R v Schultz [2008] NSWCCA 199 | Case summary

DECISION: 1.The appeals are dismissed and the sentence on count 1 is confirmed. In relation to counts 2 and 3 the head sentence and release dates are confirmed. In lieu of the direction which was made by sentencing judge the Court directs that the respondent be released at the expiration of 6 months of his sentence upon entering a recognizance pursuant to s 20(1)(b) himself in the sum of $200, to be of good behaviour for a period of 2 years from that date and to appear and receive sentence if so called upon at any time in respect of any breach within the relevant period. 2. A further direction is that he accept the supervision and guidance of an officer of the NSW Probation Service for a period of 2 years and obey all reasonable directions. He must report to the Probation Service within 7 days of his release. Date for release is confirmed as 15 October 2008.

Section 134.2(1) offence - sentenced pursuant to s 20(1)(b) Crimes Act 1914 to 2 years and 3 months imprisonment to commence on 16 April 2008 and to be released after 6 months upon entering into a recognizance on self surety of $200, to be of good behaviour for 2 years from 15 October 2008. 4 Each charge relates to a continuous course of conduct, although the relevant legislation was amended during that course of conduct. The maximum penalty for a breach of s 29B of the Crimes Act was 2 years imprisonment and/or a fine of $20,000. The maximum penalty for a breach of s 29D was originally imprisonment for a term of 5 years and/or a fine of $50,000. However, the maximum penalty changed in 1986 to imprisonment for 10 years and/or a fine of $100,000. It changed again on 7 April 1997 when the maximum fine became $110,000. Section 29D was repealed on 23 May 2001 and replaced by s 134.2(1) Criminal Code 1995. An offence against that provision carries a maximum penalty of 10 years imprisonment and/or a fine of $66,000. 5 The offences all concern the receipt by the respondent of age pension payments made in the name of his mother, Elsie Schultz. Mrs Schultz was entitled to the pension and lodged an authority with the Department of Social Security in 1978 which had the effect of appointing the respondent as her "payment nominee". In accordance with that authority her age pension payments were thereafter paid into a bank account controlled by the respondent. Mrs Schultz passed away on 6 July 1982. However, payments of her pension continued to be made throughout the period of the respondent's offending. 6 On 28 September 1984 an "entitlement review" form in the name of Elsie Schultz was lodged with the Department of Social Security stating that she resided at 139 The Kingsway, Cronulla and paid $20 per week in board and lodging to her son, the respondent, who resided at the same address. Thereafter a rent assistance form in her name was lodged with the Department of Social Security on 13 April 1989 which provided similar particulars. An income review form was lodged on 14 November 1989 in which it was stated that Mrs Shultz was paying $30 per week in board to the respondent. 7 As a consequence of the respondent's deception he received $198,503.16 which was deposited into a bank account controlled by him over a 22 year period. When interviewed by the police the respondent confessed his wrongdoing and admitted that he had lodged the relevant false declarations with the Department. 8 The sentencing judge carefully reviewed the circumstances of the respondent's offending. He also considered the respondent's subjective case. In order to make reparation for the money received the respondent has been required to sell his house. He has repaid all amounts owing. As a result of these offences his marriage has failed. He now has significant health issues and suffers from pain in his shoulder, neck, back, right groin, right hip, both ankles and a knee. His pain is controlled by analgesics. It is apparent that he will require surgical intervention for some of his disabilities. 9 The sentencing judge received evidence from a psychologist indicating that the respondent exhibits depressive symptomology which has been present over a long period of time. The psychologist gave evidence that the respondent has suffered from a gambling problem during periods of his life. 10 The sentencing judge provided extensive and detailed remarks on sentence. Although a useful explanation of his Honour's reasoning they went significantly beyond the purpose which remarks are required to serve. The fundamental objective of remarks on sentence is to explain to the prisoner in language that he or she can understand the reasons for the sentence which the court imposes. Although consideration must be given to all relevant issues it is unnecessary, and in many cases inappropriate, to discuss the detail of previously decided cases. 11 His Honour determined that having regard to the objective criminality of the offences and notwithstanding the respondent's subjective circumstances a term of imprisonment was appropriate. His Honour determined that a term of periodic detention would not be adequate. As his Honour put it "in the scheme of things so extensive is his criminality, noting the significant amount of money that the offender received, the offending could only be met in my view appropriately with some form of full time custody to give proper recognition to the element of general deterrence." 12 Notwithstanding the fact that the respondent had maintained his deception over many years and had made three false declarations to the Commonwealth his Honour classified the objective criminality as being less than an offence involving "deliberation and sophistication". His Honour had in mind that greater criminality would be involved in an offence where false names, false accounts and false identities had been created. 13 His Honour accordingly determined to impose the prison sentences which I have identified. By the application of the provisions of s 20(1)(b) of the Crimes Act (Cth) his Honour made directions for the respondent to be released on recognizance at the expiration of 6 months of his sentences. The parties are agreed that by making release orders in relation to each sentence there was a technical non-compliance with s 20(1)(b). Only one recognizance was required. The parties are agreed that if the appeal were to be dismissed this Court should intervene to impose an appropriate direction. 14 The Crown does not challenge the head sentences. Although it was submitted that they are moderate it was accepted that in all the circumstances they were within the available range for these offences. However, the Crown challenged his Honour's directions that the respondent be released on recognizance after only six months in custody. It was submitted that the requirement that the respondent serve only six months in fulltime custody was manifestly inadequate. 15 The Crown submitted that the manifest inadequacy was explained by his Honour's failure to consider whether the custodial term should fall within "the generally accepted range of 60% to 66.6% and up to 75% in the worst cases (see Bernier (1998) 102 A Crim R 44; Paull (1990) 20 NSWLR 427). In the respondent's case the six months recognizance release order represents only 33.3% of the head term for count 2 and 22.2% of the head term for count 3. 16 The Commonwealth emphasised that the sentencing judge had made no reference to the "accepted range" in his remarks on sentence and provided no explanation as to why he considered it appropriate to depart to such a significant degree from that range. The Crown further submitted that if there is no "tariff" which dictates the minimum term set by means of non-parole period or recognizance release order, it must nevertheless be of sufficient length to ensure that the sentence reflects the criminality involved and does not inappropriately diminish the very important impact of general deterrence: R v Drazkiewicz (unreported, CCA, 23 November 1993 per Badgery-Parker J at p 7). It was submitted that although a minimum term is of benefit for the offender and is intended to assist his rehabilitation it must not be shortened beyond the lower limit of what might reasonably be regarded as appropriate punishment: The Queen v Shrestha (1990) 173 CLR 48 (per Brennan and McHugh JJ at 63). 17 The respondent submitted that there was no recognisable relationship between the head sentence and the period provided in relation to any recognizance release order. To support this proposition the Court was referred to Johnsson v R [2007] NSWCCA 192 where Grove J said (at [30]) "the convention requiring division of term where a non-parole period is specified does not govern the principles to be applied when recognizance release is ordered." It was further submitted that there was a clear distinction between a recognizance release order and the release of a prisoner to parole (see R v Smith [2004] QCA 417 at [9]-[10]). 18 In relation to the sentence which his Honour imposed the respondent emphasised the sentencing judge's findings that the offence was not the worst of its kind, was opportunistic and lacked deliberation, planning and sophistication. It was submitted that having regard to the nature of the offending and the subjective circumstances of the respondent a period of six months full-time custody was adequate to both punish him and deter others who might be tempted to commit a similar offence. 19 In the circumstances of the present case it is unnecessary to resolve the dispute as to whether there is or should be a recognised relationship between a head sentence and a period provided in a recognizance release order. However, given the circumstances when such an order is available and may be appropriate, the approach adopted in Johnsson has considerable merit. It allows the court sufficient flexibility to impose a sentence which can provide both adequate punishment but also encourage the offender's rehabilitation. 20 In my judgment the term of full-time custody which his Honour provided was manifestly inadequate. I accept that an offence which involves planning and the creation of the fraudulent documents necessary to perpetrate the offence may in some circumstances be objectively more significant than the present offence. However, the respondent maintained his deception over many years. During the course of his criminal activity he created three false declarations and continued to exploit the weaknesses in the Commonwealth's administrative processes to his financial advantage. To my mind his criminality was significant and, notwithstanding his subjective circumstances, required that he serve a custodial term significantly greater than six months. Social security fraud is notoriously difficult for the Commonwealth to police. When it is discovered a punishment must be imposed which marks out the offence as serious and sends a message to the community that anyone contemplating committing a similar offence can expect a significant period of full-time custody. 21 This matter comes before the Court as a Crown appeal for which the principles are well known: see R v Wall [2002] NSWCCA 42 at [30]; citing Everett v The Queen (1994) 181 CLR 295; Lowndes v The Queen (1999) 195 CLR 665, Dinsdale v The Queen (2000) 202 CLR 321. The Court has a lively discretion to refuse to intervene even if error has been shown. 22 In the present case the respondent is due for release on 15 October 2008 which was approximately 8 weeks from the day of the hearing of this appeal. There is evidence before this Court, which was accepted by the Crown as relevant to the Court's discretion, which confirms that the respondent requires medical attention which is not available to him within the prison system. This may be a result of either or both the fact that he has received a relatively short period of full-time custody or the direction that he serve his prison term in the penal institution at Muswellbrook. In any event it is apparent that his period of custody has involved particular hardship. 23 The respondent is 61 years of age and has retired from his employment. In order to repay the Commonwealth he has sold his home and has little if any assets. If he is to re-establish himself successfully in society he will need to obtain employment suited to his physical limitations. This may require retraining and he will certainly be required to obtain skills beyond those he utilised during his working life when he worked on the New South Wales railways and at an oil refinery until limited by physical injury. 24 If this Court was to impose a further term of full-time custody appropriate to his offending it would involve unusual hardship. In my judgment that hardship would not in all the circumstances be justified. For these reasons I joined in the making of the following orders:

R v Schultz

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Judgment (20 paragraphs)

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