistrate referred to the reports and all the matters which were put in mitigation. She also referred to Ms Propsting's submission concerning the need for general and personal deterrence. She finally concluded that a sentence of imprisonment was the only appropriate penalty. Having had regard to mitigating factors, however, she ordered the release of the appellant after a period of six weeks.

20 In view of the nature and extent of the offending, which included 48 counts involving the use of a false name and three occasions on which the appellant had made false statements to the department, it is not surprising that the magistrate placed considerable weight upon the issue of deterrence. On the hearing of the appeal, Mr Loftus, for the respondent, submitted that the magistrate in so doing had appropriately balanced all competing considerations and had structured a sentence which, in the final analysis, was very lenient. I think there is considerable merit in that submission. Nevertheless, I believe that in having proper regard to the question of deterrence, the magistrate gave insufficient weight to the particular circumstances of this case, in particular the substantial delay.

21 The last of these offences occurred more than seven years prior to sentence being imposed. Thereafter, there did not appear to be any other offending of any kind. The information upon which the appellant was eventually sentenced was laid more than three years after the offences were detected. Although the period between the detection of the offences and the laying of the first information is the only period directly attributable to the prosecution, the whole of the delay was a relevant factor to be taken into account. The conduct of the appellant during that period, together with her plea of guilty and the making of restitution were all matters which demonstrated that she had made substantial efforts towards her rehabilitation in the intervening period. Those matters, together with the appellant's health problems, support Mr Ey's submission that personal deterrence had, by the time of sentence, become less of an issue and this was therefore an appropriate case to order the immediate release of the appellant. I agree with that submission. General deterrence is an important factor but in this case it can be adequately dealt with by the imposition of a custodial sentence, albeit a suspended one. In the circumstances I have finally concluded that the magistrate erred in not ordering the immediate release of the appellant and thereby imposed a sentence which was manifestly excessive.

22 I therefore allow the appeal. I confirm the sentence of 20 months imprisonment but I order the immediate release of the appellant upon her entering into a recognizance on the same terms and conditions as ordered by the magistrate.