R v McMahon
[2019] ACTSC 25
•4 February 2019
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | R v McMahon |
Citation: | [2019] ACTSC 25 |
Hearing Date: | 1 February 2019 |
DecisionDate: | 4 February 2019 |
Before: | Mossop J |
Decision: | See [50] |
Catchwords: | CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – Judgment and punishment – sentencing – social security payments – dishonesty offences – dishonestly obtaining by deception financial advantage from Commonwealth entity |
Legislation Cited: | Crimes Act 1914 (Cth), s 21B Criminal Code Act 1995 (Cth), s 134.2(1) |
Cases Cited: | Cameron v The Queen [2002] HCA 6; (2002) 209 CLR 339 Coombe v The Queen [2009] WASCA 105 R v Thomson [2009] SASC 237 |
Parties: | The Queen (Crown) Justine McMahon (Offender) |
Representation: | Counsel P Botros (Crown) M Kukulies-Smith (Offender) |
| Solicitors Commonwealth Director of Public Prosecutions (Crown) Kamy Saeedi Law (Offender) | |
File Number: | SCC 301 of 2018 |
MOSSOP J:
Introduction
Justine McMahon is charged with obtaining a financial advantage by deception contrary to s 134.2(1) of the Criminal CodeAct 1995 (Cth). The maximum penalty is 10 years imprisonment or a fine of $66,000. The offender entered an early plea of guilty. She has spent no time in custody in relation to the offending.
Facts
The facts relevant to the commission of the offence were largely agreed. They are set out in the Statement of Facts which was tendered. In summary the facts are as follows. Between 9 February 2009 and 2 January 2017, the offender intentionally misrepresented her true circumstances to the Department of Human Services (the Department) and as a result of that deception she obtained a Parenting Payment Single (PPS) at a higher rate than she was entitled. The misrepresentations made were that she was not in a relationship and that she did not live with anyone else, both of which were untrue. As a result of that deception she obtained a benefit of $139,199.97 from the Commonwealth.
Parenting Payment Single is payable to persons with dependent children until the date of the youngest child’s eighth birthday. The rate of PPS payable is affected by the recipient’s marital status – either single or partnered – and is also affected by other income received by the person including income from employment. Between 4 February 2009 and 26 October 2016 the offender provided a number of false statements to the Department in relation to her PPS which she had been receiving since 10 December 2008. The essence of those misrepresentations was that she had separated from her husband and was living by herself with her children. The misstatements also involved the assertion that she continued to live at an address in Newcastle, which, after late 2010 or early 2011 she did not.
On 5 February 2009, she represented that she had separated from her husband on 3 December 2008. Neither of the two referees which she named as being able to verify her separation were able to be contacted by the Department.
On 11 August 2009, she represented that there were no changes to her circumstances and she lived alone with her children.
On 20 November 2009, she lodged a document in which she advised that she lived at a particular address in a suburb of Newcastle and that she was not sharing accommodation with other people. In February 2010, during a phone interview she confirmed that she was separated and that separation occurred on 2 December 2008.
In October 2016, the offender provided a document to the Department in which she represented that she lived at the same address as previously advised with only her children. Shortly after she represented that there had been no change in circumstances that she had not already told the Department about and that the information that she provided was complete, true and correct.
However, a rent review commenced in December 2016 resulted in the Department obtaining information that the offender’s tenancy at the Newcastle address had ended in February 2011.
During part of the period of the offending the offender’s husband was employed on a full-time basis with the Department of Home Affairs earning a gross income of $520,213.88 over the period. None of that income was declared by the offender to the Department.
While the offender was not required to regularly report her income in order to continue receiving benefits from the Department, she was subject to an ongoing legal obligation to report an event or change in circumstances such as changes in her husband’s income including if he commenced earning income or if his income varied. The offender did not report an event or change in circumstances.
During the period of her offending the offender was paid $168,247.93. She was eligible in that period to receive $29,047.96. The total overpayment that she obtained was, therefore, $139,199.97.
State government entities or utilities held documentary records related to this period that would have made it difficult for the offender to deny that during the relevant period she lived with her husband.
New South Wales (NSW) road transport records showed that the offender and her husband resided at the same address in Newcastle since the year 2000. At the time of the phone interview with the Department in February 2010, the offender was pregnant to her husband with their third child who was born in September 2010, and hospital records show that her husband was present at the birth and that he and the offender both listed the same residential address.
Australian Capital Territory (ACT) transport records showed that both the offender and her husband had registered at the same address in the ACT in 2011, and when they moved again in 2013. Utilities records in the ACT showed the same information.
On 3 March 2017, the offender contacted Centrelink and admitted that she had received payments which she was not entitled to. This resulted in a review of her entitlements, a subsequent investigation and the offender being charged with the current offence.
There was some dispute between the parties as to whether the offender disclosed wrongdoing that would not otherwise have been detected. I will return to that issue and make some additional findings of fact later in these reasons.
Objective seriousness
The objective seriousness of an offence such as this must be assessed having regard to the amount obtained, the nature and duration of the deception engaged in by the offender and the circumstances in which the offender engaged in that deception. In the present case a significant amount of money was obtained by the deception. The deception occurred by reason of a number of representations made over a number of occasions over a period of eight years. It involved both positive misrepresentations and failures to provide accurate information. It did not involve the kind of planning and sophistication that is involved in cases where false identities or documents are relied upon. The deception occurred in order that the offender obtain additional payments from the government in circumstances where dire need has not been demonstrated. Indeed, during most of the period of offending the offender’s husband had employment which excluded poverty as any explanation for her continuing dishonesty. On the other hand, the obtaining of increased payments did not lead to extravagant expenditure of the additional funds which appear to have been disbursed on day-to-day expenses for the offender and her family. Having regard to the general terms of s 134.2, the unlimited scope of the financial advantage covered by the offence and the broad range of circumstances in which a person may dishonestly obtain a financial advantage from a Commonwealth entity, the present offending is in the low to mid range of objective seriousness for this offence.
Subjective circumstances
The offender is 48 years old. She grew up in New South Wales. She described her childhood as difficult and her father as a chronic alcoholic. As a result of financial difficulties, her family lost the family home when she was eight years old. The family lived in a caravan for a year and then a garage for a further two years. When she was 12, the land on which the garage was built was repossessed by a bank and her parents separated. She and her brother moved to Newcastle with her mother. She lived there until she moved to Canberra with her husband in 2011. She has been married to her husband for around 30 years and they have three sons aged eight, 10 and 12. Her husband was not aware of her offending conduct.
She completed Year 12 at school and worked in supermarkets until the age of 32. She currently works in a department store working 32 hours per week.
She does not have any drug or alcohol problems. She has suffered from anxiety and depression associated with the disclosure of her offending and the present charge.
I accept the offender’s evidence that she commenced her offending shortly after the birth of her second child. Her second child was born prematurely and was kept in hospital for an extended period. Even after release he had health conditions which made life more difficult for his parents and the offender in particular. I accept her evidence that at the time she first made false representations she was feeling overwhelmed by her life and that this contributed to her offending conduct. I accept that the financial insecurity of her own childhood and her desire to avoid that for her own children was a motivating factor in starting on the course of offending that she did. That said, it is a significant feature of the present case that the false representations continued for many years and her difficult circumstances at the commencement of her offending do not explain or mitigate the seriousness of her ongoing offending in subsequent years.
She accepts responsibility for her offending, was overwhelmed with guilt and wanted to set things right. She was assessed as suitable for a community service work condition.
The offender has made voluntary reparation to the Department totalling $300. The Commonwealth has also unilaterally withheld a tax refund of $1155.92. No other reparation has been made.
The offender tendered a letter from herself to the Court. That letter makes her remorse and contrition very clear. It provides further information about her family circumstances during the period of her offending and the difficulties, in particular that she had after the birth of her second child. This evidence is consistent with one of the underlying drivers of her criminal behaviour being the financial insecurity that she herself suffered during her own childhood.
The offender also tendered a letter from her brother. That letter reinforces the evidence about the circumstances of her growing up and the possible long-term effect on her outlook. It also attests to her otherwise good character, the difficulties that she had in raising her children and the success that she has had in that endeavour.
A further letter from the offender’s mother-in-law was tendered. The information in that letter is also consistent with the offender being a person who is otherwise of good character and prepared to assist and support members of her family, in particular her mother-in-law as well as her children.
A letter from her husband was also tendered. That letter provided further evidence about the difficult circumstances that the offender faced at the time of the birth of her second child, the circumstances of her upbringing and the likely anxiety that she had about her financial circumstances in the light of her family’s financial circumstances at the time the offending commenced. It provides significant evidence of her involvement in her children’s lives and hence the likely effect that a period of imprisonment will have upon her children.
Further evidence as to her good character is provided by longtime friend Cecely Cliff who has known her for 29 years. That is consistent with her being a person who is otherwise of good character, significant for her family and unlikely to reoffend.
A letter from her supervisor in her current employment as a sales assistant at a department store was also tendered. The supervisor indicated that the offender was a trustworthy team member including in relation to the handling of cash. She indicated that she would hire the offender again.
Finally a letter from her psychologist, Joshua Davis, was tendered. That evidence related to treatment received between February 2017 and January 2019. It illustrates that she is taking steps to deal with her guilt and undermined self-worth as a result of her offending conduct. It indicates the remorse that she suffers as a result of her conduct. It is consistent with there being a negligible likelihood of any further offending.
Criminal history
The offender has no criminal history. She is therefore a person who is otherwise of good character. She is entitled to leniency on that basis.
Plea of guilty
A plea of guilty for a Commonwealth offence may result in a discount to the offender’s sentence if the plea is evidence of the offender’s remorse, acceptance of responsibility and willingness to facilitate justice: see Cameron v The Queen [2002] HCA 6; (2002) 209 CLR 339 at [11]-[15]. In that case, the High Court referred to the distinction between a discount for the facilitation of justice and a discount for the utilitarian value of the plea as being “not without its subtleties”. It is this subjective willingness to facilitate justice rather than the utilitarian value of having saved the community expense at trial which provides the basis for leniency in relation to a federal offence. The Court is not entitled to further reduce the sentence on the basis of the utilitarian value of the plea.
Consideration
The Australian welfare system is a very significant component of the Commonwealth budget. Dishonesty in relation to whether or not a person has a partner is dishonesty of a type which is easy to engage in but maybe difficult to detect. It is not the sort of dishonesty against which measures such as data matching between Commonwealth authorities is a readily available tool. Such dishonesty by recipients of welfare not only imposes an immediate burden upon the Commonwealth and hence upon taxpayers, but it also has a corrosive effect upon the overall functioning of the welfare system. That is because the need to protect the Commonwealth against such dishonesty means that increasingly intrusive burdens are placed upon genuine recipients of welfare. This tends to stigmatise and marginalise those genuinely deserving of welfare. The corrosive effect of dishonesty extends to the erosion of public confidence in the welfare system. That public confidence is essential to the ongoing public support of a welfare system designed to protect a wide range of classes of vulnerable people in need of government support. Such a welfare system which protects the needy from poverty is a central aspect of the maintenance of a civilised society. For these reasons, even in circumstances where specific deterrence is not a significant factor in sentencing an offender, general deterrence remains a very significant purpose of sentencing for offences such as this. See to similar effect the remarks quoted in R v Robertson [2008] QCA 164; 185 A Crim R 441 at [19].
In the present case specific deterrence is not a significant sentencing consideration. In the light of the offender’s guilty plea, her oral evidence, what she told the author of the pre-sentence report and the letters that were tendered on her behalf, I accept that she is genuinely remorseful and that there is very little chance of her offending in this manner again. That conclusion is reinforced by the fact that she is otherwise of good character and has no criminal history. However, as I have indicated, general deterrence remains of importance.
Clearly, a custodial sentence will involve a significant impact upon her children and her husband. Her children will no doubt be deprived of their principal carer and will suffer by reason of her incarceration. However, there is no evidence that they will be deprived of care. They will be cared for by their father, other family members or paid carers. Whilst I take the impact upon her children and husband into account and give it some weight, the circumstances of the offender are not such as to indicate that the hardship to her dependents is such as to rule out a sentence involving full-time imprisonment.
As I indicated earlier, there was some dispute as to whether or not the offender’s disclosure of her offending was unprompted or whether it occurred in circumstances where she was aware that her dishonesty was, or was about to be discovered.
The offender relied upon the decision in R v Ellis (1986) 6 NSWLR 603. In that case, the NSW Court of Criminal Appeal recognised (at 604) as part of the policy of the law “to encourage a guilty person to come forward and disclose both the fact of an offence having been committed and confession of guilt of that offence” and that “the disclosure of an otherwise unknown guilt of an offence merits a significant added element of leniency, the degree of which will vary according to the degree of likelihood of that guilt being discovered by the law enforcement authorities, as well as guilt being established against the person concerned”.
Ellis itself involved voluntary disclosure of involvement in armed robberies at the instigation of a minister of religion.
In the present case the evidence of the offender was that she voluntarily made the disclosure of her guilt because she could no longer live with it. She said she voluntarily terminated payments prior to her admission of guilt. On the other hand, the Crown pointed to evidence that prior to the disclosure she had been aware of investigations into whether she lived at the address in Newcastle that she had stated and hence that her disclosure was not unprompted. It also pointed to evidence that payments were suspended because of a failure to respond to a request for information rather than at the offender’s request.
A review of the offender’s entitlement to rental assistance was commenced in December 2016. A request for further information was sent to her on 2 December 2016. It is not possible to find that she received this correspondence. As a result of her failure to respond to this request her payments were suspended on 4 January 2017.
In January 2017, the offender obtained advice from Legal Aid ACT in relation to disclosing her guilt. She was told that she should ensure her mental health was stable and then make the disclosure. As a result of this advice she started seeing the psychologist Mr Davis, seeing him for the first time on 24 February 2017.
On 21 February 2017, an officer of the Department confirmed with a real estate agent in Newcastle that the offender had vacated the Newcastle premises in February 2011 and that rental assistance had been incorrectly paid since that time. On 28 February 2017, the offender was told by an officer of the Department that the Department had verified that she had not lived at the address in Newcastle since February 2011.
On 1 March 2017, an officer of the Department found that an internal record of the Department now showed that she was living at an address in Evatt and inquiry of the relevant real estate agent indicated that both the offender and her husband were tenants there. The evidence does not disclose how the Department became aware of the Evatt address. The evidence about how this information came to be recorded is incomplete. It is consistent with it having been provided by the offender to the Department although the evidence is not sufficient to determine that that was the case.
On 3 March 2017, the offender contacted Centrelink by phone and confessed that she had received seven years of payments that she was not entitled to.
The issue is the degree to which leniency is warranted as a result of the disclosures that the offender made. Ellis indicates that the degree of leniency depends upon the likelihood that her guilt would have been discovered and established by law enforcement authorities. In my view, it is likely that a component of the overpayments, those relating to rent assistance, would have been discovered in any event because the Department had already commenced a review of her rent assistance including whether or not she lived at the address in Newcastle during the relevant period. The evidence of Departmental processes was not sufficient to indicate that it would have gone further to fully investigate the whole of her entitlement to PPS not just the rent assistance component. If it did conduct an investigation, then, as I have indicated above, there were documentary records held by state government entities or utilities available that indicated that the offender and her husband had not in fact separated or remained separated.
My conclusion is that the offender’s disclosures were significant in that they ensured that the whole of her unlawful conduct came to light and that her guilt was readily able to be proven. While it is not a case such as Ellis which appears to have been a case where guilt and proof of guilt was very unlikely in the absence of a confession, it is a case in which the policy of the law to encourage persons to come forward to disclose guilt and make a confession is applicable and I give it some weight in determining the ultimate sentence.
The Crown identified comparable cases by pointing to four cases where intermediate courts of appeal had considered sentences imposed for like offences. While not all of them involved s 134.2(1), they did involve like offences with like penalties and involved offences arising out of the provision or non-provision of information to the Commonwealth leading to incorrect payments of benefits. Those cases were: R v Robertson, Coombe v The Queen [2009] WASCA 105, R v Thomson [2009] SASC 237 and Payne v The Queen [2010] WASCA 177. The offender also identified a number of cases in the Victorian County Court involving welfare fraud where sentences of full-time detention were not imposed. Principal reliance was placed upon the decision of the Victorian County Court in DPP v Vistarini [2015] VCC 136. Each of the decisions of intermediate appellate courts involved the imposition of sentences of between 18 months and three years with periods of full-time custody between nine and 12 months. On the other hand, Vistarini involved a fully suspended sentence of imprisonment of two years. The offence provision and the facts of Vistarini are similar to the present case, although in that case the sentencing judge accepted that because of the offender’s psychological condition the Verdins principles were applicable both in relation to the commission of the offences and so as to increase the burden of incarceration. I place greater reliance upon the decisions of intermediate courts of appeal in determining current sentencing practice. It is notable that in R v Thomson, the South Australian Court of Criminal Appeal found a wholly suspended sentence for similar offending to be manifestly inadequate and imposed a requirement to serve nine months of 33 month sentence before release. Although in some respects the offending in that case was more serious because the offending continued even after the offender had been charged with offending in relation to an earlier period, the case does suggest that Vistarini is, at the very least, a decision at the very lenient end of the spectrum.
The Crown’s ultimate submission was that a custodial sentence involving a period of full‑time detention was warranted. Counsel for the offender submitted that a custodial sentence which was either wholly or substantially suspended would be appropriate.
In my view, only a custodial sentence will adequately reflect the seriousness of the offending and the need for general deterrence of this type of conduct. Further, having regard to the authorities pointed to by the Crown, I consider that a period served by way of full-time detention is necessary. I will impose a sentence of imprisonment of two years with a recognizance release order to operate after seven months. The making of a reparation order under s 21B of the Crimes Act 1914 (Cth) in the sum of $137,100.69 was sought by the Crown and not opposed.
Orders
The orders of the Court are:
1.The offender is convicted and sentenced to imprisonment for a period of two years.
2.The offender is to be released after having served seven months imprisonment upon giving security in the sum of $1000 (without surety) by recognizance that she will be of good behaviour for a period of two years from that date.
3.The offender is to make reparation to the Commonwealth by way of payment of $137,100.69.
| I certify that the preceding fifty [50] numbered paragraphs are a true copy of the Reasons for Sentence of his Honour Justice Mossop Associate: Date: 26 February 2019 |
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