Burman v Commonwealth Services Delivery Agency - [2004] SASC 224

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
BURMAN v COMMONWEALTH SERVICES DELIVERY AGENCY
Judgment of The Honourable Justice Gray
29 July 2004
CRIMINAL LAW - PARTICULAR OFFENCES - OFFENCES AGAINST THE GOVERNMENT
SOCIAL WELFARE - SOCIAL SECURITY PAYMENTS - OFFENCES
Appellant charged with making a false statement under the Social Security Act - statements resulted in overpayment of social security allowance - appellant had received a warning letter on a prior occasion for the same behaviour - appellant sentenced to six months imprisonment and a bond - whether magistrate erred by treating general deterrence as the overriding principle - whether magistrate erred in treatment of earlier alleged similar offending - whether magistrate had proper regard to appellant’s prospects of rehabilitation - evidence of the appellants mental condition put before the court - magistrate erred - appellant resentenced to imprisonment for one month and release on a bond.
Social Security (Administration) Act 1999 (Cth) s 212; Crimes Act 1914 (Cth) s 16; , referred to.
Kovacevic v Mills (2000) 76 SASR 404; R v Place (2002) 81 SASR 395; Veen (No 2) (1988) 164 CLR 465; Ralph v Narwojee (Murray, Anderson & Templeman JJ, 17 Jan 2003, unr; Lari v Pavlos (Owen J, 17 May 1996, unreported), considered.

BURMAN v COMMONWEALTH SERVICES DELIVERY AGENCY
[2004] SASC 224
Magistrate’s Appeal

GRAY J: This is an appeal against sentence.
Background
Charles Burman was charged with seven counts of recklessly making a false statement contrary to sections 212 and 217 of the Social Security (Administration) Act 1999 (Cth). The offending occurred on 30 September and 19 December 2002 and on five occasions between 16 January and 13 March 2003.
Each offence involved Mr Burman lodging an application for the payment of a ‘New Start Allowance’ with Centrelink and at the same time providing a statement that he had not undertaken any work during the period covered in each application. In fact, on each occasion Mr Burman had been employed on a casual basis with Integrated Workforce.
As a result of the offending, Mr Burman received an overpayment of $2,123.94. Of that amount as at 19 April 2004, $904.56 had been recovered. This resulted from the withholding of social security benefits. Full recovery will be effected over time.
Mr Burman’s only prior offence of dishonesty was as a young offender. He was released on that occasion without conviction.
It was put to the magistrate by counsel for the Commonwealth that in May 2001 Mr Burman had obtained benefits when failing to correctly advise of income received. This conduct had led to a warning letter. On 15 September 2000 and 25 September 2002 administrative penalties were imposed on Mr Burman by Centrelink. This was for failures to correctly record employment income. A warning letter had been sent on 10 September 2001. This, it was said, put Mr Burman on notice that similar conduct would likely result in prosecution.
Counsel for Mr Burman informed the magistrate that his client was a 25 year old single man. It was said that he had serious mental health problems. It was claimed that he suffered from alcoholism that led to his offending. Mr Burman’s mental health problems made it particularly difficult for him to access suitable treatment for his alcoholism. Although this was not from a want of endeavour on Mr Burman’s part. During 2003 he had been admitted to the psychiatric ward of a number of hospitals and to a clinic to obtain assistance for his alcoholism.
Mr Burman had been homeless at times during the past four years. However at Christmas 2003, when in a state of crisis, he approached his parents seeking their assistance. They agreed to his return home. He has continued to reside at that home. The stability of the family arrangements were said to have allowed Mr Burman to address his mental health problems and alcoholism. He has and continues to receive treatment. He is currently following through a course of treatment from his general practitioner, Dr Worthington. He has agreed to his mother managing his finances.
It was submitted that Mr Burman was contrite and remorseful and had acknowledged at the earliest opportunity his offending by his pleas of guilty. It was emphasised that full restitution would be effected over time.
Mr Burman’s prospects for rehabilitation were evidenced by the support from his parents and the ongoing treatment provided by Dr Worthington, since May 2003.
Dr Worthington described Mr Burman as a complicated person who was difficult to classify psychiatrically, and who was not easy to treat. He formed the opinion that Mr Burman suffered from a number of psychiatric conditions including an anti-social personality disorder, a social phobia disorder, a state of chronic anxiety and depression. Mr Burman displayed narcissistic personality traits and had developed a dependence on benzo-diazepine, alcohol and other substances.
Mr Burman’s mental health problems, in Dr Worthington’s opinion, had left him with insecurity and vulnerability associated with a sense of bewilderment. As a result of his mental health problems, Mr Burman is prone to violent assaults from others, probably at times when affected by alcohol in public places. He had been subjected to a number of serious assaults.
Dr Worthington did not consider Mr Burman to have a good prognosis. Notwithstanding that he had in recent times cooperated fully with Dr Worthington’s course of treatment, his ultimate rehabilitation remained problematic. Dr Worthington was of the view that Mr Burman would be at risk in a prison environment. His personality profile was likely to lead to victimisation. He had a history of attempted suicide.
The Magistrate’s Approach
The learned sentencing magistrate took a very serious view of the offending. He considered that notwithstanding Mr Burman’s pleas of guilty, his personal circumstances, his mental health issues, his alcohol and drug addiction and the fact that he was making endeavours to rehabilitate himself, it was necessary that Mr Burman be sentenced to an immediate term of imprisonment. In reaching this conclusion, the magistrate had regard to what he described as:
an overriding principle in sentencing in Commonwealth matters of this nature of general deterrence.
This was said to be the case given that these offences are very difficult to detect, their prevalence and the fact that the community at large suffers as a result of this type of behaviour.
The magistrate noted that, had this been the first incident of such behaviour, he would have considered releasing Mr Burman forthwith. However, he considered that Mr Burman had previously committed similar behaviour and been given a warning by the Department without prosecution and that in these circumstances the offending called for an immediate term of imprisonment.
The magistrate imposed the one penalty on all counts of six months imprisonment and ordered that Mr Burman be released after serving one month of that term of imprisonment. His release was subject to Mr Burman entering into a bond to be of good behaviour and to obey all reasonable directions concerning treatment and counselling relating to drug and alcohol problems and to obey all reasonable directions concerning psychiatric assistance.
Issues on Appeal
On appeal four grounds were advanced:
-that the magistrate erred in principle by treating general deterrence as the overriding principle in sentencing in Commonwealth matters;
-that the magistrate erred in treating earlier alleged similar offending as a major aggravating factor;
-that the magistrate had failed to have proper regard to the appellant’s prospects of rehabilitation;
-that the sentence imposed was manifestly excessive.
Further evidence was tendered with the consent of the Commonwealth regarding Mr Burman’s mental health. Subsequent to being sentenced, his mental health had deteriorated to the point that he required further hospitalisation.
Consideration of Issues on Appeal
General Deterrence
Division 2 of part 1B of the Crimes Act 1914 (Cth) addresses the general sentencing principles to be applied in sentencing for Commonwealth offences. Section 16A(1) is in the following terms:
(1)In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.
Section 16A(2) [1] identifies particular matters to which the sentencing court must have regard. Although not mentioned specifically, it is accepted that general deterrence is a relevant matter for consideration.[2]
[1] In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court:
[2] See R v Selleck (2000) 78 SASR 194 at 211-212, R v Paull (1991) 20 NSWLR 427 at 434 and Director of Public Prosecutions (Cth) v El Karhani (1990) 20 NSWLR 370 at 380.
In Kovacevic v Mills[3] Doyle CJ, Mullighan, Bleby and Martin JJ made the following observations with respect to sentencing for offences of social security fraud:
We agree that in cases of deliberate and sustained fraud, deterrence must loom large in determining the appropriate sentence. But other matters, especially rehabilitation, must still be considered. We do not agree that deterrence must take priority over all other considerations, at least if that statement means that there is no scope for the Court to be influenced by considerations of rehabilitation in finally arriving at the sentence to be imposed. It may well be that King CJ did not mean to exclude considerations of rehabilitation, or mean to say that a sentence of imprisonment, with at least some of it to be served, must be imposed in every case of sustained and deliberate fraud. But his remarks are capable of being read as requiring an order for imprisonment, with at least some of it to be served, in virtually every case, and absent truly exceptional circumstances.
In our opinion the proper approach to sentencing is better reflected by saying that in a case of the type referred to by King CJ, an order for imprisonment, with at least some of the imprisonment actually to be served, is ordinarily likely to be required. This is because the commission of a number of offences of fraud over a period of time makes imprisonment appropriate even for a first offender, because of the seriousness of the offending. The same matters may require that at least part of that term of imprisonment actually be served, even in the case of a person with no previous convictions. But there is still a need to consider all aspects of the matter, and to consider the interests of society and of the offender in the rehabilitation of the offender. Also, in an appropriate case, there may be room for the exercise of mercy and leniency: …
[3] (2000) 76 SASR 404. The principles discussed in Kovacevic v Mills have also been applied in Stevens v Centrelink [2003] NTSC 16, Garnsey v Stamford (2002) 131 A Crim R 427, Parente v Commonwealth (2002) 220 LSJS 126, Cruse v Treminio [2001] ACTSC 59, Director of Public Prosecutions v Milne [2001] VSCA 93, R v Blackman [2001] NSWCCA 121, Hayward v Hubbard [2000] WASCA 416
The Court of Criminal Appeal in R v Place[4] applied the approach in Kovacevic:
Another court of five judges was also called upon to consider the role of the appellate court in setting appropriate standards in Kovacevic v Mills. The appellant had pleaded guilty to a number of offences under the Social Security Act 1991 (Cth) and was sentenced to a term of imprisonment. On appeal the appellant contended that a previous decision of this Court in R v Cameron was erroneous because it held that considerations of deterrence were to outweigh all other considerations. It was submitted that such an approach was contrary to general sentencing principles which require that all relevant factors be considered in each case. In the joint judgment of Doyle CJ, Mullighan, Bleby and Martin JJ, the judgment of Doyle CJ in Cadd as to the proper function of the appellate court in setting appropriate standards was approved. That approval was followed by this observation:
"However, we agree that a sentencing standard cannot dictate a result in every case, or remove the need for consideration of the facts of each case and the application of the relevant considerations to those facts.”
…
We agree with the further submission advanced from Mr Kourakis that in a case such as the present, considerations of deterrence cannot displace all other considerations, either at the outset or at the conclusion of the sentencing process. All relevant considerations must be taken into account, and given due weight. The establishment of a sentencing standard by this Court cannot require a judge or magistrate, when imposing sentence, to take into account only one of the considerations relevant to sentencing, be it deterrence or some other consideration. However, consistently with that, it is appropriate for this Court to indicate that a certain type of offending is likely to attract a certain type of punishment, and in particular imprisonment, and to indicate an appropriate sentence range for particular types of offending. (our emphasis)
[4] (2002) 81 SASR 395
As earlier observed the magistrate in the present case treated general deterrence as an overriding principle when sentencing with respect to Commonwealth offences of this nature. The magistrate’s approach is in conflict with the reasoning in Kovacevic. General deterrence is an important consideration. However it must not take priority over all other considerations. It is not an overriding principle. The magistrate erred in his application of sentencing principle.
Prior Conduct
Mr Burman’s prior conduct did not result in any charges being laid. He received a warning letter and administrative penalties. However none of these matters established that he had engaged in prior criminal conduct. They represented and evidenced no more than the Commonwealth’s reaction to unjudged conduct.
The magistrate was in error in treating the earlier conduct as “similar offending conduct”. In effect, he treated the prior unjudged conduct as though it were established criminal conduct and sentenced Mr Burman on that basis. He was in error to do so.
In Veen (No 2)[5] Mason CJ, Brennan, Dawson and Toohey JJ observed:
There are two subsidiary principles which should be mentioned. The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner’s claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community’s understanding of what is relevant to the assessment of criminal penalties.
[5] (1988) 164 CLR 465 at 477
In Lari v Pavlos[6], Owen J of the Supreme Court of Western Australia applied the reasoning of the High Court in Veen (No 2) in similar circumstances to the present case:
His Worship said: “This is not the first time that you have offended in this regard”. This is, I think, a reference to information presented by the prosecutor during the course of his remarks on sentencing in which he said, at 17-18 of the Appeal Book: “Going back to 1990, he had an overpayment raised against him as a consequence of working as a taxi driver and then, whilst he admitted that he had been working, he climed that other drivers had told him that he didn’t have to declare income. He was involved in an overpayment of over $1500, but he was significantly sent a warning letter by the department about the potential for prosecution action and it was also pointed out to him what his obligations were if he didn’t understand the system. Each fortnightly application form contains a warning that the penalties for providing false and misleading information - it also states that the department officers work out how much to be paid to a beneficiary. He didn’t take advantage of that. There is no suggestion that he ever approached the department to clarify any of his uncertainties.”
In my opinion the reference by the Magistrate to the appellant having “offended” is an error. Whilst the appellant may have engaged in conduct which the department felt was an offence under the Act he was not prosecuted and not found guilty. There was no evidence that he admitted any wrongdoing. It could not be said that he had offended. The fact that he had been cautioned by the department is not of itself sufficient in that regard.
It also, I think, runs counter to the dicta of the High Court in Veen v The Queen (No 2) …
It seems to me that the Magistrate has given greater weight than was warranted to the fact that the appellant had previously been involved in overpayments of social security. Had this submission been framed to negative the suggestion that the appellant’s behaviour was a mistake and totally out of character for him or an aberration, the result may have been different. In my opinion however, this information seems to have influenced the Magistrate in terms of the penalty to be imposed and in that respect there has been an error.
[6] (Owen J, 17 May 1996, unreported)
In Ralph v Narwojee[7] the Western Australian Court of Criminal Appeal considered similar circumstances. In that case the appellant had received warning letters about overpayments made by the department following inaccurately filled out forms.
…It concerns the Magistrate’s emphasis in his sentencing remarks on the appellant’s state of knowledge due to his past dealings with the department concerning overpayments. In the passages set out above, the Magistrate observed more than once that the appellant’s previous experience with respect to overpayments and the steps which had been taken against him to recover the overpayments must have fixed the appellant with a full appreciation of his disclosure obligations. Ms Archer submitted that the Magistrate treated this as aggravating his offending. The passages do indicate that this was the Magistrate’s approach and I would uphold the submission that it was an erroneous approach. The offence which is created by s215 is the obtaining of a social security payment knowing that the payment is not payable, or is payable only in part. That the appellant knowingly submitted false claims could not therefore of itself aggravate the offence. A matter which is an element of the offence (in this case knowledge) cannot of itself also be a matter of aggravation.
[7] (Murray, Anderson and Templeman JJ, 17 January 2003, unreported)

Even if the prior unjudged conduct had been established to be criminal it would be wrong to treat it as a major aggravating factor of this offending. Its relevance was not such as to require immediate imprisonment in the present case.
The Appellant’s Poor Health
Mr Burman’s state of health is poor. He suffers from a number of psychiatric disorders. Since sentencing as a result of his deteriorating mental health he has been admitted as an in-patient. A recent report has provided the following information:
Mr Burman was admitted to Glenside Campus on 19 June 2003…He was initially in Cleland House, an open ward, but was transferred to the closed ward at Brentwood on 20 June 2004.
Mr Burman appeared to be suffering from Major Depression with prominent suicidal ideation and homicidal ideation. There was evidence of Personality Disorder with features of Antisocial Personality Disorder, and prominent substance abuse.
…he also gave evidence of an Anxiety Disorder, with some features of obsessive compulsive disorder.
Rehabilitation
Although Mr Burman’s rehabilitation is impeded by his addictions, prospects do remain. His family support is of importance and he appears to be following a recommended course of treatment. The magistrate made no reference to prospects for rehabilitation - a relevant factor tending to militate against the imposing of an immediate custodial term of imprisonment in this case.
In the circumstances it is unnecessary to fully consider the contentions that the penalty imposed was manifestly excessive. However even if no sentencing error had been identified, in the circumstances of this case, having regard to the appellant’s poor state of mental health, it would be open to conclude that the sentence was manifestly excessive.
Conclusion
For the forgoing reasons this appeal should be allowed. The sentence imposed by the magistrate should be set aside. Mr Burman should be sentenced to a term of imprisonment of one month. However an order should be made for his immediate release. It is important that he receive ongoing treatment. The bond that he has entered into addresses these matters. In these circumstances there is no need to alter the terms of the bond.
The appeal is allowed. The sentence of six months imprisonment is set aside. A sentence of imprisonment of one month is imposed and an order is made for Mr Burman’s immediate release.

(a) the nature and circumstances of the offence;
(b) other offences (if any) that are required or permitted to be taken into account;
(c) if the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character - that course of conduct;
(d) the personal circumstances of any victim of the offence;
(e) any injury, loss or damage resulting from the offence;
(f) the degree to which the person has shown contrition for the offence:

(i) by taking action to make reparation for any injury, loss or damage resulting from the offence; or

(ii) in any other manner;
(g) if the person has pleaded guilty to the charge in respect of the offence - that fact;
(h) the degree to which the person has co-operated with law enforcement agencies in the investigation of the offence or of other offences;
(j) the deterrent effect that any sentence or order under consideration may have on the person;
(k) the need to ensure that the person is adequately punished for the offence;
(m) the character, antecedents, cultural background, age, means and physical or mental condition of the person;
(n) the prospect of rehabilitation of the person;
(p) the probable effect that any sentence or order under consideration would have on any of the person's family or dependants.

(3) Without limiting the generality of subsections (1) and (2), in
determining whether a sentence or order under subsection 19B (1), 20 (1) or 20AB (1) is the appropriate sentence or order to be passed or made in respect of a federal offence, the court must have regard to the nature and severity of the conditions that may be imposed on, or may apply to, the offender, under that sentence or order.