Issac v R

1. [1]

   DAVIES J: On 28 October 2022, the applicant pleaded guilty in the Local Court to one count of obtaining a financial advantage by deception contrary to s 134.2(1) of the Criminal Code (Cth). The maximum penalty for this offence is 10 years’ imprisonment.

2. [2]

   On 16 June 2023, the applicant was sentenced by Judge Colefax SC in the District Court to imprisonment for 3 years commencing 16 June 2023 and expiring 15 June 2026. His Honour also ordered that the execution of the sentence be partly suspended after a period of 16 months, on 15 October 2024, on condition that the applicant enter into a self-recognizance, without security, in the sum of $1,000 for a period of 20 months. Relevantly, the conditions of the recognizance were that the applicant be of good behaviour, and that she accept supervision of NSW Corrective Services: R v Issac [2023] NSWDC 207 (“R v Issac”).

3. [3]

   The applicant now seeks leave to appeal against the sentence upon the following grounds:

The offending

1. [4]

   The applicant was sentenced on the basis of agreed facts which can be briefly stated. Between about 20 August 2013 and 3 December 2020, the applicant falsely represented to Services Australia that she was not a member of a couple when she lodged an application for Parenting Payment Single (PPS) on 20 August 2013. She falsely represented that she was separated from her husband Ramon Audisho and that she was not otherwise a member of a couple. As a result of the deception, the applicant fraudulently obtained payments of PPS totalling $170,787.11.

2. [5]

   PPS is an income support payment for sole parents. It is payable to persons with dependent children until the date of the youngest child’s 8th birthday. A parent is eligible for PPS only if that parent is not a member of a couple.

3. [6]

   On 28 July 2007, the applicant and Mr Audisho were married. At no point were they divorced.

4. [7]

   On 15 February 2010, whilst the applicant was in receipt of Newstart Allowance Payments, the applicant called Services Australia and advised that she had separated from her husband since 8 February 2010.

5. [8]

   On 14 June 2013, the applicant and Mr Audisho’s first child was born. The child’s birth certificate recorded them as the parents and that they resided at the same address. Following the birth of that child the applicant lodged her initial claim for PPS on 20 August 2013. Thereafter, the applicant received payments of PPS.

6. [9]

   On 23 March 2017, the applicant’s and Mr Audisho’s second child was born. On 24 April 2017 the applicant lodged a new born child declaration form with Services Australia, indicating that she did not have a partner.

7. [10]

   On 5 July 2017, the applicant lodged an application for Family Tax Benefit with Services Australia in which she again indicated that she was separated, and had been since 8 February 2010. On other occasions in September 2017, May 2018, August 2018 and January 2019 the applicant informed Services Australia that she was separated and she did not know where Mr Audisho worked or who he was living with.

8. [11]

   On 11 April 2019, the applicant and Mr Audisho’s third child was born. On 15 July 2019, the applicant again contacted Services Australia regarding a benefit due to her having recently given birth. In doing so she again said that she was separated from Mr Audisho and that he had a new partner.

9. [12]

   During the period of the offending, there were 45 occasions when the applicant contacted Services Australia in relation to her payments, but at no time did she advise them that she was a member of a couple.

10. [13]

    The relationship between the applicant and Mr Audisho was first detected by way of data-match with another Commonwealth agency on 10 August 2020. A search warrant was executed on 3 December 2020 at the jointly owned property at Mount Pritchard where the applicant and Mr Audisho lived.

11. [14]

    It was ascertained that the financial affairs of the applicant and Mr Audisho were intertwined and that their financial position was very strong due to Mr Audisho’s financial position.

12. [15]

    The applicant was arrested on about 5 December 2021.

Subjective matters

1. [16]

   The applicant did not give evidence at the sentence hearing. Rather, she relied on a report from the psychiatrist, Dr Sathish Dayalan. That report along with various medical records, was tendered without objection by the Crown. Dr Dayalan was not required for cross-examination.

2. [17]

   The medical records disclose that on 14 July 2009 the applicant underwent a left mastectomy and sentinel node biopsy. Pathology demonstrated a 1.75mm grade 2 invasive cancer. The applicant subsequently underwent chemotherapy, and she was treated with Tamoxifen (an anti-oestrogen drug used for the treatment of breast cancer) for two years. Whilst undergoing the chemotherapy, the applicant was diagnosed with an overactive thyroid gland.

3. [18]

   The applicant told Dr Dayalan that she suffered from depression from the time of the cancer diagnosis in 2009. Whilst there was no contemporaneous medical evidence concerning that depression, it has subsequently been recorded in medical records in 2016 and 2019.

4. [19]

   There is some further medical evidence in 2019, shortly after the birth of her third child, of some weeks of depression. There was also medical and psychological evidence from 10 December 2020 evidencing complaints of depression from that time onwards.

5. [20]

   The applicant told Dr Dayalan that her husband had been unfaithful to her, that he had spent money on gambling and that there had been domestic violence. The applicant told Dr Dayalan that because of those matters she did not wish to be reliant on her husband, and she wished to be financially independent. It was in those circumstances that she made the false claims.

6. [21]

   On the basis of the medical records and the account given to him by the applicant, Dr Dayalan concluded that the applicant suffered from major depressive disorder with anxious distress that had been recurrent in nature. Dr Dayalan noted that thyroid conditions were endocrine disorders most commonly associated with anxiety and depression. He noted the applicant’s sense of shame associated with being diagnosed with cancer at an early age and losing her breast. He noted that she felt unsupported by her husband who was unfaithful and was losing money on gambling.

7. [22]

   Dr Dayalan said that there were some challenges to providing an opinion on the nexus between her psychiatric condition and the offending behaviour given the historical nature of the offending behaviour and the provision of misleading information at various time intervals. He considered that there was a high probability that the applicant suffered from post-partum depression around the time when she first lodged the claim for the PPS.

8. [23]

   Dr Dayalan said that the applicant’s depressive disorder had significantly impacted on her occupational functioning, and it appeared that she had resorted to offending behaviour to contain anxiety about her ability to manage if the marriage failed. He said that it was very likely that her depressive disorder impaired her ability to consider carefully the consequences of her decision.

9. [24]

   Dr Dayalan considered that the impact of incarceration would be more onerous upon her in view of her major depressive disorder with anxious distress.

Findings of the sentencing judge

1. [25]

   His Honour appeared to accept (R v Issac at [24]) that the applicant had experienced depression in 2009 until 2011 as she had asserted. His Honour then observed that there was no independent medical record of the applicant being diagnosed, or treated for, depression after 2011 until after the execution of the search warrant in December 2020.

2. [26]

   His Honour noted at [25] what was contained in a perinatal psychosocial referral of 10 December 2012 in which the applicant reported her “Husband not very supportive. Has great support from family”. His Honour then said at [26] that “after this point in the chronology some caution needs to be exercised in relation to the history you gave to Dr Dayalan”. That history included that her husband had been unfaithful, had spent money on gambling, and that the applicant and her husband struggled to manage their finances, with the result that the applicant had not wanted to be reliant upon her husband and had, therefore, made claims to receive parental allowance from Centrelink.

3. [27]

   His Honour observed at [29] that there was no independent document in evidence confirming the history given to Dr Dayalan and that the history appeared inconsistent with the financial transactions set out in the agreed facts which included the following:

4. [28]

   His Honour noted at [37] that he was unable to make any finding as to how the applicant used the fraudulently obtained funds.

5. [29]

   His Honour noted at [39] what was contained in the statement of agreed facts about the relationship between the applicant and her husband as disclosed in SMS and chat messages, and in the significant amounts of money that were spent by the applicant and her husband on luxury items.

6. [30]

   The sentencing judge noted at [40] a submission by the Crown on the question of the applicant’s mental health as follows:

7. [31]

   Of this submission, his Honour said at [41]:

8. [32]

   His Honour then held at [42] that the applicant’s condition did not reduce her moral culpability to any significant degree, particularly because there were many occasions when she had the opportunity to discontinue her dishonest conduct.

9. [33]

   His Honour found at [44] and [45] that, in the absence of sworn and persuasive evidence of contrition and remorse, he was not satisfied that the applicant was genuinely remorseful. In relation to the fact that she repaid the fraudulently obtained funds, his Honour observed at [44] that, “The repayments are also capable of being regarded as steps taken by you to reduce the penalty you will receive.”

10. [34]

    His Honour found that the applicant had good family support and that the applicant had taken steps to engage with mental health professionals after the offending came to light. His Honour regarded her prospects for rehabilitation as guarded. He considered that specific deterrence was fully engaged.

Grounds of appeal

1. [35]

   The applicant drew attention to what this Court had said in Edmonds v R [2022] NSWCCA 103 in relation to procedural fairness at a sentence hearing. The applicant submitted that the decision was relevant for a consideration of what occurred at the sentence proceedings in the present matter.

2. [36]

   The applicant submitted that Dr Dayalan’s report was admitted into evidence without objection and Dr Dayalan was not required for cross-examination. Nevertheless, the applicant submitted, the Crown made submissions to the sentencing judge which effectively challenged some of the material in Dr Dayalan’s report concerning the nexus between the applicant’s depression and the offending. The applicant submitted that the Crown did so by reference to material contained in the statement of agreed facts that supported the assertion that the applicant was in a stable and functioning marriage, and a loving and committed relationship.

3. [37]

   The applicant submitted that the Crown had submitted to the sentencing judge that the applicant only started seeing a mental health clinician in the month prior to the sentence proceedings, and that that overlooked the other evidence that the applicant had undertaken psychological treatment from December 2020 with a psychologist, Ms Zaarour.

4. [38]

   The applicant submitted that in those ways, the sentencing judge may have been inadvertently misled by the Crown, and that that led to the findings made by his Honour that were, in effect, inconsistent with what the applicant reported to Dr Dayalan, as recorded in his report.

5. [39]

   The applicant further submitted that there was procedural unfairness by the fact that the sentencing judge informed senior counsel for the applicant, in relation to the financial evidence concerning the applicant’s family bank accounts and loans, that he was not going to make any adverse findings to the applicant in the light of that evidence. The applicant submitted that senior counsel therefore did not seek to address the sentencing judge further in relation to that portion of the agreed facts. The applicant submitted that there was no indication by the sentencing judge that he was considering making adverse findings concerning the history provided to Dr Dayalan by the applicant and in relation to the applicant’s mental health condition.

6. [40]

   The applicant submitted that the adverse findings about the history given to Dr Dayalan,

7. [41]

   In Edmonds, the applicant did not give evidence, but relied upon a psychological report which set out a history given by the applicant to the psychologist about her background, giving rise to the need to consider “Bugmy matters” (Bugmy v The Queen (2013) 248 CLR 601; [2013] HCA 27).

8. [42]

   During the course of submissions, there was a debate between the sentencing judge and counsel for the applicant about the effect of the psychologist’s report going into evidence without objection in circumstances where the applicant did not give sworn evidence to corroborate what she had told the psychologist. Counsel for the applicant commenced to make submissions about Bugmy matters, but the sentencing judge said:

9. [43]

   In his sentence remarks, the sentencing judge in Edmonds, said that,

10. [44]

    Not surprisingly, the Crown in that case on appeal conceded that there had been a denial of procedural fairness. In considering whether the concession was properly made Dhanji J (with whom Macfarlan JA and Rothman J agreed) said at [28]:

11. [45]

    What occurred in the present matter differed significantly from what took place in Edmonds.

12. [46]

    The exchanges between senior counsel for the applicant and the sentencing judge which are relied upon in support of this ground are as follows:

13. [47]

    The applicant submitted that the findings made by the sentencing judge that amounted to a denial of procedural fairness were what is set out at [31]-[34] above.

14. [48]

    It is clear from the exchanges between senior counsel for the applicant and the sentencing judge that the present matter bears no relationship to what occurred in Edmonds. In the present matter, the principal debate in the passage identified by the applicant (and set out at [45] above) was about the Crown submission that the offending had taken place by reason of the applicant’s greed. That issue fed into the question of where the fraudulent funds went, and what they were used for.

15. [49]

    His Honour made it clear that he did not know, on the evidence, where the money went. His Honour made it clear that he was simply having trouble “with the proposition that the monies were deployed for any particular purpose in any particular direction when I don’t know where the money went”. Nowhere did his Honour give any indication, or make any statement, that there was no need for senior counsel for the applicant to address him on any other aspect of the matter.

16. [50]

    At the sentence hearing, the Crown first addressed the sentencing judge, and in the course of doing so said this:

17. [51]

    The Crown also said:

18. [52]

    Thereafter, senior counsel for the applicant was invited to reply to the Crown’s submissions.

19. [53]

    A reading of the whole of the submissions in reply made on behalf of the applicant before the sentencing judge discloses that there was no engagement with what the Crown had submitted, namely, that the Crown did not accept all that the applicant had told to Dr Dayalan, when there was either an absence of supporting evidence or evidence to the contrary.

20. [54]

    During those submissions, senior counsel for the applicant had agreed with his Honour that the evidence went “nowhere near” to support the proposition that the husband’s conduct towards the applicant was “in an abusive way”. In the context, “abusive” was a general term for the way the husband was treating the applicant. The exchange was as follows:

21. [55]

    Three other matters are significant. First, the written submissions on behalf of the applicant at the sentence proceedings say this:

22. [56]

    Those submissions also drew attention to other borrowings made by the husband, and to the fact that the applicant’s financial circumstances showed that she had financial assistance from her husband contrary to what she told Services Australia.

23. [57]

    That was reinforced by senior counsel in oral submissions who said:

24. [58]

    The only thing said by senior counsel in response to the Crown’s submissions in that regard was this:

25. [59]

    Secondly, part of the account given by the applicant to Dr Dayalan was not supported by what was contained in the statement of agreed facts, not only as to the intertwined financial situation of the applicant and her husband, and the support provided by him, but also from what was said in the agreed facts to be:

26. [60]

    Thirdly, the applicant had tendered on her behalf medical records which, to some extent, contradicted what she told Dr Dayalan, in that those records noted that she told various medical and health professionals she had good support from her partner. Nor did those reports bear out her account that since 2009 she had been low in mood for most days, that she had sleep and appetite problems, panic attacks, that she lacked energy, and that she had suicidal thoughts. Indeed, the reports from her GP in 2021 do not record any anxiety at all, nor any depression until 2020. Accepting that she suffered from depression from 2009 to 2011, the contemporaneous medical reports refer to isolated incidents of depression and/or anxiety, apparently related to pregnancy or child birth.

27. [61]

    These matters point to the fallacy in the submissions now made on behalf of the applicant, namely, that because Dr Dayalan’s report was tendered without objection and he was not cross-examined, the sentencing judge was obliged to accept what was contained in that report. Ultimately, the onus was on the applicant to persuade the sentencing judge on the balance of probabilities that the position was as she had outlined it to Dr Dayalan. In reaching a decision about whether such an onus had been discharged, the sentencing judge had to consider all of the evidence, and not just the material contained in Dr Dayalan’s report. That was no doubt why senior counsel for the applicant, in referring to the applicant’s unsworn and unchallenged evidence, said:

28. [62]

    The sentencing judge was not obliged to accept what was contained in Dr Dayalan’s report. He had to be satisfied on the balance of probabilities that those matters were made out. It was scarcely surprising that his Honour found that they were not made out, except in accordance with the Crown’s concession, when there was conflicting evidence in the statement of agreed facts and in the contemporaneous medical evidence tendered on behalf of the applicant.

29. [63]

    At no stage did the sentencing judge give an indication that he would not draw an adverse inference against the applicant, except in relation to the issue of where the funds went, and as to any motive for the offending.

30. [64]

    There was no denial of procedural fairness. This ground should be rejected.

31. [65]

    The applicant submitted that this ground was interrelated with ground 1 asserting a denial of procedural fairness.

32. [66]

    The applicant submitted that his Honour failed adequately to refer to and accept the evidence concerning the applicant’s mental state prior to, during, and after the period of the offending. The applicant pointed to the medical records, but placed particular emphasis on those which concerned her psychological treatment from 2020 after the detection of the fraud.

33. [67]

    The applicant submitted that his Honour erred in finding that she had taken steps to engage with mental health professionals only after the offending came to light, and only in relatively recent times. The applicant submitted that, in making that finding, his Honour may have been inadvertently misled by a submission to that effect made by the Crown. The applicant pointed to the words “only in relatively recent times” to submit that the finding failed to take account of the fact that the applicant had been having psychological treatment from December 2020.

34. [68]

    The applicant submitted that the approach taken by the sentencing judge was too restrictive as to the whole question of her mental illness, and how a consideration of her current mental health informed the subjective considerations generally in her sentencing.

35. [69]

    In oral submissions, the applicant said that the objective evidence demonstrated a causal connection between the mental health and the offending which entitled the sentencing judge to place significant weight on that connection, and therefore lead to a reduction in moral culpability. The applicant submitted further that his Honour did not give effective consideration to her mental health and the causal connection.

36. [70]

    The particular difficulty for the applicant in relation to this ground is that it was, in substance, a ground that the sentencing judge did not accord sufficient weight to matters in the applicant’s favour concerning her mental health and the effect that it had on her offending. The weight to be given to those matters was entirely a matter for the sentencing judge. Error of law is not demonstrated by showing that greater weight should have been accorded to a matter by a sentencing judge.

37. [71]

    It is clear from the judgment of the sentencing judge at [41] (set out at [31] above) that his Honour accepted the concession of the Crown that the applicant suffered from a major depressive disorder and that at certain points of time that disorder impaired her ability to consider carefully the consequences of her decision making. Further, his Honour was not incorrect in finding that the applicant had only taken steps to engage with mental health professionals after the offending came to light. The medical records tendered by the defendant demonstrate clearly that, for a variety of reasons, the applicant was not prepared to seek treatment or assistance for her mental health problems. She only commenced such treatment after the fraud was discovered and the search warrant had been executed.

38. [72]

    Moreover, contrary to the submission of the applicant that the sentencing judge placed no weight on the mental health issues and the causal connection with her offending, and gave no consideration to reducing her moral culpability, his Honour accepted the concession of the Crown and accepted that her moral culpability was reduced, but not to any significant degree.

39. [73]

    I would reject this ground.

40. [74]

    The applicant submitted that Dr Dayalan raised in his report that custody would be more onerous for the applicant arising from her mental health conditions. The applicant also pointed to the Crown’s statement in its written submissions that a sentence of imprisonment would weigh more heavily on the applicant than for a person of normal health. The applicant submitted that, nevertheless, the sentencing judge made no finding to that effect.

41. [75]

    It may be accepted that Dr Dayalan raised this matter in his report. Contrary to the applicant’s submission, the Crown did not submit that the applicant’s mental state would weigh more heavily on her in custody, but that it may do so. However, no such submission was made on behalf of the applicant to the sentencing judge, as the applicant accepts in her written submissions in this Court. By contrast, the applicant submitted that the effect of any full-time sentence would be both hardship for the applicant’s children, particularly because of their [my emphasis] medical and mental conditions, and that it would be onerous for her not to be able to care for her children.

42. [76]

    As this Court has observed on a number of occasions, sentencing proceedings are adversarial proceedings: Richards v R [2023] NSWCCA 264 at [58]; Edmonds at [26]. If a party does not make a submission that a particular finding ought to be made, the sentencing judge is under no obligation to examine all of the evidence and to raise issues for consideration. The obligation is for an applicant (or, in other cases, the Crown) to identify and raise for consideration the issue in respect of which they seek a favourable finding or determination.

43. [77]

    In the present case, where the Crown had raised the possibility of the matter, and no submission was made on the applicant’s behalf, the sentencing judge was entitled to infer that no such finding was sought by the applicant, particularly where the Crown had submitted that Justice Health was equipped to deal with persons suffering from such conditions.

44. [78]

    I would reject this ground.

45. [79]

    The applicant submitted that the evidence demonstrated that the debt of $171,718.30 had been fully repaid by the applicant. The applicant submitted that despite that evidence, the sentencing judge found that, in the absence of sworn and persuasive evidence of contrition or remorse, he could not be satisfied on the balance of probabilities that the applicant was genuinely remorseful.

46. [80]

    The applicant submitted that this was because his Honour did not accept that repayment was, in itself, demonstrative of any remorse or contrition. The applicant submitted that this precluded his Honour from meaningfully considering the implications of the repayment on the question of contrition.

47. [81]

    The applicant submitted that s 16A(2)(f) of the Crimes Act 1914 (Cth) requires the Court to take into account the degree to which the offender has shown contrition for an offence by taking actions to make reparations or any other factor relevant and known to the Court: Zhang v R [2011] NSWCCA 233 at [7]. The applicant submitted that it was not open for the sentencing judge to hold that there was no contrition in this matter, and not to take into account the degree to which the repayment evidenced contrition.

48. [82]

    The applicant submitted that the ground was inextricably linked with the finding by the sentencing judge that his Honour was not satisfied that the applicant was genuinely remorseful. In that regard, the applicant relied on what was said in Hyunwook v R [2010] NSWCCA 148 at [32] that restitution was a powerful way to show remorse.

49. [83]

    His Honour considered the question of the repayment and the issue of remorse as follows:

50. [84]

    The sentencing judge was not obliged to find that there was some degree of contrition simply because the fraudulently obtained amount had been fully repaid. In circumstances where the sentencing judge was not satisfied of contrition and remorse, for reasons apart from the repayment of the funds, it was open to his Honour, for the reasons he gave, to conclude that the repayment of the funds itself did not constitute contrition. Nothing in s 16A(2)(f) or what was said in Zhang compels a conclusion that some degree of contrition must be found simply because a fraudulently obtained amount had been repaid. Other matters inform a determination of contrition, and the onus is on the applicant to show contrition on the balance of probabilities.

51. [85]

    It may be accepted from Hyunwook that “actions speak louder than words” (at [32]), but in that case the offender gave sworn evidence in addition to making recompense. Further, there was no evidence here of any financial hardship to the applicant in repaying the money, especially in the face of a strong Crown case: R v Phelan (1993) 66 A Crim R 446 at 448. Finally, it is relevant that the amounts paid were raised as a debt by the Commonwealth and were the subject of a reparation order sought by the Crown. That made it inevitable that the applicant would be required to pay the full outstanding amount which could be enforced if unpaid.

52. [86]

    His Honour’s conclusion was open to him, and no error is demonstrated.

53. [87]

    I would reject this ground.

Conclusion

1. [88]

   I propose the following orders:

2. [89]

   HAMILL J: I agree with Davies J.

3. [90]

   HUGGETT J: I agree with Davies J.