R v Conway

[2001] NSWCCA 51

Reported Decision: 121 A Crim R 177

New South Wales

Court of Criminal Appeal

CITATION:	R v Conway [2001] NSWCCA 51
FILE NUMBER(S):	CCA 60335/00
HEARING DATE(S):	2 March 2001
JUDGMENT DATE:	2 March 2001
PARTIES :	Regina v Isabella Jean Conway
JUDGMENT OF:	Heydon JA at 1; Bell J at 30; Smart AJ at 31

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	00/11/0178
LOWER COURT JUDICIAL OFFICER :	Kinchington DCJ

COUNSEL :	CP O'Donnell (Cth Crown) P Winch (Applicant)
SOLICITORS:	Commonwealth Director of Public Prosecutions Legal Aid Commission of New South Wales
CATCHWORDS:	Criminal law - Sentencing - Social Security fraud - Whether sentence manifestly excessive - Whether sufficient weight given by sentencing judge to subjective circumstances - Mitigative weight of pre-sentence reparation by way of partial repayment of defrauded monies - Whether prospect of loss of applicant's house involves a considerable or real sacrifice on applicant's behalf - "Tragic life" and emotional attachment to house
LEGISLATION CITED:	Crimes Act 1900 (Cth)
CASES CITED:	R v Hull (NSWCCA, unrep, 6 October 1994) R v Price (NSWCCA, unrep, 2 September 1993) R v Purdon (NSWCCA, unrep, 27 March 1997) R v van Tung Luu (NSWCCA, unrep, 7 December 1984 R v Winchester (1992) 58 A Crim R 345
DECISION:	See para 32

IN THE COURT OF
CRIMINAL APPEAL

60335/00

HEYDON JA
BELL J
SMART AJA

Friday, 2 March 2001

REGINA v Isabella Jean CONWAY

JUDGMENT

1    HEYDON JA: This is an application for leave to appeal against sentences imposed by Kinchington DCJ, QC, on the applicant on the ground that they are manifestly excessive. The applicant submitted that the circumstances were so exceptional that no custodial sentence should have been imposed; alternatively, that if a custodial sentence should have been imposed, that which was imposed was excessive. It must be said at the outset that the case is a most distressing one, but sympathy for the applicant by itself cannot deflect attention from the fundamental issue of whether the sentencing judge’s discretion can be said to have miscarried.

2    On 15 March 2000 the applicant pleaded guilty to five charges of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1900 (Cth), and repeated those pleas in the District Court on 16 May 2000.

3    On 17 May 2000 on each charge the sentencing judge imposed a head sentence of 2½ years imprisonment with a non-parole period of 15 months. He ordered that the sentences be served concurrently. He also made an unopposed order that the applicant pay $51,337.85 by way of reparation.

4    The five charges related to over-payments stemming from the applicant’s use of three names and three bank accounts over nearly ten years. Those over-payments totalled $109,905.05. At the time of sentencing, the sum of $58,567.20 had been repaid.

5    The trial judge described the applicant’s subjective circumstances as follows (AB 68.1-71.3):

“You are presently aged sixty-two, having been born on 5 April 1938, at the present time you are a widow. You reside in premises owned by yourself and which you have told me are valued in the vicinity of just over $300,000. The only money that is outstanding on those premises is the charge to the Social Security Department. It is clear from this material that you have endured a life of hardship. You came from a dysfunctional family background, your parents separated when you were young and it was your practice, or your mother’s practice, to allow you to accompany one of your elder sisters to dances in the town in which you reside[d]. On one of those occasions while you were walking home you were raped by three men. You apparently received no counselling or help following that rape and it undoubtedly has impacted upon you throughout your life.
Eventually because of the dysfunctional nature of your family life you were placed in a girls’ home in Armidale, you stayed there until you were aged fifteen when you returned home. However things did not get better for you because by this time your mother had acquired a further partner who sexually harassed you following your return home. In order to escape that sexual harassment you married at the early age of sixteen. As a result of that marriage you had three sons but that marriage did not last very long and after some ten years you and your husband separated as a result of his infidelity and other conduct towards you. You were left to raise your three sons and it would seem that you did the best for those sons over the ensuing years and you made every effort to provide those children with a secure home and you did everything to ensure that they would have something after your death. You were very much aware, it would seem, of the fact that you had received no assistance, financial or emotional from either of your parents.
Two things appear to have dominated your life, firstly the desire to do well and secondly the desire to obtain and own your dream home. It would seem that your first desire has been unfulfilled because a large part of your life, after early business ventures failed has been spent in receipt of pensions under our Social Security system. However, you seem to have acquired your dream home. That dream home, to some extent, I am satisfied was financed by the moneys that you received from the Social Security Department and which you have now agreed to repay to them.
Following your arrest in respect of these matters it would seem that you have co-operated with the authorities at all times and admitted your guilt in respect of defrauding the Commonwealth of the moneys that have now been specified. It would seem from that material that throughout your life, after two businesses failed, towards the end of the seventies, or in the early eighties, you appeared always to have difficulties with money. You were short of money to pay bills and short of money to make improvements on the houses that you occupied during that time. You were always conscious of the fact that you had received no financial assistance from your parents and you did not want to leave your sons in the same situation and you were conscious that you wanted to leave them some money following your death.
It is clear from the material contained in the pre-sentence report that you were well aware of your criminal activity and that it was wrong. You now accept that your conduct was unacceptable and you [are] now deeply ashamed and sorry for that criminal behaviour over the nine and a half years during which you conducted this fraudulent activity. It is clear that you wish to make reparation to the best of your ability, it is clear that you have the ability to make full reparation of the moneys that you received from the Commonwealth and you have made some attempt to pay that money, in fact you have paid just over half of the money that you did so fraudulently obtain. Now, as I have previously indicated, you are prepared to sell your house, or raise money on it to complete those reparation payments.
In summary, your life can be assessed to date as being one full of tragedy to some extent. The partners you have taken up with have not all been supportive of you and certainly have not ended up in providing you with the support that you obviously needed to become a worthwhile member of our community.
In the Pre-sentence report of 15 May, which was prepared by Marguarita Bonnet, but signed by Lorraine King, you have been assessed as being suitable for all the alternative non full time custodial sentences. I am satisfied that your pleas of guilty and your willingness to pay reparation to the Commonwealth and your general attitude to the situation you are now in represent true contrition and remorse for your criminal conduct over the period in question.”

6    He then said (AB 71.3-72.9):

“I now turn to a consideration of the sentences that I must subject you to in this case.
You have pleaded guilty to each of these five charges and I accept those pleas as signs of your remorse and contrition for conducting yourself in this criminal way over the nine and a half years in question, however, your pleas of guilty to those charges must be looked at in the light of the extremely strong Crown case that existed against you. Both from a specific and general deterrent point of view persons involved in defrauding the Commonwealth through the Social Security system deserve no sympathy from this Court. Both this Court and the Court of Criminal Appeal of this State have emphasised on many, many, occasions that people who defraud the Social Security system must go to gaol except in the most special of circumstances.
The concepts of general and specific deterrence are very important in frauds of this nature because the Social Security system is based upon trust and not only must it to be brought home to those who defraud the system that they will be punished but it must also be brought home to others who might be tempted to defraud the system that if they do so and they are caught they also will face severe punishment. One of the disturbing facts of your case is that these frauds were committed over a period of some nine and a half years and involved just over $100,000.
You certainly are entitled to a discount for your early plea of guilty and your admission of guilt from the outset and I will discount the sentence that I must subject you to because of that factor. One of the matters that has influenced me in determining what I should do with you is the fact that your conduct over the period in question, to my mind, showed a considerable degree of organisation. It was undoubtedly planned, you were aware of the weaknesses in the Social Security system, you used three different names and identities and three different bank accounts to attempt to hide your fraudulent conduct.
You have no prior convictions but the on-going nature of these offences establishes to my mind that less weight can be given to that fact and the fact that you were previously a person of good character. While you might have been a person of good character at the outset of your fraudulent conduct it seems that you were not such a person half way through or later during the period of your conduct.
Your age is another problem. You are now, as I said, sixty-one years of age. While not in your twilight years, because a person of sixty-one has many many years of useful life left to them for them to enjoy, you are not young and any sentence that I must subject you to must take that factor into account.
Bearing in mind that your criminal conduct was over a period of some nine years, leads me to the conclusion that I have no alternative but to subject you to a full time custodial sentence of some severity.”

7    He concluded (AB 73.5):

“It seems to me that in all the circumstances of this case the community’s abhorrence to people committing this type of crime, which involves breaching the trust that is placed in them by the Social Security system can only be appeased by my subjecting you to a head sentence of some two and a half years imprisonment and fixing a non-parole period in relation thereto of fifteen months.”

8    Counsel for the applicant advanced three submissions.

9    The first was that the sentencing judge “failed to give sufficient weight to the applicant’s subjective case”.

10    The second was as follows (written submissions pp 2 and 3):

“The learned sentencing judge noted that repayment in full would be made and used that finding as demonstrating ‘true contrition’ (Summing Up page 7 [AB 71.1]). He did not however take it into account in any other way in mitigation of penalty. In Raymond Anthony Phelan (1993) 66 A Crim R 446 Hunt CJ at CL stated that where repayment involves considerable sacrifice then the repayment is a matter which can be taken into account. Justice Hunt’s restriction upon the circumstances in which restitution may be relevant was not followed by Justice Smart, who commented (p. 450):
‘I regard restitution as an important factor in this type of case and I would not wish to restrict the use of which could be made of that. So much depends on the circumstances of the case.’
It is submitted that the sale of Mrs Conway’s house would involve sacrifice given the priority she has placed upon such ownership.
The applicant’s readiness and ability to make restitution it is submitted was a matter to which insufficient weight was given by the learned sentencing judge.”

Orally, stress was placed on the $58,000 (approximately) paid voluntarily before sentence.

11    The third submission amalgamates the first and second (written submissions p 3):

“It is submitted that the learned sentencing judge erred in failing to find that this case was one in which very special circumstances existed, so as to justify a penalty of other than full time custody. Regina v Winchester (1992) 58 A Crim R 345.
Mrs Conway’s immediate confession and early plea, her tragic life history, her candour and contrition, the repayments she had made at the time of sentence and the secure arrangements for full restitution upon the sale of the house, in conjunction with her age, it is submitted, combine to make this an exceptional case.
Consequently, it is submitted that the sentence was manifestly excessive.”
Did the Subjective Case Constitute Exceptional Circumstances?

12    Every element of hardship in the applicant’s background on which her counsel relies appears to have been specifically mentioned by the sentencing judge except for Mr Conway’s suicide and the death of her son at the age of 32. The suicide took place in January 1997, relatively late in the period during which the crimes were committed. The son’s death took place in 1991, but the evidence does not appear to demonstrate that it was a justification or excuse for the crimes.

13    In evaluating whether the applicant’s subjective circumstances were sufficiently exceptional to make an appropriate sentence for her significantly below the usual sentences in this type of case, it must be borne in mind, as the sentencing judge did, that social security fraud is a relatively easy crime to commit, so that general deterrence is a particularly important goal; that goal is reflected in the view that “a custodial sentence should be imposed unless there exist some very special circumstances justifying some lesser punishment”: R v Winchester (1992) 58 A Crim R 345 at 347.

14    Social security fraud is a relatively easy crime to commit because persons who claim social security payments are often in genuine and urgent need, and there is no time to investigate their bona fides closely. The price of avoiding hardship by granting speedy relief is the risk of abuse by non-genuine claimants. Thus in R v van Tung Luu (NSWCCA, unrep, 7 December 1984, p 3) Street CJ said:

“The courts of this State have uniformly sought to make plain to persons who abuse the system of social welfare that they must expect to face heavy penalties. The introduction into the administration of that system of overly meticulous preliminary checks before benefits are paid could result in real hardship to persons whose need for benefits is urgent and immediate. Thus it is that such susceptibility is open to abuse, which results in persons who do abuse it receiving salutary penal consequences at the hands of the courts.”

And in R v Purdon (NSWCCA, unrep, 27 March 1997, p 7) Hunt CJ at CL said:
“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.”

15    The Crown has referred to numerous cases relating to sentencing for social security fraud. Many of the sentences imposed have been much heavier than those imposed on the applicant, often for conduct of less criminality. The serious elements of the applicant’s offences turn on the long period over which they were committed, the premeditation involved, the repeated and continuing character of the misrepresentations, the total sum involved and the degree of planning and organisation evidenced by the use of three different identities and three different bank accounts. The sentencing judge weighed against these matters the unhappy history of the applicant, her age, her health, her good general character, her remorse and contrition, her co-operation with the authorities and the fact that she had made and would continue to make reparation.

16    The circumstances cannot be described as so exceptional that no custodial sentence should have been imposed. Nor can it be said that the circumstances (apart from those to do with reparation) made the sentences manifestly excessive. From one point of view they are comparatively light, and significantly heavier sentences have been imposed on much older people in worse health. Despite that, other minds might have arrived at lower sentences for the applicant, but at the end of the day the applicant’s argument boils down to the proposition that the discretion miscarried because its result was manifestly excessive, not because of any particular identifiable error leading to that result. The sentences determined by the sentencing judge are not outside the bounds of a sound sentencing discretion if reparation issues are left out of account.

Repayment

17    Apart from the reference relied on by the applicant to the applicant’s willingness to pay reparation representing “true contrition and remorse” at AB 71.1, the sentencing judge made three other references to reparation (at AB 67.5, 70.5 and 73.9-74.1).

18    The reference at AB 67.5 was:

“At the present time it would seem you are reducing your debt to the Commonwealth at the rate of just over $50 per week from pension entitlements that you are presently receiving under the Social Security system. You have also given evidence in these proceedings that it is your intention to place your house on the market for sale and to repay the balance of the money that you acknowledge is owed to the Department.”

19    The reference at AB 70.5 was quoted above.

20    The reference at AB 73.9-74.1 was:

“The Crown seeks a reparation order in the sum of $51.337.85, that is not opposed and I make that order. In making that order I note that the Social Security Department holds a mortgage over your home under the relevant legislation.
In fixing the sentences I have subjected you to I have taken into account the fact that you have already repaid to the Department over $58,000 and that I will make the reparation order in the sum I have specified.”

21    These references, particularly the last, are quite inconsistent with the submission that the sentencing judge only used the fact that the applicant had made and was continuing to make reparation as evidencing contrition and remorse.

22    Whether or not the repayment can be described as involving “considerable” sacrifice in the light of the facts presented to the sentencing judge, it certainly involved real sacrifice. To be compelled to give up the home in which the applicant had lived, a home with which she had presumably had some happy associations, despite the generally sad nature of her life, is a real sacrifice; and it was contemplated that if a loan could not be raised on the house it would have to be sold pursuant to the statutory mortgage. While the sentencing judge did not make an explicit reference to the obvious point just made, it goes without saying, particularly in view of the sentencing judge’s reference to the applicant’s original desire to acquire the house as a “dream home”. It cannot be concluded that the sentencing judge overlooked the point.

23    Accordingly it seems that the sentencing judge did give some weight to the fact that the applicant had before sentence made some, and would in due course make full, reparation, in part by losing equity in her house.

24    Though the sentencing judge did not mention this, in evaluating the hardship to the applicant of possibly losing her house, it must be remembered that some of the proceeds of her crimes were used to improve it.

25    The contention that a discretionary decision on sentencing should be set aside because “insufficient” weight was given to a particular factor is not an easy contention to succeed in. To fail to give any weight to a material matter is an error the evidence of which is relatively easy to demonstrate, and the consequence of which will usually be to cause the decision to be set aside. A contention that there was a failure to give sufficient weight to a particular factor involves a contention that some error occurred in a complex process of weighing that factor with others. However, an error of principle or a result which is plainly indicative of some error can be caused, and evidenced, by a failure to give sufficient weight to a relevant factor.

26    The sentencing judge considered a wide range of relevant matters. The applicant concedes that he gave some weight to the reparation question.

27    The Crown referred to R v Price (NSWCCA, 2 September 1993, unreported) and R v Hull (NSWCCA, 6 October 1994, unreported). The Crown pointed to the sentences in R v Price, which were much heavier than those imposed on the present applicant, despite the fact that approximately $1,000,000 was recovered after the sentence from asset sales. However, the criminal record of the accused in R v Price was bad. The Crown also submitted that in R v Hull distressing personal circumstances did not deflect the court from the view that there should be a full time custodial sentence. That may be accepted: the issue is whether the sentence actually imposed was too long. The Crown also submitted that the sale of the applicant’s house, which at the time of sentence was seen as a real possibility, could not be characterised as causing her much prejudice, because even after a sale and repayment of what was owed she would still have about $300,000. That does not grapple with the non-monetary prejudice of losing the home with which part of her past life had been associated.

28    In my judgment when one couples the substantial voluntary pre-sentence payments with the real hardship involved in the possible loss of her home, the submission that insufficient weight was given to reparation factors is valid.

Orders

29    I am of the opinion that orders should be made which would have the result of the applicant being released today, while not altering the balance of the sentence. Settlement of the form of the orders is left to counsel.

30    BELL J: I agree.

31    SMART AJ: I agree.

32    [After an adjournment, the following orders were made:

1. Leave to appeal granted.

2. Appeal allowed.

3. Sentences imposed in the court below be quashed.

4. In lieu thereof the applicant be sentenced on each count to imprisonment for 2½ years to date from 17 May 2000. The sentences are to be served concurrently.

5. Pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth) the applicant be released on 2 March 2001 upon entering into a recognizance herself in the sum of $100 to be of good behaviour until 16 November 2002.]

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