DICKER v MILLS No. SCCRM-99-274 Judgment No. S148

[1999] SASC 148

DICKER v MILLS
[1999] SCSA 148

Magistrates Appeal (Criminal)

Debelle J  (ex tempore)

1. This is an appeal against sentence. 

2. On 2 March 1999, the appellant pleaded guilty to eleven counts of knowingly or recklessly making a false statement in connection with a claim for a social security payment under the Social Security Act 1991. The false statement was made in respect of unemployment benefits. The appellant had falsely stated on the required forms that he had not done any part-time or casual employment during the period to which each form related when, in fact, he was employed and receiving income from a fencing contractor. The false statement was made on eleven separate forms covering the period 19 December 1997 to 3 July 1998. The appellant also pleaded guilty to two counts of receiving unemployment benefits when he was not entitled to do so. The amount involved in all of these offences totalled $4,537.82.

3. The magistrate decided to impose one penalty in respect of all of the offences, exercising his powers to do so under s1353 of the Social Security Act.  He ordered the appellant be sentenced to a period of eight months imprisonment.  He further ordered that the appellant should be released after having served a period of two calendar months imprisonment and be placed on a bond to be of good behaviour for a period of 24 months.  The appellant was also ordered to repay the sum of $4,537.82 and to pay costs totalling $118.  

4. The appellant appeals on the ground that the sentence is manifestly excessive. The gravamen of the appeal is not that the head sentence itself was manifestly excessive but, rather, that the magistrate ought to have suspended that sentence and to have ordered the immediate release of the appellant pursuant to s19 of the Crimes Act 1914 (Cth).

5. The appellant is aged 50 years.  He has been married but is now divorced.  He has no previous convictions.  Before this offending, the appellant had been employed for a period of three years as a meat worker.  His income was sufficient to maintain his lifestyle and to discharge his financial obligations, which included payments to a financier in relation to his motor car, rent and an obligation to pay maintenance for children.  At the beginning of 1997, his employer encountered financial difficulty and reduced the days in which he could be employed.  The appellant was unable to meet all his financial obligations and he fell into arrears.  The meat works where he was employed ultimately closed and the appellant's employment was terminated. 

6. The appellant applied for and obtained unemployment benefits but that was not sufficient to pay his financial commitments and he fell further into arrears.  He received letters threatening repossession of his motor car and demands from the Child Support Agency.  The appellant was able to secure employment with a fencing contractor.  Although employed on a casual basis, he regularly worked five days a week for eight hours a day.  His income varied from $315 to $1,265 per fortnight. 

7. The appellant said that he feared that, if the fencing contractor could not continue to employ him, he would be unable to receive further unemployment benefits for a period of time which would further compound his financial difficulties.  He applied all the unemployment benefits he received in meeting his financial commitments.  He was particularly concerned to retain his motor car because, without it, he would have great difficulty in securing employment in the country area in which he lived.  It seems that his working skills are limited to those which might be utilised in rural industries.  At the time he appeared in court, the appellant was unemployed and wholly dependent on his unemployment benefit.  Reparation is being made by withholding part of that benefit. 

8. All of these matters were mentioned to the magistrate in the course of submissions by the appellant's solicitor.   It was submitted that, although the appellant's offending warranted a period of imprisonment, it was appropriate to order his immediate release. 

9. Mr Ryan, who appears for the appellant, has submitted the magistrate has placed too much weight on the need for general deterrence and has given too little weight to the personal circumstances of the appellant.  He further submits that the magistrate has incorrectly stated the principles to be applied when sentencing persons guilty of a fraud of this kind. 

10. When sentencing the appellant, the magistrate said:

    “Defendant, I take all those matters which have been put to me into account.  I sincerely hope that you do not have false expectations about the outcome of today's proceedings.  The cases which bind me make it absolutely clear, there is absolutely no doubt about it whatsoever, that in this type of offending where there has been a deliberate, prolonged, continuous fraud on the Social Security system, imprisonment must nearly always be the penalty that the courts are to impose. 

    There are numerous cases and, no doubt, they are well known to Mr Vigar.  (The magistrate then mentioned a series of cases).  They are cases which make it quite clear that a period of imprisonment must always be imposed unless there are some mitigating factors in the circumstances of the offences or peculiar to the offender which would make the imposition of immediate imprisonment not necessarily appropriate. 

    There is nothing that I can point to in either the manner in which you went about defrauding the Social Security system over the seven months or so or factors peculiar to you or your own special circumstances, which would make me impose a penalty other than an immediate term of imprisonment.  The cases make it quite clear there must be rare and exceptional circumstances for a penalty other than imprisonment to be imposed.  There are not any such circumstances in your case. 

    The decisions to which I have referred are cases which also provide a guideline as to the penalties to be imposed by the courts.  But they are only examples, as each case must be looked at on its own merits and I do so.  Those cases to which I referred also tell us that the courts have a great responsibility to protect the integrity of the Social Security system by imposing penalties for deliberate and sustained frauds which are likely to operate as a deterrent not only to the offender, not only to you, but to others who might be likewise inclined.”

Observations to similar effect were made by Lander J in Fischer v Director of Public Prosecutions (1995) 65 SASR 194 at 198 where, after referring to a number of recent decisions, his Honour said:

“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: Keeley v Department of Social Security (unreported) Supreme Court SA, Mullighan J, file No.93/1093, 30 July 1993.”

It is implicit in these remarks that there will be occasions when imprisonment will not be ordered or, if ordered, the sentence will be suspended.  There is nothing in these remarks which requires a departure from the well-established principle that regard must be always had to the circumstances of the offence and of the offender and that the punishment should, so far as is possible, fit the crime which has been committed: Webb v O'Sullivan (1952) SASR 65 at 66, affirmed in Yardley v Betts (1979) 22 SASR 108 at 112 to 113. Indeed, the remarks of Lander J expressly referred to mitigating features in the form of the circumstances of the offence or circumstances peculiar to the offender.

1. When sentencing for social security frauds of this kind, it is relevant to have regard to such as the prevalence of the offence, the seriousness of the fraud and its effect upon the community, the fact that the offence was of a continuing nature, the motive for the offending, the amount unlawfully obtained, and the manner in which the fraud was committed: see Duggan J in Clare v Rehn (1992) 166 LSJS 78. The list is not intended to be exclusive.

2. The seriousness of social security frauds and their effect upon the community have been commented upon in a number of decisions of this court.  It is sufficient to refer to The Queen v Vasin (1985) 39 SASR 45, The Queen v Cameron and Simounds (1993) 171 LSJS 305 at 306-307, and Loveridge v The Queen (1994) 178 LSJS 234. Factors which point to the seriousness of the crime are that a fraud of this kind strikes at the heart of the social security system, a system which is necessary for the support of persons who genuinely and honestly need the financial benefit. Thus, there is a need for sentences for this crime to contain a real element of deterrence. As was said by King CJ in The Queen v Cameron and Simounds at 307:

   “For these reasons, the courts have a great responsibility to protect the integrity of the Social Security system by imposing punishments for deliberate and sustained fraud which are likely to operate as a deterrent to others who may be tempted. It is necessary to acknowledge and to appreciate that recipients of Social Security benefits are, almost without exception, subject to great financial pressures. They are obliged to maintain themselves and to provide for their needs on an income which is by no means handsome.  Therefore, there must always be a temptation to enhance that income, and if it appears that that can be done without running the risk of substantial punishment, it is likely that others will be tempted to follow in the fraudulent course.  It is necessary for the courts to send, and consistently send, a clear signal to all who might be so tempted that sustained and deliberate fraud upon the system will mean going to gaol.”

It must be remembered that those observations were made concerning a well-planned, deliberate and systematic scheme of fraud involving false identity.  Not every fraud against the Commonwealth can necessarily be characterised as a systematic, deliberate and sustained fraud.  That serves to underline the need to consider the particular circumstances of each offence. 

1. An initial reading of the magistrate's remarks might suggest that he has over-emphasised the aspect of general deterrence.  It might suggest, as Mr Ryan submitted, that the remarks have raised the bar too high and that the magistrate has failed to have regard to the fact that the fraud committed by this appellant was by no means as systematic, deliberate and sustained as that which has been the subject of other decisions.  But I think that a careful examination of the magistrate's reasons shows that he has recognised that there will be cases where there will be mitigating circumstances and that, in this case, he has considered whether any apply in the case of this appellant.  The emphasised passages in the remarks which I have quoted provide an indication of that fact.  It must be remembered that these are ex tempore reasons of a busy magistrate and that he will not necessarily spell out every aspect of his reasoning. 

2. Furthermore, it was, in any event, appropriate to include in the sentence an element of general as well as personal deterrence.  Despite sentences of imprisonment not infrequently ordered by courts, there is no indication that there is any decrease in the level of frauds against the social security system.  It is, therefore, regrettably necessary to seek to continue to reinforce the message to the community that offences of this kind will be severely punished by ordering periods of imprisonment which have a real element of general deterrence.  In this context it is appropriate to adapt the remarks of Olsson J in Flavel v Venning (unreported 16 July 1992, Jdt  NoS3507) and state in the plainest of terms that there is nothing less criminal about a social security fraud involving some $4,500 than a larceny of goods to that value or an embezzlement of another's money in such a sum.  The fact that it is an offence against the community in general, rather than an individual in particular, does not lessen its criminality. 

3. The appellant succumbed to the temptation to defraud the system because of financial pressures upon him.  One can readily sympathise with his plight.  However, there is an aggravating feature of his offending.  It is that he had, on an earlier occasion, claimed benefits to which he had not then been entitled.  On that occasion, he had received a letter warning him that prosecution would follow if he were later to offend in a similar way.  That warning had been given in 1995, that is to say, some two and a half years before the offending the subject of this appeal.   It is plain that the appellant learnt nothing from that warning. 

4. Mr Ryan tendered a letter which indicates that there is a building contractor who has work available in the coming months and could employ the appellant. The appellant obtained an order suspending the order of imprisonment pending the hearing of this appeal.  I do not think that it is proper for him to seek to rely on events which have occurred between the date of the order made by the magistrate and the hearing of the appeal.  In any event, the work is available for several months and will, presumably, remain available upon the appellant's release from any period of imprisonment. 

5. It has not been demonstrated that the magistrate has erred in the exercise of his sentencing discretion.  The penalty ordered was well within the bounds of that discretion.  I am satisfied that the magistrate did have regard to the personal circumstances of the appellant. 

6. For all of these reasons, the appeal is dismissed.