Director of Public Prosecutions v Lindsay Stuart Brook No. SCCRM 94/519 Judgment No. 4978 Number of Pages 7 Criminal Law and Procedure

[1995] SASC 4978

COURT COURT OF CRIMINAL APPEAL IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), MATHESON(2) AND MILLHOUSE(3) JJ

CWDS
Criminal law and procedure - Sentence - Social Security Fraud - carefully planned and executed scheme over period of 7 years 7 months - $301,000 fraudulently obtained - $123,000 recovered - obtaining 9 aged pensions by means of fictitious identities, birth certificates, tax file numbers and bank accounts - age 70 years - no prior convictions - personality disorder - moderate coronary artery disease - importance of general deterrence - total head sentence 8 years' imprisonment - on appeal by DPP non-parole period of 8 months increased to 2 years.

HRNG ADELAIDE, 21 February 1995 #DATE 21:2:1995 #ADD 14:3:1995

Counsel for appellant:     Mr B R Martin QC with
   Ms F Propsting

Solicitors for appellant:    DPP (Cwlth)

Counsel for respondent:     Mrs M E Shaw

Solicitors for respondent: Lee and Partners

ORDER
Appeal allowed.

JUDGE1 KING CJ This is an application by the Director of Public Prosecutions for the Commonwealth for leave to appeal against sentences imposed upon the respondent in the District Court. The respondent pleaded guilty to nine charges of defrauding the Commonwealth and nine charges of operating a bank account in a false name.

2. In addition to that, he requested that the court take into account 15 offences of knowingly making a statement to a taxation officer that was false in a material particular, and 29 offences of operating a false name bank account.

3. A sentence of imprisonment for six years was imposed with respect to defrauding the Commonwealth, and a sentence of two years imprisonment was imposed with respect to the offences of operating a bank account in a false name. Those sentences were made cumulative, resulting in a total head sentence of eight years. A non-parole period of eight months was fixed. The Director of Public Prosecutions' application relates only to the non-parole period.

4. The crimes for which the respondent has been sentenced arose out of a scheme which he devised and implemented over a period of seven years and seven months to obtain aged pensions in fictitious names. He obtained nine pensions in nine different names.

5. The scheme resulted in the Commonwealth being defrauded of a total sum of $301,458.80. The scheme, in broad outline, was that the respondent created fictitious identities by obtaining birth certificates in the names of deceased persons. Those persons, in all but one instance I think, are people who had died at an early age between the years 1920 and 1940.

6. The respondent produced those birth certificates to the Department of Social Security as proof of identity and he opened the bank accounts in false names, and also rented premises and post office boxes in false names as part of the scheme. He operated a total of 40 bank accounts in false names and used 22 different names.

7. The offences with respect to the taxation office relate to his obtaining tax file numbers in 15 names to support his false claims, and in addition to that he obtained motor vehicle licences in 11 names. He obtained five birth certificates, also in the names of deceased persons, in addition to the nine which were used. Those five birth certificates apparently have never been used.

8. There is no satisfactory account, to my mind, of what became of the money which the respondent obtained. He purchased a property at Kangaroo Island at a cost of approximately $41,492 and obtained a loan from a credit union of $22,400 for the purchase of that property. That property yielded on sale $71,065. In addition to that, $52,171 was found in bank accounts, either in the respondent's true name or in the names of the fictitious persons whose identities he had used. A total of $123,237 has therefore been restored to the Commonwealth.

9. But, of course, that leaves an amount in excess of $170,000 unaccounted for and this is the more curious by reason of the fact that throughout the period the respondent was legitimately receiving a Commonwealth superannuation pension in the region of $17,000 a year and a part war service pension in the amount of $66 a fortnight. The respondent's only comment on what became of the money to the officer who questioned him was that he did not remember.

10. When the police approached the respondent he made available to them a box or carton containing the relevant documents in his possession. He pleaded guilty at the first opportunity in the Magistrates Court. He declined to be formally interviewed and has provided no further information than that which I have mentioned as to what became of the money.

11. The respondent's crimes are undoubtedly of a very serious character. They were carefully planned and carefully executed over a period of many years. There is no element of impulsiveness involved in them. They were a deliberate and calculated fraud upon the Commonwealth.

12. The seriousness of crimes of fraud on the Social Security system has been stressed in a number of cases and it is unnecessary for me to repeat the comments which have been made in those cases. I refer to R v Vasin and Scherf
(1985) 39 SASR 45, R v Sopher (1993) 70 A Crim R 570, especially at p.573, and R v Cameron and Simounds (1993) 171 LSJS 305, especially at pp.306 and 307, and an unreported decision of the Court of Criminal Appeal of this State in R v Loveridge delivered on 21 September 1994.

13. A planned and calculated fraud of this kind strikes at the foundations of the social security system and, as I have remarked in other cases, it thereby threatens the system which is so necessary for the support of persons in our society who have the need of its support and who are genuine and honest people. I think that, in addition to that, it tends to bring into public opprobrium recipients of social security benefits who are honest and genuine and who do not deserve that opprobrium, and it also results in their lives being subjected, by those who have the responsibility of protecting the public revenue, to a greater degree of scrutiny than would be necessary if persons like the respondent did not subject the system to fraudulent activity.

14. There is no question in my mind but that the courts have a serious responsibility to impose penalties which operate as a deterrent to those who attempt to obtain social security benefits to which they are not entitled by dishonest practices.

15. The head sentences imposed in this case were undoubtedly severe. They are not the subject of appeal. There has been a suggestion, during the course of argument, that this court perhaps should use its power to adjust those sentences, but I feel that the seriousness of this case does not warrant that course, particularly as the scheme involved the distinct elements of defrauding the Commonwealth and operating the bank accounts in false names.

16. The learned sentencing judge imposed cumulative head sentences for those two criminal aspects of the fraudulent scheme, and I think that he was justified in doing that. Although the result is undoubtedly severe, I do not think, particularly in the absence of an appeal by the respondent against the head sentence, that this court should be inclined to make an adjustment.

17. The real problem relates to the non-parole period. If it were not for circumstances personal to this respondent, I think that a non-parole period in the region of four or five years would be appropriate to this case. However, there are personal factors of a significant kind.

18. The respondent was born on 30 December 1924 and is therefore now 70 years of age. He has no prior convictions. He is, as the nature of the crimes indicate, an intelligent, self reliant and resourceful person, and that is confirmed by the psychiatric evidence. He has, however, from an early age apparently suffered from a personality disorder which has affected his personal relationships and his attitude to other people and to society generally.

19. That personality disorder seems to have been affected in some way, possibly intensified, by unfortunate experiences during war service, and it has also been intensified by most unhappy experiences with his son who apparently became addicted to heroin and subsequently committed suicide.

20. The personality disorder has resulted, at various times in the respondent's life, in anxiety and depression and he has received psychiatric treatment on three occasions during his life. Nevertheless, there is nothing in his psychiatric condition which affects his intellectual capacity, his capacity to appreciate the criminality of his actions, or his capacity to avoid criminal conduct.

21. He has a physical condition described as moderate coronary artery disease, but that has produced, so far, no severe symptoms. The psychiatric evidence is, however, that prison may produce, and perhaps is likely to produce, psychiatric symptoms in the nature of paranoia and depression and that will undoubtedly have the result of imprisonment bearing more heavily upon him than it might bear upon a person who does not have the psychiatric disabilities to which I have referred. It may be also that his physical condition will have the result that prison will bear more heavily upon him than it would on others who are younger and fitter.

22. Certainly his age alone means that imprisonment must be a heavy burden to him. Those matters were important for the consideration of the sentencing judge and were undoubtedly given full weight by him. They must have inclined him to reduce the non-parole period in the way that he did below what might otherwise have been expected. As I have said, the case merited a non-parole period of four to five years in a younger and fitter man who was not subject to the personal considerations which I have mentioned in the case of this respondent.

23. There are two critical questions in the case: The first is whether the learned sentencing judge was justified in reducing the non-parole period from what it would otherwise have been to the extent which he did reduce it by reason of the factors personal to the respondent; the second question is whether, if he was not so justified, this is a case of the kind which justifies the grant of leave by this court to the Director of Public Prosecutions.

24. To my mind, the paramount need for general deterrence in a case of this kind requires that the non-parole period be considerably longer than that fixed by the sentencing judge. I think that in his natural and understandable sympathy for an elderly man afflicted in the way that this man is afflicted, the learned judge has lost sight, to a degree, of the paramount need for general deterrence and I have reached the conclusion that the non-parole period fixed by the sentencing judge is manifestly inadequate.

25. The question remains whether leave should be granted to the Director of Public Prosecutions in the circumstances of this case, and I bear in mind what has been said in this court in cases such as R v Osenkowski (1982) 30 SASR 212 and R v Wilton (1981) 28 SASR 362 and what has been said in the High Court in Malvasso (1989) 168 CLR at 227 and Everett v R (1994) 124 ALR 529.

26. It seems to me that it is important that the courts maintain adequate standards of punishment for crimes of this kind against the social security system. It is necessary that the public understand that the courts are determined, by the penalties which they impose, to protect the integrity of the social security system which the taxpayer maintains and by so doing to send a message to those who may be tempted to defraud it that actions of that kind will be met by condign punishment.

27. This is an important case from that point of view because the court is dealing with an elderly man who has both psychiatric and physical afflictions. The court must always take into account the personal factors in this kind of case in determining a fair and just sentence, but it is necessary for the protection of the Social Security system that people of that kind should understand that they cannot escape the consequences of their actions with relative impunity simply by reason of age and the afflictions which, unhappily, go with age.

28. It seems to me, for that reason, that this is a case in which the court ought to intervene by granting leave to appeal to the Director of Public Prosecutions. There is an important principle involved in this case. There is an important issue of maintaining adequate standards and of making it clear to people in the community who may be tempted towards this type of crime.

29. In my opinion, therefore, leave to appeal should be granted to the Director of Public Prosecutions, and the appeal should be allowed for the purpose of increasing the non-parole period.

30. The term of an appropriate non-parole period is a matter of difficulty and concern, having regard to the age and health of the respondent. Certainly those considerations should incline the court to keep the non-parole period to the minimum which is required for the purposes of general deterrence. I have reached the conclusion that an appropriate non-parole period in this case is two years.

31. I would, therefore, grant leave to appeal. I would allow the appeal. I would vary the sentence to the extent of increasing the non-parole period to two years.

32. The order of the court will be: leave to appeal to the Director of Public Prosecutions, appeal allowed, non-parole period increased to two years.

JUDGE2 MATHESON J I agree with the Chief Justice and for the reasons that he has given that leave to appeal should be granted, that the appeal should be allowed and that the non-parole period should be increased to two years.

2. However, I think the head sentence of 8 years is manifestly excessive, having regard to the age of the respondent, his physical and mental afflictions and his pleas of guilty.

3. It appears that the highest head sentence in cases similar to this case is five years; see Sopher (1993), 70 A Crim R at 570, a case which was in fact in some respects more serious than this.

4. I have no doubt that if there had been an appeal by the respondent against the severity of the head sentence that, I, at least, would have interfered. Whilst there is no appeal by the respondent against the severity of the head sentence, I consider that this court has power to adjust the head sentence under s.353(4) of the Criminal Law Consolidation Act.

5. In my opinion, the learned trial judge did err in fixing the head sentence he did. It appears to me that because he had decided to fix a very short non-parole period that he sought to compensate by fixing a very long head sentence, and that is erroneous. I would reduce the total head sentence to five years. Because on this aspect my view is a minority one, it is unnecessary for me to go further and restructure the various sentences.

JUDGE3 MILLHOUSE J From the history of the respondent, few people would not agree that he has had a hard and tragic life, with, it looks a lot of bad luck. However, that doesn't excuse a man from doing what the respondent did - a deliberate course of misconduct over 7 years, fraud on the Commonwealth - that is on his fellow citizens - ending only when he was caught - a course of conduct which was planned cleverly, carefully and meticulously.

2. I bear in mind the opinions expressed by the two psychiatrists and the psychologist as to the effects of imprisonment on the respondent. Dr Earle Williams said:
    "One must agree that this man should be brought to justice,
    but compassion should be exercised in the face of his various
    severely pathological personality disorder handicaps. These have
    not directly caused him to act wilfully and with sinister intent
    to hurt his fellow man. It has all been a pathetic and distorted
    psychological war by him against society, power and authority
    through perversely stealing from authoritarian institutions but
    sadly getting little joy from it."

3. Dr Lyndon Murray said:
    "I would have considerable concerns about the psychiatric
    effects of imprisonment on this elderly man. I expect he would
    become depressed and paranoid, probably requiring transfer to
    psychiatric in-patient care in James Nash House. Despite the fact
    that he has not previously attempted suicide, I would rate this
    risk highly in this man should he be imprisoned because of his
    age, the multiple losses, his loneliness, his negative prospects
    and his cardiac state."

4. Mr Litt, the psychologist, said:
    "In my opinion, however, I do not believe that Mr Brook
    serving a gaol sentence will achieve anything either from a
    'psychological or rehabilitation point of view. Mr Brook is 69
    'years old and, in terms of his physical and mental health, this
    'would be detrimental."

5. Yet, as the Chief Justice remarked when I reminded Mr Martin during argument of one of these opinions, the deterrent aspect of punishment has to be the dominant aspect in a case like this. Bearing that in mind, a non-parole period of 8 months for such a fraud - and less than half of the proceeds of which have been recovered is manifestly inadequate.

6. As the argument proceeded, I was inclined to think that a non-parole period of more than two years would be appropriate, but, in view of the persuasive views of the other members of the court and of the three opinions I have quoted, I agree that the increase in the period to two years is sufficient, especially now that there are no remissions. If it hadn't been for the three opinions I have quoted, I would have thought that at least three years was warranted.

7. With respect, however, I cannot agree with my brother Matheson that the total head sentence should be reduced. The respondent hasn't seen fit to appeal against the head sentence and, while we have the power to vary it under s.353(4) of the Criminal Law Consolidation Act, Mrs Shaw didn't actually take the plunge and actually apply to us to do so. Even if she had, I would not have been willing to grant her application.

8. Eight years is severe but in view of the circumstances of the crimes - as the Chief Justice has recounted them - but not so severe as to warrant interference.

9. I agree that leave to appeal should be granted, the appeal allowed to the extent of increasing the non-parole period to two years.