Supreme Court of the ACT|2019-02-15|Before: Loukas-Karlsson J

R v Woods; R v Mathews; R v Mathews [2019] ACTSC 33 (15 February 2019)

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - Judgment and Punishment - Sentence - commonwealth offences - dishonestly obtaining a financial advantage by deception - co-offenders - pleas of guilty - delay

Crimes Act 1914 (Cth) ss 16A, 20, 29D

Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; 253 CLR 58

Bui v DPP (Cth) [2012] HCA 1; 244 CLR 638

Chandler v The Queen [2010] VSCA 338

Coles v R [2016] NSWCCA 32

Dinsdale v The Queen [2000] HCA 54; 202 CLR 321

Director of Public Prosecutions v Reynolds [1999] VSCA 224

DPP (Cth) v Gow [2015] NSWCCA 208

DPP (Cth) v Thomas [2016] VSCA 237

Duncan v The Queen (1983) 47 ALR 746

Hili V The Queen [2010] HCA 45; 242 CLR 520

Huang aka Liu v R [2018] NSWCCA 70

Marasco v The Queen [2016] VSCA 85

Markarian v The Queen [2005] HCA 25; 228 CLR 357

Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59

Naizmand v R [2018] NSWCCA 25

Payne v R [2010] WASCA 177

Qi Zhou v R [2014] VSCA 123

R v Bandy [2018] ACTSC 261

R v Chapman [2001] NSWCCA 457

R v Desborough [2010] QCA 297

R v Harrington [2016] ACTCA 10

R v Lattouf (Unreported, NSW Court of Criminal Appeal, Mahoney ACJ, Sully J and Adams AJ, 12 December 1996)

R v McKendry (unreported, Victorian Court of Appeal, June 1996, Winneke P, Charles JA and Southwell AJA)

R v Merrett [2007] VSCA 1; 14 VR 392

R v Meyboom [2012] ACTCA 48

R v Minassian [2007] QCA 39

R v Schwabegger (1998) 4 VR 649

R v Talia [2009] VSCA 260

Scook v The Queen [2018] WASCA 114

Singh v R [2018] NSWCCA 60

The Queen v Pham [2015] HCA 39; 256 CLR 550

Thomson v R [2014] NSWCCA 88

Zdravkovic v The Queen [2016] ACTCA 53

Commonwealth Director of Public Prosecutions (Crown)

SCC 192 of 2018; SCC 188 of 2018; SCC 190 of 2018

1. On 27 July 2018, Maria Mathews pleaded guilty to an offence of by deception, dishonestly obtaining a financial advantage from the Department of Defence, contrary to section 134.2(1) of the Criminal Code 1995 (Cth).

2. On 27 July 2018, Maria Mathews pleaded guilty to an offence of by deception, dishonestly obtaining a financial advantage from the Department of Defence with Philip Mathews, contrary to section 134.2(1) of the Criminal Code 1995 (Cth).

3. On 27 July 2018, Philip Mathews pleaded guilty to an offence of by deception, dishonestly obtaining a financial advantage from the Department of Defence with Maria Mathews, contrary to section 134.2(1) of the Criminal Code 1995 (Cth).

4. On 27 July 2018, Malcolm Woods pleaded guilty to an offence of by deception, dishonestly obtaining a financial advantage from the Department of Defence, contrary to section 134.2(1) of the Criminal Code 1995 (Cth).

5. The maximum penalty for each offence is 10 years imprisonment.

6. The agreed facts are set out in the Statement of Facts, which forms a part of the Crown Tender Bundle.

7. Maria Mathews enlisted on 2 September 2002 as a member of the Royal Australian Navy ("RAN") achieving the rank of Leading Seaman.

8. Philip Mathews enlisted in 1979 as a member of the Royal Australian Navy ("RAN"). He achieved rank of Leading Seaman. He was discharged from permanent service into the Active Reserve in May 2008. He thereafter took a civilian job as a driver.

9. Malcolm Woods enlisted on 7 January 1992 as a member of the Royal Australian Navy ("RAN") and achieved a rank as a senior non-commissioned officer - Chief Petty Officer.

10. Maria Mathews and Philip Mathews were married on 16 January 1999. Philip Mathews, as the senior ranking member, subsequently applied to the Australian Defence Force (ADF) for them to be categorised as Members with Dependents (MWD). Their marriage was subsequently recognised and they were granted additional allowances, entitlements and posting preferences. The ADF does this in order to support the sustainability and stability of relationships given the regularity with which members are required to be posted to new locations or deploy on operations. There were no children of this marriage but each had older children from previous relationships.

11. In 2007 Maria Mathews and Philip Mathews were both posted to Darwin. At that time, Philip Mathews held the senior rank and as such, he applied for a "married quarter" for Maria Mathews and himself to live in. This attracted significant rental subsidies. They were allocated defence housing at 3 Burrana St, Winnellie, NT, being a property on the RAAF Base in Darwin. Both were permanent members of the RAN at this time.

12. When Philip Mathews was discharged from permanent service into the Active Reserve, Maria Mathews made application for recognition of their marriage and the additional allowances and entitlements were transferred into her name as the permanent RAN member including the "married quarter" and associated rental subsidies at 3 Burrana St, Winnellie, NT.

13. Malcolm Woods and Joanne Woods were married on 30 November 1991. Malcolm Woods applied to the ADF for categorisation as a Member with Dependents. Their marriage was subsequently recognised by the Australian Defence Force (ADF) and Malcolm Woods was granted additional entitlements and posting preferences. These were slightly different as Joanne Woods was not a member of the ADF. They had instead set up a family home at Mt Martha in Victoria where they were raising three sons.

14. In September 2009 Maria Mathews received a new posting to HMAS Manoora based out of Sydney. She took up that posting, electing to leave her husband Philip Mathews in Darwin to continue his civilian employment. She applied for entitlements to maintain their "married quarter" and other allowances on the basis that she was in a relationship with Philip Mathews.

15. In January 2010, Malcolm Woods received a new posting to HMAS Manoora based out of Sydney. He took up that posting, electing to leave his wife Joanne Woods and children in the family home at Mt Martha, Victoria. He applied for entitlements and other allowances on the basis that he was in a relationship with Joanne Woods.

16. Maria Mathews and Malcolm Woods ceased their marriages after meeting at their new posting on HMAS Manoora on or about 19 January 2010. At about this point Malcolm Woods commenced his new position as Chief Petty Officer - a position which placed him directly in the chain of command above Leading Seaman Maria Mathews. They formed a new intimate relationship and by 1 February 2010 their respective marriages had ended. Thereafter they took active steps to conceal their relationship from navy members and Command in order to remain posted together and to continue receiving entitlements and allowances they would not otherwise have been entitled.

17. Philip Mathews, having agreed to the end of his marriage with Maria Mathews, formed a new relationship with Woraluk Kechid during early 2010. He also failed to advise of a change in his circumstances such that he continued to receive the benefit of living in a "married quarter" and the associated rental subsidies and travel allowances received via Maria Mathews, to which he was otherwise not entitled.

Entitlements as ADF members - categorised as Members with Dependents (MWD)

18. As a member of the RAN, the defendants were eligible for a number of entitlements depending on the conditions of her ADF service.

19. The Pay and Conditions Manual ("PACMAN") sets out the conditions of service for all ADF members, and is available by electronic access on the Defence Restricted Network (internal IT system). The PACMAN is also available to all RAN personnel serving on ships, via the Ship's information web.

20. Entitlements are determined by the ADF member's categorisation, including the recognition of any dependant relationship and the nature of their postings. This determines what allowances, housing solutions and entitlements the member and their dependants can receive. All ADF members, serving in a fulltime capacity are placed in one of three categories:

(a) Member with Dependants ("MWD"), means the member has in their household people who meet the definition of dependant. The member needs to be providing a home for them at the member's posting location, and live in it with at least one dependant;

(b) Members with Dependants (unaccompanied) ("MWD(U)"), means the member provides a home for their dependants, but is unable to live with their dependants for service related reasons, such as the ADF member being posted interstate;

(c) Members without Dependants ("MWOD"), means the member does not qualify under one of the other two categories.

21. Division 2 of Chapter 1, Part 3 of the PACMAN sets out that a dependant is any of the following persons who normally live with a member:

(a) The member's spouse;

(b) The member's interdependent partner;

(c) The member's dependent child.

22. Where a member is categorised MWD(U), the PACMAN sets out that they may be entitled to the following:

(a) Separation allowance to compensate for the time they spend away from their dependants for Service reasons;

(b) Food allowance to assist the member to meet the additional food expenses they incur while posted away from their dependants;

(c) Rent assistance where the member is entitled to housing assistance, to subsidise private rental paid for a suitable home;

(d) Service residence, being Commonwealth funded residential accommodation to the ADF member or their recognised dependants;

(e) Reunion travel, paid by the Commonwealth to allow the member to make or receive reunion visits with their recognised dependant. The Commonwealth can meet flight and taxi expenses;

(f) Remote Location Leave travel, to provide relief from the climate and isolated conditions of remote locations; and

(g) Removal costs, to meet the costs for relocation from one location to another.

23. Chapter 8, Part 3A of Division 1 of the PACMAN sets out that a member must apply in order to be categorised as MWD and MWD (U), and that the members Commanding Officer is a delegate for the purpose of determining categorisation.

24. Part 5 of Chapter 1 of the PACMAN sets out that members are responsible for keeping themselves informed about their entitlements, and, where there is a change in circumstances that would affect their qualification for an entitlement, informing their Commanding Officer and any approving authority for housing assistance about that change as soon as practicable.

25. For a member who is categorised as MWD or MWD(U), the relevant changes to personal domestic circumstances would include, but are not limited to:

(a) Separation or divorce from partner/spouse; or

(b) Notification or marriage or de facto status; or

(c) Whether the member has dependent children; or

(d) If a child leaves the family home.

26. For a member who holds MWD or MWD(U) categorisation on the basis of a dependant spouse, Chapter 6 of the PACMAN sets out that a breakdown of that marriage is where the relationship has irretrievably ended. For example, when:

(a) Either party has begun legal proceedings to end the relationship; or

(b) The member has been re-categorised as a member without dependants; or

(c) One or both parties declare that the relationship has ended.

27. All ADF members are trained in understanding their pay, allowance and conditions of services, beginning in recruitment training, and as part of their annual mandatory training. Included is Fraud and Ethics training which ensures that Members are aware and understand their employment conditions and responsibilities, including their obligation to report any change to their personal circumstances which may affect their entitlements, and behave ethically and all times.

28. On 18 August 2009, Maria Mathews applied for categorisation as MWD(U), with effect from 12 October 2009, being the date she began a posting in Sydney aboard the HMAS MANOORA. On that form, she listed her dependant was her spouse Philip Mathews and stated that she maintained a home for him at 3 Burrana St, Winnellie NT. She also signed an acknowledgement that she is required to advise unit administrative staff of changes in her domestic circumstances which may affect her continued eligibility for the allowances payable.

29. Her application was accepted. Within the notification of acceptance it was reiterated that changes to circumstances which may impact approval must be reported immediately.

30. On 6 October 2009 Maria Mathews submitted an application for Rent Allowance. On that application, she marked her categorisation as MWD(U). The defendant also signed a declaration which stated:

the information I have provided in this form is true and accurate. I am aware that the giving of false or misleading information, documents or statements to the DHA is a serious offence under the Commonwealth's Criminal Code 1995 and the Defence Force Discipline Act 1982 and that this legislation imposes substantial penalties, including imprisonment for committing these offences. Any entitlement provided to me as a result of such conduct may be recovered.

31. On 6 September 2010, Maria Mathews completed and signed a Defence Housing Australia (DHA) Rent Allowance Review form. On that form she listed her categorisation (MWD(U)) had not changed. In signing the document, she declared the details provided were true and correct and that she would contact her regional DHA office should any circumstances change.

32. On 12 November 2009, Malcolm Woods applied for categorisation as an MWD(U), with effect on 18 January 2010, being the start date he began a posting in Sydney aboard the HMAS MANOORA. On that form, Malcolm Woods listed his wife Joanne Woods and their three sons as his dependants. Malcolm Woods also signed an acknowledgement that he is required to advise the unit administrative staff of any changes in his domestic circumstances which may affect his continued eligibility for the allowances payable. His application was accepted and within the notification of acceptance it was reiterated that changes to circumstances must be reported to the Customer Service Centre as soon as they occur.

33. On 17 January 2011, Maria Mathews re-applied for categorisation as MWD(U), with effect from 11 February 2011, being the date she began a posting aboard the HMAS Ballarat. On that form, she listed her dependant as her spouse Philip Mathews, and stated that she maintained a home for him at 3 Burrana St, Winnelle NT. Maria Mathews signed an acknowledgement that she is required to advise unit administrative staff of any changes in her domestic circumstances which may affect her continued eligibility for the allowances payable.

34. On 23 September 2010, Malcolm Woods re-applied for categorisation as an MWD(U), with effect on 20 September 2010. On that form, he listed his wife Joanne Woods and their three sons as his dependants. Malcolm Woods signed an acknowledgement that he is required to advise the unit administrative staff of any changes in his domestic circumstances which may affect his continued eligibility for the allowances payable. His application was accepted and within the notification of acceptance it was reiterated that changes to circumstances must be reported to the Customer Service Centre as soon as they occur.

35. Both Maria Mathews and Malcolm Woods completed leave applications for multiple instances of leave during the charge period including "reunion travel".

36. There is evidence of a new relationship between Maria Mathews and Malcolm Woods from 1 February 2010.

37. On or about 19 January 2010 Maria Mathews met Malcolm Woods when he started work on HMAS Manoora.

38. From at least 1 February 2010 they had formed a relationship. Neither of them advised their chain of command or unit administration staff of this relationship. This was in keeping with their obligation to advise of a change in circumstance that may affect their respective categorisation. As a result, maintained MWD(U) categorisation.

39. Emails between Maria Mathews and Malcolm Woods disclose the relationship commenced in January 2010, and that the two subsequently became engaged.

40. On 3 June 2010, Maria Mathews and Malcolm Woods were counselled as a result of concerns of an inappropriate relationship on board the HMAS MANOORA. Maria Mathews was a Cook on the HMAS MANOORA and Malcolm Woods was her direct supervisor as Chief Petty Officer. Both denied that their friendship was compromising.

41. On 2 September 2010, Malcolm Woods and Maria Mathews were questioned about the existence of an inappropriate relationship, and denied that they were in a relationship. At that time it was reiterated that they were obligated to declare an inappropriate relationship in order to allow command teams to make informed decisions on situations in the best interest of the members, and the Unit to which they belonged.

42. Maria Mathews had been approved for private rental assistance for a property at 11/149 Pyrmont St, Pyrmont NSW. Evidence confirms that during early 2010 Malcolm Woods moved into and shared that property with Maria Mathews. For example:

(a) Between 1 January 2011 and 9 February 2012 Malcolm Woods postal address for his various banking and home loan accounts was changed to the address above;

(b) On 29 July 2011, Malcolm Woods submitted an Application for an Australian Passport, in which Maria Mathews signed as his passport guarantor. Both list their residential address as 11/149 Pyrmont St, Pyrmont NSW;

(c) On 26 August 2011, prior to Maria Mathews being deployed to the Persian Gulf. Maria Mathews nominated Malcolm Woods as her primary emergency contact;

(d) Between 28 August 2011 and 5 September 2011, Maria Mathews and Malcolm Woods holidayed in New Zealand with Maria Mathews' parents. Travel records show Maria Mathews and Malcolm Woods listed the Pyrmont address above as their residential address.

Evidence of Separation of Malcolm Woods and Joanne Woods in January 2010

43. Records from the Department of Human Services disclose that Joanne Woods applied for Parenting Payment (Single) and listed the date of her separation from Malcolm Woods as 14 January 2010.

44. Malcolm Woods did not visit Joanne Woods or their 3 children thereafter, nor did he have reunion visits with his children who remained living in Mount Martha, Victoria.

45. Records from the Child Support Agency disclose that on 28 April 2010 the Agency accepted a child support application from Joanne Woods. The Agency determined that Joanne Woods held 100% of care percentage, with 0% attributed to Malcolm Woods. As a result, it was assessed that child support was payable by the defendant to Joanne Woods for the care of their younger children.

46. A close family friend of Malcolm Woods and Joanne Woods confirms that prior to his posting to Sydney, Malcolm Woods and Joanne Woods independently of each other disclosed to him that their marriage had failed.

47. The father of Joanne Woods, who lived next door during the relevant time, confirms that he began financially supporting Joanne Woods and the children as financial support was not forthcoming from Malcolm Woods after his move to Sydney. He also discloses that Malcolm Woods did not return to Melbourne to visit Joanne Woods or the children.

48. In an email dated 18 May 2011 from Malcolm Woods to Maria Mathews confirms the relationship as at 19th January 2010.

Evidence of separation of Maria Mathews and Philip Mathews

49. On 26 August 2011, Maria Mathews nominated Malcolm Woods as her primary emergency contact in a 'National Welfare Coordination Centre Family Registration' form. The primary emergency contact records the wishes of the ADF member as to who is to be notified in the event of being killed, wounded or captured on ADF operations.

50. In the Application for Divorce filed on 17 February 2012 Maria Mathews and Philip Mathews declared they had separated as at 12 September 2009; The supporting Affidavit bears the signature of both Maria Mathews and Philip Mathews who each swore that "the facts of which I have personal knowledge are true", and "all other facts are true to the best of my knowledge, information and belief."

51. Maria Mathews was required to advise unit administration staff of her separation from Philip Mathews, effective at least from 1 February 2010, as this would affect her categorisation, and, accordingly, her eligibility for certain allowances. Maria Mathews:

(a) did not advise unit administration staff of her separation from Philip Mathews until 2 May 2012.

(b) did not disclose that she was MWOD as at 1 February 2010, (rather, used the date of the divorce being granted, 21 April 2012, as the date her circumstances had changed).

Evidence of new relationship between Philip Mathews and Woraluk Kechid

52. Philip Mathews met Woraluk Kechid via a mutual friend in about December 2009.

53. In early 2010, Philip Mathews commenced formed a new intimate relationship with Woraluk Kechid. At the time, she was studying in Sydney. However, in approximately August 2010 Woraluk Kechid moved to Darwin.

54. Records from the Charles Darwin University show on 24 August 2010 Ms Kechid applied to the university. Philip Mathews was her nominated contact person. Thereafter her enrolment and course fees were paid by Philip Mathews.

55. On 17 January 2011, Philip Mathews and Ms Kechid opened the first of several joint bank accounts together. Their address was listed as 3 Burrana St, Winnellie, NT.

56. On 24 June 2012, Philip Mathews submitted a partner sponsorship form to allow Ms Kechid to migrate to Australia. That form disclosed the following:

(a) Philip Mathews and Ms Kechid had decided to commit to a long term spousal or de-facto relationship since at least 30 September 2010;

(b) Philip Mathews and Ms Kechid became de-facto partners from 21 September 2011;

(c) Philip Mathews signed an undertaking on that form that the information he supplied was complete and correct, and that he was aware that providing false or misleading information may result in prosecution; and

(d) Supporting witnesses signed Statutory Declarations attesting to the relationship developing two and a half years prior - at least early 2010.

57. On approximately 20 August 2010, Philip Mathews met with Navy Warrant Officer Monica Jean Roberts. During that meeting, Philip Mathews advised that he lived locally in Darwin at the RAAF base and that his spouse (Maria Mathews) was a serving member based in Sydney at HMAS Manoora.

58. During July 2011, Philip Mathews briefly spoke again with Ms Roberts and said words to the effect that his wife was still living in Sydney.

59. On 27 August 2011, Philip Mathews inadvertently told Ms Roberts and her husband, he was about to marry his third wife (Kechid) in a few months' time.

60. Philip Mathews did not inform Defence Housing Australia that he had separated from MARIA. Defence Housing Australia records show that Philip Mathews attended the Darwin Office 5 September 2011, and enquired about processes when there was a breakdown of marriage. Philip Mathews falsely represented to a DHA official that "the marriage has not broken up just yet, but it could be a possibility." He was informed of his removal entitlements and that he had 28 days to vacate the property once categorisation had changed; and

61. Emails between Maria Mathews and Malcolm Woods disclose that all parties were aware of the others' relationship status:

Particulars of loss caused to Commonwealth Entity - Department of Defence

62. The financial advantage obtained during the charge period comprised of the following allowances and benefits which were paid into the defendant's nominated ADF pay bank accounts. The amount paid to Maria Mathews by the Department of Defence was $74,921.75, and the amount to which she was entitled was $35,382.73. As such, the loss to the Department of Defence was $39,539.02.

Maria Mathews (Charge 2) / Philip Mathews (Charge 1)

63. Maria Mathews and Philip Mathews reached an agreement that they would maintain the deception that they were in fact married, which allowed for the defendant to maintain the MWD(U) categorisation applied for (set out above), and caused a loss to Department of Defence. This included a subsidised service residence and Reunion Travel allowance.

64. As a result, there was no entitlement to a DOD subsidised Service residence as Philip Mathews was no longer a dependant for the purpose of MWD(U) categorisation. Members may be required to make a contribution based on the market rent attached to the service residence. The defendant paid a contribution out of her ADF pay and as such the financial advantage in respect of the Service Residence is calculated by subtracting the defendant's contribution from the total market rent paid by the DOD. The loss to the Department of Defence was $35,960.40.

65. There was no entitlement to Reunion Travel paid for by the DOD on the basis that Maria Mathews was classified MWD(U). The loss to the Department of Defence was $2,851.69.

67. As a result of Malcolm Woods dishonestly maintained a MWD(U) categorization during the charge period, by:

(a) concealing the date of his separation the subsequent breakdown of his marriage, shortly after lodging his MWD(U) application dated 12 November 2009; and

(b) re-applying for MWD(U) categorisation on 23 September 2010 and materially misrepresenting his personal circumstances,

he obtained a financial advantage from the DOD, being allowances and benefits totalling $42,505.78.

68. The amount paid to Malcolm Woods was 86,573.76, and the amount to which he was entitled was $44,068.01. The loss to the Department of Defence was $42,505.78.

69. Reunion travel was claimed on an "own means" cent per kilometre basis and paid out to Malcolm Woods on the basis of his claim that in order to reunite with his wife and children he was travelling from Sydney, NSW to Mount Martha, VIC in vehicle QLS135.74 Malcolm Woods did not undertake the travel he represented to the DOD:

(a) Malcolm Woods did not reunite with Ms Woods or his children during the relevant periods;

(b) Malcolm Woods did not have a valid driver's licence during those periods;

(c) Vehicle QLS135 was a vehicle registered in Malcolm Woods name until 6 October 201077 (and remained unregistered thereafter), but remained at the Mount Martha address from the time Malcolm Woods was posted to Sydney to the time it was disposed in 2013;

(d) In relation to the period 18 to 27 March 2011, Malcolm Woods made and paid for a booking for him and Maria Mathews for a holiday apartment in Rockingham, WA from 18 to 21 March 2011; and

(e) Malcolm Woods' phone and/or banking records disclose that he was not in Victoria during those periods.

70. The prosecution submitted that in assessing the objective seriousness of the offending, the Court should consider the role of each offender, the course of conduct, injury, loss or damage resulting from the offence, and the degree to which the offenders have shown contrition for the offending.

71. The prosecution submitted that the motivation for committing the offence was financial gain, and referred to the fact that there was no evidence of financial hardship before the Court.

72. Counsel for the offenders submitted that the offending was opportunistic, although spread over an extended time period, and "not driven by greed, in the sense of the abstracted monies being applied for the payment of luxuries". Nonetheless, it was conceded by counsel for the offenders that some parts of the defrauded monies do not comfortably relate to 'necessities'.

73. The prosecution submitted that the offending involved a significant degree of effort and organisation, including that Maria Mathews and Malcolm Woods falsely denied their relationship when "counselled" by command about allegations of an inappropriate relationship, and that Maria Mathews and Malcolm Woods submitted forms containing false information in relation to the maintenance of rental properties, applying for leave allowances and Maria Mathews, continuing the rental subsidy for the Darwin service residence.

74. Counsel for the offenders submitted that the course of conduct was not particularly sophisticated, as no false names were employed, no false documents were created, no elaborate cover-up was engaged and the offending was "obvious". Counsel for the offenders submitted, "It consisted, in essence, of all three offenders telling lies about the end of relationships and the start of new relationships in order to continue to attract benefits to which they had been entitled because of their earlier status as assessed by their employer, the Commonwealth".

75. The prosecution submitted that the offending forms part of a course of conduct, and referred to the following:

(a) The charge period is close to two and a half years in duration;

(b) There were multiple acts of concealment of the change in relationship status by each defendant;

(c) Maria Mathews and Malcolm Woods each submitted multiple forms containing false information; and

(d) Philip Mathews made two false representations in Darwin in late 2011.

76. The quantum of the fraud is particularised above at [62]-[69].

77. The role of each offender may be characterised as follows:

78. Maria Mathews was the principal applicant and beneficiary of the entitlements paid to both herself and Philip Mathews. However, both offenders were involved in actively concealing the end of their relationship, and the commencement of their new relationships. Both were also defence members of significant rank and length of service, and were aware of their legal obligations to advise of a change in their circumstances. Maria Mathews completed multiple forms and applications during the charge period where false information was provided to the Department of Defence, her chain of command, and other organisations which further advanced the fraud. Most of these contained a declaration that the contents were true and correct and an acknowledgment that changes in circumstances are required to be declared.

79. Malcolm Woods was the principal applicant and beneficiary of the entitlements paid to him. It was further submitted that the evidence is clear that this offender's marriage ended immediately prior to his posting to HMAS Manoora. This offender was also a defence member of significant rank and length of service, and was aware of the legal obligation to advise of a change in his circumstances. This offender also completed multiple forms and applications during the charge period where false information was provided to the Department of Defence, his chain of command, and other organisations which further advanced the fraud. Most of these contained a declaration that the contents were true and correct and an acknowledgment that changes in circumstances are required to be declared.

80. In relation to objective seriousness, as set out at [78]-[79], it is clear that these are serious offences.

81. Maria Mathews is 53 years of age, Malcolm Woods is 49 years of age, and Philip Mathews is 54 years of age.

82. Counsel for the offenders submitted that the offender Maria Mathews currently resides with the offender Malcolm Woods, in the small town of Derby in Western Australia. They were for a period of time working with the Aboriginal corporation in Derby. They have now started a partnership performing catering on a part-time basis, with two employees. Maria Mathews is involved with the Country Women's Assocation, the local church, the choir and Gudamal, the local Aboriginal Corporation. In relation to this, counsel for the offenders stated that Maria:

...is hopeful, given the opportunity, that she will assist...in developing what she describes as micro industries, collecting and marketing bush honey, seafood, and things of that nature.

83. Maria Mathews relocated to Derby with Malcolm Woods to be with her father who has now passed away. She now resides there on a small plot of land in a caravan. Counsel for the offenders submitted broadly that they are involved with the local Aboriginal community, and are living an austere lifestyle.

84. The prosecution referred to the fact that the pleas of guilty were entered on the first day of the contested hearing in the Magistrates Court. The prosecution also acknowledged that the offenders made full repayment of the alleged overpayment in December 2016 on a "without prejudice" basis.

85. Counsel for the offenders submitted that repayment reflected both remorse and the facilitation of justice. It was submitted that it was immaterial that the payment was made at the time that it was on a "without prejudice basis", as "that was obviously done on legal advice and for good reason". It was submitted that the repayment "speaks volumes for the virtues of insight, contrition and reform and not the legal boilerplate accompanying the repayment".

86. The prosecution did not cavil with the proposition that the offenders were remorseful, and I accept that the offenders are remorseful and have facilitated justice.

87. In evidence before me were a number of character references for each offender.

88. I received two references from the Chief Executive Officer of Winun Ngari Aboriginal Corporation. The corporation owned a business where both Maria Mathews (manager) and Malcolm Woods (assistant manager/chef) were employed. Those references included the following:

[Maria Mathews and Malcolm Woods were] employed through Winun Ngari Aboriginal Corporations Commercial Arm Frilled Enterprises PTY LTD from April to October 2017...[at] the Kettle Café Derby in the Kimberley Region of WA, one of a number of businesses the Corporation owns and operates. [They] worked independently and autonomously...

[They] were honest and upfront in all [their] dealings with our Corporation. Prior to commencing employment, [they] advised us that there was an outstanding matter with the ACT Courts and this might impact on the time [they] were able to commit to our employment. We are aware that [they] are facing the courts with a charge of obtaining a benefit by deception. Whilst employed by the Kettle Derby [they were both] exceptional worker[s] who...were able to trade at a profit for the last couple of months of their employment, the first time since the business opened in early 2016.

They catered for the tourist market and were getting increased local business which was a reflection of the quality of food and service they provided. Due to the excellent food and management, the Kettle Café was listed as the best eating place within the Derby West Kimberley Shire by tourist and locals. They also employed local Indigenous people who may not have been given opportunities at other local businesses.

It was unfortunate that [they] have left our employment and returned to the ACT to deal with the matter before the Courts...since [their] departure we were unable to secure an alternative management team to the same calibre and ceased trading.

89. I also received the following individual references.

90. In addition to the reference above at [88] have before me a reference under the hand of a Commander in the Royal Australian Navy (Navy), dated 8 November 2017, which includes the following:

Maria was the head chef onboard Sirius, in charge of the galley which provides three hot meals a day seven days a week when at sea for the 73 members of Ship's Company. Maria was not your typical sailor, as she was older and more mature than your average sailor and in fact Maria was commonly referred to as the Ship's mother. This is a true testament to the way she cared and supported every member of Ship's Company whether senior or junior to her in rank. As a Navy chef, Maria was outstanding, easily the best chef I have ever had the pleasure of serving with in my 27 years of naval service. Maria was always dependable and extremely dedicated, so much so that she received a Commanding Officer's Commendation prior to leaving the ship in 2016.

...

In my time knowing [Maria] Mathews I would categorise her as a role model sailor who lived and breathed the Navy Values of Honour, Honesty, Integrity, Loyalty and Courage. I have no hesitation in highly recommending her character as mitigation for her court case; or for any future employment.

91. In addition, I have before me a reference under the hand of a Chief Petty Officer in the Navy dated 9 November 2017, which includes the following:

Maria is very aware of the severity and potential consequences of this matter that has been a topic of discussion when we have engaged in the social environment.

Maria will go out of her way to help others and she presents herself as a very caring and polite natured person. Maria has on several occasions, lifted the spirits of the personnel within the Command building at HMAS Stirling by providing special surprises at certain times including Easter and Christmas to approximately 40 Defence and Civilian personnel located within the building at her own expense and in her own time. This open generosity to people that she doesn't even work for is a testament to Maria's character that has continued to the present day. During conversations with Maria, I have learned that she has provided much of her own time and resources to assisting the local Aboriginal communities in the Northern part of W.A. Maria welcomes everyone that I know with a warmth and generosity that is not often displayed by others.

92. In evidence in relation to Philip Mathews was a reference from someone who has known the offender for over 10 years, dated 17 November 2018. The reference includes the following:

I have known Philip for over 10 years, both commercially and socially. I was very surprised to learn of the predicament he is in. I am aware that he has pleaded guilty to a charge of obtaining a benefit by deception.

I have always found him extremely honest when he worked as a subcontract driver for my Limousine and Bus business.

Both Philip and his partner shared an apartment with me for 3 years and would say that I have never met a more hard working and sincere couple.

I understand that full restitution has been made and I know this has caused financial stress for them. Philip is working on Groote Island as a Mining dump truck operator and Woraluk is a Chef. They are working extremely hard to restore themselves to a reasonable financial situation.

...

I know he truly regrets his actions and would say that they were completely out of character for the man I know.

93. Also before me is a reference under the hand of a co-worker and subordinate which was undated, and includes the following:

I have known Philip Wayne Mathews for approximately 4 years as both a co-worker and a subordinate. I have been made aware of his guilty plea to the charge of obtaining a benefit by deception. When I was told of this I was very surprised to say the last as I have always found Philip to be one of the most honest (to a fault) people that I personally know. We have had many discussions about this case and I have been very aware of his regret and remorse for making a bad decision. I am under the impression that he has paid back in full the amount in question (and more). I am sure the gravity of the situation is not lost on him as he has engaged a psychologist to help him with some issues that have been exacerbated by this case.

94. Finally, before me is a reference under the hand of the offender's line manager, which was also undated, and includes the following:

Philip asked me to write a character reference letter, but the truth is that I had already started to make reference to his character, on this letter, after Philip had shared his past with me. It sounded completely out of character from the honest person I had become to know - I was personally shocked to say the least.

...

Philip has made mistakes, and I personally know he is incredibly remorseful, and is willing to do whatever it takes to make reparations, financially and emotionally, if possible. But to do that, Philip needs you to give him an opportunity. I just hope you will recognise the power you wield with regard to the future of this man and make a fair decision.

95. In addition to the reference above at [88] I have before me a reference under the hand of a Chief Petty Officer in the Navy, dated 9 November 2017, which includes the following:

I was surprised to learn of these proceedings when Malcolm informed me, as in my opinion he has always been a diligent worker, always respectful to others regardless of whom they are and has always displayed his passion to the Navy values of Honor, Honesty, Courage, Integrity and Loyalty and he displays a personal responsibility to minimize waste and improve processes through policy and procedures for his core role as Chief Petty officer Military Logistics - Chef.

Malcolm has been trusted with and has achieved excellent results in dealing with people from all areas of Defence, International visitors, Federal and local Government officials, School groups and Work experience students in his role as the Visits Liaison Officer Assistant. These visits are often highly demanding and carried significant personal responsibility to ensure that sufficient planning was in place in preparation for each visit. Malcolm would often be the first contact with the Royal Australian Navy that these visitors met before moving onto the main purpose of each visit and the subsequent feedback from these visits has been exceptional. Malcolm was also solely responsible for the organization and conduct of Historical type tours of HMAS Stirling by retirement home and other local citizen groups that provide an insight into today's Navy and the historical aspect of Garden Island in which the RAN establishment, HMAS Stirling is located. These types of visits are often challenging due to the groups age and mobility that often require last minute change. On many occasions, Malcolm has arrived early, used his own vehicle or provided assistance at his own expense and time to ensure that their experience is as enjoyable as can be.

96. I take these references into account on sentence.

97. In addition to the references listed above, I also have in evidence a number of commendations. In relation to Maria Mathews, I have before me the following commendations in evidence:

(a) A letter of congratulations to Maria Mathews for receiving an an ADF Gold Group Commendation dated 13 April 2010,

(b) A letter of congratulations to Maria Mathews from Chief of Navy R.H. Crane for the award of a Chief of Joint Operations Gold Commendation to Assail Two dated 30 April 2010,

(c) A confirmation letter to Maria Mathews on the Receival of the Group Bravery Citation dated 8 August 2011,

(d) A letter of congratulations to Maria Mathews from Warrant Office of the Navy M.R. Tandy for Receival of the Group Bravery Citation dated 26 August 2011;

(e) A letter of congratulations to Maria Mathews from Chief of the Defence Force D.J. Hurley for Receival of the Group Bravery dated 2 September 2011,

(f) A letter of congratulations to Maria Mathews from NSW Premier Barry O'Farrell for Receival of the Group Bravery Citation,

(g) An invitation to Maria Matthews to an Investiture Ceremony dated 27 February 2012; and

(h) A letter of thanks to Maria Mathews following Operation Slipper dated 31 march 2012.

98. In relation to Malcolm Woods, I have before me the following commendations:

(a) A letter of appreciation to Malcolm Woods for service on the HMAS Ballarat dated 29 June 2012; and

(b) A letter of commendation to Malcolm Woods for service on the HMAS Ballarat dated 29 June 2012.

99. I take these commendations into account on sentence.

101. The offenders pleaded guilty on 28 July 2018 on the first day of hearing at the Magistrates Court.

102. In Xiao v R [2018] NSWCCA 4; 96 NSWLR 1 (Xiao) at [269]-[278], a five-judge bench of the NSWCCA held that s 16A(2)(g) of the Crimes Act 1914 (Cth) requires a court to take into account the utilitarian value of a guilty plea when considering the fact that an offender has pleaded guilty. To the extent that Tyler v R [2007] NSWCCA 247; 173 A Crim R 458 (Tyler) found otherwise it should not be followed: Xiao [278]; DPP (Cth) v Thomas [2016] VSCA 237 (Thomas) at [7]. Whether or not s 16A(2)(g) permitted a purely utilitarian discount was previously the subject of conflicting authority at the intermediate appellate level in NSW, Victoria and the ACT: see Tyler; DPP (Cth) v Gow [2015] NSWCCA 208, R v Harrington [2016] ACTCA 10; Thomas.

103. In Huang aka Liu v R [2018] NSWCCA 70, Bathurst CJ at [9], summarised the approach to be taken in Commonwealth matters when dealing with the utilitarian value of a guilty plea.

104. In Naizmand v R [2018] NSWCCA 25, the court described the Crown's submission concerning the effect of Xiao as expanding the operation of s 16A(2)(g) to include utilitarian considerations rather than being limited to them, that is, in addition to considerations relevant to whether or not a particular plea facilitated the course of justice. The court appeared to accept that submission, going on to state, at [43]:

In addition, ... the Court in Xiao also recognised at [272] that contrition and remorse as sentencing considerations are separately accounted for in s 16A(2)(f). While the Court acknowledged that other factors in s 16A(2)(a)-(p) will from time to time overlap in the sentencing exercise for Commonwealth offences, the value of the plea as a subjective consideration under s 16A(2)(g) does have traction, particularly where, as the Court noted at [269], the section provides no express limitation on the manner in which the plea is to be taken into account.

105. The overlap between remorse, contrition and a guilty plea, all of which are separately listed in s 16A(2) was considered again in Singh v R [2018] NSWCCA 60 at [28]-[30].

106. I will allow a discount of 20% for each of the offenders for their plea of guilty as evidence of the offenders' remorse and acceptance of responsibility.

107. The offenders have spent no time in custody referable to this offence.

108. Counsel for the offenders submitted that there had been considerable delay in these matters not attributable to any fault on the part of the offenders. The offending took place between 2010 and 2012, and an investigation commenced in about August 2011, but the matter as not referred to the Commonwealth DPP for more than 4 years. The offenders rely on delay until the end of 2017, after which delay arose as a consequence of an unsuccessful judicial review application.

109. In written submissions, counsel for the offenders submitted that the delay was substantial, undue and unexplained in any meaningful fashion. Counsel submitted that in in the intervening period of 6 ½ years, each of the offenders "has gotten on with his or her life and each has done so without coming to the attention of authorities in any other way". Further, counsel submitted that it was "significant that full restitution was made by the offenders after their offending came to light and shortly after charges were pressed".

110. Counsel submitted that consistent with the authorities, substantial delay not attributable to the fault of an offender will mitigate a sentence: see Chandler v The Queen [2010] VSCA 338, where Maxwell P and Weinberg JA at [16] refer to the comments of Ashley and Weinberg JJA in R v Talia [2009] VSCA 260 at [22] as follows:

Delay may stand as a powerful mitigatory feature. If the accused has not re-offended in a lengthy period between offending and sentence, it will tend to show that there is an enhanced prospect of rehabilitation. There is also a question of fairness in the event that a matter is left hanging over an offender's head during an apparently leisurely process of investigation and prosecution. The longer the period of delay, the greater its likely weight as a mitigatory circumstance, particularly when the delay is not attributable to the conduct of the accused. Again, whilst it is not necessary for delay to operate as a circumstance of mitigation, that it be unexplained, the fact that it is not attributable to the conduct of the accused will likely make it of greater significance.

111. Counsel also referred to the well-known observations of Street CJ in R v Todd (1982) 2 NSWLR 517 at 519-520, quoted with approval by the High Court in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 (Mill) at 64:

it would be wrong, in my opinion, to disregard the practical situation that the appellant had already served a substantial period of imprisonment in Queensland for offences so closely related in time and character to the Sydney offences.... . . . 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.

112. Counsel further referred to the authorities of Marasco v The Queen [2016] VSCA 85 and Coles v R [2016] NSWCCA 32 which took the same principles on delay into account.

113. At the hearing, counsel for the offenders further referred to the authority of Scook v The Queen [2018] WASCA 114, where the Court at [18]-[26] considered the cases of R v Schwabegger (1998) 4 VR 649; R v Merrett [2007] VSCA 1; 14 VR 392 (Merrett) and Duncan v The Queen (1983) 47 ALR 746, to the effect that delay in and of itself is significant, regardless of whether there exists an explanation for delay.

114. Counsel submitted that there had been subsequent rehabilitation for each of the offenders in the intervening period of five years (not including the judicial review period). The prosecution conceded that there was "significant evidence of rehabilitation" during this time.

115. The prosecution submitted that delay is not a matter provided for under s 16A(2) of the Crimes Act, but nevertheless did not cavil with the submission that delay can mitigate a sentence where it is undue, having regard to the length of the delay, the explanation for that delay, and its consequences for the offenders: see Qi Zhou v R [2014] VSCA 123 at [22], where the Court stated as follows:

So far as delay is concerned, it is to be remembered that there is no automatic discount in every case of asserted delay. The reasons and circumstances surrounding a delay need to be examined in each case. In the present case there was the complexity of the case, the volume of the material, the chronology to which we have referred well justify the judge's conclusion that the overall period of delay was not extraordinary or inordinate. That said, the judge in any event appropriately took into account the elapse of time between the execution of the initial search warrant and the imposition of a sentence upon the applicant.

116. The prosecution conceded that there had been delay involved in this matter, but submitted that the delay was attributable to the complexity of the investigation and the protracted nature of these proceedings.

117. The prosecution submitted that delay may otherwise be relevant to the extent to which an offender has achieved rehabilitation during the delay, and the extent that it constitutes a form of punishment in itself, given the uncertainty of the sentence hanging "over one's head": Merrett at [36]-[39].

118. The prosecution submitted that the delay should be placed in context of the initial report of concerns to Department of Defence investigators in 2011, after which the offending continued for a further 8 months, as well as the complexity of the investigation, which required evidence from multiple external government and civilian sources.

119. In my view it is appropriate to take into account the delay of five years as a mitigating factor, in particular relevant to the now rehabilitated offenders and the uncertainty they faced in the interim.

120. In the case of federal offences, it is implicit in Part IB of the Crimes Act that I must have regard to current sentencing practices throughout the Commonwealth: see Pham at [18]; [23]-[24]. Regard must be had to sentencing decisions of intermediate appellate courts in comparable cases as "yardsticks" that may serve to illustrate but not define the possible range of sentences available: see The Queen v Pham [2015] HCA 39; 256 CLR 550 (Pham) at [29]; Hili V The Queen [2010] HCA 45; 242 CLR 520 at [53]- [54].

121. The offenders referred to the case of R v Chapman [2001] NSWCCA 457, which involved a Sergeant in the regular Army who was charged with defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth). The Sergeant made 313 fraudulent claims resulting in payments from the Department of Defence to which he was not entitled. The offender had no criminal history, and had made a career out of his military service. He had not made any reparation. He was sentenced to three years' imprisonment, to be released after 22 months upon entering into a cognisance to be of good behaviour for a further 14 months. A defence appeal was dismissed.

122. The offenders also referred to the case of Director of Public Prosecutions v Reynolds [1999] VSCA 224, which also involved charges of defrauding the Commonwealth contrary to s 29 of the Crimes Act 1914 (Cth). The offender was an employee of the Department of Defence, having engaged in an elaborate fraud, involving the submission of false claims by ex-Defence Force employees for the payment of allowances and then diverting those payments in her own favour. The offence involved the offender forging the names of the various payees. The total overpayments amounted to $110,409.76 arising from 122 false claims, and by the time of sentencing the offender had made no reparation. A plea of guilty was entered on the third day of the trial. There was evidence that the offender had used the abstracted funds for the payment of living expenses and necessities rather than luxuries. The offender received a sentence of 18 months imprisonment, wholly suspended. This was overturned by the Court of Appeal, which imposed a concurrent period of 18 months imprisonment in relation to two counts, with the release of the offender after serving 180 days and upon her entering into a recognisance to be of good behaviour for a period of two years.

123. The offenders finally referred to the case of R v McKendry (unreported, Victorian Court of Appeal, June 1996, Winneke P, Charles JA and Southwell AJA). The offender pleaded guilty to a charge of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth). The offender was employed as a travel clerk with the Australian Army and on 326 occasions over a two year period he generated false documents for fictitious travel and forged signatures to divert the relevant monies in his favour. The total amount abstracted was $377,101.65. The offender was 27 years of age with no criminal history, and had cooperated by making admissions. He demonstrated remorse. The offender received a sentence of 3 years imprisonment, to be released after 2 years upon entering into a bond to be of good behaviour for three years, which was upheld on appeal.

124. The prosecution referred first to the case of R v Minassian [2007] QCA 39, in which the offender pleaded guilty to two counts of fraud contrary to s 134.2(1) of the Criminal Code 1995 (Cth), in which the total amount abstracted was $20,723.50. The offending occurred over two years and three months. In relation to the first count, the offender claimed to Centrelink that he was single when he was married, and failed to advise of income from employment. In relation to the second count, the offender made a claim for benefits under a false name. The offender pleaded guilty on the first day of the trial. He had a previous conviction for two dishonesty offences, and was on probation at the time that he committed these offences. The offender had made attempts at reparations, and had repaid half the debt by the time of sentence. The offender had a gambling addiction and depression, with a 12 month old child and financially dependent partner. His level of remorse was considered to be low. The offender received a total sentence of 3 years imprisonment, to be released after 9 months upon entering into a 3 year good behaviour order. The sentence was upheld on appeal.

125. The prosecution also referred to the case of Thomson v R [2014] NSWCCA 88, in which the offender pleaded guilty to two counts of fraud contrary to s 135.1(5) of the Criminal Code 1995 (Cth), in which the total amount abstracted was $54,771.67. The offending occurred over a period of four years. In relation to count one, the offender received Newstart allowance under a false name. In relation to count two, the offender received a disability pension under a false name. The offender entered an early plea of guilty, and had made partial reparations in the amount of $5,824 at the time of sentence. The offender had a previous conviction for indecent assault. The offender had a gambling addiction and was assessed as having a low risk of reoffending. There was a three year delay between the issue of the search warrant and prosecution. At first instance, the offender was sentenced to 2 years imprisonment, to be released after two months for count one, and 9 months imprisonment for count two, with partial cumulation, which resulted in a total sentence of 2 years imprisonment with 14 months to serve. An appeal by the offender was refused on the basis that the offender was not denied procedural fairness just because an ICO report was ordered and a custodial sentence was ultimately imposed.

126. The prosecution also referred to the case of R v Desborough [2010] QCA 297, in which the offender pleaded guilty to one count of fraud contrary to s 134.2(1) of the Criminal Code 1995 (Cth). The total amount abstracted was $49,334.55. In this matter, the offender failed to advise Centrelink when she began living with her partner, and also failed to declare, or under declared, her intermittent employment. The offender made an early plea of guilty, and participated in a record of interview where she made admissions. She had a minor criminal history and her offending was driven by need as opposed to greed, as she cared for young children. She made attempts at reparation, and was assessed as having good prospects for rehabilitation. The offender was sentenced to two years imprisonment, to be released after six months on recognisance for three years. This was reduced on appeal to two years imprisonment to be released after three months.

R v Woods; R v Mathews; R v Mathews [2019] ACTSC 33

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (228 paragraphs)

R v Woods; R v Mathews; R v Mathews [2019] ACTSC 33 (15 February 2019)

Legislation Cited (1)

Cases Cited (5)