Department of Social Security v Kedrayate No. Scgrg-97-1312 Judgment No. S6425

[1997] SASC 6425

DEPARTMENT OF SOCIAL SECURITY  v  KEDRAYATE

Magistrates Appeal
Criminal

Nyland J:

This is a prosecution appeal against sentence. The respondent appeared before a stipendiary magistrate in the Magistrates Court at Adelaide on 15 August 1997 charged with three breaches of the Social Security Act 1991.

The first count which alleged the making of a misleading statement on 17 September 1991 in support of a claim for an allowance was withdrawn.  The respondent pleaded guilty to the remaining two counts.

Count 2 alleged that the respondent had on or about 12 September 1994, made a misleading statement by stating on an application for a Job Search allowance, that he was born in the Torres Strait, when in fact he was born in Fiji.

Count 3 alleged that he had made a further misleading statement on or about 1 May 1995 on a Job Search/New Start allowance by stating that he was born in Australia when he was actually born in Fiji.

The learned stipendiary magistrate imposed one penalty with respect to both offences, namely a fine of $100.  In addition by way of reparation he ordered the respondent to pay the sum of $7,737.70. 

At the time of making the aforesaid applications the respondent was a native of Fiji, not an Australian citizen, and he was not therefore entitled to any benefits.  The respondent arrived in Australia sometime in 1989.  A sea captain known to him in Fiji had suggested that he come for a trip to Australia.  The respondent accepted.  When the ship arrived in Sydney, the captain suggested that the respondent have a look around Sydney.  The respondent accepted the invitation but when he returned to the dock the ship was gone.  He did not realise that the captain was going to leave him in Sydney.  At that time, the respondent had no knowledge of the English language, nor did he have anywhere to live.  He remained in Sydney and lived on the streets for many months, gradually picking up a little English.  In due course he formed an association with a group of aboriginal people which included an aboriginal woman called Lavina Graham.  Sometime later, Lavina Graham told the respondent that she was pregnant by him.  She wanted to settle down with him and live together as a family.  On advice from Graham or other members of the group the respondent went to the Department of Social Security.  He maintained, however, that he did not understand the forms provided, nor did he know very much about the procedure.  He believed that Lavina Graham’s brother may have completed the first form. 

The respondent began receiving Job Search allowance payments in the sum of between $227 and $337 per fortnight in September 1991.  The money was used by the respondent to pay his own expenses and those of Lavina Graham.  Lavina Graham subsequently had a child who had health problems and required a number of operations.  Lavina Graham moved to Adelaide some time towards the end of 1992.  The respondent remained in Sydney for a few months but came to Adelaide in about July 1993 and resumed living with Graham and other members of her family.  The respondent continued to receive payments from the department. 

The respondent completed a second claim form on or about 12 September 1994.  The respondent maintained that at the time of doing so he was drunk and affected by drugs.  He was interviewed by the manager of the office who filled out some forms and asked him some questions.  He asked the respondent whether he was an Islander and the respondent replied in the affirmative.  It was at about this time that the respondent became aware that he was doing something wrong.  After looking at a map he realised that the Torres Strait islands were unconnected with Fiji.  He was very scared and did not know what to do.  He did not know how he was going to live and also support his son.  According to the respondent, the department at no time asked whether he spoke or understood English properly, nor was he offered the services of an interpreter.

The respondent’s association with Graham concluded in about March 1996.  In September 1995, the respondent had met Bianca Gabell while he was working as a landscaper at Martindale housing estate at Mount Barker.  In 1996 he moved to Mount Barker where he commenced living in a de facto relationship with Gabell.  It appeared that she was the first person to explain the Social Security system to him.  At that point he understood fully that he was not supposed to be receiving the allowance.

Mr Mead, who appeared for the respondent at the hearing before the magistrate, told the court that the respondent did not have any relatives from Fiji living in Adelaide, nor did he know anyone in Sydney when he had arrived in Australia.  The respondent married Bianca Gabell on 17 August 1996 and they had a six month old boy.  The respondent was employed full time at the Chapmans smallgoods factory at Nairn in the Adelaide hills.  The respondent earned $310 per week net.  His wife received a family payment of $183 per fortnight.  The total disposable income of the family was therefore $401.50 per week.  Mr Mead told the court that the respondent’s expenses included:  $50 per week to the Department of Social Security by way of repayment of the overpaid amount and $130 per week rent. He owed the Department of Social Security a total sum of approximately $29,000.  Mr Mead provided the magistrate with a copy of a reference/medical report from a Dr Jeremy Thompson which described the respondent as being a supportive partner.  The report also referred to impending surgery for the respondent’s son and wife.  Mr Mead submitted that the effect of an immediate custodial sentence would be to deprive the family of their breadwinner and said it would make the impending medical treatment extremely difficult.

The magistrate took into account the respondent’s plea of guilty and in his remarks accepted that the respondent had been the victim of circumstances and that there had been inherent in each of the offences significant language problems, coupled with, at least in respect of Count 2, some incorrect advice upon which the respondent had relied.  He indicated that in those circumstances he did not believe imprisonment to be the appropriate penalty and therefore would impose a fine.  He had regard to the report of Dr Thompson and indicated that he thought that a fine of $1,200 would be appropriate but in view of the respondent’s impecunious circumstances he reduced that amount to $100.  In addition, he ordered the respondent to make reparation and to pay court fees of $93 and a counsel fee of $80.  He allowed six months to pay.

The prosecution has appealed against the sentence on the ground that it was manifestly inadequate and further that the magistrate erred in failing to give any or adequate weight to the need for general deterrence in relation to offences involving social security. 

In considering this appeal, it is necessary to bear in mind the principles which govern prosecution appeals against sentence.  In R v Osenkowski , King CJ said at p213:

"The proper role for prosecution appeals, in my view, is to enable the courts to establish and maintain adequate standards of punishment for crime, to enable idiosyncratic views of individual judges as to particular crimes or types of crimes to be corrected, and occasionally to correct a sentence which is so disproportionate to the seriousness of the crime so as to shock the public consciousness."

Also, in The Queen v Drewett , King CJ said at p345:

"Mere disparity, however, even great disparity between the sentence imposed and the sentence which the appellate court would regard as appropriate, does not of itself justify allowing a prosecution appeal against sentence.  I think that it is clear that appeals by the prosecution against sentence cannot be decided on the same basis as defence appeals against sentence: Griffiths v The Queen ; The Queen v Bitter ; The Queen v Osenkowski (supra)".

The most recent curial pronouncement of the High Court on this topic would appear to be Everett v R , wherein the Court said (per Brennan, Deane, Dawson and Gaudron JJ) at 299:

"An appeal by the Crown against sentence has long been accepted in this country as cutting across the time honoured concepts of criminal administration by putting in jeopardy for the second time the freedom beyond the sentence imposed.  See eg Whittaker v The King ; Reg v Tait ; Reg v Wilston ; Reg v Holder ; Reg v Peterson ; Reg v Stach ; Cooke v Purcell ; Reg v Dowie ; Reg v Arnold ; Reg v Hillsley .  That being so, a ‘court entrusted with the jurisdiction to grant or refuse such leave should give careful and distinct consideration to the question whether the Attorney-General has discharged the onus of persuading it that the circumstances are such as to bring the particular case within the rare category in which a grant of leave to the Attorney-General to appeal against sentence is justified.’: Malvaso v The Queen .  In determining whether that question should be answered in the affirmative, a court of criminal appeal should be guided by the following comment of Barwick CJ in Griffiths v The Queen  :

‘An appeal by the Attorney-General should be a rarity, brought only to establish some matter of principle and to afford an opportunity for the Court of Criminal Appeal to perform its proper function in this respect, namely, to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons.’

The reference to ‘matters of principle’ in that passage must be understood as encompassing what is necessary to avoid the kind of manifest inadequacy or inconsistency in sentencing standards which Barwick CJ saw as constituting ‘error in point of principle’, ibid at 310."

Mr Loftus, who appeared as counsel for the appellant on the hearing of this appeal referred to the various authorities which have dealt with the sentencing of offenders who unlawfully obtain income support benefits.  The principles emerging therefrom are conveniently summarised by Olsson J in Laxton v Justice  wherein he said:

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

1. 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. 

1. 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.

1. Whilst it may be proper in cases of first offences of this type accompanied by mitigating circumstances t impose a fine, nevertheless a custodial sentence may well be appropriate in cases of serious frauds unaccompanied by substantial mitigating circumstances."

In addition, Lander J in Fisher v DPP  commented:

"All of the cases suggest that it would only be in exceptional circumstances that a person convicted of sustained offences involving deliberate fraud of social services legislation would escape a period of imprisonment.  It seems to me that a period of imprisonment must be nearly always imposed unless there is some special mitigating feature in the circumstances of the offences, or peculiar to the offender, which would make the imposition of immediate imprisonment not necessarily appropriate."
 Accordingly, the first matter to determine with respect to this appeal is whether the magistrate erred in not imposing an immediate custodial sentence.  In view of the somewhat unusual facts relating to this matter, I consider that the magistrate correctly decided that this case could more appropriately be dealt with by the imposition of a fine rather than a custodial sentence.  Although Mr Loftus did not resile from his submission that a custodial sentence was appropriate, he quite properly conceded that the particular circumstances of this offender and his offending may have been such as to bring the magistrate within the exercise of his sentencing discretion in imposing a fine.  He submitted, however, that having decided to impose a fine, the magistrate erred in imposing a fine of such a small amount, being in effect 10% of the fine he otherwise considered appropriate in the circumstances.  That is the significant matter for decision in this case.

In reducing the fine from $1,200 to $100, the magistrate referred to Cameron v Winkler (reported as Winkler v Cameron ).  In that case, Legoe J considered an appeal against penalty with respect to Social Security offences.  He concluded that where imprisonment is not regarded as an appropriate response to the offending, any fine imposed should be calculated by reference, first to the gravity of the offending, and then to any relevant mitigating factors.  The ability of the offender to pay the amount fixed should be considered, although the magistrate need not be confined to considering his or her immediate capacity to pay.  Time to pay should be determined on the defendant’s total liabilities, including counsel fees and other funds recoverable under threat of imprisonment.  At p669, after referring to a passage from the first edition of Thomas, Principles of Sentencing which states:

"Within the range of fines appropriate to the offence a preliminary figure is reached by reference to the gravity of the offence (including in appropriate cases such factors as the extent to which the offender has profited from the offence) and then allowance is made for mitigating factors and in particular the offender’s ability to pay." 

Legoe J went on to say:

"This proposition is found in R v Lewis  where the Court of Criminal Appeal is reported as deciding that:

‘A fine should be within the defendant’s own capacity (though not necessarily his present capacity) to pay, otherwise he might be saddled with a debt that he cannot pay and have to go to prison ...’

This case has been followed and applied in a series of later cases, see 1976 Criminal Law Review at 458-461.  In R v Deaga  the Court of Criminal Appeal laid down that a fine should not normally be imposed without an investigation of the offender’s means.
In this jurisdiction the principles above referred to in the English courts and textbook (Thomas) have received little consideration.  In Reid v Liersch , Walters J said: ‘If a fine is to be imposed with an alternative of imprisonment, there must be a true alternative ad not an illusory one (R v Hall ).  In the ordinary case, if an offence is such as to merit a sentence of imprisonment, and the offender is without apparent means with which to pay a fine, no useful purpose will be served by sentencing him, as well as to a term of imprisonment, to a fine, in default of payment of which forthwith, he shall serve an additional term of imprisonment.  In such a situation, it may well involve the application of an erroneous principle to impose, in addition to a sentence of imprisonment, a monetary penalty, well-knowing that it cannot be paid and requiring payment of it forthwith.’  Indirectly his Honour was clearly stressing the need for the amount of the fine to be related to the defendant’s means.

In Zanol v Newton  Zelling J said it is the total penalty which should be taken into consideration, that is, the amount of the fine and any other sum which is recoverable under threat of imprisonment including counsel fees, witness fees, costs and (I would add) restitution.  For a discussion on the need for the court to make full inquiries into the defendant’s means and ability to pay the fines and other costs see Daunton-Fear in her recent book Sentencing in South Australia at pp193-194."

Comments to  similar effect were made by Olsson J in Fry v Bassett  and by von Doussa J in Wood v McDonald .  In the latter case, von Doussa J found that a fine of $400 was "a very stiff one" in the circumstances of that case.  As, however, the magistrate had allowed six months to pay he did not think there was any reason to conclude such a penalty was likely to operate as a sentence of imprisonment and the sentence therefore was not manifestly excessive.

In this case, the respondent owes the department a total sum amounting to about $29,000.  Mr Loftus argued, however, that this was only a civil liability which did not carry with it the threat of imprisonment.  Therefore, the consequent fine imposed by the magistrate for these offences was manifestly inadequate.

While it is true that a sentence of imprisonment does not attach to the overpayment, Mr Loftus’ submission overlooks the necessity for a court to consider the respondent’s total financial position.  Whatever fine was to be imposed would carry a sentence of imprisonment by reason of default.  If a fine was beyond the respondent’s capacity to pay then a sentence of imprisonment would inevitably follow

In this case, the fine imposed by the magistrate was relatively small and if I had been the sentencing judge, I doubt that I would have reduced the fine to such a low amount.  That, however, is not the test.  An appellate court should not interfere with a sentence simply because it would have imposed a different sentence if, having taken into account all relevant factors, it appears that the sentence imposed was within the acceptable scope of judicial discretion.

In this case, the respondent did not set out on a deliberate course of conduct to defraud the department.  He was placed in a difficult position by reason of his isolated situation and lack of understanding of the English language.  The magistrate was confronted by a person with substantial family and financial obligations which included the requirement to repay a debt of about $29,000 to the Department of Social Security.  In the peculiar circumstances of this case I am not persuaded that the penalty imposed by the magistrate was such as to require this court to interfere on appeal.  The appeal is therefore dismissed.