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Reparation Orders

The content on this page was last reviewed on 24 February 2017.

1. Overview

Where an individual is found guilty of a federal offence they may be ordered to make reparation under the s 21B of the Crimes Act 1914 (Cth).

Under federal legislation, a reparation order is not an independent sentencing option. Professor Freiberg notes that:

[W]here a person is convicted of an offence against the law of the Commonwealth, or is conditionally discharged without the court proceeding to conviction, the court exercising federal jurisdiction may, in addition to any other sanction imposed, require the offender to make reparation to the Commonwealth or to a federal public authority… (emphasis added). 1

Reparation orders can be made under the following provisions:

Section 21B: as an Ancillary Order Reparation orders made pursuant to s 21B are treated as civil debts: Crimes Act 1914 (Cth) s 21B(3). 2

Where a person is convicted of a federal offence; or an order is made to discharge the offender without conviction under s 19B; the court may, in addition to any penalty, order the offender to make reparation to the Commonwealth or to any other person.

s 21B reparation order may be made notwithstanding that there is no prior civil liability to make reparation: Vlahov v Commissioner of Taxation (1993) 26 ATR 49.

Section 19B: following a non-conviction order Reparation orders made under s 19B are made a condition of the sentencing order.

The court may discharge the offender without proceeding to conviction on the condition that the offender makes such reparation as the court specifies: Crimes Act 1914 (Cth) s 19B(1)(d)(ii).

An offender who fails to comply with such a reparation order will be in breach of their sentencing order. Accordingly, the original sentencing order may be revoked and the offender re-sentenced for the original offence pursuant to s 20A.

Section 20(1): following the conditional release of an offender Reparation orders made under s 20(1) are made a condition of the sentencing order.

The court may release a person convicted of a federal offence on the condition that the person makes such reparation as the court specifies: Crimes Act 1914 (Cth) s 20(1)(a)(ii).

An offender who fails to comply with such a reparation order will be in breach of their sentencing order. Accordingly, the original sentencing order may be revoked and the offender re-sentenced for the original offence pursuant to s 20A.

Section 16BA(5): where another offence is taken into account Where other offences are taken into account during sentencing pursuant to s 16BA, the court may make such reparation orders as it would have been able to make if the person had been convicted before the court of the offence.
Section 20AB(4)(b): where a sentencing alternative is imposed in a participating state or territory Where the court imposes a sentencing alternative pursuant to s 20AB(1), the court may also make a reparation order.

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2. Definition of Reparation

Reparation is not defined in the Crimes Act 1914 (Cth).  Reparation may be made by money payment or otherwise: s 21B(1)(c)-(d).

The Australian Law Reform Commission has defined ‘reparation’ as:

[A] broad term used to describe any attempt to make amends for a wrong or injury. It encompasses both restitution and compensation. Restitution in the criminal context refers to the return of its owner of the exact property taken by an offender. Compensation refers to the provision of monetary or other recompense by the offender to another for any loss, damage or injury suffered as a result of the crime. 3

Professor Freiberg states that the term is wide enough to include reparation in the form of money payment, restitution in specie, compensation by way of money payment, or perhaps even restorative labour or community service. 4

2.1 Reparation orders and civil proceedings

An order for reparation is not a penalty. 5  Rather, reparation orders are a means through which a victim of crime is able to achieve a quick and easy civil remedy without needing to institute separate civil proceedings against an offender. 6

However, reparation orders are not solely an expedited process for resolving civil claims. 7 A reparation order can be made irrespective of whether there is a prior civil liability to make reparation. 8  The availability of a parallel civil claim is neither necessary, nor inconsistent with the making of a reparation order. 9

A victim’s right to institute civil proceedings is not affected by a federal reparation order: s 15F.

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3. Application of s 21B

Section 21B can be triggered where:

  • a person is convicted of a federal offence; or
  • an order is made under s 19B to discharge the offender

3.1 Reparation to the Commonwealth

Under s 21B(1)(c) a person may be ordered to make reparation to:

  • the Commonwealth; or
  • to a public authority under the Commonwealth

in respect of:

  • any loss suffered; or
  • any expense incurred

by reason of the offence.

See further below: 5. Causation.

3.2 Reparation to any Person

Under s 21B(1)(d) a person may be ordered to make reparation to any person, in respect of any loss suffered as a direct result of the offence.

See further below: 5. Causation.

Note: a body corporate falls within the definition of ‘any person’ for the purposes of a reparation order made under s 21B: s 4B(4). 10 See further: Corporations.

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4. Definition of Loss

Loss is not defined in the Crimes Act 1914 (Cth). Courts have interpreted the term ‘loss’ broadly.

For example, in Gould v Federal Commissioner for Taxation [1998] WASCA 260, the Western Australia Court of Appeal explained that, in relation to reparation orders in favour of the Commonwealth:

[W]hat triggers the power [in s 21B] is that the Commonwealth has sustained a loss. Once this is established, there is nothing more for the Commonwealth to prove. The end disposition depends on all of the circumstances of the individual case. Matters such as the nature and subject matter of the loss suffered are relevant. But they are not the only considerations and the discretion is a broad one. 11

Reparation orders have been made to cover losses incurred by the Commonwealth arising from failure to pay income tax deductions, 12 and to recover costs incurred by a corporation following the commission of an offence. 13

In Hookham v The Queen [1994] HCA 52 Deane, Dawson and Gauldron JJ stated at [7]:

[A] loss need not involve the transfer from the Commonwealth to someone else of a proprietary interest. The Commonwealth suffered a loss by being deprived of money which it would have been paid had it not been for the commission of the offences in question. There is no reason why that should not be regarded as being a reparable loss (citations omitted).

A director may be subject to a reparation order for losses incurred by the Commonwealth as a result of a company’s failure to pay taxation: Hookham v The Queen [1994] HCA 52. For example, s 8Y(1) of the Taxation Administration Act 1953 (Cth) deems directors of companies to be liable for taxation offences committed by the company

Intervening conduct which prevents an offender from later undoing the loss does not affect the power to make a reparation order: Davies v Taylor [1997] TASSC 132.

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5. Causation

Under s 21B(1)(c), a person may be ordered to make reparation to the Commonwealth or a public authority in respect of any loss suffered by reason of the offence.

Under s 21B(1)(d), a person may be ordered to make reparation to any person in respect of any loss suffered as a direct result of the offence.

In Liaver v Errington [2003] QCA 5, the Queensland Court of Appeal considered the expression ‘by reason of the offence’ to require a relationship of cause and effect. This might consist of multiple causes and involve a number of steps. 14 The Court concluded that possession of excisable tobacco on which the duty was not paid caused a loss to the Commonwealth. 15

In R v Foster [2008] QCA 90, McCurdo P (Mackenzie AJA and Chesterman J agreeing) considered the meaning of the words ‘as a direct result of.’ The Court held that s 21B(1)(d) requires there to be ‘as a matter of fact, a close or significant connection between the loss suffered and the offence which caused it’. 16 McMurdo P (Mackenzie AJA and Chesterman J agreeing) stated at [71]–[74]:

It is clear enough from the terms of s 21B that for a court to make a reparation order under s 21B(1)(d) in favour of “any person” requires a closer connection between the offence and the loss than for a court to make a reparation order under s 21B(1)(c) in favour of the Commonwealth. The clear legislative intent in enacting s 21B(1)(d) is as follows. Federal offenders who through their offending have caused a loss to others should be liable to compensate those who have suffered that loss, where there is a sufficiently direct connection between the offence and the loss.

The legislature’s use of the term “a direct result”, rather than “the direct result” suggests it did not intend to limit the capacity to make a reparation order under s 21B(1)(d) to a single loss arising from an offence, if on the facts, there is more than one direct loss.

When read together with s 21B(1)(c), those words also suggest that, where a secondary loss by way of a ripple effect occurs as a result of an offence, a reparation order could not be made under s 21B(1)(d) in favour of the person suffering the loss.

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6. Exercising the discretion to impose a reparation order

Courts have judicial discretion in determining whether to make a reparation order and the amount of any such order. 17

In Hookham v The Queen [1994] HCA 52 Deane, Dawson and Gaudron JJ observed at [9]:

[I]n a context where the Parliament has not expressly identified the considerations to be taken into account in making an order for reparation under s 21B, a trial judge would be excluded from taking account of an offender’s personal circumstances and means only if, and to the extent that, “the subject matter and the scope and purpose” of the relevant statutory provisions enable it to be said that those particular considerations were “definitely extraneous to any objects the legislature could have had in view”.

6.1 Relevance of offender’s financial circumstances

Part IB does not specifically require the court to consider an offender’s financial circumstances when making an order for reparation. However, courts have found that an offender’s financial means is a relevant consideration in the exercise of the discretion to make an order for reparation.

In Vlahov v Commissioner of Taxation (1993) 26 ATR 49, the Full Court of the Supreme Court of Western Australia noted that there is no provision in the Crimes Act 1914 (Cth) requiring the court to consider an offender’s financial circumstances before making a reparation order but stated at 55:

[T]he Court has a discretion whether or not to make a reparation order. That discretion is, of course, to be exercised judicially. In the exercise of that discretion, the court may have regard to the personal circumstances and means of the offender.

This has been followed by other intermediate courts of appeal: R v Hookham (1993) 31 NSWLR 38; Davies v Taylor [1997] TASSC 132; Liaver v Errington [2003] QCA 5, [4] (McMurdo P); Vadasz v DPP (Cth) [1999] SASC 255, [41]; R v West [2015] ACTSC 134, [79].

In R v West [2015] ACTSC 134, Refshauge J declined to make a reparation order due to the financial circumstances of the offender, stating at [80]:

I find she [the offender] presently has no means to make a reparation order. Her partner is not working and has not worked for significant periods of time. After this offending, Ms West will find it very hard to find employment. Having carefully considered the position, I decline to make a reparation order.

The onus is on the offender to prove their lack of means to make reparation, not the Crown to prove the offender’s means: Davies v Taylor [1997] TASSC 132 applied in R v West [2015] ACTSC 134, [80].

6.2 Other relevant considerations in exercising the discretion

In Davies v Taylor (1996) 134 FLR 394, Slicer J listed considerations relevant to exercising the discretion at 403–4:

Section 21B does not afford an unfettered discretion and circumstances such as complexity, suitability of civil proceedings, differing degrees of causative responsibility and absence of any utility in the making of an order, may be taken into account.

[T]he exercise of discretion is not wholly constrained. It permits limited regard to personal circumstances, efficacy of the order, relative causative effect on loss, the conduct of co-offenders and complexity. But its exercise is guided by an objective rather than a subjective approach to those circumstances.

In R v Allred [2015] ACTSC 327 Refshauge J held that the following principles were relevant to exercising the discretion under s 21B:

  • the making of such orders is discretionary;
  • it is not wrong in principle, however, to order compensation against an offender without means;
  • the order is a means of vindicating the invasion of the victim’s rights by avoiding the need for expensive civil action;
  • the court may have regard to the effect such an order may have on the rehabilitation of the offender and the means available to meet such an order. An order for compensation is not a punishment and is different in its effect on sentencing to a confiscation order;
  • a lengthy period of payment is not reasonable; and
  • compensation should generally only be ordered in straight forward cases. 18

The fact that an offender has been subject to earlier bankruptcy proceedings does not act as a bar to the making of a reparation order: Knight v The Queen (1990) 51 A Crim R 323.

6.3 Reparation orders in addition to fines

Where the sentencing judge imposes a fine equal to the maximum penalty for that offence, there is no impediment to also imposing a reparation order for the loss caused. This will not, of itself, mean the sentence imposed is excessive: Chief Executive Officer of Customs v Labrador Liquor Wholesale [2006] QCA 558.

6.4 Reparation orders and co-offenders

Where co-offenders have jointly caused the relevant loss, the court has a discretion to apportion the loss between the co-offenders. However, this does not exclude a court from ordering each offender to pay the total sum: R v Melrose [2016] QCA 202, [16]–[17].

In R v Melrose [2016] QCA 202, the Court dismissed an appeal against an order for reparation under s 21B imposed on one of two co-offenders for the total amount of loss. The Court stated at [17]:

The applicant submitted the “actual” fraud amount that was the basis of sentence should be reduced by the quantum of fraud involving a co-offender … [I]t was within his Honour’s discretion to make the reparation order for the full amount.  Section 16A(2)(e) of the Act stipulates that the Court must take into account the “injury, loss or damage resulting from the offence”.  It was correct to attribute $182,287.23 as the amount fraudulently obtained and open to the sentencing judge to make the order on this basis.

6.5 Considerations when ordering reparation as a condition of discharge or release

An order to make reparation can be made a condition of release under s 20(1)(a)(ii) or a condition of a non-conviction order under s 19B.

When reparation is ordered as a condition of release, the order is drawn ‘within the ambit of the overall penalty’. 19 It will then be necessary to consider the impact of the order to make reparation on the totality of the overall penalty. For example, in Johannessen v Collins (1992) 24 ATR 306, Owen J stated at 319:

By making the restitution or reparation order a condition of the recognisance, his Worship effectively drew that order within the ambit of the overall penalty … it would then be necessary to take into account the liability to make restitution when considering the means of the offender to meet a pecuniary penalty.

In Hayes v The Queen [2014] VSCA 309 the Court suggested that a court should not require the payment of reparation as a condition of release under s 20. Weinberg and Beach JJA stated at [26]–[27]:

Construing the judge’s orders as requiring payment of the reparation sum as a condition of release would seem to us to run counter to the prohibition in s 20(2A) of the Crimes Act 1914, which prevents the imprisonment of an offender for failing to pay a reparation amount.

That said, the parties are agreed that the judge did not intend to make the reparation order a condition of the recognisance release order (citations omitted).

In Johannessen v Collins (1992) 24 ATR 306 Owen J allowed an appeal against sentence where an order to make reparation was made a condition of a recognizance release order pursuant to s 20(1). Owen J acknowledged that courts have the power to make such orders, but stated at 319:

Bearing in mind all of the circumstances of the case, I believe that the appropriate order is a reparation order under s 21B and not a restitution or reparation order as a condition of a recognisance. I should not be taken as saying that there was no power to make the order which was made. Clearly, such a power exists under s 20(1). However, in this case, taking into account the personal circumstances of the appellants and the substantive penalty imposed, it would have been a more appropriate reflection of the legislative intent to have structured the reparation order in the way which I have suggested (emphasis added).

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7. Enforcement under s 21B

No person may be imprisoned for a failure to comply with an order to pay reparation, restitution or compensation: s 21B(2).

A reparation order made pursuant to s 21B is enforceable as a final judgment of the court of civil jurisdiction in which it is filed: s 21B(3).

An order to make reparation is enforceable where the clerk, or other appropriate officer, of the court signs a certificate specifying:

The certificate must be filed in a court having civil jurisdiction to the extent of the amount to be paid: s 21B(3)(c).

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8. Enforcement of Reparation Orders

State or Territory law regarding enforcement or recovery of a reparation order applies to a person convicted in a State or Territory of an offence against a law of the Commonwealth: Crimes Act 1914 (Cth) s 15A. 20 See further: Default, Enforcement and Recovery.

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9. Breach

No person may be imprisoned for a failure to comply with an order to pay reparation, restitution or compensation: s 21B(2); s 20(2A).

The consequences of breach of a reparation order made under s 21B may be different to those which follow a breach of a reparation order made under s 19B or s 20(1).

Breach of a reparation order made under s 19B or s 20(1) constitutes a breach of the original sentencing order. The Australian Law Reform Commission noted that:

If an ancillary order has been made a condition of a sentencing order, an offender who fails to comply with the ancillary order will breach his or her sentencing order. Accordingly, the original sentencing order imposed on the offender may be revoked and the offender may be re-sentenced for the original offence. 21

Section 20A sets down what is to occur when a person has failed to comply with an order made under s 19B or s 20(1). See further: Breach of Conditional Release Bonds After Conviction.

Breach of a reparation order made under s 21B does not constitute a breach of the original sentencing order. Reparation orders made pursuant to s 21B are treated as civil debts. 22 Any breach is considered a civil matter.

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10. Other federal laws

Other federal laws may allow for compensation or reparation to be ordered upon conviction for particular crimes: see, eg, Corporations Act 2001 (Cth) s 1317H, 1317HA, 1317HB; Competition and Consumer Act 2010 (Cth) s 87(1A)(c). 23

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Notes:

  1. Arie Freiberg, Fox & Freibeg’s Sentencing: State and Federal Law in Victoria (Thomson Reuters, 3rd ed, 2014) 541.
  2. See Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [8.22].
  3. Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [8.3].
  4. Arie Freiberg, Fox & Freibeg’s Sentencing: State and Federal Law in Victoria (Thomson Reuters, 3rd ed, 2014) 528.
  5. R v Foster [2008] QCA 90, [72].
  6. See Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [8.15]. See also Inwood v The Queen (1974) 60 Cr App R 70, [73] cited in Gould v Federal Commissioner of Taxation [1998] WASCA 260; Johannessen  v Collins (1992) 93 ATR 4001Davies v Taylor [1997] TASSC 132; Donovan v Wilkinson [2005] NTSC 8, [26].
  7. Gould v Federal Commissioner of Taxation [1998] WASCA 260.
  8. Vlahov v Commissioner of Taxation (1993) 93 ATR 4501 quoted with approval in Gould v Federal Commissioner of Taxation [1998] WASCA 260.
  9. Davies v Taylor [1997] TASSC 132.
  10. See Donovan v Wilkinson [2005] NTSC 8, [29]; Hookham v The Queen [1994] HCA 52.
  11. Gould v Federal Commissioner of Taxation [1998] WASCA 260.
  12. Gould v Federal Commissioner of Taxation [1998] WASCA 260; Davies v Taylor [1997] TASSC 132.
  13. Donovan v Wilkinson [2005] NTSC 8.
  14. Laiver v Errington [2003] QCA 5, [39]-[50].
  15. Laiver v Errington [2003] QCA 5, [50].
  16. R v Foster [2008] QCA 90, [74].
  17. R v Foster [2008] QCA 90, [67].
  18. Refshauge J set out these principles in R v Steen [2015] ACTSC 259, [51]-[52], in considering the principles relevant to compensation orders under the Crimes (Sentencing) Act 2005 (ACT). His Honour referred to the judgment of Bell J in RK v Mirik [2009] VSC 14 in formulating these principles. Bell J was considering the making of compensation orders under s 85B of the Sentencing Act 1991 (Vic). Refshauge J held in R v Allred [2015] ACTSC 327 that these principles were applicable to exercising the discretion to impose a reparation order under s 21B, stating: ‘I have also been asked to make a reparation order, available under s 21B of the Crimes Act. I have set out the relevant principles in R v Steen [2015] ACTSC 259 at [51]- [52].’: at [94].
  19. Johannessen v Collins (1992) 24 ATR 306, 319.
  20. Section 15A refers to the enforcement of ‘fines’. Under the Crimes Act 1914 (Cth) the definition of ‘fine’ includes any costs or amounts ordered to be paid by offenders: s 3(2)(b). A reparation order therefore falls within the definition of ‘fine’.
  21. Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [8.22].
  22. Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [8.22].
  23. See further Arie Freiberg, Fox & Freibeg’s Sentencing: State and Federal Law in Victoria (Thomson Reuters, 3rd ed, 2014) 545–6.