Vargess v Hughes - [2017] WASC 291

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CRIMINAL

CITATION: VARGESS -v- HUGHES [2017] WASC 291

CORAM: ALLANSON J

HEARD: 21 SEPTEMBER 2017

DELIVERED : 21 SEPTEMBER 2017

FILE NO/S: SJA 1040 of 2017

BETWEEN: KEVIN VARGESS
Appellant
AND
JONATHAN PETER HUGHES
Respondent

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE G MIGNACCA-RANDAZZO
File No  :PE 6558 of 2017, PE 6559 of 2017, PE 6560 of 2017, PE 6561 of 2017, PE 6562 of 2017, PE 6563 of 2017, PE 6564 of 2017, PE 6565 of 2017, PE 6566 of 2017, PE 6567 of 2017, PE 6568 of 2017, PE 6569 of 2017, PE 6570 of 2017, PE 6571 of 2017, PE 6572 of 2017, PE 6573 of 2017, PE 6574 of 2017, PE 6575 of 2017, PE 6576 of 2017, PE 6577 of 2017, PE 6578 of 2017, PE 6579 of 2017, PE 6580 of 2017, PE 6581 of 2017, PE 6582 of 2017, PE 6583 of 2017, PE 6584 of 2017, PE 6585 of 2017, PE 6586 of 2017, PE 6587 of 2017, PE 6588 of 2017, PE 6589 of 2017, PE 6590 of 2017, PE 6591 of 2017

Catchwords:

Criminal law - Appeal against sentence - Where multiple fraud offences - Whether only imprisonment justified - Turns on own facts

Legislation:

Criminal Code Act 1913 (WA), s 409
Sentencing Act 1995 (WA), s 6, s 54, s 58, s 76, s 77, s 80

Result:

Leave to appeal granted
Appeal on ground 1 allowed
Sentence of imprisonment set aside
Appellant resentenced

Category: B

Representation:

Counsel:

Appellant: Ms S H King
Respondent: Ms G N Beggs

Solicitors:

Appellant: Legal Aid (WA)
Respondent: Director of Public Prosecutions (WA)

Case(s) referred to in judgment(s):

DC v The State of Western Australia [2014] WASCA 121
El Rakhawy v The Queen [2011] WASCA 209
Long v Mayger [2004] WASCA 41; (2004) 142 A Crim R 289
Magdi v The State of Western Australia [2010] WASCA 234
McNamara v The State of Western Australia [2010] WASCA 193
Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610
R v Alimic [2006] VSCA 273
R v Baldock [2010] WASCA 170; (2010) 203 A Crim R 214
Roffey v The State of Western Australia [2007] WASCA 246
Wilson v The State of Western Australia [2010] WASCA 82
ALLANSON J:
(These reasons were given orally and have been edited from the transcript.)

Kevin Vargess

On 25 May 2017, Mr Vargess was convicted in the Magistrates Court on 34 charges of gaining a benefit with intent to defraud, contrary to s 409(1)(c) of the Criminal Code. Mr Vargess pleaded guilty.
The offences were committed between 13 July 2013 and 23 August 2015. The statement of material facts was brief. The prosecutor advised the court that only the date and the value of the benefit received changed between the charges. The substance of each offence was that Mr Vargess submitted an online claim to Medibank Private, claiming that he received a medical service when he had not received that service. He was paid a benefit.
Mr Vargess was represented. His counsel advised the court that Mr Vargess was in custody on other matters for which he had not been granted bail. He had been in custody since the last week of September 2016. Those matters are to go to trial in the District Court in early 2018.
In mitigation, the court was advised that Mr Vargess was made redundant in 2013, and was without work. In 2013, he had entered a de facto relationship. He and his partner had three children, one born in the relationship.
The facts accepted before the sentencing magistrate were that Mr Vargess and his partner both have long term physical conditions that required treatment. One of the children was having regular speech therapy. At the hearing, defence counsel said:
A problem arose because he lost his employment, and there were limits on how many claims he could make for each of those treatments per year per family member. So what he was doing was - the three of them were accessing those treatments. He would then go on to the Internet and make a claim for a different form of treatment that they have not reached the cap or the limit to.
Over the two year period of the offending, Mr Vargess made fraudulent claims on the health insurer by which he received benefits to the value of $6,843.13. The amounts received in single offences varied between $48.90 and $598.30.
In submissions on appeal, counsel for Mr Vargess sought to correct the facts of the offending. The correct facts, it is now said, are that Mr Vargess claimed the rebate for the correct treatment but claimed under a different family member's name - for example, by claiming the rebate for speech therapy when the cap was reached by entering that a different child had received that treatment. The corrected facts, if accepted, would not alter that he was claiming a rebate which he knew he was not entitled to.
The offending stopped when Mr Vargess obtained work in 2015. He was charged in January 2017.
Counsel for Mr Vargess submitted that because Mr Vargess was in custody on other matters, the dispositions available were limited to a term of imprisonment or a fine. Counsel pressed for a fine. In particular he stressed the circumstances that led to the offending, and that the offences were not for the purpose of obtaining material goods or luxury items, but to provide for the health needs of his family.
The prosecution stressed the number of offences, and the period over which they were committed. The prosecutor submitted that a term of imprisonment was appropriate to give effect to general and specific deterrence.
His Honour referred to the practical and legal reasons that excluded a community order. But neither the parties nor the court seem to have considered whether a sentence of imprisonment, suspended under s 76 of the Sentencing Act, should be imposed.

The sentence

The magistrate imposed sentences of imprisonment for each offence. He found, specifically, that Mr Vargess was not of good character. He also found that the offences were ones of 'clear intent, clear fraudulent means, deliberately so, systematically so …'
His Honour stated that imprisonment was a sentence of last resort, but fines were not appropriate. They did not reflect the seriousness of the offence, or the need for general deterrence, bearing in mind the number of offences, the period of time over which they were committed and the systematic way in which they were committed. His Honour said:
I've not focused necessarily on the individual amounts, but looked at this globally dishonest pattern of offending. Even if you weren't in custody, having had bail refused, I would form the view that a community order is not appropriate … I have formed the view that the offences are so serious that a term of imprisonment is justified.
After a discount of 20% for the plea, his Honour determined that for each offence there would be a sentence of imprisonment of 6 months. Two of those sentences were made cumulative, the remainder concurrent. The result was a sentence of 12 months' immediate imprisonment, with eligibility for parole.

The grounds of appeal

Mr Vargess appeals on two grounds.
1.The sentences were individually manifestly excessive and in total disproportionate to the total criminality having regard to the circumstances of the offences, the personal circumstances of the appellant and sentencing standards.
2.The learned Magistrate erred by not considering suspending the term of imprisonment that was imposed.
The appellant does not identify any patent error in his Honour's sentencing remarks other than that in ground 2.

Ground 1

Ground 1 alleges two errors: first, that each sentence was manifestly excessive; second, that the total sentence is disproportionate to the total criminality. Both are species of implied error. This court cannot intervene unless it is satisfied that the individual sentence or the total effective sentence is unjust or unreasonable: Wilson v The State of Western Australia [2010] WASCA 82 [2].
In DC v The State of Western Australia [2014] WASCA 121 at [40] ‑ [41], Mazza JA said:
The allegation that a sentence is manifestly excessive is governed by the well-known principles relating to appellate intervention in discretionary decision-making, described in House v The King (1936) 55 CLR 499. The appellant must establish that the sentence was 'unreasonable or plainly unjust', thus enabling the appellate court to infer error in the exercise of the sentencing discretion: Barbaro v The Queen [2014] HCA 2 [26].
The orthodox approach to the analysis of an allegation of manifest excess is to examine it having regard to the maximum penalty, the standards of sentencing customarily observed, the place which the criminal conduct occupies in the scale of seriousness of crimes of the type in question and the personal circumstances of the offender: Chan v The Queen (1989) 38 A Crim R 337, 342 [40] - [41].
The allegation that the overall sentence is disproportionate relies on the first limb of the totality principle. That principle requires a judge or magistrate who is sentencing an offender for more than one offence to ensure that the total effective sentence bears a proper relationship to the overall criminality of all the offences viewed in their entirety, having regard to all of the circumstances of the case, including those referable to the offender personally: Roffey v The State of Western Australia [2007] WASCA 246 [24] - [26].
Counsel for Mr Vargess submitted that there is no generally appropriate type of sentence for fraud, and the circumstances and seriousness of the offence can differ widely. Counsel submitted that an offender who commits a fraud of a similar level to this offending, without relevant history and without breaching court orders, would ordinarily receive a non-custodial disposition.
Counsel referred to cases, in some of which non-custodial sentences had been imposed for offences of fraud. None of them is comparable on the facts. Ultimately, the submission is an assertion that having regard to the plea, the absence of a record of dishonesty, and the fact that Mr Vargess ceased offending when his financial position improved, a non-custodial sentence should have been imposed. Counsel referred also to the value of the benefit received being comparatively small in total, and small in individual offences.
The respondent submits that the offending was 'protracted, persistent and sustained'; that Mr Vargess was fully aware his conduct was fraudulent; and that the offending struck at the integrity of Medibank's online claims system. It is not disputed that Mr Vargess continued his behaviour over about two years, and that he was aware his conduct was fraudulent. The submission about the 'integrity' of the online claims system echoes the magistrate's statement that using the online system in the way that Mr Vargess did 'erodes the efficiency and the reliability and integrity' of a system that is designed to facilitate making claims.
In the absence of truly comparable sentences, ground 1 must be approached as a question of principle. The court must have regard to the principles set out in section 6 of the Sentencing Act.
First, the sentence imposed must be commensurate with the seriousness of the offences, taking into account the statutory penalty, the circumstances of their commission, including the vulnerability of any victim, any aggravating factors, and any mitigating factors.
The penalty for an offence against s 409 includes imprisonment for 7 years. On summary conviction, Mr Vargess was liable to imprisonment for 2 years and a fine of $24,000 for each offence.
Mr Vargess could not claim mitigation from youth or previous good character.
The circumstances which led to Mr Vargess offending in this way ‑ unemployment and consequent financial pressure ‑ are not rare. The particular circumstance, which was not disputed, that he needed to access medical treatment for himself and members of his family, but which he otherwise could not afford, is perhaps less common. On the facts before the magistrate, the dishonesty did not continue after Mr Vargess obtained employment.
It is well established that offences involving serious dishonesty committed over a period of time and involving substantial sums of money will ordinarily result in a term of immediate imprisonment. This is because in such cases the weight to be given to general deterrence is increased and that given to personal factors is reduced: El Rakhawy v The Queen [2011] WASCA 209 [36]; R v Baldock [2010] WASCA 170; (2010) 203 A Crim R 214 [145] and Magdi v The State of Western Australia [2010] WASCA 234 [38]. The offending by Mr Vargess was over a two‑year period and was deliberately dishonest. But neither the total amount obtained, nor the individual amounts obtained in any particular offence, could be said to be substantial.
Where the offending involves a course of conduct over a long period, the sentence should reflect the totality of that conduct. This is generally done by fixing an appropriate sentence for each offence and then considering questions of accumulation and concurrency: Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610. The amount in issue in each offence is also a factor in assessing the relative gravity of the offence: R v Alimic [2006] VSCA 273 [10]. The importance of that factor for an individual sentence may be tempered by the fact that each was part of a continuing course of dishonest conduct: McNamara v The State of Western Australia [2010] WASCA 193 [13]. But it is still necessary to have regard to the place which the criminal conduct occupies on the scale of seriousness of offences of that type.
The second principle is that the court must not impose a sentence of imprisonment unless it decides that the seriousness of the offences is such that only imprisonment can be justified or the protection of the community requires it.
Looking at the whole of Mr Vargess' conduct, in my opinion it is manifestly wrong to imprison in the quite unusual circumstances of these offences. Even having regard to the number of offences, and the period of the offending conduct, I am satisfied that the sentence discloses error. The seriousness of the offending conduct is not such that only imprisonment can be justified. Deterrence is required, but fines can be significant deterrents.
I would grant leave on ground 1, and allow the appeal on that ground.

Ground 2

My conclusion on ground 1 makes it unnecessary to determine ground 2. I will, however, comment briefly.
The respondent made a limited concession that the error in ground 2, by not considering suspension, has been made out. The respondent submits, and I agree, that his Honour's sentencing remarks must be considered in the context that Mr Vargess was in custody on remand for other charges, and the submissions made to his Honour were that:
(1) the available dispositions were fine or imprisonment;
(2)community based dispositions such as a CBO or ISO were not available.
His Honour did not expressly refer to the option of a suspended term. The inference arises that - because of Mr Vargess' position on remand for other matters - he did not consider suspension as an available sentencing option. Legally, it was an option, despite the fact that the whole of the period of suspension was likely to elapse while Mr Vargess was in custody.
In accepting that the concession was properly made, I do not intend to suggest that Mr Vargess' status as a remand prisoner was irrelevant to whether suspending the term of imprisonment would meet the objectives of sentencing. In Long v Mayger [2004] WASCA 41; (2004) 142 A Crim R 289, 294 [25] Steytler J said:
The decision whether or not to suspend a sentence will ordinarily depend upon a range of factors and, as Perry J (with whom Millhouse J was in agreement) observed in R v Wacyk [1996] SASC 5622; (1996) 66 SASR 530 at 536, the exercise of the discretion 'one way or the other must turn upon a careful evaluation of the overall circumstances of the particular case, which will include consideration of the circumstances of the offending and the circumstances personal to the offender'. …
At [26] his honour set out factors which should be considered in deciding whether to suspend a sentence. The list was not intended to be exhaustive (see [29]).
The decision whether to suspend may often involve balancing the need for deterrence against the opportunity that suspension can provide for rehabilitation. The suspension of a term of imprisonment when, at the time of sentencing, the court is aware that the whole of the period of suspension is likely to elapse with the offender in custody, offers no opportunity for rehabilitation. Nor is it an effective exercise in clemency. It is difficult to see in what way the objectives of sentencing can be met by suspending imprisonment in these circumstances.

Conclusion

The appellant will have leave to appeal and the appeal will be allowed on ground 1. The sentences on each charge will be set aside and a fine imposed.
For a series of offences of this nature - subject of course to the appellant's means ‑ a substantial fine would be required. A global fine under s 54 can be imposed for offences that form part of a series of offences of the same or a similar kind. That is the case here.
In setting a fine I take into account that Mr Vargess has been in custody since 25 May 2017, a period of about 16 weeks. I will set aside the sentence of imprisonment and impose a fine of $2,000. Under s 58, I order that he be imprisoned until the fine is paid but not longer than 8 days. Had it not been for the period of imprisonment already served, the fine imposed would have been $25,000.