Chugg v Stanford

[2000] TASSC 93

[2000] TASSC 93

CITATION:           Chugg v Stanford [2000[ TASSC 93

PARTIES:  CHUGG, Betty May
  v
  STANFORD, Mark

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 7/2000
DELIVERED ON:  19 July 2000
DELIVERED AT:  Launceston
HEARING DATE/S:  17 July 2000
JUDGMENT OF:  Underwood J

CATCHWORDS:

Criminal Law - Jurisdiction practice and procedure - Judgment and punishment - Sentence - Factors to be taken into account - Purpose of sentence - Deterrence - Social security fraud - General deterrence significant.

Laxton v Justice (1985) 30 SASR 377; Hrasky v Boyd [2000] TASSC 39 followed.

Aust Dig Criminal Law [827]

Criminal Law - Jurisdiction practice and procedure - Judgment and punishment - Sentence - Miscellaneous matters - Fine - Capacity of offender to pay.

Maynard v White A108/1994; Young v Geddie (1978) 45 FLR 400 followed.

Aust Dig Criminal Law [986]

REPRESENTATION:

Counsel:
           Applicant:  A Woodgate
           Respondent:  J D Barnett
Solicitors:
           Applicant:  Ritchie Parker Alfred Green & Co
           Respondent:  Commonwealth Director of Public Prosecutions

Judgment ID Number:  [2000] TASSC 93
Number of paragraphs:  11

Serial No 93/2000

File No LCA 7/2000

BETTY MAY CHUGG v MARK STANFORD

REASONS FOR JUDGMENT  UNDERWOOD J
  19 July 2000

1. The applicant pleaded guilty in a court of petty sessions to 11 counts of knowingly or recklessly presenting a false document contrary to the Social Security Act 1991 (Commonwealth), s1346 and s1350.  The applicant was fined $2,500 and allowed 12 months within which to pay the fine.  The applicant seeks a review of the order of fine upon the grounds that:

·   it was manifestly excessive in all the circumstances;

·   it was beyond the capacity of the applicant to pay the fine; and

·   error occurred in failing to give the applicant sufficient time to pay the fine.

The relevant facts are that the applicant was in receipt of a Newstart Allowance.  Between 3 February 1999 and 24 June 1999 she obtained employment and earned in the order of $1,300 each fortnight.  On 11 separate occasions during that period the applicant falsely stated in an application for payment of a Newstart Allowance form that she had not been engaged in any part-time or casual work in the period to which the form related. 

1. The applicant made a full confession and pleaded guilty.  The learned magistrate was told that the amount overpaid by reason of the false statements was $4,570.13, and that sum was being repaid at the rate of $3.25 per fortnight by withholding that amount from the applicant's Newstart Allowance.  The learned magistrate was also told that at the time of the sentencing hearing, the applicant was in receipt of "a reduced rate of Newstart Allowance" and that was the reason for the very low rate of repayment. 

1. Counsel for the applicant told the learned magistrate that the applicant was a single woman aged 46 years and then living at Longford.  He said that the applicant was born in Launceston but at the age of 12 moved with her family to live in Victoria.  She left school half-way through her third year to take a job in "retailing".  Counsel told the learned magistrate that the applicant "obtained a considerable work record in that area".  The applicant came to Tasmania not long before the commission of these offences and obtained six months' work with the Midlands Council.  Counsel told the learned magistrate that after leaving the council the applicant became addicted to gambling.  She obtained work as a shop assistant but gambled away all her earnings.  She commenced her deception upon the Department of Social Security in order to support her gambling addiction.  In addition, the applicant stole from her employer, was detected and dismissed.  This latter criminal conduct resulted in 12 convictions for stealing for which the applicant was ordered to perform 119 hours of community service.  Counsel then said to the learned magistrate:

"Now to lose her job and facing [sic] the courts as a consequence of being prosecuted for stealing has been a strong incentive for Miss Chugg to give up her gambling and she has managed to do that, and my instructions are that she has not been to the Casino since last July."

1. The learned magistrate was also told that the applicant's income was a social security benefit of $310 per fortnight from which she paid $170 per fortnight rent and a further $40 per fortnight repayment of a loan.  I accept the submission of Mr Woodgate, who appeared as counsel for the applicant, that the imposition of a fine that is beyond the offender's reasonable capacity to pay constitutes an error of law.  This proposition is correctly encapsulated in the following passage from the judgment of Zeeman J in Maynard v White, A108/1994, at 1:

"A general principle to which regard is to be had in determining the quantum of a fine is that there ought not to be imposed upon an offender a fine which is beyond that offender's reasonable capacity to pay.  That principle has been recognised in many cases of which Broughton v Lowe [1979] Tas R 309 (NC7), Devlyn v Lowe A31/1990, and Kaye v Vagg (No 2) (1984) 11 A Crim R 127 are but some recent Tasmanian examples. However, it is undoubted that that principle must yield to any statutory provisions which require that there be imposed a fine in some minimum amount, which minimum amount may well be beyond the offender's capacity to pay."

See also Young v Geddie (1978) 45 FLR 400 at 403 - 404.

1. No arithmetic fault can be found in Mr Woodgate's submission that after payment of rent and loan instalment the applicant was left with only $100 a fortnight, and that if the fine and costs were paid by equal fortnightly instalments over the period of 12 months within which it was ordered that the fine be paid, that would leave the applicant only $4.96 per fortnight with which to feed, clothe and otherwise maintain herself.  However, it does not follow from such arithmetical reasoning that the amount of fine is excessive and/or the period of time within which it has to be paid is unreasonably short.

1. The capacity of an offender to pay a fine is not measured by reference only to his or her circumstances at the moment the fine is imposed.  As well as an offender's present financial circumstances, his or her capacity to pay a fine includes the ability to generate income by the utilisation of such intellectual and/or physical skills that he or she possesses and the legitimate and reasonable demands that may be made upon the income thereby generated.  See R v Lewis (1965) Crim LR 121; Winkler v Cameron (1981) 33 ALR 663 at 669. As Mr Barnett, counsel for the respondent submitted, the applicant was not ordered to pay the fine by instalments over 12 months, but ordered to pay the fine and costs within 12 months. The question for the learned magistrate was whether or not it was within the reasonable capacity of the applicant to do that.

1. Prior to the applicant falling prey to an addiction to gambling the applicant had been of good character and from what her counsel told the learned magistrate, she had been successful in earning income in the retail industry over a long period.  It appeared from the material put before the learned magistrate on the sentencing hearing that the applicant had been able to find work initially at a municipal council and later in a shop after she came to Tasmania from Victoria.  There was nothing to suggest that the applicant had to support any one other than herself, nor that she had any prior debts other than the one she was paying off at the rate of $40 per fortnight.  Although it is accepted that the applicant's convictions would make it difficult for her to obtain work, she demonstrated a capacity to earn income in the order of $1,000 per fortnight at the time she committed these offences and that capacity appeared unimpaired.  Any diminution in that capacity by reason of local knowledge of the applicant's former addiction to gambling and consequential criminal convictions could be ameliorated by her return to the State in which she has lived for virtually the whole of her adult life.  No reason was put to the learned magistrate why a return to Victoria, or for that matter, a move to any part of the country in order to facilitate utilisation of her earning capacity was not reasonably open to the applicant. 

1. In my view, the foregoing demonstrates that the applicant has failed to establish that error of law occurred by the imposition of a fine which was beyond the applicant's reasonable capacity to pay.  Similarly, no error attended the making of an order that it be paid within 12 months.

1. There is no substance in the ground that alleges that the sentence was manifestly excessive.  The learned magistrate articulated correct principle when he said that:

"There should be a penalty of meaning, that will be of meaning to you, of significance to you, and it will act hopefully as a deterrent to others who may be liable to commit these sorts of offences."

1. For many years now, Australian courts have emphasised the importance of general deterrence when imposing sentence for crimes constituting a fraud on the social security system.  In Laxton v Justice (1985) 38 SASR 377, Olsson J said at 381:

"(1)     Offences of this type are now prevalent.  The offence is difficult to detect and penalties should reflect a concern for the protection of the revenue.

(2)      Frauds of this kind must be viewed seriously because they threaten the basis of the social security system which is designed to provide financial security for those in the community who are in need.  A deterrent penalty is called for.

(3)      It is relevant to regard a continuing series of frauds of this type as increasing the moral blameworthiness of the offender's deceits by way of contrast with single or short term offences.

(4)      Whilst it may be proper in cases of first offences of this type accompanied by mitigating circumstances to impose a fine, nevertheless a custodial sentence may well be appropriate in the case of serious frauds unaccompanied by substantial mitigating circumstances."

See also Hrasky v Boyd [2000] TASSC 39 and cases cited therein.

1. In this case, the fraudulent conduct was deliberate and calculated.  It occurred on 11 separate occasions and the amount involved was not inconsiderable.  The circumstances of this case were such that it might be said that the imposition of a short prison sentence would have been within the proper exercise of the sentencing discretion.  I am clearly of the view that it has not been established that the imposition of a fine of $2,500 was so high that it reflected some undefined error in the proper exercise of the sentencing discretion.  The motion to review is dismissed.