Kostov v Director of Public Prosecutions (NSW) (No 2)

1. [1]

   BELL P: On 13 August 2019, Ms Adriana Kostov (Ms Kostov) was convicted in the Local Court of New South Wales by Milledge LCM in relation to two offences of using a false document to obtain a financial advantage, contrary to s 254(b)(ii) of the Crimes Act 1900 (NSW).

2. [2]

   On 30 October 2019, Ms Kostov filed an application in the Local Court for the annulment of her convictions. That application was dismissed on 1 November 2019.

3. [3]

   On 5 December 2019, Ms Kostov lodged an appeal in the District Court of New South Wales appealing from the dismissal of the annulment application.

4. [4]

   On 11 December 2019, Hunt DCJ struck out the appeal from the annulment decision of the Local Court under s 11A(1) of the Crimes (Appeal and Review) Act 2001 (NSW) on the basis that the Court had no jurisdiction to hear it (the District Court decision).

5. [5]

   On 6 March 2020, Ms Kostov filed a Summons seeking judicial review of the District Court decision pursuant to s 69 of the Supreme Court Act 1970 (NSW).

6. [6]

   Pausing there, it is necessary to note that, on 19 November 2018, in Kostov v State of New South Wales (Vexatious Proceedings) [2018] NSWSC 1794, Fagan J made the following orders (the vexatious proceedings order) pursuant to s 8(7) of the Vexatious Proceedings Act 2008 (NSW):

7. [7]

   Ms Kostov sought and successfully obtained a grant of leave to appeal from the vexatious proceedings order on 27 March 2019. This was notwithstanding the fact that she had sought to adjourn the application: see Kostov v State of New South Wales (No 2) [2019] NSWCA 66. Notwithstanding the grant of leave to appeal, Ms Kostov discontinued her appeal. She therefore remains subject to the vexatious proceedings order, and the consequences that flow from such an order under the Vexatious Proceedings Act.

8. [8]

   Ms Kostov’s summons for judicial review of the District Court decision was listed for directions before me on 20 April 2020. I made directions on that day and, on 21 April 2020, I published a short judgment setting out the reasons for those directions: Kostov v Director of Public Prosecutions (NSW) [2020] NSWCA 73.

9. [9]

   The directions made on 20 April 2020 were relevantly as follows:

10. [10]

    The background to those directions was the fact that, as recorded in my reasons of 21 April 2020 and as noted at [6] above, on 19 November 2018, Ms Kostov was (and remains) the subject of the vexatious proceedings order made by Fagan J.

11. [11]

    As also recorded in my reasons of 21 April 2020, on 20 April 2020 I raised with the parties and Ms Kostov, in particular, the issue of whether or not, as a result of the vexatious proceedings order, she was required to have obtained leave under the Vexatious Proceedings Act, prior to the institution of the current judicial review proceedings in this Court, it being common ground that she had neither sought nor attained such leave. I drew attention in this regard to s 13 of that Act, with subsections (1)-(3) providing as follows:

12. [12]

    Given the terms of s 13 of the Vexatious Proceedings Act, it seemed to me necessary, as an essential first step, prior to making any other directions for the hearing of the summons for judicial review, that the parties be given an opportunity to make submissions by reference to s 13 of the Vexatious Proceedings Act as to whether or not Ms Kostov required leave pursuant to that Act prior to the institution of the judicial review proceedings and what the consequences, if any, of her failure to obtain that leave might be.

13. [13]

    There would be no basis to make directions in relation to the judicial review proceedings if those proceedings were taken to have been dismissed by virtue of s 13 of the Vexatious Proceedings Act.

14. [14]

    Ms Kostov participated by telephone in the directions hearing on 20 April 2020 and, although she dropped out of the hearing at one point, she was on line at the time when I explained the directions and the reasons for the directions I had made. She did not object to the timetable I proposed. Indeed, she indicated that she would only need a couple of days in order to make her submissions. Notwithstanding that, I afforded her 7 days in which to make submissions and 7 days in which to reply to any submissions made on behalf of the Director of Public Prosecutions (NSW).

15. [15]

    On the morning of 21 April 2020, the day after these directions were made, Ms Kostov sent an email to the Registrar of the Supreme Court and to my Associate requesting me to recuse myself from all matters concerning Ms Kostov. She had not raised any such objection during the directions hearing on 20 April 2020.

16. [16]

    The basis from Ms Kostov’s request that I recuse myself, as best I could discern it from her email, was as follows:

17. [17]

    Ms Kostov completed this email with the following statement:

18. [18]

    Later on 21 April 2020, after a copy of my reasons for the directions made the previous day had been sent to the parties, Ms Kostov sent a further email to my Associate relevantly acknowledging receipt of the reasons. Her email response included the following:

19. [19]

    On the morning of 23 April 2020, I instructed my Associate to reply to Ms Kostov’s correspondence, with a copy to the Solicitor for Public Prosecutions (who appeared for the Director of Public Prosecutions (NSW) as respondent in the judicial review proceedings) in the following terms:

20. [20]

    Regrettably, Ms Kostov persisted with her stance and responded to my Associate on 23 April 2020, repeating her request for me to recuse myself on the basis of my prior professional relationship with the law firm and stating that:

21. [21]

    The reference to the “Klewer matter” was a reference to this Court’s decision in Klewer v Director of Public Prosecutions (NSW) (No 2) [2020] NSWCA 69 (Klewer) which was handed down on 20 April 2020 prior to the directions hearing in this matter and to which I drew the parties’ attention both orally and in my reasons of 21 April 2020. It will be necessary to refer to the judgment in Klewer later in these reasons.

22. [22]

    On 27 April 2020, in an email, copied to my Associate but addressed to counsel for the Attorney General for New South Wales (the Attorney General) who, by separate notice of motion, had sought leave to be joined as third respondent (see further at [49]-[52] below), Ms Kostov reiterated her previous position, stating:

23. [23]

    Notwithstanding the informality of the manner in which Ms Kostov’s recusal application was made, namely by email to my chambers on the day following the directions, I will, as indicated in my Associate’s email of 23 April 2020 (see [19] above), deal with the application insofar as I understand it.

24. [24]

    It is first desirable and necessary to set out the principles and refer to the authorities relevant to allegations of apprehended bias.

The principle of apprehended bias

1. [25]

   The principle of apprehended bias gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the court or tribunal be independent and impartial: Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6] (Ebner). In John Fairfax Publications Pty Ltd v Maurice Kriss [2007] NSWCA 79, the Court of Appeal held that the principle “exists not only to protect litigants from actual bias and injustice, but to maintain public confidence in the courts by ensuring that justice appears to be done”.

2. [26]

   Where a question arises as to the independence or impartiality of a judge or other judicial officer, the governing principle, as outlined by the High Court in Ebner at [6], is that:

3. [27]

   It is well established that the judge in respect of whom apprehended bias is alleged may rule on such an application. The plurality in Ebner (at [74]) described this as “both the ordinary, and the correct, practice”: see also Quigley (A Practitioner) v The Legal Practitioners Complaints Committee [2003] WASCA 228 at [99]-[101]; GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Limited [2013] FCAFC 150 at [33]; Markan v Bar Association of Queensland (No 1) [2013] QSC 108; Lunn v The Commissioner for Public Employment [2009] NSWSC 19 at [23]; Duke Group Ltd (in liq) v Pilmer [2001] SASC 215 at [71]. This is for sound reasons. If it were otherwise, the mere making of an allegation, however misconceived, would have real potential to disrupt the orderly conduct of court proceedings if invariably required to be referred to another judge to await his or her determination. Furthermore, as Mahoney JA observed in Australian National Industries Ltd v Spedley Securities Ltd (in liq) (1992) 26 NSWLR 411 at 436:

4. [28]

   The High Court in Ebner (at [8]) identified the two steps required in relation to the application of the apprehension of bias principle, as follows:

5. [29]

   In Aussie Airlines at 222, Merkel J noted that “[p]rior professional relationships between adjudicator and litigant have been considered on a number of occasions. The very system of judicial appointment from the senior ranks of the profession means that such prior associations are inevitable”. Similarly, the High Court in Ebner recognised that the “potential forms of association between a judge and a litigant are manifold” (at [29]), but went on to stress that the important question is:

6. [30]

   The importance of “identifying” and “articulating” the nature of the apprehended bias was recently considered by the Supreme Court of Western Australia in Farkas v Thomason [2020] WASC 67 at [74], where Smith J noted that:

7. [31]

   A number of decisions have raised for consideration the specific issue of whether a prior professional relationship between a lawyer and a client will disqualify the lawyer, on becoming a judge, from sitting in proceedings to which the former client is a party.

8. [32]

   In Western Australia v Watson [1990] WAR 248, the Full Court of the Supreme Court of Western Australia rejected the submissions that a judge should ordinarily disqualify himself or herself if there had been a professional association between the judge and one of the parties to litigation, and where the other party has objected (at 263). The Full Court observed that the duty of a judge to disqualify for proper reasons was matched by an equally significant duty to hear any case in which there was no proper reason to disqualify (see also Raybos Australia Ltd v Tectran Pty Ltd (1986) 6 NSWLR 272).

9. [33]

   This is the same point that Sir Anthony Mason made in Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352; [1986] HCA 39 where his Honour observed:

10. [34]

    In Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78 at 87-88; [1991] HCA 25, the High Court held that a prior professional relationship between a lawyer and client does not generally disqualify the lawyer, on becoming a judge, from sitting in proceedings to which the former client is a party, even if as lawyer the judge had given advice on an issue which will arise in the litigation. However, the judge may choose not to sit if the correctness or appropriateness of the advice is in issue, and a fortiori if the advice has gone beyond an exposition of the law to advise adoption of a course of conduct to advance the client’s interests and it will be necessary to decide whether the course of conduct taken was legally effective, wise, reasonable or appropriate. This inevitably will depend on the nature of the relationship, the ambit of the advice given and the issues for determination.

11. [35]

    In S & M Motor Repairs, the issue before this Court was whether the primary judge should be disqualified because he had previously, on a number of occasions, appeared as counsel for the defendant, Caltex Oil. The majority of the Court held that the trial judge had nor erred in failing to disqualify himself, and that a professional relationship with Caltex Oil for 10 years, in which the trial judge had acted as their barrister, did not give rise to the requisite apprehension. The majority of the Court formulated the relevant question (at 378-379) as:

12. [36]

    That the “reasonable observer” would have a reasonable understanding of the way in which barristers carry out their work was reiterated by Brereton J in British American Tobacco Australia Ltd v Peter Gordon [2007] NSWSC 109 (BATA), where his Honour noted (at [63]) that:

13. [37]

    Similarly, in Aussie Airlines at 230, Merkel J noted that the “informed” observer could be presumed to have the “general knowledge” that when barristers act for a client they do so in a professional capacity, and could as easily have been briefed to fulfil the same task for the opposite side, that in accepting a brief the barrister does not become part of or identified with the client and has no financial interest in the outcome, and that the barrister acts as a member of an independent Bar, bound by a professional code of ethics.

14. [38]

    In BATA, the defendant applied to Brereton J to disqualify himself on the ground of apprehended bias said to arise from the circumstance that for over a period of about four months in 2003, when at the Bar, his Honour had acted for BATA in other proceedings, which the defendant contended involved substantially the same issue as that which would have arisen in the proceedings in question. At [85], Brereton J highlighted the following propositions in relation to apprehended bias and prior professional relationships between a judicial officer and a litigant:

15. [39]

    In BATA, Brereton J did choose to recuse himself from the interlocutory proceedings in question, only because those proceedings raised the “iniquity issue” with which his Honour had previously been briefed by BATA when working at the Bar. At [113], his Honour concluded that a:

16. [40]

    In Bakarich v Commonwealth Bank of Australia [2010] NSWCA 314, the principal issue before this Court was the alleged apprehended bias of the primary judge, based on his previous professional relationships with both Senior and Junior Counsel for the defendant Bank, and the Bank itself. Prior to his appointment to the Supreme Court in early 2003, the primary judge had represented the Bank in a number of cases while he was a barrister. The Court held (at [59]-[60]):

Consideration

1. [41]

   No basis has been made out for me to recuse myself in the hearing of the preliminary point in this matter, namely whether or not the proceedings should be taken to have been dismissed by reason of the operation of s 13(3) of the Vexatious Proceedings Act and Ms Kostov’s failure to obtain leave prior to their institution. That is so for several reasons.

2. [42]

   First, I had no involvement whatsoever with any application made by any person or by any law firm, let alone “the client” and “the law firm”, to have Ms Kostov declared a vexatious litigant in 2018 or at any other time. Indeed, I had never heard of Ms Kostov until well after I took up my appointment to this Court on 28 February 2019.

3. [43]

   Second, whilst it is correct that from time to time throughout my career at the Bar, I was retained by “the law firm” to which Ms Kostov referred in her email of 21 April 2020, extracted at [18] above, including in one matter to represent “the client” to whom Ms Kostov also referred, so far as I am aware from the decision of Fagan J in which Ms Kostov was declared to be a vexatious litigant (see [6] above), neither “the law firm” which formerly retained me, nor “the client” referred to by Ms Kostov, played any role in the proceedings before Fagan J. The parties to those proceedings were Ms Kostov and the State of New South Wales, represented by the Crown Solicitor’s Office.

4. [44]

   Third, the fact that a judge may have formerly been retained from time to time by a particular law firm for a particular client is not in and of itself a basis for recusal (as the authorities referred to at [33]-[40] above make abundantly clear).

5. [45]

   Fourth, to the extent that Ms Kostov has pointed out in her email correspondence that the tipstaff or associate to Fagan J was employed by “the law firm” in question after he or she left the position with Fagan J is wholly irrelevant, both generally and in the context of her application for me to recuse myself from the hearing and determination of the preliminary issue in this matter. As I have explained, this matter is concerned with what is essentially a purely legal question viz. what are the consequences, if any, of a failure by a person the subject of a vexatious proceedings order in not obtaining leave prior to commencing judicial review proceedings.

6. [46]

   Fifth, Ms Kostov’s submission, if I have understood it correctly, involved a serious and wholly unfounded implicit assertion that, in making the vexatious proceedings order, Fagan J was in some way influenced to do so by a former tipstaff or associate doing the bidding of a law firm at which he or she had just commenced employment, and which was not, in any event, retained by either party in the proceedings before Fagan J.

7. [47]

   On any number of levels, this contention is not only flawed but scandalous. I reject it in its entirety.

8. [48]

   Accordingly, the application that I recuse myself is refused.

Joinder application

1. [49]

   Before turning to a consideration of the substantive question for determination, namely whether Ms Kostov required leave to commence these proceedings, it is necessary to deal with a notice of motion filed in these proceedings by the Attorney General on 27 April 2020. That notice of motion sought leave for the Attorney General to be joined as third respondent to the summons filed by Ms Kostov on 6 March 2020 in order to make submissions on the questions contained in my directions of 20 April 2020. The notice of motion was supported by an affidavit of Ms Amanda Rose Sapienza (Ms Sapienza) which relevantly stated that the Attorney General sought leave to be joined on the basis that the questions which were the subject of my directions of 20 April 2020 concerned the operation of the Vexatious Proceedings Act and had implications beyond this particular case. The affidavit pointed out that the Attorney General is the Minister with responsibility for the Vexatious Proceedings Act.

2. [50]

   This motion was listed for hearing on 4 May 2020 and Ms Kostov was informed of that listing. She indicated, however, by email of 1 May 2020 to my Associate, that:

3. [51]

   Following this indication, I withdrew the listing of the motion with a view to dealing with it in the course of this judgment, in light of Ms Kostov’s unilateral refusal to participate in the proceedings, notwithstanding the fact that they had been commenced by her.

4. [52]

   For the reasons stated by Ms Sapienza as outlined at [49] above, it is appropriate that the Attorney General be joined to the proceedings and I will grant leave to do so.

Leave to bring judicial review proceedings

1. [53]

   That then leaves for consideration the two questions in respect of which I made directions on 20 April 2020, namely, whether or not Ms Kostov required leave pursuant to the Vexatious Proceedings Act to commence the judicial review proceedings and what the consequences were, if any, of her failure to obtain such leave.

2. [54]

   Submissions were filed on these questions by both Ms Gleeson of counsel on behalf of the Director of Public Prosecutions (NSW), and by Mr Emmett of counsel on behalf of the Attorney General in anticipation of being joined as a respondent to the proceedings.

3. [55]

   As will be apparent from these reasons so far, Ms Kostov unilaterally refused to make submissions on either of the questions the subject of the 20 April 2020 directions, unless and until the informal recusal application was dealt with (see [17], [18], [20] and [22] above). That refusal extended to not taking up the provision made in the directions to file submissions in reply.

4. [56]

   It is not for a litigant to dictate how a Court is to proceed, nor unilaterally to refuse to comply with directions made by the Court. In this regard, I note that no application was made by Ms Kostov during the directions hearing of 20 April 2020 for me to recuse myself, and no suggestion was made by her on that occasion that it was inappropriate for me to deal with the matter, or that Ms Kostov would not be making submissions.

5. [57]

   The course I adopted, as set out in my Associate’s email to Ms Kostov of 23 April 2020 extracted at [19] above, was designed to deal with her application fairly and efficiently. Ms Kostov’s ability to comply with the Court’s directions in relation to the leave question arising under s 13 of the Vexatious Proceedings Act did not depend in any way on whether or not I recused myself. As explained in my Associate’s email of 23 April 2020, had I considered that a case for recusal was made out, I would have referred the leave question to another judge of appeal.

6. [58]

   Ms Kostov was squarely on notice of the Court’s directions and that the Court expected those directions to be complied with. Her misguided and unilateral decision not to file any submissions on the leave question was entirely of her own making. I say nothing further about the peremptory tone of her communications. She has had ample opportunity to make submissions and has not taken up that opportunity.

Submissions by the Director of Public Prosecutions (NSW) and Attorney General

1. [59]

   The submission on behalf of the Director of Public Prosecutions (NSW), in summary form, was that:

2. [60]

   The Director of Public Prosecutions (NSW) referred to Klewer (discussed further at [64]-[67] below) and then submitted:

3. [61]

   In Potier v State of New South Wales [2014] NSWCA 359 at [9], Leeming JA described s 13 of the Vexatious Proceedings Act as containing provisions which “operate of their own force.”

4. [62]

   In written submissions filed on behalf of the Attorney General, it was submitted that the decision in Klewer required Ms Kostov to have obtained leave. It was then submitted that, notwithstanding the terms of s 13(2) of the Vexatious Proceedings Act (extracted at [11] above), it may be open to this Court to grant leave nunc pro tunc but that, if this power existed, it should be exercised sparingly. The Attorney General submitted that:

5. [63]

   The submission that leave could be granted retrospectively nunc pro tunc is far from self-evident in my view and, as Ms Kostov elected not to participate in this aspect of the case and therefore did not seek leave nunc pro tunc, it is not necessary to decide the question.

Significance of Klewer

1. [64]

   In Klewer, this Court decided that a person the subject of a vexatious proceedings order who is convicted of a criminal offence does not require leave under the Vexatious Proceedings Act to appeal from such a decision: see Klewer at [25]-[26], [35], [70]-[71] and [104].

2. [65]

   By majority (Simpson AJA and myself), the Court also held that where a person the subject of a vexatious proceedings order seeks judicial review of a decision to dismiss an appeal from a criminal conviction, leave pursuant to the Vexatious Proceedings Act is required to bring such proceedings: [38]-[42], [107] and [112].

3. [66]

   At [109]-[111], Simpson AJA explained:

4. [67]

   In Klewer, Ms Klewer had sought the requisite leave in her summons for judicial review and such leave was, in the particular circumstances, granted.

Consideration and conclusion

1. [68]

   As was submitted by both the Director of Public Prosecutions (NSW) and the Attorney General, Ms Kostov was required to obtain leave to bring judicial review proceedings in this Court by reason of the fact that she was and remains the subject of a vexatious proceedings order. This follows both from an application of the principles enunciated in Klewer, and the terms of s 13 of the Vexatious Proceedings Act.

2. [69]

   As Beazley P explained in De Varda v Austin [2018] NSWCA 263 at [29] (De Varda):

3. [70]

   No such leave was secured in the present case.

4. [71]

   The consequences of Ms Kostov not seeking leave prior to commencing proceedings are dictated by s 13(3) of the Vexatious Proceedings Act, extracted at [11] above, namely that the proceedings are taken to have been dismissed.

5. [72]

   It is not necessary to consider the Director of Public Prosecutions (NSW)’s fall back position that leave should not be granted, even if it could now be sought from this Court and granted nunc pro tunc.

6. [73]

   Consistent with this Court’s decision in Klewer and De Varda, in my opinion, Ms Kostov’s failure to have first obtained leave to commence the judicial review proceedings has contravened s 13(1) of the Vexatious Proceedings Act. As no leave was sought or granted within 28 days of the institution of those proceedings, they are, by reason of s 13(3) of the Vexatious Proceedings Act, taken to have been dismissed. Consistent with the order made in De Varda, a declaration that the proceedings stand dismissed will be made.