Traffic & Criminal Lawyer with 20+ Years of Experience. Located in Sydney. Travels All Over Australia.
0410 689 843 Free Case Consultation

Call 0410 689 843 to Talk About Your Legal Problems Today.

Get Free Legal Advice

Centrelink Fraud

Print This Page

The most serious matters of ‘Social Security Fraud’ are prosecuted under ss134.1, 134.2 or 135.4 of the federal Criminal Code Act 1995 (‘the Code’) which carry a maximum penalty of 10 years imprisonment. However, generally the offence charged is against s135.2 of the Code, which is, Obtaining a financial advantage from a Commonwealth entity knowing or believing that he or she is not eligible to receive that financial advantage – the maximum penalty being 12 months imprisonment.

There has been some recent judicial consideration in relation to s135.2 and the the Code in general, revolving around sections 4.3 and 4.1(2) of the Code and whether the offence under s135.2 can be committed by an omission ie. by a failure to notify a Commonwealth Services Deilvery Agency ie. Centrelink of an overpayment or non-entitled payment. By majority, the Full Court of the South Australian Supreme Court in Poniatowska v DPP (Cth) [2010] SASCFC 19 (Doyle CJ and Duggan J with Sulan J dissenting) have ruled that the offence under s135.2 can be committed by omission but only where the conduct is a duty or obligation arising under the law. In relation to Centrelink matters, the court ruled that no such duty or obligation arises hence, a mere omission or failure to notify Centerlink does not fall within s135.2[1]. Hence, there must be positive conduct ie. notification to Centrelink of a false state of affairs. However, it should be noted that the High Court of Australia is currently reserved on an appeal by the Commonwealth Director of Public Prosecutions on this issue as to how ss4.3 and 4.1(2) operate – see ruling of the Full Court of the South Australian Supreme Court set out below.

General Principles[2]:

In R v Purdon  (CCA(NSW), 27 March 1997, unreported)  it was held that in the case of a fraud upon the social security system, a custodial sentence is to be imposed unless there exist very special circumstances justifying some lesser order.

Hunt CJ at CL, in delivering the leading judgment in R v Purdon, above referred to and adopted the following passage in R v Luu (CCA(NSW), 7 December 1984, unreported) :

The courts of this State have uniformly sought to make plain to persons who abuse the system of social welfare that they must expect to face heavy penalties. The introduction into the administration of that system of overly meticulous preliminary checks before benefits are paid could result in real hardship to persons whose need for benefits is urgent and immediate. Thus it is that such susceptibility is open to abuse, which results in persons who do abuse it receiving salutary penal consequences at the hands of the courts.

The criminality of this offence is impacted not only by the amount of money but also by the period of time over which the offence/s were committed: R v Hawkins(1989) 45 A Crim R 430 ; R v Delcaro (1989) 41 A Crim R 33. Any detriment to be suffered by the prisoner’s family is to be regarded as an almost inevitable consequence of criminal conduct and as such is only marginally, if at all, relevant: R v Medina (CCA(NSW), 28 May 1990, unreported).

Hardship to the prisoner’s family operates in mitigation only where there are exceptional circumstances, beyond the sort of hardship which inevitably results to a family when a parent is incarcerated, to consider a non-custodial sentence: R v Boyle (1987) 34 A Crim R 202; T v R (1990) 47 A Crim R 29; R v Alexander (1994) 78 A Crim R 141; R v Herrera (CCA(NSW), 6 June 1997, unreported).

As to prior good character, this is a favourable matter to which the court may have regard in relation to sentence, however it carries less weight with ongoing offences than with an isolated offence: R v Tipene (CCA(NSW), 7 May 1987, unreported) ; R v Phelan (1993) 66 A Crim R 446.

Voluntary repayments can be interpreted differently, as one cannot purchase mitigation. However, where there has been a substantial degree of sacrifice involved in the repayment, it is a matter that can properly be taken into consideration as mitigating factor: R v Phelan (1993) 66 A Crim R 446 .

A prisoner’s health or age might be relevant to the length of any sentence to be imposed, however they are factors that do not usually prevent the imposition of a gaol sentence if imprisonment is otherwise warranted. The Department of Corrective Services has the responsibility of providing health care for prisoners: R v Perks (CCA(NSW), 8 May 1987, unreported, BC8701667) ; R v Price (CCA(NSW), 13 August 1993, unreported) and R v Sopher (1993) 70 A Crim R 570.

A qualification to the general rule that a custodial sentence should be imposed arises where the prisoner makes immediate admissions of guilt and is permitted by the authorities to continue for a substantial period to make regular repayments of the amount involved before any action is taken to prosecute the offence and where the prosecution is, without any valid explanation, brought on tardily: Winchester v R (1992) 58 A Crim R 345.

PONIATOWSKA v DPP (CTH) [2010] SASCFC 19 (2 August 2010)

Last Updated: 3 August 2010

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

DISCLAIMER – Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated.

PONIATOWSKA v DPP (CTH)

[2010] SASCFC 19

Judgment of The Full Court

(The Honourable Chief Justice Doyle, The Honourable Justice Duggan and The Honourable Justice Sulan)

2 August 2010

CRIMINAL LAW – PARTICULAR OFFENCES – PROPERTY OFFENCES – OTHER FRAUDS AND IMPOSITIONS – FRAUDULENTLY OR DECEPTIVELY OBTAINING MONEY, VALUABLE, FINANCIAL BENEFIT OR ADVANTAGE – GENERALLY

SOCIAL WELFARE – OFFENCES – FALSE STATEMENTS AND FRAUD – GENERALLY

Appeal against conviction and sentence – appellant omitted to advise Centrelink of changes in her financial circumstances while receiving parenting payments – appellant pleaded guilty to 17 counts of obtaining a financial advantage from the Commonwealth knowing that there was no entitlement to it contrary to s 135.2 of the Criminal Code (Cth) – convictions recorded on each count – appellant appealed against the decision of the magistrate to record a conviction in relation to each count – single judge of Supreme Court dismissed the appeal – subsequently notice of appeal against conviction filed by appellant – whether s 135.2 of the Criminal Code creates an offence which can be committed by way of omission – whether offence can only be committed by omission if a legal duty or obligation to act in a certain way exists – whether complaint defective in that each count alleged conduct which did not amount to an offence – whether admitted facts could support charges laid in complaint – whether complaint defective by reason of failure to identify relevant transaction, act or omission.

HELD: (Doyle CJ and Duggan J) (Sulan J dissenting) appeal against conviction allowed – offence under s135.2 of the Criminal Code can be committed by means of an omission – however an omission will attract criminal liability only if the omission constitutes a failure to perform a legal obligation – s 135.2 does not itself create a legal obligation to act and not omit – appellant could not, in law, have been convicted of the offences – convictions set aside – admitted facts could not support charges laid in complaint.

Criminal Code (Cth) s 4.1(2), s 4.3, s 5, s 135.2; Crimes Act 1914 (Cth) s 29D; Social Security Act 1964 (NZ) s 127, s 80A; Social Security (Administration) Act 1999 (Cth) s 67, s 74, referred to.

R v Iannelli [2003] NSWCCA 1; (2003) 56 NSWLR 247; DPP (Cth) v Neamati [2007] NSWSC 746; DPP (Cth) v Acevedo [2009] NSWSC 653; Nicholson v The Department of Social Welfare [1999] 3 NZLR 50; R v Liberti (1991) 55 A Crim R 120, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

“omission”

PONIATOWSKA v DPP (CTH)

[2010] SASCFC 19

Full Court: Doyle CJ, Duggan and Sulan JJ

1. DOYLE CJ and DUGGAN J: The appellant pleaded guilty to 17 counts of obtaining a financial advantage from the Commonwealth knowing that there was no entitlement to it contrary to s 135.2 of the Criminal Code (Cth) (“the Code”). The wording of the first count of the complaint is as follows:

1. On or about the 30th day of August 2005 at Adelaide or elsewhere in the said State engaged in conduct and, as a result of that conduct, obtained a financial advantage for herself from a Commonwealth entity, namely the Commonwealth Services Delivery Agency trading as ‘Centrelink’, knowing or believing that she was not eligible to receive that financial advantage; contrary to s 135.2(1) of the Criminal Code (Cth).

Particulars

The defendant was not entitled to the said financial advantage, namely part payment of Parenting Payment Single, because the defendant failed to advise Centrelink of payments of commission received by her from Employment Services Australia Pty ltd (a subsidiary company of the Hickinbotham Group) while she was in receipt of Parenting Payment Single.

The remaining 16 counts were similarly worded.

2. It was alleged that the offending took place between August 2005 and May 2007. The background to the alleged offending was set out in a Summary of Facts provided to the Magistrate. The facts stated in the summary were not disputed. Insofar as it is relevant for present purposes the summary stated as follows:

It is alleged that the [appellant] failed to declare to Centrelink her income from employment. The [appellant] has been in receipt of Centrelink payments intermittently since 1995.

During the period of offending the [appellant] received fortnightly payments of Parenting Payment Single. Parenting Payment Single is means tested and the [appellant] was required to advise Centrelink of any changes to her circumstances including any income received.

The [appellant] was employed as a full time sales consultant with Employment Services Australia Pty Ltd (a subsidiary company of Hickinbotham Group) between 30 January 2005 and 21 February 2006. The [appellant] was paid by way of commission in accordance with the terms of her contract of employment. As the commission payments became payable, the payments were made to the [appellant] at the end of each month. Following the termination of her employment the [appellant] continued to receive payments of commission up until the end of May 2007.

In the period from August 2005 until May 2007 the [appellant] received 17 lump sum payments of commission as set out below. The total amount of those commission payments was $71,502.00. During that period the [appellant] failed to declare any of those commission payments to Centrelink and as a result received payments of Parenting Payment Single to which she was either not entitled or only partially entitled.  

The [appellant] was reminded on numerous occasions of her ongoing obligation to advise Centrelink of any income she received. These reminders occurred in letters regularly sent to the [appellant]. She was also put on fortnightly earning reporting at times before and during the offending period which required her to declare any income earned.

Immediately prior to the offending period an overpayment had been raised as a result of her initial failure to advise of her employment with Employment Services Australia. That overpayment was raised in April 2005 and the [appellant] was then required to report on a fortnightly basis. On 22 April 2005 she reported income of $700 per fortnight, on 12 May 05 she reported fortnightly earnings of $400 and thereafter each fortnight she reported no income. As a result of reporting no income, she was taken off fortnightly reporting requirements in the beginning of September 2005 but was advised of her continuing obligation to report any change in circumstances and income received. Being taken off fortnightly reporting coincided with her commencing to receive substantial lump sums of commission from Employment Services Australia, usually at the end of each month. Those payments (gross) were:

August 05 $ 4200

September 05 $ 4200

October 05 $ 6134

November 05 $ 4200

December 05 $ 600

January 06 $ 1336

February 06 $ 2900

March 06 $ 2345

April 06 $ 4029

June 06 $12828

July 06 $ 5177

August 06 $ 2766

September 06 $ 5795

October 06 $ 1467

November 06 $ 6381

February 07 $ 3977

May 07 $ 3167

3. The appellant pleaded guilty to all counts. Convictions were recorded on each count and the appellant was sentenced to one penalty of imprisonment for 21 months. She was released immediately upon entering into a recognisance in the sum of $10 to be of good behaviour for a period of two years.

4. The appellant appealed against sentence to a single Judge of this Court. The appeal was against the decision of the Magistrate to record a conviction in relation to each count. The appeal was dismissed. The appellant then appealed to the Full Court against the decision of the single Judge. Initially the appeal was confined to an appeal against sentence and, in particular, against the single Judge’s decision to affirm the recording of the convictions. However, on 11 June 2010, the appellant filed a Notice of Appeal against conviction.

5. The grounds of the appeal against conviction are as follows:

1. That the conviction of the applicant constitutes a miscarriage of justice in that:

1.1 The complaint is defective in that in relation to each count, the matters pleaded do not relate to or constitute a known offence.

1.2 Alternatively, the complaint is defective in that in relation to each charge, the statement of the offence fails to identify the transaction, act or omission that is the subject matter of the charge, or the factual ingredients of the charge.

1.3 That upon the admitted facts, in relation to each charge in the complaint, the conduct of the applicant could not constitute the offence charged and in law she could not be convicted of the offence charged.

6. At the hearing of the present appeal the Court intimated that it would deal with the Notice of Appeal against conviction as an application for permission to amend the appeal against sentence by the addition of an application for permission to appeal against conviction. The appellant also applies for an extension of time to appeal against conviction. 

7. It was argued in relation to the first ground of appeal against conviction that the complaint was defective in that each count alleged conduct which did not amount to an offence. According to the argument s 135.2 of the Code does not create an offence which can be committed by way of omission and the appellant could not be convicted of an offence against the section by omitting to advise the relevant department of changes in her financial circumstances. 

8. The offence of obtaining a financial advantage is defined in s 135.2 of the Code as follows:

Obtaining financial advantage

(1) A person is guilty of an offence if:

(a) the person engages in conduct; and

(aa) as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and

(ab) the person knows or believes that he or she is not eligible to receive that financial advantage; and

(b) the other person is a Commonwealth entity.

Penalty: Imprisonment for 12 months.

9. Section 4.3 of the Code states:

Omissions

An omission to perform an act can only be a physical element if:

(a) the law creating the offence makes it so; or

(b) the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform.

10. Section 4.1(2) of the Code defines “engage in conduct” as meaning:

(a) do an act; or

(b) omit to perform an act.

11. Mrs Shaw QC, for the appellant, argued that an offence cannot be committed by omission unless the law imposes a duty to act in a particular way and there is an omission to comply with that requirement. She drew attention to the requirement in s 4.3 of the Code that an omission can only be a physical element if the law creating the offence makes it so or impliedly provides that the offence can be committed by an omission to perform an act that by law there is a duty to perform. According to the argument, s 135.2(1) of the Code could not be construed as meeting either of these requirements so as to create an offence which could be committed by way of omission. In other words she submitted that in no circumstances could an offence by omission be charged under the section.

12. The essence of the offence created by s 135.2 is the obtaining of a financial advantage with the fault elements which are applicable under s 5 of the Code.[1] In light of the definition of “engage in conduct” in s 4.1 of the Code and the stipulation in s 135.2 that “engages in conduct” constitutes a physical element of the offence created by that section, it must be acknowledged that an offence under this provision can be committed by means of an omission.

13. However, it is well established that there can be no criminal liability for an omission unless the alleged conduct constitutes a failure to perform a legal obligation. In R v Iannelli,[2] the New South Wales Court of Criminal Appeal quashed the conviction of the appellant who had been found guilty of being knowingly concerned in the commission by two companies of defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914 (Cth) by failing to pay tax instalment deductions to the Commissioner of Taxation. Handley JA said:[3]

These convictions therefore depend essentially on omissions. Criminal liability for mere omissions in Anglo-Australian law is exceptional unless it has been expressly imposed by statute. Glanville Williams, Criminal Law. The General Part, 2nd ed (1961) London, Stevens & Sons Ltd, at 3–5 states:

“In some instances an omission will create criminal responsibility without any positive act … In law, as in morals, the concept of culpable omission presupposes a duty to act; and a rule penalising an omission must state to whom this duty belongs … the criminal law does not impose a duty upon someone to act to prevent a consequence whenever it imposes a duty not to bring about the consequence. The law relating to omissions is not co-extensive with the law relating to acts. It is partly coincident in manslaughter and murder, but here the event of death leads the law to look upon the omission with special severity. Most crimes, particularly those at common law, are defined to need a positive act … .”

Lord Hailsham, ed, Halsbury’s Laws of England, 4th ed, Vol 11 (1976) London, Butterworths, at 15 is to the same effect:

“9. Omissions. As a rule the criminal law imposes no obligation on persons to act so as to prevent the occurrence of harm or wrongdoing. There is no general duty to prevent the commission of crime; nor does a person commit a crime or become a party to it solely because he might reasonably have prevented its commission. Omission to act in a particular way will give rise to criminal liability only where a duty so to act arises at common law or is imposed by statute. Such a duty is exceptional and the criminal law does not ordinarily require a man to be his brother’s keeper.”

14. In Nicholson v The Department of Social Welfare,[4] the New Zealand Court of Appeal discussed the effect of s 127 of the Social Security Act 1964 (NZ) which makes it an offence for a person to do or say anything or omit to do or say anything for the purpose of misleading an officer of the relevant department for the purpose of receiving or continuing to receive a social welfare benefit. Richardson P and Keith J said in their judgment:[5]

In the context of s 127, the relevant “omission” must consist of a failure to comply with some legal obligation. An omission is simply “The neglect to perform what the law requires” (Black’s Law Dictionary (5th ed, 1979)); “[a] crime can be committed by omission, but there can be no omission in law in the absence of a duty to act” (Glanville Williams, Textbook of Criminal Law (2nd ed, 1983) at p 148).

We can find no relevant obligation in this case, for reasons relating both to the general law and to the particular statute.

15. It would seem that the Code incorporates this principle. The Model Criminal Code Officers Committee Report on Chapter 2 of the Code states:[6]

Clearly, the physical element of an offence constituted by conduct can include conduct constituted wholly by an omission to act. However, the Committee accepted the common law and Griffith Code position that omissions attract liability only if the statute creating the offence explicitly says so, or the omission was in breach of a legal duty to act. It will be necessary for P to prove that the omission was accompanied by any relevant fault element. The circumstances in which there is a legal duty to act will be set out in the relevant offence provisions.

16. As previously stated, it is our view that an omission to perform an act can constitute a physical element of an offence under s 135.2. However, the definition of “engage in conduct” which includes an omission to perform an act does not overcome the requirement that the conduct charged must be an omission to carry out an obligation imposed by law. It is necessary to identify a relevant duty or obligation arising under the general law or statute before enquiring whether there has been a breach by way of omission.

17. In the present case it is necessary to determine whether the alleged omission is of such a nature as to be capable of constituting an element of the offence. This in turn will require the identification of a relevant duty or obligation. Here the duty or obligation can only arise under s 135.2 itself or under some other Federal statutory provision.

18. The only relevant statute in this case is the Social Security (Administration) Act 1999 (Cth) (“the Administration Act”). Division 6 Sub Division B of the Administration Act provides various mechanisms aimed at ensuring that persons in receipt of social security payments provide information on matters which may affect the entitlement to, or level of, such payments. Section 67 of the Administration Act authorises the department to issue a notice in writing requiring a recipient to inform the department if there is a change in the circumstances of the recipient. Other provisions include the power to require attendance of recipients at departmental interviews. Section 74 of the Administration Act provides that the refusal or failure to comply with such notices constitutes an offence punishable by imprisonment for six months.

19. In the Summary of Facts provided to the Magistrate by the prosecution it is stated that the appellant was reminded in numerous letters sent to her by the department of an “ongoing obligation” to advise Centrelink of any income she received. It is also stated that she was put on fortnightly reporting at times before and during the alleged offending. It is not clear whether formal notices under the Administration Act were issued. The appellant denies receiving correspondence from the department.

20. Ms Chapman, for the Director of Public Prosecutions (Cth) (“the DPP”), stated on the hearing of the appeal that if notices under the Administration Act were issued they were not relied upon for any purpose other than to assist in establishing that the appellant knew or believed that she was not eligible to receive social security payments at certain times.

21. Ms Chapman did not rely on any provision in the Administration Act as establishing a duty of disclosure in cases such as the present. Instead she argued that the obligation was created by s 135.2 itself. It was submitted that the Code provides that the offence can be committed by way of an omission and s 135.2 is directed at conduct, including omissions, which result in a person obtaining a benefit to which there is no entitlement. It was argued that a duty is thereby created not to obtain a benefit by means of an omission.

22. The case of Nicholson v The Department of Social Welfare provides some guidance in assessing this argument. The appellant in that case was a school teacher who had been in receipt of a domestic purposes benefit. She obtained a teaching position and contacted the relevant government agency advising them that she was now in employment. Despite this, the benefit payments continued. The appellant retained the amounts paid.

23. The appellant was charged with wilfully omitting to tell the department that she was working during the period she received the benefits. It was acknowledged that she had advised the department of her change in circumstances originally as required by s 80A of the Social Security Act 1964 (NZ). In doing so she had complied with the duty under s 80A but that section did not create a further obligation to provide information on an ongoing basis. The issue was whether there was an obligation to communicate with the department at future indeterminate times and advise of the changed circumstances.

24. The prosecution argued that the duty was to be found in s 127 of the Social Security Act 1964 (NZ), the section under which she was charged. Section 127 provided as follows:

127. Every person who makes any statement knowing it to be false in any material particular, or who wilfully does or says anything or omits to do or say anything for the purpose of misleading or attempting to mislead any officer concerned in the administration of this Act or any other person whomsoever, for the purpose of receiving or continuing to receive (for himself or for any other person), or which results in himself or any other person receiving or continuing to receive –(a) Any benefit under this Act or the Social Welfare (Transitional Provisions) Act 1990; or

commits an offence and shall be liable on summary conviction to imprisonment for a term not exceeding 12 months or to a fine not exceeding $5,000, or to both imprisonment and fine.

25. The New Zealand Court of Appeal identified two difficulties in the way of upholding the prosecution submission. The first is of assistance in the present case. In their joint judgment Richardson P and Keith J said:[7]

Next there are two construction complications in this case if s 127 itself creates the obligation. The first is the description of the omission in s 127. An omission is the failure to act where the law requires some act. In terms of s 127 it is the omission “to do or say anything”. The next set of words, “for the purpose of misleading” any officer concerned in the administration of the statute, does not describe the quality of the act or the physical circumstances in which it is to be performed. Rather, those words are directed to the intention accompanying the omission. To give adequate definition and to decide in what circumstances the duty fastens it is necessary to look elsewhere in the Act. It is only because the appellant’s circumstances have changed that in the present class of case there is an obligation to inform the Department. In this class of case an omission has significance only where there was a legal obligation to act and not to omit, so that the omission is a breach of the legal duty to act. It is necessary to determine what circumstances must occur for the obligation to arise, how long the person on whom the obligation rests had to comply, what steps will discharge that obligation and, finally, when the failure to advise was complete.

Another way of highlighting the difficulty of determining the scope of the proposed stand-alone obligation and the related offence under s 127 is to consider the questions – who, when and what? By the express terms of s 127, the offence can be committed by individuals other than the beneficiary or applicant. Is a friend of the beneficiary who knows of continued unjustified receipt of benefit in circumstances such as the present obliged to inform the Department of that fact? To deny that on the basis that a third party has no obligation is to beg the question and to ignore the generality of the references to “Every person” and “any other person whomsoever”. The when and what questions can be taken together. What circumstances occurring at what time give rise to the obligation? Does each payment? Or the receipt of each bank statement indicting continuing payment? Or each use of the funds?

26. The majority of the Court (Richardson P and Keith J) concluded that no relevant duty had been established and violated. It followed that none of the features found in offences committed by way of omission existed.

27. As previously stated, the use of the term “engaged in conduct” in s 135.2 enables that physical element of the offence to be proved by way of an omission. This follows from the definition of the term in s 4.1 of the Code. However, although it is possible to commit an offence against s 135.2 by way of omission, it is our view that the section does not itself create a legal obligation to act and not omit. In particular, s 135.2(1)(aa) does not create such an obligation. It provides for a further physical element which requires proof that the person obtained a financial benefit as a result of the conduct. This element is concerned with causation and provides no assistance as to the nature of an omission on which a charge might be based.

28. Ms Chapman relies on s 4.3(a) of the Code which provides that an omission can be a physical act if the law creating the offence makes it so. She argues that the law creating the offence (s 135.2) makes an omission a physical element because it picks up the definition of “omission” so that the requirements are fulfilled.

29. This can be tested by assuming that s 135.2 relevantly reads as follows (additional words are in bold):

(1) a person is guilty of an offence if:

(a) the person engages in conduct or omits to perform an act; and

(aa) as a result of that conduct or omission to perform an act, the person obtains a financial advantage…

Even in these circumstances, in our opinion the law creating the offence (s 135.2) has not made an omission to perform an act a physical element of the offence.

30. The concept of an “omission” must be read as referring to a law which identifies the omission in question in such a way as to create a duty to perform the omitted act. An example of such a law is a law which makes it an offence for a person to refuse or fail to produce a driver’s licence on request by a police officer. The refusal or failure to produce the driver’s licence is an identified or specific omission, and it is an omission to perform an act which the person in question is obliged to perform, having regard to the terms of the offence creating provision. An omission to file a tax return provides another example.

31. There are a number of reasons for taking this approach to the definition of “omission”.

32. First, there is the generally accepted proposition that an omission will attract criminal liability only if the omission is a failure to perform a legal obligation. We have referred to that principle above.

33. Second, there is the practical consideration that on Ms Chapman’s argument, every time a statute punishes a person for engaging in conduct it will equally punish, in general terms, an omission to perform an act, because usually a reference to engage in conduct is to be read as including an omission to perform an act. That means that every law creating an offence by reference to engaging in conduct, will equally create an offence by reference to an omission to perform an act, because the operation of the definition of “engage in conduct” in every case makes it so.

34. The third consideration is also a practical one. If s 135.2 is read as Ms Chapman suggests, how does one identify the omission to perform an act that attracts criminal liability? Is it the failure to inform Centrelink that the recipient is not entitled to a particular payment that has been received? It is one thing to punish conduct (in the affirmative sense) that results in a person obtaining a financial advantage. It is another thing to punish an omission to perform an act that results in a person obtaining a financial advantage. In the latter case the link to the obtaining of the financial advantage is far less clear.

35. The absence of any duty which would enable an omission to constitute an element of the charges becomes further apparent when the wording of the charges is examined. The statement of offence in each case alleges that the appellant “engaged in conduct”. There is no reference to an omission and no indication of what might amount to an omission in the behaviour of the appellant.

36. In each count under the heading of “Particulars”, it is asserted that the appellant was not entitled to the social security payment because she failed to advise Centrelink of the commission payments which she received. This statement does no more than provide an incorrect reason why there was no entitlement to payment. It is not a particular of the offence charged.

37. An attempt was made to avoid duplicity by dividing the alleged course of conduct into 17 counts. Presumably the dates upon which it is alleged the offences took place are the dates of the receipt of the various payments. But the question which was posed in Nicholson v The Department of Social Welfare (NZ)[8] “What circumstances occurring at what time give rise to the obligation?” might also be asked in the present case. Again, the absence of a clear answer to this enquiry would appear to result from the flawed nature of the charges arising from the absence of the identification of a duty which would then provide guidance as to when, and in what circumstances there was an omission which could be related to each of the 17 counts.

38. In summary, we are of the view that s 135.2 does not define any duty or obligation relevant to an offence committed by way of an omission. The DPP does not rely on any notice issued to the appellant for the purpose of establishing such a duty; nor was it suggested that the duty was to be found elsewhere in the Administration Act. The approach of the Administration Act is to provide for the issuing of notices by the department requiring information and to impose a penalty punishable by imprisonment for a failure to comply with such notices. The Administration Act does not create a separate “stand alone” obligation. We have explained why we consider that s 135.2 does not impose a relevant obligation.

39. It follows that the appellant could not, in law, have been convicted of the offences charged in the complaint and this Court should set aside the convictions which were recorded following the pleas of guilty.[9]

40. It also follows that the admitted facts could not support the charges laid in the complaint (Ground 1.3).

41. Ground 1.2 of the appeal against conviction complains that the complaint is defective in that the statement of the offence in each count fails to identify the transaction, act or omission which is the subject matter of the charge. This difficulty has been addressed in the discussion regarding the wording of the complaint. The failure to identify the transaction is a direct consequence of the absence of a relevant duty.

42. In view of these conclusions it is unnecessary to deal with the appeal against sentence.

43. We would grant an extension of time within which to appeal against conviction. We would allow the appeal against sentence to be amended by the addition of the appeal against conviction and, allow the appeal against conviction. The convictions on each count should be set aside.

44. SULAN J: I have had the benefit of reading the reasons of Doyle CJ and Duggan J. I adopt their summary of the facts and the issues which arise on the appeal.

45. However, I am unable to agree with their reasons and conclusion that, in order to establish the offence charged, it is necessary to identify a statutory or common law duty by the appellant to advise the Department of her changed financial circumstances. In my view, the common law has no application in considering the offences to which the appellant has pleaded guilty.

46. Before considering the provisions in the Act relevant to the offence of obtaining a financial advantage, it is necessary to have regard to the legislative history leading to the enactment of s 135.2 of the Criminal Code Act 1995 (Cth) (“the Code”).

Legislative history of the Code

47. The use of extrinsic materials was discussed by French CJ in K-Generation v Liquor Licensing Commission, as follows:[10]

At common law it is not necessary before entering upon a consideration of such material to surmount a threshold of ambiguity, obscurity or possible absurdity. Statutory interpretation requires the court to have regard to the context in which the words to be interpreted arise and also their statutory purpose. Context includes “the existing state of the law and the mischief which, by legitimate means … one may discern the statute was intended to remedy.” (Citations omitted)

48. In having regard to the meaning of provision in a statute, and in absence of some textual indication to the contrary, one assumes that Parliament has used the words in their ordinary meaning. In Project Blue Sky Inc v Australian Broadcasting Authority, McHugh, Gummow, Kirby and Hayne JJ observed:[11]

However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. (Citations omitted)

49. The Code commenced operation on 1 January 1997 and was the product of a plan to develop an Australian Model Criminal Code. In 1987, a committee was established by the Federal Attorney-General to review Commonwealth criminal law. In 1990 the committee produced an Interim Report entitled Principles of Criminal Responsibility and Other Matters. A draft Bill was prepared but never introduced into the Commonwealth Parliament. No Final Report was prepared. In the following year, the Standing Committee of Attorneys-General established the Model Criminal Code Officers’ Committee (“MCCOC”) to prepare a uniform criminal code for all Australian jurisdictions. The MCCOC prepared a report entitled Theft, Fraud, Bribery and Related Offences to consider offences of dishonesty.

50. A series of further amendments were subsequently made, including the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 2000, which introduced provisions including s 135.2. The enactment of those provisions had regard to that Report. The Report reflected general concern that, despite the flexibility of the Theft Act, there were cases which fell outside the ambit of offences of theft, such as obtaining property by deception, and obtaining a financial advantage by deception. It was argued that this imported some need for a general dishonesty offence. The Report stated:[12]

The most obvious examples of cases which might be caught by a general dishonesty offence are cases where there is some form of dishonest acquisition of property but the conduct does not involve theft or fraud (eg the employee who uses the employer’s premises to make a secret profit, the cinema projectionist who secretly makes copies of films and sells the copies). These cases are not theft because they do not involve an appropriation, nor is there no intent to permanently deprive. Nor are they either of the deception offences because there was no deception. An agreement to do these sorts of things has been held to be a conspiracy to defraud, notwithstanding that the conduct if done by an individual would not amount to either theft or fraud. The creation of a general dishonesty offence along the lines of conspiracy to defraud offence – but without the need to prove agreement – would mean that a person like some of the defendants in the conspiracy to defraud cases could be convicted of an offence of general dishonesty even if it were the sole participant in the scheme. Such an offence could take the form of the existing deception offences but simply drop the requirement that there be a deception. The offence would then be as follows:

(1) A person who dishonestly obtains property belonging to another, with the intention of depriving the other permanently of it, is guilty of an offence.

Maximum penalty:

Imprisonment for 10 years.

(2) A person who dishonestly obtains a financial advantage is guilty of an offence.

Maximum penalty:

Imprisonment for 10 year.

The creation of such an offence would obviate the need to retain a separate offence of conspiracy to defraud because the concerns which led to its codification – the existence of cases which involve dishonest gains or losses but do not fit within any of the existing theft/fraud offences – would have disappeared. Such cases could simply be charged as conspiracies to commit the general dishonesty offence. However the ramifications of such an offence extend far beyond the offence of conspiracy. A general dishonesty offence would make most of the offences in this chapter superfluous. So long as the prosecution could prove a dishonest obtaining of property or a financial advantage, the offence would be proved without the need to prove any other elements – such as appropriation without consent, property belonging to another, intention to permanently deprive, deception, use of menaces, the intent to influence the exercise of an agent’s duty – of the existing offences. Guilt or innocence in these cases would turn almost solely on the element of dishonesty.

51. There were a number of arguments advanced in favour of a general dishonesty offence. The Report refers to cases where there will be no offence in the nature of deception shown but where there is clear dishonesty. The Report gives a number of examples:[13]

Examples of such cases are Scott (illegal copying of films) Hollinshead (manufacture of electricity meter devices) and Combe (using employer’s premises to make profits). Similarly, ongoing payment schemes – such as social security – can be defrauded without any deception where the recipient fails to inform the authority of a change in circumstance which means that the pension or benefit is no longer payable (Citations omitted). (Emphasis mine).

52. The nature of the MCCOC’s recommendations are to simplify the prosecuting of offences involving dishonesty:[14]

It has been suggested that the cure to these problems is to enact specific offences to deal with them rather than a general dishonesty offence. However there are very significant difficulties with this approach. The ingenuity of fraudsters is such that a statute book has little or not chance of keeping up with them. The specific offence is usually never devised until it is all too late. Some dishonest people will never be charged or will be acquitted before the gap is closed. There will be a plethora of offences – the opposite to what we are hoping to achieve under the Model Criminal Code.

The Code

53. Section 135.2 provides:

Obtaining a financial advantage

(1) A person is guilty of an offence if:

(a) the person engages in conduct; and

(aa) as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and

(ab) the person knows or believes that he or she is not eligible to receive that financial advantage; and

(b) the other person is a Commonwealth entity.

Penalty: Imprisonment for 12 months

54. Section 4.1(2) defines conduct which includes an omission to perform an act. Section 4.1(2)(b) provides that “engage in conduct” means to omit to perform an act. The DPP contends that the appellant omitted to advise the relevant department of changes to her financial circumstances.

55. Section 4.3 of the Code provides:

An omission to perform an act can only be a physical element if:

(a) the law creating the offence makes it so; or

(b) the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform.

56. The question is whether the physical element of the offence, as prescribed by s 4.3(a), is contained within s 135.2. If that is the case, then the law creating the offence in s 135.2(1) makes the omission a physical element of the offence. Alternatively, if no offence is created in the manner described, then s 4.3(b) would apply and, as Doyle CJ and Duggan J conclude, it is necessary to identify a duty that the appellant is required to perform. I agree with the majority that there is no such identifiable duty.

57. The definition of “physical element” under the Code is defined in s 4.1 which provides:

4.1 Physical elements

(a) conduct; or

(b) a result of conduct; or

(c) a circumstance in which conduct, or a result of conduct, occurs.

58. In my view, s 135.2 provides that an omission can constitute the physical element of the offence if, as a result of the failure of a defendant to advise of his or her change in financial circumstances, that defendant obtains a financial advantage. It does not require the Court to look to a duty which the law imposes.

59. The Court is not required to look to the existence of a duty of disclosure, either by statute or at common law, in addition to what is already provided by s 135.2. The causative link between the conduct, being the omission to inform the relevant Department of a change of circumstances and the resultant financial advantage, is sufficient to satisfy the physical element in s 135.2(1)(aa).

60. In order to establish that the offence has been committed, the Court would then need to be satisfied that the fault element is present as required by s 135.2(1)(ab).

61. In order to establish the physical element required pursuant to s 4.1(b), the prosecution must prove that the defendant obtained a financial advantage as a result of her omission to inform the Department of her changed financial circumstance.

62. In my opinion, the intention of the legislature in enacting s 135.2 was to overcome the very problem created by the requirement to identify a duty in cases in which a person fails to disclose that they are obtaining a financial advantage, to which they are not entitled, from the Commonwealth. The specific provision in the Code does not require the existence of a duty at law outside the provisions of the Code in order that the “physical element” be satisfied. As previously stated, the provisions involving general dishonesty intended to encapsulate offences which may otherwise have been difficult to prove and fell outside the ambit of the offences created under other specified criminal Acts. With this intention in mind, I am of the view that s 135.2 provides for the “physical element” and the offence is therefore proved.

63. I would refuse to extend the time to appeal against conviction, refuse permission to the appellant to change her plea, and I would refuse her permission to appeal against conviction. As to the appeal against sentence, in view of the decision by the majority to allow the appeal against conviction, it is unnecessary for me to consider the appeal against sentence.

[1] DPP (Cth) v Neamati [2007] NSWSC 746; DPP (Cth) v Acevedo [2009] NSWSC 653 at [15].

[2] [2003] NSWCCA 1; (2003) 56 NSWLR 247.

[3] [2003] NSWCCA 1; (2003) 56 NSWLR 247 at [20]- [21].

[4] [1999] 3 NZLR 50.

[5] [1999] 3 NZLR 50 at [24]-[25].

[6] Criminal Law Officers Committee, Parliament of Australia, Model Criminal Code Chapter 2 – General Principles of Criminal Responsibility Report (1992) at 19.

[7] [1999] 3 NZLR 50 at [26], [28].

[8] [1999] 3 NZLR 50 at [28].

[9] R v Liberti (1991) 55 A Crim R 120 at 121-122.

[10] [2009] HCA 4; (2009) 237 CLR 501, 527.

[11] [1998] HCA 28; (1998) 194 CLR 355, 384.

[12] Model Criminal Code Officers’ Committee of the Standing Committee of Attorneys-General, Report Model Criminal Code Chapter 3 Conspiracy to Defraud (1995), 153.

[13] Model Criminal Code Officers’ Committee of the Standing Committee of Attorneys-General, Report Model Criminal Code Chapter 3 Conspiracy to Defraud (1995), 157.

[14] Model Criminal Code Officers’ Committee of the Standing Committee of Attorneys-General, Report Model Criminal Code Chapter 3 Conspiracy to Defraud (1995), 158.


[1] Poniatowsk v DPP (Cth) [2010] SASCFC 19 per Doyle CJ and Duggan J at para 16.

[2] Extracted from Lexisnexis

What next?

Contact Geoff Today. Ask your questions or for legal help.

If you or a loved one is facing criminal charges, call 0410 689 843 for a free phone consultation. Geoff will give you clear, comprehensive and practical advice about your situation.

You can ask for help over the phone or via email; Geoff can also come to you, just ask and he will travel to your home to discuss your legal problem.

Contact Details

Phone

0410 689 843

Email Address

email@geoffharrison.com.au

Contact Geoff for Help

Get free legal advice. You can then decide if you want to hire Geoff for more substantial work, such as arguing your case in court.

  • This field is for validation purposes and should be left unchanged.