Walsh v Department of Social Security

[1996] SASC 5795

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA PERRY J

CWDS
Criminal law - sentencing - social security fraud - the appellants, husband and wife, appealed against the imposition of custodial terms of three and four months imprisonment respectively, imposed on admitted charges of making false statements in support of claims for Job Search Allowance - they both failed to disclose their earnings or the earnings of the other in statements to the Department of Social Security given over a number of months, with the result that overpayments were made, in the case of the husband of approximately $2,740, and in the case of the wife of approximately $4,670 - they had three young children, aged between two and eight years - medical evidence tendered on appeal was to the effect that the children were asthmatic, had been hospitalised on numerous occasions with asthmatic attacks, and took Ventolin administered by their mother - held that although systematic frauds upon the social welfare system generally warranted custodial sentences, even for first offenders, the imprisonment of both parents would operate so harshly on the children that the mother should be given the benefit of a conditional release order operating forthwith - observations as to the importance of having regard to international instruments to which Australia was party which emphasise the protection of the family as the natural and fundamental group unit of society and the need to ensure the child such protection and care as may be necessary for his or her well-being - such instruments underscore the importance of provisions such as s16A(2)(p) of the Crimes Act 1914 (Cwth) which oblige the sentencing court to consider the probable effect of any sentence on the person's dependants. Social Security Act 1991 (Cwth) s1344(1)(a) and s1347(b); Crimes Act 1914 (Cwth) s16A(2)(p) and s20; International Covenant on Civil and Political Rights Article 23; The Convention on the Rights of the Child Article 3(2), referred to. R v Cameron and Simounds (1993) 171 LSJS 305; Flavel v Venning Olsson J, 16 July 1992, unreported, judgment No S3507; Laxton v Justice
(1985) 38 SASR 376; Minister for Immigration and Ethnic Affairs v Teoh (1995) 128 ALR 353; Jumbunna Coalmine NL v Victoria Coal Miners Association (1908) 6 CLR 309; Polites v The Commonwealth and Anor (1945) 70 CLR 60; Ahmad v Inner London Education Authority (1968) 1 QB 36, considered.

HRNG ADELAIDE, 21 August 1996 #DATE 5:9:1996

Counsel for appellant:     Mr F Difazio

Solicitors for appellants: Voumard Bell

Counsel for respondent:     Mr M Loftus

Solicitors for respondent: DPP (SA)

ORDER
Appeals allowed.

JUDGE1 PERRY J
1. The appellants appeal against the sentences imposed upon them in the Magistrates Court sitting at Clare on various counts of social security fraud. They lodged separate notices of appeal, which were heard together. These reasons deal with both appeals.

2. The appellant Shaun Walsh pleaded guilty to seven counts of making false statements in support of claims for the Job Search Allowance, contrary to s1344(1)(a) of the Social Security Act 1991 (Cwth) ("the Act"). His offending occurred between 27ÊMay 1994 and 18ÊAugust 1994. The gist of the charges against him was that in each of the statements he failed to disclose his employment and income from a freight company, McArdle Freight, and failed correctly to declare his wife Melissa WalshÕs employment with and income from SA Co-Op Bulk Handling Ltd ("Bulk Handling"). As a result, he obtained an overpayment of $2,740.

3. The appellant Melissa Walsh pleaded guilty to three counts of making false statements contrary to s1344(1)(a), and eight counts of obtaining a benefit, namely, instalments of Job Search Allowance, contrary to s1347(b). of the Act. Her offending occurred between 15 July 1993 and 30 November 1993. It took the form of a failure to advise the Department of Social Security of Shaun WalshÕs employment and income, and a failure correctly to declare her own income from her employment with Bulk Handling. By reason of the offences, she obtained an overpayment of $4,668.63.

4. In both cases the learned sentencing Magistrate entered a conviction on all counts. He sentenced the appellant Shaun Walsh to three months imprisonment and the appellant Melissa Walsh to four months imprisonment. He ordered both appellants to repay to the Department of Social Security the amounts over paid.

5. Both appellants complain that the sentence imposed upon them was manifestly excessive, and that the learned sentencing Magistrate failed to have regard to the relevant sentencing criteria set out in the Crimes Act 1914 (Cwth). By an amendment which I permitted to the notices of appeal during the course of the hearing before me, both the appellants added as an additional ground a complaint that the learned sentencing Magistrate "erred in not considering or alternatively inadequately considering whether a conditional release order should be made pursuant to s20 of the Crimes Act". It was that ground which became the main focus of both appeals.

6. The appellant Shaun Walsh is now aged 26 years and the appellant Melissa Walsh 24 years.

7. The appellant Shaun Walsh made an application for Job Search Allowance on 18 April 1994, at which time he was unemployed. While receiving the allowance, on 17Ê May 1994 he commenced casual work as a truck drive with McArdle Freight. At first he was offered only two days employment. But this built up, and during the period the subject of the charges he worked approximately five days a week, albeit on a casual basis. He earned on average a gross wage per week of about $544. At the same time his wife was receiving about $269 per week from her work as a casual general hand with Bulk Handling.

8. The appellants have three young children aged respectively eight, four and a half, and two years. They had significant financial commitments.

9. It was put to the learned sentencing Magistrate on behalf of the appellant Shaun Walsh that he was prompted to continue claiming the Job Search Allowance for fear that if he did not do so and became unemployed, he would have no income for a period of weeks before the allowance would, in the ordinary course, be restored.

10. As to the appellant Melissa WalshÕs failure to disclose her husbandÕs employment and income, it was suggested that this was an oversight. As to her failure to declare fully her own employment income, it was put that she was employed on a casual basis during the relevant period, and was paid the week after she completed each Job Search form, and therefore had details of only one weekÕs earnings (which she declared) instead of two. At least, that was the explanation given by her counsel. There are obvious difficulties in accepting that the offence could genuinely have arisen in that way, at least after the first form was put in.

11. Neither of the appellants had a criminal record, and both were before the court for the first time. Both appellants claimed credit for the fact that they were voluntarily endeavouring to repay the overpayment by small fortnightly payments.

12. In the course of his remarks on penalty, the learned sentencing Magistrate observed:
    "Offences of social welfare fraud I regard as particularly serious
    having regard to a number of factors. Firstly, they are prevalent
    to the point of being absolutely rife in this country. Secondly,
    their nature - they strike at the very heart of the social welfare
    system making less funds available to the legitimate needy and they
    tend to cause divisions in society whereby legitimate recipients
    become regarded with suspicion by sections of society. Thirdly,
    they are an offence against the taxpayers of this country.There are
    certain types of offences where imprisonment is the only
    appropriate penalty, even for first offenders, as a result of the
    prevalence and nature of the offences and Social Security fraud,
    generally speaking, falls into this category - sentencing must give
    due weight not just to punishment and deterrence of the offenders
    but deterrence of the thousands of others in the community who are
    similarly inclined and anything short of an immediate term of
    imprisonment is no deterrent whatsoever to potential
    offenders.Although this is the first time before a court for both
    of you, each of you is before the court for multiple offences
    extending over some months and involving a reasonable sum of
    money.I regard immediate imprisonment as the only appropriate
    penalty. I give you credit for your pleas of guilty and reduce the
    penalty accordingly."

13. Mr DiFazzio of counsel for the appellants submitted that the learned sentencing Magistrate gave excessive weight to the need for general deterrence. Certainly, his remarks on sentence reflect concern for that aspect of the matter.

14. But it is not to be inferred from sentencing remarks, particularly, as is the case here, ex tempore remarks, that because some aspect of the matter is not expressly referred to it has not been taken into account. This was an experienced Magistrate. I would not assume that he has failed to give proper weight to matters personal to the offender simply because he did not expressly advert to all of them.

15. In any event, general deterrence will always be to the forefront in sentencing for social security fraud, at least in circumstances in which it has been committed systematically over a period of time: see R v Cameron and Simounds
(1993) 171 LSJS 305 per King CJ at 307, Flavel v Venning Olsson J, 16 July 1992, unreported, judgment S3507 and Laxton v Justice (1985) 38 SASR 376 per Olsson J at 381.

16. If each of the appeals was to be approached discretely, it could not be said that the course taken by the learned sentencing Magistrate gave rise to appealable error. It seems to me that each sentence, considered individually, was well within the sentencing discretion.

17. However, the case has one unusual feature not present in any of the various cases to which counsel made reference during the course of their submissions. That is, that the sentences, both of which were to be served forthwith, would result in three young children, the youngest only just two years of age, being separated from both of their parents during the period of their imprisonment.

18. Without opposition from counsel for the respondent, I received in evidence an affidavit of the appellant Melissa Walsh in which she deposes, inter alia, to the fact that the three children are all asthmatic; that they have been hospitalised on numerous occasions with asthmatic attacks at the Clare Hospital and the Adelaide ChildrenÕs Hospital; and that all three regularly take Ventolin which she administers by way of an electric nebuliser.

19. I also received by consent on the hearing of the appeal, a report from a medical practitioner practising at Clare. In the report he states that he has been general practitioner to the appellants for nearly ten years. He states that in that time he had come to know the family "quite well". He said:
    "I am not familiar with the details of their legal problems, but am
    concerned deeply about the effect any proposed jailing would have
    on the physical and mental well being of this family unit.I see the
    children as being particularly punished. It is unfortunate in this
    society, that some children would not be adversely affected by the
    forced removal of their parents. This is definitely not so in this
    case. I think the psychological damage in all three children would
    be profound and long lasting. They would also be placed in a
    situation of added physical danger as they have suffered from
    recurrent serious respiratory illness requiring hospital admission.
    It is my fear that if these children are deprived of parental
    contact, the early warning signs of impending illness may be
    missed."

20. In this case, it was particularly important that the learned sentencing Magistrate have regard to the combined effect of the sentences imposed upon both appellants upon the welfare of their dependant children. Common law principles of sentencing would compel consideration of that consequence. The need to have regard to that factor is referred to expressly in s16A(2) of the Crimes Act, which lists the various matters which the court must take into account in determining the sentence to be passed. One of them (subs(2)(p)) is "the probable effect that any sentence or order under consideration would have on any of the personÕs family or dependants."

21. Various international instruments which have been entered into by Australia emphasise the protection by the society and the State of the family as the natural and fundamental group unit of society (International Covenant on Civil and Political Rights, Article 23. The covenant was ratified by Australia on 13 August 1980. It appears on the statute books as a schedule to the Human Rights and Equal Opportunity Commission Act 1986 (Cwth)), and preservation of the rights of children.(The Convention on the Rights of the Child, ratified on 17 December 1990. It entered into force for Australia on 16 January 1991. See Article 3(2) "State Parties undertake to ensure the child such protection and care as is necessary for his or her well being É" The text may be found in The Rights of the Child, International Instruments (Ed Saulle) (Transnational Publishers) 1995.) Although such international instruments do not form part of Australian law (Minister for Immigration and Ethnic Affairs v Teoh (1995) 128 ALR 353 per Mason CJ and DeaneÊJ at 361), they serve to underscore the importance of provisions such as s16A(2)(p) of the Crimes Act, which, where possible, should be construed and applied consistently with them.(Jumbunna Coalmine NL v Victorian Coal Miners Association
(1908) 6 CLR 309 per OÕConnor J at 363; Polites v The Commonwealth and Anor (1945) 70 CLR 60 per WilliamsÊJ at 80-81, and Ahmad v Inner London Education Authority
(1978) 1 QB 36 per Lord Denning at 41 and per Scarman LJ at 48.) So that while we should always bear in mind the principles which find expression in relevant international instruments, particularly those which have to do with human rights, recourse to them in this case is hardly necessary, as s16A(2)(p) of the Act is clear and unambiguous in its terms.

22. It appears to me that, bearing that provision in mind, either the learned sentencing Magistrate failed to pay sufficient regard to the effect upon the appellantsÕ three young children of a custodial sentence imposed upon both parents, or, on the basis of the additional material which has been placed before me for the purposes of the appeal, recognition of the need to have regard to the dependant children, should result in intervention by way of appeal in a form appropriate to ensure that the welfare of the children is adequately protected.

23. In all the circumstances, in my opinion, that result would best be achieved by allowing the appeal of Melissa Walsh to the intent that in her case she should be given the benefit of a conditional release order under s20 of the Crimes Act.

24. I would affirm all of the orders under appeal in both cases, except that in the case of Melissa Walsh I would add an order that she be released forthwith upon her giving security by recognisance that she will be of good behaviour for a period of three years.

25. I will hear submissions from counsel for the respondent as to whether or not any other conditions should be imposed.