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Supreme Court 12 July 2007

DPP (Cth) v Neamati

[2007] NSWSC 746

Fraud & dishonesty
CRIMINAL LAW PRACTICE AND PROCEDURE WHETHER ERROR OF LAW

Citation: DPP (Cth) v Neamati [2007] NSWSC 746
Court: Supreme Court of New South Wales, Common Law Division
Date: 12 July 2007
Judge(s): Howie J

Background

The defendant faced six charges under s 135.2(1) of the Criminal Code (Cth) of obtaining a financial advantage while knowing or believing he was not eligible to receive it. The prosecution alleged that he had deliberately understated his income in claims for Youth Allowance over a period from May 2002 to September 2005, resulting in an overpayment of approximately $19,798.

At the close of the prosecution case, the defence made a submission of no prima facie case. The Magistrate (Magistrate O'Shane) upheld that submission, finding there was no evidence of the requisite knowledge. She also ordered the prosecution to pay the defendant's costs.

The Commonwealth Director of Public Prosecutions appealed to the Supreme Court under s 56(1) of the Crimes (Appeal and Review) Act 2001, seeking to have the dismissals quashed and the matter remitted to the Local Court.

  • Whether the Magistrate erred in law by requiring the prosecution to prove that the defendant knew his conduct constituted a criminal offence, rather than simply that he knew or believed he was not entitled to the benefit.
  • Whether, applying the correct legal test, the prosecution evidence was sufficient to establish a prima facie case on the element of knowledge or belief.
  • Whether the costs order made against the prosecution was open on the evidence and reasoning before the Magistrate.

Decision

The defendant's own counsel conceded before the Supreme Court that the Magistrate had made an error of law. The Magistrate had required the prosecution to prove that the defendant knew his conduct amounted to a criminal offence. That requirement has no foundation in s 135.2(1) of the Code. The only knowledge element in the offence is that the defendant knew or believed he was not eligible to receive the financial advantage. Proof of criminality is not an element.

Howie J then considered whether, despite the error, the appeal should nonetheless be dismissed on the basis that no prima facie case existed on the correct test. His Honour concluded that a prima facie case did exist. The prosecution had adduced circumstantial evidence including the defendant's pattern of conduct in reporting income, letters from the agency notifying him of his reporting obligations, and evidence of government publicity about those obligations. Taken together, that evidence was capable of supporting an inference that the defendant knew or believed he was not entitled to the full benefit received.

On the costs question, Howie J found the order was unreasonable. The Magistrate's reasons for awarding costs against the prosecution were either undisclosed or incomprehensible. There was no identifiable factual basis for a finding that the prosecution had unreasonably failed to investigate the matter, particularly given the defendant had declined to participate in a police interview. The Magistrate had also appeared to rely on statements by defence counsel about the defendant's background (arrival from Iran in 1999, limited English) when no evidence of those matters had actually been placed before the court.

Orders Made

  • The orders of the Magistrate dismissing the six charges and the costs order are quashed.
  • The proceedings are remitted to the Local Court to be heard before a different magistrate, consistently with the Supreme Court's judgment.
  • The defendant is to pay the plaintiff's costs of the appeal, with the benefit of a certificate under the Suitor's Fund Act if otherwise entitled.

Key Takeaways

  • Under s 135.2(1) of the Criminal Code (Cth), the prosecution is not required to prove that a defendant knew his or her conduct was a criminal offence. The relevant knowledge element is only that the defendant knew or believed they were not eligible to receive the financial advantage in question.
  • A no prima facie case submission must be assessed against the actual elements of the charged offence. Dismissing charges because evidence is lacking on a non-existent element constitutes an error of law.
  • Circumstantial evidence of a defendant's knowledge (including correspondence from a government agency, reporting obligations, and conduct over time) can be sufficient to establish a prima facie case even where there is no direct evidence of the defendant's state of mind.
  • A costs order against a prosecutor in the Local Court must be supported by identifiable and comprehensible reasoning. Relying on assertions made from the bar table that are unsupported by evidence before the court does not provide an adequate basis for such an order.
  • Where a magistrate's error of law would not have changed the result (because no prima facie case existed in any event), an appeal court would not intervene. Here, the Supreme Court found a prima facie case did exist, making the error determinative.

Legislation and Cases Referenced

Legislation:
- Criminal Code (Cth) 1995, ss 5.3, 5.4, 5.4(4), 5.6(1), 5.6(2), 135.2(1), Chapter 2
- Crimes (Appeal and Review) Act 2001 (NSW), s 56(1)
- Criminal Procedure Act 1986 (NSW), s 214(1)(c)
- Financial Transaction Reports Act (Cth) 1992
- Customs Act 1901 (Cth)

Cases:
- Lodhi v R [2006] NSWCCA 121
- Lee v R [2007] NSWCCA 71
- R v JMR (1991) 74 A Crim R 39
- Torrance v Cornish (1985) 79 FLR 87
- He Kaw Teh v The Queen (1985) 157 CLR 523
- Ianella v French (1968) 119 CLR 84
- Latoudis v Casey (1990) 170 CLR 534