REGINA v LOPEZ [1999] NSWCCA 245 | Case summary

1 SPIGELMAN CJ: I call on Adams J to deliver the first judgment. 2 ADAMS J: The appellant, Eduardo Lopez, was convicted in the District Court at Campbelltown on 11 February 1999, upon his pleas of guilty, to four counts of imposing upon the Commonwealth under s 29B of the Crimes Act 1914 (Cth). The maximum penalty under that section for each offence is imprisonment for two years. Her Honour Judge Morgan sentenced the appellant to six months imprisonment on each count, ordering that the sentences were to be served concurrently. 3 The substance of the Crown case was that the appellant, during most of the period from 1 January 1992 to 28 February 1996, was in receipt of two payments from the Department of Social Security, one of which he was entitled to but the other of which he was not and which he obtained under the false name, for relevant purposes, of Eduardo Chavez. The double payments appear to cover the periods 3 August 1992 to 30 June 1994, 17 March 1995 to 14 September 1995 and December 1995 to 23 February 1996. It was not disputed that the total amount overpaid was $23,891.66. 4 The appellant, who was twenty-two years old when the frauds commenced had been born in Peru and came to Australia in 1992. Between November 1991 and February 1992 whilst visiting his family there he met and married his first wife but returned to Australia without her. He was undertaking studies at TAFE in accounting. He was unable to find employment although he was prepared to study part time. He could not afford to bring his wife from Peru to Australia, nor to pay immigration expenses and other incidental payments relating to obtaining a visa for her. Her Honour adverted to his statement "that he needed the money" in terms to which, to my mind, suggest that her Honour considered that he did act out of need rather than greed. Certainly, there was nothing in the evidence to suggest the contrary. He obtained employment in July 1996 and has remained in employment since that time. About a year after his first wife came to Australia in 1995 they were divorced. He has since remarried and is presently supporting his wife. 5 The offences were discovered by a computer match performed, as I understand it, routinely by the Commonwealth Services Delivery Agency. On 20 March 1997 the appellant declined the invitation to participate in a taped record of interview but, after being cautioned, said "...I admit that I have done what you have said. I do not wish to say any more. It will only cause trouble." It seems, however, that despite this admission and his desire to say nothing further, his denial, of course, that he had claimed a benefit using the name Chavez was a lie. However, I do not think that this is material in light of his initial candid admission. 6 The appellant said this about the offences during his evidence before the learned sentencing judge- "Bringing my wife here was very important. I wasn't with her and there was need for her to come here and I needed the money and I needed to pay expenses for immigration and phone calls to see how the status of her visa was. I guess I over-expend. Having had the money, had my access, I completely disregarded for - I guess I was selfish in a way. I did not look into it thinking that it was a very serious offence. I - sometimes people do make mistakes in life and such big mistakes like the one I made and should have known that the consequences were so great I've got to notify the social security straight away. After my marriage break-up and all that, I want to live a normal life. I've got a good job and I don't believe that's what everybody strives for. I don't know, it's up to your Honour to decide whether I should stay outside of gaol or in." 7 It appears that by arrangement with the Agency that the appellant commenced repayment on 1 May 1997, shortly after his initial interview, by fortnightly deductions to the Commonwealth from his salary and that he had, to the date of his conviction, paid $5,139.53. Her Honour ordered reparation in the sum of $18,752.13, when she sentenced the appellant, pursuant to s 21B of the Crimes Act 1912. 8 Both in terms of his admission of the offence and his plea of guilty as well as other evidence from the Probation and Parole Service there was more than adequate material justifying a conclusion that the appellant was remorseful and contrite. Her Honour did not, however, advert to this consideration, although she mentioned that his plea of guilty "is a matter to be taken into account". It may be that the element of contrition was not regarded by her Honour as significant because of the serious misapprehension of the circumstances of the case under which, it appeared, her Honour laboured. In giving judgment, her Honour said -

"Although it has been my view that the offenders who defraud the Commonwealth should be repaying from their own money that they earn themselves, I think overall that the problem here is that it was such a persistent offending over a period from early 1992 until he was spoken to in 1997. There was no suggestion that the prisoner at any time, although he says he realised the seriousness of what he was doing, there is no indication that he was going to stop before he was spoken to and arrested in relation to this matter. Indeed, the prisoner has said himself to the probation officer who has seen him today that it was the most stupid thing he has ever done, and he quite frankly conceded, as he did before me in evidence, that he just needed the money." 9 As I have already, I hope, made clear, the appellant received no benefit at all from 28 February 1996 (from which, as I understand it, it can be inferred that he made no false claim after 14 February 1996), over a year prior to his being confronted with the allegation of fraud. 10 It is most regrettable that neither counsel for the appellant at the time, who is not appearing for him on this appeal, nor counsel for the Crown corrected her Honour's mistake. It is also regrettable that it appeared that counsel for the Crown at the hearing made a submission which was relied on by her Honour for the finding to which I have adverted. 11 The appellant pleaded guilty on the first occasion upon which he was legally represented before the committing magistrate at the Parramatta Local Court on 25 November 1998. The apparent delay between the admission by the appellant in March 1997 and the occasion upon which he pleaded guilty is not explained in the material before us. It appears that a summons commencing the committal proceedings was only issued some time shortly before October 1998. The learned sentencing judge quite rightly referred to the seriousness of offences of this kind. In R v Jennifer Rose Purdon (unreported, NSW CCA 27 March 1997), Hunt CJ at CL (with whom the other members of the Court agreed) said - "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 payments of benefits and therefore hardship to those whose need is urgent. It has also been said 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 of providing funds for the social security system to operate and the even heavier burden created by the widespread abuse of it by frauds such as this. The rule is not based upon the facts 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: see R v David Fernanda Medina at 6; R v Meares (1991) 53 A Crim R 141 at 145." 12 This approach to issues arising from sentencing offenders guilty of crimes such as these has been stated often and it is unnecessary to cite more authorities. Having regard to the events following discovery of the appellant's fraud, to which I have already referred, reference should also be made to the decisions of this Court in R v Christian Lawrence Blair (unreported, NSW CCA 17 December 1997) and Winchester 58 A Crim R 345. Although Blair could be distinguished on the facts from this case, the relevant principle was extracted by Hunt CJ at CL and set out in Winchester in terms with which the other members of the court agreed in the following way at p 349 - "...Where an offender at the present time makes immediate admissions of guilt but is permitted by the Department to continue for a substantial period to make regular repayments of the amount involved in the offence before any action is taken to prosecute the offence, what may have been required by way of punishment if the prosecution had been instituted speedily is no longer necessarily required when the prosecution is, without any valid explanation, brought on tardily. That very special circumstances or qualification to the general rule that general deterrence requires the imposition of a custodial sentence in these cases, has been applied not infrequently in the District Court ..." 13 It is necessary briefly to refer to parts of the conversation that occurred between Mr Jones, who was the investigating officer of the appellant on the occasion when he was confronted with his fraud and following his admission this conversation occurred - "HE SAID: What would happen now?' I SAID: I would return to my office and prepare a report on the interview, an overpayment would be calculated and he would be advised by letter of the amount owed. Your file would also be referred to the Department of Public Prosecutions in order to establish if any action would be taken in relation to receiving payments you were not entitled to. You will be advised of any proceedings to be taken. HE SAID: What is this Public Prosecutions? I SAID: All files that deal with fraud against the Department of Social Security are referred to the Department of Public Prosecutions in order to establish if the matter is prosecuted. If the matter is prosecuted a summons is issued and the person must appear in court to answer any charges that are laid. HE SAID: Why does it have to go to them, I have agreed that I have made a mistake and I am willing to repay any money. I SAID: Mr Lopez, I am just here to conduct an interview about certain matters, you have stated that you do not wish to continue with the interview. I will now write my report and you will be advised of any further matters by letter." 14 It has not been suggested that, at the time or after an agreement had been reached with the Department for the purpose of paying by instalments the amount defrauded, it was indicated that criminal proceedings would be set in train. The appellant might be forgiven for supposing that the agreement with the Department that he could repay the money indicated in the way he had proposed it, which was not dissented to at the interview, meant that he would not be so prosecuted. 15 Be that as it may, it seems to me, that the circumstances set out in Winchester apply here to significantly affect the sentence. With all due respect, it seems to me that the reasons for judgment in the court below are affected by two significant errors: first, the misapprehension that the appellant's persistent offending continued until he was confronted by the Agency in March 1997, whereas it had in fact voluntarily ceased in February the previous year; and secondly, failing to take into account the unexplained substantial delay in commencing criminal proceedings. 16 I am also concerned by the absence in her Honour's judgment of any reference to s 16G of the Crimes Act 1912, although s 16A is referred to on a number of occasions. I note that s 16G of the Act was referred to in written submissions handed up by the solicitor for the Director of Public Prosecutions, however. In my view, sentencing judges who are required to apply particular statutory provisions directly affecting the calculation of a sentence, such as s 16G, should refer to it in their judgment. Amongst other things, this serves the valuable purpose of assuring the prisoner that all material facts which may weigh in his or her favour have been given due consideration by the court. In this vein, I should mention that the appellant was but twenty-two years of age when they ceased. Though not a youth, he was a young man at the time of the offences. 17 The error concerning continuation of the offence until detection was, perhaps, induced by the submission made by the solicitor for the DPP to that effect in written submissions handed up to her Honour. Whilst conceding this error and the role of the Crown in bringing it about, in this court Mr Roser for the DPP submits, in effect, that it was immaterial and the language of the learned sentencing judge in this regard merely correctly reflected the fact that the applicant was a persistent offender until 1996. To my mind this submission ought not be accepted. There is a substantial difference between the culpability of a person who voluntarily ceased fraudulent behaviour on the one hand and that of a person on the other hand who continues that behaviour until it stopped by discovery of the crime. 18 It seems to me that the fact that the appellant voluntarily ceased his crimes, which does not commonly occur in this area, is a significant fact of mitigation, not only because it shows an acknowledgment of wrongdoing to some extent and supports the conclusion that the fraud arose out of need rather than greed, but it is in the public interest to encourage offenders such as this to cease their activities. Full contrition would only be demonstrated by voluntarily disclosing the wrongdoing to the relevant authorities and seeking to make good the sum defrauded. Even so, bringing the offences to an end voluntarily seems to me, in the public interest, to be a significant fact which should be reflected in sentence by a real discount, although circumstances vary so greatly that the extent of such a discount cannot be specifically calculated. 19 Her Honour, because of the error to which I have referred, did not consider this element as a material factor in the sentence which she imposed. I regard this as an additional matter beyond the mistaken finding that the appellant's criminal behaviour was brought to an end by the Agency's discovery of the fraud. 20 Mr Roser further submitted that her Honour gave appropriate weight to all the subjective matters placed before her on the applicant's behalf. This submission should not be accepted in my view without the significant qualification arising from the consideration referred to in Winchester cited above. 21 At the same time, there is no doubt that these frauds were substantial and extended over a long period. Were it not for the errors in the court below I would consider that the sentence was within the range appropriate in a case of this kind. Indeed, on one view, it extended a considerable degree of leniency. However, I consider that this Court, having regard to the failure of the learned sentencing judge to take into account facts materially affecting the culpability of the appellant, should adjust the sentence resulting from that process. 22 Accordingly, in my view, the sentence passed in the District Court should be quashed. An appropriate sentence would be two years imprisonment to be served by way of periodic detention. Having regard to the fact that the appellant has already served something over a month in full time custody, I consider that this Court should impose a fresh sentence of eighteen months imprisonment from 11 February 1999 to be served by way of periodic detention. 23 SPIGELMAN CJ: I agree. 24 ABADEE J: I agree. 25 SPIGELMAN CJ: The order of the Court is as Adams J proposed. **********

REGINA v LOPEZ

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