McAree v Barr [2006] TASSC 37

Crimes Act 1914 (Cth), s16A(2)(p).

Hrasky v Boyd [2000] TASSC 39; (2000) 9 Tas R 144; Boyle (1987) 34 A Crim R 202; R v Wirth (1976) 14 SASR 291, referred to.

Respondent: Commonwealth Director of Public Prosecutions

Judgment Number: [2006] TASSC 37

1 The applicant, Janet Louise McAree, appeals against the sentence imposed upon her following her plea of guilty to two charges of obtaining a financial advantage in breach of the Criminal Code Act 1995 (Cth), s135.2(1). The sentences were expressed to be cumulative sentences of imprisonment that were partially suspended on the condition that the applicant committed no offences of dishonesty within a period of 28 months and entered into a recognizance in the sum of $500 in respect of each sentence. Whilst suspended sentences of imprisonment are authorised by the Sentencing Act 1997 (Tas), the sentencing of the applicant was not governed by that Act, but the Crimes Act 1914 (Cth), Pt 1B. The latter Act does not authorise the suspension of a sentence of imprisonment, but provides for recognizance release orders that can achieve a similar outcome. As the terms in which the applicant was sentenced do not comply with the Crimes Act, the sentences will in any event require rectification. I will return to this after considering the appeal on the basis that the applicant's sentencing complied with that Act. Recasting the sentences imposed as an in globo sentence in language that is appropriate to the Crimes Act, the applicant would have been sentenced to ten months' imprisonment and an order made that she be released after serving three months of that sentence upon giving security by entering into a recognizance for $1,000 not to commit an offence involving dishonesty for a period of 28 months from the date of her release from prison.

2 The applicant's convictions arise from her failure to correctly report to Centrelink her income from casual employment from 15 September 2001 to 19 December 2003, a period of about two years three months. This resulted in the overpayment of benefits to her totalling $13,088.85. On 15 September 2001, the applicant commenced casual employment with A C Nielsen. During the initial three month period of that employment, she advised Centrelink via her fortnightly claim forms that she was employed, but substantially understated her income. During the balance of the period of her employment with A C Nielsen, which concluded on about 15 May 2003, she failed to disclose any further earnings from that employment to Centrelink. Of the $20,936.98 that the applicant earned during the 20 month period that she was employed by A C Nielsen, she only disclosed income of $1,150.

3 After the cessation of her employment with A C Nielsen, the applicant commenced casual employment with Woolcourt Research on 10 June 2003. Between that date and the conclusion of that employment on 19 December 2003, the applicant earned a total of $5,841.97 and only disclosed earnings of $408 to Centrelink.

4 In November 2003, Centrelink detected the applicant's breaches arising from her employment with Woolcourt Research and claimed $3,173.79 for overpaid benefits from her. That amount was repaid.

5 In November 2004, Centrelink detected the applicant's breaches arising from her employment with A C Nielsen and claimed $9,919.15 for overpaid benefits from her. At the time of the applicant's sentencing, the sum of $8,846.04 remained due and payable from her to Centrelink.

6 Between 1989 and July 1999, the applicant had been an intermittent recipient of unemployment benefits. From July 1999 to the time of her sentencing, she had been in continuous receipt of unemployment benefits. During the period to which her convictions relate, she had been required to lodge periodic payment application forms in which she declared any employment she had obtained and the income derived therefrom. Over the majority of the offending period she had been either required to lodge claim forms on a fortnightly or a monthly basis. Centrelink had written to her periodically throughout the period of her offending, reminding her of her obligations, including the need to declare all income. On several occasions prior to 1999 the applicant's benefits had been cancelled because of her return to full time work. In 1994, she incurred a debt of $248 to Centrelink when she failed to correctly report her income.

7 The applicant's criminal conduct was calculated and involved repeated deceit. Having dishonestly obtained full benefits whilst employed by one employer, she undertook the same course of conduct when she took up employment with a subsequent employer. Over a period of about two years, she regularly lodged dishonest claims for benefits.

8 When the period of the applicant's offending commenced she was 47 years of age. She was aged 51 when sentenced. After leaving school, the applicant involved herself in many pursuits and interests and was employed in a variety of clerical and research positions. Her most enduring project was working as a research and production assistant with Mr Catchlove, a movie director and writer, with whom she formed a relationship and occasionally resided, over a period of about 12 years. He died in February 2001.

9 In mid-1999, the applicant was referred to a psychologist for treatment for depression that was linked to the long-standing traumatic effect on her of the death of her brother and the more recent deaths of her stepfather in 1996 and her father in 1997. Her condition was referred to as a deep depression which lasted for about one year.

10 Following the death of Mr Catchlove, the applicant moved to Sydney in order to care for her ailing mother. In October 2001, the applicant successfully completed a clinical hypnotherapy course of three months' duration. Her period of offending commenced at this time. The explanation for her criminal conduct is that she was unable to meet her living expenses, which included accumulated educational expenses. She was living beyond her means.

11 Some time prior to December 2004, the applicant's mother expressed a wish to move to Tasmania, her place of birth. As her mother's health was deteriorating, the applicant agreed to accompany her. According to a statutory declaration provided to the Court by the applicant's elder brother, in about December 2004 he and his wife, together with the applicant and their mother, moved to a house that was purchased at Woodstock, which is south of Huonville. About six months thereafter, the applicant's brother and his wife moved to the Australian Capital Territory where they now reside and where the applicant's brother is employed.

12 At the time of the applicant's sentencing, her mother was 74 years of age and suffering from multiple complex health problems. The family doctor provided the Court with a report to the effect that the applicant was her mother's prime carer and that her mother was very dependent on her for daily care and psychological support. This was confirmed in the applicant's brother's statutory declaration which included the following as to the difficulty of caring for the applicant's mother should the applicant be imprisoned:

"I broached the possibility of my mother living with myself and my wife in Canberra, but my mother will not countenance this option, preferring to remain 'independent' and living in her own home. She will also not countenance myself and my wife leaving our jobs in Canberra to move back to Tasmania and assist her, as she is aware of the serious or adverse ramifications to the broader family interest."

His reference to the "broader family interest" is a reference to the interests of his extended family.

13 The applicant has no relevant prior convictions.

14 The learned magistrate sentenced the applicant to what amounts to a term of ten months' imprisonment, three months of which sentence was immediately effective.

15 The applicant appeals against the sentence on the grounds that:

* insufficient regard was paid to the probable effect that the actual imprisonment of the applicant would have on her mother, as required by the Crimes Act, s16A(2)(p).

16 The applicant's counsel did not submit that the head sentence of ten months' imprisonment was beyond the appropriate range. The sole focus of counsel's challenge to the sentence was that three months of it was made immediately effective.

17 In the course of the comments he made when passing sentence, the learned magistrate in substance said that he was making a portion of the sentence immediately effective because of the needs of deterrence. The importance that the learned magistrate gave to general deterrence is consistent with the authorities. In Hrasky v Boyd [2000] TASSC 39; (2000) 9 Tas R 144 at par20, Underwood J (as he then was) observed that for many years Australian courts have emphasised the importance of general deterrence when imposing a sentence for what is loosely referred to as social security fraud. The authorities cited by his Honour included:

* R v Rossi and R v Bowman (1988) 4 WAR 463, a decision of the Full Court of Western Australia where, at 467 the court said:

"Reported cases in recent years demonstrate a developing trend towards imposing custodial sentences, even for first offences, in the absence of substantial mitigation circumstances."

* R v Purdon, an unreported New South Wales Court of Criminal Appeal decision dated 27 March 1997 where Hunt CJ at CL (with whose reasons for judgment the other members of the court agreed) referred, at 4 - 5, to:

"... the strongly worded statements of this Court that make it clear beyond any doubt that, in the case of a fraud upon the social security system, a custodial sentence is to be imposed unless there exist very special circumstances justifying some lesser order."

"The rationale stated for the rule that a custodial sentence is to be imposed for social security fraud except in very special circumstances is that the offence is easy to commit but difficult to detect, it is widespread, and the introduction of more checks upon applicants for social security would cause delays in the payment of benefits and therefore hardship to those whose need is urgent. It has also been said that the rule reflects a concern for the protection of the revenue, but I would prefer to express it as a concern for the additional burden upon all taxpayers who shoulder the heavy burden of providing the funds for the social security system to operate and the even heavier burden created by the widespread abuse to it by frauds such as these. The rule is not based upon the fact that many of the frauds are perpetrated for motives of greed rather than need. Both types of fraud are widespread. They are equally difficult to detect. If the fraud is based upon a perceived need, a custodial sentence must be expected except in very special circumstances. If the fraud is based on greed, the custodial sentence will be longer."

18 In South Australia, less primacy is accorded to the needs of general deterrence when dealing with social security fraud, nevertheless it has been recognised that deterrence must loom large in the sentencing. In Kovacevic (2000) 111 A Crim R 131, Doyle CJ, Mulligan, Bleby and Martin JJ 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 the imprisonment need not be served."

19 See also McPherson v Commonwealth Services Delivery Agency [2005] SASC 187; (2005) 156 A Crim R 188.

20 In the circumstances of the applicant's sustained and repetitive fraudulent conduct, I am not persuaded that the learned magistrate erred in placing the significance that he did on the needs of general deterrence. Putting to one side the question of hardship to the applicant's mother, and paying due regard to all other relevant matters such as: the applicant's plea of guilty; her partial repayment of the amount overpaid; her depressed mental state prior to the commencement of the period of her offending; her prior good character and work record; and her concern for her mother, I am satisfied that the learned magistrate's conclusion that for reasons of general deterrence three months of the applicant's sentence should have immediate effect was within the sentencing range appropriate in this instance.

21 The Crimes Act, s16A(2)(p), required the learned magistrate to take into account "the probable effect that any sentence or order under consideration would have on any of the person's family or dependants". Courts of Criminal Appeal in three States have held that this provision is declaratory of the common law and is not intended to change it; Sinclair (1990) 51 A Crim R 418 at 430, R v Matthews (1996) 130 FLR 230 at 233 and Togias [2001] NSWCCA 522; (2001) 127 A Crim R 23 at 25 - 26. At common law the general principle is that a sentencing court should have no regard to the hardship which a sentence of imprisonment will have upon the members of an offender's family as hardship is part of the price to pay for committing an offence; Boyle (1987) 34 A Crim R 202 at 204 - 205. As explained in R v Wirth (1976) 14 SASR 291 by Wells J at 296:

"Hardship to spouse, family, and friends, is the tragic, but inevitable, consequence of almost every conviction and penalty recorded in a Criminal Court. Again and again, sentencing judges point out that convicted persons should have thought about the likely consequences of what they were doing before they did it ... ."

This general approach to hardship is not an absolute rule and it will be departed from in exceptional cases, Boyle (supra) at 205. In Wirth (supra) at 246, Wells J said:

"... hardship likely to be caused by a sentence of imprisonment under consideration ought to be taken into account where the circumstances are highly exceptional, where it would be, in effect, inhuman to refuse to do so."

Even if established, exceptional hardship is not a passport to freedom. It is one of the factors that must be taken into account in all the circumstances of the case. In some cases it is entitled to great weight, in others to hardly any weight, Director of Public Prosecutions (Cth) v Gaw [2006] VSCA 51 [21].

22 In the circumstances of this case, I am not persuaded that because of the hardship which the applicant's incarceration would cause to her mother, the learned magistrate erred by making a portion of the sentence immediately effective. Whilst the evidence established that the applicant's mother would suffer from the loss of the applicant's daily care and attention, that suffering could, at least partly, be alleviated by the applicant's mother taking up the option of living with her son and his wife in Canberra during the applicant's absence. That the applicant's mother would not countenance this option and preferred to remain in her own home indicated that she considered she could cope on her own and that such hardship as she anticipated from the absence of her daughter was manageable not exceptional. It remained open to the applicant's mother to take up the option of moving to her son's residence if her expectations about her ability to cope in the absence of her daughter proved wrong.

23 Hardship to the applicant's mother is, of course, not a matter to be viewed in isolation. Having reviewed all relevant matters, including hardship to the applicant's mother, I am not persuaded that the sentence imposed by the learned magistrate fell outside the range of sentencing options open to him.

24 Subject to the need to bring the terms in which the applicant was sentenced into line with the requirements of the Crimes Act, the appeal has not been sustained. I will hear the parties as to the consequential orders I should make.