Cloros v Centrelink - [2013] SASC 74

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
CLOROS v CENTRELINK
[2013] SASC 74
Judgment of The Honourable Justice Gray
30 May 2013
CRIMINAL LAW - APPEAL AND NEW TRIAL - INTERFERENCE WITH DISCRETION OR FINDING OF JUDGE - GENERAL PRINCIPLES
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE
PROCEDURE - COURTS AND JUDGES GENERALLY - JUDGES - POWERS AND DUTIES IN RESPECT OF UNREPRESENTED LITIGANTS
Appeal by defendant against conviction and sentence - defendant convicted following a trial in the Magistrates Court of 16 counts of making a reckless false statement in connection with a claim for Newstart Allowance contrary to sections 212 and 217 of the Social Security (Administration) Act 1999 (Cth) - defendant failed to declare income and employment details to Centrelink - defendant sentenced to term of imprisonment of five months - defendant to be released immediately upon entering a good behaviour bond - reparation order of $7,731.21 imposed pursuant to section 218 of the Social Security (Administration Act) - where defendant had appeared at trial unrepresented - whether Magistrate erred in finding that Centrelink had made the payments alleged by prosecution - whether Magistrate erred in finding that defendant had made misrepresentations - whether Magistrate erred in concluding that defendant's bank records confirmed the receipt of Centrelink payments and payments from defendant's employers - whether Magistrate erred in concluding that defendant had not made disclosure of his employment to Centrelink - whether Magistrate dissuaded defendant from giving evidence - whether Magistrate failed to have regard to defendant's personal circumstances in sentencing.
Held: Appeal dismissed - Magistrate's findings were open on the evidence - Magistrate complied with her obligations regarding unrepresented defendants - sentence imposed was appropriate for an offence of this kind.
Social Security (Administration) Act 1999 (Cth) s 212, s 217 and s 218; Crimes Act 1914 (Cth) s 16A(2) and s 20(1)(b), referred to.
Devries v Australian National Railways Commission (1993) 177 CLR 472; Fox v Percy (2003) 214 CLR 118; Cooling v Steel (1971) 2 SASR 249; Finn v Department of Correctional Services [2012] SASC 88; Spurway v Police [2011] SASC 177; Frick v Police [2011] SASC 17; R v Zorad (1990) 19 NSWLR 91; Pezos v Police (2005) 94 SASR 154; Kovacevic v Mills (2000) 76 SASR 404; R v Ferrer-Esis (1991) 55 A Crim R 231, considered.

CLOROS v CENTRELINK
[2013] SASC 74
Magistrates Appeals: Criminal
GRAY J.

This is an appeal against conviction and sentence.
The defendant and appellant, Jonathon Dean Cloros, was charged with 17 counts of making a reckless false statement in connection with a claim for Newstart Allowance contrary to sections 212 and 217 of the Social Security (Administration) Act 1999 (Cth). One count, being count 4, was withdrawn.
The defendant pleaded not guilty to the remaining 16 counts. The trial was conducted before a Magistrate at the Elizabeth Magistrates Court on 27 and 28 November 2012. The defendant was convicted on each count. The defendant appeared unrepresented at trial and on the appeal.
It was the prosecution case that between 24 November 2006 and 28 September 2007 the defendant made 16 reckless false statements in which he failed to declare income from employment. This resulted in the defendant receiving 15 payments of Newstart Allowance to which he had no entitlement and one payment to which he had only a partial entitlement. The defendant had been in receipt of a Newstart Allowance on an ongoing basis since 14 December 1994. During the period of offending, the defendant worked with Weslo Pty Ltd from 22 January 2006 on a casual basis as a crowd controller and with Total Control Security Services between 11 November 2006 and 13 September 2007 on a casual basis as a crowd controller. During the period of offending, the defendant was required to report his income to Centrelink by lodging an Application for Payment of Newstart Allowance form on a fortnightly basis. At question one of each form the defendant was asked if he had earned any income during the relevant period and, if so, how much. It was the prosecution case that on 15 forms the defendant stated that he had not earned any income or completed any work in the period relevant to each form, despite working and receiving income from the above employers. The prosecution also alleged that on one form the defendant grossly under-declared his income. The defendant received Newstart payments on a fortnightly basis paid electronically into his bank account with Westpac Banking Corporation. The prosecution alleged that the total resulting overpayment was $7,731.21.
Four witnesses were called in support of the prosecution case. Two Centrelink officers, Steven Donnelly and Maria Cave, and a representative of each of the defendant’s employers, Ranato Gadlan of Weslo and Christine Rau of Total Control Security, were called.
At the close of the prosecution case, the defendant made a no case to answer submission. The Magistrate declined to find that there was no case to answer. The defendant called no evidence. The Magistrate subsequently accepted the evidence of the prosecution witnesses and found the prosecution case proved beyond reasonable doubt.
On 9 January 2013, the Magistrate convicted the defendant on each count and imposed the one sentence of a term of imprisonment of five months. Pursuant to section 20(1)(b) of the Crimes Act 1914 (Cth) the Magistrate ordered that the defendant be immediately released upon entering into a $750.00 recognizance to be of good behaviour for a period of 18 months. Pursuant to section 218 of Social Security (Administration) Act, the Magistrate made a reparation order in the sum of $7,731.21, but declined to order any costs in favour of the prosecution.
The complaint had been the subject of an earlier trial leading to the defendant being convicted. An appeal against those convictions was successful. A Judge of this Court considered that the prosecution had not established in the first trial that module F forms had not been received by Centrelink.[1] A module F form is a document providing for the disclosure of details of employment. In the present proceeding, as is discussed later, that issue was squarely addressed by the prosecution, evidence was led on the issue and a finding was made by the Magistrate that module F forms had not been received by Centrelink.
[1] Cloros v Centrelink (Unreported, Supreme Court of South Australia, Kourakis J, 11 May 2012).
The defendant’s notice of appeal is said to be against the whole of the judgment and the orders made by the Magistrate. The defendant seeks the setting aside of the convictions, the revocation of the reparation order and an order that Centrelink make back payments. The grounds of appeal, however, border on the incomprehensible.
On the hearing of the appeal, the defendant asserted for the first time that the Magistrate had dissuaded him from giving evidence and had not had regard to his submissions.
On the conviction appeal, as I understand the defendant’s submissions, four further complaints were advanced with respect to the convictions recorded by the Magistrate. It was asserted that the Magistrate erred in concluding that Centrelink had made the payments alleged by the prosecution, erred in concluding that the defendant had made misrepresentations, erred in concluding that the defendant’s bank records confirmed both the receipt of Centrelink payments as well as payments by the defendant’s employers, and, finally, erred in concluding that the defendant had not made a disclosure of his employment through the provision of module F forms.
On the sentence appeal, the defendant repeated his complaints concerning the conviction appeal. He then added that he was undertaking studies and was keen to return to work, and he asserted that the Magistrate had failed to have proper regard to these matters.
The respondent submitted that the Magistrate’s findings of fact were not only open on the evidence, but were fully justified by the evidence. It was submitted that each of the elements of the offence were made out in respect of each count. It was said that the defendant received a Newstart Allowance without disclosure of money received from employment. Had there been proper disclosure, the defendant would not have been entitled to the monies received.
Conviction Appeal
Insofar as the defendant sought to challenge on appeal the Magistrate’s findings as to credibility, it is pertinent to point out that the Magistrate had the advantage of seeing and hearing the witnesses give evidence during the course of the trial. It is open to this Court to review those findings and to reach a different conclusion. However, it is to be recognised that the Magistrate was in the best position to make a judgment as to credibility and reliability. Unless some reason is shown to suggest that the Magistrate’s conclusions were not fairly open, it is difficult to establish any basis on which to overturn those findings. The High Court in Devries v Australian National Railways Commission[2] placed emphasis on the significant advantage that the conductor of a trial has as a consequence of hearing and observing the witnesses. The appeal court is at a significant disadvantage in this respect. In particular, in Devries v Australian National Railways Commission, Deane and Dawson JJ observed:[3]
An appellate court which is entrusted with jurisdiction to entertain an appeal by way of rehearing from the decision of a trial judge on questions of fact must set aside a challenged finding of fact made by the trial judge which is shown to be wrong. When such a finding is wholly or partly based on the trial judge's assessment of the trustworthiness of witnesses who have given oral testimony, allowance must be made for the advantage which the trial judge has enjoyed in seeing and hearing the witnesses give their evidence. The "value and importance" of that advantage "will vary according to the class of case, and, ... [the circumstances of] the individual case". If the challenged finding is affected by identified error of principle or demonstrated mistake or misapprehension about relevant facts, the advantage may, depending on the circumstances, be of little significance or even irrelevant. If the finding is unaffected by such error or mistake, it will be necessary for the appellate court to assess the extent to which it was based on the trial judge's conclusions about the credibility of witnesses and the extent to which those conclusions were themselves based on observation of the witnesses as they gave their evidence as distinct from a consideration of the content of their evidence. Judges are increasingly aware of their own limitations and of the fact that, in a courtroom, the habitual liar may be confident and plausible, and the conscientious truthful witness may be hesitant and uncertain. In that context, it is relevant to note that the cases in which findings of fact and assessments of credibility are, to a significant extent, based on observation of demeanour have possibly become, if they have not always been, the exception rather than the rule. Indeed, as Kirby A.C.J. pointed out in Galea v. Galea, in many cases today, judges at first instance expressly "disclaim the resolution of factual disputes by reference to witness demeanour". However, this does not deny that in many cases a trial judge's observation of the demeanour of witnesses as they give their evidence legitimately plays a significant and even decisive part in assessing credibility and in making factual findings.
[Footnotes omitted.]
[2] Devries v Australian National Railways Commission (1993) 177 CLR 472; see also, Fox v Percy (2003) 214 CLR 118.
[3] Devries v Australian National Railways Commission (1993) 177 CLR 472, 479-480.
As earlier observed, the defendant was unrepresented at trial. Courts should ensure that defendants who are unrepresented are apprised of their rights and duties at all times, and must be vigilant to keep proceedings free of error or misunderstanding.[4]
[4] Cooling v Steel (1971) 2 SASR 249, 251; see also, Finn v Department of Correctional Services [2012] SASC 88, [20]; Spurway v Police [2011] SASC 177, [67]; Frick v Police [2011] SASC 17, [8]-[9].
The Magistrate was under a duty to ensure that the defendant was in a position to be able to make an effective choice as to the exercise of his rights during the course of the trial. However, the Magistrate could not tell the defendant how to exercise those rights.[5]
[5] R v Zorad (1990) 19 NSWLR 91, 99; see also, Pezos v Police (2005) 94 SASR 154, 158-9.
It is apparent, in the within proceedings, that the Magistrate attended to these obligations and duties during the trial. The Magistrate ensured that the prosecution was put to strict proof at all times. Her Honour explained to the defendant the process of tendering documents and the basis of any objection to this. Her Honour ensured that the onus remained on the prosecution to explain why various documents were admissible. The Magistrate assisted the defendant in formulating cross-examination questions and with the processes involved in cross-examining witnesses. Her Honour attempted to accommodate the defendant’s timetabling issues. Her Honour assisted the defendant in making a no case to answer application. The Magistrate ensured that the prosecutor took the witnesses through all forms individually to better assist the defendant in understanding the case against him. The Magistrate reminded the defendant to actively listen to witness answers and prosecution questions, and afforded the defendant time to consider how he wanted to present his case.
The defendant, beyond a bare assertion from the body of the Court, provided no material to suggest that the Magistrate had acted in a manner to dissuade the defendant from giving evidence. The defendant did not attempt to support his assertion by any reference to the transcript.
A review of the transcript discloses that the Magistrate carefully explained to the defendant that he had several options open to him as to the manner in which he could present the defence case. The Magistrate pointed out that the defendant could call evidence from himself and from witnesses, and that he could also tender documents. Her Honour enquired as to whether the defendant would like time to think about what course he would follow. There followed a lengthy interchange between the Magistrate and the defendant in which the Magistrate repeatedly suggested that the defendant focus on the options that had been outlined and, in particular, whether he wished to give evidence, call evidence or simply make submissions. Following further discussion, the Magistrate reiterated the options available to the defendant and made it clear that she did not wish to influence the defendant in any way. At the conclusion of the discussion, the defendant informed the Magistrate that he did not wish to give evidence and the matter proceeded to the making of final submissions.
There is no support for the defendant’s assertion that the Magistrate dissuaded him from giving evidence. The transcript clearly supports the conclusion that the Magistrate was painstaking in attending to her obligations when dealing with an unrepresented defendant. She did so with patience and gave careful explanations of the options open to the defendant.
I reject the defendant’s assertion that the Magistrate dissuaded him from giving evidence. I reject the defendant’s assertion that the Magistrate did not have regard to the defendant’s submissions. A review of the transcript discloses that the Magistrate paid careful attention to the defendant’s submissions. Her Honour’s reasons also display a clear understanding of the issues arising in the trial.
A review of the Magistrate’s reasons further discloses a careful attention to the elements of the offences, the need for the prosecution to prove its case beyond reasonable doubt, and a close analysis of the documentary and oral evidence. The prosecution tendered exhibits P7 to P22, being Centrelink forms entitled “Application for Payment of Newstart Allowance”. Each of these forms contained answers provided by the defendant to particular questions and contained a declaration signed by the defendant. Relevantly, each of the Centrelink forms contained a question asking the defendant whether he did any work in the period to which the form related. Leaving aside count 12, the defendant ticked the box “no” in answer to this question on each form. As a consequence, the defendant received a Newstart Allowance payment from Centrelink in respect of each of the 15 counts, being counts 1 to 3, 5 to 11 and 13 to 17.
Evidence by way of a certificate established each payment and tendered records from the defendant’s bank account confirmed each payment. Evidence led from Centrelink officers established that no module F forms had been received during the relevant period. Evidence from employers of the defendant during the relevant period confirmed his work for those employers and the wages received. The declaration signed by the defendant on the Centrelink forms confirmed the correctness of the information appearing in each form. As noted above, the defendant gave no evidence himself and led no other evidence in the defence case. The defendant cross-examined the witnesses, but there was no inconsistency in their evidence.
The Magistrate concluded:
I am satisfied that the defendant completed the forms that constitute exhibits P7 to P22 inclusive. The charges are that the defendant made a false statement. The tick to the ‘no’ box of question one on the forms (save and except count 12) is a response to a question on the form. The question is asked in connection with or in support of his claim for a social security payment. The defendant has stated on the forms that he did not work in the period. The declaration section of the form then asks whether the information given on the form is correct. I am satisfied that evidence before the court establishes that the defendant worked in the periods as charged and that he earnt an income from this work. Only in one period charged did he declare income (count 12). Evidence before the court proves that the statement that no work was undertaken in the periods was not correct. I am satisfied that the evidence before the court proves that the statements were false. I am satisfied that it is proven that the defendant was reckless as to whether the statements were false. I am satisfied there can be no other explanation for the false statements by the defendant.
I am satisfied that charges 1-3, 5-11, 13-17 are proven beyond reasonable doubt. I find the defendant guilty of those charges.
The remaining count, count 12, differed from the other counts in that the allegation was that the defendant had made an incomplete disclosure of monies earned during the relevant period. In respect of this count, the Magistrate provided the following reasons in reaching her conclusion that the charge had been proved beyond reasonable doubt:
The allegation is that the defendant earnt more than the $162 in the period ending 6 July 2007 which was reported on the form (exhibit P17). The defendant has ticked the box for self employment and said that he earnt $162 in the period. He has given an ABN number and said that he worked 4.5 hours by way of self employment. He does not refer to Total Control Security Services Pty Ltd in that period. Exhibit P28 sets out that the defendant worked in the period from 21 June 2007 to 5 July 2007. There is overlap between the pay period for Total Control and the relevant period for Centrelink of 12 days. The records from Total Control (the relevant employer for that period) do not set out the dates that work was undertaken but rather set out where the work was done and how many hours. They then set out a fortnightly payment. There is a payment made on 5 July 2007 in the sum of $422.68. While the days worked are not set out in the pay records, there are 5 sessions of work for Total Control in that period. If two of those work periods are potentially not in that period (given there is a 12 day overlap) that leaves the potential for three days to be worked within that Centrelink period. The defendant does not declare that he undertook any work for Total Control in that period. As he had ticked the yes box in question one, question two was required to be completed. Question two reads :
What work did you do ? Please complete details of all work you have done in this period.
The form then sets out the types of work and questions with respect to those categories of work – Paid employment, self-employment and Voluntary work.
I am satisfied that the failure to report the work with Total Control is false. I am satisfied that the defendant earnt more than $162 in the period. I am satisfied that it is proven that the defendant was reckless as to whether the statement was false. I am satisfied there is no other explanation for the false statement by the defendant.
I find that … count 12 is proven. I find the defendant guilty of that charge.

A review of the evidence allows the conclusion that there was ample material to support each of the Magistrate’s findings of fact. On the appeal, the defendant appeared to consider that he could make good his appeal by making assertions as to his belief or as to the facts. When it was explained to the defendant that he needed to identify particular aspects of the Magistrate’s reasons that he said were in error and to support his assertions by reference to the evidence, the defendant repeatedly reiterated his beliefs and his assertions of fact. When asked to identify particular paragraphs in the Magistrate’s reasons that were the subject of complaint, he asserted that the Magistrate’s analysis of the Centrelink forms P7 to P22 was riddled with errors. When taken through the particular paragraphs relating to those exhibits, it transpired that each paragraph was a correct summary of the exhibit under discussion.
Finally, the defendant submitted that the conclusions reached by the Magistrate could not be sustained. He asserted that the bank records did not confirm the payments and that module F forms had been provided to Centrelink. Having reviewed the evidence, I consider that there was ample evidence to support each of the Magistrate’s findings. I am satisfied that the Magistrate’s analysis of the bank records was correct. I am satisfied that the Magistrate’s conclusion that module F forms had not been provided was correct. I am satisfied that the Magistrate’s conclusions that the Centrelink forms contained false statements made by the defendant in respect of each count were correct.
In summary, the evidence led by the prosecution made out each element of each count. The Magistrate considered that evidence and found it to be both credible and reliable. No error can be identified. No basis has been established to support the appeal against conviction.
Sentence Appeal
The defendant was found guilty of 16 offences, each of which carried a maximum penalty of a term of imprisonment of 12 months.
The sentence imposed was well within an appropriate range of penalty. In cases of sustained and deliberate welfare fraud such as the present case, an order for imprisonment, with at least some of the period of imprisonment to be served, is ordinarily likely to be required.[6]
[6] Kovacevic v Mills (2000) 76 SASR 404, 411-412.
The defendant’s offending was sustained and deliberate and, as a result, $7,731.21 was defrauded from the federal government.
Section 16A(2) of the Crimes Act sets out a list of factors that are to be taken into account when sentencing. It is not intended to be an exhaustive list and does not require a sentencing magistrate to refer to each of the matters referred to therein.[7]
[7] R v Ferrer-Esis (1991) 55 A Crim R 231, 237-238.
Following the trial, the Magistrate reserved her decision, which she then delivered some weeks later. Following the delivery of the Magistrate’s reasons, submissions were heard as to penalty. The Magistrate enquired as to whether the defendant wished to adjourn the matter or to proceed immediately. The defendant indicated a wish to proceed immediately and made submissions as to his personal circumstances, including that he was 39 years of age, that he was studying and that he was looking for work. He indicated that he had medical reports that he wished to place before the Court. The prosecution then made submissions in which it was said that an order of imprisonment was sought, but with immediate release pursuant to section 20(1)(b) of the Crimes Act. A reparation order in the amount of $7,731.21 was sought pursuant to section 218 of the Social Security (Administration) Act and an order for costs in the amount of $3,829.00 together with GST was also sought. The prosecution referred to the decision in Kovacevic v Mills.[8] The prosecution informed the Magistrate that there were psychological reports that were made available to the prosecution and that they were available for tender. The defendant resisted the tender and the reports were not provided. At this point, the defendant became agitated and the Magistrate adjourned the matter for several weeks.
[8] Kovacevic v Mills (2000) 76 SASR 404.
Sentencing submissions resumed on 9 January 2013. The defendant, on this occasion, tendered a medical certificate, a medical report from the Lyell McEwin Hospital, a letter from South Australia Police and a Centrelink medical certificate. The sentencing submissions concluded with the prosecution inviting the Magistrate to impose the one penalty in respect of all the offending. At this point, the defendant became agitated and the Magistrate was unable to make remarks as to sentence. The Magistrate then sentenced the defendant in the terms earlier outlined. The defendant’s agitated state was such that he was eventually restrained and taken into custody.
It is clear that for offending of this nature and seriousness a term of imprisonment is an appropriate sentence. As was observed by the Full Court in Kovacevic v Mills:[9]
[9] Kovacevic v Mills (2000) 76 SASR 404, 411-412.
In our opinion King CJ was right to emphasise in Cameron the responsibility of the courts to protect the integrity of the social security system, and the need for a firm approach to offences involving sustained and deliberate fraud. In particular, the Court must do what it can to deter such offending. Offences of the type in question are common. The fact that such offending occurs over a longish period of time demonstrates that the offending is calculated, or at least not committed on the spur of the moment. And it is true that sustained fraud against the social security system tends to undermine it, and because of its widespread and insidious nature, to impose substantial costs upon the community.
Nevertheless, we cannot fully subscribe to one aspect of what King CJ said in Cameron, encapsulated in the following passage (at 307):
"Nevertheless, in cases of this kind, that is to say of sustained and deliberate fraud over a period of time, the deterrent purpose of punishment must be paramount. The necessity of protecting the integrity of the social security system by deterrent penalties must take priority over other considerations."
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: see Webb v O'Sullivan [1952] SASR 65 per Napier CJ at 66 and R v Osenkowski (1982) 30 SASR 212 at 212-213.
In some cases the length of the period during which the offending occurs, or the amount involved, or the devices used to effect the fraud, is likely to lead a court to conclude that a sentence of imprisonment actually to be served is required. As is always the case in sentencing, and as Cox J said in R v King, a sentencing standard is a general guide to those who have to sentence in the future, with certain tolerances built into it.
…
There is one further thing that should be said. While imprisonment is likely to be required, it is preferable not to say that a case must be exceptional before a different approach is taken. For example, some offenders in this area are persons whose circumstances are extremely difficult, indeed distressing. An offender might be virtually destitute, with dependents to support. An offender might act as a result of domestic pressures that few people could withstand. That might be a circumstance, coupled with other circumstances, that warrants a more merciful approach in imposing sentence, even though it is a circumstance which is not wholly exceptional, because it tends to recur with this type of offending. It is for that reason that it is safer to say that imprisonment is the starting point, rather than that the case must exhibit exceptional features before a court can properly refrain from making an order for imprisonment. In saying this we do not intend to undermine our earlier statement that in cases of sustained and deliberate fraud, imprisonment is likely to be required.
[Emphasis added.]
These observations make it evident that the Magistrate imposed a sentence that was well within her discretion. No error of principle has been identified. It has not been demonstrated that the Magistrate had regard to any irrelevant material or failed to have regard to any relevant material. In these circumstances, no basis has been established to justify the appeal as to sentence.
Likewise there was no error in the making of the reparation order. Section 218 of the Social Security (Administration) Act enables an order for reparation to be made for the entire amount.
Conclusion
The appeals against conviction and sentence are dismissed.