Director of Public Prosecutions (Cth) v Allan Ross Tugwell No. SCCRM 96/12 Judgment No. 5563 Number of Pages 7 Criminal Law and Procedure

[1996] SASC 5563

COURT IN THE COURT OF CRIMINAL APPEAL OF SOUTH AUSTRALIA PRIOR(2), PERRY(1) AND DUGGAN(3) JJ

CWDS
Criminal law and procedure - obtaining pension payments by false statements - crown appeal against penalty - Application by DPP (Cth) for leave to appeal against a sentence of 28 months imprisonment upon which the respondent, a 50 year old Vietnam war veteran, was released forthwith on entry into a good behaviour bond - systematic fraud over a period of three years involving a total overpayment of repatriation pension entitlements of approximately $59,000 - observations as to the seriousness of offences involving systematic fraud against public authorities - analogy with social security fraud - emphasis on deterrence - leave to appeal granted and respondent ordered to serve 12 months imprisonment before release on a bond - warning that the term of imprisonment ordered, including the pre-release order, should not be regarded as necessarily appropriate in comparable cases, when a longer term might ordinarily be imposed. Veterans Entitlement Act 1986 (Cwlth), referred to. Weinel v Fedcheshen (Perry .18 August 1995, Judgment No 5216, unreported, available on SCALE); Work Cover Corporation v Jelfs (Cox J, 8 May 1995, Judgment No 5088 unreported, available on SCALE), considered.

HRNG ADELAIDE, 15 April 1996 #DATE 15:4:1996 #ADD 20:5:1996

Counsel for appellant:     Mr B R Martin QC with him
   Ms G F Lian

Solicitors for appellant:    DPP (Cwlth)

Counsel for respondent:     Mr P E Broderick

Solicitors for respondent: Lempriere Abbott McLeod

ORDER
Appeal allowed.

JUDGE1 PERRY J This is an application for leave to appeal by the Commonwealth Director of Public Prosecutions against the sentence imposed in the District Court upon the respondent on seven admitted counts of making false statements in writing to the Repatriation Commission contrary to section 208(1)(e) of the Veterans Entitlement Act 1986 (Cth).

2. The respondent also asked for two offences of obtaining payment to be taken into account, one in relation to 79 payments of what was described as a disability pension and the other in relation to 79 payments of a service pension. It appears that the payment offences relate to the false statements in writing the subject of the seven counts in the information pursuant to which the charges in question were laid.

3. The sentence as to which the applicant seeks leave to appeal was that the respondent be imprisoned for 28 months, but that he be released forthwith upon giving security by recognisance in the sum of $1,000 for a period of two years to be of good behaviour during that period.

4. The applicant contends that in ordering the immediate release of the respondent, the learned sentencing judge failed to have proper regard to the deterrent aspect of the sentencing process and failed to give sufficient weight to the premeditated, deliberate and consistent nature of the fraud, the need to protect the revenue, the extreme difficulty in detecting frauds of this type and other aggravating circumstances.

5. The respondent is a Vietnam war veteran. He was a member of the Australian Army between the ages of 18 to 27, during which time he spent two periods of active service in Vietnam and one short period in Borneo. He left the Army in 1972, following which he worked for a time as a plant operator with the Highways Department. He has been in receipt of a Veteran's disability pension since 1976 due to lumbar disc degeneration. From 1989 he was granted a separate pension known as a service pension.

6. The charges reflect the making by the respondent of a number of false statements both with respect to the service pension and the disability pension. It appears that he was employed by a company known as SA Plant Operator Training Consultants Pty Ltd as an instructor, between July 1989 and August 1993. The work was casual, indeed sporadic, with gaps of some months when he did not work. The gist of the offending is that the respondent understated the hours which he was working on various forms which he submitted in support of on-going payments and that, in other forms, falsely denied that he had worked at all during certain periods.

7. With respect to the disability pension he made a number of false statements. One of those, namely, a statement the subject of count three, is particularly significant. That charge arose out of his actions in November 1989 when he furnished a letter purporting to be from his employer, to the Veterans Review Board, then hearing an appeal in relation to his disability pension. The letter falsely stated that his employment had been terminated. It appears that he also stated in an application for an increase in his disability pension that he was unable to work.

8. The offending took place between August 1989 and August 1992, a period of three years. As a result of the making of the false statements the respondent received over and above pension payments to which he was legitimately entitled an amount of $59,180, being an amount to which he was not entitled. The overpayment is being repaid by way of periodic deductions from the disability pension to which he is still entitled.

9. The respondent is now aged 50 years. He has two grown up children by a previous marriage and two teenage children by his present marriage. In 1976 he was convicted of perjury and sentenced to a suspended term of nine months imprisonment. In 1981 he was convicted of forging and uttering, upon which a further suspended sentence, on that occasion of 18 months imprisonment, was imposed with a three year good behaviour bond.

10. The present offences came to light following an investigation prompted by an anonymous complaint received by the Department of Veterans Affairs.

11. When he was interviewed in November 1994, the respondent made full admissions with respect to the various false statements, but denied any knowledge of the making of the letter involved in count 3. As to that, however, the plea of guilty entered by the respondent to that count must be taken as a clear indication that he admitted the elements of the offence encompassed by it. In particular, he must be taken to have furnished a letter purporting to be from his employer to the Veterans Review Board falsely stating that his employment had been terminated. Clearly enough, the respondent must be taken to have known the falsity of the letter as it asserted a fact which he must have known was not true.

12. The learned sentencing judge had before him a psychiatric report which apart from referring to the physical disabilities which no doubt account for his receipt of the pension in question, spoke of the adverse effect which incarceration would be likely to have upon him. In particular the author of the report suggested that confinement could aggravate the respondent's condition of post traumatic stress disorder.

13. At the hearing of the appeal, counsel for the respondent put before the court evidence of the admission by the respondent to the Adelaide Clinic on 16 January 1996 for some fourteen days as an in-patient. Apparently this admission followed the service on the respondent of the application now in question. The psychiatrist responsible for his care at that stage, Dr Rofe, furnished a report which, with the consent of counsel for the applicant, was placed before this court. In that report, Dr Rofe concludes that a prison sentence would be calculated adversely to affect the respondent's psychological health.

14. During the course of his sentencing remarks the learned sentencing judge observed:
    "Crown counsel have submitted to me that this type of fraud
    is similar to Social Security fraud. I think that is
    debatable. What caused this was your desire to involve
    yourself with some very much what I would regard as casual
    work.

You have obviously many skills as a driver of heavy
    machinery and so you involved yourself in some part-time
    work and, as you know, received something of the order of
    $6,000 a year from this part-time work. As you said, you
    were 'going nuts' in doing nothing.

I accept your frustration. It is a great pity that you
    filed these statements. Of course, what that meant was that
    by reason of that you lost your pension, a pension which I
    have no doubt you would have received in that time. As your
    counsel pointed out, you lost the benefit of that pension
    over that period. As he mentioned, you may well have lost
    something in the order of $80,000 and from this part-time
    work you received $20,000.

It was a stupid offence, that is how I would categorise your
    actions. It would seem that if you had not worked, that
    service pension would have continued. I think it may well
    have. That is an ancillary matter. Your fraudulent
    statements are the reason you are here.

I see that you are now making steps to repay that. I look
    upon you as a special case because of your background. I
    think what I am prepared to do is to give you a chance.
    There are a few minor blemishes in your past but they are
    outweighed by your war service."

15. The learned sentencing judge then went on to impose the penalty the subject of the application before the court.

16. Mr Martin QC of counsel for the applicant directed some degree of criticism to some of the observations made by the learned sentencing judge in the passage which I have just quoted.

17. In my opinion, much of that criticism is well-founded. In particular, I think it was wrong to say that, on the facts as disclosed to the court, the fraud was caused by the respondent's desire to involve himself in casual work. On the contrary, I think it right to say that the fraudulent conduct was prompted by a combination of need and greed. The fact that the respondent was in casual work provided an opportunity for misleading statements to be given to the authorities with respect to the extent of that work.

18. I think that the expression that the offence was "stupid" tends to indicate that the learned sentencing judge was taking a less than adequate view of the seriousness of the offending. Furthermore, his reference to a few minor blemishes in the respondent's past seems hardly adequate to describe the offences of perjury which the respondent committed, and forging and uttering.

19. More importantly, however, the remarks by the learned sentencing judge in which he indicated that he entertained some hesitation in accepting the view that this type of fraud was similar to social security fraud, indicates a misapprehension as to the seriousness of the offending.

20. Offences of this kind are serious. The offending in question is characterised by a calculated series of fraudulent statements pursuant to which the respondent procured the payment of over $59,000 more than he was otherwise entitled to. In my opinion, it is right to draw an analogy between this type of offending and social security fraud.

21. Mr Broderick of counsel for the respondent suggested that the analogy should not be drawn as the pensions in question were intended to be compensatory in nature.

22. In Weinel v Fedcheshen (Perry J, 18 August 1995, judgment No 5216, (unreported, available on SCALE)) I dealt with the question whether or not the systematic obtaining of payments under the Workers Rehabilitation and Compensation Act 1986 by dishonest means should, for the purposes of sentencing, be equated with cases involving social security fraud. In that case, I held that the two should be equated, citing the remarks tending to that conclusion expressed by Cox J in WorkCover Corporation v Jelfs (8 May 1995, judgment No 5088 (unreported, available on SCALE)).

23. Social security fraud is regarded as a special category as it is difficult to detect and its commission tends towards a breakdown of a community based system designed to assist particular categories of disadvantaged persons.

24. The same comment can be made about the fraud now in question. Circumstances of aggravation exist by reason of the systematic and repeated fraud committed by the respondent over a considerable period of time. It is characteristic of the view taken by the courts with respect to that class of offending that the deterrent effect must usually be regarded as outweighing personal considerations and that the imposition of other than custodial terms is to be regarded as exceptional.

25. In my opinion, having regard to the course taken by the learned sentencing judge, the applicant is right in suggesting that the learned sentencing judge simply could not have paid sufficient regard to the seriousness of the offending, and allowed two much weight to be given to personal factors which should have been outweighed by the necessity for deterrence.

26. Here the offending was committed over a lengthy period of time, involved a substantial sum of money and the modus operandi included the use of a false and misleading letter. In my opinion, although one has to have regard to the limited circumstances in which leave will be given to the prosecution to bring an appeal against sentence or to obtain leave in such a case, this is one such case in which leave should be given. In my opinion, to allow this sentence to remain uncorrected would be to send the wrong signal to other courts as to the appropriate approach to be adopted in dealing with cases involving systematic fraud of this kind.

27. There is, of course, the element of double jeopardy involved which I have anxiously considered, as the sentence in question was imposed on 20 December 1995 and the respondent has been at large since then, with the benefit of a bond. However, the fact of the matter is that, in my opinion, for the reasons which I have given, this is simply not a case in which the course taken by the learned sentencing judge can be justified, and the departure from what should have been a correct approach to sentencing is so substantial as to warrant interference by this Court.

28. For those reasons, I would give leave to appeal.

29. I would allow the appeal for the purpose of quashing the order permitting the immediate release of the respondent, to the intent that the sentence of 28 calendar months remain, but directing his release after serving a period of imprisonment of 12 calendar months, such release to be on the respondent's own recognisance in the sum of $2,000 to be of good behaviour for two years immediately following such release. I would at the same time order that the sentence of imprisonment run from the date on which the respondent is taken into custody, the execution of the order being suspended for a period of seven days from now, that period being designed to give to the respondent the opportunity of putting his affairs in order before being taken into custody.

30. I would direct that he immediately then surrender himself to the sheriff to enable the order of imprisonment to be carried into effect.

31. Before departing with the case, I would, however, say that the decision which I have come to is in no way to be taken as an indication that the sentence of 28 months imprisonment, or for that matter the period of 12 months which I would order be served before the respondent was able to avail himself of the release order, are an appropriate punishment for the offending in question. It might well have been the case that a longer term of imprisonment could have been justified. The case is not to be regarded as any sort of precedent for the appropriate length of any term of imprisonment to be imposed for an offence of this kind or for an appropriate term of actual confinement before release under the terms of a pre-release order.

JUDGE2 PRIOR J In my opinion, the applicant has discharged the onus of persuading this court that the circumstances are such as to bring this particular case within the rare category in which a grant of leave to the prosecution to appeal against the sentence is justified. I would, therefore, grant leave to appeal.

2. I agree with the reasons given by Perry J. I agree with the order he proposes with respect to release. The sentence and order for release should not be regarded as any true indication of a tariff. Rather this is a case where, on the material put to us on appeal, this court has acted more out of sympathy than any other reason in directing release after twelve months. I do not accept that by doing that, we have permitted sympathy to dictate the outcome in the way in which the trial judge would appear to have done.

3. Order of the court, therefore, is leave to appeal. Appeal allowed with the order for release made by the sentencing judge set aside. There is a direction to release the respondent after service of twelve months of the sentence of imprisonment, upon the respondent then entering into a bond to be of good behaviour for two years. Execution of this order is suspended for seven days.

JUDGE3 DUGGAN J I agree with the orders proposed by Perry J and I also agree with the reasons which he has given in support of his conclusions.