Potts v BONNICI - [2009] SASC 199

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
POTTS v BONNICI
[2009] SASC 199
Judgment of The Honourable Justice Nyland
8 July 2009
SOCIAL WELFARE - OFFENCES - FALSE STATEMENTS AND FRAUD
Appellant failed to inform Centrelink of income from employment over a three-year period – appellant in an abusive relationship during period of offending – appellant suffering from mental illness - whether Magistrate erred in not proceeding under s 20 BQ Crimes Act – whether Magistrate erred in declining to exercise his discretion to proceed without recording a conviction pursuant to s 19 B Crimes Act 1914 Cth.
Held: appeal allowed – insufficient regard to appellant’s mental health and exceptional and unusual personal circumstances surrounding commission of offences – convictions and sentence imposed by Magistrate set aside but appellant to be subject to recognisance release order for a period of 18 months.
Criminal Code (1995) Cth s 135.2(1); Crimes Act (1914) Cth ss 19B, 4K, 20 BQ, 20(1)(B), 16A(1), referred to.
Boonstoppel v Hamidi [2005] SASC 248; Kovacevic v Mills (2000) 76 SASR 404, applied.

POTTS v BONNICI
[2009] SASC 199
Magistrates Appeal

NYLAND J: The appellant was charged with nine counts of obtaining financial advantage from a Commonwealth entity, contrary to s 135.2(1) of the Criminal Code (Cth). The offences were committed over a period of approximately three years, ie from about 13 February 2004 to 23 February 2007. During that period the appellant was in receipt of a Disability Support Pension from Centrelink but at the same time was employed as a teacher, initially on a temporary basis as a relieving teacher and as from 25 January 2006 as a full-time teacher. The appellant failed in her obligation to inform Centrelink of her employment and her income therefrom. It appears that over the relevant period the appellant’s gross income was about $181,872.92, none of which was declared to Centrelink. As a result, the appellant received Disability Support Pension payments to which she was not entitled amounting to the sum of $36,720.07. That sum was however repaid to Centrelink on 22 November 2007.
On 29 July 2008 the appellant appeared before a Stipendiary Magistrate in the Adelaide Magistrates Court with respect to the charges. Before entering a plea, an application was made for the matter to be dealt with pursuant to s 20BQ Crimes Act 1914 (Cth) (Crimes Act). In making that application, Ms McCrohan, who appeared for the appellant relied on reports from Dr Raeside and Dr Gill, both of whom are psychiatrists, a letter from Dr Maruszcxyk, who is also a psychiatrist, and a report from Mr Balfour, a psychologist. Those reports document in some detail the breakdown of the appellant’s mental health as a result of an abusive relationship she had with a man called Daryl Lunny over a number of years. Having considered those reports, the Magistrate indicated that he was satisfied that at the relevant time the appellant was suffering from a mental illness within the meaning of s 20BQ Crimes Act. Having regard to the seriousness of the alleged offending however he was not persuaded that it would be more appropriate to deal with the appellant under that section than otherwise in accordance with the law.
The charges were then read to the appellant, who pleaded guilty to them. The Magistrate recorded a conviction with respect to each count and pursuant to s 4K Crimes Act imposed one sentence for all of the offending. The Magistrate indicated that his starting point was a sentence of eight months imprisonment but that was reduced by one quarter to reflect the appellant’s pleas of guilty. That resulted in a sentence of six months imprisonment. Pursuant to s 20(1)(b) the Magistrate ordered that the appellant be released forthwith upon giving security by recognisance in the sum of $1,000 to be of good behaviour for a period of two years.
In her notice of appeal, the appellant complains:
The sentence was manifestly excessive;
The learned Special Magistrate erred:
2.1 in finding the appellant was not eligible to be dealt with pursuant to s 20 BQ Crimes Act, and
2.2 in declining to find the charges proved but not recording a conviction pursuant to s 19B Crimes Act.
On appeal, the appellant seeks orders that her convictions be quashed and that she be dealt with pursuant to s 20BQ or in the alternative, that she be released without conviction pursuant to s 19B Crimes Act.
Section 20BQ Crimes Act
This section provides a diversionary approach for the summary disposition of a person suffering from a mental illness. In considering this section it is necessary for the sentencing authority first to determine whether a defendant is suffering from a mental illness and secondly to determine whether, in light of all the evidence before the court, it would be more appropriate to deal with a person under that provision than otherwise in accordance with the law.[1]
[1] Boonstoppel v Hamidi [2005] SASC 248 at [29] per Gray J.
It is evident from the remarks of the learned Stipendiary Magistrate that he was aware of the two-stage approach required by the section and applied it to the circumstances of the appellant. He accepted the matters set out in the medical reports with respect to the appellant’s personal circumstances and considered that she was, on the basis of those reports, suffering from a mental illness. When considering the second stage, however, he was not persuaded that it was appropriate to deal with the appellant in accordance with the provisions of that section due to the seriousness of the offending.
There are clearly mitigating circumstances surrounding the appellant’s offending, but I am not persuaded that the Magistrate was in error in deciding that it was not appropriate to proceed under s 20 BQ. As the Magistrate pointed out, the offending in this case was serious and was committed over a lengthy period of time. Although the appellant was suffering from a mental condition in the nature of a depressive illness and a post traumatic stress disorder, the medical reports indicate that she understood the nature and quality of her actions and their wrongfulness. Mr Balfour, for example, thought she would have been able sufficiently to appreciate the nature and quality of her actions and their wrongfulness. Dr Raeside supported the appellant being dealt with under s 20 BQ but he also considered that she knew the nature and quality of her actions and the wrongfulness of them. On that basis he did not support a mental competence defence.
Dr Gill indicated that it would be difficult to establish that the appellant did not know the nature and quality of her conduct, but thought it was fair to say that it was the coercive threats of Lunny which seemed to have influenced her decision not to disclose the fraud, rather than any physical inability to control her conduct.
Section 19B Crimes Act
In my view, the learned Magistrate was correct in proceeding to deal with the matter by way of sentence. The issue which then arises is whether he fell into error when he declined to exercise his discretion to proceed without recording a conviction pursuant to s 19B Crimes Act. Section 19B also requires the sentencing authority to engage in a two-stage process. The first stage requires the identification of one or more of the factors set out in 19B(1)(b), namely:
(i) the character, antecedents, age, health or mental condition of the person; or
(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
If any one of those matters is established then the Court must consider whether in the circumstances 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.
It is not suggested that this was a trivial matter but Ms McCrohan, who appeared as counsel for the appellant on the hearing of the appeal, argued that the mental condition of the appellant, together with the circumstances in which the offences were committed amounted to extenuating circumstances which enlivened the discretion to sentence the appellant without recording a conviction.
Personal circumstances of appellant
At the date of sentence, the appellant was aged 58 years. She had been working as a teacher with under-privileged children but there was a real possibility of her losing that employment if a conviction was recorded. She had no prior record, and had held positions of responsibility in various schools at which she had taught over the years. She was married for a brief time and involved in another relationship prior to her disastrous relationship with Lunny.
Magistrate’s remarks
The learned Magistrate had regard to all of these matters in considering the appropriate penalty but concluded that the issue of general deterrence outweighed the circumstances personal to the appellant. In his opinion, that required convictions to be recorded to satisfy the obligations imposed upon him under s 16A(1) Crimes Act. He referred to the fact that this was deliberate and sustained offending although he bore in mind that it was attributable to domestic pressures of a kind that few people could withstand. He reminded himself that a sentence of imprisonment was an option of last resort to be imposed only after all other sentencing options had been eliminated, but he considered a sentence of imprisonment was appropriate. He took into account the personal situation of the appellant, however, by making a recognisance release order, which operated forthwith.
The medical evidence
In considering these matters it is necessary to have regard to the detailed information contained in the various reports. It appeared that the appellant first met Lunny in about 1999, at which time she was in stable employment. By the end of 2001 however their relationship had deteriorated to the extent that she was unable to work. She spent about two years in unstable circumstances and was frequently obliged to take shelter in a women’s refuge. Mr Balfour said in his report dated 21 December 2007 that she continued to live in fear of Lunny. Although he did not support the legal defence of duress, he nevertheless considered that she was subjected to considerable duress from Lunny who threatened her with violence not to terminate her benefits. He described her offending behaviour as having occurred “in response to a unique combination of situational factors”. He went on to say that the only reason she had offended was because she was:
…entrapped in a parasitic relationship with Mr Lunny, who stalks her. She does not know how to rid herself of his presence in her life because she fears him. I believe that once the pernicious influence of Mr Lunny is removed from her life, she will be able to return to a normal lifestyle and cease offending.
Mr Balfour made it clear that the appellant did not offend out of personal avarice but under duress from Lunny and said she did not use the money she misappropriated to go on an extravagant spending spree nor to lead an opulent lifestyle.
Dr Raeside considered that the appellant was suffering from a major depressive disorder, which appeared to be chronic, which he related to the trauma of the physical and emotional abuse, stalking behaviour and other involvement by Lunny, which had left her with a sense of helplessness and despair. As I have mentioned, Dr Raeside supported the appellant being dealt with under s 20 BQ, as he considered her depression and anxiety were significant factors influencing her offending behaviour. He thought she would benefit from treatment with anti-depressant medication, psychological therapy and practical assistance in order to extract herself from Lunny’s attention. He indicated that:
…even without incarceration she is at significant risk of worsening her depression with a conviction that will prevent her from teaching.
In his report dated 13 April 2008, Dr Gill commented that it was:
… highly unlikely that the fraud would have occurred if she had not found herself in this abusive relationship and it can truly be said that being the victim of abuse and violence was the reason she found herself in this predicament.
In his report dated 30 April 2008 Dr Gill discussed the appellant’s mental health problems at some length and the difficulties created by Lunny and said:
In summary, I think there are many factors that make Ms Potts story white (sic) exceptional. In particular, her status as a victim of extraordinary levels of abuse, violence and intimidation is pivotal in understanding how she came to commit the offences she has been charged with. She is not a person who is likely at all to re-offend. It would be most appropriate for her to receive support and help for dealing with the traumatic experiences of this relationship and ensuring she can extricate herself from any future contact and feel safe in doing so.
He went on to say:
Her employment is very important as a source of self esteem and sense of normality for her in an otherwise chaotic and frightening interpersonal life. It would be devastating if she was to lose this employment as a result of a conviction being recorded against her. I would recommend to the court that these exceptional circumstances be taken into account when considering how to deal with Ms Potts.
On the hearing of the appeal Ms McCrohan tendered an affidavit of the appellant, sworn on 17 February 2009. Although it is in the nature of fresh evidence, it was received without objection from Ms Barnes, who appeared for the respondent. In that affidavit, the appellant mentions that the Teachers Registration Board had indicated that it was highly likely that her registration would be cancelled if she was convicted of the offences which are the subject of this appeal, although her registration might be cancelled in any event.
Ms Barnes submitted however that the contents of that affidavit did not materially affect the issue, as the possibility of the appellant losing her employment was a matter that was before the learned Magistrate and was taken into account by him. Ms Barnes submitted that the learned Magistrate had taken into account all relevant matters. She accepted that there were mental health issues as set out by the doctors in the various reports but submitted they were outweighed by the fact that the appellant’s conduct amounted to a sustained, deliberate fraud over a long period of time and the offences did not cease until they were detected by Centrelink. In the period in question, the appellant had earned over $180,000 but had declared none of that money to Centrelink. Ms Barnes referred to Kovacevic v Mills stating that in cases of deliberate and sustained fraud, deterrence must loom large in determining the appropriate sentence.[2]
[2] Transcript p 9, lines 14-17.
Nevertheless the court in Kovacevic v Mills made it clear that they did not consider that deterrence must take priority over all other considerations. The court said[3]:
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.
[3] (2000) 76 SASR 404 at [43].
Conclusion
There is considerable force in the matters put by Ms Barnes to support the sentence imposed by the learned Magistrate. This was a serious course of offending which took place over a lengthy period of time. Nevertheless, there were some unusual and quite unique features relating to it. Although the medical evidence did not support a legal defence of duress, it is clear that the appellant was subjected to considerable emotional pressure from Lunny which resulted in the commission and continuation of the offending behaviour. The learned Magistrate was understandably concerned about the gravity of the offending and was anxious to impose a sentence which would act as a deterrent. In so doing however, he fell into error by paying insufficient regard to the appellant’s mental health and the quite exceptional and unusual circumstances surrounding these offences which permitted him to take a merciful approach to the imposition of sentence. The appellant had a mental illness when she committed these offences. The medical reports clearly link her offending behaviour to the pressure and abusive treatment she was receiving from Lunny.
The evidence supports a finding that the appellant is a person who is not likely to offend again. She has made full restitution. She clearly has an excellent reputation as a teacher of under-privileged children. It would be regrettable if the recording of a conviction for these offences, in the circumstances in which they occurred, brought an end to her ability to perform that task and thereby contributed further to her mental health difficulties. In my opinion, the mental health problems of the appellant and the extenuating circumstances in which this offending occurred are such that it is expedient to release the appellant on probation without proceeding to conviction. The appeal is therefore allowed. The convictions and sentence imposed by the learned Magistrate are set aside. Pursuant to s 19B(1)(d) the appellant will be discharged without proceeding to conviction upon entering into a recognisance in the sum of $1,000 to be of good behaviour for a period of 18 months.