Parente v the Commonwealth No. Scciv-02-653

PARENTE v THE COMMONWEALTH
[2002] SASC 212
MAGISTRATES APPEAL

BLEBY J (ex tempore): The appellant pleaded guilty in the Magistrates Court of South Australia to sixteen offences with which she was charged, being offences against s 215(b) of the Social Security (Administration) Act 1999 (Cth). The Magistrate recorded a conviction on each count, but pursuant to s 20(1)(a) of the Crimes Act 1914 (Cth) he ordered that the appellant be released without passing sentence, upon her giving security by a recognizance in the sum of $500 to be of good behaviour for a period of eighteen months.
The appellant appeals only against the recording of the convictions. She claims that the Magistrate should have exercised his discretion under s 19B of the Crimes Act 1914 to discharge her without proceeding to conviction upon her giving security by recognizance in the amount and on the conditions which were in fact imposed.
The nature of the social security benefit which she obtained was the payment of an Austudy allowance. The sixteen offences occurred between 6 December 2000 and 18 July 2001. By her plea, the appellant admitted that on each of those sixteen occasions she knowingly obtained payment of the benefit which was not payable at all. On each occasion she was disentitled to the payment because of the receipt of workers compensation and income from her employment with the Flinders Medical Centre. In relation to the payments referred to in counts 7 – 16 (from 14 March 2001), she was further disentitled to payment because she was no longer a full-time student.
The total amount of payments obtained was $4,615. They were each paid into a bank account into her name. Although the payments were credited to her bank account, she did not use them. They merely accumulated in the account. After she had voluntarily informed Centrelink on 26 July 2001 that she was not entitled to the payments, she later repaid the full amount she had received in three instalments, the reason for the instalments being that she paid by her credit card, and the amount she could pay on each instalment was limited by the credit limit on her card. At all events, by the time of the hearing, and indeed, before the summons was issued, the full amount had been repaid. She was interviewed on 13 November 2001 and made full and frank admissions.
The offending, viewed objectively, was reasonably serious. It extended over a period in excess of seven and a half months. It involved an amount of $4,615. By her plea, the appellant admitted that she knew that she received each payment and that when she received it she was not entitled to it. There was an obligation on her to notify Centrelink of the receipt of workers compensation and income from her employment. The offences committed from 14 March 2001 were compounded by her knowing that she was not a full-time student.
On the other hand, she did not use the payments for her own benefit. She eventually voluntarily informed Centrelink that she was no longer entitled to the benefit, arranged for it to be cancelled, and proceeded to repay the overpaid benefit. When questioned, she made full and frank admissions.
There were several reasons accepted by the Magistrate for the delay in informing Centrelink that she was no longer entitled to the payment. She was originally employed as a biochemistry laboratory assistant at Flinders Medical Centre. She suffered a work injury in 1999 and was performing four hours per day clerical work, together with some light duty laboratory work. She was not getting any better, and her self confidence and belief in her own abilities were being undermined. It was in those circumstances that she sought the assistance of a psychologist, and undertook a vocational assessment. Her psychological profile indicated, among other things, that at times she might be so tuned into feelings of idealism, sensitivity and introspection that she might overlook the more functional aspects of situations, but that she would be likely to be empathetic to others’ feelings, and showed an interest in work which contributed to her own growth and development and to that of others.
She decided to commence tertiary study at Flinders University in February 2000, and was granted nine months unpaid leave from Flinders Medical Centre. She continued psychological counselling during 2000 because of a relationship breakdown which caused sleeping difficulties and difficulties in concentration on her studies and learning, with some indications of depression. It was during this period of study that she became entitled to and received Austudy payments. When she resumed work in November 2000 at the Flinders Medical Centre she was described by the psychologist as being “tired emotionally, physically and mentally”. Moreover she began experiencing feelings of distress and panic whenever she encountered her ex-boyfriend, also employed at the Flinders Medical Centre.
Her emotional stress at the time, while not an excuse for the offending, is an explanation. It was also put in her favour that the psychological assessment indicated that she was loyal and trustworthy, hard working and persistent, considerate and thoughtful. Her case was supported by a number of positive character references testifying to her honesty, trustworthiness and integrity and her caring nature.
It was also put that on several occasions she attempted to telephone the department, was put on hold, was unable to get through and gave up in frustration. There were, of course, other ways in which she could have informed Centrelink of her position, as she eventually did. The Magistrate accepted that she was not motivated by greed, and that she simply allowed the money to accumulate, and after a significant period of time paid it back.
The Magistrate also gave full consideration to her own personal circumstances. At the time of the hearing she was aged twenty-nine, single, and working part-time as a technical officer while studying full-time for a degree in speech pathology. She had no prior convictions. The Magistrate acknowledged that in future she expected to be seeking work in the field of government instrumentalities. Her concern was that convictions for offences of this kind would adversely effect her applications for employment.
Section 19B(1) of the Crimes Act 1914 enables a Court to discharge a person without proceeding to conviction where the Court is:
“ ….. of the opinion, having regard to:
(i)the character, antecedents, cultural background, age, health or mental condition of the person;
(ii)the extent (if any) to which the offence is of a trivial nature; or
(iii)the extent (if any) to which the offence was committed under extenuating circumstances;
that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation”.
Before the Magistrate, the appellant’s counsel properly acknowledged that the offences could not be characterised as trivial. The Magistrate described her as being an eligible candidate for the application of the section “by reason of her previous good character, her antecedents, which generally show her in a good light, and the extenuating circumstances in which the offences were committed”.
The Magistrate then considered whether it was expedient to exercise the powers under s 19B(1) “and to consider whether the (appellant’s) character, antecedents and the extenuating circumstances can reasonably support the exercise of the statutory discretion”. By that I take the Magistrate to mean the statutory discretion either to dismiss the charges or to discharge, without proceeding to conviction, upon giving security to be of good behaviour and to observe any other conditions imposed.
That is not strictly speaking correct. The first consideration is whether, having regard to the matters mentioned in section 19B(1)(b), to which I have already referred, the Magistrate is of the opinion that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation. If any of those three opinions are formed, the Court may then by order either dismiss the charges or discharge the person without proceeding to conviction upon the person giving appropriate security to be of good behaviour.
By the sentence imposed in this case, the Magistrate clearly formed the opinion, having regard to the matters set out in s 19B(1)(b) that it was expedient to release the appellant on probation. There was every justification for the formation of that opinion. But it is only when that opinion is formed that the Court is then able either to dismiss the charges or to discharge the person without proceeding to conviction but upon the person giving the appropriate security to be of good behaviour.
In this respect the section differs from the Probation of Offenders Act 1907 (UK) on which it is based. That section, and s 4(1) of the former Offenders Probation Act 1913 (SA) provided that if the Court was of the opinion that, having regard to the same set of matters, “it is expedient to exercise any of the powers conferred by this sub-section the Court may………..” dismiss the information without conviction, convict but discharge without penalty, or, without conviction, or having convicted, discharge the offender conditionally on his entry into recognizance. As enacted in the Crimes Act, the section imposes an additional step before the discretion arises to discharge without conviction.
However, I am not sure that in this case the failure of the Magistrate to express his opinion on that intermediate step has any consequence. As I have said, he plainly was of the requisite opinion to bring the balance of the section into play if he thought it was appropriate to do so.
In deciding to exercise his discretion not to proceed without conviction he took into account the fact that by virtue of the maximum penalty being twelve months imprisonment (Social Security (Administration) Act 1999 s 217), parliament regards offences of this kind as serious, that the offence was prevalent, that it posed difficulties in detection and raised the need for deterrence, that the system depended upon people fulfilling their obligations of informing Centrelink of changes in their circumstances in a timely fashion, and that offences of this nature are not infrequently committed by persons who are of generally good character. He took into account the stigma of conviction, the number and nature of the offences and the amount of the overpayment. Taking all those factors into account he concluded that the mitigating and personal factors relating to the appellant did not make it an appropriate case for the exercise of his discretion under s 19B(1).
The Magistrate was thorough and comprehensive in his sentencing remarks. Apart from taking an immaterial short cut to which I have referred, he appears to have taken into account every relevant factor favourable to the appellant that he was obliged to take into account in making the discretionary judgment that he did. I might have given greater weight to particular discretionary factors than the Magistrate did. However, he seems to have considered that these were outweighed by the prevalence of the offence and the need for deterrence, as if they were paramount and must take priority.
The Full Court in Kovacevic v Mills (2000) 76 SASR 404, disapproved of the view previously expressed in R v Cameron (1993) 171 LSJS 305, that in sentencing for offences against social security legislation deterrence must be paramount and must take priority over other considerations. The majority (Doyle C.J., Mullighan and Martin JJ and I) said, at 411:
“We agree that in cases of deliberate and sustained fraud, deterrence must loom large in determining the appropriate sentence. But other matters, especially rehabilitation, must still be considered. We do not agree that deterrence must take priority over all other considerations, at least if that statement means that there is no scope for the Court to be influenced by considerations of rehabilitation in finally arriving at the sentence to be imposed”.
It seems to me that the Magistrate may have fallen, perhaps unwittingly, into that trap, as if this offence were one committed with dishonest intention. There were powerful considerations favourable to the appellant. She volunteered her change of circumstances. The offence was not revealed by any detection activity conducted by Centrelink. She acknowledged that she had been overpaid. She was not motivated by greed or personal gain. She proceeded to repay the amount of the overpayment before any prosecution was launched. She knew that she was not entitled to the money. Her only crime was not telling Centrelink to cancel the payments for seven months, for which, on the evidence, there was at least an explanation.
There is undoubtedly a need for deterrence against social security fraud. While offences against this section may be prevalent, I doubt that there is a prevalence of offences where the essence of the offence was merely a failure to notify promptly, while not using and intending to repay the money. There is little or no need for deterrence against that type of offending which is not greed-induced, which involves voluntary admissions and voluntary repayment. Indeed, the imposition of a conviction or substantial penalty might well have the effect of discouraging the sort of ultimate honesty displayed by this appellant.
It was the paramountcy given to deterrence and prevalence by the Magistrate which, in my opinion was, in all the circumstances, irrelevant, which caused the exercise of the Magistrate’s discretion to miscarry and which justifies interference with the exercise of that discretion by this Court: House v The King (1936) 55 CLR 499 at 505; Dinsdale v R (2000) CLR 321 at 324 to 325.
In the most unusual circumstances of this case, I would exercise my discretion in favour of not recording a conviction. The appeal is therefore allowed. The convictions are set aside. In all other respects the order of the Magistrate is confirmed.
There will be an order that the respondent pay the appellant’s cost of the appeal.

[2002] SASC 212

26 June 2002