R v Theodossio & Said

[1998] QCA 421

IN THE COURT OF APPEAL

[1998] QCA 421

SUPREME COURT OF QUEENSLAND

C.A. No. 348 of 1998 C.A. No. 361 of 1998

Brisbane

[R v. Theodossio and Said]

THE QUEEN

v.

RONALD WILLIAM THEODOSSIO and LISA MARIE SAID

(Applicants) Appellants

de Jersey CJ
McPherson JA

Chesterman J

Judgment delivered 18 December 1998
Judgment of the Court.

IN RELATION TO C.A. NO. 348/1998 THE APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE IS GRANTED. APPEAL ALLOWED. ORDER FOR REPARATION MADE AGAINST THE APPLICANT THEODOSSIO IS VARIED BY SUBSTITUTING AS THE AMOUNT $27,272.92.

IN RELATION TO C.A. NO. 361/1998 THE APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE IS GRANTED. APPEAL ALLOWED. THE ORDER AND SENTENCE IMPOSED BY THE LEARNED SENTENCING JUDGE AGAINST THE APPLICANT SAID IS VARIED TO THE EXTENT OF DELETING CLAUSE 8 OF THE CONDITIONS OF THE RECOGNISANCE.

CATCHWORDS:

CRIMINAL LAW - sentencing - conditional recognisance - validity of condition preventing applicant from applying to the Commonwealth for a sole parent pension or equivalent - whether sentence an invalid exercise of discretion or manifestly excessive - policy considerations - reparation ordered in addition to imprisonment - whether sentence manifestly excessive - co-offenders involved in defrauding the Commonwealth.

Isaacs v. McKinnon (1949) 80 CLR 502 Wright (1994) 74 A Crim R 152 R v. Giordano Unreported Judgment, Queensland Supreme

Court at Cairns, 28/11/95

R v. Allsopp [1972] QWN 34

Counsel:	Mr P. Leask for the applicants/appellants. Mr G. Davey for the respondent.
Solicitors:	Legal Aid Queensland for the applicants/appellants. Commonwealth Director of Public Prosecutions for the respondent.
Hearing Date:	4 December 1998

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 18 December 1998

1. The applicant Lisa Said was charged on indictment with one count of defrauding the Commonwealth. She pleaded guilty on 15 September, 1998 and, after a prolonged hearing during which she contested much of the material alleged against her, was sentenced on 18 September, 1998 to a term of imprisonment for two and a half years to be released after twelve months upon giving security by recognisance in the sum of $1,000.00. The applicant’s early release was further conditional upon a number of requirements, the last of which was the subject of some controversy and provides the basis for the application for leave to appeal against sentence. The condition was that for a period of two years following her release the applicant must not apply to the Commonwealth for a sole parent pension or the equivalent.

2. The applicant, Said, was a single woman born on 23 April, 1969. She lived with her co-offender, Theodossio, as man and wife and received financial support from him. On 6 March, 1994 she gave birth to a child fathered by Theodossio. Notwithstanding her domestic arrangements she applied for a sole parent pension, misrepresenting the paternity of her child and denying her relationship with Theodossio. By reason of her deception she received $42,298.44 from the Department of Social Security by way of sole parent pension and family allowance. The period in respect to which she received the payments extended just over three years, from March 1994 to May 1997. The learned sentencing judge made findings most adverse to Said. He described her as a consummate and compulsive liar who had shown no remorse.

3. Said instigated the fraud, and Theodossio facilitated its continuance by himself falsely declaring (thrice) to the effect that he was not in any relationship with her. Theodossio’s involvement commenced in January 1995. Theodossio also pleaded guilty, in his case to having been knowingly concerned in defrauding the Commonwealth. Each offender had minor prior convictions for dishonesty.

4. The condition under challenge was imposed by the learned sentencing judge pursuant to the power conferred on the Court by section 20 of the Crimes Act 1914. That provides:

   “20(1) Where a person is convicted of a federal offence ... the Court ...
   may, if it thinks fit:

   (a)       by order, release the person, without passing sentence on him, upon his giving security, with or without sureties, by recognizance or otherwise to the satisfaction of the Court, that he will comply with the following conditions - ...

(iv) that he will, during a period, not exceeding two years, that is specified in the order, comply with such other conditions (if any) as the Court thinks fit to specify ...

(b)       Sentence the person to imprisonment in respect to the offence ... but direct, by order, that the person be released upon giving security of the kind referred to in paragraph (a) either forthwith or after he or she has served a specified period of imprisonment ... ”

1. One may note at once that counsel for the Commonwealth, as well as counsel for the applicant, had opposed the inclusion of the condition. In imposing it, the learned judge said this:

   “When I raised the question of depriving you for a period of future social security benefits, that course was opposed by the Crown and opposed by Mr Griffith (defence counsel). The Crimes Act enables me to require you, on a recognisance release order, to be of good behaviour for a period and to comply with such other conditions as the Court thinks fit to specify in the order. In my view, there is a sufficient power to make it a condition of your recognisance release order that you do not apply for a period of two years, which is the maximum period provided for by the Crimes Act, for a sole parent pension or its equivalent and I will make it a condition of the recognisance release order. The economic effect on you of such an order will not be great and your child will not suffer. General deterrence supports such a condition.”

2. We consider the condition to have been clearly inappropriate because of the operation of section 16A(2)(p) of the Crimes Act, which obliges the Court, when sentencing, to take into account the probable effect of a proposed sentence or order on the prisoner’s family or dependants. While this condition may have had a salutary effect on the applicant, and protected the Commonwealth for at least a time from what the judge plainly saw as the applicant’s inveterate dishonesty, the sad reality is that its operation would likely prejudice the proper support of her child should the applicant otherwise become qualified for the pension. This consideration rendered the imposition of the condition beyond the limits of a sound sentencing discretion.

3. The learned judge was, by section 16A(2)(p), obliged in the circumstances to take into account the probable effect of the proposed condition on the child. He said that he was satisfied the child would not suffer. We respectfully differ from that view. The purpose of such a pension is to enable a sole parent properly to care for the needs of the child. If the applicant qualified for it, and the turbulent nature of her relationship with Theodossio distinctly raised the possibility that she could, but could not draw it, it surely follows that the proper maintenance of the child would be rendered precarious. It is not apparent why the judge said that the child “will not” suffer. There was no material from which he could reliably be satisfied, for example, that the child’s needs would, in such circumstances, be catered for adequately from other sources. We appreciate that his Honour’s utter scepticism as to the applicant’s integrity may well have fuelled doubts about even whether the pension moneys, if received, would be applied for their intended purpose. But that sort of possibility did not, we consider, allow the judge nevertheless to conclude that this condition would not likely prejudice the child. That factual error means that the sentencing process miscarried. But the sentence, minus this condition, is nevertheless appropriate, as both sides effectively agreed.

4. The limits on the power contained in section 20(1)(a)(iv) has been considered authoritatively only once, Isaacs v. McKinnon (1949) 80 CLR 502. The case arose out of a conviction for breach of provisions of the Bankruptcy Act 1924. Dixon J (who dissented in the result) said (at 523-4):

   “The words ‘such conditions as the Court thinks fit to impose’ are very wide but they do not authorise the imposition of conditions which are repugnant to the principles or policy of the law or are foreign to the purpose of the power. The provision is concerned with the consequences of crimes against Federal law. Federal laws against which offences may be committed deal with a variety of subjects and the specific applications of the power to impose conditions must vary accordingly. Here we are concerned with its application to bankruptcy offences. In that field of operation s. 20 cannot authorise the imposition of conditions at variance with positive provisions of the bankruptcy law or with the rules of law or of policy which form part of the system.”

5. McTiernan J (with whom Rich J agreed) said (at 529):

   “The question whether any condition upon which a court orders the release of an offender is within the general discretion given by s. 20(1) would depend upon its connection with some relevant principle such as retribution, correction or punishment and perhaps various moral and social considerations. From this point of view the discretion which the Court of Bankruptcy has under s. 20(1) is not more limited than that of any other court to which it applies. But the discretion is one which every court is bound to exercise subject to law. Neither the Court of Bankruptcy nor any other court may impose a condition which contravenes the Bankruptcy Act or any other statute or is contrary to public policy”.

6. It follows that the power conferred by section 20(1)(a)(iv) will be exceeded if

   the condition:

• is not connected with principles applicable to the sentencing of offenders
against federal laws;

• contravenes a provision of a statute or other rule of law;

• is contrary to public policy or the legislative policy of the federal law, breach of

which has given rise to the operation of section 20.

1. It cannot be said that the condition imposed is unconnected with some relevant principle applicable to the treatment of persons convicted of a federal offence. It effects a substantial punishment upon the applicant. The sentencing judge expressly considered the condition to be a deterrent. It has been estimated that were the applicant entitled to a sole parent pension for the whole of the two year period referred to in the condition she would receive about $25,000.00. The money would go to support her and her child. The deprivation of this income is a substantial economic sanction.

2. Viewed in this light the condition, though not on this ground an invalid exercise of power, makes the sentence manifestly excessive. The applicant was imprisoned as a deterrent to others and as an appropriate punishment because her circumstances made it improbable that she would be able to restore the money she obtained by fraud. Having been sent to jail, partly because of her impecuniosity, it is an excessive penalty to insist that the applicant forego such a substantial sum of money.

3. It is to be noted that the applicant was ordered to make restitution to the Commonwealth of the sum of $40,909.38. The discrepancy between this amount and the amount obtained by fraud is explained by the Commonwealth’s withholding some moneys to which the applicant was entitled. No complaint is made about the order for reparation but the condition in question operates independently of it. No provision was made to allow a set-off, as it were, to reduce the amount to be repaid to the extent to which the applicant foregoes social security payments which she would otherwise have been able to claim and receive for the period of two years following her release from prison. Any mechanism necessary to effect the reduction would no doubt be complicated. The task of calculating what moneys the applicant might have received had she been eligible for a pension and applied for it may have been impossible. Whether that is so or not, and whether or not that explains why no “credit” was to be given for pension moneys foregone the result of imposing the condition is a sentence that is clearly too severe. The restriction remains in the event that the Commonwealth is paid the money by Theodossio or someone else.

4. It does not appear that the imposition of the condition can be criticised on the ground that it contravenes any of the provisions of the Social Security Act 1991. The learned judge was careful to order only that the applicant not apply for a sole parent pension or the equivalent. There is nothing in the Social Security Act which obliges a sole parent to apply for a pension no matter how constrained the circumstances. By section 259 a person who wants a sole parent pension must make a proper claim for it. By section 260, to be proper the claim must be in writing and in a form approved by the Secretary who, by section 266, must determine the claim in accordance with the Act. Sections 249 to 252 set out in detail the conditions of eligibility for a sole parent pension. If a person claims a pension and satisfies the eligibility criteria then the secretary would determine the claim in favour of the claimant. But a person who qualifies for a pension breaks no law by not claiming one, so the condition precluding the applicant’s making a claim does not contravene any section of the Social Security Act.

5. It was argued that section 280 which, subject to exceptions, makes sole parent pensions “absolutely inalienable, whether by way of, or a consequence of, sale, assignment, charge, execution, bankruptcy or otherwise” indicates a statutory policy that a person eligible for a pension cannot lose the right to apply for one. The condition which suspends the applicant’s ability to apply for the pension is said to contravene the policy which finds expression in section 280. The section is however concerned to prevent the transfer of the receipt of a sole parent pension. It makes the pension non-transferrable, whether by operation of law or the act of the pension recipient. The section ensures the pension goes to the person who claims it and is eligible to receive it. It does not address the right to apply for a pension.

6. It is otherwise when one considers whether the condition is contrary to public policy. When public policy is relied upon as the factor invalidating a condition imposed pursuant to section 20(1)(a)(iv) the existence and content of the policy should be clear beyond argument. Public policy can often be difficult to discern or define and as a basis for judicial decision making can give rise to too great a latitude for subjectivity.

7. With that caution in mind, it nevertheless seems that preventing the applicant from applying for a sole parent pension is contrary to the policy which underlies the provisions of the Social Security Act. It is clear from works such as Australian Social Security Law, Policy and Administration by Carney and Hanks that considerable differences of opinion exist as to what social values and policies underlie, or ought to underlie, the provision of social welfare and the means by which the disadvantaged should be protected. See in particular the survey in chapter 2, “The Historical Legacy and Values of Australian Social Security”.

8. This much is uncontroversial that the policy of part 2.6 of the Social Security Act is to provide income support for lone parents on the basis of financial need. It is recognised as an obligation of the wider community that those who, for whatever reason, do not have sufficient income or assets to provide basic needs for their children should receive public moneys for that purpose. See Carney and Hanks, op cit, at pp. 123, 129. When introducing the Social Security Bill for the second time the Minister described it as providing financial assistance for individuals and families in genuine need. (See Parliamentary Debates, House of Representatives, volume 174, p. 4,642.)

9. The condition in question may have the effect of depriving the applicant of the only lawful means available to her of supporting her child. Should the father cease contributing to its maintenance, she may be wholly unable to provide basic necessities of life for her child without the pension. A condition which has that effect is alien to public policy. It is no part of the policy of a civilised society that a child should starve because its mother was a thief.

10. In the case of the applicant Said, we would grant leave to appeal, uphold the appeal, and vary the sentence and order imposed by the learned sentencing judge to the extent of deleting clause 8 of the conditions of the recognisance.

11. The applicant Theodossio was born on 5 April, 1963. He was sentenced to eighteen months imprisonment, to be released after six months, upon entering into a recognisance. The terms of that recognisance are not presently material. Theodossio was also ordered to pay reparation of $40,909.38. The learned judge found his culpability was not as great as Said’s, but that he was a participant in Said’s fraud, and that it had been within his capacity to prevent the fraud. Theodossio did not receive the moneys fraudulently misappropriated from the Commonwealth, although he did gain an indirect benefit through the consequent reduction in any pressing need for him to make “child support payments” to the Child Support Agency - notwithstanding that he contributed financially in other ways to the household directly. Theodossio’s contention is that the sentence imposed is manifestly excessive: either he should have to serve the imprisonment but not pay the reparation, or he should pay the reparation and not have to serve the imprisonment; it is the combination, he asserts, which creates the manifestly excessive nature of the penalty.

12. As will be seen, the judge distinguished between the involvement of the two offenders in the penalties he imposed. Said has actually to serve twelve months imprisonment, Theodossio six months. We think it clear that imprisonment was warranted, even allowing for Theodossio’s lesser role. We refer to what was said in Wright (1994) 74 A Crim R 152, 160 per Davies JA and White J:

    “It has been said of the social security fraud cases that they are prevalent and that they are difficult to detect. That is undoubtedly true and those factors are important considerations in the decision to impose custodial terms in those cases.”

    Having regard to the amount involved and the flagrant character of the deception, of which this applicant must be taken to have been aware, no reasonable complaint can be made of his having to serve six months of eighteen.

13. Reference was made to a sentence of two years imprisonment, with the release after six months, imposed in the District Court on a sixty one year old woman, with no prior convictions, who defrauded the Commonwealth of $80,000. (R v. Giordano, Cairns, Unreported Judgment delivered 28 November 1995). Allowing for differences, we do not consider this judge’s approach as in any particular disconformity with that.

14. The order for reparation was authorised by section 21B of the Crimes Act. Liability to make reparation, in the case of co-offenders, is joint and several. It is up to the court whether, in a case like this, it apportions the loss between the co- offenders. But that does not exclude a court from ordering each to pay the total sum. We note the passage in Archbold (1997) paragraph 5-399:

    “An offender may not complain on the ground that the order is for a greater sum than he received as his share of the proceeds of the crime, so long as it is not larger than the total amount stolen (see R. v. Lewis, unreported, January 31, 1975) or on the ground that there is an objectionable disparity in making such an order against him but not against his accomplices: ibid.”

    Of course the Commonwealth cannot in fact recover more than the total of $40,909.38. But it should reasonably have the right to recover the lot from either. Each caused the loss, by respective acts of participation in the fraud.

1. Mr Johnson, for Theodossio, submitted however that at least the amount of reparation ordered against Theodossio should have been less, because he was not involved for the whole of the period - some nine to ten months less than the three years for Said. We would have considered that as involving the drawing a somewhat fine distinction, and not immediately suggestive of manifest excess. It is arguably important to notice that as from January 1995, Theodossio had the capacity to stop this fraud. But Mr Davey, who appeared for the Commonwealth, formally conceded that the amount of reparation ordered against Theodossio should be reduced by one-third, to reflect his not having been involved for that first ten month period. (The ten months is in fact closer to one-quarter but counsel conceded a one- third reduction should be made.) A one-third reduction produces $27,272.92.

2. With relation to Theodossio’s separate claim that the order for reparation rendered the punishment manifestly excessive in his case, one notes also that such a reparation order is not appropriately styled a “punishment” at all: it is indeed a matter of reparation, the restoration of property, as it were, to the person entitled, and the making of such an order has the practical benefit of avoiding the necessity for separate civil proceedings: see R. v. Allsopp [1972] QWN 34.

3. Theodossio’s application should therefore be allowed, and leave granted, and the order for reparation made against him varied by substituting as the amount, $27,272.92.