WorkCover Corporation of South Australia v Musolino

Case [2007] SASC 249

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

WORKCOVER CORP OF SA v MUSOLINO

[2007] SASC 249

Judgment of The Full Court

(The Honourable Justice Duggan, The Honourable Justice White and The Honourable Justice Kelly)

4 July 2007

WORKERS' COMPENSATION - OFFENCES

CRIMINAL LAW - JURISDICTION, PRACTICE AND PROCEDURE - JUDGMENT AND PUNISHMENT - ORDERS FOR COMPENSATION, REPARATION, RESTITUTION, FORFEITURE AND OTHER MATTERS RELATING TO DISPOSAL OF PROPERTY - RESTITUTION

Respondent an ex-employee of Workcover Corporation of South Australia pleaded guilty in Magistrates Court to 82 offences of obtaining and aiding and abetting the obtaining of payments by dishonest means – respondent sentenced in Magistrates Court to term of imprisonment – respondent appealed to single judge of Supreme Court whereupon sentence was suspended – prosecution appeal against suspension of sentence.

Respondent made restitution after being sentenced in Magistrates Court and during hearing of appeal to single judge - restitution made pursuant to order of magistrate under s 120(3) of Workers Rehabilitation and Compensation Act 1986 - judge on appeal gave weight to restitution in deciding to suspend sentence - extent to which restitution is a mitigating factor in these circumstances discussed.

General and personal deterrence important considerations when sentencing for offences of fraud on social security system - protection of the integrity of social security system important consideration - such considerations have bearing on term of imprisonment and whether sentence should be suspended - deterrent effect reduced when sentence suspended.

Held: Appeal allowed and order suspending sentence set aside.

Workers Rehabilitation and Compensation Act 1986 s 120(1), s 120(3); Criminal Law (Sentencing) Act 1988 s 10(1)(f); Magistrates Court Act 1991 s 42(4); Criminal Law Consolidation Act 1935 ., referred to.
Everett v The Queen (1994) 181 CLR 294; Griffiths v The Queen (1977) 137 CLR 293; Malvasso v The Queen (1989) 168 CLR 227; R v Hinton (2002) 134 A Crim R 286; R v Smith (1987) 44 SASR 587; R v Zamagias [2002] NSWCCA 17, applied.
Ferrone v Waite (1996) S5788, 23 August 1996; Kovacevic v Mills (2000) 76 SASR 404; Neill v Police [1999] SASC 270; Police v Cadd & Ors (1997) 69 SASR 150; R v C (2004) 89 SASR 270; R v Nath (1994) 74 A Crim R 115; Workcover Corporation v Jelfs (1995) S5088, 8 May 1995; Elliot v Harris (No 2) (1976) 13 SASR 516, discussed.

WORKCOVER CORP OF SA v MUSOLINO
[2007] SASC 249

Full Court:  Duggan, White and Kelly JJ

  1. DUGGAN J. The respondent pleaded guilty in the Adelaide Magistrates Court to 82 offences of obtaining and aiding and abetting the obtaining of payments by dishonest means contrary to s 120(1) of the Workers Rehabilitation and Compensation Act 1986 (“the WRCA”).  He was sentenced to imprisonment for 38 months and two weeks with a non-parole period of 19 months.  The magistrate decided not to suspend the sentence.

  2. An appeal against sentence by the respondent to a judge of this court was allowed, and the sentence imposed by…

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WorkCover Corporation of South Australia v Musolino [2007] SASC 249
Case
[2007] SASC 249
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CaseChat Overview and Summary

In WorkCover Corporation of South Australia v Musolino, the respondent, a former employee, appealed against the suspension of his sentence by a single judge of the Supreme Court. The respondent had pleaded guilty to 82 offences involving the fraudulent acquisition of payments. Initially sentenced in the Magistrates Court, his sentence was subsequently suspended by the Supreme Court judge. The prosecution appealed this decision.

The central legal issue was the extent to which the suspension of a sentence of imprisonment could be justified in cases involving fraud against the social security system. The court had to consider whether the deterrent effect of imprisonment was compromised when the sentence was suspended and whether this could justify the application of principles set out in Everett v The Queen. These principles allow for appellate intervention in sentencing decisions to ensure they are not manifestly inadequate or inconsistent.

The court held that while a suspended sentence is indeed a form of punishment, it is significantly more lenient than an immediate term of imprisonment. The deterrent effect of a suspended sentence is reduced, though not entirely eliminated. In this case, the court found that the respondent’s conduct was highly deliberate and involved considerable planning, deceit, and significant financial loss. Given the serious nature of the offending, the court concluded that the deterrent effect was crucial and that the sentence should not have been suspended. The appeal was therefore upheld, and the original sentence of imprisonment was reinstated.

This decision underscores the importance of general and personal deterrence in cases of social security fraud. It also highlights the exceptional circumstances under which appellate intervention is warranted in sentencing decisions.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

DUGGAN J WHITE J KELLY J
However, I would accept the appellant’s submission that the magistrate was clearly aware of the conduct charged against the respondent and that he did not sentence him for uncharged conduct or take such conduct into account when considering whether to suspend the respondent’s sentence of imprisonment.Conclusion When discussing considerations relevant to the exercise of the discretion to suspend a sentence the learned judge said:The courts have repeatedly and consistently emphasised that a suspended sentence is very real punishment. As observed by Bray CJ in Elliot v Harris (No 2): [12]So far from being no punishment at all, a suspended sentence is a sentence to imprisonment with all the consequences such a sentence involves on the defendant’s record and his future, and it is one which can be called automatically into effect on the slightest breach of the terms of the bond during its currency. A liability over a period of years to serve an automatic term of imprisonment as a consequence of any proved misbehaviour in the legal sense, no matter how slight, can hardly be described as no punishment.Over the ensuing decades, these remarks have been adopted, applied, reaffirmed and echoed on numerous occasions.[13] As such, the suspension of a term of imprisonment will in no way detract from the capacity of that sentence to reflect the principle of general deterrence.[12] Elliot v Harris (No 2) (1976) 13 SASR 516 at 527.[13] See for example R v Harris (2001) 122 A Crim R 241 at [42]-[48] (Gray J); R v Regan [2003] SASC 287 at [24], [27]; Vartzokas v Zanker (1989) 51 SASR 277 at 279 (King CJ); R v Jarrett (1992) 58 SASR 457 at 459 (King CJ). There can be no doubt about the appropriateness of the remarks made by Bray CJ. His Honour was there commenting on the erroneous statement by a magistrate who had said:I agree with the view currently prevailing in England that a suspended sentence is really no punishment at all. However, the judge in the present case went on to say that the suspension of a term of imprisonment will in no way detract from the capacity of the sentence to reflect the principle of general deterrence. If that statement does no more than express the view that there is an element of general deterrence in a suspended sentence it is in accordance with the observations by Bray CJ in the above passage. However, that is not to say that a suspended sentence has the same deterrent effect as an unsuspended term. It must be acknowledged that a suspended sentence is a significantly more lenient penalty than an immediate term of imprisonment.[14] The deterrent effect is reduced by suspending the sentence although not eradicated entirely. A relevant matter when considering suspension in a case such as the present is to determine whether the requirements of deterrence are of such a nature as to outweigh considerations in favour of suspending the sentence.[14] R v Zamagias [2002] NSWCCA 17 at [32]; R v Hinton (2002) 134 A Crim R 286 at [33]. In my view, the respondent’s conduct was in the more serious category of offending for offences of this nature. The respondent used knowledge acquired as a former employee of the Corporation to assist him in arranging for the false claims to be made. The offences involved considerable planning and a high level of deceit by the respondent. They were committed over a period of approximately seven months and, as the architect of the schemes which were part of the overall offending, the respondent encouraged others to become part of that offending. The amount involved in the respondent’s offences was considerable.

Ratio Decidendi

Legal Principle Established

Established by: DUGGAN J, WHITE J, KELLY J

In my view, the prospect of the respondent in the present case being required by an order of this court to serve a sentence which a judge of the court has suspended justifies the application of the Everett principles. Accordingly, intervention should be regarded as exceptional. However, justification for interference may be found in cases where there is demonstrated error and where it is “necessary to avoid manifest inadequacy or inconsistency in sentencing”.[8][8] Griffiths v The Queen (1977) 137 CLR 293; Malvasso v The Queen (1989) 168 CLR 227 at 234.Considerations relevant to social security and Workcover fraud The factors relevant to the sentencing of offenders for frauds of this nature have been referred to in a number of authorities. Those authorities stress the importance of general and personal deterrence, the difficulty of detection, the protection of the integrity of the social security system and the elements of deliberation and planning which frequently accompany the commission of such offences. These considerations have a bearing on the length of any term of imprisonment which might be imposed and whether any such term should be suspended.[9][9] Workcover Corporation v Jelfs (1995) S5088, 8 May 1995. In Ferrone v Waite[10] Perry J said:“...offences of this kind are difficult to detect and, when uncovered, deterrence must be at the forefront of the sentencing process. Commonly, an immediate custodial term would be imposed where there has been a deliberate systematic defrauding over a period of time. The suspension of any term of imprisonment imposed in such circumstances is exceptional, not because the exercise of the discretion is couched in such terms, but because of the need to recognise that in such cases general deterrence looms large.”[10] (1996) S5788, 23 August 1996. It is, of course, necessary to retain flexibility to meet the circumstances of particular cases. In the joint judgment of Doyle CJ, Mullighan, Bleby and Martin JJ in Kovacevic v Mills[11] their Honours said:Nevertheless, we cannot fully subscribe to one aspect of what King CJ said in Cameron, encapsulated in the following passage (at 307):“Nevertheless, in cases of this kind, that is to say of sustained and deliberate fraud over a period of time, the deterrent purpose of punishment must be paramount. The necessity of protecting the integrity of the social security system by deterrent penalties must take priority over other considerations.”We agree that in cases of deliberate and sustained fraud, deterrence must loom large in determining the appropriate sentence. But other matters, especially rehabilitation, must still be considered. We do not agree that deterrence must take priority over all other considerations, at least if that statement means that there is no scope for the Court to be influenced by considerations of rehabilitation in finally arriving at the sentence to be imposed. It may well be that King CJ did not mean to exclude considerations of rehabilitation, or mean to say that a sentence of imprisonment, with at least some of it to be served, must be imposed in every case of sustained and deliberate fraud. But his remarks are capable of being read as requiring an order for imprisonment, with at least some of it to be served, in virtually every case, and absent truly exceptional circumstances.[11] (2000) 76 SASR 404 at [38].