Nolan v Jarvis

[2006] TASSC 64

[2006] TASSC 64

CITATION:                 Nolan v Jarvis [2006] TASSC 64

PARTIES:  NOLAN, Nicole Therese
  v
  JARVIS, Linda

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 8/2006
DELIVERED ON:  14 September 2006
DELIVERED AT:  Hobart
HEARING DATE:  14 August 2006
JUDGMENT OF:  Tennent J

CATCHWORDS:

Criminal Law – Jurisdiction, practice and procedure - Judgment and punishment – Sentence – Factors to be taken into account – Purpose of sentence – Deterrence – Social Security fraud – Weight to be given to deterrence over other factors.

Aust Dig Criminal Law [827]

Criminal Law – Jurisdiction, practice and procedure - Judgment and punishment – Sentence – Factors to be taken into account – Miscellaneous matters – Irrelevant factors – Investments held by offender.

Aust Dig Criminal Law [850]

Criminal Law – Jurisdiction, practice and procedure - Judgment and punishment – Sentence – Factors to be taken into account – Other matters – Social Security fraud – Failure to consider alternative sentencing options – Crimes Act (Cth) 1914, s17A.

Aust Dig Criminal Law [851]

Criminal Law – Jurisdiction, practice and procedure - Judgment and punishment – Sentence – Factors to be taken into account – Parity – Generally – Social Security fraud – Comparison with other sentences.

Aust Dig Criminal Law [835]

Criminal Code Act 1995 (Cth), s135.2(1).
Crimes Act1914 (Cth), s17A.
Garnsey v Stamford [2002] TASSC 43; Jennings v Westbury, 30 September 1988, File No LCA 93/1988; Kovacevic (2000) 111 A Crim R 131, referred to.
Dadson v O’Brien 75/1998; Hrasky v Boyd (2000) 9 Tas R 144, applied.
Walsh v Department of Social Security (1996) 67 SASR 143, distinguished.

REPRESENTATION:

Counsel:
             Applicant:  S Wright
             Respondent:  J D Barnett
Solicitors:
             Appellant:  Crisp Hudson & Mann
             Respondent:  Commonwealth Director of Public Prosecutions

Judgment Number:  [2006] TASSC 64
Number of paragraphs:  49

Serial No 64/2006
File No LCA 8/2006

NICOLE THERESE NOLAN v LINDA JARVIS

REASONS FOR JUDGMENT  TENNENT J

14 September 2006

1. The applicant seeks a review of a sentence imposed by a magistrate on 10 May 2006.  She pleaded guilty to 21 charges of obtaining a financial advantage contrary to the Criminal Code Act 1995 (Cth), s135.2(1).

1. On 21 occasions between 14 January 2004 and 15 December 2004, the applicant received a benefit from Centrelink when she knew she was not entitled to it because she was living as a member of a couple with one Leigh Norththrop.  It had been alleged that the applicant did this on 25 consecutive occasions during that period.  However, four allegations were dropped because the prosecution was satisfied that in respect of the occasions referred to, being 11 February, 10 March, 30 June and 11 August 2004, the applicant was not living with Mr Norththrop.

1. The applicant was convicted and sentenced to six months' imprisonment, to be released after serving two months, on a recognisance of $5,000.  The applicant has served none of that time to date, pending the outcome of this review.  The maximum penalty in respect of each of the 21 charges to which the applicant pleaded guilty was 12 months' imprisonment.

Facts from the prosecutor

1. The facts put by the prosecutor were that, at the time the offending began, the applicant had been in receipt of benefits from Centrelink since 1996.  As part of her continued eligibility to receive benefits she was required to advise Centrelink of any changes in her circumstances, including commencing a defacto relationship.  In the period relating to the charges, her partner earned an income from employment not declared to Centrelink.  The applicant's average fortnightly income, inclusive of benefits, over the period of offending was approximately $2,134.42. The total overpayment of benefits was $9,316.10.

1. The applicant owned a home with her partner.  She held the title with him as tenants in common as to 90 per cent to her and 10 per cent to him.  The house was purchased at the beginning of 2004 and the parties commenced to live together in that house in January 2004.  The house was purchased for $325,000.  In the loan application made by the applicant for a mortgage to assist with the purchase, the applicant set out that she had received $250,000 from a settlement with her former partner, was to receive a further $200,000 in April 2004, and had also received another property at Wynyard in the settlement valued at $169,000 with a mortgage of $31,633.  In the same application, the applicant set out that she received $500 per week by way of child support.

1. The applicant's offending came to light following information provided to Centrelink by a member of the public.  The applicant was interviewed and made full admissions.  She told interviewers that she had some gambling difficulties and that her relationship was at times unsettled.  At the time of sentence, the applicant had repaid the debt to Centrelink and she had no prior convictions.

Plea in mitigation

1. At the time of sentence, the applicant was living with her three children aged 12, 8 and 7 in the house purchased with Mr Northrop.  She did not work but received $1,000 per week by way of maintenance.  She was paying $100 per week in respect of her house mortgage.

1. Following the birth of her third child, the applicant suffered from postnatal depression which was undiagnosed until some time in 2001 when her marriage broke down.  She received extensive professional assistance following that and reports from a psychologist, Kristen Webb-Foss, and a psychiatrist, Mr Reid, were provided to the Court.

1. At the time of sentence, counsel for the applicant told the learned magistrate that the applicant had informed interviewing officers that "she was suffering from a gambling problem".  However he provided no detail at all about the nature of the problem, the extent of it, its practical impact on her life, or what steps she had taken specifically to address it, save for a reference to her contacting Gamblers Anonymous and seeking treatment for her "post natal and related gambling issues" through a Dr Barnes.  No report from Dr Barnes was put before the Court.  There then followed a discussion with the learned magistrate about the decision in Garnsey v Stamford [2002] TASSC 43 to which the prosecutor had already referred.

1. Counsel submitted that by reason of the fact the applicant was suffering postnatal depression, her gambling addiction should be given significant weight as a mitigatory factor.  He sought to distinguish Garnsey v Stamford (supra) on the basis the offender in that matter had a long-standing gambling problem prior, and subsequent, to the offending and had sought no help.  He described the conduct in that case as a calculated course of conduct.

1. Counsel otherwise submitted that the applicant was a single mother with three children, her relationship with Mr Northtrop had been volatile with periods of separation, and he had contributed either nothing or very little to household expenses and only once to a mortgage repayment while living with the applicant.  The applicant had very much wanted to keep the relationship going.  I infer, although it is unclear, that what counsel also told the learned magistrate, and this appears at the top of page 19 of the judge's papers, was that the applicant's gambling was a significant impost on her income during the period of offending.

1. Counsel also submitted that notwithstanding the applicant's apparently strong capital and income position, the impact of her gambling and financial obligations to her household meant that her "financial position was not as beneficial as what could be seen from the information put forward".  He also told the court that the applicant had received an $11,000 tax bill arising from trust arrangements put in place by her former husband, which she had paid, and which they were trying to sort out.  It was not apparent when that occurred or what impact it had on her overall capital position.

1. In effect, counsel submitted that without the parenting payment which the applicant received as a consequence of her non-disclosure, she would not have been able to continue to run her household and care for her children.

Grounds of review

1. The grounds of review of the sentence were as follows:

"1The learned Magistrate erred in law and in fact in the exercise of his sentencing discretion in sentencing the Appellant to an actual term of 2 months imprisonment to be served and that such sentence was manifestly excessive in all the circumstances.

2The learned Magistrate erred in law and in fact in taking into account the Appellants investments in the exercise of the sentencing discretion in that those investments had no impact on the Appellants entitlement to receive a parenting payment single from the Commonwealth Services Delivery Agency and was an irrelevant consideration in all the circumstances.

3The learned Magistrate erred in law and in fact in the exercise of the sentencing discretion in not accepting the psychologist's reports and the Appellants Tourette's Disorder, its sequelae being impulsitivity, obsessionality and greater rates of mood disorder as being a mitigatory factor in the sentencing process.

…

7The learned Magistrate erred in law and in fact and contrary to Section 17A of the Crimes Act (CTH) 1914 in that he considered there was no other sentence than a sentence of imprisonment which was appropriate in all the circumstances of the Appellants case.

…

9The learned Magistrate erred in law and in fact in that he operated on a factual error in the sentencing process in that he sentenced on the basis that the Appellant had received and invested the sum of $200,000.00 in a bank account and that she had paid $180,000.00 for a house during the period of offending when in fact those monies were received prior to the period of offending."

1. I will deal with the grounds in the order in which counsel did.

Ground 2

1. The learned magistrate said at 14 of his reasons:

"In this particular case in my view there is little to be said in mitigation.  It was clearly a matter of greed.  It was clearly an unnecessary taking of monies which the person was not entitled.  To sit on two hundred thousand dollars and claim benefits should be condemned.  It is abhorrent to anybody who is in fact trying to receive benefits and seeing other people living so comfortable and receiving benefits themselves."

1. Counsel submitted that the learned magistrate erred in law and fact in taking into account, in exercising his discretion, the applicant's investments because they had no impact on her entitlement to receive benefits.  He submitted it was an irrelevant consideration.

1. This ground must fail.  As a matter of fact, the applicant had assets and investments at the commencement of the period of offending.  As a matter of fact the charges arose not from failing to disclose those assets, but from failing to disclose the existence of a relationship.  There is no suggestion otherwise in the learned magistrate's reasons.  There is no suggestion in the learned magistrate's reasons that he concluded that the existence of those investments precluded the applicant, simply by reason of their existence, from claiming benefits.  The learned magistrate was clearly considering the question of whether the offending was motivated by reason of "greed rather than need" which he was entitled to do.  In considering that, he made the observations he did.

Ground 9

1. The learned magistrate said at 13 of his reasons:

"During the time that she received these particular benefits, she had in fact invested some $200,000 in a bank account.  She had paid for a house of $180,000.  She was in fact well off.  Well off financially.  In the pre-sentence report that I obtained, she stated at that time to the probation officer, she actually informed the probation officer she had $380,000 invested but I accept it was only $200,000 invested and $180,000 by way of the house purchase."

1. The challenge by counsel in this ground is that the learned magistrate had made a factual error in the first two sentences of the above passage in that the applicant had received and invested these monies and purchased the house prior to the offending and not during it.

1. This ground might only succeed if the learned magistrate's comment is interpreted in the manner asserted by counsel, namely that the learned magistrate meant the applicant took these steps after she began offending.  As a matter of fact when the offending started the applicant had monies invested.  She continued to do so after it started.  The first occasion of offending occurred on 14 January 2004.  According to counsel, the house was purchased in January 2004.. 

1. This was the information provided to the learned magistrate.  His comments are consistent with those facts.  This ground must fail.

Ground 3

1. It is apparent from the learned magistrate's reasons generally that he had read the reports of Ms Webb-Foss and Mr Reid supplied by the applicant's counsel.  He made references to them.  At 13 of his reasons, starting at line 19, he referred to the medical conditions discussed in those reports and conclusions drawn.  He then said:

"It is quite clear in my view that none of those or neither of those reports in fact give me any basis upon which I would find a mental illness or intellectual disability.  I therefore totally reject that particular submission made to me in relation to sentencing."

1. However, he went on at 14 of his reasons to say:

"I give full consideration to submissions made to me to the medical reports tendered so I am aware of those particular circumstances from which she does in fact have some medical condition but only medical, not mental.  I want to make that quite clear."

1. Counsel conceded this ground could not succeed after the comment of the learned magistrate in his reasons at 14, was pointed out.

Ground 7

1. Counsel submitted that the learned magistrate acted contrary to the Crimes Act 1914 (Cth), s17A, in that he considered that no sentence other than imprisonment was appropriate in this case. Section 17A provides:

"(1)   A court shall not pass a sentence of imprisonment on any person for a federal offence, or for an offence against the law of an external Territory that is prescribed for the purposes of this section, unless the court, after having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case.

(2)     Where a court passes a sentence of imprisonment on a person for a federal offence, or for an offence against the law of an external Territory that is prescribed for the purposes of this section, the court:

(a)shall state the reasons for its decision that no other sentence is appropriate; and

(b)shall cause those reasons to be entered in the records of the court.

(3)     The failure of a court to comply with the provisions of this section does not invalidate any sentence.

(4)     This section applies subject to any contrary intention in the law creating the offence."

1. The learned magistrate said, at 5 of the transcript:

"In my view, it is an appropriate matter where a term of imprisonment should be imposed and it is certainly is an appropriate matter where in fact part of that sentence should in fact be served.  I gave full consideration to all other sentences that could be imposed, and in my view taking into account the comments of Chief Justice Underwood as he now is in Hrasky v Boyd  this is clearly a matter which in fact warranted and in my view demanded a term of imprisonment be served."

1. By the above comments the learned magistrate has clearly considered the alternative sentencing options available to him and concluded that an immediate custodial term was the only appropriate sentence.  As Wright J said in Dadson v O'Brien 75/1998:

"The purpose of s17A is to reinforce that which has been received wisdom at common law for decades, viz, that imprisonment is the ultimate penal sanction which should be reserved for those cases in which some lesser punishment is inappropriate.

In my opinion, it would be a rare case in which s17A will afford a basis for impugning a sentence where it is plain that the sentencing judge or magistrate has taken account of all relevant matters and has justifiably concluded that either a suspended or immediate custodial sentence is required."

1. Wright J went on in that case to refer to the judgment of Kearney J in Freeman v Pulford (1988) 92 FLR 199 in relation to an appeal by reference to s17A. He said at 3:

"If Kearney J was intending to say only that a breach of s17A exposes the sentence appealed against to scrutiny and thus operates to open the door to review, I would not disagree with his opinion, but I would observe that in Tasmania such a process is only the first step. The reviewing judge may then exercise his own discretion within the parameters permitted by s17A but only after concluding that such non-compliance has caused a substantial miscarriage of justice.

The Justices Act 1959, s110(2)(ab) provides:

'(2)  On the hearing of a motion to review, the court shall, upon consideration of the evidence and materials adduced and brought before the justices and such further evidence (if any) as it thinks fit, review the order so far as relates to the ground set forth in the notice to review, and thereupon may do all or any of the following things, namely:_-

(a)    ... ;

(ab)  in a case where the court considers that no substantial miscarriage of justice has occurred even though the cause or matter raised by the motion might be decided in favour of the applicant, dismiss the motion;'

The test for whether or not an appeal on a ground such as that now under consideration, will result in the sentence being overturned must depend upon the appellate court's determination of the question whether or not a "substantial miscarriage of justice" has occurred.

It seems to me that such a conclusion can only be reached after the court has made a further determination that the sentence actually imposed was inappropriate, either because it was manifestly excessive (as claimed by ground 1 of the present motion) or because some other sentence was more appropriate. Obviously both of these questions are part of the same problem. I am therefore of the opinion that if there has been a breach of s17A, that, of itself, is not a sufficient basis for upholding the appeal.

I therefore turn to consider whether or not there has been a breach of s17A in the present case."

1. The learned magistrate in the present case was referred to various authorities and urged clearly by counsel for the applicant not to imprison her.  He went on to consider a number of matters he was required to consider in determining a sentence and in conclusion said what he did set out at par27.  I am of the view that in dealing with the matter as he did the learned magistrate gave reasons which demonstrated that he considered relevant factors and available sentences and concluded that a sentence of imprisonment was the only appropriate sentence.  This ground must therefore fail.

Ground 1

1. This is the overall ground that the sentence was manifestly excessive.

1. Counsel referred to Hrasky v Boyd (2000) 9 Tas R 144. At par20 Underwood J (as he then was) said:

"For many years now, Australian courts have emphasised the importance of general deterrence when imposing sentence for what is loosely referred to as social security fraud. In Laxton v Justice (1985) 38 SASR 376, Olsson J said at 381:

'(1)    Offences of this type are now prevalent. The offence is difficult to detect and penalties should reflect a concern for the protection of the revenue.

(2)    Frauds of this kind must be viewed seriously because they threaten the basis of the social security system which is designed to provide financial security for those in the community who are in need. A deterrent penalty is called for.

(3)    It is relevant to regard a continuing series of frauds of this type as increasing the moral blameworthiness of the offender's deceits by way of contrast with single or short term offences.

(4)    Whilst it may be proper in cases of first offences of this type accompanied by mitigating circumstances to impose a fine, nevertheless a custodial sentence may well be appropriate in the case of serious frauds unaccompanied by substantial mitigating circumstances'."

This was a case where the Crown appealed against the inadequacy of a sentence for 97 counts of what might loosely be described as "social security fraud".  The offender had been sentenced to 12 months' imprisonment but released immediately on a $5,000 recognisance.  That sentence was quashed and the offender ordered to serve 6 months of the sentence.

1. Counsel for the applicant submitted that that case was clearly distinguishable from the applicant's.  He referred to the number of offences and the amount of the overpayment and submitted it was a case of serious and deliberate fraud.  He described the applicant on the other hand as having offended over a shorter period, having obtained a lesser amount and referred to her offending as a crime of omission as opposed to commission.  In this regard he referred to the decision of Cox J (as he then was) in Jennings v Westbury, 30 September 1988, File No LCA 93/1988.  In dealing with a social security case Cox J said at 4:

"... her offences were sins of omission.  It was not a case of a course of conduct involving the making continually of false statements.  She was initially entitled to the payments, and when she entered into the defacto relationship she ceased to become entitled to them, but she kept them … In my view her moral turpitude was considerably less than that of one who actively pursues a course of deceit which induces payments … to be made."

1. With respect, I take the view that it is somewhat more difficult to apply the logic of Cox J today than it was in 1988.  There is now considerable emphasis given by Centrelink, both individually and generally, to publicising the requirements to disclose changes in circumstances.  There has also been increasing publicity given to cases of social security fraud and increasing emphasis on deterrent penalties.  To argue that someone who simply omits to tell Centrelink information they know they are required to communicate and which, if communicated, will result in a loss of benefits, should be treated differently from someone who keeps filling in a form each fortnight and does not include information they know they are required to communicate which will result in a loss of benefits, when both ultimately defraud the public purse, creates, in effect, different classes of fraud, unjustifiably in my view.

1. Counsel submitted that the learned magistrate made no reference to the applicant's children in his reasons for sentence.  He referred to Walsh v Department of Social Security (1996) 67 SASR 143. That case concerned a husband and wife sentenced together in relation to social security fraud. They had three children, the youngest of whom was 2. Both parents were sentenced to a term of imprisonment. On appeal Perry J held at 146 – 147:

"If each of the appeals was to be approached discretely, it could not be said that the course taken by the learned sentencing magistrate gave rise to appealable error.  It seems to me that each sentence, considered individually, was well within the sentencing discretion.

… the combined effect of the sentences imposed upon both appellants on the welfare of their dependant children.  Common law principles of sentencing would compel consideration of the consequences.  The need to have regard to that factor is referred to expressly in s 16A(2) of the Crimes Act ...".

1. In that case, the court considered further material not made available to the sentencing magistrate as to particular health difficulties of the children, the role of the mother in attending to those difficulties, and to the potential psychological effect on the children of the breaking up of the family unit.  The sentence of immediate imprisonment on the wife was quashed and she was made the subject of a conditional release order.

1. In the present case, the learned magistrate was told there were three children, the youngest of whom was 7.  He was also told that the applicant had been married to their father.  He was given absolutely no other information about the children.  There was no submission about any potential hardship which might occur as far as the children were concerned and the learned magistrate was told that the applicant knew that imprisonment was a possibility.  While there was no specific reference to it, it was open to the learned magistrate to infer in the circumstances that no such specific hardship would flow.  This is not a case in the same vein as Walsh (supra).

1. It is of note that in the reports tendered to the court from Ms Webb–Foss and Mr Reid, both report the applicant as living with a partner at the time of their reports which were in March and May 2006.  This was a factor known to the learned sentencing magistrate and again would reduce any concern about the impact a sentence of imprisonment would have on her children.  This would have been further reduced by the ongoing role of the children's father in their lives, as outlined in the October 2005 pre-sentence report. 

1. Counsel for the applicant also referred to Kovacevic (2000) 111 A Crim R 131. In that case, the Full Court of the Supreme Court of South Australia was dealing with an appeal against sentence for social security fraud. It involved a young man who had pleaded guilty to 34 counts resulting in an overpayment of $7,065.92. The sentencing magistrate had imposed a sentence of 10 months' imprisonment, subject to a conditional release order after serving three months. The court held:

"(3)   Deterrence cannot be regarded as the priority consideration in sentencing for all social security fraud offences.  While imprisonment is likely to be imposed in ordinary cases, particularly in cases of sustained and deliberate fraud, mitigating circumstances, rehabilitation and considerations of mercy and leniency must also be considered in each case.  It cannot be said that imprisonment is required except in exceptional cases.

Cameron and Simounds (1993) 171 LSJS 305, discussed.

Keeley v Department of Social Security (unreported, Supreme Court, SA, Mullighan J, No 93-1093 of 1993, 30 July 1993), applied."

The court in that case noted that the learned magistrate had made a factual error in determining that the offender had not ceased offending until detected and that that, and the fact there had been full reparation, were particularly significant matters amongst other matters personal to the offender which justified his being released immediately.

1. Counsel for the applicant submitted that in the present case there were a number of factors personal to the applicant which justified a conclusion that the sentence was manifestly excessive.  The matters he referred to were:

-     the volatility of the applicant's relationship,

-     that she was contributing fully to the household during the period of offending,

-     that she had made full restitution,

-     that her acts were ones of omission not commission,

-     that the offending was over a relatively short period of time,

-     that the offending involved far less of an overpayment than in other cases referred to,

-     the effects of her illnesses,

-     her remorse,

-     that she admitted her conduct, and

-     that she had children.

1. Counsel for the Commonwealth submitted the learned magistrate had made no demonstrable error in this matter.  He relied on the principles set out in pars18 - 24 in the judgment of Underwood J (as he then was) in Hrasky v Boyd (supra) and in pars60 - 67 in Kovacevic (supra).  He submitted that courts have acknowledged that general deterrence should be emphasised, but it was not the only factor to be considered.

1. He submitted there were factors in this case which clearly pointed to the need for a custodial sentence.  These were the amount of the overpayment, $9,316.10, that the offending had occurred over a 12 month period, that the applicant had not voluntarily ceased offending but had only done so when exposed, and that throughout the period of offending she was in a strong financial position.

1. There can be no doubt the applicant had significant assets during the period of offending.  She had the home she lived in, she had significant money invested and she appears also to have had a second property at Wynyard subject to a relatively small mortgage.  Her counsel's submissions as to her financial situation seem to have been based on her immediately available income and to largely ignore her assets.  Clearly the learned magistrate took into account that the applicant had assets which she presumably could have realised and lived off had she wished to do so rather than have recourse to Centrelink benefits.  In my view he was entitled to consider that factor.

1. As to the applicant's involvement with gambling, in the report of a psychiatrist Mr Reid, he recites the applicant was gambling socially prior to the end of her marriage but that it escalated.  Her marriage ended in 2001.  In 2004 he noted she gambled daily using the parenting payment to fund the habit.  Since being exposed for social security fraud, she had stopped gambling.  Mr Reid had no first-hand knowledge at all of the applicant prior to, or during, the period of offending in 2004, seeing her only well after the event in 2006.

1. A report from psychologist Kristen Webb-Foss was also presented to the Court.  Ms Webb-Foss saw the applicant twice in 2001 and then not again until 2006.  The report cannot assist the Court as far as any steps which might have been taken by the applicant to address her gambling.  All that is therefore known is what her counsel put to the Court.  The material before the learned magistrate was therefore that there had been gambling to varying degrees since at least 2001, that the applicant stopped when her offending came to light, and that she may have discussed such issues with her doctor.  The learned magistrate was entitled in the circumstances not to give that factor much, if any, weight.

1. Other factors to which counsel for the Commonwealth made reference were that the applicant had admitted to Ms Webb-Foss that she was well off but greedy, notwithstanding being well provided for in her marriage settlement.  Further that she told Mr Reid she knew she was doing the wrong thing.

1. The learned magistrate clearly had a number of factors he had to consider.  He gave quite extensive reasons for his sentence and referred to numerous factors.  He clearly had regard to the applicant's medical conditions as outlined by Mr Reid and Ms Webb-Foss and their consequences.  He considered her gambling, her financial position, her plea of guilty, the amount of overpayment, and the period over which she offended.

1. When reviewing a sentence, a court should not interfere simply because it may have imposed a different sentence in all the circumstances.  It must be shown that the sentence imposed was one which was so far out of the range of sentences which could be imposed for offences of this type as to, in itself, demonstrate that the magistrate made an error.  That has not been shown here.  The sentence was clearly within the range considered appropriate by the courts and the learned magistrate considered and balanced the many factors he was required to consider.

1. The notice to review will be dismissed.