Warden v The Queen [2019] VSCA 2

1 During a period of nearly 13 years, between 24 October 2003 and 16 August 2016, the applicant received disability support pension ('DSP') payments totalling $221,744.38. A DSP is a benefit payable to people with a disability, illness or injury that prevents them from working full-time. The amount payable is affected by a recipient's other income, including income from employment.

2 The applicant was granted a DSP because she falsely declared that she was not engaged in full-time work. In fact, during the period in which she received a DSP, she provided family day care services to children in her home as a full-time independent contractor to the Hobsons Bay City Council. She received payments totalling $717,925.04 from the Council.

3 The applicant pleaded guilty to a single charge of dishonestly obtaining a financial advantage by deception from a Commonwealth entity, contrary to s 134.2(1) of the Criminal Code Act 1995 (Cth). The maximum penalty for that offence is 10 years' imprisonment.

4 On 23 July 2018, the applicant was sentenced to 3 years' imprisonment, with an order that she be released on a recognizance of $1,000 to be of good behaviour for a period of 3 years after serving 14 months of the prison sentence.[1] The judge made a declaration pursuant to s 6AAA of the Sentencing Act 1991 that, had it not been for the applicant's plea of guilty, she would have sentenced the applicant to 4 years and 6 months' imprisonment with a non-parole period of 3 years.

5 The applicant seeks leave to appeal against her sentence on the sole ground that it is manifestly excessive because insufficient weight was given by the judge to:

(b) the circumstances in which the offending occurred;

(c) the application of the Verdins[2] principles;

6 For the reasons that follow, the application for leave to appeal will be refused.

7 On 24 October 2003, the applicant made a claim to the relevant Commonwealth agency for a DSP. In the claim form, she stated that she suffered from osteoarthritis affecting her hands, feet, knees, back and neck. This statement was supported by medical material.

8 The applicant declared that she was not employed or in receipt of a wage or salary and that she did not know when she would be able to work full-time or part-time. As I have already stated, that declaration was false. Due to her work for the Council, the applicant was not entitled to a DSP.

9 The applicant continued to receive a DSP until 16 August 2016. Throughout the period of the offending, she remained in full-time employment. She maintained annual registration as a child care provider and submitted regular timesheets to the Council in order to be paid.

10 During the period of the offending, the applicant declared an income of $3,681.39 to Centrelink, which represented 0.51 per cent of her actual income of $717,925.04. She did not file any income tax returns in relation to that actual income.

11 When the applicant's DSP was reviewed in 2007 and 2008, she represented to Centrelink that she was not undertaking any form of employment.

12 An investigation commenced into the applicant's entitlement to a DSP following a data match audit conducted by the Australian Taxation Office in 2015. The applicant was charged in November 2017 and entered a plea of guilty to the charge at a committal mention on 8 March 2018.

13 In May 2018, the applicant began to make weekly repayments. As at the time of sentencing, she had repaid $5,800, leaving a balance of $215,944.38 then owing.

14 The applicant was aged between 45 and 58 during the period of the offending and 60 at the time of sentence.

15 The applicant was born in the United Kingdom. She is the second eldest of five siblings. Her childhood was punctuated by emotional and physical abuse at the hands of her father, particularly when he was drinking heavily. Her family migrated to Australia when she was 12 years of age. Her parents required her to leave school in Year 9 to care for her younger siblings.

16 When she was 16 years of age, the applicant's father requested that she leave the family home for disciplinary reasons. She experienced periods of homelessness in her late adolescence until she secured government housing and found employment in a factory.

17 Between 1973 and 1984, when the applicant was aged between 15 and 26, she was in a relationship with a man who abused alcohol and was violent towards her. They had two sons, the first born in 1976 and the second born in 1979. Following the breakdown of that relationship, the applicant's sole income was a single parent benefit. A few years later, the applicant commenced a five-year relationship with another man. She gave birth to her third son in 1987.

18 The applicant struggled financially. The father of her two older sons did not pay any child support and the father of her third son did not commence paying child support until that son was 16 years old.

19 In 1988, the applicant became aware that her two older sons had been sexually abused while attending Cub Scouts. That offending was reported and the abuser was convicted. The abuse had a significant impact on her sons, both of whom struggled in adulthood with substance abuse issues. For most of their lives, they have depended on the applicant for financial and other support.

20 The applicant completed a certificate in childcare and established a home-based childcare business, predominantly caring for children with complex needs, including autism. This was the business that was in operation in October 2003 when she applied for a DSP.

21 A psychologist, Dr Mathew Barth, prepared a report dated 15 June 2018 for the purposes of the plea. Dr Barth stated that the applicant has a 'long history of emotional problems which dates back to her childhood', that she is a 'very psychologically vulnerable person' and that she suffers from a major depressive disorder with recurrent episodes of mild to moderate severity. He stated that the applicant would experience a relatively lengthy period of adjustment to the custodial environment and be at considerable risk of deterioration in her mood. He strongly recommended that she receive psychological treatment.

22 The applicant told Dr Barth that she offended in order to give her children a better life than she had.

23 The applicant suffers from a number of physical conditions, including right shoulder tenosynovitis, osteoarthritis in the knee and bowel issues for which she is prescribed a range of medications.

24 The applicant does not have a prior criminal history.

25 The judge stated that the applicant's offending 'does not fall at the low end of the range of offending of its kind' and that '[t]he sustained deception ... only ceased following detection'.[3] She said that, although the applicant's offending did not have aggravating features such as the creation of fraudulent documents, it involved 'a deliberate deception that continued over many years'.[4] The judge described the applicant's receipt of income from the Council as an aggravating feature and noted that she had not filed income tax returns in relation to that income.

26 The judge accepted that the applicant's motive for fraudulently claiming a DSP was to support her family and to avoid returning to a life of financial hardship, rather than to live a lavish lifestyle.

27 The judge took into account as mitigating circumstances the applicant's guilty plea at an early opportunity and accepted that she was genuinely remorseful. The judge also noted that 'at the age of 60 years, [the applicant has] no prior criminal record and [is] to be sentenced ... as a person of otherwise good character'.[5] She took into account the large number of character references tendered on behalf of the applicant.

28 The judge accepted that the applicant's diagnosed mental health issues, combined with her ongoing physical limitations, 'will make imprisonment more onerous for [her] than for others'.[6] She accepted Dr Barth's opinion that the applicant's depressive symptoms, combined with her fragile personality, meant that she is likely to experience a lengthy period of adjustment to prison and be at considerable risk of deterioration in mood. She said that she had taken these matters into account 'in reducing the sentence [she] would have otherwise imposed'.[7]

29 The judge said that she was satisfied that the risk that the applicant would further offend was relatively low. She also assessed the applicant's prospects of rehabilitation as 'very good'.[8] However, she added that the sustained period of the applicant's offending meant that specific deterrence was a relevant consideration, albeit not as significant as general deterrence, denunciation and just punishment.

30 The applicant submitted that the sentence is manifestly excessive because the judge gave insufficient weight to her age, lack of criminal history, remorse, low risk of reoffending and very good prospects of rehabilitation, and the fact that the offending occurred in 'entirely situational' circumstances that are highly unlikely to arise again in the future. The applicant also contended that although the judge accepted that, due to her mental health issues, prison would be more onerous for her than other prisoners without those issues, and that there was a risk that her mental condition would deteriorate in prison, the judge gave limbs 5 and 6 of Verdins insufficient weight in her exercise of the sentencing discretion.

31 The applicant submitted that the judge gave insufficient weight to the following matters when assessing her moral culpability and the context in which she became involved in the offending:

(b) Her abusive relationship with the father of her first two sons.

(c) Her young age when her first two sons were born.

(d) The fact that, in 1984, her relationship with her first partner broke down and her only income was a single parent benefit.

(e) The fact that her first partner never paid any child support.

(f) The fact that her relationship with her second partner broke down after five years and he did not pay child support until their son was 16 years of age, at which time he commenced paying $10 per week.

(g) The fact that, in 1988, she become aware that her first two sons had been sexually abused, which abuse had a significant impact on the wellbeing of those sons and they have depended on her for financial and other support.

(h) The fact that, when she commenced offending in 2003, she had sons aged 27, 24 and 16. As noted by the judge, she offended to give her children a better life than she had, and that there was no suggestion of enrichment in the sense of the applicant living a lavish lifestyle.

32 The Crown submitted that the sentence cannot be regarded as manifestly excessive when the principles relevant to sentencing for social security fraud offences are applied to the objectively very serious nature and circumstances of the present offending. The matters that the Crown emphasised included the following:

(a) The large amount that the applicant dishonestly obtained from Centrelink. The amount of money involved in the offending is a significant consideration in assessing the seriousness of offending and the level of criminality involved as this is '... an indication of the extent to which [an offender] is prepared to be dishonest and to flout the law and to advance whatever are his own purposes'.[9]

(b) The offending was not isolated or spontaneous and covered a period of nearly 13 years. During this period the applicant received DSP overpayments on 335 occasions, knowing on each occasion that she was not entitled to the payment. The single charge thereby reflected a repetitive course of conduct involving many instances of offending, and accordingly involved greater criminality.[10]

(c) The offending was aggravated by the fact that during the offending, the applicant also received significant income from the Council, only a fraction of which was declared to Centrelink.

(d) The offending only ceased after detection.[11]

(e) A primary sentencing consideration in cases of social security fraud is general deterrence, in order to protect the revenue. Where offending involves deliberate and sustained fraud, the need for general deterrence is such that 'an order for imprisonment, with at least some of the imprisonment actually to be served, is ordinarily likely to be required' unless the circumstances justify some lesser order.[12]

(f) It is common that in cases of 'white collar crime', offenders have no prior criminal history and are otherwise of good character.[13] As general deterrence is a primary sentencing consideration in such cases, personal mitigatory factors such as good character and good prospects of rehabilitation are generally given less weight than they might otherwise be given.[14] In the present case, the applicant's reliance on her previous good character must also be balanced against the fact that her deceptive offending continued for nearly 13 years.

(g) Specific deterrence, denunciation and just punishment were also very relevant sentencing objectives in the present case. Specific deterrence was of importance particularly given the very lengthy period of time over which the offending occurred, the amount involved, and the fact that the offending involved multiple omissions.

(h) Imprisonment is ordinarily likely even if the fraud was motivated by perceived need. If the fraud is based on greed, the custodial sentence will usually be longer.[15] This remains the case even if the fraud is committed for the benefit of another.[16]

(i) The maximum penalty of 10 years' imprisonment reflects the seriousness with which Parliament considers this conduct and provides a yardstick against which a sentence is to be considered.[17]

(j) Social security offences are prevalent, relatively easy to commit and can be difficult to detect. The social security system is a major impost on the Australian government's revenue and on taxpayers, and the burden of fraud on the system falls on the whole community.[18] Frauds such as that in the present case are not victimless and provide a heavy burden for taxpayers.[19]

(k) The honesty of those claiming under the welfare system is essential to its successful operation. Offences against the welfare system lead to a public loss of confidence in the integrity and worth of that system and create a risk of demonising the genuine and needy in society who require assistance from time to time.[20] Such offences may also lead to the imposition of additional stringency, restrictions and delays on claimants for social security payments, and cause injustice to legitimate recipients.[21]

(l) The applicant was not eligible for any moderation of the weight to be given to general deterrence or any reduction in her moral culpability on the basis that mental health issues were causative of the offending.

33 According to the Crown, the judge took into account and gave sufficient weight to all the mitigating circumstances upon which the applicant relied.

34 The Crown also submitted that the sentence in the present case is consistent with sentences imposed in comparable cases such as Leighton v The Queen,[22] R v Barton[23] and R v Pham.[24]

35 In Leighton, the 72-year-old offender pleaded guilty to three charges of obtaining, over a 10-year period, benefits totalling $109,083.47 to which he was not entitled using two different names. He had several prior convictions for dishonesty offences. He was sentenced to 6 years' imprisonment with a non-parole period of 4 years. The New South Wales Court of Criminal Appeal allowed an appeal against that sentence and resentenced the offender to 5 years' imprisonment with a non-parole period of 3 years. The Court had primary regard to the offender's ill health, which made prison more onerous for him.

36 In Barton, the 54-year-old offender pleaded guilty to two charges of obtaining over a period of 4 years and 4 months, under two different names, dual Centrelink benefits totalling $66,454.89 to which he was not entitled. He had very old prior convictions for dishonesty. The Queensland Court of Appeal dismissed an appeal against a sentence of 3 years' imprisonment subject to a recognisance release order after 10 months.

37 In Pham, the 35-year-old offender obtained a benefit of $126,488.58 over a period of 4 years and 10 months by falsely claiming two types of benefit, including by using a false name, and failing to declare income. She pleaded guilty to two charges of obtaining a financial advantage by deception. She had three prior convictions for offences of dishonesty. The Queensland Court of Appeal upheld an appeal against a sentence of 3 years' imprisonment subject to a recognisance release order after 9 months. The Court reduced the custodial period of the sentence to 6 months on the basis that the offender's moral culpability was significantly reduced because she had been subject to threats and intimidation by a violent former partner who forced her to give him large sums of money to fund his drug addiction.

38 In my opinion, it is not reasonably arguable that the sentence is manifestly excessive.

39 The matters upon which the Crown has relied in combination demonstrate that the sentence is well within the range of sentencing options that was open to the judge. In particular, having regard to the prolonged period over which the offending occurred and the large amount of money involved, the offending can only be regarded as serious. There are many members of the community who, like the applicant, are motivated by desire to financially provide for their families. However, unlike the applicant, the vast majority do so honestly rather than by resorting to calculated and prolonged courses of fraudulent conduct.

40 I do not accept the applicant's submission that the judge gave insufficient weight to the mitigating factors upon which she relied. When the serious nature of the offending is considered in the light of the maximum penalty of 10 years' imprisonment, one would ordinarily expect a sentence greater than 3 years' imprisonment and the custodial component of the sentence to exceed 14 months. The fact that the judge imposed the sentence that she did can only be explained on the basis that she gave full weight to those mitigating factors.

41 While so-called comparable cases are not precedents and care must be exercised in how they are used to assess the appropriateness of a sentence in a given case,[25] the sentences imposed in the cases of Leighton, Barton and Pham, upon which the Crown has relied, indicate that the sentence imposed by the judge is consistent with current sentencing practices and is not manifestly excessive.

42 For the above reasons, the application for leave to appeal against sentence will be refused.

[1] DPP (Cth) v Warden [2018] VCC 1119 ('Sentencing remarks').

[2] R v Verdins [2007] VSCA 102; (2007) 16 VR 269.

[9] R v Hawkins (1989) 45 A Crim R 430, 435.

[10] R v Richard [2011] NSWSC 866 [65(f)]; R v De Leeuw [2015] NSWCCA 183 [116].

[11] R v Lopez [1999] NSWCCA 245 [17]-[18].

[12] Kovacevic v Mills [2000] SASC 106; (2000) 76 SASR 404, 411 [40] ('Mills'); DPP (Cth) v Milne [2001] VSCA 93 [13] ('Milne').

[13] DPP (Cth) v Page [2006] VSCA 224 [37] ('Page'); R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29, 43 [59].

[14] Page [2006] VSCA 224 [37]; DPP (Cth) v Gregory [2011] VSCA 145; (2011) 34 VR 1, 15-16 [53]; R v Williams [2005] NSWSC 315; (2005) 152 A Crim R 548, 579 [60].

[15] Mills [2000] SASC 106; (2000) 76 SASR 404, 414-15 [59]; R v Purdon (Unreported, New South Wales Court of Criminal Appeal, Hunt CJ at CL, McInerney J and Donovan AJ, 27 March 1997) 7-8 ('Purdon').

[16] R v Smith [2004] QCA 417 [16]-[17].

[17] Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357, 372 [30]-[31].

[18] Purdon (Unreported, New South Wales Court of Criminal Appeal, Hunt CJ at CL, McInerney J and Donovan AJ, 27 March 1997) 7.

[19] Milne [2001] VSCA 93 [12]; Purdon (Unreported, New South Wales Court of Criminal Appeal, Hunt CJ at CL, McInerney J and Donovan AJ, 27 March 1997) 7.

[20] R v Newton [2010] QCA 101; (2010) 199 A Crim R 288, 289-90 [7], 293 [29]; R v Hurst [2005] QCA 25.

[21] Purdon (Unreported, New South Wales Court of Criminal Appeal, Hunt CJ at CL, McInerney J and Donovan AJ, 27 March 1997) 7-8; Ralph v Nawrojee [2003] WASCA 5 [25].

[22] [2010] NSWCCA 280 ('Leighton').

[23] [2006] QCA 18 ('Barton').

[24] [2014] QCA 287 ('Pham').

[25] See, eg, Djordjic v The Queen [2018] VSCA 227 [74]; Sutic v The Queen [2018] VSCA 246 [97].