Kostov v YPOL Pty Ltd

THE COURT: On 27 March 2017, the appellant (previously identified in this Court by the pseudonym ZXC) was convicted in the Supreme Court of criminal contempt by contumacious breach of a restraining order in civil proceedings against the respondent (YPOL), an incorporated firm of solicitors. Following the receipt of expert reports as to her psychiatric condition, Adriana Kostov was found on 11 July 2017 to be a person under a legal incapacity, and a tutor was appointed for the civil proceedings. Thereafter, on 22 August 2017, she was found to be unfit to defend the proceeding as to sentence for the contempt, and no penalty was imposed on her except the entry of conviction. Suppression orders that had been made on 11 July 2017 were also vacated on 22 August 2017.

Ms Kostov appeals to this Court against her conviction and the vacating of the suppression orders. She also seeks leave to appeal against the restraining order, the appointment of a tutor, and various orders as to costs. Both the appeal and application for leave require an extension of time. Their resolution demands close attention to the procedural history between the parties, the character of contempt proceedings, and the appellate function in relation to questions of fitness to plead.

On 29 April 2016, Ms Kostov commenced proceedings 2016/131955 in the Supreme Court, alleging negligence by YPOL and a solicitor, Mr Easton. On 11 July 2016, those proceedings were summarily dismissed by Harrison J: Decision Restricted [2016] NSWSC 961. On 26 August 2016, Ms Kostov commenced further proceedings 2016/257819, alleging negligence based on the same factual substratum. On 1 December 2016, Bellew J stayed those proceedings pending the payment of costs in the earlier proceedings; made an order under Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 2.1 that Ms Kostov “desist from communicating with [YPOL], its servants, agents, employees and legal representatives, in connection with the proceedings or the subject matter of the proceedings other than by email to the [YPOL] solicitors” at a specified address (the restraining order); and awarded YPOL its costs of the motion: Decision Restricted [2016] NSWSC 1722.

By notice of motion filed with leave in proceedings 2016/257819 on 27 January 2017, YPOL sought an order that Ms Kostov “be dealt with for contempt of court having disobeyed an order of the Court made by his Honour Justice Bellew in this matter on 1 December 2016, in the circumstances set out in the Statement of Charge annexed to this notice of motion”. The amended statement of charge filed on 15 February 2017 identified the restraining order above, listed prohibited communications by Ms Kostov after becoming aware of that order, and charged that she had thus breached the order and “thereby committed contempt of court”. In the course of hearings on 3 February 2017 and 16 March 2017 (concerning subpoenas sought by YPOL), Ms Kostov admitted to having sent prohibited communications: Decision Restricted [2017] NSWSC 39. On 17 February 2017, she was ordered to appear to answer the contempt charges at a hearing fixed for 27 March 2017.

At that hearing, in which Ms Kostov participated for some time by telephone, Fagan J dismissed her application for an adjournment, read out the charges of contempt and, after terminating the call because of her “shouting down the phone line”, proceeded to determine the matter in her absence. His Honour described Ms Kostov as seeming “to be not in her right mind”, noted a need to assess “whether she is suffering from some personality disorder or worse”, and expressed reluctance to determine a “sentence of imprisonment without having had some assessment made of her”. He continued: “In the absence of medical evidence or any form of medical explanation, her conduct is contumacious”. As to the Court’s power to order such an assessment, counsel for YPOL cited The Owners Strata Plan 21372 v Banovic [2017] NSWSC 177, in which the parties were agreed that the Mental Health (Forensic Provisions) Act 1990 (NSW) (MHFP Act) did not apply in relation to a civil contempt being dealt with in the context of civil proceedings.

Having recorded that he had no doubt that Ms Kostov’s conduct was “in knowing defiance of the order”, Fagan J declared that Ms Kostov had committed a contempt of the Supreme Court as particularised in the amended statement of charge, convicted her of “the criminal contempt as declared in [that] order”, and made orders for preparation of a presentence report by the Office of Community Corrections: Decision Restricted [2017] NSWSC 341. On 28 March 2017, Ms Kostov filed a motion under UCPR, r 36.16 for those orders to be set aside. However, on 6 April 2017, Adamson J dismissed that motion with costs on the basis that Ms Kostov had chosen not to appear before Fagan J: Decision Restricted [2017] NSWSC 395.

At a directions hearing before Fagan J on 12 April 2017, Ms Kostov tendered a report by Dr Robert Gertler, a psychiatrist, dated 4 April 2017. That report included an opinion that Ms Kostov was “suffering from a major depressive episode at the present time as part of a bipolar mood disorder” and “lacked insight into her behaviour”. The proceeding as to sentence was adjourned, and a later hearing, vacated: Decision Restricted [2017] NSWSC 514. Around 7 July 2017, Ms Kostov (through LegalAid solicitors) filed a further motion under UCPR, r 36.16, and a report by Dr Andrew Ellis, another psychiatrist, dated 28 June 2017 was sent to Fagan J’s chambers and served on YPOL. According to this report, it was “likely that over the course of proceedings [the appellant] would not, from a psychiatric point of view have been considered fit to be tried” because “she [had] significant formal thought disorder”.

At a further directions hearing on 11 July 2017, Fagan J found that Ms Kostov was “under a legal incapacity” and appointed a tutor under UCPR, r 7.18: Decision Restricted (Supreme Court (NSW), Fagan J, 11 July 2017, unrep). His Honour also made orders under the Court Suppression and Non-Publication Orders Act 2010 (NSW) (CSNPO Act), s 7, prohibiting publication or disclosure of evidence as to Ms Kostov’s psychiatric illness.

Ms Kostov’s 7 July 2017 motion under UCPR, r 36.16 and the proceeding for sentence were heard together by Fagan J on 7 and 8 August 2017, and determined by a judgment delivered on 22 August 2017: Decision Restricted [2017] NSWSC 1071. His Honour held (at [28]) that “proceedings on a notice of motion charging criminal contempt” are “criminal proceedings” as defined in the Civil Procedure Act 2005 (NSW) (CP Act), s 3(1), to which the UCPR is inapplicable, with the result that Ms Kostov’s notice of motion was dismissed. He accepted (at [38]) that R v RTI (2003) 58 NSWLR 438; [2003] NSWCCA 283 established that the MHFP Act had no application after conviction. Purporting to exercise the inherent jurisdiction of the Court, he found (at [52]) that the applicant was presently unfit to defend the sentence proceeding according to the criteria in R v Presser [1958] VR 45. He determined (at [66]) to apply the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act), s 10A, to dispose of the sentence proceeding without imposing any further penalty. (By s 10A(2), such action is taken to be a sentence passed by the court on conviction of the offender.) And he concluded (at [67]–[68]), exercising the power under the Supreme Court Act 1970 (NSW) (SC Act), s 23, that Ms Kostov should pay YPOL’s costs of both its notice of motion charging contempt and her 7 July 2017 notice of motion under UCPR, r 36.16, assessed on the ordinary basis.

Fagan J also vacated the non-publication order previously made on 11 July 2017. On Ms Kostov’s application for an interim suppression order pending an intended appeal from that order, McCallum J on 20 September 2017 ordered that “all judgments in the current proceedings be removed from Caselaw and not published until 18 October 2017 or further order of the Court of Appeal”. That order was continued by Campbell J on 17 October 2017 and then by Payne JA in the present appeal proceeding 2017/353721 on 26 February 2018. The orders made by Payne JA as entered in JusticeLink were corrected under the slip rule on 29 November 2018 to refer to the non-publication of all “judgments in proceedings 2016/257819”.

Ms Kostov commenced appeal proceeding 2017/353721 by a notice of appeal filed on 21 November and amended in “written submissions” on 9 February 2018 challenging:

Ms Kostov also commenced proceeding 2018/106954 by a summons filed on 6 April 2018 seeking leave to appeal against:

Ground 1 of the appeal challenges Ms Kostov’s conviction for the contempt charged by YPOL’s 27 January 2017 notice of motion. And ground 2 must be taken to include a challenge to the dismissal of Ms Kostov’s 7 July 2017 notice of motion under UCPR, r 36.16, which followed from Fagan J’s characterisation of the contempt proceedings as criminal. Thus, upon grounds 1 and 2 being upheld, this Court would have power to set aside the costs order made by Fagan J on 22 August 2017 without any grant of leave as sought by prayer 1d: cf SC Act, s 101(2)(b). In the circumstances, the relief sought by the notice of appeal should be taken to include an exercise of that power, which is not opposed by YPOL.

As the contempt charged by YPOL was “committed in connection with proceedings in the Court”, the application for punishment for it was properly made by notice of motion “in the proceedings”: Supreme Court Rules 1970 (NSW) (SCR), Pt 55, r 6(1). The amended statement of charge was the final “statement specifying the contempt of which the contemnor [was] alleged to be guilty”: SCR, Pt 55, r 7. That statement was required to include sufficient particulars to enable the alleged contemnor to meet the charge against her: Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 at [40]–[47] (Tobias JA, Campbell JA relevantly agreeing). As one unanimous High Court (Williams ACJ, Kitto and Taylor JJ) observed in Coward v Stapleton (1953) 90 CLR 573 at 579–580 and another (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ) quoted in Doyle v The Commonwealth (1985) 156 CLR 510 at 516:

YPOL’s written submissions for the conviction hearing before Fagan J, which were served on Ms Kostov earlier that day, alleged that her “disobedience of the Communication Order [amounted] to criminal contempt on the basis that the conduct involved deliberate, contumacious disregard of the court’s order”. The notice of motion and amended statement of charge did not include any distinct allegation of contumacy, specific prayer for punitive relief or other express indication that the contempt alleged was criminal, rather than civil. Whether, for that reason, it was incapable of supporting a conviction for criminal contempt need not be decided: see Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at [133], fnn (155), (156) (Hayne, Heydon and Crennan JJ); Markisic v Keelty [2005] NSWSC 1124 at [41]–[47] (Simpson J) (aff’d sub nom Markisic v Commonwealth of Australia (2007) 69 NSWLR 737; [2007] NSWCA 92).

The prosecution of the charge of criminal contempt by motion in civil proceedings was not itself a criminal proceeding. That much follows a fortiori from the following statement of the High Court (Mason CJ, Wilson, Deane, Toohey and Gaudron JJ) in Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 89, determining an application as to costs on appeal from a conviction for criminal contempt relating to pending criminal proceedings:

Accordingly, as Nettle J explained in his concurring reasons in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 at [66], “the applicable rules of procedure are the rules of procedure which apply to other civil proceedings”, subject to a qualification to be discussed below: see also at [35], [42] (French CJ, Kiefel, Bell, Gageler and Keane JJ). Thus, at least where a charge of criminal contempt is brought in the Supreme Court by motion in “civil proceedings”, as defined in the CP Act, s 3(1), that Act and the UCPR apply: CP Act, s 4(1), Sch 1; UCPR, r 1.5(1), Sch 1.

The qualification identified by Nettle J at [67] is “that some of the safeguards applicable to criminal proceedings also apply to a civil proceeding for criminal contempt”. His Honour, quoting Coward at 580 and Doyle at 516, justified the application of those safeguards – including the privileges against self-incrimination and self-exposure to penalty – by reference to “accepted notions of elementary justice” and the prospect of committal resulting in “very serious interference with the liberty of the subject”.

Those justifications apply with particular force in relation to the common-law requirement that a criminal trial not proceed unless the accused is fit to plead. That requirement has been attributed to “the humanity of the law of England falling into that which common humanity, without any written law would suggest”: Proceedings in the Case of John Frith for High Treason (1790) 22 Howell’s State Trials 307 at 318, quoted in Eastman v The Queen (2000) 203 CLR 1; [2000] HCA 29 at [64] (Gaudron J). Undoubtedly, then, this safeguard for criminal proceedings applied also in the civil proceeding for criminal contempt against Ms Kostov. It would, moreover, seem to operate unaffected by provisions of the MHFP Act because the application of that Act is expressly limited by s 4 to “criminal proceedings”, and other provisions of the Act, particularly the references to the Director of Public Prosecution in ss 16 and 19, tend against that undefined expression having an enlarged meaning that would include the exercise of the civil jurisdiction in respect of the prosecution of a criminal contempt.

The civil character of proceedings for contempt is reflected in the SC Act, s 101(5), providing that this Court, rather than the Court of Criminal Appeal, has jurisdiction to hear and determine an appeal from a judgment or order of the Supreme Court in proceedings relating to contempt of court: see also Hearne v Street at [132] on SC Act, s 101(6). Given the application of the UCPR, and the finding that Ms Kostov is a person under a legal incapacity, an appeal and application for leave to appeal filed by her, rather than a tutor, may be incapable of invoking this Court’s jurisdiction: UCPR, r 7.14(1); see Mao v AMP Superannuation Ltd [2015] NSWCA 252 at [56]–[58]. Nevertheless, as the substantial grounds in the appeal are unopposed and meritorious, the circumstances justify an exercise of the Court’s power to dispense with the requirement of a tutor in relation to the commencing and carrying on of the appeal: CP Act, s 14; Mao at [59].

The appeal is by way of a rehearing, in which this Court has all the powers and duties of the primary judge, including those as to fact finding; the power to receive “further evidence”, “on special grounds” after a trial on the merits; and the power to make any order that ought to have been made or that the nature of the case requires: SC Act, s 75A(5)–(10). It is unnecessary to decide whether the reports of Drs Gertler and Ellis – before Fagan J at the hearing as to sentence, but not conviction – constitute further evidence for some purposes in this appeal. If they do, their probative value and the extraordinary circumstances of Ms Kostov would give rise to special grounds for receiving them as further evidence in the appeal: see Hammond v JP Morgan Trust Australia Ltd [2012] NSWCA 295; (2012) 16 BPR 30,901 at [24] (Meagher JA, Basten JA and Bergin CJ in Eq agreeing).

As YPOL accepts, those reports plainly raise a real and substantial question as to Ms Kostov’s fitness to plead as at the date of her conviction hearing. In other words, this Court cannot be satisfied that the primary judge could not reasonably have found Ms Kostov unfit to plead. The immediate consequence is that a miscarriage of justice has occurred. As that miscarriage goes to the root of the proceedings, it is necessarily a “substantial” miscarriage within the applicable “proviso”, namely UCPR, r 51.53. See Eastman v The Queen at [86]–[87] (Gaudron J), [319] (Hayne J); Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318; [2003] HCA 28 at [114]–[115] (Heydon J); cf R v RTI at [31] (Howie J, Tobias JA and Shaw J agreeing), approved in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 at [295] (Mason P, Wood CJ at CL and Sully J).

It follows that grounds 1 and 3 of Ms Kostov’s appeal should be upheld; that her conviction and sentence should be set aside; and that YPOL’s notice of motion charging her with contempt, unless withdrawn, should be listed before a Judge of the Common Law Division for directions. For the reasons at [17] above, Fagan J erred in dismissing Ms Kostov’s 7 July 2017 notice of motion on the basis that UCPR, r 36.16 did not apply, and ground 2 of Ms Kostov’s appeal should also be upheld. In turn, the costs order made by his Honour on 22 August 2017 should be set aside, as conceded by YPOL. Nevertheless, YPOL should not be ordered to pay Ms Kostov’s costs of its notice of motion charging her with contempt, which remains to be determined in the Common Law Division. The time for the filing of the appeal should be extended to 9 February 2018 to permit such relief.

The non-publication order made by Fagan J on 11 July 2017 was to protect Ms Kostov against self-harm in circumstances where Dr Ellis’ report indicated that she had not received effective treatment and there was “a concern regarding her being publicly named in legal proceedings as likely to impact on her ‘sense of self-identity and motivation to engage with treatment’”: Decision Restricted (Supreme Court (NSW), Fagan J, 11 July 2017, unrep). The source of power for that order was said to be the CSPNO Act, s 8(1)(c). However, towards the end of argument on 8 August 2017, while Ms Kostov was represented by senior counsel, Fagan J indicated that he proposed to review the earlier suppression order to allow for the publication of his sentencing reasons, particularly in circumstances where his reasons for judgment declaring Ms Kostov to have committed contempt had been published without restriction on 27 March 2017 under the medium neutral citation [2017] NSWSC 341.

Having undertaken that review, his Honour was not satisfied that continuance of the non-publication order was necessary to protect the safety of Ms Kostov: Decision Restricted [2017] NSWSC 1071 at [70]–[74]. His Honour noted:

Fagan J also regarded publication of his judgment disposing with the contempt charge and reasons for not imposing any punishment on Ms Kostov as engaging the public interest in open justice. In our view, his Honour is not shown to have erred in so proceeding, and ground 4 of the appeal should be rejected.

Ms Kostov’s email correspondence to this Court, both before and after the hearing, indicates that her interest in suppression orders principally relates to the identification of particular third parties in an earlier judgment in the Common Law Division. For instance, in an email of 22 October 2018, she explained that, whilst she is “not ashamed that [she] became unwell”, those third parties “should not be dragged into this”. And the same concern was reiterated in an email of 11 December 2018. Because the identity of those third parties is wholly peripheral to the issues in the proceedings in the Common Law Division and this Court, the public interest in open justice does not require such identification. Accordingly, upon Ms Kostov promptly providing a list of the references identifying those third parties in the judgments below, this Court proposes to make an order under CSNPO Act, s 8(1)(e) preventing publication of those references. Such an order is necessary in the public interest to protect Ms Kostov’s mental health. In the interim, the existing order in the appeal proceeding, continued by Payne JA on 26 February 2018, should remain in force.

Prayers 1a–1c of Ms Kostov’s summons seeking leave to appeal lack sufficient merit to justify an order dispensing with UCPR, r 7.14 or extending the time for filing that process. The time for appealing from the restraining and costs orders made by Bellew J on 1 December 2016 has well and truly passed, and the former has already been the subject of the contempt charges. The costs order made by Adamson J on 6 April 2017 followed the dismissal of Ms Kostov’s notice of motion to set aside Fagan J’s orders of 28 March 2017 on the basis that they were made in her absence. There is no appeal from the order dismissing that motion, and accordingly no arguable error in the making of the costs order following its dismissal. And the order for the appointment of a tutor made by Fagan J on 8 August 2017 was supported by Dr Ellis’ evidence. In written submissions received since the hearing of the appeal, Ms Kostov maintains that her medical circumstances have changed, that she has “recovered”, and that she is “back at work”. However, there is no further evidence before this Court concerning her medical condition at the time of that order or currently.

In the circumstances, there should be no orders as to the costs of the appeal or application for leave to appeal. Although the appeal against conviction and sentence has been allowed, Ms Kostov has represented herself and did not appear on the hearing of the appeal. At the same time, the respondent did not oppose the relief sought in the appeal, other than as to the costs of the appeal. And the conviction and sentence have been set aside principally because of evidence that was not before Fagan J at the conviction hearing. It follows that each party should bear its or her own costs of the appeal and of the hearing on 7 and 8 August 2017.

Accordingly, the Court makes the following orders: