Poniatowska v Director of Public Prosecutions (Cth) - [2010] SASC 1

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
PONIATOWSKA v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)
[2010] SASC 1
Judgment of The Honourable Justice David
15 January 2010
MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - PRINCIPLES ON WHICH COURT ACTS - MISCARRIAGE OF JUSTICE
Appellant pleaded guilty in the Magistrates Court to 17 counts of obtaining a financial advantage contrary to s 135.2 of the Criminal Code Act 1995 (Cth) - Magistrate entered a conviction, and pursuant to s 4K of the Crimes Act 1914 (Cth) imposed one penalty of 21 months' imprisonment and ordered immediate release of appellant upon condition that she enter into a recognizance for a period of 24 calendar months in the sum of $10.00 - appellant now appeals against the recording of a conviction - whether the Magistrate should have exercised his discretion under s 19B of the Act to discharge her upon her giving security without proceeding to a conviction.
Held: Magistrate was correct in not acceding to the submission not to convict - appeal dismissed.
Criminal Code Act 1995 (Cth) s 135.2; Crimes Act 1914 (Cth) s 4K, s 19B, referred to.

PONIATOWSKA v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)
[2010] SASC 1
Magistrates Appeal (Criminal)

DAVID J: The appellant pleaded guilty in the Magistrates Court to 17 counts of obtaining a financial advantage, contrary to s 135.2 of the Criminal Code Act 1995 (Cth). The Magistrate entered a conviction and, pursuant to s 4K of the Crimes Act 1914 (Cth) (“the Act”), imposed one penalty of 21 months’ imprisonment. He also ordered the immediate release of the appellant, upon condition that she enter into a recognizance for a period of 24 calendar months, in the sum of $10.
The appellant appeals against the recording of a conviction. She argues that the Magistrate should have exercised his discretion under s 19B of the Act to discharge her without proceeding to a conviction, upon her giving security by recognizance in the amount and on the conditions which were, in fact, imposed.
Summary of allegations
It is undisputed that the appellant had been in receipt of social security payments intermittently since 1995. The relevant period of the offending was between 30 August 2005 and 30 May 2006. During that time, she was in receipt of a single parenting payment. That is a means-tested benefit, and the appellant was required to inform Centreline of any changes of her circumstances, including any income which she earned.
The appellant was employed full time as a sales consultant by Employment Services Australia, a subsidiary company of Hickinbotham Group, between 30 January 2005 and 21 February 2006. From August 2005, the appellant was paid by way of commission at the end of each month. She continued to receive commission payments until May 2007, over a year after her employment with Employment Services Australia ceased. In the period August 2005 until May 2007, she received 17 lump sum payments of commission. The total amount of the commission payments was $71,502. She did not inform Centrelink of any of the commission payments and, as a result, she obtained $20,000.17 to which she was not entitled. It is also undisputed that, during the period of her offending, she was often reminded of her ongoing obligation to inform Centrelink of any income she received.
The offending was detected by Centrelink on 27 September 2007, following a Centrelink review, and the Magistrate was informed that on 20 August 2009 full restitution had been made.
The Magistrate’s decision
The appellant submitted that the Magistrate should discharge her without proceeding into a conviction, pursuant to s 19B of the Act. That section says:[1]
[1] Crimes Act 1914 (Cth), s 19B.
Discharge of offenders without proceeding to conviction
19B (1) Where:
(a)a person is charged before a court with a federal offence or federal offences; and
(b)the court is satisfied, in respect of that charge or more than one of those charges, that the charge is proved, but is of the opinion, having regard to:
(i)the character, antecedents, 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;
The court may, by order:
…
The Magistrate correctly directed himself that the operation of that section involved a two-stage process. There was no question that the offending was not trivial, but the section was enlivened because of (a) the appellant’s prior good character, and (b) the extenuating circumstances of which these offences were committed.
In considering the second stage of the process, the Magistrate held that, in the exercise of his discretion, he could not refrain from convicting her of the offences.
It was put to the Magistrate that, during the period leading up to the offending, whilst the appellant was employed by the Hickinbotham Group, she was sexually harassed to the extent that she suffered mental stress, anxiety and depression. It was in that state of mind that she embarked upon her offending behaviour. That contention was supported by a number of medical reports[2] and also by the fact that she made a successful claim for damages in the Federal Court of Australia for sexual harassment, as a result of which she was awarded a substantial amount of damages. I have carefully read that judgment,[3] which was tendered both to the Magistrate and on this appeal.
[2] Dr C Griffin, 27 June 2007, Dr A Czechowicz, 12 June 2008 and 30 July 2009.
[3] Poniatowska v Hickinbotham, [2009] FCA 680 per Mansfield J.
It was put to the Magistrate that her judgment was so clouded that that would amount to extenuating circumstances which justified the operation of s 19B of the Act. The Magistrate concluded that:[4]
[4] Commonwealth v Poniatowska, Remarks on Penalty of J.M. Baldino SM, 16 October 2009, 4 [24] – [27].
Having carefully assessed and considered all the matters before me and having regard to the following factors, namely:
1.The seriousness of the offending behaviour.
2.The amount of the overpayment which was a substantial sum just in excess of $20,000.
3.The period over which the offending behaviour occurred.
4.The fact that you declared no income at all as opposed to declaring an incorrect amount, or under declaring income received.
5.In your case, because the commission payments made to you were spasmodic and in varying sums, even to venture a guess at the income that you were receiving from Centrelink would have been preferable to denying any income at all.
6.The fact that in the period leading up to the start of the offending behaviour, numerous letters were sent to you, reminding you of your obligation to Centrelink.
7.There was no voluntary cessation of the offending conduct, as you were detected as a result of Centrelink review.
8.The total amount in income actually received by you was in a significant sum in excess of $71,000.
9.The offending was calculated, with full knowledge that what you were doing was wrong, and constituted a sustained and deliberate fraud involving a serious course of offending. It was not a case of momentarily succumbing to or acting on a spur of the moment, temptation.
In view of all those factors I am unable, in the exercise of my discretion, to refrain from convicting you of these offences. The fact that you were suffering from considering emotional stress does not, in my assessment, override or displace the need to impose punishment for sustained and deliberate fraud which will also act and be seen by the community as general deterrence, and discourage others from embarking from similar course of offending conduct.
In my experience in this jurisdiction, these offences are often committed by persons of good prior character with no prior convictions and quite often, by persons who suffer from stress, anxiety and other mental illnesses howsoever caused, whether as a result of domestic violence, gambling addiction, sexual abuse and violation and other causes. I am unable to find that the stress and illness which you were labouring under at the time of the offending period, or the cause of it, distinguishes you from other offenders who embark upon this fraudulent course of conduct so as to justify the application of the Section 19B provision.
Accordingly, you will be convicted on all counts. I consider that in all the circumstances a term of imprisonment is warranted and necessary …
Argument on appeal
The appellant now argues that the Magistrate has erred because he has not paid enough regard to the contents of the psychiatric reports that were presented to him on submissions. Her counsel, Mr Heywood-Smith QC, argues that, in particular, Dr Czechowicz’s opinion as to her state of mind, has not been given enough regard by the Magistrate. In particular, in his report of 30 July 2009, when commenting on her sexual harassment whilst employed by the Hickinbotham Group, he says:[5]
This continuous personal strain and erosion of her self confidence led her to a mental breakdown. I had diagnosed her as suffering from Adjustment Disorder with Mixed Anxiety and Depressed Mood. Her symptoms included features of post traumatic stress disorder. The date of injury was 15/5/05 but I did not see her until 21/2/07. Other psychiatrists treated her at the time.
…
As I noted in my examination specifically on 24/9/08 she had an exacerbation of symptoms of anxiety and depression including panic attacks, insomnia and general malaise as well as psychomotor retardation which puts her at a significant disadvantage when again faced by allegations that were compounded by the neglectful delays by her former employer in passing on detailed information about commissions paid to her. The same information which should have also been sent to the ATO she believes was delayed. These were significant factors in increasing her confusion which is relevant to the current charges to which she has pleaded guilty.
…
3.During the time period from May 2005 until the present time she has suffered from Adjustment Disorder with Mixed Anxiety and Depressed Mood which is exacerbated by symptoms of Post Traumatic Stress Disorder brought on by continuing public humiliation which has affected self confidence and her capacity to tend to her own affairs. Her judgement has been clouded by her mental illness …
[5] Pre Sentence Psychiatric Report, 30 July 2009, pp 2-3.
Mr Heywood-Smith argues that these, combined with the fact that the payments she received, which were not declared, were by way of commission and not normal PAYE amounts, made this case unusual and that, combined with her previous good record as attested by character references, justifies the use of s 19B not to convict.
Mr Perrotta for the respondent argues that the offences were deliberate, although acknowledging that she was suffering from the condition described by Dr Czechowicz. He also argues that, although the payments were by way of commission, they were regular and over a period of 21 months, and the amounts received were substantial. In those circumstances, he argues that the Magistrate was correct.
Conclusion
I have much sympathy with the appellant and the situation of her former employment, as is described in Mansfield J’s judgment. I accept the evidence that was tendered to the Magistrate and to me describing her psychiatric state at the time. I also accept that she was of previous good character, as is demonstrated by her good record and the character references which were presented to the Magistrate and to myself.
However, in my view, the Magistrate has not erred. He has clearly taken into account her psychiatric condition and the stress she was under. He said in his sentencing remarks:[6]
In considering this second stage of the process, I again have regard to the well-presented and forceful submissions made by each party and I have regard to the relevant authorities sited [sic] and tendered by each party, as well as the authorities researched by me.
The essence of the submission by the defence is summarised by reliance firstly, on the medical report of Dr Griffin dated 27 June 2007 and the two medical reports of Dr Andrew Czechowicz dated 12 June 2008 and more recently on 30 July 2009. Secondly, the character testimonials from Jeremy Cordeaux, Ms A Szydlowska, Dr Barry Elsey and Ms Helen Hayes and thirdly, the contents and finding of Judge Mansfield’s judgment dated 23 June 2009.
I have read, several times, the contents of each of those documents to which I have referred. However, I do not propose to transverse in detail, the contents of the documents or re-visit in these remarks, the contents or findings of the 100 page judgment of Judge Mansfield.
As I have said, I have read the documents and I do take the contents into consideration.
Based on the contents of these documents, Ms Davidson has submitted that your employment with Hickinbotham Group was not pleasant, and as a result of the harassment to you, you suffered mental stress, anxiety and depression. It was whilst in that stage of mind that you embarked upon the offending behaviour. Your health deteriorated and your judgment became clouded. You became overwhelmed by what was happening to you at work, you lost control and whilst you knew that what you were doing in respect to the Centrelink statements was wrong, you were unable to do anything about it.
A further fact which I have been asked to take into account when considering this aspect of Section 19B, is that a conviction may jeopardise your prospects of being admitted and registered as a legal practitioner, if and when you complete your studies in that field. That is certainly a relevant consideration in the exercise of my statutory discretion …
[6] Commonwealth v Poniatowska, Remarks on Penalty of J.M. Baldino SM, 16 October 2009, 3-4 [18] – [22].
I agree with the Magistrate’s reasoning about the seriousness of the offending, and the fact that there was a substantial amount of money obtained over a period of time and the offending with full knowledge that what she was doing was wrong. The Magistrate has considered those matters pertaining to her employment and her psychiatric condition and the imposition of a non-custodial sentence. He was clearly correct in not acceding to the submission not to convict.
I dismiss the appeal.