Luxton v Commonwealth Services Delivery Agency - [2006] SASC 257

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
LUXTON v COMMONWEALTH SERVICES DELIVERY AGENCY
[2006] SASC 257
Judgment of The Honourable Justice Nyland
24 August 2006
CRIMINAL LAW - PARTICULAR OFFENCES - OFFENCES AGAINST THE GOVERNMENT - DEFRAUDING THE COMMONWEALTH
CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - SENTENCE - RECOGNISANCES, PROBATION AND OTHER NON-CUSTODIAL ORDERS - RECOGNISANCES - CONDITIONS
Appeal against sentence – appellant pleaded guilty to seven counts of false statements in claims for social security payments – long and protracted history including numerous adjournments – appellant unrepresented at sentence hearing - request for adjournment refused - magistrate proceeded on basis of a continuing course of misconduct - overpayments referred to in agreed statement of facts – custodial sentence imposed - notification of overpayments disputed – appeal allowed to suspend sentence imposed by magistrate.
Social Security (Administration) Act 1999 s 218, referred to.
Kovacevic v Mills (2000) 76 SASR 404, considered.

LUXTON v COMMONWEALTH SERVICES DELIVERY AGENCY
[2006] SASC 257
Magistrates Appeal : Criminal

NYLAND J: This is an appeal against sentence.
The appellant was charged with seven offences of making false statements in claims for social security payments contrary to ss 212 and 217 of the Social Security (Administration) Act 1999. The appellant pleaded guilty to all the charges and was sentenced in the Magistrates Court at Port Augusta on 12 December 2005.
The learned sentencing magistrate indicated that he regarded a sentence of four months’ imprisonment to be appropriate after allowing a 25 per cent discount for the appellant’s pleas of guilty. He concluded that in all the circumstances it was not appropriate to suspend the sentence. The magistrate also made a reparation order under s 218 of the Social Security (Administration) Act 1999 requiring the appellant to pay to the Commonwealth the sum of $2160.28.
The conduct constituting the charges against the appellant related to seven occasions between 16 October 2003 and 1 April 2004 on which the appellant lodged applications for payment forms for a Newstart allowance. In each application the appellant stated that he had not been employed during the relevant period when he had in fact been in remunerated employment.
The appellant was first required to appear in the Port Augusta Magistrates Court to answer the charges against him on 31 August 2004. The appellant failed to appear that day. Thereafter there was an extended number of hearings before sentence was finally imposed. The chronology of court appearances after 21 August 2004 appears to be as follows:
·On 23 November 2004 there was no appearance by the appellant but there was an indication that Mr Mancini was acting for him. The matter was adjourned to 8 February 2005.
·On 8 February 2005 there was no appearance by the appellant nor Mr Mancini. There had, however, been some intimation that a plea would be entered. The matter was then adjourned to 12 April 2005 and the file marked “No further adjournments”.
·On 12 April 2005 the file is endorsed “No appearance by [appellant] nor Mr Mancini. The matter further adjourned until 7 June 2005”.
·On 7 June 2005 there was no appearance by the appellant nor Mr Mancini. The matter was adjourned to 2 August 2005. The file was again endorsed “No further adjournments”.
·On 2 August 2005, there was no appearance by the appellant nor Mr Mancini and a warrant was issued.
·On 18 October 2005 the appellant appeared in court, presumably in answer to the warrant, at which time he was represented by Mr Mancini. The appellant then pleaded guilty to all of the charges. A statement of facts was tendered and at Mr Mancini’s request a pre-sentence report was ordered. The matter was then adjourned to 12 December 2005 for submissions and penalty.
On 12 December 2005 the appellant appeared in the Port Augusta Magistrates Court. Ms Wilkinson appeared on instructions from Mr Mancini, and made an application on behalf of the appellant for an adjournment. This was to enable the appellant to have time to make full restitution and for Mr Mancini to take instructions on the pre-sentence report as he had only received it on 9 December 2005. It also appeared that the appellant was not in a position to pay his legal fees until after 16 December 2005.
The application for the adjournment was opposed by counsel for the Commonwealth Director of Public Prosecutions due to the delays which had already occurred in resolving the matter. The learned magistrate refused the application for the adjournment on the basis that the appellant had been given ample time to resolve the matter. He indicated that Mr Mancini could have briefed another solicitor to make sentencing submissions on behalf of the appellant. Ms Wilkinson was not, however, instructed to make those submissions. She then withdrew from the file and the matter proceeded with the appellant unrepresented.
According to the affidavit of Scott David Swain, the legal officer who appeared for the Commonwealth Director of Public Prosecutions, he then submitted to the court that the appropriate penalty was a term of imprisonment. He said the prosecution’s attitude to the penalty was founded on the decision of the Full Court of the Supreme Court of South Australia in Kovacevic v Mills[1] and he further submitted:
(1)that the appellant had a prior conviction for social security fraud, and
(2)that he previously had the benefit of being released forthwith with respect to those offences;
(3)that he breached the recognisance that he entered into for those prior offences;
(4)that he was re-sentenced and served 10 months in prison for that breach;
(5)that he had other prior convictions for dishonesty;
(6)that he had again committed another fraud on the Commonwealth.
[1] (2000) 76 SASR 404
According to Mr Swain’s affidavit the learned magistrate then directed questions to the appellant with respect to the offending, his background and personal circumstances, and the appellant submitted the following:
(1)that he admitted the facts;
(2)that he admitted his prior convictions;
(3)that he wanted his lawyer to represent him for sentence;
(4)that the money he obtained from Centrelink was paid out in expenses, fuel, travel and accommodation with respect to his employment;
(5)that he wanted to make full restitution;
(6)that he did not mean to offend;
(7)that he only had a short period of employment with each of the five employers he worked for;
(8)that he had been married for 27 years, had three sons and a granddaughter;
(9)that he had set his life in a straight line and had permanent employment;
(10)that when he was previously imprisoned, it had a major impact on his family and it was difficult for him to obtain employment after his release.
The learned magistrate then imposed the sentence of four months imprisonment which was not suspended.
On appeal, the appellant did not take issue with the term of imprisonment imposed by the magistrate but complained of the magistrate’s failure to exercise his discretion to suspend that sentence.
The amended grounds of appeal against the sentence imposed by the magistrate are as follows:
1.The learned magistrate erred in refusing to adjourn the sentencing hearing.
2.The learned magistrate erred in proceeding to sentence the appellant when he was not legally represented and such as to give rise to a miscarriage of justice by virtue of which the appellant was not able to put adequate information, materials or submissions.
3.The learned magistrate failed to afford the appellant a fair or adequate sentencing hearing.
4.The learned magistrate erred in failing to have adequate regard to:
4.1 the appellant taking action to make reparation pursuant to section 16A(2)(i) of the Crimes Act 1914;
4.2 the deterrent effect any sentence or order may have on the appellant pursuant to section 16A(2)(i) of the Crimes Act 1914;
4.3 the character, antecedents, age and means of the appellant pursuant to section 16A(2)(m) of the Crimes Act 1914.
4.4 the prospect of rehabilitation of the appellant pursuant to section 16A(2)(n) of the Crimes Act1914.
5.The learned magistrate erred in determining not to suspend the sentence wholly or in part pursuant to section 20(1)(b) of the Crimes Act 1914;
6.The learned magistrate erred in determining not to make a recognizance release order ‘because of the antecedents of the defendant and the serious continuing offending of dishonesty’.
Grounds 1, 2 and 3:
These three grounds can be dealt with together. Mr Mancini acted for the appellant throughout these proceedings and also appeared as counsel for the appellant on the hearing of the appeal. He argued that the application for the adjournment which was made on 12 December 2005 was for a short period only. As such, it would not have caused any prejudice to the prosecution but it was essential for the appellant to provide him with the opportunity to be represented by counsel.
Despite the long history of the matter, Mr Mancini argued that there had not been any significant delay since the pleas of guilty had been entered. He said the earlier adjournments had been required to obtain instructions from the appellant and for disclosure of various matters from the prosecution. They were also required for the preparation of sentencing submissions, and to accommodate the availability of counsel. He submitted that the refusal of the adjournment had forced the appellant to be unrepresented in a serious and complex sentence hearing. Further it was one in which the appellant was faced with an immediate custodial sentence by virtue of his antecedents and the nature of the offending and which, in fact, resulted in such a sentence being imposed.
Mr Mancini also submitted that the appellant had not been given sufficient time to deal with the pre-sentence report which had only been completed the Friday before the Monday hearing and which had only been faxed to his solicitors on that date. The appellant did not see the report until he attended at court. He did not, therefore, have any opportunity to discuss the matters contained therein with his legal advisors. Mr Mancini submitted that if an adjournment had been granted, the appellant would have arranged to provide the court with letters of support from his son and daughter-in-law.
Mr Mancini also submitted that the learned magistrate had failed to explain to the appellant the principles arising from the case Kovacevic v Mills (supra) or make a copy available to him, that case having been relied upon by the prosecution in the course of submissions.
In Kovacevic v Mills the Court of Criminal Appeal said that an order for imprisonment, with at least some of the imprisonment actually to be served, was ordinarily likely to be required in cases of deliberate and sustained fraud. In a joint judgment Doyle CJ, Mullighan, Bleby and Martin JJ said [40]:
This is because the commission of a number of offences of fraud over a period of time makes imprisonment appropriate even for a first offender, because of the seriousness of the offending. The same matters may require that at least part of that term of imprisonment actually be served, even in the case of a person with no previous convictions.
However, they went on to say [43]:
In our view in the more serious cases of sustained and deliberate fraud, deterrence is very important, imprisonment is likely to be required, but all mitigating circumstances and the rehabilitation of the offender must still be considered. Substantial mitigating circumstances, and in some cases considerations of mercy and leniency may lead to the conclusion that a sentence of imprisonment is inappropriate or that such a sentence is appropriate, but that the imprisonment need not be served.
The significance of that decision is that in cases of deliberate and sustained fraud, deterrence is an aspect in determining sentence, but it is not to take priority over other relevant factors in sentencing. Whilst an order for imprisonment is the appropriate starting point in such cases, there is still the need to balance deterrence alongside other factors relevant to sentencing, and in certain cases those other factors may result in suspension of any term of imprisonment imposed.
Although the magistrate had asked the appellant a number of questions in the course of the hearing, in answer to which the appellant admitted facts or allegations against him, Mr Mancini submitted that the learned magistrate had failed to inform the appellant of the process by which he could dispute any of those facts. This was of particular importance as some of the matters contained in the statement of facts which was tendered by the prosecution were disputed or required clarification. In particular there was a dispute about the item headed “Previous prosecutions for overpayment”. This referred to five previous overpayments as a result of failure to declare income from employment to Centrelink for a period from 1993 to 2002. The appellant admitted the debt which had been raised in September 1993 and that he had been sent a warning letter in relation to that debt and believed that was the matter for which he had been prosecuted in 1995.
The appellant, however, disputed that he had received warning letters or notifications from Centrelink about the other debts referred to in the statement as having been raised in 1998 and 2002. He was therefore unaware of a problem relating to them. That was therefore a matter which would have been the subject of argument if the appellant had been represented by counsel at the sentence hearing. This was of particular significance as the learned magistrate appeared to have relied upon those matters as part of a demonstrated pattern of conduct by the appellant.
Grounds 4 and 5:
As far as grounds 4 and 5 are concerned, Mr Mancini submitted that there were a number of mitigating factors that would have been put to the magistrate if the appellant had been represented. These included the opportunity to make reparation, the loss of employment in the event of an immediate custodial sentence, the assistance given by the appellant to his sons by way of employment, issues relating to his wife’s health and potential financial hardship.
Mr Mancini argued that matters contained in the pre-sentence report indicated that the appellant had been undergoing a process of rehabilitation and that should have resulted in a favourable exercise of discretion to suspend the sentence. In this regard it is fair to say that the pre-sentence report does refer to the appellant in reasonably positive terms. It describes there having been a major turn around in the appellant’s life since he committed the offences. It refers to his employment as an earth moving sub-contractor at the Challenger Gold Mine and his intention to employ his sons there. It also mentions that as his business expands he will be in a position to employ others. The comment is made that the appellant’s attitude and the effort he has put in since he committed the offences augers well for the future and concludes:
The contributing factors at the time of offending have been resolved. There are no identified issues which require departmental assistance. [The appellant] has repaid the full amount that he obtained dishonestly from Centrelink. His life is now settled with steady employment in an isolated location. It can fairly be said that he is making a contribution to his family and to the development of the State in an isolated location.
The reference to the repayment of the debt in that report is, however, incorrect as at the time the report was written the appellant had not repaid the monies owed, although he has since done so.
Mr Mancini also argued that the quantum of monies involved was not large and was committed in the context of financial impoverishment in which the monies were not used for lifestyle or other issues, and those matters also weighed in favour of a suspended sentence.
The respondent contended, however, that all of these matters had been placed before the magistrate at the time of sentence. The matter had been extremely protracted and the appellant had been given ample opportunity to obtain legal representation. It was appropriate for the magistrate to have regard to the appellant’s prior offending history which reduced the opportunity for leniency on this occasion. In all of the circumstances the sentence imposed by the magistrate was well within the range of what was appropriate for such serious offending.
The respondent also pointed out that a copy of the statement of facts which included the particulars of overpayments had been provided to Mr Mancini in November 2004. That was the same statement of facts that was tendered on 18 October 2005 when the plea was entered. The appellant had therefore had the benefit of representation at the time that pleas were taken and the facts were read and admitted. It was submitted that the magistrate also had the benefit of the matters personal to the appellant which were set out in the pre-sentence report ordered at the request of the appellant. Accordingly, this was not a situation in which the appellant could be regarded as being unrepresented on a number of important issues.
These matters are not particularly easy to resolve. It is understandable that the learned magistrate was not impressed by yet another application for an adjournment of the matter in December 2005. In my opinion, the court had been extremely tolerant of the delays in this matter as the proceedings had by that time been outstanding for over one year, and the appellant had been put on notice on earlier occasions that no further adjournments would be permitted. He had in that period ample opportunity to engage and instruct counsel to act on his behalf. Although the appellant may have been placed in a difficult position as a result of the late arrival of the pre-sentence report all of the matters contained therein were available to the magistrate and undoubtedly taken into account by him when reaching a decision as to the appropriate penalty. The learned magistrate also sentenced the appellant on the basis that the appellant intended to make reparation of the monies which had been overpaid to him.
The learned magistrate does, however, appear to have proceeded on the basis of a continuing course of misconduct by the appellant based on the receipt of advice as to the overpayments referred to in the statement of facts. The appellant does not dispute that the relevant amounts were raised as set out in the statement of facts but disputes that he was advised of those matters. These matters were, however, clearly treated by the magistrate as circumstances of aggravation as the magistrate said:
You have previously received warnings from the Department of Social Security relating to other overpayments. Sadly, you have continued to offend in this manner.
This was a critical issue as it established a pattern of behaviour which was highly relevant to the decision as to suspension and the magistrate appears to have relied upon that in reaching a decision not to suspend the sentence. As these were matters of aggravation, however, it was necessary for them to be proved beyond reasonable doubt. The appellant, to that extent was prejudiced in his appearance before the learned magistrate by the absence of representation to canvass that particular issue. In the circumstances I consider that there was an error which has caused the sentencing discretion to miscarry. In view of the delays in this matter, rather than referring this matter back to the learned magistrate to resolve the issue in dispute, I propose to exercise the sentencing discretion afresh.

In so doing I will disregard the disputed matters. Nevertheless, the appellant does have a previous conviction for a similar offence and that reduces the scope for leniency on this occasion. In considering the appropriate penalty, I propose to take into account the matters contained in the psychological report prepared by Mr Richard Balfour dated 17 March 2006. That was provided to me on the hearing of the appeal on the understanding that it was irrelevant to the issues for decision on appeal, but would be available to be taken into account in the event that I re-sentenced the appellant for these matters.
Mr Balfour described the appellant as being aged 46 and a man with a borderline intellectual disability but with a good work ethic. He referred to him being a conscientious father and husband, dedicated to his family. He had experienced a number of significant life stresses which resulted in him developing an adjustment disorder characterised by depressive features. He has lost 20 per cent vision in both eyes as a result of a medical condition which causes progressive blindness. His wife suffers from a progressive kidney disorder which is potentially life threatening.
He mentioned that the offending behaviour occurred during a period when he had been largely unemployed for 16 months. It mentions that Mrs Luxton coped both emotionally and financially very poorly on the previous occasions in which the appellant served ten months in gaol and there was a good chance that if he received a lengthy custodial sentence for this offence that his wife would terminate the marriage, which would affect his mental state and would require him to be closely monitored to ensure he did not become actively suicidal. Mr Balfour recommended that the appellant participate in a supervised structured rehabilitation program which would include a case manager to provide him with support and guidance. He said he would benefit from cognitive behavioural therapy, with a psychologist to assist him to improve his repertoire of coping strategies, tolerance of stress and to improve his social problem solving skills and refer him to a financial counsellor to assist him in learning to manage his finances during times of financial stress.
Having had regard to all of the matters in Mr Balfour’s report, as well as the pre-sentence report, I have decided, notwithstanding the prior conviction of the appellant and taking into account the principles set out in Kovacevic v Mills, that it is appropriate to give the appellant one last chance to foster his rehabilitation. I therefore propose to make an order for suspension of the sentence imposed by the magistrate. The order of the court is therefore that the appeal be allowed to the extent that the sentence of four months imprisonment will be suspended on condition that the appellant enter into a recognisance in the sum of $250 to be of good behaviour for a period of two years.