Diner, Michael Ian v Ragg, Jarrod

[1999] TASSC 142

[1999] TASSC 142

CITATION:             Diner v Ragg [1999] TASSC 142

PARTIES:  DINER, Michael Ian
  v
  RAGG, Jarrod

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 18/1999
DELIVERED ON:  16 December 1999
DELIVERED AT:  Launceston
HEARING DATE/S:  26 November 1999
JUDGMENT OF:  Crawford J

CATCHWORDS:

REPRESENTATION:

Counsel:
             Applicant:  In person
             Respondent:  J D Barnett
Solicitors:
             Appellant:  Zeeman Kable & Page
             Respondent:  Commonwealth Director of Public Prosecutions

Judgment ID Number:  [1999] TASSC 142
Number of paragraphs:  20

Serial No 142/1999

File No LCA 18/1999

MICHAEL IAN DINER v JARROD RAGG

REASONS FOR JUDGMENT  CRAWFORD J
  16 December 1999

1. On a complaint the applicant faced seven charges which were as follows:

"CHARGE:  Knowingly or recklessly make a false statement

BREACH OF: Section 1346 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 12 January 1996 at Launceston in Tasmania did knowingly or recklessly make a false statement in a document entitled 'Claim for Job Search/Newstart/Youth Training Allowance' dated 12 January 1996 IN THAT he stated that he or his partner would receive $245.00 as rent in the period to which the form related which was false in that he or his partner received approximately $330.00 per week gross rental income from properties at 175 Elphin Road Newstead.

AND FURTHER:  2

CHARGE:  Knowingly or recklessly make a false or misleading statement

BREACH OF: Section 1344 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 17 January 1996 at Launceston in Tasmania did knowingly or recklessly make a false or misleading statement in connection with his claim for a Social Security payment IN THAT in a document entitled 'Real Estate Details' dated 15 January 1996 he stated that his property at German Town Road St Marys was mortgaged to Archer Bushby & Co and that he owed $92,000 with monthly repayments of $855.00.

PARTICULARS OF FALSITY OR MISLEADING NATURE OF THE STATEMENT
1  Michael Ian Diner did not reveal that this was a collateral mortgage to secure the loan over 375 Hobart Road Youngtown and not a separate loan from that declared in the 'Real Estate Details' document for his property at 375 Hobart Road Youngtown.

2  The amount he did not owe any monies on the mortgage as at 15 January 1996.

AND FURTHER:  3

CHARGE:  Knowingly or recklessly make a false or misleading statement

BREACH OF: Section 1344 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 17 January 1996 at Launceston in Tasmania did knowingly or recklessly make a false or misleading statement in connection with his claim for a Social Security payment IN THAT in a document entitled 'Real Estate Details' dated 15 January 1996 he stated that his property at 375 Hobart Road Youngtown was mortgaged to Archer Bushby & Co and that he owed $92,000 with monthly repayments of $855.00.

PARTICULARS OF FALSITY OR MISLEADING NATURE OF THE STATEMENT
1  Michael Ian Diner did not reveal that this mortgage was to secure a loan over 375 Hobart Road Youngtown which was the same loan as that declared in the 'Real Estate Details' document for his property at German Town Road St Marys which was the subject of a collateral mortgage.

2  The amount he did not owe any monies on the mortgage as at 15 January 1996.

AND FURTHER:  4

CHARGE:  Knowingly or recklessly make a false or misleading statement

BREACH OF: Section 1344 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 17 January 1996 at Launceston in Tasmania did knowingly or recklessly make a false or misleading statement in connection with his claim for a Social Security payment IN THAT in a document entitled 'Real Estate Details' dated 15 January 1996 he stated that he and/or his partner received a gross weekly income of $115.00 from the property at 175 Elphin Road Newstead.

PARTICULARS OF FALSITY OR MISLEADING NATURE OF THE STATEMENT
1  The gross weekly rental income received from 175 Elphin Road Newstead was approximately $330.00 per week made up of

a)  Rent of $100 per week by Emma's Curtains paid by Maxima Vanrongen or Emma Dalco
b)  Rent of $500 per month by Daks of Newstead paid by Maurice Long.

c)  Rent of $115 per week paid by Katrina Seymour

AND FURTHER:  5

CHARGE:  Knowingly or recklessly present a false document

BREACH OF: Section 1346 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 20 February 1996 at Launceston in Tasmania did knowingly or recklessly present a document entitled 'Application for payment of Job Search/Newstart/Youth Training Allowance' dated 20 February 1996 in which he advised that his assets had not changed in the period 26 January 1996 to 8 February 1996 which was false in that the mortgage on 375 Hobart Road Youngtown and the collateral mortgage on his property at German Town Road had been discharged on or about 29 January 1996.

AND FURTHER:  6

CHARGE:  Knowingly or recklessly present a false document

BREACH OF: Section 1346 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 20 February 1996 at Launceston in Tasmania did knowingly or recklessly present a document entitled 'Application for payment of Job Search/Newstart/Youth Training Allowance' dated 20 February 1996 in which he advised that his assets had not changed in the period 9 February 1996 to 22 February 1996 which was false in that the mortgage on 375 Hobart Road Youngtown and the collateral mortgage on his property at German Town Road had been discharged on or about 29 January 1996.

AND FURTHER:  7

CHARGE:  Knowingly or recklessly present a false document

BREACH OF: Section 1346 Social Security Act 1991

PARTICULARS:  THAT MICHAEL IAN DINER on or about 7 March 1996 at Launceston in Tasmania did knowingly or recklessly present a document entitled 'Application for payment of Job Search/Newstart/Youth Training Allowance' dated 7 March 1996 in which he advised that his assets had not changed in the period 23 February 1996 to 7 March 1996 which was false in that the mortgage on 375 Hobart Road Youngtown and the collateral mortgage on his property at German Town Road had been discharged on or about 29 January 1996."

1. Prior to the sentencing process the applicant appeared for himself before the magistrate.  Following a hearing which took place on many days between 22 April 1998 and 1 September 1998 the magistrate reserved his decision.  On 29 April 1999 reasons were given for determining that counts 1, 5, 6 and 7 had not been proved, that count 2 was proved as to its first particular only, that count 3 was proved as to its first particular only and count 4 was proved.  The counts not proved were dismissed.  Submissions concerning sentence were made on four dates between 29 April 1999 and 20 July 1999.  During that period the applicant instructed a solicitor who appeared for him.  On 20 July 1999 the magistrate sentenced the applicant, on the three counts which were proved, to three months' imprisonment from 15 July 1999, being the date upon which he was remanded in custody.  However, the applicant was immediately admitted to bail, and he has remained on bail ever since, because of the present motion to review which was instituted by notice filed in this Court on 21 July 1999.

1. The notice to review contains four grounds, the first two of which attack the findings that counts 2, 3 and 4 had been proved and the last two of which attack the sentence.  The grounds are as follows:

"1        Notwithstanding that the learned Magistrate dismissed Counts 1, 5, 6 and 7 and was not satisfied that a particular of Count 2 and a particular of Count 3 were proved, still proceeded to convict on a further particular of Count 2 and a further particular of Count 3 and all of Count 4 and in so doing, was inconsistent.

2         That the findings of guilt were against the weight of the evidence.

3         The learned Magistrate erred in law in sentencing the Applicant to a term of imprisonment when he clearly indicated that a substantial fine was an option open and invited the Applicant and Counsel to research the Applicant's ability to raise monies to pay a substantial fine.

4         The learned Magistrate imposed a sentence which was manifestly excessive in all the circumstances."

1. In his reasons, the learned magistrate first addressed counts 2, 3, 5, 6 and 7 and made the following findings of fact.  The applicant, along with his wife, was the registered owner of an estate in fee simple in land at St Marys which was comprise in certificate of title volume 2459 folio 98 and land at 375 Hobart Road, Youngtown, which was comprised in certificate of title volume 4763 folio 87.  At all material times their interests in both parcels of land were mortgaged to Donald Nixon Stewart and Nicholas George Alexander Gee to secure the repayment of $114,000 and interest thereon. 

1. The learned magistrate found that the St Marys land was mortgaged to collaterally secure the repayment of the same principal sum and interest thereon.  I interpolate that there was only one loan from those mortgagees but it was secured by separate mortgages over both properties.  In the case of the St Marys land, the applicant and his wife executed a memorandum of mortgage to Messrs Stewart and Gee dated 8 July 1993 and registered 10 August 1993 mortgage No B673537.  At that time 375 Hobart Road was owned by four people, namely the applicant and his wife, Peter John Dix and Patricia Louise White.  Those four people were the registered proprietors and they executed a memorandum of mortgage to Messrs Stewart and Gee also dated 8 July 1993 but registered on 16 July 1993 mortgage No B673538.  Each mortgage referred to the principal sum also being secured by the other mortgage.  By October 1995 Dix and White transferred their interest in 375 Hobart Road to the applicant and his wife, so that Mr and Mrs Diner were thereafter the registered proprietors.

1. A building on 375 Hobart Road, Youngtown was destroyed by fire and on 27 November 1995 the applicant made a claim on his insurer, GIO Australia, which was accepted.  On 15 December 1995 the applicant signed a partial release and on 29 December 1995 he signed a total loss release.  The insurer paid out various amounts including $100,000 by a cheque dated 22 December 1995 to the solicitors Archer Bushby.  (It is, I think, common knowledge that Messrs Stewart and Gee were two of the partners in that firm.)  The proceeds of that cheque were applied, among other things, to the discharge of the outstanding principal sum owing under the mortgages, which was $92,000 at that time.  (Archer Bushby recorded the receipt of $100,000 on 2 January 1996.  Mr Stewart had the responsibility to attend to the discharge of the mortgage but it so happened that it was his usual practice to take holidays for the first two weeks each January and so the matter was not attended to for some time.)  The learned magistrate found that "the relevant transaction to which I have just referred" (the discharge) "was effected by apparently, within the financial records and accounting system of that firm on the 18th of January, 1996, a date which is significant, the delay, being occasioned by, it seems, Mr Stewart's absence on leave".  The applicant knew, on 15 January 1996, that GIO had accepted his fire claim and that part of the insurance proceeds had been, or were in the process of being appropriated towards the discharge of the mortgages. 

1. I also interpolate that by a claim form entitled "Claim for Job Search/Newstart/Youth Training Allowance" signed by the applicant, dated 12 January 1996 and received on the same day by the Department of Social Security, the applicant sought some form of benefit or allowance.  Within a few days he had lodged further documents in support of his claim. 

1. The learned magistrate found that on 17 January the applicant submitted to the department two forms entitled "Real Estate Details" signed by him and dated 15 January 1996.  One of those forms, P13, related to the St Marys land and the other, P14, related to the land at 375 Hobart Road, Youngtown.  Question 5 in both of the forms asked, "Is the property mortgaged?"  On both forms he answered in the affirmative.  In such event both forms asked, "How much do you owe?"  He replied with "$92000".  In answer to other questions he stated that the interest rate per annum was 10.5 per cent and the monthly repayments were $855.  Both forms asked for the name and address of the mortgagor [sic] and he advised that it was Archer Bushby & Co, 63 Charles Street, Launceston (being the name of the firm in which the mortgagees were partners). 

1. The following critical findings were made by the learned magistrate:

"I find that at the time of submitting those documents to the Department of Social Security the defendant knew that the mortgage over the St Marys property was collateral to the mortgage over the Young Town property, yet, both forms showed the indebtedness or a liability in respect of each parcel of land in that amount.  I am satisfied of those facts beyond reasonable doubt and accordingly, particular (1) of each of counts 2 and 3 is established in that I am satisfied beyond reasonable doubt that the defendant knew the material facts and that the statements particularised were false."

The learned magistrate then went on to find that particular (2) of counts 2 and 3 had not been made out because as at 15 and 17 January 1996, the dates upon which the applicant signed and lodged the Real Estate Details forms, the $92,000 liability secured by the mortgages had not been discharged, notwithstanding that Archer Bushby had received the necessary funds to attend to the discharge.  The learned magistrate held that "the legal reality was that as at 15th and 17th of January monies were owing under those mortgages and had not been appropriated by the solicitors to those who were entitled to receive them.  Consequently, particular (2) of count 2 and particular (2) of count 3 are not established."

1. With the utmost of respect, I have no doubt that the learned magistrate was in error when he found that particular (1) of each of counts 2 and 3 had been established.  It was clearly established by the evidence that if an applicant for a benefit or allowance disclosed that he owned real estate he was issued with the Real Estate Details form (known in the department as a Module R) for each piece of real estate owned by him.  In this case the applicant was issued with a Module R form upon which he answered questions in relation to 375 Hobart Road, Youngtown.  He was also issued with a Module R form upon which he answered questions in relation to the land at St Marys.  His answers with respect to the mortgages secured over those two pieces of land were true.  In each case, he was asked whether the property was mortgaged and he correctly answered in the affirmative.  There was a separate mortgage over each property.  Having answered in the affirmative he was asked how much did he owe and he correctly answered, in the each case, $92,000, showing that the interest rate per annum was 10.5 per cent and the monthly repayments $855.  He did not, of course, owe $92,000 twice, that is to say, he did not owe a total of $184,000 under the two mortgages.  But the form he filled in did not invite an explanation that one mortgage was collateral to the other.  It merely sought answers to precise questions relating to the piece of land to which the particular Module R form referred. 

1. The applicant was not required to simply list his assets and liabilities, from which detail his net asset position might easily be ascertainable.  The deficiency in the department's system on this occasion was that the information on one Module R form was not compared with the information on another such form.  Each form contained the instruction "please complete a separate form in relation to each property."  That is precisely what the applicant did with regard to 375 Hobart Road and the St Marys land and he correctly answered the questions and filled in the forms with regard to the mortgages. 

1. If a departmental officer had carefully considered the information contained in the two forms it ought to have been apparent that each form may well have been referring to the same mortgage liability and that the applicant did not in fact have mortgage liabilities over the two properties totalling $184,000.  It would have been apparent that it was unlikely that a person would have two entirely unrelated mortgages over separate properties under which the same principal sum was owing, the same interest rate was payable and the same monthly repayments were required.  In my opinion the applicant's answers were not false and they were not shown to be knowingly or recklessly misleading.  An officer of the department may have been misled by the answers, but the fault for that lay with the officer and the department's forms and system.  I conclude that the findings that counts 2 and 3 had been proved must be set aside.  As the order that the applicant be imprisoned for three months from 15 July 1999 was made upon the three counts which included them, it will be quashed.

1. I deal next with the question whether the learned magistrate was also in error when he found that count 4 had been proved.  In support of his claim for a benefit or allowance which was lodged on 12 January 1996, the applicant completed a number of Real Estate Details forms, two of which have already been referred to by me.  He had disclosed in the claim form that he, or his partner, was the owner of 175 Elphin Road, Newstead.  He was therefore required to complete a Real Estate Details form with respect to the premises at that address.  He and his wife signed that form, which was dated 15 January 1996 and lodged with the Department on 17 January 1996.  In it the following questions were asked and answers given:

"2        What is the address of this property?

Unit/flat number           House number and street

175 Elphin Rd

Newstead.

Town/Suburb  Postcode

Newstead  7250

…

4         Do you receive income   Yes     3         No       

from your property?

If Yes, what is the gross  
           weekly amount?  $115 ¾

(please attach a copy of your last income tax return)".

1. The learned magistrate made the following critical findings:

"This particular charge is related to the amount of rental income that he received from the premises.  I find that as at the 15th of January 1996 and indeed the 17th of January 1996 when this particular document was submitted to the Department that he, and/or his partner were entitled to receive rental income in terms of the amounts particularised in the particulars to the charge, an amount which exceeds significantly the amount of $115 per week gross income referable to the 175 Elphin Road, Newsteaad [sic] property.  I am satisfied that when the defendant submitted that form to the Department of Social Security that he knew that the information was incorrect.  He presented it to the Department.  I find that the information was false as particularised.  I am satisfied of those matters beyond reasonable doubt and accordingly count 4 is proved."

1. There was evidence that 175 Elphin Road consisted of two shops and an old house, referred to by the applicant as 175A, 175B and 175C.  Maxine Dalco rented the shop at 175A for $100 per week.  Receipts showed that on 23 December 1995 she paid $300 being rent in advance to 13 January 1996.  On 26 January 1996 she paid $200, probably in arrears.  Maurice Long rented the shop at 175B for $500 per month due on the 15th day of each month.  No receipts were in evidence.  Katrina Seymour rented the house at 175C for $115 per week.  She had retained only two receipts from her time as a tenant, one of which showed that she made a payment of $460 on 22 December 1995 for the period to 19 January 1996.  The total of the rents payable with respect to the three units, calculated on a weekly basis, was therefore $330.  The relevant Real Estate Details form submitted by the applicant which purported to relate to 175 Elphin Road, and which was not expressed to be limited to only one of units A, B or C, stated that the gross weekly amount of rent from the property was $115.  The learned magistrate was justified in concluding that the information provided by the applicant was incorrect. 

1. The applicant pointed to the fact that in the Real Estate Details form he indicated that it concerned a house.  He argued that was evidence that he had completed separate forms for the shops.  When interviewed by federal agents on 30 January 1997 he was asked whether he filled in forms for 175A, B and C.  He said that he did not remember what forms he filled in.  Reference was then made to an allegation that he had made false statements concerning the total amount he received from 175 Elphin Road.  It was then that he asserted that he believed there were more forms.  Later in the interview his response had hardened into "there must be another two forms somewhere".  By the time he gave evidence to the learned magistrate he was asserting that the form in evidence was only one of three forms completed by him and that the department must have lost the other two forms.  Although that was a possibility it was most unlikely, particularly having regard to the fact that on the form in evidence he stated that the market value of the property was $124,000, which was a sum possibly consistent with the value of all of 175A, B and C, but not with only one of those addresses.  In an earlier claim made by him, in December 1995, he had stated the value of 175A, B and C to be $137,000.  The difference between the two figures was explained by his evidence suggesting that the reason for the value of his assets, as advised by him, changing between December 1995 and January 1996, was because "I think I over-estimated them in December".  It should also be noted that when he made the December 1995 claim he completed only one Real Estate Details form with respect to 175A, B and C Elphin Road.

1. A ground of the motion to review is that the conviction on count 4 was inconsistent with the findings with regard to the other counts.  An examination of the reasons of the learned magistrate do not support the ground.  Concerning count 1, the learned magistrate concluded that the claim form asked what income the applicant expected to receive within the 14 day period commencing 12 January 1996.  His answer was $245 and having regard to evidence creating uncertainty concerning whether some of the tenants were slow in paying, the learned magistrate was not satisfied beyond reasonable doubt that the applicant's stated expectation of receipts amounted to a false or misleading statement.  Counts 2, 3, 5, 6 and 7 concerned the information provided by the applicant about the mortgages over the St Marys land and 375 Hobart Road, Youngtown.  Findings that those counts, or particulars of them, were not proved were in no way inconsistent with the finding that count 4 was proved, as it concerned different information provided by the applicant in the course of making his claim.

1. The finding that count 4 was proved has not been shown by the applicant to have been erroneous.  It was reasonably open on the evidence and there was adequate evidence supporting it. 

1. As the sentence imposed by the learned magistrate will be quashed, consequent upon the setting aside of the findings that counts 2 and 3 were proved, and the finding that count 4 was proved will remain undisturbed, it follows that the applicant must be re-sentenced with respect to count 4 alone. 

1. For the reasons I have given it will be ordered that the findings of the learned magistrate that counts 2 and 3 had been proved be set aside and the order that the applicant be imprisoned for three months from 15 July 1999, made with respect to counts 2, 3 and 4, will be quashed.  I will hear submissions from the parties concerning sentence on count 4.