Criminal law - Sentencing - Social security fraud - Commonwealth defrauded of more than $100,000 over 10 years - Appellant the mother of two small children - Children cared for by appellant's sister while appellant in prison - Whether sentence of immediate imprisonment was manifestly excessive

Crimes Act 1914 (Cth), s 16A(2), s 29

R v Mitchell (Unreported, WASCA, Library No 980618, 28 October 1998)

The State of Western Australia v Wynne [2008] WASCA 195

1 JUDGMENT OF THE COURT: The appellant appealed against her sentence and applied for leave to appeal. After hearing the appeal the court granted leave to appeal but dismissed the appeal with reasons to be published later. These are the reasons.

2 The appellant pleaded guilty on 31 October 2008 to two counts in an indictment which read:

(a) Between 22 February 1996 and 23 May 2001 at Perth ... and elsewhere [the appellant] defrauded the Commonwealth in the amount of $16,595.29 by continuously and dishonestly failing to correctly inform the Department of Social Security and then, from 1 July 1997, the Commonwealth Service Delivery Agency (Centrelink) that she was residing overseas, contrary to s 29D of the Crimes Act 1914 (Cth).

(b) Between 1 July 2001 and 30 June 2006 at Perth ... and elsewhere [the appellant] dishonestly caused a loss of $85,845.70 to another person, namely the Commonwealth Services Delivery Agency (Centrelink) which is a Commonwealth entity, knowing or believing that there was a substantial risk of the loss occurring contrary to subsection 135.1(5) of the Criminal Code (Cth).

3 The sentencing judge sentenced the appellant on count 1 to a term of 20 months' imprisonment and in relation to count 2, a term of 12 months' imprisonment to be served cumulatively upon count 1, making a total of 32 months' imprisonment. The sentencing judge also directed that the appellant should be eligible for release pursuant to a recognisance release order after she had served 12 months of that sentence. The sentence was ordered to commence on 31 October 2008.

4 The ground of appeal asserts the total sentence of immediate imprisonment imposed was manifestly excessive 'when viewed against comparable cases and in all the circumstances'. The circumstances identified were the plea of guilty, the appellant's antecedents, the circumstances of offending and the impact on the appellant's children. In oral submissions it became clear that the central plank of the appellant's submission was the contention that there were exceptional circumstances warranting a non-custodial sentence because of the impact imprisonment would have on the appellant's young children.

5 The facts were that the appellant resided for approximately 10 years in the United States whilst in receipt of Centrelink payments which were paid into an Australian bank account and during that time she failed to advise Centrelink that she had left Australia. She lived in the United States with her former partner, the father of her two children. The appellant provided Centrelink with the residential address of her sister in Australia. From 1995 until 2006 she had been almost continuously in receipt of social security benefits including job search allowance, carer payments, New Start allowance, parenting payments, and family tax benefits, when none of these should have been paid to her. Between those dates she was paid a total of $102,440.99 in Centrelink payments to which she was not entitled.

6 Since being in receipt of the Centrelink benefits, the appellant purchased three residential properties located in Western Australia and South Australia. She failed to disclose those assets to Centrelink. Centrelink benefits were used in large part to meet the payment of mortgages. By the time she was sentenced the appellant repaid the entire amount which had been wrongly paid to her.

7 The appellant participated in an interview with the Australian Federal Police in April 2007 and admitted that she resided in America and that the bulk of the time she spent there living with her former de facto partner, who was the father of her two children. The appellant reported an unhappy childhood which she said had caused her emotional damage. Her relationship with her de facto was an unhappy one. The appellant said that her de facto husband was domineering, abused alcohol and illicit drugs and was a gambler with a criminal history and that she 'escaped' this relationship in 2006 when she returned to Australia. The appellant's children were, a few months prior to sentencing, aged 7 and 9. Imprisonment has caused distress to the children and it is burdensome on the appellant's older sister, who has care of the children. The court was provided with a pre-sentence report, numerous favourable references and a detailed psychological report. The appellant is now 44 years old, had no criminal record and the sentencing judge accepted that she was unlikely to offend again. The sentencing judge accepted that not only by the pleas of guilty, but also from other material before the court, that the appellant was remorseful and ashamed of what she had done.

8 The offence against s 29 of the Crimes Act 1914 (Cth), provides a maximum penalty of 10 years' imprisonment or a pecuniary penalty of $110,000 or both and the maximum penalty for an offence against s 135.1(5) is imprisonment for 5 years. The sentencing judge by her sentencing remarks revealed that she was aware of the matters which s 16A(2) of the Crimes Act require the court to take into consideration. One such matter is the probable effect the sentence would have on the person's family. Her Honour said that she would take into account the probable effect of the sentence on the children, although her Honour also observed that the appellant had the support of her sister and support from friends in the community and that 'the situation of your children alone is not persuasive in the sense that it cannot overcome the gravity of your offending and the circumstances of this particular case'.

9 Her Honour examined some other cases which had been referred to, to indicate the range of sentences customarily imposed, and concluded that the only sentence appropriate was one of immediate imprisonment.

10 The appellant in written submissions, filed a schedule of cases said to demonstrate that the sentences imposed were manifestly excessive. However, reference need not be made to them because in oral submissions, counsel conceded that none of them were in fact comparable, which is the case. Each case in the schedule involved different offences carrying lower maximum penalties, involved significantly different circumstances, and much smaller amounts taken over much shorter periods of time. The respondent submits that the relevant cases were those referred to by the sentencing judge and that when regard is had to those cases, the sentence imposed on the appellant was within a sound exercise of her Honour's sentencing discretion. Those cases are referred to below.

11 There is no doubt that her Honour took into account all of the factors referred to in the particulars to the ground of appeal, because they were expressly mentioned. As already stated, the main point of the oral submissions was whether the fact that the appellant had two small children warranted a non-custodial sentence. Reference was made during submissions to this court to The State of Western Australia v Wynne [2008] WASCA 195, where Miller JA (Steytler P and Murray J agreeing) said at [81] that the guiding principle is that ordinarily hardship caused to an offender's children will not be a circumstance that is taken into account in the sentencing process, but that the hardship may be taken into account when the degree of hardship that imprisonment will involve is exceptional, particularly where the offender is the mother of young children, or where imprisonment will result in the children being deprived of care. In all cases, it depends on the gravity of the offence and the circumstances of the case. Wynne was not a case involving charges requiring sentences to be imposed under the Crimes Act. Nothing said in Wynne can be read as contradicting s 16A(2)(p). Where sentences are imposed pursuant to the Crimes Act, s 16A(2)(p) states that the probable effect of the sentence on the person's family or dependants must be taken into account. However, the weight that matter will have will vary. For example, if the offence is very serious, then the effect on family or dependants will carry relevantly less weight. If affected children can be adequately cared for by other family members, then the factor is likely to have less significance than a case where a mother has shown proper parental care and the children will be thrown into the hands of welfare groups or a government body if the mother is imprisoned.

12 The sentencing judge noted that the children were fragile as a result of the abuse they were said to have witnessed in the domestic environment in which they formerly lived and noted that there was no doubt that 'they keenly feel their separation from the [appellant]'. This was noted in the appellant's sister's letter to the court and in a letter of a counsellor who had recently had contact with the children. These are not, however, particularly unusual circumstances. No doubt the small children of all female offenders who have a loving relationship with their children will feel the effects of separation. The sentencing judge said that these circumstances, along with other personal circumstances, did not overcome the gravity of the offending and concluded that there had to be a custodial sentence.

13 R v Mitchell (Unreported, WASCA, Library No 980618, 28 October 1998), was one of the cases referred to by the sentencing judge. In that case, Pidgeon J (White & Steytler JJ agreeing) recognised the importance of general deterrence in cases of this kind which involve sustained and deliberate fraud over a period of time. Pidgeon J referred to a South Australian case (R v Cameron (Unreported, SASC, 19 July 1993)) in which King CJ observed that abuse of the social security system jeopardises the system itself and the welfare of all those who depend for their livelihood upon the system. King CJ stated that it was the duty of the court to protect the social security system against this type of abuse by making orders which operate as a deterrent. The sentencing judge was therefore correct to identify this as a case which warranted the sentence of immediate imprisonment. Mitchell's case involved a woman defrauding the Commonwealth of just over $87,000 in circumstances where there had been full restitution and a fast-track plea, and where the appellant had a 10-year-old dependent child. The Court of Criminal Appeal upheld a State appeal against a sentence of 3 1/2 years' imprisonment, suspended upon payment of $20,000 security, and in lieu imposed a sentence of 3 1/2 years' imprisonment, with an order that 12 months had to be served before the appellant could be made 'eligible for parole'. The other cases referred to by the sentencing judge were District Court cases, the transcripts of which revealed sentences in relation to similar charges of:

(a) 18 months' imprisonment (after 9 months the appellant was to be released on a recognisance release order). In that case there had been a plea of guilty and the amount involved was approximately $66,000;

(b) 2 1/2 years' imprisonment (10 months to be served before release on a recognisance release order). In that case there were strong mitigating circumstances. The fraud involved $60,000;

(c) 30 months' imprisonment (eligibility for release pursuant to a recognisance release order after 10 months). $81,000 was involved, there was no record, an early plea of guilty and good references.

(d) 2 years' imprisonment (immediate release on a recognisance release order). The sum involved was $74,000. However, the offender was elderly, being 72 years old and there were other strong mitigating circumstances.

14 The sentences in this case of immediate imprisonment and eligibility for release after 12 months were therefore at the top, but within the range, of sentences customarily imposed. The amount involved and the time over which the fraud took place, though, was greater than any of the other cases to which reference was made. The strong mitigating circumstances were, undoubtedly, the plea of guilty, the fact that the appellant had repaid the full amount, and the fact that the young children would be separated from their mother. The existence of these factors meant that the sentence was severe and that justified the grant of leave to appeal. However, while the sentence was severe, it was not outside the range of a sound sentencing discretion and therefore, no error was made by the sentencing judge. In consequence, the sentence was not manifestly excessive.

15 For those reasons, leave to appeal was granted but the appeal dismissed.