Citation: Regina v Giallussi [1999] NSWCCA 56 revised - 29/03/99
Court: NSW Court of Criminal Appeal
Date: 12 March 1999
Judge(s): Stein JA, Abadee J, Adams J
Background
The respondent, a part-owner of a nursing home, pleaded guilty to five counts of defrauding the Commonwealth under s 29D of the Crimes Act 1914 (Cth). Over five consecutive financial years from 1989 to 1994, she submitted false claims to the Commonwealth Department of Community Services and Health for nursing and personal care staff costs. The false claims involved fabricated staff rosters, timesheets, payroll records and wages payments for employees who either provided no care or did not work at the nursing home at all. The total loss to the Commonwealth was $264,110.16, though the respondent's personal gain was estimated at approximately $38,000.
In the District Court, Judge Downs convicted the respondent and sentenced her to fines of $20,000 on each of the five counts, totalling $100,000. No custodial sentence was imposed. The sentencing judge found special circumstances, concluding that the fines would constitute a more severe penalty than other available options and would serve as an adequate deterrent.
The Commonwealth Director of Public Prosecutions appealed to the Court of Criminal Appeal, arguing that the fines-only sentence was manifestly inadequate and failed to reflect the objective seriousness of the offences.
Legal Issues
- Whether the sentence imposed by the District Court was manifestly inadequate for offences of systematic, large-scale Commonwealth fraud
- Whether the sentencing judge erred in finding special circumstances that justified departing from a full custodial sentence
- What sentence the Court of Criminal Appeal should impose on re-sentencing, taking into account the double jeopardy principle applicable in Crown appeals
Decision
The Court of Criminal Appeal found that the sentence was manifestly inadequate and that the sentencing discretion had miscarried. The offences were characterised as a sophisticated, ongoing fraud spanning five years, involving deliberate falsification of multiple records and the enlistment of employees to assist in the scheme. The fraud exploited a system that relied on the honesty of recipients, was motivated by greed, and, to some extent, deprived elderly and frail nursing home patients of benefits allocated for their welfare.
The Court found that the sentencing judge had given excessive weight to the respondent's subjective circumstances at the expense of the objective seriousness of the conduct. The subjective features relied upon by the judge, including remorse, good character, full repayment of the defrauded amount, and the guilty plea, did not rise to the level of special circumstances justifying the complete displacement of a custodial term.
On re-sentencing, the Court acknowledged that this was a Crown appeal and that the double jeopardy principle required some moderation of the sentence that would otherwise have been appropriate. Adams J noted that the respondent had, in the intervening months since the original sentence, borrowed funds to pay the fines and had not been at fault for the original sentencing error. Taking these matters into account, the Court imposed three years imprisonment to be served by way of periodic detention, concurrent on each count, together with the original fines of $20,000 per offence.
Orders Made
- The appeal was allowed and the sentence imposed by Judge Downs was quashed
- The respondent was sentenced to three years imprisonment on each charge, to be served concurrently, commencing 26 March 1999, by way of periodic detention at Mullawa Detention Centre
- The respondent was fined $20,000 in respect of each offence, totalling $100,000 (noting the fines had already been paid)
Key Takeaways
- A fines-only sentence for a five-year, systematic fraud on the Commonwealth totalling over $264,000 was held to be manifestly inadequate, notwithstanding the offender's good character, full repayment, guilty plea, and remorse.
- Finding "special circumstances" sufficient to displace a custodial sentence requires more than the accumulation of favourable subjective features; those features must genuinely distinguish the case from the ordinary range of such offending.
- Where the Commonwealth relies on an honesty system to administer public funds, a breach of that trust over a sustained period is a significant aggravating factor in sentencing.
- In Crown appeals, the double jeopardy principle operates to moderate the sentence that would otherwise be imposed at first instance, particularly where time has passed and intervening consequences have already affected the offender.
- The Court of Criminal Appeal confirmed it retains a discretion not to intervene even where a sentence is found to be manifestly inadequate, though it exercised that discretion in favour of intervention in this case given the extent of the departure from accepted sentencing principles.
Legislation and Cases Referenced
Legislation
- Crimes Act 1914 (Cth), s 29D (defrauding the Commonwealth), s 16A (sentencing principles)
Cases
- Regina v Boian and Carter, CCA, 10 October 1997 (unreported)
- Regina v Sopher, CCA, 17 December 1993 (unreported)
- Regina v Purdon, CCA, 27 March 1997 (unreported)
- Regina v Luu, CCA, 7 December 1984 (unreported)
- Regina v Holder [1983] 3 NSWLR 245
- Regina v Allpass, CCA, 5 May 1993 (unreported)