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Court of Criminal Appeal 4 September 2008

R v Schultz

[2008] NSWCCA 199

Fraud & dishonesty
CRIMINAL LAW CROWN APPEAL CRIMINAL CODE 1995 (CTH)

Citation: R v Schultz [2008] NSWCCA 199
Court: NSW Court of Criminal Appeal
Date: 4 September 2008
Judge(s): McClellan CJ at CL; Barr J; Price J

Background

The respondent pleaded guilty to three offences spanning more than two decades. Between 1984 and 2006, he continued to collect his deceased mother's age pension payments, which had been deposited into a bank account under his control since 1978. His mother died in July 1982, but payments continued. Over the following years, the respondent lodged false entitlement and income review forms in his mother's name to sustain the deception. In total, he received $198,503.16 in Commonwealth pension payments to which he was not entitled.

The offences were charged across three statutory provisions reflecting legislative changes over the relevant period. The total sum was divided across three counts: a minor imposition on the Commonwealth in 1984 ($377.60), a sustained fraud from 1984 to 2001 ($130,858.79), and dishonestly obtaining a financial advantage from a Commonwealth entity from 2001 to 2006 ($67,266.77).

The Crown appealed the sentences imposed by Norrish DCJ in the District Court, principally arguing that the period of full-time imprisonment before recognizance release was manifestly inadequate.

  • Whether the period of actual imprisonment served before recognizance release was manifestly inadequate given the objective seriousness of the offending
  • Whether the sentencing judge erred in the structure of the recognizance release direction, particularly in the relationship between the head sentence and the recognizance period
  • Whether the Court of Criminal Appeal should exercise its discretion to intervene and resentence, even if error were established

Decision

The Court of Criminal Appeal unanimously dismissed the Crown's appeal. The sentencing judge had determined that full-time custody was appropriate given the duration of the fraud, the significant sums involved, and the need for general deterrence, while also recognising the respondent's considerable subjective mitigations. These included full repayment of all amounts owed (which required the respondent to sell his home), a failed marriage, significant physical health problems requiring surgical intervention, depressive symptoms, and a gambling problem identified by a psychologist.

The sentencing judge had classified the objective criminality as below the most serious category of such offences, noting the absence of false identities or sophisticated financial structures. The Court accepted this assessment, even though the offending was prolonged and involved multiple false declarations to the Commonwealth over more than 22 years.

On the question of discretion, the Court noted that the respondent was due for release approximately eight weeks from the date of the appeal hearing. Evidence accepted by the Crown confirmed that the respondent had experienced particular hardship in custody, including the unavailability within the prison system of medical treatment he required. The Court found that imposing additional full-time custody in these circumstances would constitute unusual hardship that was not justified in all the circumstances.

The Court did identify a technical deficiency in the structure of the original recognizance direction and corrected it by substituting a properly formed direction under s 20(1)(b) of the Crimes Act 1914 (Cth), adding a supervision condition with the NSW Probation Service. The head sentences and release date of 15 October 2008 were otherwise confirmed.

Orders Made

  • The Crown appeals dismissed; the sentence on count 1 confirmed
  • For counts 2 and 3, the head sentences and release dates confirmed
  • In lieu of the original recognizance direction, the respondent directed to be released at the expiration of 6 months upon entering a recognizance in the sum of $200, to be of good behaviour for 2 years and to appear and receive sentence if called upon for any breach
  • The respondent directed to accept the supervision and guidance of an officer of the NSW Probation Service for 2 years, obey all reasonable directions, and report to the Probation Service within 7 days of release
  • Release date confirmed as 15 October 2008

Key Takeaways

  • In dismissing the Crown appeal, the Court of Criminal Appeal confirmed that even where an offender has committed prolonged and serious Commonwealth fraud, a sentencing judge may properly structure a sentence under s 20(1)(b) of the Crimes Act 1914 (Cth) that involves a relatively short period of actual full-time custody followed by recognizance release, provided the subjective circumstances justify that approach.
  • A Crown appeal against sentence will not automatically succeed even where the Court identifies a technical error in the structure of a recognizance direction; the Court retains a discretion to decline to resentence where intervention would cause unusual hardship.
  • Particular hardship experienced during custody, including the unavailability of necessary medical treatment within the prison system, is a relevant consideration when the Court exercises its discretion on a Crown appeal.
  • The objective gravity of fraud offences involving false declarations to a Commonwealth agency was assessed on a spectrum, with the Court accepting that offences lacking features such as false identities or sophisticated financial mechanisms may fall below the most serious category, even where the offending extended over more than two decades.
  • Under s 20(1)(b) of the Crimes Act 1914 (Cth), a recognizance release direction must be properly structured in its relationship to the head sentence; where a technical deficiency exists, the appellate court may substitute a corrected direction rather than imposing a fresh custodial term.

Legislation and Cases Referenced

Legislation
- Crimes Act 1914 (Cth), ss 20(1)(a), 20(1)(b), 29B, 29D
- Criminal Code 1995 (Cth), s 134.2(1)

Cases
- Bernier (1998) 102 A Crim R 44
- Dinsdale v The Queen (2000) 202 CLR 321
- Everett v The Queen (1994) 181 CLR 295
- Johnsson v R [2007] NSWCCA 192
- Lowndes v The Queen (1999) 195 CLR 665
- Paull (1990) 20 NSWLR 427
- R v Drazkiewicz (unreported, CCA, 23 November 1993)
- R v Smith [2004] QCA 417
- R v Wall [2002] NSWCCA 42
- The Queen v Shrestha (1990) 173 CLR 48