Zaky v R

JOHNSON J: I have had the advantage of reading the judgment of Hamill J. I agree with his Honour's reasons and proposed orders. I wish to make some brief observations concerning the use of a suspended sentence as a sentencing alternative, a matter touched upon at [29] - [35] of his Honour's judgment.

The Australian Law Reform Commission has observed, in the context of recognizance release orders under s 20(1)(b) Crimes Act 1914 (Cth) (“the Crimes Act”), that the "legitimacy of suspended sentences has historically been a matter of controversy": Report 103, Same Crime, Same Time - Sentencing of Federal Offenders (April 2006), para 7.51. The Commission proceeded to consider the utility of a suspended sentence, recommending that it should remain as a sentencing option, although it was proposed that an express power to suspend a sentence should be enacted: Recommendation 7-7.

In New South Wales, the utility of suspended sentences under s 12 Crimes (Sentencing Procedure) Act 1999 (NSW), (“the Sentencing Act”) was considered by the New South Wales Law Reform Commission in Chapter 10 of Report 139, Sentencing, (July 2013). It was noted that "suspended sentences have always been controversial": para 10.23. The competing arguments for and against the retention of suspended sentences were set out in paras 10.23 - 10.31. The Commission recommended the creation of a new sentencing alternative, a community detention order, to take the place of a suspended sentence: Recommendation 10.1. If suspended sentences were to be retained, some reforms were proposed concerning the present model in s 12: Recommendations 10.2 - 10.5.

The recommendations in these reports of the Australian Law Reform Commission and New South Wales Law Reform Commission have not been implemented. Section 20(1)(b) of the Crimes Act and s 12 of the Sentencing Act remain as the provisions allowing for suspension of terms of imprisonment.

The authorities referred to by Hamill J at [30] - [33] confirm the significant purpose to be served by this type of order, with those statements having application to such orders for both Commonwealth and NSW offences.

DAVIES J: I agree with Hamill J.

HAMILL J: This is an application for leave to appeal against a sentence imposed on Manerva Zaky (the applicant) in the District Court on Friday, 28 November 2014 by his Honour Judge King SC. The applicant was sentenced in relation to two offences of what might generally be described as fraud on the Commonwealth revenue. The reason that there were two offences was that during the period of offending the relevant legislation changed. The offending otherwise represented a continuous course of conduct.

The first offence was an offence under s 29D of the Crimes Act alleging that the applicant, between 2 August 1999 and 23 May 2001, defrauded the Commonwealth by obtaining rent assistance to which she was not entitled. The amount obtained was $4,561.66. The maximum penalty was one of 10 years imprisonment and or a fine of $110,000.

The second offence was charged pursuant to s 134.2 (1) of the Criminal Code (Cth). That offence alleged that between 24 May 2001 and 14 October 2010, the applicant dishonestly obtained a financial advantage by means of a deception from the Commonwealth. The amount obtained by the deception was $22,813.12. The same maximum prison sentence applied.

A statement of the charges themselves shows that the amounts in question were not great but that the period over which the offending took place was in excess of a decade. The facts showed that the deception was repeated on a number of occasions.

Having received the evidence and heard submissions on Friday, 14 November 2014, King DCJ adjourned the proceedings for sentence on Friday, 28 November 2014. On that latter day, he delivered comprehensive remarks on sentence. He imposed a sentence of six months on the first count and a sentence of 18 months on the second count. The second sentence was accumulated to a degree of two months of the first count. This meant that the overall sentence was one of 20 months. His Honour imposed a recognizance release order (minimum non-parole period) of 10 months under the provisions of the Crimes Act of 10 months. This means that the applicant is eligible to be released on 27 September 2015 on entering the recognizance.

The applicant relies on two grounds of appeal:

In short, the facts of the offence were that the applicant received benefits (rental assistance) to which she was not entitled over a period of around 11 years. The benefits were received as a result of a series of false representations which led the Commonwealth to believe that she was paying rent whereas, in fact, the owner of the premises in which she lived was her then husband. Her husband had a variety of aliases. This facilitated the deception. The sentencing Judge set out the facts in some detail in his remarks on sentence. The facts go back in time before the period of offending and it is unnecessary for present purposes to set out the earlier events other than to note that they placed in context the deceptions upon which the two charges were based. The facts and falsehoods upon which the charges were based were set out in the remarks on sentence as follows:

It can be seen from this short overview of the acts done during the relevant period that the deception was a sustained one and of more complexity than is often seen in cases of social security fraud. This was not a case where there was one deception at the outset, or one where circumstances changed, followed by a failure to correct the deception, or error for fear of the overpayments being uncovered. Apart from the fact that the total amount received was relatively small, this was quite a serious example of an offence in the nature of social security fraud. For these reasons, Ms Francis (who appears for the applicant) made no suggestion that the sentence was manifestly excessive in the sense that its length and content disclosed or suggested latent error.

The applicant was convicted at trial and received no benefit from a willingness to facilitate the course of justice. There was no evidence of remorse on her part. There was a belated repayment of the money by the applicant’s son but King DCJ did not consider this to be a mitigating feature but rather an attempt to mitigate penalty at a very late stage.

However, there were some reasonably compelling features in the personal circumstances of the applicant.

This included the fact that she had only one functioning upper limb as a result of her mother taking thalidomide during her pregnancy. There was also evidence in a pre-sentence report that the applicant “suffers from bilateral osteoarthritis causing chronic pain in her knees, she requires a walking stick to assist with mobility is unable to stand or sit for prolonged periods”. A letter from a medical centre confirmed a number of her physical ailments and medical conditions. King DCJ accepted this evidence and noted that his observations during the trial were that the applicant was in some discomfort as a result of her arthritis. It was submitted, and his Honour accepted, that this would make any period of custody more onerous upon her. Evidence tendered on the hearing of the appeal on the “usual basis”, confirmed that the applicant’s incarceration was more onerous as a result of her disabilities. However, this material will only inform the outcome of this appeal if error is otherwise established.

A pre-sentence report was prepared and tendered by the Crown on the sentencing hearing. The applicant was a 52 year old woman with a significant physical disability who had no previous criminal offences recorded against her. She described an “unpleasant education experience” and experienced difficulties with reading and writing. She had some employment in her past but was on a Centrelink pension at the time of sentence. She reported that she was subject to both verbal and emotional abuse in the course of her marriage.

The pre-sentencing report made an actuarial assessment of her risks and needs and posited that the applicant was a low risk of re-offending. King DCJ accepted this assessment finding that “there is a low risk of reoffending considering her age and her lack of offending other than for the 11 year period covered by these offences.”

The report also stated that the applicant would “benefit from a short period of supervision by Community Corrections”. She was assessed as suitable for a community service order and has signed the necessary undertaking to perform such work. She was “deemed ineligible” because the authorities were “unable to secure work that accommodates her physical issues”.

A matter that received little attention either at first instance or on the hearing of the appeal was the fact that the sentencing options available to the District Court were not determined, directly at least, by the provisions of the Sentencing Act. In spite of the prominence that the matter took on appeal, a “suspended sentence” under s 12 of the Sentencing Act was not (in terms) an available sentencing option. Because the District Court was exercising federal jurisdiction in relation to offences committed contrary to a Commonwealth statute, the sentencing options were governed by Part 1B of the Crimes Act. Section 20AB(1) of the Crimes Act provides:

The sentences or orders “prescribed for the purposes of this section” are found in clause 6 of the Crimes Regulations 1990 (Cth). The table in clause 6 does not include a suspended sentence.

However, this distinction has no bearing on the outcome of the present appeal. A “suspended sentence” effectively exists under another name in the Crimes Act. Section 20(1)(b) provides:

I propose to deal with the grounds of appeal on the basis that the views expressed by the Sentencing Judge applied equally to an order under s 20(1)(b) as they did to a suspended sentence.

The grounds of appeal are closely related and can be dealt with together. Each arises from remarks made by the primary Judge in the course of argument. The impugned remarks were not repeated in the remarks or judgment on sentence. That judgment was reserved and the remarks on sentence delivered two weeks after the submissions.

After the legal representative for the applicant had made his submissions, the advocate representing the Commonwealth Director of Public Prosecutions was making submissions as to the appropriate penalty. In particular the advocate made the following significant concession:

That concession prompted the sentencing Judge to make a series of statements from the bench some of which were unquestionably erroneous. First, his Honour referred to the fact that alternatives to gaol “appear to be very limited”, and that “community service is not available”. A submission by the applicant’s lawyer that an intensive correctional order (ICO) was unlikely to be available given the unavailability of community service was accepted by his Honour. The following exchange then occurred:

The sentiment behind those remarks was plainly erroneous. The respondent accepts that if those remarks reflected the final view taken by the sentencing Judge, the proceedings miscarried. The question on the appeal was whether or not the remarks ultimately informed his Honour’s decision to impose a sentence of full-time custody rather than some alternative and in particular the alternative of a suspended sentence or, more correctly, a recognizance release order under s 20(1)(b) Crimes Act.

The concession made by counsel for the respondent as to the erroneous nature of those remarks is clearly correct. What has happened in Victoria, and the reason why it has happened, was of no relevance to a proper and judicial exercise of the sentencing discretion in the applicant’s case. Further in a series of cases, this Court has made it clear that while there is an element of leniency in the suspension of a sentence, it remains a gaol sentence and an appropriate and available sentencing option. It is unfortunate that this needs to be stated yet again, but it is appropriate that I repeat comments made in previous cases.

In Regina v Zamagias [2002] NSWCCA 17 Howie J said at [32]:

R v Nahlous [2013] NSWCCA 90 Adamson J (with whom Hoeben CJ at CL and Davies J agreed) said at [86]:

In Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 Kirby J said at [74]-[76]:

Gleeson CJ and Hayne J said at [17]:

Not only were the comments of King DCJ contrary to repeated statements of principle by appellate courts, they were also contrary to a study published by NSW Bureau Of Crime Statistics And Research: Lulham, Weatherburn and Bartels, “The recidivism of offenders given suspended sentences: A comparison with full-time imprisonment” Crime and Justice Bulletin: Contemporary Issues In Crime And Justice vol 136 (September 2009) (“BOCSAR report”). That study compared recidivism rates of offenders subject to prison sentences and those who received suspended sentences under s 12 of the Sentencing Act. The report suggests that suspended sentences are a useful and important sentencing option in terms of “promoting the rehabilitation of offenders”: cf s 3A(d) Sentencing Act. The report noted at 10:

The report concluded at 13:

Since preparing the draft of this judgment I have had the opportunity to read the additional comments of Johnson J. I gratefully adopt his Honour’s review of more recent discussions concerning suspended sentences by the Australian and NSW Law Reform Commissions. I note that the findings of the BOCSAR report (see above at [34]-[35]) are referred to by the NSW Law Reform Commission in its report at [10.22].

There is no doubt that the comments of the sentencing Judge betrayed a significant error of principle. The question remains whether the remarks, occurring as they did two weeks before the remarks on sentence were delivered, reflected the final and considered view of the sentencing Judge. Ms Francis refers to the fact that at no stage did his Honour retract those views either in argument or in the course of the remarks on sentence. She also relies on the fact that his Honour did not refer to the concession that had been made by the Crown. She refers to the case of RCW v R (No 2) [2014] NSWCCA 190 at [37] where RA Hulme J (Bathurst CJ and Adams J agreeing) said:

Counsel for the respondent relies on the general principle that observations made by a Judge in the course of argument are not generally regarded as sufficient to establish error or as indicating the basis of the reasoning adopted by a Judge at first instance. He submits that his Honour’s unfortunate remarks cannot properly be seen as representing final and considered reasons for failing to suspend the sentence. He relies on the fact that the matter was not subject to an ex tempore decision following immediately upon the exchange to which the applicant refers. That was considered to be a relevant consideration in RCW v R (No 2) where the court set out two circumstances in which comments made in argument might be used in support of a ground of appeal.

The first of those circumstances was where the comments “can assist in elucidating abbreviated statements appearing in the remarks on sentence”. The second is where “during the course of submissions a judge exposes his or her reasoning and announces a concluded view which is ultimately maintained without any qualification of the reasoning in an immediately ensuing ex tempore sentencing judgment”.

The respondent submits that neither of those circumstances apply in the present case and that the general proposition stated in cases such as R v Egan [2013] NSWCCA 196 and Geddes v R [2012] NSWCCA 94 are applicable. Those cases represent strong authority, if such were needed, that the exchanges between bench and bar in the course of submissions cannot ordinarily be used in support of a ground of appeal particularly when a reasoned judgment follows after a period of adjournment.

I accept the respondent’s submission that when his Honour came to impose sentence he explained the reason that he had concluded that a full-time custodial sentence was the only available sentencing option. King DCJ said:

There is nothing to suggest that his Honours ill-considered and infelicitous comments in relation to the option of suspending sentence informed those remarks. The remarks on sentence were clear on their face and needed no elucidation by reference to what had been said during the course of the submissions. It is significant, on the authorities, that the judgment was reserved for a period of two weeks.

While a different sentencing Judge may have taken a different view, there is no submission that it was not open to King DCJ to conclude that a full-time custodial sentence was the only appropriate option in the exercise of his discretion. It is true, as Ms Francis pointed out, that the case was one that would ordinarily have been dealt with in the Local Court and that the prescribed maximum penalty would then have been two years in respect of each of the offences. However, that is a matter that the sentencing Judge specifically adverted to and took into account. The sentence itself does not suggest that there must be some reason, possibly ascertainable in comments made in the course of argument, that led the Court into erroneous disposition of the applicant’s case. The imposition of a full-time custodial sentence was in accordance with a long line of authority that “persons who abuse the system of social welfare must expect to face heavy penalties”: R v Van Tang Luu (CCA (NSW), 7 December 1994, unrep) and “a custodial sentence is to be imposed for social security fraud except in very special circumstances”: R v Purden (CCA (NSW), 27 March 1997, unrep).

For those reasons I would not uphold Grounds 1 and 2. The question of the utility of suspended sentences is an important one and I would grant leave to appeal. However, the appeal should be dismissed.

The orders that I propose are: