Twigden v Centrelink - [2010] SASC 154

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
TWIGDEN v CENTRELINK
[2010] SASC 154
Judgment of The Honourable Justice Gray
28 May 2010
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - ADMISSION OF FRESH EVIDENCE - IN GENERAL
Appeal against sentence - defendant and appellant pleaded guilty to three counts of obtaining a financial advantage from Centrelink contrary to section 135.2(1) of the Criminal Code (Cth) - defendant sentenced to twelve month term of imprisonment - sentence suspended in part, but defendant ordered to serve 10 weeks immediate imprisonment - whether Magistrate erred in not suspending total term - consideration of further materials provided to Court on the hearing of the appeal.
Held: appeal allowed - defendant's mental condition and underlying cognitive difficulties at time of committing offences disclosed by the further materials, warranted suspension of the entire sentence of imprisonment imposed - sentence suspended on entry by defendant into a recognizance.
Criminal Code (Cth) 135.2(1); Mental Health Act 1993 (SA); Supreme Court Civil Rules 2006 (SA) r 286; Criminal Law (Sentencing) Act 1988 (SA) s 10; Crimes Act 1914 (Cth) s 16A(1)(e), s 16A(1)(f) and s 20, referred to.
Fox v Percy (2003) 214 CLR 118; R v Smith (1987) 44 SASR 587; R v Brain (1999) 74 SASR 92; Kovacevic v Mills (2000) 76 SASR 404; R v Thomson [2009] SASC 237; R v Cameron (1993) 171 LSJS 305; R v Wiskich (2000) 207 LSJS 431; R v Tsiaras [1996] 1 VR 398; Director of Public Prosecutions v Bannam (1985) 14 A Crim R 475; Slowiak v Director of Public Prosecutions (2000) 210 LSJS 100; R v Allen [2005] QCA 73; Matulich v Police (2007) 252 LSJS 219; R v Stubberfield [2010] SASC 9, considered.

TWIGDEN v CENTRELINK
[2010] SASC 154
Magistrates Appeal
GRAY J.

This is an appeal against sentence.
Introduction
At the time of the offending, the defendant was mentally ill, although not so unwell as to give rise to a mental impairment defence. This appeal raises difficult questions with respect to the sentencing of offenders with such a mental illness.
The circumstances called for a thorough examination of the defendant’s offending and mental state at the time of the offending. The reception of further evidence on the hearing of the appeal confirmed the defendant’s ongoing struggle with depression and difficulties with cognitive functioning. The defendant’s mental illness provided an explanation for her offending and diminished the moral culpability associated with her offending. It was only following a closer examination of the defendant’s difficulties that the evidence as to her diminished cognitive functioning was tendered to the Court.
Background
On 27 January 2010, the defendant and appellant, Anne-Marie Twigden pleaded guilty to three counts of obtaining a financial advantage from Centrelink contrary to section 135.2(1) of the Criminal Code (Cth).[1]
[1] Section 135.2(1) of the Criminal Code (Cth) provides:
(1) A person is guilty of an offence if:
(a) the person engages in conduct; and
(aa)as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and
(ab)the person knows or believes that he or she is not eligible to receive that financial advantage; and
(b)the other person is a Commonwealth entity.
Penalty: Imprisonment for 12 months.
Between February 2007 and July 2008, the defendant received a widow’s allowance from Centrelink to which she was only partly entitled due to income received from employment. During the 14 month period of her offending, the defendant worked as a registered nurse with three nursing agencies and earned approximately $64,800.00 gross. None of this income was declared to Centrelink despite numerous contacts with Centrelink customer service officers. As a consequence, the defendant received an overpayment of her widow’s allowance, totalling $16,460.99. The defendant’s offending was discovered through the Australian Taxation Office performing data matching.
At the time of sentencing, the Court was provided with information that the defendant had been diagnosed with depression and a bipolar condition from the age of 19 years. A report from Jonathon Hare, a forensic psychologist, addressing the defendant’s mental state, and a report from a social worker, Tamara Otello, were before the Magistrate.
In his report, Mr Hare set out the defendant’s background and history. At the time of the preparation of the report, the defendant was 56 years of age. The report disclosed that the defendant was raised in an abuse environment both at home and at secondary school and subsequently was in a mutually abusive marriage for more than 30 years. In 2004, the defendant separated from her husband and is now divorced. The defendant has two adult children with whom she has little to no contact.
Mr Hare’s report further outlined that the defendant had a history of depression since the age of 19 years, and that over that time she had consulted many psychiatrists. She also had a history of abusing prescribed and over the counter drugs, in addition to heavy alcohol use.
On leaving school, the defendant trained and then worked as a nurse for almost 40 years. As a consequence of her problem with drugs, the defendant had been called before the Nurses’ Board on a number of occasions. In October 2009, the defendant was suspended from nursing. She will not be able to return to nursing without evidence demonstrating her fitness to do so.
In Mr Hare’s opinion, the defendant was suffering from depression during the time of her offending. She was taking prescribed anti-depressant medication and seeing a clinical psychologist. According to Mr Hare, “Depression almost certainly would have affected her motivation, her ability to make decisions, and her ability to act in her own best interests”. Mr Hare further observed that this was likely to have interfered with her ability to attend to her reporting requirements to Centrelink.
Mr Hare outlined his recommended treatment as follows:
She needs to continue with treatment for depression and anxiety, both medical and psychological, and such treatment should also address the borderline aspects of her personality. I recommend she recommence treatment with her clinical psychologist… She would also benefit from social work assistance to assist in obtaining suitable accommodation and sorting out her financial situation.
Ultimately, Mr Hare concluded that if the defendant continued her abstinence from opiates and alcohol, then the prognosis from the recommended treatment would improve. However, Mr Hare noted that the defendant will continue to need assistance for a considerable period of time.
In relation to the effect on the defendant of a custodial sentence, Mr Hare made the following remarks:
If [the defendant] were to receive a custodial sentence in relation to the offences, in my opinion, given her history as described, and her present situation, this would have a most adverse effect on her mental health.
Ms Otello’s report outlined the deterioration of the defendant’s mental state over the course of the preceding years. The report disclosed that the defendant had been receiving therapy from a clinical psychologist since 2004 for post traumatic stress disorder and depression associated with the sexual abuse and domestic violence in her past. The defendant’s problems with memory and cognition had been a concern for her psychologist, and in 2006 she was referred for a full neuropsychological investigation at the Flinders Medical Centre. For reasons unknown, this referral was not followed up. Ms Otello noted that due to the increasing deterioration of the defendant’s mental state and her inability to cope with the demands of daily living, she was referred to an emergency mental health service. The defendant resumed contact with the agency for which Ms Otello works in 2009. At this time, despite having abstained from alcohol and drug abuse from late 2008, her mental state had deteriorated to such an extent that the clinical psychologist notified the Nurses Board of South Australia, as she thought the defendant unfit to practice. This notification resulted in the defendant’s subsequent suspension of licence to practice.
Ms Otello outlined the substantially increased support that had been provided to the defendant in the months preceding sentence. This was well beyond the level of support previously experienced by the defendant. The increased support included: a housing trust unit, alleviating financial rental stress; ongoing support from a mental health worker to assist her in her efforts to recover from her breakdown and to rebuild relationships and social networks; contact with a clinical psychologist providing psychotherapy to assist the defendant with past trauma issues; support from a social worker providing the defendant with counselling and support in accessing community resources; and regular contact with a general practitioner and consultations with a psychiatrist.
Ms Otello concluded in her report:
If [the defendant] had been able to access the above services and supports sooner instead of sitting on various waiting lists she may have been able to avert the serious consequences of her melt-down: suspension and likely loss of her licence to practice nursing, and being charged with Centrelink fraud. It is reasonable to conclude that she fell through some service gaps, and not having had a case manager or anyone to keep an eye on her, she ended up in the situation she is in now.
In my opinion, her level of disorganization and inability to function particularly when under stress is such that she would benefit from a carer, however, she is isolated from her family and has no friends, and there is no one available or willing to fulfil that role. In the absence of anyone else I function as her case manager at present. [The defendant’s] case demonstrates the service gaps of the mental health sector and the extreme vulnerability of clients who have no support network to rally help and intervention when their condition takes a turn for the worse.
The Magistrate took into account those opinions in his remarks before proceeding to sentence the defendant to a term of imprisonment of 12 months:
As I said at the outset each case depends very much on the facts. In this instance there was clearly a case of sustained actions of defrauding Centrelink. For general deterrence reasons there clearly must be a term of imprisonment. In my view the starting point for this offending should be a period of 16 months but I will reduce that to 12 months after taking in to account your plea of guilty.
The Magistrate then considered whether the 12 month sentence imposed should be suspended, concluding:
I must now consider whether the whole of that should be suspended, part of that term to be suspended or no part of that to be suspended. I am acutely aware of your psychological problems and the history that you have had at that stage when you offended. I am left however with the plain fact that it was a deliberate and sustained offending involving a considerable amount of money over a 14 month period. I find myself unable to exercise my discretion to suspend the whole of that sentence, but order that you actually serve a term of imprisonment, I have decided on 10 weeks. In my view the length of term to be served should have been greater than 10 weeks but I have reduced the actual amount to be served because of your age and your circumstances. I said I would order reparation pursuant to section 21B of the Crimes Act and after serving 10 weeks you will be released from imprisonment pursuant to section 20(1)(b).
[Emphasis added]
The appeal was against that part of the sentence imposed which required the defendant to serve the 10 week immediate custodial term.
The Appeal
On appeal, counsel for the defendant contended that the Magistrate erred in the exercise of his discretion in not giving sufficient weight to the defendant’s personal circumstances and in not ordering the immediate release of the defendant.
It was said that although the Magistrate referred to the relevant personal circumstances and note was taken of the opinions of Mr Hare and Ms Otello, insufficient weight was given to the mitigating effect that the state of the defendant’s mental health had on her offending. It was further contended that the Magistrate did not give adequate weight to the defendant’s personal circumstances and the change in those circumstances with respect to ongoing progress and support, since the time of the offending. It was submitted that inadequate weight was accorded to the detrimental effects which an immediate custodial sentence would have upon the defendant’s mental health. It was further contended that the fact that the recognisance ordered by the Magistrate was limited to six months without any provision of supervision, demonstrated a misunderstanding of the defendant’s rehabilitation needs and that as a consequence inadequate weight was given to rehabilitation. Ultimately, it was said that the mental state of the defendant at the time of the offending and the steps taken since in her recovery warranted an approach to sentencing different to that taken by the Magistrate.
Counsel for Centrelink contended that the Magistrate’s sentencing discretion had not miscarried and that the sentence imposed was not manifestly excessive. It was said that having regard to the facts and circumstances of the offending, including the seriousness of the offending and the need for general and personal deterrence, the sentence imposed was within the appropriate range. Counsel submitted that the defendant’s mitigating circumstances were not such as to outweigh the seriousness of the offending and the need for deterrence, both personal and general. Ultimately, it was said that no error had been identified and that there was no basis to interfere with the Magistrate’s decision.
Further Evidence
On the hearing of the appeal, having regard to the opinions expressed by Mr Hare and Ms Otello with respect to the defendant’s cognition and mental functioning, the defendant sought an opportunity to place before the Court a neuropsychological report and a psychiatric report addressing those matters. That course was not opposed by Centrelink. As a consequence, further reports were tendered without objection: a report from the defendant’s current treating psychiatrist, Zsolt Lukacs dated 31 March 2010, a report from a forensic neuropsychologist, Mark Reid dated 8 April 2010 and a report from the defendant’s clinical psychologist, Amber Keast, dated 20 April 2010. Two additional reports originally provided to the Nurses Board from a clinical psychologist, Danielle Zerk, were also tendered on the hearing of the appeal.
The two reports from Dr Zerk provided context to the aspects of the defendant’s mental state which warranted a report to be provided to the Nurses Board. The first of those reports was prepared in December 2005 and highlighted the recent decline in the defendant’s cognitive functioning and memory. Dr Zerk discussed the defendant’s increasing confusion and issues with memory. At that time, Dr Zerk provided the opinion that the defendant warranted supervision or close monitoring when performing tasks directly relating to use of memory. According to Dr Zerk, any complex cognitive tasks would be overwhelming for the defendant.
In the second report of 6 February 2009, Dr Zerk expressed the opinion that the defendant in her then state was unfit to practice all aspects of nursing. Dr Zerk noted the defendant’s history of depression and her need for intensive support. The report records that the defendant had in the past been detained on more than one occasion under the Mental Health Act 1993 (SA). It was following the provision of this report that the defendant was most recently suspended from nursing practice.
The further reports tendered supported Mr Hare’s opinion that an immediate custodial term would be detrimental to the defendant’s mental state and prospects of recovery.
Dr Keast in her report outlined the impact on the defendant of the two nights spent in custody before being released on bail pending appeal. The trauma triggered by her imprisonment was associated with the defendant’s chronic and severe childhood abuse. Dr Keast made the following observations in relation to the impact of a 10 week term of imprisonment:
Thus given the trauma expected to be triggered, one would predict that a custodial sentence of 10 weeks imprisonment would have an extremely detrimental impact upon [the defendant’s] mental state. Specially, it could be predicted that [the defendant] would likely to experience: dissociative-like symptoms such as feeling numb, disorientated, overwhelmed and unable to cope; re-experiencing symptoms such as flashbacks of the perceived trauma in prison and of her childhood abuse; and markedly exacerbated anxiety and depression symptoms – including suicidality. It is difficult to predict the duration of the aftermath, however such complicated trauma is time-intensive to treat with the exacerbation of symptoms likely to continue for an extensive period of time, possibly months or even years.
Dr Keast observed that in addition to the immediate impact on the defendant’s mental state outlined, the risk that the defendant may lose her housing and become homeless and the interruption to the support networks which she has begun to build, would also significantly impact on the defendant’s mental functioning, concluding:
In summary, extended incarceration is likely to have a significantly detrimental impact on [the defendant’s] mental functioning, hence markedly impacting her ability to function within the community upon her release and greatly increasing the practical and therapeutic support services that she will require.
Dr Lukacs report similarly outlined that a custodial term would cause the defendant significant distress and confirmed the opinions expressed in the report of Mr Hare and Dr Keast with respect to the defendant’s ongoing problems with depression.
The report of Mr Reid also confirmed these matters, but significantly, provided an insight into the defendant’s neuropsychological status and any cognitive deficits.
In relation to cognitive or intellectual issues, Mr Reid noted:
I was aware the court was see[k]ing a neuropsychological assessment and report on [the defendant] and I was also aware that throughout the one hour interview with her she was often confused and had difficulty in answering questions in an appropriate and continuous manner. She often asked for questions or issues to be repeated.
With respect to the neuropsychological examination of the defendant, Mr Reid summarised as follows:
Current neuropsychological examination does reveal a picture of cognitive difficulties in a person who has an underlying above average intellectual level. Although she does have an above average immediate attention span or working memory span, her ability to learn and retain larger amounts of information is curtailed, even when this information is presented in a very structured form, when she has to deal with more complex or multifaceted forms of information, she has difficulty comprehending this and becomes confused. This was evident on a range of neuropsychological tests and clearly has an adverse influence on her short term memory in general.
In addition, [the defendant] has difficulty in manipulating any complex information or undertaking any form of multitasking. Again she becomes confused and she finds this quite embarrassing.
Overall, the picture of cognitive impairment relates to a difficulty in the effective information processing of more complex information, despite her above average intellectual level.

Mr Reid considered that it would be “highly probable” that the defendant was likely to have been suffering such deficits in her cognitive functioning at the time of the offending, continuing:
…Although during 2007 she was no longer abusing prescription drugs, there is at least a thirty year history of such abuse and I believe the adverse effects of this would have been well entrenched and probably permanent. This was also a period in her life where she describes being very profoundly depressed due to her “horrific divorce” as well as the more recent deaths of both of her parents. This was also a period when she was consuming excessive amounts of vodka and I believe it is probable that with all of these factors combined at that time, she would have presented as a very confused, withdrawn and depressed person. With the addition of her alcohol overuse during that period of time, it is probable that her general cognitive status was indeed, worse than currently assessed.
Mr Reid concluded that in his opinion, having regard to his assessment of the defendant and the other information provided, it is imperative that the defendant receive ongoing and appropriate treatment for her condition. Mr Reid agreed with the comments of Ms Otello with respect to the forms of treatment and support that are appropriate and the fact that the defendant remains “extremely vulnerable” if such treatment and supports are withdrawn or not maintained appropriately. Finally with respect to imprisonment, Mr Reid made the following comments:
Notwithstanding any directions made by the court, if [the defendant] were to spend a period of time in prison, I believe this has the potential to profoundly exacerbate her underlying depressed mood. I believe that under such circumstances, she would require ongoing observation regarding her depression and her potential suicide risk.
Following the tendering of the further reports, counsel for the defendant made further submissions. It was said that the reports illustrate that the defendant was in a very depressed state during the period of the offending. That state was compounded by her abuse of alcohol. It was said that it was apparent that the defendant was not coping at that time and was in dire need of treatment and counselling. Counsel submitted that there existed a clear connection between the defendant’s mental illness and her offending. It was contended that the reports illustrated that the defendant’s mental state was such that she had a reduced capacity to act in her own best interests. It was submitted that the various reports consistently highlighted the vulnerability of the defendant and her fragile mental health and that in these circumstances, an immediate custodial term was inappropriate.
Counsel further brought to the Court’s attention the fact that the defendant was willing and able to make full reparation to the Commonwealth. It was submitted that the debt of approximately $14,000.00 as at the date of the appeal could be paid by the defendant as she could access her superannuation fund to do so. The payment would substantially reduce that fund.
As discussed above, counsel for Centrelink did not oppose the receipt of the further reports by the Court. However, it was submitted that those reports only reiterated what was expressed in the opinion of Mr Hare and that report was before the Magistrate at the time of sentencing. Although it was said that the new reports did not provide any fresh insight beyond the earlier reports, it was conceded that the full extent of the defendant’s cognitive impairment as assessed in the report of Mr Reid, was not before the Magistrate. It was accepted that the reparation anticipated in this case, although late, was relevant as repaying the losses sustained, but also as demonstrating some contrition and remorse. It was further accepted that suspension of the entire sentence in this case would be open to this Court in the exercise of its discretion.
The Role of the Appeal Court
Before embarking on a consideration of the matter, it is appropriate to make a number of observations in relation to an appeal to this Court.
Rule 286 of the Supreme Court Civil Rules 2006 (SA) provides that the appeal to this Court is by way of rehearing:[2]
[2]    Prior to January 1 2010 these provisions were found in rule 292 of the Supreme Court Civil Rules 2006 (SA).
(1)     An appeal is to be by way of rehearing (unless the law under which the appeal is brought provides to the contrary).
(2)     Subject to any limitation on its powers arising apart from these rules, the Court may determine an appeal as the justice of the case requires despite the failure of parties to the appeal to raise relevant grounds of appeal, or to state grounds of appeal appropriately, in the notice of appeal.
(3)     Subject to any limitation on its powers arising apart from these rules, the Court may—
(a)draw inferences of fact from evidence taken at the original hearing and, in its discretion, hear further evidence on a question of fact;
(b)amend or set aside the judgment subject to the appeal and give any judgment that the justice of the case requires;
(c)     remit the case or part of the case for rehearing or reconsideration;
(d)     make orders for the costs of the appeal.
An appeal by way of rehearing does not involve a completely fresh hearing by the appellate court of all the evidence. Rather, the court proceeds on the basis of the record and any fresh evidence that it chooses to admit.[3] Although the reports of Dr Keast and Dr Lukacs in some respects reiterate the earlier opinion of Mr Hare, the report of Mr Reid sheds significant light on the defendant’s mental state. The analysis of the defendant’s cognitive impairment, a matter existing at the time of sentencing, provides insight into the defendant’s background and ultimate criminality and constitutes admissible evidence on the appeal. As King CJ observed in Smith:[4]
The proper purpose of fresh evidence on an appeal against sentence is to bring before the court facts which were in existence at the time of the imposition of sentence but were not known to the sentencing judge or to explain facts which were before the sentencing judge so as to put them in a new light.
[3] Fox v Percy (2003) 214 CLR 118 at [22].
[4] R v Smith (1987) 44 SASR 587 at 588; These observations were confirmed by Doyle CJ in R v Brain (1999) 74 SASR 92 at [86].
In the circumstances of the within proceeding it is appropriate to consider the sentence afresh, having regard to the further evidence.
The Merits
The defendant’s offending the subject of the appeal was serious. It is well recognised that offences involving the defrauding of the social security system are serious and will usually warrant a term of imprisonment. In Kovacevic v Mills,[5] Doyle CJ, Mullighan, Bleby and Martin JJ in their joint judgment assessed the earlier remarks of King CJ in Cameron[6] in relation to the importance of protecting the integrity of the social security system, and observed:[7]
In our opinion King CJ was right to emphasise in Cameron the responsibility of the courts to protect the integrity of the social security system, and the need for a firm approach to offences involving sustained and deliberate fraud. In particular, the Court must do what it can to deter such offending. Offences of the type in question are common. The fact that such offending occurs over a longish period of time demonstrates that the offending is calculated, or at least not committed on the spur of the moment. And it is true that sustained fraud against the social security system tends to undermine it, and because of its widespread and insidious nature, to impose substantial costs upon the community.
[5]    Kovacevic v Mills (2000) 76 SASR 404 at [40]; see adoption of these remarks in R v Thomson [2009] SASC 237 at [17]-[18] (Kelly J, with whom Bleby & David JJ agreed).
[6]    R v Cameron (1993) 171 LSJS 305.
[7]    Kovacevic v Mills (2000) 76 SASR 404 at [37].
Their Honour’s went on to consider the correct approach to sentencing with respect to offences of that nature:[8]
In our opinion the proper approach to sentencing is better reflected by saying that in a case of the type referred to by King CJ, an order for imprisonment, with at least some of the imprisonment actually to be served, is ordinarily likely to be required. This is because the commission of a number of offences of fraud over a period of time makes imprisonment appropriate even for a first offender, because of the seriousness of the offending. The same matters may require that at least part of that term of imprisonment actually be served, even in the case of a person with no previous convictions. But there is still a need to consider all aspects of the matter, and to consider the interests of society and of the offender in the rehabilitation of the offender. Also, in an appropriate case, there may be room for the exercise of mercy and leniency: see Webb v O'Sullivan [1952] SASR 65 per Napier CJ at 66 and R v Osenkowski (1982) 30 SASR 212 at 212-213.
[Emphasis added]
[8] Kovacevic v Mills (2000) 76 SASR 404 at [40].
Doyle CJ, Mullighan, Bleby and Martin JJ further discussed the particular relevance of deterrence when sentencing for fraud against the social security system:[9]
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.
[Emphasis added]
[9] Kovacevic v Mills (2000) 76 SASR 404 at [43] following agreement with the comments made in Keeley v Department of Social Security (unreported, Supreme Court, SA, Mullighan J, No 1093 of 1993, 30 July 1993).
Finally, there Honours made the following qualifying observations with respect to the importance of imprisonment in sentencing for these offences:[10]
There is one further thing that should be said. While imprisonment is likely to be required, it is preferable not to say that a case must be exceptional before a different approach is taken. For example, some offenders in this area are persons whose circumstances are extremely difficult, indeed distressing. An offender might be virtually destitute, with dependants to support. An offender might act as a result of domestic pressures that few people could withstand. That might be a circumstance, coupled with other circumstances, that warrants a more merciful approach in imposing sentence, even though it is a circumstance which is not wholly exceptional, because it tends to recur with this type of offending. It is for that reason that it is safer to say that imprisonment is the starting point, rather than that the case must exhibit exceptional features before a court can properly refrain from making an order for imprisonment. In saying this we do not intend to undermine our earlier statement that in cases of sustained and deliberate fraud, imprisonment is likely to be required.
[10] Kovacevic v Mills (2000) 76 SASR 404 at [45].
The defendant’s history as outlined in the reports indicates that the defendant has a lengthy history of sustained problems with mental health and other personal problems. As Mr Reid’s report makes clear, the defendant suffers from cognitive impairment which causes difficulty for her in effectively processing more complex information. The reports indicate that she was mentally unwell at the time of the offending. She was depressed and struggling financially at the time. Although she was not abusing drugs at the time, the adverse effects of the previous thirty year history of such abuse were likely entrenched and, as Mr Reid observed in his report, probably permanent. Further, at the time of offending the defendant was abusing alcohol. The defendant had recently lost both parents and had suffered what she described as a “horrific divorce”. At the time of the offending the defendant had little to no assistance or support from either friends or family. The defendant had little contact with her children and had few friends. The defendant’s mental state has been of such a nature that she is unfit to continue working as a nurse and has been suspended from practice.
The reports further demonstrate that since the time of the offending, the defendant has made substantial steps in her rehabilitation. In addition, the defendant is now receiving assistance and has a level of support not previously experienced. This has enabled her to make progress in her rehabilitation. As the report of Mr Reid indicates, the effect of imprisonment would have the potential to profoundly exacerbate her underlying depressed mood and potentially cause her to become suicidal. The effect of imprisonment would be to significantly undermine the progress to rehabilitation made by the defendant.
The defendant’s mental illness is relevant to the sentencing process in a number of ways. In Wiskich[11] Martin J, with whom Prior and Williams JJ agreed, adopted the following passage of the Victorian Court of Appeal in Tsiaras:[12]
Serious psychiatric illness not amounting to insanity is relevant to sentencing in at least five ways. First, it may reduce the moral culpability of the offence, as distinct from the prisoner's legal responsibility. Where that is so, it affects the punishment that is just in all the circumstances and denunciation of the type of conduct in which the offender engaged is less likely to be a relevant sentencing objective. Secondly, the prisoner's illness may have a bearing on the kind of sentence that is imposed and the conditions in which it should be served. Thirdly, a prisoner suffering from serious psychiatric illness is not an appropriate vehicle for general deterrence, whether or not the illness played a part in the commission of the offence. The illness may have supervened since that time. Fourthly, specific deterrence may be more difficult to achieve and is often not worth pursuing as such.
Finally, psychiatric illness may mean that a given sentence will weigh more heavily on the prisoner than it would on a person in normal health.
[11] R v Wiskich (2000) 207 LSJS 431 at [29].
[12] R v Tsiaras [1996] 1 VR 398 at 400.
The impact of a mental condition on the relevance of deterrence was discussed in Director of Public Prosecutions v Bannam[13] where Young CJ, with whom Fullagar and King JJ agreed, observed:
…It has been said by this Court in cases such as Mooney [1978] 2 Crim LJ 351 and Anderson [1981] VR 155, that where an offender adduces evidence in support of a plea in mitigation to the effect that he was mentally ill at the time of the commission of the offence, whether by establishing legal insanity or mental illness short of legal insanity, a sentencing judge in considering personal and general deterrence on the one hand and rehabilitation on the other hand may take into account the offender's mental condition, not by way of any reduced responsibility for the offence but by way of giving little weight to general deterrence, such an offender not being an appropriate medium for making an example to others. …
[13] Director of Public Prosecutions v Bannam (1985) 14 A Crim R 475 at 478.
In accordance with the comments in Kovacevic,[14] the defendant’s mental condition at the time of offending and the steps taken to rehabilitate since that time are matters relevant to the consideration of an appropriate sentence. The circumstances of the defendant put the defendant’s offending in a context which warrants a more merciful approach. In particular, as discussed in the authorities above, although deterrence is generally considered to be of particular importance when sentencing for social security fraud, having regard to the defendant’s mental state, deterrence is of less relevance in the circumstances of this case.
[14] Kovacevic v Mills (2000) 76 SASR 40.
The defendant’s offer of full reparation, although late, is also of relevance in assessing the appropriate sentence to be imposed. Section 16A(2) of the Crimes Act 1914 (Cth) outlines the matters to be considered by a sentencing court, and relevantly provides:
(2) A court, in determining sentence for an offence, should have regard to such of the following matters as are relevant and known to the court:
…
(e)any injury, loss or damage resulting from the offence;
(f)the degree to which the defendant has shown contrition for the offence—
(i)by taking action to make reparation for any injury, loss or damage resulting from the offence; or
(ii) in any other manner;
Sections 10(1)(e) and 10(1)(f) of the Criminal Law (Sentencing) Act 1988 are in exactly the same terms.
The relevance of reparation in the context of social security fraud was remarked upon by Doyle CJ, Mullighan, Bleby and Martin JJ in Kovacevic v Mills:[15]
[15] Kovacevic v Mills (2000) 76 SASR 404 at [81]; those remarks were adopted in Slowiak v Director of Public Prosecutions (2000) 210 LSJS 100.
…Pursuant to s 16A(2)(f)(i), the court is obliged to take into account any action by the appellant to make reparation in the context of contrition. As has been mentioned, the total amount received has now been repaid. It may be said that in arranging for reparation to be made, the appellant was doing no more than meeting an obligation imposed by law and repaying what he had illegally received by his own conduct. It should also be said that offenders cannot buy their way out of severe punishment by repaying what they should never have received. However, the Courts are obliged to regard reparation as a positive matter so far as an offender is concerned. In SA Police v John (1995) 181 LSJS 20, King CJ, with whom the other members of the Court agreed, said (at 22):
“The fact that somebody has made the sacrifice necessary to enable full restitution to be made is an important consideration and, of course, this court encourages that course to be taken.”
There the court was sentencing under State law but the relevant provisions in the Criminal Law (Sentencing) Act 1988 (SA) are the same: see s 10(f). There are cases where reparation has been the decisive factor in the exercise of the discretion to suspend a custodial sentence: see R v Robertson (1984) 115 LSJS 51. In that case, much like the present case, reparation was made after sentence was imposed and pending appeal. King CJ, with whom the other members of the court agreed, said, when referring to reparation as the new factor (at 53):
“The new factor is important in another way because it shows that the appellant has made use of the time which he has had since he has been on bail to rehabilitate himself by working, and working hard, and making good use of the money which he has earned for the benefit of those whose money he had taken. This augurs well for his rehabilitation and gives this Court some ground for extending a leniency to him which was not available to the learned sentencing judge. I think that the combination of these two aspects of the new factor is sufficient to enable this court to intervene, bearing in mind that the appellant was in gaol from the date upon which he was remanded for sentence, 13 March 1984, to the date on which he was released on bail, 9 May 1984, a period of two months.”
In Radjevic v Police (1997) 67 SASR 478 Debelle J regarded reparation favourably even though, as here, it was made from money borrowed.
In our view, the making of reparation is an important factor in the present circumstances and it should be acknowledged in a positive way in the sentencing process. Standing alone, it should not be regarded as decisive, but along with the other matters which have been mentioned, it justifies an order for immediate release.

The full reparation offered by the defendant is relevant both for the fact of being a mitigating factor on its face and reducing or mitigating the loss caused by the offence, but also as demonstrating contrition or remorse. In Allen[16] in discussing the effect that full restitution should have on the sentence to be imposed, the Queensland Court of Criminal alluded to the dual relevance of reparation. Jerrard JA observed:[17]
[T]he sentences imposed in [previous decisions] do demonstrate a consistent recognition by this Court of the significant benefit that restitution in full actually gives to victims of dishonest behaviour and to the community.
Restitution in full is a means of demonstrating that crime need not pay and sometimes does not pay and restitution can also be evidence of remorse quite independently from the benefit that it gives to the victim. That benefit is appropriately extended to the person being sentenced usually by significant reduction in any actual term of imprisonment imposed.
In this matter I consider that [the appellant’s] significant position of trust does make the head sentence of four years appropriate but the fact that restitution in full was made and made by the sale of his family’s home, means that the period of actual imprisonment to be served is manifestly excessive when compared to the other decisions of this Court and relatively recent ones too, to which I have referred.
[16] R v Allen [2005] QCA 73.
[17] R v Allen [2005] QCA 73 at [11].
In agreeing with the orders proposed by Jerrard JA, McMurdo P observed:[18]
Whilst Courts would never allow wealthy offenders with the capacity to pay compensation to buy their way out of an appropriate custodial sentence, restitution is, as the respondent concedes, a relevant mitigating factor in that it compensates the victim and benefits society and is often, as here, a tangible demonstration of genuine remorse.
[18] R v Allen [2005] QCA 73 at [12].
In Matulich, following a review of relevant authority I adopted these observations and further summarised the following relevant principles:[19]
Statutory recognition has been given to the relevance of restitution in the sentencing process through sections 10(1)(e) and 10(1)(f) of the Sentencing Act.
These statutory provisions provide a recognition of the common law principles identified in Robertson.
A sentencing court, as observed in Kovacevic, must treat restitution as mitigatory. This is because the making of restitution impacts directly on the extent of any loss suffered, and must be brought to account by reason of section 10(1)(e).
The circumstances under which restitution is made may demonstrate contrition and remorse. These are matters of mitigation. As explained in Robertson, this is because contrition and remorse suggest that there are good prospects for rehabilitation.
As observed in John, O’Keefe and Allen, restitution may be of particular significance if accompanied by circumstances of personal sacrifice. Such circumstances may lead to the suspension of a term of imprisonment, or alternatively may operate to substantially reduce the time to be spent in custody.
These principles were adopted by the Court of Criminal Appeal in Stubberfield.[20]
[19] Matulich v Police (2007) 252 LSJS 219 at [30], reviewing R v Robertson (1984) 115 LSJS 51; Radjevic v Police (1997) 67 SASR 478; Kovacevic v Mills (2000) 76 SASR 404; SA Police v John (1995) 181 LSJS 20; O’Keefe (1992) 60 A Crim R 201; R v Allen [2005] QCA 73.
[20] R v Stubberfield [2010] SASC 9 at [20].
Although the defendant’s offer of reparation may be characterised as late, it is still relevant and significant. The fact of full restitution demonstrates that the defendant has accepted responsibility for her actions and her willingness to make amends. That acceptance of responsibility further indicates the progress made by the defendant in her rehabilitation. Furthermore, the reparation is significant as it recompenses in full the loss suffered by Centrelink.
Finally, it is relevant to note that the defendant has minimal prior offending. Her relevant antecedents include two offences of larceny arising out of shoplifting offences in 1993. No conviction was recorded on the first offence. The second of those offences breached a bond imposed with respect to the first. As a consequence a conviction was recorded for that second offence and a further bond imposed. That bond was not breached and no further offending occurred until the offending the subject of the within proceeding.
In the circumstances as outlined, although a sentence of imprisonment was appropriate, the defendant’s mental condition and underlying cognitive difficulties when committing the offences, warranted suspension of the entire sentence of imprisonment imposed. The defendant’s circumstances demonstrate that she requires both assistance and supervision. That is best achieved by imposing a sentence which enables supervision by mental health professionals. A period of supervision with support mechanisms and treatment programs in place to suit the defendant’s circumstances in this proceeding, is appropriate. In that respect, section 20 of the Crimes Act 1914 (Cth) provides for the conditional release of offenders after conviction:
(1) Where a person is convicted of a federal offence or federal offences, the court before which he or she is convicted may, if it thinks fit:
(a)by order, release the person, without passing sentence on him or her, upon his or her giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he or she will comply with the following conditions:
(i)that he or she will be of good behaviour for such period, not exceeding 5 years, as the court specifies in the order;
…
(iv)that he or she will, during a period, not exceeding 2 years, that is specified in the order, comply with such other conditions (if any) as the court thinks fit to specify in the order, which conditions may include the condition that the person will, during the period so specified, be subject to the supervision of a probation officer appointed in accordance with the order and obey all reasonable directions of a probation officer so appointed; or
(b)sentence the person to imprisonment in respect of the offence or each 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 in respect of that offence or those offences that is calculated in accordance with subsection 19AF(1).
…
(4) Where an order is made under subsection (1) in respect of a person, the court shall, as soon as practicable, cause the order to be reduced to writing and a copy of the order to be given to, or served on, the person.
…
Conclusion
I consider it appropriate to confirm the order of imprisonment of 12 months. However, it is appropriate to allow the appeal for the limited purpose of ordering pursuant to section 20(1)(b) of the Crimes Act the release of the defendant forthwith upon her giving security by recognizance that she be of good behaviour for five years. That recognizance is to be supervised for a period of two years. It is to be a condition of the recognizance that the defendant follow the directions of her probation officer.
The appeal is allowed.