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Court of Criminal Appeal 25 June 2015

Zaky v R

[2015] NSWCCA 161

Fraud & dishonesty
SENTENCING SOCIAL SECURITY FRAUD SUSPENDED SENTENCES APPROPRIATENESS OF SENTENCING OPTION WHERE JUDGMENT RESERVED APPEAL DISMISSED

Citation: Zaky v R [2015] NSWCCA 161
Court: NSW Court of Criminal Appeal
Date: 25 June 2015
Judges: Johnson J, Davies J, Hamill J

Background

The appellant was convicted of two offences of fraud on the Commonwealth, arising from a continuous course of conduct spanning approximately eleven years. She received rental assistance payments from Centrelink by repeatedly making false representations that she was paying rent to a third party, when in fact she was living in a property owned by her then husband. The total amount dishonestly obtained across both offences was approximately $27,375.

The District Court sentenced her to a total of 20 months imprisonment, with a recognizance release order (the Commonwealth equivalent of a minimum non-parole period) of 10 months. The sentencing judge declined to impose a suspended sentence, describing it during the course of submissions as "hardly a penalty" and making reference to the abolition of suspended sentences in Victoria.

The appellant sought leave to appeal against the sentence on two grounds, arguing that those comments revealed legal error in the sentencing exercise.

  • Whether the sentencing judge erred by characterising a suspended sentence as "hardly a penalty," thereby applying a wrong principle in refusing to impose one.
  • Whether the sentencing judge took into account an irrelevant consideration by referring to the abolition of suspended sentences in Victoria.
  • Whether erroneous comments made during the course of submissions, rather than in the reserved judgment itself, can ground a successful appeal against sentence.

Decision

Hamill J (with whom Johnson J and Davies J agreed) dismissed the appeal. His Honour acknowledged that the sentencing judge's comments about suspended sentences, made during the hearing of submissions, were ill-considered and infelicitous. A suspended sentence is a recognised and legitimate sentencing option under both Commonwealth and NSW legislation, and describing it as "hardly a penalty" did not accurately reflect its legal standing.

However, the Court found no basis to conclude that those comments had actually guided the sentencing outcome. The judgment was reserved for two weeks after submissions were heard, and when King DCJ delivered his remarks on sentence, they were comprehensive, clear on their face, and grounded in the established principles applicable to social security fraud. The reserved judgment made no reference to the impugned comments.

The Court applied the general rule that erroneous comments made in the course of argument cannot, without more, ground an appeal against sentence. The significance of the judgment having been reserved reinforced that conclusion. The formal remarks on sentence disclosed no error, and the imposition of full-time custody was consistent with a long line of authority that persons who abuse the social welfare system will face heavy penalties, with custodial sentences required except in very special circumstances.

Johnson J added observations about the broader controversy surrounding suspended sentences. He noted that both the Australian Law Reform Commission and the NSW Law Reform Commission have examined the utility of suspended sentences, with the latter recommending their replacement with a new community detention order. Neither set of recommendations has been implemented, and suspended sentences remain available under the relevant legislation.

Orders Made

  • Leave to appeal granted.
  • Appeal dismissed.

Key Takeaways

  • Erroneous or ill-considered comments made by a sentencing judge during submissions do not automatically ground an appeal against sentence; the question is whether those comments infected the actual sentencing outcome as expressed in the reserved judgment.
  • Where a judgment is reserved, the formal remarks on sentence carry particular weight, and an appellate court will not lightly infer that oral comments made during argument guided conclusions expressed clearly and independently in the written reasons.
  • Under established NSW and Commonwealth authority, a custodial sentence is the appropriate disposition for social security fraud except in very special circumstances, and persons who abuse the welfare system can expect heavy penalties.
  • Suspended sentences remain a lawful and legitimate sentencing option under both s 12 of the Crimes (Sentencing Procedure) Act 1999 (NSW) and s 20(1)(b) of the Crimes Act 1914 (Cth), notwithstanding ongoing controversy about their utility and reform recommendations that have not yet been implemented.
  • In dismissing the appeal, the Court of Criminal Appeal confirmed that the significance of sentencing errors in submissions must be assessed against the totality of the reserved judgment, not the submissions hearing in isolation.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1914 (Cth), s 20(1)(b), s 29D
- Criminal Code (Cth), s 134.2(1)
- Crimes (Sentencing Procedure) Act 1999 (NSW), s 12
- Crimes Regulations 1990 (Cth)

Cases:
- Dinsdale v The Queen [2000] HCA 54; 202 CLR 321
- R v Egan [2013] NSWCCA 196
- R v Nahlous [2013] NSWCCA 90
- Geddes v R [2012] NSWCCA 94
- R v Purden (CCA (NSW), 27 March 1997, unreported)
- RCW v R (No 2) [2014] NSWCCA 190
- R v Van Tang Luu (CCA (NSW), 7 December 1994, unreported)
- R v Zamagias [2002] NSWCCA 17