By Natalie Burgess
In DPP (Cth) v Keating [2013] HCA 20, the High Court ruled that federal legislation imposing a backdated duty on social security recipients to inform Centrelink of changes in their circumstances had failed in its goal of shoring up the prosecution of past instances of social security fraud by omission. The Court held that an omission or failure to act can only attract criminal responsibility when, at the time of the failure, there was an existing legal duty to perform the act. The case sustains the importance of certainty in the criminal law, particularly the role it plays in the purpose and interpretation of the Commonwealth Criminal Code Act 1995 (Cth), but leaves aside some important constitutional questions involving the scope of the Commonwealth legislature’s power to enact retrospective criminal law.
Ms Keating’s omission
From October 2005 to September 2010 Ms Kelli Anne Keating was the recipient of a social security payment called the ‘Parenting Payment Single’ (PPS), often known colloquially as the single mothers’ benefit. When she applied for the benefit, Ms Keating was working on a part-time basis at Channel 7. During the Centrelink application process she had provided, by way of evidence of income, a payslip that showed she earned $760.15 per fortnight. Her benefit was calculated on the basis of this information. In fact, from the time she began receiving the benefit to September 2009, the income Ms Keating earned every fortnight varied (sometimes more than the $760.15 figure provided to Centrelink, sometimes less) and she never declared these fluctuations.
Section 135.2(1) of the Commonwealth Criminal Code provides that, where a person ‘engages in conduct’, as a result of which she obtains a financial advantage from the Commonwealth, and knew she was not entitled to receive that advantage, she is guilty of an offence, punishable by up to ten years in prison. The Criminal Code defines the term ‘engages in conduct’ to include not only positive acts but also failures to act (referred to as ‘omissions’). Ms Keating subsequently was charged with three counts of obtaining financial advantage from the Commonwealth contrary to s 135.2(1). It was alleged that, over three separate periods between May 2007 and September 2009, Ms Keating obtained a total overpayment of $6292.79, because of her omission to notify Centrelink of her changed income.
Ms Poniatowska’s legacy
The High Court previously had considered this particular offence in the context of the PPS in 2011 in DPP (Cth) v Poniatowska [2011] HCA 43. The Director was granted special leave to appeal the Full Court of the Supreme Court of South Australia’s decision that it was not sufficient for conviction that Ms Poniatowska had obtained a financial advantage at the expense of the Commonwealth as a result of her failure to notify Centrelink. Because her conduct involved an omission or failure to act, there had to be a legal obligation for her to do the thing she had failed to do. This long-standing common law principle, the Full Court said, was incorporated into s 4.3 of the Commonwealth Criminal Code, the provision that dictates the circumstances in which an omission can constitute an offence under the code.
To understand the issues in these cases, it is helpful to know something of the nature of omissions. Traditionally, the criminal law has been concerned with prohibition — ‘thou shalt not’. In most cases a person has to ‘do’ a thing in order to have committed an offence. The theoretical debate over the circumstances in which omissions should be criminalised is a hot one. Certainly, to impose liability for an omission is to set a more onerous standard than liability for a commission, as a person who is prohibited from performing a certain act arguably has more options open to them than a person who is required to perform a certain act.
In the end, however, the principle that had traction with the High Court in Poniatowska was certainty. A majority of the Court observed that the principles of criminal responsibility stated in the Commonwealth Criminal Code ‘proceed from the view that the criminal law should be certain and that its reach should be able to be ascertained by those who are subject of it’. Put more simply, a person has to be able to know: in what circumstances is my failure to perform an act, or to let something happen or continue, a ‘criminal’ failure? When does not doing something become not doing something criminally?
And so in Poniatowska, the High Court affirmed the decision of the Full Court of the Supreme Court of South Australia, that the general law principle that there can be no criminal liability for an omission unless it is the omission to perform a legal obligation, is incorporated into the Commonwealth Criminal Code. Anticipating this outcome, prior to the High Court decision in Poniatowska being handed down, the Commonwealth Parliament enacted legislation that purported to impose just such a duty. The newly inserted s 66A of the Social Security Administration Act 1999 (Cth) introduced a new legal duty for all social security recipients to inform Centrelink within 14 days of any change in circumstances that might affect the payment of social security to them.
Ms Keating’s challenge
The new Commonwealth legislation means that any social security recipient who fails to tell Centrelink of changes in their income (within 14 days) could potentially be prosecuted for obtaining a financial advantage from the Commonwealth that they weren’t entitled to receive. Importantly, the new s 66A was made effective from 20 March 2000, backdated to retrospectively impose a duty upon those charged before the amending Act received Royal Assent. That means that the new duty applied to everyone who received social security since the Criminal Code became law, including social security fraud defendants who may have been able to rely on the High Court’s eventual decision in Poniatowska. This, of course, included Ms Keating.
Ms Keating was granted removal of her case from the Magistrates’ Court of Victoria to the High Court. The Commonwealth Director of Public Prosecutions relied on both the backdated general duty in the new s 66A and notices allegedly issued to Ms Keating under s 68 of the Social Security Administration Act requiring her to notify Centrelink of a change in her circumstances, with which, as a recipient of these notices, she was under a legal duty to comply under s 74 of the Act.
The defendant succeeded in her argument that s 66A failed to create a duty such that her failure to notify Centrelink of her changes in income amounted to ‘engaging in conduct’ for the purposes of s 135.2 of the Commonwealth Criminal Code. The High Court also held that the notices were capable of imposing a duty if certain facts were found, and remitted the matter back to the Magistrates’ Court for determination.
A ‘statutory fiction’
The effect of the Director’s argument was to say that s 66A imposed criminal liability for a failure to do an act that, at the time, Ms Keating was not required to perform. This, the Court noted (adopting the language used in argument by counsel for the defendant) would have created a ‘statutory fiction’. For the Court to uphold such a ‘fiction’ in a case where proof of a serious criminal offence is in issue, the legislative intent must be absolutely clear.
Such a construction was not supported by the language of the Commonwealth Criminal Code. Section 4.3(b) (the subsection in issue in Keating) states that an omission to perform an act can only constitute the physical element of an offence where ‘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 use of the present tense in this provision (‘is’), as the High Court observed, is important, and it accepted the defendant’s submission that criminal responsibility for omissions under s 4.3 is ‘confined to a failure to do a thing that at the time of the failure the law requires the person to do’. Any future attempts by the legislature retrospectively to impose criminal responsibility for an omission will likely require, as the defendant submitted, either an amendment to s 4.3 or to the offence provision itself (in this case s 135.2).
Another submission of the defendant in Keating involved the role of intention where the duty to perform an act is retrospectively imposed. The Director argued that there are two elements only for which proof is required: the fact that the person intended to not perform the act, and that, at law, there is a duty to perform the act. This argument did not recognise the connection that must be made between the intention and the duty — how can a person be said to intentionally fail to do something, such that it is a criminal failure, in circumstances where there is no legal duty to do so? The test is not whether the person intended to break the law, the test is whether the person intended to not perform an act in circumstances where there was a duty to perform it.
The importance of certainty
A key message arising from both Poniatowska and Keating is the importance of certainty in the criminal law, and for the Criminal Code in particular. In Poniatowska, the majority makes reference to the second reading speech introducing the Criminal Code’s Bill to Parliament that quotes the following from Bentham:
Do you know how they make [law]? Just as a man makes law for his dog. When your dog does anything you want to break him of, you wait till he does it, and then you beat him for it.
The Court’s approach in both cases is based on the understanding that a fundamental purpose of codifying the criminal law, from the outset, was to state up front with certainty the obligations placed on those who are the subject of it. Retrospective imposition of a duty that is then, to quote the Court in Keating, ‘incapable of discharge’, would be contrary to this purpose.
It should be noted that this issue of the lack of certainty in the PPS scheme is not completely resolved. During the hearing of Poniatowska, Justice Bell raised with counsel for the Director the difficulty under the PPS scheme of determining the exact point when the defendant’s failure to act constituted engaging in conduct for the purposes of s 135.2. Her Honour’s concern is that a person who is subject to a charge must be in a position to know the act that they failed to perform, where they are said to have omitted to act, and when. The majority judgment in Poniatowska observes that counsel for the Director was unable to provide a satisfactory answer to that question and Justice Bell had a similar exchange with counsel for the Director during argument in Keating. Whether this difficulty creates further problems for the Commonwealth in future applications of the general and notice duties now imposed on social security recipients remains to be seen.
A constitutional question?
In Keating, and not for the first time, the Court decided the case on established principles of statutory construction, avoiding additional constitutional questions raised by the defendant. But these constitutional issues are significant and worthy of consideration. A law such as s 66A which, as the Court described, operates (when applied retrospectively) as a ‘fiction’, requires a court to accept the ‘fiction’ that the facts of a case are other than they actually were, that the law at the time was other than it actually was. To what extent is this an impermissible interference with the judicial process, such that it constitutes a usurpation of the judicial power set out in ch III of the Constitution?
The power of the Commonwealth legislature to enact retrospective criminal law is derived from a series of cases including, most significantly, Polyukhovich v Commonwealth [1991] HCA 32, which involved a law criminalising war crimes in committed in Europe during World War II. Chief Justice Mason and Justices Dawson and McHugh (separately) upheld the impugned law in that case, Justices Deane and Gaudron wrote strong individual dissents against the Commonwealth’s power to enact the law, Justice Brennan did not consider the question of retrospectivity, and Justice Toohey, recognising that the Commonwealth’s capacity to enact retrospective criminal law may be limited in some contexts, upheld the law in that particular case. To what extent should Polyukhovich, a case involving war crime of a heinous character, be held out as authority for the proposition that the Commonwealth legislature has a broad power to enact retrospective criminal law?
If the Commonwealth Parliament amends the Commonwealth Criminal Code to clearly state that people can be prosecuted for failing to perform legal duties that didn’t exist at the time of the failure, then the constitutional question will have to be resolved. For now, no such legislation has been passed. Instead, the Commonwealth DPP has issued a ‘Litigation Instruction’ advising prosecutors on how to distinguish past prosecutions that were based on omissions from ones that were based on commissions (eg, giving false information to Centrelink). This may be a prelude to the dropping of many of the reported 15,000 social security prosecutions brought between the introduction of the Commonwealth Criminal Code and the enactment of s 66A. One of those cases, Ms Keating’s, was struck out at the Heidelberg Magistrates’ Court on 10 July 2013.
Natalie Burgess is a Judge’s Associate at the Federal Court of Australia. Natalie graduated with a JD from Melbourne Law School in December 2012, and in 2013 was involved as a research assistant to counsel for the defence in DPP (Cth) v Keating.
AGLC3 Citation: Natalie Burgess, ‘Fiction and Certainty in Social Security Prosecutions: DPP (Cth) v Keating’ on Opinions on High (25 July 2013) <https://blogs.unimelb.edu.au/opinionsonhigh/2013/07/25/burgess-keating/>.
One mistake the Cth Parliament made in this case was to assume that amendments to social security law (a restrospective duty to keep Centrelink up-to-date) would simply be automatically picked up by the general principles of criminal responsibility (in this case, s. 4.3 of the Criminal Code.)
Someone pointed out to me that the Cth’s drafters sometimes seem to treat the general principles like a dictionary, servicing the rest of the statute book, rather than like stand-alone rules and, in this respect, Keating resembles an earlier High Court case, Dickson v R [2010] HCA 30. In Dickson, the High Court held that a savings provision inserted into provisions on theft of Cth property (preserving state laws on theft) had no effect on a general provision (in s. 11.5 of the Criminal Code) creating a separate offence of conspiracy to do any other serious offence.
The message for the Cth drafters is that they may need to specifically amend the general principles to bed down any changes they might want to make to specific criminal offences. That’s arguably a pity, as the general principles aren’t meant to be fiddled with all the time. They’re meant to be general. An alternative may be to insert a robust provision in the general principles ‘picking up’ changes made elsewhere. (There actually was such a provision in 11.6 relating to conspiracy offences, but the High Court didn’t consider it in Dickson.)