Pennington v McLean

[2008] TASSC 4

[2008] TASSC 4

CITATION:                 Pennington v McLean [2008] TASSC 4

PARTIES:  PENNINGTON, Steven John
  v
  McLEAN, Heather

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 826/2007
DELIVERED ON:  15 February 2008
DELIVERED AT:  Hobart
HEARING DATES:  12 February 2008
JUDGMENT OF:  Underwood CJ

CATCHWORDS:

Criminal Law – Jurisdiction practice and procedure – Judgment and punishment – Sentence – Factors to be taken into account – Purpose of sentence – Deterrence.

Criminal Code 1995 (Cth), s135.2(1).
Hrasky v Boyd (2000) 9 Tas R 144; Owen v McClean [2008] TASSC 3, followed.
Aust Dig Criminal Law [827]

Criminal Law – Jurisdiction practice and procedure – Judgment and punishment – Sentence – Factors to be taken into account – Miscellaneous matters – Reparation and restitution by offender.

Criminal Code 1995 (Cth), s135.2(1).

Attorney-General v Saunders [2000] TASSC 22, applied.

Aust Dig Criminal Law [844]

REPRESENTATION:

Counsel:
             Applicant:  D G Gray
             Respondent:  I R Arendt
Solicitors:
             Applicant:  Zeeman Kable and Page
             Respondent:  Commonwealth Director of Public Prosecutions

Judgment Number:  [2008] TASSC 4
Number of Paragraphs:  19

Serial No 4/2008
File No LCA 826/2007

STEVEN JOHN PENNINGTON v HEATHER McLEAN

REASONS FOR JUDGMENT  UNDERWOOD CJ

15 February 2008

1. The applicant seeks a review of orders that he:

(1)be sentenced to 12 months' imprisonment; but

(2)upon entering into a recognisance release order he be released after serving 8 months of that sentence,

upon conviction for 73 counts of obtaining a financial advantage, contrary to the Criminal Code 1995 (Cth), s135.2(1).

1. This is a case of "social security fraud" with respect to the Newstart allowance.  On 73 occasions between July 2001 and February 2005, the applicant failed to disclose income he had earned in the preceding fortnight and consequently received a total of $23,730.63 by way of Newstart allowance, knowing that he was not entitled to it.  The grounds relied upon for a review of the orders of sentence are that:

·     it was manifestly excessive; and

·     the learned magistrate failed to take into account, or sufficiently take into account, the fact that the applicant "had repaid the debt by way of increasing his mortgage".

1. The applicant had been in receipt of some kind of benefit from July 1995, but in about March 1997, commenced casual employment as a crane driver.  At first, the applicant reported his earnings to Centrelink.  In about mid-2001, his employment became more regular, but between July 2001 and February 2005, the applicant did not disclose that income or even that he was working, to Centrelink.  During this period, the applicant earned an average of $909 per fortnight, amounting to a total of $66,393.51 over the period of offending.  In result, during this period the applicant received benefits totalling $23,730.63 to which he was not entitled.  In 2005, the applicant became a fulltime employee and ceased to claim any benefit.

1. The applicant's crimes were only detected as a result of a "tip off" received by Centrelink.  When interviewed by Centrelink about the offences, the applicant denied that he had been working during the period referred to, but he ultimately accepted his criminal liability by pleading guilty at an early stage in the proceedings. 

1. Prior to the sentencing hearing, the applicant arranged to increase the mortgage on his home to enable to him to repay the whole of the sum unlawfully obtained.  Apart from the fact that during the period of offending the applicant was depressed and defending criminal charges in respect of which he was ultimately acquitted, there were no relevant mitigating circumstances.

1. Mr Gray, counsel for the applicant, submitted that I should find as a fact that the learned magistrate did not take into account that before he was sentenced, the applicant repaid the whole of the sum to which he was not entitled.  I reject that submission.  Early in his comments on passing sentence, the learned magistrate said "… those offences took place over an approximately three and a half year period and involved an overpayment to you to which you were not entitled of some $23,000 and I do have regard to the fact that you have repaid that sum."

1. Clearly, when exercising his discretion the learned magistrate did take into account the repayment of the sum to which the applicant was not entitled.  I see no substance in Mr Gray's submission that because the learned magistrate did not subsequently articulate or quantify what benefit or discount he gave the applicant for the repayment, I should conclude that he did not take it into account.  Judicial comments on passing sentence are not required to spell out the number of months that are added to or subtracted from some hypothetical sentence for each aggravating and each mitigating factor.  It is sufficient if the comments refer to the major facts relevant to the exercise of the sentencing discretion in sufficient detail to expose the reasoning process.  The fact that the learned magistrate made express reference to the repayment at the start of his comments makes it clear that he had this fact in his mind, and inferentially, took it into account, when he exercised his sentencing discretion.

1. Although Mr Gray began his submissions with the statement that the applicant was unlikely to succeed unless he established that the learned magistrate failed to take full restitution into account, as pleaded, the motion to review raises the issue of whether in all the circumstances of the case, which include the fact that the applicant made full restitution, the sentence was manifestly excessive.

1. At the time of sentence, the applicant was 55 years old.  He is the father of adult twin children and married for the second time following the death of his first wife from cancer in 1993.  On three occasions, twice in 1972 and once in 1974, the applicant appeared in a court and was convicted of crimes of dishonesty.  On two of those appearances he was sentenced to periods of imprisonment.

1. In my reasons for judgment handed down today in the case of Owen v McLean [2008] TASSC 3, I reviewed the principles applicable to the proper exercise of the sentencing discretion involving "social security fraud". I said this at par6 of that judgment:

"In Hrasky v Boyd (2000) 9 Tas R 144, I wrote fairly extensively about the principles involved in sentencing for what is commonly known as "social security fraud". In essence, I concluded:

·     when sentencing for Federal offences, regard should be had to principles expressed, and sentences ordered, in other jurisdictions, as well as in this State;

·     although an order of imprisonment was not the inevitable outcome in every case, general deterrence is an important factor in sentencing for 'social security fraud'."

1. I rely on, but do not stay to cite, all the authorities I referred to in Hrasky v Boyd.  For present purposes it will suffice if I repeat the observations made by Hunt CJ at CL in R v Purdon, unreported, New South Wales Court of Criminal Appeal, 27 March 1997 at 5:

"The rationale stated for the rule that a custodial sentence is to be imposed for social security fraud except in very special circumstances is that the offence is easy to commit but difficult to detect, it is widespread, and the introduction of more checks upon applicants for social security would cause delays in the payment of benefits and therefore hardship to those whose need is urgent. It has also been said that the rule reflects a concern for the protection of the revenue, but I would prefer to express it as a concern for the additional burden upon all taxpayers who shoulder the heavy burden of providing the funds for the social security system to operate and the even heavier burden created by the widespread abuse to it by frauds such as these. The rule is not based upon the fact that many of the frauds are perpetrated for motives of greed rather than need. Both types of fraud are widespread. They are equally difficult to detect. If the fraud is based upon a perceived need, a custodial sentence must be expected except in very special circumstances. If the fraud is based on greed, the custodial sentence will be longer. See Regina v David Fernanda Medina CCA, 28 May 1990, unreported at 6; Regina v Mears (1991) 53 A Crim R 141 at 145."

1. This Court has subsequently applied the principles expressed in Hrasky v Boyd a number of times.  See, for example, McAree v Barr [2006] TASSC 37; Nolan v Jarvis [2006] TASSC 64.

1. Application of those principles to the amount involved in this case, the period of offending, and the circumstances of the applicant, shows that a sentence of 12 months' imprisonment, with a recognisance release order after serving 8 months of that sentence, is within the scope of the proper exercise of the sentencing discretion, unless it can be said that full restitution called for the imposition of a substantially lesser sentence, or an earlier recognisance release order.

1. Mr Gray submitted that repayment was evidence of contrition on the part of the applicant.  However, it was not put to the learned magistrate that the applicant was contrite, nor that his restitution was evidence of contrition.  It was put to the learned magistrate that the repayment was a "significant matter" and that the execution of any sentence of imprisonment should be suspended so that the applicant could keep his employment and pay off the mortgage.

1. The impact of early restitution is akin to the impact of an early plea of guilty in the exercise of the sentencing discretion.  Both have utilitarian value.  The former returns the lost revenue and saves costs that otherwise might have been incurred trying to recover it.  The latter saves the cost, time and inconvenience of trial.  Both may be evidence of remorse, but both might equally be a simple acceptance of the inevitable; a conviction, sentence and reparation order.

1. It is to be noted in this case that Mr Gray told the learned magistrate that it was he who first raised the issue of restitution with the applicant, and it was he who suggested to the applicant that he ask his mortgagee bank if the loan on his home could be increased so he could make repayment in full.  The law in this respect is spelled out in the following passage, at par7 of the judgment of the Court of Criminal in Attorney-General v Saunders [2000] TASSC 22:

"As was observed in Boian (1997) 96 A Crim R 582 at 586, the making of restitution does not affect the criminality involved in fraudulent conduct. Nevertheless, it is an important factor that all (or a substantial portion of) the money fraudulently taken has been recovered and it may bear upon the length of the sentence which should be imposed. The effect of crimes on a victim is an important consideration. It is in the public interest that offenders should be encouraged to lessen the impact of their crimes on the victim if it is within their power to do so. Mickelberg (1984) 13 A Crim R 365 at 370. Nevertheless, we agree that courts should be reluctant to reward discounts which are overly generous, to avoid offenders and particularly the wealthy and well-connected, buying their way out of deserved sentences. As was said by Stanley J in R v O'Keefe [1959] Qd R 395 at 400, 'it would be of the worst example if any sentence induced or tended to induce a belief that offenders would escape punishment if, when convicted, they made or offered to make restitution. Offenders cannot bargain with the court, and, in effect, buy themselves out of sentences.' However, we agree with the view of Higgins J in R v Whitnall (1993) 42 FCR 512 at 515, that there is no error in principle in the proposition that while an offender should not be allowed to purchase his or her immunity from proper punishment for the offence committed, it is nonetheless true that if the deficiency can be made good, particularly before the date of sentence, then the severity of punishment may be ameliorated. Restitution brought about by remorse may also attract greater consideration than restitution made merely for the purpose of ameliorating the severity of punishment."

1. The applicant's criminal conduct occurred on 73 separate occasions during a period in excess of three years.  It constituted a serious and sustained fraud by failing to disclose that during that period, he had been working and earning income.  This is not a case of understating income by a small amount, nor is it a case of occasional omissions to disclose work done or the correct amounts earned.  During the relevant period, the applicant's fortnightly income exceeded $1,100 on some occasions, although, as stated, the average fortnightly earnings were $909.  The failure to co-operate when initially spoken to about the offending indicates that the applicant was not then remorseful and sought to avoid the consequences of his criminal conduct.  He is not without prior criminal conviction, although his prior offences were committed a long time ago.  The circumstances that led up to him borrowing the money from the bank and the absence of a submission that there was remorse, tend to show that the repayment might have been the acknowledgement of the inevitable, and an expression of hope that it might result in a lighter sentence being imposed.

1. The sentence in respect of which a review is sought is substantial.  However, I am unpersuaded that the order of 12 months' imprisonment and/or order that the applicant not be released until he has served 8 months of that sentence, either separately or together, constitute a manifestly excessive sentence that should be set aside.

1. The application to review is dismissed.