DEFENCE FORCE DISCIPLINE APPEAL TRIBUNAL Jordan v Chief of Air Force [2015] ADFDAT 2 Citation: Jordan v Chief of Air Force [2015] ADFDAT 2 Appeal from: Defence Force Magistrate Parties: HUGH DAVID JORDAN v CHIEF OF AIR FORCE File number: DFDAT 1 of 2015 Judges: TRACEY (PRESIDENT), LOGAN AND BRERETON JJ (MEMBERS) Date of judgment: 17 July 2015 Catchwords: DEFENCE – conviction relating to receipt of rental allowance – whether appellant guilty of the charge on which he was convicted – consideration of proper construction of the offence of "obtaining a financial advantage" under s 135.2(1) of the Criminal Code Act 1995 (Cth) – whether physical and fault elements must exist contemporaneously – whether record of interview conducted with service police admissible at trial Legislation: Criminal Code Act 1995 (Cth) s 135.2(1) Defence Act 1903 (Cth) s 58B Defence Force Discipline Act 1982 (Cth) s 61(3) Defence Force Discipline Appeals Act 1955 (Cth) ss 23(1)(b), 23(1)(c) Evidence Act 1995 (Cth) s 90 Cases cited: Director of Public Prosecutions of the Commonwealth v Poniatowska (2011) 244 CLR 408 – cited Date of hearing: 26 June 2015 Place: Brisbane (heard in Adelaide) Category: Catchwords Number of paragraphs: 38 Counsel for the Appellant: Ms M Barnes and Mr C Fabbian Solicitor for the Appellant: Fabbian Lawyers Counsel for the Respondent: GPCAPT J Harris SC and LTCOL R Cawte Solicitor for the Respondent: Director of Military Prosecutions DEFENCE FORCE DISCIPLINE APPEAL TRIBUNAL DFDAT 1 of 2015 ON APPEAL FROM A DEFENCE FORCE MAGISTRATE BETWEEN: HUGH DAVID JORDAN Appellant AND: CHIEF OF AIR FORCE Respondent JUDGES: TRACEY (PRESIDENT), LOGAN AND BRERETON JJ (MEMBERS) DATE OF ORDER: 17 jULY 2015 WHERE MADE: BRISBANE (heard in adelaide) THE TRIBUNAL ORDERS THAT: 1. The appeal be allowed. 2. The conviction of the appellant be quashed. DEFENCE FORCE DISCIPLINE APPEAL TRIBUNAL DFDAT 1 of 2015 ON APPEAL FROM A DEFENCE FORCE MAGISTRATE BETWEEN: HUGH DAVID JORDAN Appellant AND: CHIEF OF AIR FORCE Respondent JUDGES: TRACEY (PRESIDENT), LOGAN AND BRERETON JJ (MEMBERS) DATE: 17 JULY 2015 PLACE: brisbane (heard in adelaide) REASONS FOR JUDGMENT 1 The appellant is a Leading Aircraftman in the Royal Australian Air Force. Following a trial before a Defence Force Magistrate ("the DFM") he was convicted of obtaining a financial advantage from the Commonwealth. He was sentenced to a period of detention. 2 He has appealed to the Tribunal against his conviction. His principal ground raises issues relating to the proper construction of s 135.2(1) of the Criminal Code Act 1995 (Cth) ("the Criminal Code") which had application to him pursuant to s 61(3) of the Defence Force Discipline Act 1982 (Cth). He also alleges that the DFM wrongfully admitted into evidence a record of interview which had been conducted with him. Some further grounds were not pressed. THE FACTS 3 The relevant facts were not in dispute. 4 The appellant had an entitlement to rental allowance as a condition of his service. On 4 July 2012 he advised the Defence Housing Authority ("the Authority") that he was moving to a house in Mawson Lakes in South Australia and that he would be the sole occupant of the premises. 5 On 19 September 2012 he signed and submitted an application for rental allowance to the Authority in respect of his occupancy of the premises. He said that he was the sole occupant of the property. He undertook, in the application form, to advise the Authority and his commanding officer, in writing, of any changes to the details provided by him in the application form within 10 days of the change occurring. He received rental allowance at the rate appropriate to a sole occupant with effect from 7 July 2012 and continued to receive an allowance at that rate until 16 February 2014. 6 In February 2013 Ms Jade O'Connell moved into the premises. 7 On 4 June 2013 the appellant updated his service records (his PMKeyS) to state that Ms O'Connell was his next of kin and that she resided with him at the Mawson Lakes property. 8 On 17 February 2014 the appellant advised the Authority that he was sharing the premises with Ms O'Connell. His rental allowance was changed to the shared rate. That rate was less than that payable to sole occupants. THE CHARGES 9 The appellant was charged with one count of "obtaining a financial advantage" in that "between on or about 14 February 2013 and 16 February 2014 [he] engaged in conduct by which he obtained a financial advantage from the Commonwealth of $2,864.62 knowing or believing he was not eligible for that financial advantage." 10 The figure of $2,864.62 represented the difference between the amount of rental allowance paid to the appellant during this period and the amount to which he was entitled at the "sharing rate". 11 In the course of the trial the charge was amended to change the commencement date of the relevant period from 14 February 2013 to 4 June 2013. The amount of the overpayment was reduced to $1,996.75. These changes occurred pursuant to an agreement between the prosecutor and the defending officer. Following the amendment the appellant was re-arraigned and pleaded not guilty to the amended charge. THE OFFENCE 12 Section 135.2(1) of the Criminal Code provides that: "(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." 13 In Director of Public Prosecutions of the Commonwealth v Poniatowska (2011) 244 CLR 408 the High Court considered this offence. The case involved the prosecution of a recipient of social security benefits who had been overpaid when she failed to declare certain commissions which she had received. It was held that she had been wrongly convicted of an offence under s 135.2 because criminal liability did not attach to an omission unless the act, which the person had omitted to perform, was one which he or she was under a legal obligation to perform. The plurality observed (at 416-7) that: "20 Offences against a law of the Commonwealth consist of physical and fault elements. Physical elements of an offence may be conduct, a result of conduct, or a circumstance in which conduct, or a result of conduct, occurs. The fault elements of intention and recklessness apply to the physical elements stated in paras (a) and (aa) respectively. Paragraph (ab) specifies the fault element of knowledge or belief with respect to the physical element of circumstance of non-eligibility for receipt of the financial advantage. 21 Applying the provisions of Pt 2.2 of the Code, the offence created by s 135.2(1) may be described as having the following physical and fault elements: (a) the person intentionally engages in conduct; (aa) as a result of the conduct, the person obtains a financial advantage for himself or herself from another person, being aware of the substantial risk that this will occur and, having regard to the circumstances that are known to him or her, it being unjustifiable to take the risk that this result will occur; (ab) the person knows or believes that he or she is not eligible to receive the financial advantage; and (b) the other person is a Commonwealth entity (absolute liability). 22 The first physical element of the offence is an element of conduct. "Conduct" and the expression "engage in conduct" are each defined in s 4.1(2) of the Code: "In this Code: conduct means an act, an omission to perform an act or a state of affairs. engage in conduct means: (a) do an act; or (b) omit to perform an act." 23 Section 135.2(1)(a), when read as incorporating the default fault element, requires proof that the person intentionally does an act or intentionally omits to perform an act. At issue are the circumstances in which the intentional omission to perform an act may ground liability for the offence. This directs attention to s 4.3, which states the principles of criminal responsibility for the omission to act under the laws of the Commonwealth: "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."" THE RULING 14 The Defence Force Magistrate ("the DFM") ruled that each payment of rental allowance which was made to the appellant between 19 September 2012 and 16 February 2014 "was the direct result" of the application made by the appellant on 19 September 2012. Once Ms O'Connell had moved in "there was no longer an entitlement to the non-share rate of rental allowance." The appellant knew that. The DFM further ruled that he did not consider "that the state of affairs whereby Ms O'Connell was sharing could be said to be conduct, the result of which was a payment of the financial advantage concerned." The relevant conduct, for the purposes of s 135.2(1)(a) was the positive act of making the original application rather than the intentional omission to advise of the appellant's changed circumstances once Ms O'Connell had taken up residence. The DFM identified the financial advantage obtained by the appellant as "being overpayment of rent allowance calculated at the non-sharing rather than the sharing with one rate." He found the appellant guilty of the charge, as amended, and recorded a conviction. THE PRINCIPAL GROUND OF THE APPEAL 15 The appellant argued that he had obtained a financial advantage to which he was not entitled because his circumstances had changed "and the relevant conduct which resulted in the obtaining of the financial advantage could only be the failure to advise of the change to those circumstances". 16 The Chief of Air Force sought to support the DFM's approach to the construction of s 135.2. He acknowledged that this construction necessarily raised the possibility of liability arising even though there was no coincidence between the physical elements of the offence, prescribed in paragraph (a), and the fault elements identified in paragraph (ab). 17 He submitted that, if the relevant conduct was the making of the original application, it followed that the financial advantage obtained by the appellant was the total sum of the allowances paid to him following the making of the application. He acknowledged that the appellant had not been charged on this basis: rather, the financial advantage which was identified in both the original and modified charges was the difference between the "shared" and "non-shared" rates paid after Ms O'Connell took up residence. 18 One element of the offence created by s 135.2 is that the financial advantage in question be obtained as a result of the conduct. The use of the definite article ('that') in paragraph (ab) indicates that the same financial advantage is being referred to in both paragraphs (aa) and (ab). It is difficult to comprehend how the financial advantage referred to in the charge – being the amount by which the sole rate exceeded the shared rate after his change of circumstances on 4 June 2013 - can be said to have been gained as a result of making his original application, in different circumstances, on 19 September 2012 - except, perhaps, in an extremely broad causal sense. Such a construction will not lightly be adopted where criminal liability is being imposed. 19 The offence created by s 135.2 is engaging in the conduct referred to in paragraph (a), producing the result identified in paragraph (aa), with the knowledge referred to in paragraph (ab). The gist of the offence created by the section is the conduct referred to in paragraph (a) and not the receipt referred to in paragraph (ab). The section does not, in our opinion, make it an offence to receive a financial advantage knowing that the recipient is not eligible to receive it. What is proscribed is engaging in conduct that results in receipt of a financial advantage with knowledge that the recipient is not eligible to receive it. In the absence of the knowledge identified in paragraph (ab), the conduct is entirely innocent. The knowledge referred to in paragraph (ab) must exist contemporaneously with the conduct referred to in paragraph (a): it is that knowledge which deprives the conduct of an innocent character. 20 The construction which we prefer is supported by the language of the section which suggests that paragraphs (a) and (ab) are concurrent requirements. The financial advantage might not be obtained immediately: paragraph (aa) clearly contemplates that the obtaining may post-date the conduct. The necessary knowledge or belief prescribed by paragraph (ab), however, relates to eligibility to receive the financial advantage. That knowledge or belief must be present when the person engages in the offending conduct. 21 When the appellant lodged his original application in September 2012 he stated, truthfully, that he was the sole occupant of the house. He was paid the allowance to which he was entitled as a single occupant. The prosecution, at trial, did not seek to suggest that, at that time, and for some five months thereafter, he was ineligible to receive the monies paid to him or that he knew or believed that he was ineligible to receive them. These payments had been made at regular intervals. It would be a curious result if these lawfully received payments were to be treated as part of a financial advantage received by reason of a later failure by the appellant to notify the Authority of his changed circumstances. 22 He was not, as a result, guilty of the charge on which he was convicted – or, more precisely, of the conduct alleged against him by the prosecution, namely, the making of the application. 23 It may have been open to the prosecution to have put its case on the basis that, once Ms O'Connell had moved into the premises or the appellant had acknowledged her as his next of kin, the appellant had been required to, but did not, advise the Authority of his changed circumstances and that, as a result, he received the allowance at a higher rate than that to which he was entitled. Were it to be shown that the appellant knew that he was under an obligation to report his change of circumstances and that such a change would have reduced the rate at which the allowance was paid, there would have been a strong inference that he knew or believed that he was no longer eligible to receive the higher rate and that he thereafter received a financial advantage, being the difference between his former rate and that to which he was entitled following the arrival of Ms O'Connell. 24 Had the prosecution determined to present its case in this way, it would have had to establish that the appellant had a legal obligation to report his changed circumstances to the Authority. That obligation was said to have arisen under paragraph 1.5.2(4) of the Defence Determination 2005/15, as amended by Defence Determination 2005/52. That provision required a Defence member, who was in receipt of rental allowance, to "inform the approving authority for any housing assistance that the member [was] in receipt of about the change as soon as practicable." The Authority was an approving authority and the appellant had undertaken, when he made his original application, to advise the Authority, in writing, within 10 days of any changed circumstances occurring. He had not done so. 25 In these circumstances we raised with the parties the question of whether it could be said that any miscarriage of justice had occurred such that the provisions of s 23(1)(b) or (c) of the Defence Force Discipline Appeals Act 1955 (Cth) were engaged. 26 Counsel for the appellant drew the Tribunal's attention to a long and detailed memorandum presented and marked for identification at trial. In the memorandum counsel for the appellant had advanced submissions challenging the validity of the Determinations. These arguments included a contention that the Determinations (or relevant parts of them) were not authorised by s 58B of the Defence Act 1903 (Cth) and that the delegate, who had purportedly made the Determinations, was not authorised to do so. The Determinations and relevant delegations were not in evidence at trial. Counsel for the appellant said that, had the prosecution determined to advance an "omissions" case at trial, the evidence and legal arguments relating to the efficacy of the Determinations would have been pressed. 27 Having considered these submissions, counsel for the Chief of Air Force, advised the Tribunal that, if the appellant's arguments relating to the construction of s 135.2 were successful, he did not propose to submit that there had, nonetheless, been no miscarriage of justice. 28 Had the appellant's arguments about the Determination been made and rejected, it would have been possible, consistently with Poniatowska, for the prosecution to have pursued an "omissions" case in place of or as an alternative to its positive conduct case. 29 The prosecution had, however, made a considered forensic decision to prosecute the case as one involving positive conduct on the part of the appellant and not to advance an alternative "omissions" case. It would not, in our view, be appropriate to allow such a case to be pursued on appeal. 30 The appellant's principal ground should be upheld. His conviction must be quashed. THE SECOND GROUND 31 The appellant's second ground related to the admissibility at trial of a record of interview which had been conducted with him by service police. The appellant had sought unsuccessfully to persuade the Defence Force Magistrate to exercise his discretion, under s 90 of the Evidence Act 1995 (Cth), to reject this evidence on the ground that it would be unfair to the appellant to use it to support the prosecution's case having regard to the circumstances in which the admissions which it contained were obtained. 32 The appellant complained that he had not been given sufficient information at the commencement of the interview and, in particular, information about the alleged criminal conduct on his part which was being investigated. This, it was said, had given rise to unfairness because the appellant had not been able to make an informed decision as to whether or not to participate in the interview. 33 We do not consider that the DFM erred in refusing to exclude the record of interview. 34 Near the beginning of the interview the appellant was advised that the service police were "making inquiries into allegations that [he was] in receipt of full rental allowance payment for a period of time which [he was] not entitled to". The prescribed caution and advice as to rights was then administered. 35 Despite this, the appellant argued that it had not been made clear to him that he was, potentially, facing criminal charges. He contended that there was ambiguity in the language used to explain the nature of the investigation. The allegations could equally well have been made in the course of an administrative inquiry into an overpayment. 36 We do not accept these submissions. The appellant well knew that he was being interviewed by service police officers. He had been given the standard criminal caution and advice about his rights, including his right to silence. Whilst he was a relatively junior member of the Defence Force, he may be taken to have been aware that service police do not, normally, conduct administrative inquiries and that they do not conduct interviews under caution in the course of administrative inquiries. 37 This ground must fail. DISPOSITION 38 The appeal should be allowed and the conviction quashed. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tracey, Logan and Brereton. Associate: Dated: 17 July 2015