CDirector of Public Prosecutions v Warden

[2018] VCC 1119

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for Publication

AT MELBOURNE
CRIMINAL JURISDICTION

CR-18-00511

COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS

v

LYNN WARDEN

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JUDGE:	HER HONOUR JUDGE CHAMBERS
WHERE HELD:	Melbourne
DATE OF HEARING:	16 July 2018
DATE OF SENTENCE:	23 July 2018
CASE MAY BE CITED AS:	CDPP v Warden
MEDIUM NEUTRAL CITATION:	[2018] VCC 1119

REASONS FOR SENTENCE
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Catchwords:  Sentence – defraud the Commonwealth – dishonestly obtain a financial advantage by deception – diagnosis of major depressive disorder – application of the principle in Verdins

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APPEARANCES:	Counsel	Solicitors
For the CDPP	Ms D Henderson	Commonwealth DPP
For the Accused	Ms O Trumble	Ms Kirsten Moore GTC Lawyers

HER HONOUR:

1Lynn Warden, you have pleaded guilty to one charge of obtaining a financial advantage by deception from a Commonwealth entity, contrary to s.134.2(1) of the Criminal Code Act 1995(Cth).  The maximum penalty applicable to that offence is 10 years’ imprisonment. 

2You are aged 60 years and you have no prior criminal history.

Circumstances of Offending

3The circumstances of your offending are set out in the prosecution’s opening that was tendered in these plea proceedings as Exhibit 1.  It is not my intention to repeat the entirety of that summary.

4In October 2003, you made a claim for a Disability Support Pension (“a DSP”) with the (then named) Commonwealth Services Delivery Agency.  A DSP is a benefit payable to people with a disability, illness or injury that prevents them from working full-time.  Full-time employment means any employment that exceeds 30 hours per week.  The amount of the benefit payable is affected by any other income earned by a recipient of the DSP, including income from employment.

5The claim you completed in 2003 stated that you suffered from osteoarthritis affecting your hands, feet, knees, back and neck.  This was supported by medical material.

6You also declared that you were not employed or in receipt of a wage or salary and that you did not know when you would be able to work full-time or part-time.  That declaration was false.  In fact, you were engaged full-time as an independent contractor to the Hobsons Bay City Council providing family day care services to children in your home.  You had no entitlement to a DSP.

7You continued in receipt of a DSP until 16 April 2016.  Throughout this period, you remained in full-time employment; taking all steps necessary to maintain your annual registration requirements as a child care provider and submitting regular time-sheets to the Council in order to be paid.

8Between 24 October 2003 and 16 April 2016 you received a total gross income of $717,925.04 from Hobsons Bay City Council, being an average gross income of $2,143.06 per fortnight.

9During that period, you were in continuous receipt of a DSP. You received a total of $221,744.37 in benefits that you were not entitled to receive.

10An investigation commenced into your entitlement to a DSP following a data match audit conducted by the Australian Tax Office in 2015.  You were then charged in November, 2007 and entered a plea of guilty to the charge at committal mention on 8 March, 2018.

11Since May 2018, you have made weekly repayments totalling $5,800 leaving a balance of $215,944.38 owing as of today.

12Gravity of the offending

13Ms Warden, you have pleaded guilty to a serious charge, reflected in the maximum penalty of 10 years imprisonment set by Parliament.

14It involved you defrauding the Commonwealth of a significant amount of money, $221,744.38, over an extended period of close to thirteen years.  Your offending began with you, knowingly, making a false statement about your employment status.  It continued thereafter, until 2016, by you failing to advise Centrelink of the fact of your employment and of your income.

15An aggravating feature of your failure to do so is the fact that you were in continuous receipt of an income from the Council, averaging $2,143 gross per fortnight, throughout that period.  You filed no income tax returns in relation to your income over that period.

16There is a marked disparity between the income received by you and the income declared by you.  Over the relevant period, you only declared an income of $3,681.39 to Centrelink; a figure representing just 0.51% of your actual gross income of $717,925.04.

17When your DSP was reviewed in 2007 and 2008 you represented to Centrelink that you were not in any form of employment.

18Yours is offending that does not fall at the low end of the range of offending of its kind.  The sustained deception by you only ceased following detection.

19In cases such as these, the sentencing considerations of deterrence, particularly general deterrence, denunciation and just punishment are all highly relevant sentencing considerations.

Personal circumstances

20I turn now to your personal circumstances.

21You were born in the United Kingdom on 30 May 1958, being the second eldest of five siblings.  Yours was an unhappy childhood, punctuated by emotional and physical abuse at the hands of your father, particularly when he had been drinking heavily.  Although close to your mother now, you report that the relationship was a difficult one when you were young.  You report significant levels of anxiety as a child.  You suffered enuresis until you were 9 years old and say this worsened when your father was physically abusive towards you.

22You and your family migrated to Australia when you were 12 years of age.  This was a time of financial hardship for the family, with both parents working long hours.  Your schooling in Australia was sporadic.  Although initially enrolled in Grade 6, you were not sent to school the following year as your family could not afford to do so.  During that year, you and your older sister were required to care for your siblings.  You attended half a year of school in Year 8, leaving to care for an infant sibling and again in Year 9, this time at the insistence of your parents in order to care for your siblings.

23At the age of 16, you were kicked out of the family home by your father for disciplinary reasons.

24This was followed by periods of homelessness in your late teens until you secured government housing and found employment in a factory.

25From the age of 15 years you were in a relationship with the father of your first two children; a relationship that lasted 11 years and was also impacted by alcohol abuse and physical violence directed at you, requiring hospitalisation at times.  You gave birth to your eldest son, Shane, in 1976 when you were 18 years old.  Your second son, Jamie, was born three years later in 1979.  Following the breakdown of that relationship in around 1984, your sole income was a single parent benefit.

26You commenced a second relationship a few years later that resulted in the birth of your youngest son, Ben in 1987.  That relationship ended five years later.

27Despite having a close relationship with your sons, you report that your times as a single mother were difficult and that you struggled financially without any income support from their fathers.  It was not until Ben was 16 years old that his father was required to pay child support of $10.00 per month. You received no financial support from the father of your other two sons.

28You subsequently completed a certificate in childcare through Victoria University.  You established your own homebased childcare business, predominantly caring for children with complex needs, including autism.  This business was in operation in October, 2003 at the time of your application for a DSP.

29In 1988 you became aware that your two eldest sons had been sexually abused while attending Cub Scouts.  You supported your children to report the abuse, despite the reluctance of other family.  The abuser was convicted.  However, the abuse has significantly impacted on the wellbeing of your two sons, both struggling in adulthood with substance abuse issues, one to a significant degree.  For most of their lives, your sons have depended upon you for financial and other support.  Until recently, both Shane and Jamie continued to live with you in government housing.  You report feelings of guilt and responsibility for the abuse they suffered and its impact upon them.

30You were assessed for the purposes of this plea by Dr Matthew Barth on
23 and 25 May, 2018.  In his report dated 15 June 2018, Dr Barth says that you have experienced significant mental health issues due to these past incidents of abuse and that you continue to present as a “very psychologically vulnerable person”.  He has diagnosed you as suffering from “a major depressive disorder with recurrent episodes of mild to moderate severity”.  He says that your mental state is exacerbated by the stress of your current legal situation but this has occurred in the context of a “long history of emotional problems which date back to [your] childhood”.  He states that you remain at significant risk of a further deterioration in mood and strongly recommends that you receive psychological treatment.

31You also have a number of physical conditions that will impact on your experience of imprisonment, including right shoulder tenosynovitis, osteoarthritis in the knee and bowel issues for which you are prescribed a range of medications to manage.

Factors in mitigation of sentence

32I have earlier outlined the circumstances of your offending and the relevant sentencing considerations for offending of this kind.  There are also other matters that are appropriate to consider in mitigation of your sentence.

33Importantly, you pleaded guilty to the offence at an early opportunity.  In doing so, you have facilitated the course of justice.  By your plea, you have acknowledged your wrongdoing and expressed remorse.  You are entitled to a sentencing discount based on your early plea.

34I further accept there is other evidence of genuine remorse, including that you have commenced repayments to the Commonwealth.  In addition, you have expressed genuine remorse for your conduct, coupled with feelings of shame, to Dr Barth and others. You told Dr Barth you offended to give your children a better life than you had.  You acknowledged however that this was “no excuse.  What I did was very dishonest and wrong.  I have let everyone down.”

35Further, at the age of 60 years, you have no prior criminal record and are to be sentenced by the court as a person of otherwise good character, a topic to which I return later in my reasons.

36Many letters of recommendation have been presented on your behalf.  In no way do these references seek to deflect the seriousness of your offending, but provide insightful observations of your personal circumstances, your history and character.  Your long-term friend, Ms Romano, says she has spoken to you frankly about the charge, and that you are ashamed and disappointed in yourself.  This is echoed in the references of your son Ben and your sister, Marie Skorobogaty.  The reference material also highlights your own history of trauma.  Each letter states that you are a kind, hardworking woman who has been a loving mother to your sons and to the many children in your care.  I have taken this reference material into account.

Prosecution submissions

37The prosecution submit that an immediate gaol term is the only suitable sentencing disposition and that your offending was serious.  Specifically. it was offending that involved a significant amount of money defrauded over many years.  Further, that it was sustained and deliberate offending that ceased only after being detected.  In the absence of exceptional or special circumstances, the prosecution submits that both general and specific deterrence warrant an immediate custodial term.

Defence submissions

38Ms Trumble, who appeared on your behalf, acknowledged that your offending calls for an immediate term of imprisonment to reflect the seriousness of the offending and to give effect to the sentencing considerations of general deterrence, just punishment and denunciation.

39However, Ms Trumble submits that the appropriate sentence must also balance the significant factors in mitigation of your sentence, including your early plea, the absence of any prior criminal history, your previous good character and the impact of imprisonment on your psychological state, given Dr Barth’s diagnosis of a Major Depressive Disorder.

40Specifically, Ms Trumble submits that two of the limbs under the principles outlined in the case of Verdins are relevant because your diagnosis of depression will make your time in custody more onerous than would be the case for someone without your mental health issues.  Further, that you are likely to experience a deterioration in your mental health condition when imprisoned based on the assessment of Dr Barth.

Sentencing principles

41In sentencing you, I am required to impose a sentence that is of a severity appropriate to all the circumstances of the offence. In doing so, I have taken into account the matters relevant to sentence that are set out in s.16A (1) of the Crimes Act 1914 (Cth).

42The first consideration is the nature and circumstances of the offence.  Because of your deception you received $221,744.38 to which you were not entitled.  Although your offending did not have elements of dishonestly that are often found in other cases, such as the creation of fraudulent documents and repeated false declarations, yours was a deliberate deception that continued over many years.  When asked in 2007 and 2008 about your employment status by Centrelink you dishonestly declared that you were unemployed.  You continued to exploit the weakness in the Commonwealth’s administrative processes, particularly in the absence of income tax returns, to your financial advantage.

43As the prosecution rightly pointed out, social security fraud is notoriously difficult for the Commonwealth to detect.  The social security system, being based on trust, is open to abuse with the result that, when abuse is discovered, sentences must be salutary.  Any sentence imposed must operate to deter others who may be tempted to engage in similar deception.  This is because a fraud on the social security system undermines the integrity of the system as a whole; it risks demonising or causing injustice to other legitimate welfare recipients.  The social security system is a major impost on the Australian government’s revenue, through its taxpayers, and as such, the burden of fraud falls on the whole community.

44In sentencing you, I have also had regard to your early plea and your lack of any prior criminal history.  I accept that there is no suggestion of enrichment in the sense of living a lavish lifestyle and that your motive for claiming benefits over this period was to support your family and to avoid returning to a life of financial hardship.  You have had a difficult life; working hard to support your family often with little or no other support.  However, reliance on your previous good character, whilst relevant, must also be balanced against the fact that this deception continued over a near thirteen-year period.

45I also accept that your diagnosed mental health issues, combined with ongoing physical limitations, will make imprisonment more onerous for you than for others.  The evidence of Dr Barth, which I accept, is that your depressive symptoms, combined with your “fragile personality” mean that you are likely to experience “a lengthy period of adjustment to prison and be at considerable risk of deterioration in mood”.  I have taken these matters into account in reducing the sentence I would have otherwise imposed.

46I am also satisfied that your risk of further offending is relatively low.  However, the sustained period of your offending means the sentence must operate as a specific deterrent to you although, in your case, this sentencing factor is not as significant as the considerations of general deterrence, denunciation and just punishment.  I accept that you are genuine in your expressions of remorse, as indicated through your plea, in your comments to others and as evidenced by your repayments to date.  These factors, combined with the ongoing support of your family, mean that I consider your prospects of rehabilitation to be very good.  It will be important however, that you follow Dr Barth’s recommendations as to treatment and counselling for depression.

47Section 12A of the Crimes Act provides that the Court should not pass a sentence of imprisonment unless it is satisfied that no other sentence is appropriate in all the circumstances.  Ms Trumble conceded that a sentence of imprisonment was appropriate given the serious nature of the offending, but urged that the court impose a lengthy recognisance release order after a relatively short period of imprisonment to be served.

48I am satisfied that no sentence other than imprisonment is appropriate in the circumstances given the amount of money dishonestly obtained and the sustained nature of the deception.  As I have indicated, denunciation and punishment must be given effect through the sentence imposed, however that must be balanced against the factors in mitigation to which I have referred.

49Ms Warden, can you please stand.

Sentence

50Ms Warden, on the charge of dishonestly obtaining a financial advantage by deception from a Commonwealth entity, you are sentenced to a term of imprisonment of three years, to be released after serving 14 months on a recognisance of $1000 to be of good behaviour for a period of three years.  This sentence commences today, 23 July, 2018.

51The prosecution sought an order for reparation for the outstanding amount of $215,944.38 and I make that order, noting it is not opposed.

52Pursuant to s.16E of the Crimes Act (Cth.), I declare that the period of seven days that you have been held in custody, be reckoned as time already served under the sentence passed today and I direct that this be entered into the record of the court.

53Pursuant to s.6AAA of the Sentencing Act 1991 (Vic), I indicate that but for your plea of guilty, the sentence I would otherwise have imposed on you would have been a term of four and a half years' imprisonment, with a non-parole period of three years.

54Have a seat, Ms Warden.

55Does counsel have any questions?

56MS EALES:  No, Your Honour.

57HER HONOUR:  Or require clarification.  All right, thank you, if you could take Ms Warden.

58MS EALES:  Excuse me, Your Honour.  Ms Warden's meant to sign the recognisance release order.

59HER HONOUR:  Just one moment, have a - sorry, if you could bring her back.

60MS EALES:  Sorry, just that - - -

61HER HONOUR:  That's - - -

62MS EALES:  - - - if Ms Warden could sign through her counsel the recognisance release order.  There's drafts.  I can just amend - - -

63HER HONOUR:  You've prepared drafts.

64MS EALES:  Yes.

65HER HONOUR:  All right, thank you.  Just have a seat, Ms Warden.

66MS EALES:  Your Honour, I have some draft orders.

67HER HONOUR:  Thank you.

68MS EALES:  And also the reparation order, if Your Honour's - - -

69HER HONOUR:  Order, yes.  Ms Trumble, I just indicate I had previously noted custody management issues, but I will again note those.

70MS TRUMBLE:  If you could, Your Honour, because I do understand from
Ms Warden this morning that she hasn't received her medication.  She has received Ventolin, but hasn't received any other medication since she's been in custody.

71HER HONOUR:  All right, well, I will again note those matters, thank you.

72MS TRUMBLE:  Thanks.

73HER HONOUR:  All right.  Ms Warden, I thank your family for being here in court to support you.  I thank counsel for their assistance in this matter.

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