CDirector of Public Prosecutions v McKenzie
[2025] VCC 202
•5 March 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-24-00121
| COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| LILY MCKENZIE |
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JUDGE: | HIS HONOUR JUDGE TIWANA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 February 2025 | |
DATE OF SENTENCE: | 5 March 2025 | |
CASE MAY BE CITED AS: | CDPP v McKenzie | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 202 | |
REASONS FOR SENTENCE
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Subject:Criminal law - Sentence
Catchwords: Obtaining a financial advantage in the sum of $147,466 by deception from the Commonwealth – Attempt to dishonestly obtain a financial advantage in the sum of $58,111 by deception from the Commonwealth – Offending occurred over 5-month period – Plea of guilty following a sentencing indication – Youth – Chaotic, abusive, traumatic and unstable upbringing – Bugmy principles – Verdins limb five – Some relevant priors.
Legislation Cited: Criminal Code Act 1995 (Cth); Crimes Act 1914 (Cth); Sentencing Act1991 (Vic).
Cases Cited:Bugmy v The Queen (2013) 249 CLR 571; R v Verdins (2007) 16 VR 269; R v Mills (1998) 4 VR 235; Azzopardi v The Queen (2011) 35 VR 43; Merheb v The King [2024] NSWCCA 145; Phillips v DPP (Cth) [2024] VSCA 132; R v Burman [2023] QCA 245; Read v The Queen [2020] WASCA 56; Ryan v The Queen [2022] SASCA 110; R v Ibbetson [2020] QCA 214.
Sentence: Total effective sentence of 2 years and 6 months’ imprisonment To be released after serving 6 months on a Recognisance Release Order with conditions.
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APPEARANCES: | Counsel | Solicitors |
| For the CDPP | Ms C Foot | Commonwealth Director of Public Prosecutions |
| For the Accused | Ms M Grant | Geelong Lawyers, Barristers & Solicitors Pty Ltd |
HIS HONOUR:
Introduction
1Lily McKenzie, following a sentence indication,[1] you have pleaded guilty to one charge of dishonestly obtaining a financial advantage by deception from the Commonwealth, contrary to s 134.2(1) of the Criminal Code Act 1995 (Cth)[2] and one charge of attempting to dishonestly obtain a financial advantage by deception from the Commonwealth, contrary to ss 11.1(1) and 134.2(1) of the Criminal Code Act.[3]
[1]Sentence indication was given on 4 October 2024.
[2]Charge 1 on the Indictment.
[3]Charge 2 on the Indictment.
2The maximum penalty for each charge is 10 years’ imprisonment and/or a fine of $133,200.[4]
[4]600 penalty units.
Circumstances of the offending
3I sentence you on the basis of an agreed prosecution summary of facts that was read aloud in court.[5]
[5]Exhibit A (Dated 22 November 2024).
4On 27 May 2021, you registered an ABN[6] (ending in 088) as a sole trader in the business of “Health Care and Social Assistance” with an industry description of disability support service to parents of disabled children.
[6] Australian Business Number.
5On 14 December 2021, you called the Australian Taxation Office (‘ATO’) and registered for GST.[7] The registration was backdated to 20 October 2021.
[7] Goods & Services Tax.
6Between 15 December 2021 and 29 May 2022, you lodged 10 Business Activity Statements (‘BAS’) and made two amendments to the BAS to the ATO.
7You falsely claimed GST refunds by overstating in your BAS the total sales, GST on sales, and GST on purchases purportedly made for your business.
8The information contained in the ten BAS was false because you did not carry on any business activity and had no business income or expenses during the offending period. At the time of making each of the BAS claims, you were required to check a box declaring that the information provided was true and correct.
9As a result of lodging the ten BAS with the ATO, you dishonestly obtained GST refunds of $147,466. Specifically, you obtained:
(a) $22,545 into your NAB bank account[8]; and
(b) $124,912 into your Bendigo Bank account.[9]
[8] Ms McKenzie provided this account number to the ATO on 14 December 2021.
[9] Ms McKenzie provided this account number to the ATO on 4 January 2022.
10You attempted to dishonestly obtain a further $58,111 in GST refunds to which you were not entitled, by submitting four BAS containing false information. For the same reason, the information was false because you did not carry on any business activity and had no business income or expenses.
11Analysis of your bank accounts revealed a significant number of transfers to your other bank accounts and to other people. The remaining transactions related to personal expenditure, including everyday living, food, holiday bookings, Uber, and other payments. No transactions were consistent with any business expenditure.
12On 2 May 2022, the ATO began reviewing your BAS lodgements.
13On 5 July 2022, you called the ATO asking why your bank account could not be accessed. You were advised by the ATO to contact the case officer.
14On 12 August 2022, an ATO audit finalisation letter was issued for the activity statement period from 1 November 2021 to 28 February 2022 advising that you that information held by the ATO did not indicate any evidence of you carrying out a business. Accordingly, all amounts on activity statements were changed to $0.
15On 12 August 2022, a letter was issued advising you that your ABN and GST registrations effective, 31 May 2022, had been cancelled. No refunds were paid out due to the ongoing audit which was finalised on this date.
16You attended Geelong Police Station on 13 April 2023 for an interview and exercised your right to silence.
Personal circumstances
17Ms Patterson set out the pertinent matters relating to your background in her written submissions. Your personal circumstances are also set out in Dr Barth’s psychological report.[10]
[10]Exhibit 2.
18Your background makes for grim reading. It is plain that you have endured a particularly chaotic, abusive and unstable upbringing. It involved exposure to family violence, drug use and criminal activity. It has also involved witnessing death, attendance of police at home and incarceration of family members. You enjoyed very little family support and guidance and grew up with the Department of Human Services (‘DHS’) involved in removing you from the family home on many occasions.
19You were born in Geelong in 2000 and are now 24 years of age. You have an older half-brother, who is currently incarcerated. Your younger brother suffered sudden and extreme convulsions as a child resulting in him becoming significantly physically and mentally disabled.
20You were raised by your mother and stepfather, and had minimal contact with your biological father until you were a teenager. At times, your stepfather would leave the family home requiring your mother to care for all three children. The family home was frequented by known criminals and drug users.
21Your mother was an intravenous drug user with no driver’s licence. She struggled to care for her children. Consequently, the DHS were actively involved with your family throughout your childhood since you were two years old. You and your siblings were placed into the Department’s care on several occasions due to concerns of significant neglect, substance abuse, poor supervision and family violence.
22You and your siblings were present during your parents’ periods of homelessness and their verbal abuse towards each other. You witnessed your mother’s intravenous drug use and were involved in the process of assisting her to obtain illicit drugs.
23At about four years old, you were placed into the care of a woman who was physically and verbally abusive towards you. You recall being subjected to inappropriate touching by some older boys whilst under her care. Your maternal grandmother then obtained custody and you began living with her in Geelong. Your mother then returned to Geelong and regained custody. Your stepfather returned to live with you all upon his release from prison. The DHS continued to be involved and removed you and your siblings on various other occasions.
24At the age of 13, you were removed from the family home and began residing with your uncle and aunt for a period. You left their care after an argument with your uncle when you were 15 and became homeless for a short time before returning to live with your mother.
25When you were 16 years old, a teenage boy residing at your family home was found deceased in a bedroom after an unruly party the night before at the family home. Your older brother informed you of his death.
26You were again removed from your mother’s care despite your desire to live with her and placed into several kinship arrangements. Despite this, you would continuously run away to return home to your mother.
27During your childhood and teenage years, your older brother’s behaviour became increasingly violent and erratic, including violence directed towards you.
28Your turbulent childhood significantly disrupted your education. You attended various schools in Geelong, North Shore, Highton, Grovedale, Leopold and Newcomb. Your education was impacted by learning difficulties, and you struggled to attain basic literacy and numeracy skills. You left school half-way through year 9 after developing a relationship with an older male and due to your drug use.
29You then attended the Centre for Excellence to study a certificate in beauty and hairdressing. You were supported by Barwon Child Youth and Families but were unable to complete the required training.
30At the age of 18, you lost both of your biological parents in separate incidents. Your father died suddenly some thirteen days after your 18th birthday. Four months later, you and your older step-brother found your mother unconscious on the couch of the family home. You attempted CPR however your mother was already deceased. You experience intense grief and distress from your mother’s death and the circumstances in which you discovered her body.
31Since the age of 18, you have resided at the same housing commission accommodation. The address is situated in a high crime neighbourhood, where you describe having been robbed several times and being regularly stood over by older males.
32You were exposed to drug and alcohol abuse from a very young age in the home environment. You began using cannabis and alcohol daily from around the age of 15 until around 21. You abused many other drugs from your mid-teenage years including methamphetamines and GHB. You have also used benzodiazepines, and more recently have been using heroin.
33You have participated in brief periods of drug and alcohol treatment with the Youth Support and Advocacy Service in Geelong and have attempted two periods in residential rehabilitation. Regrettably, these attempts have been unsuccessful. Despite expressing a desire to Dr Barth to commit to further treatment and achieve abstinence, you continue to abuse Ice and GHB.
34Your unstable lifestyle has made it difficult for you to maintain employment. Aside from brief periods at a fish and chip shop, a flower farm and factory work, you have been reliant on Centrelink for income.
Criminal record
35You have a criminal history involving three court appearances in the Children’s and the Magistrates’ Court between December 2017 and February 2020. Your history consists of dishonesty and violent offending. You have five matters of theft and one offence of handling stolen goods on your record. You have six offences of reckless cause injury and five offences of affray. All three appearances attracted non conviction disposals. You were sentenced to a probation order in respect of your first two appearances and an adjourned undertaking in respect of your third appearance with which you complied. You have not been sentenced to any custodial term.
36You have appeared before the courts subsequent to the offending for which I am sentencing you. In August 2022, you were placed without conviction, on a 12 month Community Correction Order (‘CCO’) for offences including theft from a motor vehicle, handling stolen goods and dealing with property suspected of being proceeds of crime. You contravened the CCO and it was varied to re-commence on 3 April 2023. You have breached the CCO once again and are awaiting a further contravention hearing in the Magistrates’ Court. You have also been dealt with in the Magistrates Court for offences of dishonest retention of stolen goods and obtaining property by deception.
37I was told that there are a number of further matters that have resolved and are awaiting a plea hearing in the Magistrates Court. The offences subject of a plea include handling stolen goods, theft and possessing cash and items suspected of being proceeds of crime.
38These subsequent matters are relevant to your prospects of rehabilitation.
Gravity of the offending and sentencing purposes
39Honest taxpayers expect their tax contributions to be utilised in a manner that benefits the community and assists with the provision of vital services. The self-assessment system relies upon honesty. You sought to dishonestly defraud the ATO to the detriment of taxpayers who comply with the law. As the Courts have stated, this is not a victimless crime. The offending was not an isolated occurrence but occurred over a period of five months involving the submission of many utterly false BAS. Over a relatively short period, you fraudulently obtained $147,466 from the Commonwealth and attempted to obtain a further $58,000.
40The Courts have emphasised that general deterrence is a paramount consideration in cases involving fraud against the Commonwealth. In light of your criminal history and the fact that the offending was not isolated, deterring you also assumes importance.
Defence submissions
41I have had regard to the following material tendered on your plea:
(a) Written plea submissions prepared by Ms Patterson dated 25 September 2024;[11]
(b) Addendum written submissions prepared by Ms Grant;[12] and
(c) Psychological assessment report dated 20 September 2024 prepared by Dr Mathew Barth.[13]
[11]Exhibit 1.
[12]Exhibit 2 (undated but e-lodged on 21 February 2025).
[13]Exhibit 3.
42Your counsel, Ms Grant relied upon the following matters in mitigation:
(a) Plea of guilty;
(b) Youth;
(c) A considerably traumatic and disadvantaged background giving rise to Bugmy[14] considerations; and
(d) Mental health issues giving rise to principle five in Verdins.[15]
[14]Bugmy v The Queen (2013) 249 CLR 571 (‘Bugmy’).
[15]R v Verdins (2007) 16 VR 269 (‘Verdins’).
Dr Barth’s assessment
43Dr Barth assessed you on 22 July 2024 and 7 August 2024.[16] His findings are set out in his comprehensive report. I will briefly summarise them here:
[16]Assessments were undertaken via an audio-visual link.
(i)Dr Barth sets out your particularly difficult and distressing background. He opines that it has shaped you and led to ongoing distress which you have attempted to shut out with heavy drug use. Dr Barth states:[17]
[17]Exhibit 1 [34].
[You have] suffered with noteworthy emotional issues throughout [your] life. [You]… felt a deep sense of inadequacy and worthlessness since [your] abusive childhood and [have] experienced periods of depression in [your] adult years due to [your] chaotic relationships, substance abuse issues and several distressing incidents which have occurred at...home.
(ii)Dr Barth has assessed you with an Adjustment Disorder – with Mixed Disturbance of Emotions and Conduct. He opines that you require psychological treatment which focuses on addressing the emotional impacts you have endured.[18]
(iii)Dr Barth also makes a diagnosis of Borderline Personality Disorder. He states:[19]
Ms McKenzie’s significant exposure to violence and the chronic instability of her childhood has had a pervasive effect on her personality adjustment. She presents with a deep sense of worthlessness that has contributed to her seeking out dysfunctional attachments with others, particularly in regards to her association with antisocial peers. Ms McKenzie’s poor self-esteem, emotional lability and limited social skills have prevented her from developing more fulfilling relationships which has contributed to a pattern of turbulent emotional attachments (mainly involving verbal abuse and drug use).
Ms McKenzie’s history of parental neglect has meant that her self-identity is poorly developed. She has an unstable sense of her qualities as a person and is prone to intense feelings of emptiness and aimlessness with regards to her direction in life. Hence, she is an immature woman who seeks excessive reassurance and guidance from others. In conflict with these needs, her erratic moods lead to periods of hostility and resentment which prohibit her ability to manage interpersonal conflict effectively. Therefore, she has a propensity to act-out with aggressive behaviour when she feels her needs are not being met.
(iv)Dr Barth has also diagnosed you with Stimulant-Use Disorder. He states that the disorder is at a severe level and requires urgent intensive specialist substance abuse treatment.[20]
(v)Dr Barth states that you present as a very unsophisticated young woman with simplistic social reasoning. This is a reflection of your chaotic childhood instability and your educational disadvantage. He assesses your intelligence to fall in the ‘Low-Average’ range. [21]
(vi)Dr Barth completed a general risk of recidivism. He assesses your risk of general re-offending as falling in the ‘Moderate-High Risk’. He states that structured and targeted forensic psychological treatment is required to reduce future risk.[22]
(vii)I also note Dr Barth’s opinion about the impact of imprisonment upon your mental health. He states:[23]
…without treatment and support, Ms McKenzie’s mood is likely to deteriorate further so that she would be vulnerable to more severe depressive mood disturbance and anxiety. This vulnerability would be particularly intense in a custodial context. When considering Ms McKenzie’s emotional volatility, there would be a risk of impulsive acts of self-harm. Accordingly, in such circumstances the provision of appropriate treatment and supervision would be imperative in Ms McKenzie’s case. It is considered likely that Ms McKenzie would experience a lengthy period of adjustment to the custodial environment and be at considerable risk of deterioration in her mood. While it is a truism that any prisoner facing a custodial disposition will find it distressing, in Ms McKenzie’s case her erratic moods, her youth and her fragile personality adjustment all suggest that her level of distress would be more severe than would that of a prisoner not facing her psychological and personal challenges.
[18]Ibid [35].
[19]Ibid [37]–[38]. See also [45](6) and first bullet point of [47].
[20]Ibid [41].
[21]Ibid [36].
[22]Ibid [42]-[44].
[23]Ibid [50].
44I accept that your moral culpability for the offending is reduced in a general sense as articulated in Bugmy. Your formative years have been marred in a profound manner. You have been exposed to family violence, illicit substance use by your mother and step-father and criminal activity. You have witnessed police attending your home and incarceration of loved ones. You enjoyed little parental supervision or guidance. The involvement of the DHS at the age of two and growing up in different crisis accommodation meant you have lacked stability. Regrettably you have experienced tragedy, finding your mother lifeless. It is not surprising that you struggled with your education. Your multifaceted disadvantaged background has led to mental health issues and substance abuse as set out in Dr Barth’s report.
45In addition, in light of your background, your youth, and the issues you are grappling with, I am able to reduce the emphasis on general deterrence and denunciation.
46I accept that limb five of Verdins is engaged.[24] While you appear to be settling down in a custodial environment, it is early days, and I cannot ignore the opinion of Dr Barth as set out in paragraph [43] (vii) of these reasons.
[24]The existence of an impairment at the time of sentencing, or its reasonably foreseeable reoccurrence, may mean that a specific sentence may weigh more heavily on the offender than it would on a person in normal health.
47You were 21 years old at the time of the offending. You are now 24. You are struggling with profound deep-rooted issues which require intensive treatment. That is perfectly clear from Dr Barth’s report. Your rehabilitation must remain an important consideration.[25] There is of course real community interest in seeking to help a young offender who has faced appalling disadvantage.
[25]R v Mills (1998) 4 VR 235; Azzopardi v The Queen (2011) 35 VR 43.
48While I am unable to express optimism about your prospects of rehabilitation, it is clear that meaningful intensive treatment is required to address your complex and entrenched issues. I note Dr Barth’s observation:[26]
To her credit, Ms McKenzie is not indifferent to her problems and expressed her desire to commit to a healthier lifestyle.
[26]Exhibit 1 [46].
49Having given the sentence indication on 14 October 2024, you were arraigned that same day. The plea hearing was adjourned to 22 November 2024. However, you failed to appear on that day and a warrant for your arrest was issued. You were arrested on 10 January 2025 and have remained in custody since.
50I was told by your counsel that you have been utilising your time in custody productively. You completed a 12-hour ‘Relapse’ program and attend Alcoholics Anonymous and Narcotics Anonymous on a weekly basis. You have been seen by a psychiatrist and are currently prescribed medication, including an anti-depressant. Having worked in the kitchens, you are now working in horticulture.
51It is hoped that you maintain this early progress, particularly when you are released back into the community.
52I also bear in mind that having accepted the sentence indication, a trial with a jury has been avoided. You have facilitated the course of justice and accepted responsibility. Although not entered at the earliest opportunity, your plea of guilty entitles you to a sentencing discount.
Prosecution submissions
53I have also had regard to the Crown submissions.[27] The written submissions emphasise the importance of general deterrence in cases involving fraud on the Commonwealth. The Crown submitted that the gravity of the offending was such that a term of imprisonment with some actual time to serve was necessary. Deterring you from re-offending was also a relevant consideration.
[27]Exhibit B.
54The matters in mitigation, including your youth, plea of guilty, limb 5 of Verdins and the Bugmy considerations are not disputed by the Crown.
Sentencing
55I have had regard to all relevant matters and principles. I have taken into consideration the matters listed in s16A of the Crimes Act 1914 (Cth). I have considered each of the cases set out in Exhibit C tendered by the Crown.[28]
[28]Merheb v The King [2024] NSWCCA 145; Phillips v DPP (Cth) [2024] VSCA 132; R v Burman [2023] QCA 245; Read v The Queen [2020] WASCA 56; Ryan v The Queen [2022] SASCA 110; R v Ibbetson [2020] QCA 214.
56On Charge 1, you are convicted and sentenced to 2 years and 3 months’ imprisonment. On Charge 2, you are convicted and sentenced to 15 months’ imprisonment. The sentence on Charge 1 will commence today, 5 March 2025. The sentence on Charge 2 will commence after fifteen months have elapsed from today’s date. This makes a total effective sentence of 2 years and 6 months’ imprisonment.
57I direct that you serve 6 months of the term imposed before being released on a Recognisance Release Order (‘RRO’) upon giving a security in the sum of $2,000 on the following conditions that will last for a period of two years:
(i)that you be of good behaviour.
(ii)that you be subject to supervision and obey all reasonable directions of the probation officer.
(iii)you must not travel interstate or overseas without the written permission of a probation officer.
(iv)that you undertake such treatment or rehabilitation programs reasonably directed by a probation officer, including assessment and treatment for drug abuse or dependency and mental health assessment and treatment.
58In addition, you are required to report to Geelong Justice Service Centre within two clear working days upon your release from custody. You are to report to and receive visits from a Community Corrections officer, and notify an officer of any change of address or employment within two clear working days after the change.
59If you breach the conditions of the RRO, you may be brought back before this Court and dealt with for that breach. One consequence of the breach is that you may be required to serve the unexpired portion of the sentence imposed upon you today.
60His Honour: Do you understand that Ms McKenzie?
61McKenzie: Yes, your Honour.
62You will be given written notice of the sentence imposed today, including the conditions that you must comply with.
Pre-sentence detention
63Pursuant to s 18 of the Sentencing Act 1991, the period of 54 days of pre-sentence detention is declared as having already been served in respect of this sentence and I order that such declaration and its details be entered in the Court’s records.
S 6AAA declaration
64Pursuant to s 6AAA of the Sentencing Act, I indicate that had you pleaded not guilty and been convicted, I would have sentenced you to a term of 3 years and 6 months’ imprisonment with a non-parole period of 2 years and 3 months.
Reparation Order
65Pursuant to s 21B(1) of the Crimes Act 1914 (Cth), I grant the reparation order in the sum of $147,466.
66His Honour: Thank you, Ms Foot, anything arising?
67Ms Foot: No, your Honour.
68His Honour: Ms Grant?
69Ms Grant: No, thank you, your Honour.
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