Bedford v Millikan No. Scciv-01-1471

BEDFORD v MILLIKAN
[2003] SASC 137
Full Court: Doyle CJ, Lander and Gray JJ

DOYLE CJ: I would dismiss the appeal. I agree with the reasons given by Gray J for so deciding. The matter should be remitted to the Magistrates Court for consideration of the sentence to be imposed.
LANDER J:I have read in draft the reasons of Gray J. I agree with those reasons and that the appeal should be dismissed.
GRAY J:
Introduction
This is an appeal against a conviction for the offence of obtaining a payment by dishonest means contrary to section 120(1)(a) of the Worker’s Rehabilitation and Compensation Act, 1986 (SA) (“the Act”).
Section 120 provides
(1) A person who—
(a) obtains by dishonest means a payment or other benefit under this Act; or
…
is guilty of an offence.
Penalty: $50 000 or imprisonment for one year.
Mr Bedford pleaded not guilty and the matter proceeded to trial. The magistrate dismissed the complaint. Mr Millikan appealed to a single judge of this court. The appeal was allowed and Mr Bedford was convicted.
The Proceedings before the Magistrate
The Complaint
A complaint was lodged in the Magistrates Court by Malcolm Lloyd Millikan an officer of WorkCover Corporation (“WorkCover”). The complaint alleged that Lee Stephen Bedford:
On or about 28 January 1994 at Adelaide in the said State obtained by dishonest means a payment or other benefit under the Worker’s Rehabilitation and Compensation Act 1986, as amended, contrary to Section 120(1)(a) of the said Act.
Particulars:
(i)On or about 28 January 1994 at Adelaide the defendant obtained a commutation payment in the sum of $70,090-00 from WorkCover Corporation by falsely pretending that he was entitled to a commutation of his income maintenance payments.
(ii)The defendant dishonestly stated to WorkCover that he was unable to return to his employment following a work injury by reason of a permanent incapacity from being able to carry out his pre-injury duties as a boilermaker/welder.
(iii)The worker was not incapacitated as he alleged but was capable of performing that type of employment and was performing that type of employment between February 1993 and the date of his commutation on or about 28 January 1994.
The Act and the Commutation Scheme
The Act provides a scheme for the protection of workers. Injured workers are entitled to make claims in respect of medical and related expense and if incapacitated for work for weekly maintenance. In the case of injuries leading to a permanent incapacity to engage in employment WorkCover has a discretion to commute its liability to make weekly payments. At relevant times section 42 of the Act provided:
(1)Subject to subsection (2), a liability to make weekly payments under this Division may, on the application of the worker, be commuted, in whole or in part, to a liability to pay a lump sum representing the capitalised value of those payments.
(2)     Subsection (1) is subject to the following qualifications:
(a)    the commutation may only apply in relation to a liability to make weekly payments in respect of a permanent incapacity;
(b)    a liability may only be commuted after the worker has received compensation for non-economic loss;
and
(c)    subject to subsection (3), the aggregate of the amount realized by the commutation and the amount of compensation for non-economic loss must not exceed the prescribed sum and if commutation of the total liability to make weekly payments would result in an aggregate of those amounts in excess of the prescribed sum, the extent of the commutation must be reduced accordingly.
(3) The Corporation has a discretion to allow a commutation notwithstanding that the limit prescribed by subsection (2)(c) is exceeded if, in the opinion of the Corporation, the commutation is desirable in order to avoid a residual liability to make weekly payments of a trivial amount.
(4)     In this section -
“compensation for non-economic loss” means compensation under Division V;
“the prescribed sum” means the amount that, at the time of the occurrence of the disability that have rise to the liability to make weekly payments, was the prescribed sum for the purposes of Division V.
Section 95 of the Act provided that a commutation decision could be reviewed:
(1)A person who is directly affected by a decision that is reviewable under subsection (2) may apply to the Corporation for a review of the decision.
(2)       The following decisions are reviewable-
(a) a decision made on a claim for compensation;
The Request For Commutation
In 1989 Mr Bedford sustained a wrist injury during the course of his employment. As a result he was unfit to work. He received weekly maintenance payments and payments in respect of his expenses from WorkCover. He was left with a permanent partial incapacity. Pursuant to its statutory obligations[1] WorkCover actively sought to assist Mr Bedford’s rehabilitation and have him engage in employment that was appropriate to his capabilities.
[1] O’Neil v WorkCover Corporation [2001] SASC 218 at [23-27]
On 25 November 1992 Mr Bedford made application to WorkCover to commute its liability to make weekly payments to a liability to pay a lump sum representing the capitalised value of those weekly payments:
I am writing to you asking for the payment of a section 42, I have a 50% disability in my right arm and can’t continue my trade as a Boiler Maker Welder or associated trades as my arm is easily aggravated.
My only work option is to restart my own business and employ other Boiler maker welders and other trades people who I know. I would have no problem supplying as I have many contacts in the building industry and an excellent reputation prior to 30.11.89. I realize I will not receive income maintenance after computation but I strongly believe I can be successful in my own business employing others.
WorkCover rejected Mr Bedford’s application.[2] On 18 February 1993 Mr Bedford applied to have this decision reviewed. The evidence at trial disclosed little about the review process. WorkCover generated the following “pro forma”.[3]
[2] The evidence did not disclose the date, the terms or the reasons for the rejection.
[3]   The evidence suggests that the pro forma was prepared during January 1994
PRO-FORMA             REQUEST FOR COMMUTATION
(1)    CLAIM NUMBER 04141364/02
(2)    WORKER           Lee Stephen Bedford  D.O.B.          9/12/58
(3)    DATE OF DISABILITY 30/11/89     AGE AT LAST BIRTHDAY            35
(4)    CURRENT WEEKLY INCOME MAINTENANCE PAYMENTS             $           652.86(pw)
(5)    PROJECTED WEEKLY PAYMENTS TO AGE 65                $ 1015850.10
(6)    PRESCRIBED AMOUNT  $     77600.00
(7)    SECTION 43 PAYMENT  $    7510.00
(8)    BALANCE  $     70090.00
(10) LUMP SUM COMMUTATION AMOUNT:  $     70090.00
(100% OF BALANCE)
(11) TABLE (I) OR (II)?  1
(12)   MULTIPLYING FACTOR:           286
(13) LUMP SUM     $ 70090.00 ÷ *   286        =  $      245.07(pw)
(14) THEREFORE, IF $245.07 per week IS COMMUTED BY THE LUMP SUM PAYMENT OF $70090.00, WORKER HAS ONGOING ENTITLEMENT OF $ 407.79 per week
(15) (IE; CURRENT WEEKLY PAYMENTS LESS WEEKLY AMOUNT REPRESENTED BY LUMP SUM PAYMENT - REFER ITEM 13)
(16) TO DISCONTINUE ALL WEEKLY PAYMENTS, WORKER WILL NEED TO REDUCE WEEKLY PAYMENTS TO $ 245.07 (ITEM 13)
REASONS FOR COMMUTATION
The worker has been incapacitated for over 4 years and remains partially and permanently incapacitated for work. The worker’s vocational rehabilitation has been unsuccessful and re-training options are likely to be lengthy and costly. There is no indication this situation will change in the foreseeable future.
RECOMMENDED - CASE MANAGER           Paul Martin
RECOMMENDED - TEAM LEADER             Signed by
AUTHORISED - MAL MILLIKAN                 Signed by
WorkCover reconsidered its earlier decision refusing to commute. In January 1994 it determined that it would commute its liability to make weekly payments to Mr Bedford. It did so on the basis that Mr Bedford was permanently and partially incapacitated, was unemployed and unable to resume employment in the foreseeable future.
Representations to WorkCover
Whilst the request for commutation and the application for review were underway Mr Bedford attended regular meetings with WorkCover representatives to discuss his “return to work plans”. Records of meetings on 27 January 1993, 27 April 1993, 4 June 1993, 23 August 1993 and 19 November 1993 were tendered. These records demonstrate that WorkCover endeavoured to assist Mr Bedford’s return to work. The records disclose throughout 1993 that Mr Bedford actively participated in a return to work strategy They outline strategies and goals to be attempted by Mr Bedford by the next meeting. Examples include:
[Mr Bedford] to develop canvassing letter to be sent to employers. To bring in list of 20 employers where canvassing letters will be sent to.
[Mr Bedford] to follow up employers with phone calls weekly. To come into Alfreda weekly for canvassing.
[Mr Bedford] to look through ‘Advertiser’ at least twice/week and respond/apply appropriately…
[Mr Bedford] to continue job seeking as per job seeking agreement
Each record was signed by Mr Bedford and his WorkCover counsellor Ms Chin. Ms Chin undertook follow up. She liaised with an occupational therapist to obtain reports about the suitability of work at a number of worksites, negotiated with employers about appropriate duties and assisted Mr Bedford to look for suitable work.
Mr Bedford’s Return to Work
The complainant’s case was that prior to 18 February 1993, the date on which Mr Bedford requested a review, Mr Bedford had agreed to be employed with Glen Forrester Engineering. This was not disputed by Mr Bedford.
Unbeknown to WorkCover Mr Bedford commenced work as a welder with Glenn Forrester on 22 February 1993. He continued in this position until May 1994. Records from Glenn Forrester, including time sheets and pay sheets disclosed that at times Mr Bedford worked for more than 12 hours a day. The magistrate summarized the effect of this documentary evidence and other evidence from WorkCover witnesses:
…In a nutshell these witnesses were called to prove the Complainant’s assertion that the defendant worked in the relevant period between February 1993 and January 1994. I can summarise the evidence of these witnesses by saying that the Complainant has proven that the defendant was working in the relevant period, that he received a substantial amount of remuneration and that at times he worked very long hours. I can further say that the evidence of these witnesses indicated the defendant was not constantly under observation and the evidence of these witnesses supports the defendant’s assertion that he was doing light welding duties at the time and that there was no heavy work, either in the setting up or the welding that was being undertaken by him at the time.
Failure of Mr Bedford to notify return to work
Mr Bedford was under a statutory obligation to report his newfound employment with Glen Forrest to his previous employer. The scheme of the Act required him to report this fact and his change of circumstances. Pursuant to section 58A(1)(a) the previous employer was obliged to notify WorkCover. At relevant times section 58A provided:
(1) An employer (other than an exempt employer) must notify the Corporation whenever—
(a)     a worker who has been receiving weekly payments for total incapacity returns to work; or
(b)     there is a change in the weekly earnings of a worker who is receiving weekly payments for partial incapacity; or
(c)     there is a change in the type of work performed by a worker who is receiving weekly payments for partial incapacity,
(but notification is not required in a case or class of cases excepted by the Corporation from the operation of this subsection).
(2) Where a worker who has been receiving weekly payments for total incapacity returns to work with an employer other than the employer from whose employment the disability arose, the worker must notify that previous employer of the return to work.
(3)     A notification under subsection (1) or (2)—
(a)     must be given within 14 days of the occurrence of the notifiable event or such longer period as the regulations may allow; and
(b)     must include full particulars of the notifiable event.
(4) A person who without reasonable excuse fails to comply with this section is guilty of an offence.
Penalty: $1 000.
Mr Bedford failed to comply with his obligation to notify his previous employer. This was a wilful and deliberate breach of section 58. The magistrate concluded:
I find that the defendant knew full well that he should have disclosed his employment to WorkCover. The efforts of Ms Chin and others in attempting to return him to the workforce in some capacity makes it ludicrous to suggest that the defendant was not aware of that obligation.
The defendant in not informing WorkCover of his employment may not have wanted his weekly payments to have been affected by that disclosure but that is not a matter that I need to make a finding on.
In relation to his application for commutation however, I find that his motivation to not disclose that employment was simply to not delay the process of finally being able to exit the WorkCover system. To that extent I find his omission amounts to dishonest act or means.
The Trial
The WorkCover Case
As earlier observed WorkCover’s decision to commute Mr Bedford’s maintenance payments was made on the basis that:
The worker has been incapacitated for over 4 years and remains partially and permanently incapacitated for work. The worker’s vocational rehabilitation has been unsuccessful and re-training options are likely to be lengthy and costly. There is no indication this situation will change in the foreseeable future.
Counsel for the complainant submitted that knowledge of the existence of Mr Bedford’s employment between February 1993 and May 1994 would have been a material consideration to WorkCover’s ultimate decision to commute.
Mr Millikan, a manager with WorkCover in its long term claims unit, dealt with Mr Bedford’s commutation application. His evidence about the effect of employment on a commutation payment was as follows:
Q.In terms of the criteria for the making of a commutation, did the Corporation at that stage have any regard to the ability of the worker to be rehabilitated back into the work force.
A.Yes, we did, we saw commutation as I guess the last resort when all other efforts to return the person to the work force were exhausted…
Q.Is one of the things that you take into consideration whether or not the worker was able to continue working.
A.Yes it is.
Q.In that regard, what was your assessment of this worker’s situation.
A.I understood that the worker had no chance or any chance – it was remote chance of returning to the work force in the capacity that he was in before his injury.
Q.In coming to your assessments and authorising the commutation did you have regard to the rehabilitation file.
A.Yes I did.
Q.Did that form part of the basis for you decision to authorise it.
A.That was one of the areas that I took into consideration in every case.
Mr Millikan gave evidence that WorkCover only became aware of Mr Bedford’s employment after it had made the commutation it payment:
Q.Assuming that’s a schedule of work performed by Mr Bedford prior to the commutation, and the invoices that I have shown you are invoices from Mr Bedford for work done up to the date of commutation, taking into account that information, if you have had it at the time you authorised the commutation, would you still have gone ahead and authorised it.
A.No, I would not have.
Q.Why not.
A.I would have obviously sought more detail in relation to what was involved with this work and if it was work of the type of similar to what he was doing pre-injury it would have had a bearing on the commutation.
Q.If it was a similar type of work, what would you have done?
A.I wouldn’t have authorised the commutation…
Q.In terms of the information from the schedules and the invoices provided by Mr Bedford to Glenn Forrester Engineering, how does that affect the approach that you would have taken to the commutation.
A.This would have changed my view at the time completely because I authorised the commutation believing that – I didn’t believe that Mr Bedford was capable of working in this environment…
Q.Had you been aware of information relating to work as set out in the schedule and the invoices at the time that you were asked to authorise the commutation, what would you have done.
A.Firstly, I would not have authorised the commutation. Secondly, I would have required the case manager involved to take a fresh look at the matter and obviously to instigate appropriate steps to take into consideration the capacity that was now demonstrated.
Q.Why would you have done that.
A.Our focus is always on returning people to the work force. Commutation is something we do when we believe that’s been exhausted. What’s before me now indicates something different. Therefore, we would have maintained our primary focus in exploring how Mr Bedford could return to the work force and, in fact, remained employed with this company with the appropriate reductions in income maintenance and so forth…
In cross examination Mr Millikan said:
Q.Now, again to be fair to you, if you had known that in the period immediately before this request was provided to you, in practice what you would have done was required further information of this work.
A.If I was presented with the details I had here I would certainly conduct more enquiries into the type of work that was being undertaken, yes. That would be my first step…
Q.Doesn’t immediately disentitle the worker to a commutation, in your mind.
A.At that time it would have.
Q.It is subject to further enquiry, isn’t it. Isn’t that the distinction.
A.Yes, that is fair enough too. I am making the point at that moment in time that commutation would have been rejected at this time and obviously one would take into consideration any other information that came forward and we could have resurrected it.
Barry John Brooks, an employee of WorkCover Corporation handled Mr Bedford’s claim for commutation. Mr Brooks was responsible for authorising the commutation payments. His evidence included:
QIn terms of a commutation and the grant of a commutation, is it relevant to know whether or not the worker applying for it has been working.
A.It’s most relevant, yes…
Q.At any stage did you become aware of whether or not Mr Bedford had been working prior to the commutation.
A.No.
Q.If you’d become aware of him performing any work for remuneration prior to commutation what would you reaction be.
A.I wouldn’t have signed the request for commutation.
Q.Why was that.
A.Obviously there was a change in circumstances and the request for commutation would demonstrate at the time that there was no capacity, no employment
Paul Matthew Martin a claims operations manager at WorkCover Corporation gave evidence as follows:
Q.If you have been made aware of the defendant performing paid employment during the course of 1993, would you have approved the commutation.
A.If I had learnt of that I would not have even raised the request because as I recall WorkCover policy at the time was if a worker is working, engaged in paid employment, then policy was not to apply the commutation benefit…
…if he was working, he probably would not have been considered for the commutation payment. Even if we were to have considered the commutation payment, he would have received substantially less, if anything at all.
The Defence Case

It was the defence case that Mr Bedford had not obtained the commutation payment by dishonest means. At trial he was questioned about his conduct in relation to the application for commutation. He accepted that he had not informed WorkCover of his changed circumstances. He provided the following explanation:
Q.I want to turn on the issue of the fact that you were receiving monies throughout ’93 from this work …Did you advise anyone as Workcover in relation to these earnings.
A.No…
Q.Who (sic) was your reasons for not advising Workcover.
A.Two sets of reasons. First of all the reason I went to work for Glen Forrester and I would say the most prominent reason is because my income had been reduced so far that I just couldn’t make ends meet and I was slowly losing everything I had. I saw those duties as not being a fulltime job or boiler making…It was certainly focused for me as a supplement to bring my income up to where I was when I stated with Workcover and it actually failed to do that…The other reason was because that I just saw that I again I class myself as a fairly positive person, when I saw the nature of the person at Alfreda College or rehab I didn’t fit in…It was the only means I had was an income to bring my salary up to scratch.
…
Q.In terms of why you didn’t inform Workcover about that, why couldn’t this exist with Workcover from your point of view.
A.I was always under the assumption that I was available to bring my pay up or earn the difference…
Q.And was there any other aspect of Workcover involvement telling them about this activity would have had from your point of view.
A.Sadly to say if I told Karen or any of the people at Workcover that I was doing some light work on the side the whole process would have stopped to a grinding halt and I know it would have been another four years on the system. I was sick of it and I wanted to get off and there was no mechanism for them to do it.
HIS HONOUR
Q.What do you think would have appeared to your application for commutation if you told anyone at Workcover that you’d be working during ’93.
A.I think that I know in my heart that I’m eligible for it because I have a disability. However I just think seeing how the Workcover system worked it would have delayed it indefinitely.
When cross-examined Mr Bedford said:
Q.But you say whatever the case was you didn’t want to tell them about money you were earning on the side.
A.That’s correct.
Q.And you didn’t want to tell Karen Chin about the WorkCover you were doing because you felt it would end up you having to go [of] the WorkCover system.
A.No, no if I had told Karen Chin about the money I was earning I would have had a reduction in my wage from whoever, WorkCover.
Q.And you knew that.
A.Well I supposed that would have been the case.
...
Q.Now what you are saying is that you kept the work that you did in 1993 from WorkCover because you knew if they knew about it you wouldn’t get a commutation.
A.Well I wouldn’t agree with they way you have put that. It would just delay – I was always going to get a commutation. I was injured, I had a disability. I couldn’t continue the work that I did before, I still can’t today. However I had been through the bureaucracy of WorkCover for many years. I had been up to a stage where they said, we are going to finalised this, and then it went on for another year because of paper work or someone leaving. I was sick of the system. I just didn’t want to put anything else into the system that would compromise them finalising or terminating my position with WorkCover…
Q.You keep telling us that you didn’t tell anyone that you were working …because you weren’t asked, but the reality is as you have also said in you evidence that you didn’t want to tell them because you knew your benefits would be reduced.
A.I don’t think I said my benefits would be reduced, it was just it would complicate the system as it was, and I wanted a job…
The Magistrate’s Reasons
The magistrate accepted the complainant’s witnesses. The evidence established that the commutation payment made would not have been made had WorkCover been aware of the existence of Mr Bedford’s newfound employment. However, the magistrate observed that as Mr Bedford had a permanent incapacity some form of commutation payment may possibly have been considered later by WorkCover. The magistrate concluded:
I further find that had the defendant made WorkCover aware of his employment, he was nonetheless an appropriate candidate for consideration of a commutation payment at a later time. The fact that he had been working did not necessarily exclude him from being a suitable candidate.
As earlier observed the magistrate dismissed the complaint. He did so notwithstanding his finding that Mr Bedford had been dishonest in his failure to disclose his employment:
I find that the defendant knew full well that he should have disclosed his employment to WorkCover. The efforts of Ms Chin and others in attempting to return him to the workforce in some capacity makes it ludicrous to suggest that the defendant was not aware of that obligation.
The defendant in not informing WorkCover of his employment may not have wanted his weekly payments to have been affected by that disclosure but that is not a matter that I need to make a finding on.
In relation to his application for commutation however, I find that his motivation to not disclose that employment was simply to not delay the process of finally being able to exit the WorkCover system. To that extent I find his omission amounts to dishonest act or means. ...
I further find that the defendant was not dishonest in maintaining that he was unable to return to his former employment. The Complainant has failed to convince me that he had been able to resume his former employment duties.
I further find he was not dishonest in his maintaining that he had a permanent partial disability. All the evidence indicates that he did have exactly that, that is, a permanent partial disability.
After making these findings the magistrate added:
I further find that had the defendant made WorkCover aware of his employment, he was nonetheless an appropriate candidate for consideration of a commutation payment at a later time. The fact that he had been working did not necessarily exclude him from being a suitable candidate.
I find that in every respect the defendant continued to meet the required criteria for a commutation payment except in so far as that he failed to disclose this employment.
In these circumstances I am not prepared to find that the omission was such as to cause the defendant to have obtained by dishonest means the commutation payment, the subject of the charge.
Accordingly, I find the defendant not guilty.
Appeal to a Single Judge
As earlier observed the complainant appealed to a single judge of this court. The appeal was allowed and Mr Bedford convicted. The judge concluded:
The failure by the respondent to disclose his employment was however the significant issue with respect to the proof of the complaint. The evidence of the WorkCover witnesses established that the respondent would not have been granted a commutation in January 1994 if they had been aware of the particulars of his employment prior to that date…The magistrate therefore correctly found that the respondent’s omission to disclose that employment was a dishonest act.
Having reached that conclusion the complaint against the respondent was proved. The respondent may well have been frustrated by some of the WorkCover procedures as there was no real dispute that the respondent had a permanent partial disability. He also potentially was a suitable candidate for commutation at some future time. All those matters might be relevant factors in mitigation of penalty…The appeal will therefore be allowed. The finding of not guilty is set aside and a finding of guilty will be recorded.
Mr Bedford has appealed to this court from this decision.
Issues on Appeal
Counsel’s submissions
Counsel for Mr Bedford submitted that the complainant had failed to prove a causal nexus between his dishonest conduct and the obtaining of the benefit. It was said that the complainant had failed to prove that if Mr Bedford’s employment with Glen Forrester had been disclosed the lump sum he would have received would have been less. In the alternative, it was submitted that it was not sufficient that the court found that Mr Bedford would not have obtained the benefit when he did but for the use of dishonest means. It was said that the complainant had to satisfy the Court that Mr Bedford would not have obtained the benefit at all but for his dishonest conduct. This alternative submission appears to raise the defence of a claim of right.
Counsel for the complainant drew attention to the magistrate’s finding and the judge’s finding on appeal that Mr Bedford had been dishonest in his omission to inform Workcover of his changed employment circumstances. Mr Bedford’s dishonest omission to inform led to the commutation payment being made. If Mr Bedford had disclosed his employment with Glen Forrester then the commutation payment would not have been made. The complainant had established that Mr Bedford would not have received any commutation payment on 28 January 1994 had the required notice been given. The complainant had also established that there was a real possibility that no later commutation payment would have been made. At best it was said that Mr Bedford could have hoped for a reduced commutation benefit, less than the amount that he had received, some time in the future.
Dishonesty
The offence in section 120(1)(a) of the Act operates upon the obtaining of a payment or other benefit under the Act where that payment or benefit was obtained "by dishonest means". The concept of dishonesty was discussed by King CJ in R v Kastratovic[4]:
The essential notion of defrauding is dishonestly depriving some person of money or property, or depriving him or, or prejudicially affecting him in relation to, some lawful right, interest or opportunity or advantage which he possesses. ... To defraud must involve something more than the mere inducing of a course of action by dishonest means: Welham v Director of Public Prosecutions per Lord Radcliffe at 127. In offences constituted by obtaining money or property with intent to defraud, that something more may be found in the mere parting by the victim of the fraud, with money or property which he is entitled to retain and which he would not have parted with but for the use of the dishonest means: Balcombe v De Simoni (1972) 126 CLR 576. In other cases, the defrauding may consist of deceiving a person responsible for a public duty into doing something that he would not have done but for the deceit, or not doing something that but for it he would have done. In all cases , the element of intent to defraud connotes the intention to produce a consequence which is in some sense detrimental to a lawful right, interest, opportunity or advantage of the person to be defrauded, and is an intention distinct from and additional to the intention to use the forbidden means.
It would seem then that an intent to do no more than procure the payment of a debt which is presently due and payable to the accused, or which the accused believes to be presently due and payable, by the alleged victim is not an intent to defraud and is not converted into an intent to defraud by the employment of dishonest means or the means which are forbidden by the statute. That proposition, however, should not be understood in a wider sense than intended. It can apply only to a belief that the debt is presently due and payable. An intent to procure by dishonest means the payment of a debt at a date which is earlier than the due date to the detriment of the debtor would be an intent to defraud. Moreover I think that the proposition must be confined to a state of mind which excludes any belief that there is a genuine dispute about or reasonably available defence to the accused's claim.
In all cases, the element of intent to defraud connotes the intention to produce a consequence which is in some sense detrimental to a lawful right, interest, opportunity or advantage of the person to be defrauded, and is an intention distinct from and additional to the intention to use the forbidden means."
I think that the intent to deprive a person of the opportunity of having a genuine dispute or a reasonably available defence properly adjudicated upon would be an intent to defraud for the purpose of the offences based upon obtaining money or property by dishonest or forbidden means. An intent by dishonest means to convince the supposed debtor that a defence which the accused believes the debtor to consider to be reasonably available to him, is without merit, and thereby to procure the payment of the claim would be an intent to defraud notwithstanding that the accused might genuinely believe that the defence should not be sustained and that his claim is just.
[4] (1985) 42 SASR 59 at 62-63
In Peters v The Queen[5], the court considered charges of conspiracy to defraud the Commonwealth under ss 86(1)(e) and 86A of the Crimes Act 1914 (Cth). Toohey and Gaudron JJ observed that, ordinarily, fraud involved:
‘The intentional creation of a situation in which one person deprives another of money or puts the money or property of that other person at risk or prejudicially affects that person in relation to ‘some lawful right, interest, opportunity or advantage’ knowing that he or she has no right to deprive that person of that money or property or to prejudice his or her interests’.
[5] (1998) 192 CLR 493 at 508, see also MacLeod v The Queen [2003] HCA 24 at [35-37] and [105]
The use of the word “dishonest” in section 120 is employed in its ordinary meaning. The word does not convey any special statutory meaning. The question that arises is whether Mr Bedford acted dishonestly according to ordinary notions.
Mr Bedford’s failure to disclose his newfound employment amounted to wilful non-disclosure. His initial request for commutation accurately disclosed his employment position at the time it was submitted in November 1992. However his circumstances changed. Mr Bedford knew that any disclosure of his newfound employment would affect his weekly maintenance payments. Whilst he claimed in evidence that he believed he would still be entitled to receive a commutation payment if he made disclosure, he conceded that he knew the payment would have been delayed. The evidence established Mr Bedford knew that the delay could have been substantial. It was also established that there may not have been a commutation payment at all.
As earlier observed Mr Bedford’s request for commutation of 25 November 1992 included the following statement:
My only work option is to restart my own business and employ other boiler maker welders … I strongly believe I can be successful in my own business supplying others.
Reference has earlier been made to Mr Bedford’s attendances with WorkCover to discuss “return to work plans.” The records disclose that at each of these meetings Mr Bedford agreed to take or was taking steps to find employment. His conduct at these meetings was inconsistent with his employment at Glen Forrester. Mr Bedford falsely maintained the appearance of being without work and that he was searching for work. The fact was that he was in regular employment sometimes working as much as 12 hours a day. His conduct misled WorkCover.
Mr Bedford’s failure to inform WorkCover of his employment with Glen Forrester and his conduct in misleading WorkCover at each of the meetings were dishonest. By his dishonest conduct, he induced WorkCover to make the commutation payment in January 1994. Prior to this time Mr Bedford had sought to have WorkCover review its decision not to make a commutation payment on a basis that he knew to be materially false. He maintained his review application and allowed the review process to proceed to finality notwithstanding that he knew that it was being conducted on a materially false basis. Mr Bedford maintained this deception for his benefit.
In R v Rai[6] the United Kingdom Court of Criminal Appeal considered an analogous situation. Mr Rai applied for a grant from the council to upgrade his elderly mother’s home. The grant was approved. Two days after the approval his mother died. Mr Rai failed to inform the council of this fact and used the grant for his own purposes. The court held that where a person obtains goods or services on the basis of a representation of fact which was true when made but is no longer true when the goods or services are supplied, that person's acquiescence in letting the goods or services be provided and in keeping silent as to the change of circumstances can amount to deception by conduct.
[6] [2000] 1 Cr App R 242
As earlier observed counsel for Mr Bedford submitted that the complainant had not proved any causal nexus between his dishonest omission and the making of the commutation payment. This submission is without substance. Mr Bedford’s failure to advise of his newfound employment was a substantial cause of WorkCover’s decision to make the commutation payment. Had WorkCover known of Mr Bedford’s actual employment circumstances it would at the very least not have made the commutation payment when it did. Had WorkCover been aware of the true facts, further investigation would have been undertaken. WorkCover may never have commuted its liability to make weekly payments to Mr Bedford.
Section 42 of the Act authorised commutation in the following terms:
A liability to make weekly payments ...may... be commuted in whole or in part to a liability to pay a lump sum representing the capitalised value of those payments.
In the event of WorkCover exercising its discretion to commute, it could do so in whole or in part. Further, in making a decision about the amount of the lump sum to be paid, it was necessary for WorkCover to make a calculation of the capitalised value of the weekly payments. This calculation involved assessing the extent of its liability to make weekly payments and the amount of the weekly payment to be capitalised.
Although it was possible that some form of commutation payment may have been considered at some later time by WorkCover, a calculation of the capitalised lump sum would necessarily take into account Mr Bedford’s earnings in his employment with Glen Forrester. The extent of Mr Bedford’s weekly entitlement would have been directly affected by his earnings with Glen Forrester. This is demonstrated by the terms of WorkCover’s pro forma request sheet. The commutation calculation was based on a capitalisation of “current weekly income maintenance payments” of $652.86 per week. Had Mr Bedford disclosed his employment with Glen Forrester his weekly income maintenance payments would have been terminated or at the very least reduced, thus potentially affecting any commutation calculation if a commutation payment was to be made.
Claim of Right
In substance Mr Bedford asserted that he had a claim of right to a commutation payment. If Mr Bedford was entitled to the commutation payment then it would follow that a defence of claim of right could be properly advanced.
WorkCover’s discretion to commute a payment does not equate to an entitlement to commutation on the part of an applicant. On appeal counsel for Mr Bedford accepted that section 42 of the Act provided Workcover with a discretion to commute weekly payments. It was not an automatic entitlement. It was accepted that Mr Bedford did not have a legal right to a commutation payment. It was conceded that Mr Bedford could only seek a review of WorkCover’s decision not to commute.
A belief in a claim of right negates an intention to defraud even if an accused deliberately used deception in support of the claim. To afford the defence of a claim of right there must be a legal right, not a claim of a moral right. The belief need not be reasonable, only honest. The defence will not be available if the accused obtains a benefit with an intention to go beyond what the accused believes to be a claim of right. An honest claim of right negates the mens rea for offences such as larceny, robbery, criminal damage, and false pretences.[7]
[7] See R v Kastratovic (1985) 42 SASR 59 [19 A Crim R 28] (FC), White J at 79.

In R v Langham[8], King CJ observed:
[8] (1984) 36 SASR 48 [12 A Crim R 391]
A claim of right, in order to negative fraud and dishonesty, must be genuine, but it need have no foundation in law or fact. Fraud and dishonesty are negatived by a genuine belief in a legal entitlement to the property taken. ...
I think that the intent to deprive a person of the opportunity of having a genuine dispute or a reasonably available defence properly adjudicated upon would be an intent to defraud for the purpose of the offences based upon obtaining money or property by dishonest or forbidden means. An intent by dishonest means to convince the supposed debtor that a defence which the accused believes the debtor to consider to be reasonably available to him, is without merit, and thereby to procure the payment of the claim would be an intent to defraud notwithstanding that the accused might genuinely believe that the defence should not be sustained and that his claim is just. An intent to substantiate by dishonest means a claim which the accused believes to be genuinely disputed is an intent to defraud. An intent to obtain, by dishonest means, the payment of a sum in excess of what the accused believes to be due to him would amount, of course, to intent to defraud ...
More recently in MacLeod v The Queen,[9] Gleeson CJ and Gummow and Hayne JJ observed:
In Peters, the equation of ‘dishonesty’ with absence of a belief of legal right was rejected, save where ‘dishonest’ was used in a special statutory sense. Section 173 is not such a special statutory provision. Rather, in this case, the notion of ‘claim of right’ is a manifestation of the general principle identified by Dawson J in Walden v Hensler, namely that it is:
‘Always necessary for the prosecution to prove the intent which forms an ingredient of a particular crime and any honestly held belief, whether reasonable or not, which is inconsistent with the existence of that intent will afford a defence.’
Hence the statement by Glanville Williams:
‘The evidential burden of a claim of right is on the accused, but the persuasive burden is on the prosecution to rebut it.’
[9] [2003] HCA 24 at [47]
If Mr Bedford held an honest belief that the commutation payment was due and payable, then this may have been the basis of a possible defence. However the commutation payment was not due and payable. There was no entitlement.
Mr Bedford’s dishonest omission to advise of his employment with Glen Forrester was at least made to ensure that a commutation payment was received earlier than would be the case if WorkCover had known that he was employed. As King CJ in said in Kastratovic”:
an intent to procure by dishonest means the payment of a debt at a date which is earlier than the date due to the detriment of the debtor would be an intent to defraud.
Mr Bedford’s conduct was dishonest. He did not believe a debt was due. He did not believe he had a legal entitlement to the commutation payment. WorkCover had statutory duties and responsibilities. Mr Bedford’s conduct was calculated to have WorkCover do something in the performance of its statutory duties that it would not have done but for his deceit. Mr Bedford intended by his dishonest conduct to procure a consequence which was detrimental to the lawful right, interest, opportunity and advantage of WorkCover. Mr Bedford intended to deceive WorkCover to his benefit and to WorkCover’s disadvantage. By his deception Mr Bedford wished to deny WorkCover the opportunity to discharge its duties and responsibilities having regard to the true state of is employment circumstances.
The fact that Mr Bedford had suffered a permanent injury that may have entitled him to some commutation payment at a later time is a matter that may be relevant to any sentence to be imposed. It does not give rise to a defence to the complaint.
Conclusion
Mr Bedford’s dishonesty was a substantial cause of WorkCover making the commutation payment. Mr Bedford was not entitled to the commutation payment. He obtained the payment by dishonest means. This appeal should be dismissed.
LIST OF JUDGMENT CITATIONS LISTED IN ORDER OF APPEARANCE
1 O’Neil v WorkCover Corporation [2001] SASC 218 at [23-27]
2The evidence did not disclose the date, the terms or the reasons for the rejection.
3 The evidence suggests that the pro forma was prepared during January 1994
4 (1985) 42 SASR 59 at 62-63
5 (1998) 192 CLR 493 at 508, see also MacLeod v The Queen [2003] HCA 24 at [35-37] and [105]
6 [2000] 1 Cr App R 242
7 See R v Kastratovic (1985) 42 SASR 59 [19 A Crim R 28] (FC), White J at 79.
8 (1984) 36 SASR 48 [12 A Crim R 391]
9 [2003] HCA 24 at [47]

[2003] SASC 137

20 May 2003