Goldberg v Beckett

1. [1]

   HIS HONOUR: On 24 August 2015, I published my reasons for judgment in favour of Ms Beckett in her long-running dispute with the State of New South Wales in which she alleged that she had been maliciously prosecuted for a number of offences, including two counts of solicit to murder: see Beckett v State of New South Wales [2015] NSWSC 1017. I awarded Ms Beckett damages in the amount of $4,091,717 including interest. These proceedings were commenced by Turner Freeman shortly thereafter seeking, in effect, an injunction to restrain Ms Beckett from diverting her verdict monies from Turner Freeman’s trust account, in accordance with the terms of their costs agreement and a signed authority to receive, to an account in her name. Turner Freeman sought an order for the enforcement of a lien or charge over the judgment monies. Ms Beckett responded with a cross-summons challenging the validity of the Turner Freeman costs agreement and the enforceability of an irrevocable authority to receive signed by her in 2009 in Turner Freeman’s favour. The proceedings came on promptly and on 2 December 2015 I made orders that the verdict monies should be brought into court. That is what occurred. On 16 December 2015 I heard Turner Freeman’s application for an order that the funds in court be paid to them pending ascertainment of their entitlement to costs. I dismissed that application: see Goldberg v Beckett [2015] NSWSC 1966. In due course I varied that order to direct that the monies be placed into a controlled monies account so that it might attract a better rate of interest: see Goldberg v Beckett [2016] NSWSC 1646. On 18 August 2017 I dismissed Ms Beckett’s application to vary the orders I made on that occasion: Goldberg v Beckett [2017] NSWSC 1075.

2. [2]

   These proceedings should have come to an end either when the monies were paid into court or at least when they were transferred into an account attracting a higher rate of interest. They did not. Indeed, problems with placing the funds into an appropriate account gave rise to a collateral dispute between the parties that occupied considerable appearances but which generated more heat than light. Ultimately the proceedings only retained any utility or relevance largely, if not exclusively, because Ms Beckett persisted with her allegation that she had not entered into a valid and enforceable costs agreement or that she was misled by Turner Freeman about some of its terms if she had. Her principal concern, inappropriately agitated in the present proceedings, was that Turner Freeman’s bills of costs were excessive and that she was entitled to have them reduced by significant amounts. In due course, Turner Freeman’s bills of costs were assessed and reduced but only to a small extent. Notwithstanding that reduction, Ms Beckett appealed against the costs assessor’s determinations, ultimately without any or any significant success. In the final analysis, the quantum of any costs owed by Ms Beckett to Turner Freeman was completely resolved and is no longer in the realm of any contest. That resolution had nothing to do with the present proceedings. Moreover, Ms Beckett’s allegations that the costs agreement was unenforceable and should be set aside and that the irrevocable authority given to Turner Freeman to receive the verdict monies was invalid were ultimately abandoned.

3. [3]

   However, for reasons that are difficult to understand, the present proceedings remained on foot for something in excess of 2½ years, largely it would seem, if not exclusively, for the purpose of Ms Beckett’s challenge to the quantum of the costs for which she was liable to Turner Freeman for acting as her solicitor in the original proceedings and the collateral allegation that Turner Freeman had failed to comply with my order to place the funds in an appropriate account with a consequent loss of interest on those funds. As will shortly become apparent, those issues were never justiciable issues in the present proceedings. In the events that occurred, my original orders operated beneficially to both Ms Beckett and Turner Freeman by protecting Ms Beckett from her concerns that Turner Freeman would somehow misuse the funds if paid into its trust account on the one hand and by protecting Turner Freeman from its concerns that if Ms Beckett ever got her hands on the verdict monies, they would never see their costs, on the other hand.

4. [4]

   Turner Freeman made several offers of compromise in an attempt to bring these proceedings to an end but without success. Turner Freeman now maintains that as soon as I made orders in effect freezing the funds pending assessment of their costs they had succeeded and should be entitled to their costs of the proceedings. (The order sought by Ms Beckett in her cross-summons setting aside the costs agreement dated 10 February 2009 was never actively pursued before me and, as I have indicated, has now been abandoned). Turner Freeman therefore now claims both an entitlement to the costs of the proceedings and the benefit of a gross sum costs order in an amount of $350,000. Ms Beckett, in contrast, contends that she should be paid her costs of the proceedings notwithstanding the fact that she has achieved only limited success in having the funds brought into court.

5. [5]

   These very general comments require some elaboration although much of what follows has already been described in the judgments to which I have previously referred.

6. [6]

   As already indicated, the proceedings were generated by a letter sent by Ms Beckett to Turner Freeman in which she foreshadowed that she would direct the State of New South Wales to pay the verdict monies directly to her rather than to Turner Freeman in accordance with her irrevocable authority. That letter was dated 25 November 2015 and was in the following terms:

7. [7]

   On 26 November 2015, Ms Beckett wrote to the Crown Solicitor as follows:

8. [8]

   The following day the Crown Solicitor sought Turner Freeman’s advice about what to do in these circumstances:

9. [9]

   Turner Freeman replied to the Crown Solicitor’s letter later that day in terms that included the following:

10. [10]

    Ms Beckett’s further amended second cross-summons dated 4 February 2016 sought the following relief:

11. [11]

    That document was in due course explained in detailed points of claim dated 24 February 2016. Without intending to derogate from that detail, the burden of Ms Beckett’s pleaded claim was that, even though Turner Freeman had an enforceable lien over the proceeds of her judgment, it was only effective to secure the costs to which Turner Freeman might ultimately be found to be entitled. Ms Beckett disputed Turner Freeman’s claim to a (then) present entitlement to receive payment of any of the costs claimed by Turner Freeman in its tax invoice dated 25 November 2015 totalling $3,348,870 unless and to the extent that the costs had been assessed pursuant to the Act. Ms Beckett disputed Turner Freeman’s entitlement to rely upon the costs agreement with her inasmuch as she alleged it had not been explained to her, that matters listed in s 309(1) of the Act had not been disclosed to her and that Turner Freeman were also in breach of s 316 of the Act.

12. [12]

    These allegations were all disputed by Turner Freeman in points of defence dated 1 April 2016.

13. [13]

    As will be apparent, these pleaded issues were never litigated to judgment.

Turner freeman’s submissions

1. [14]

   Turner Freeman submitted that Ms Beckett’s actions were both futile and unreasonable and that, had she not purported to revoke the authority to receive, it is reasonable to assume that the matter would have proceeded in the following way. First, the judgment monies totalling $4,091,717 would have been paid into Turner Freeman’s trust account on approximately 8 December 2015. Secondly, Turner Freeman would thereafter have deducted, pursuant to Ms Beckett’s authority, and without prejudice to her right of assessment, Turner Freeman’s costs of $3,348,870 in full satisfaction of its costs and disbursements for acting in the Supreme Court proceedings, Mr Breen’s costs of $96,672.50 for having previously acted for Ms Beckett in the same proceedings, and Turner Freeman’s costs of $36,611 in satisfaction of the costs incurred in the High Court proceedings. Thirdly, Turner Freeman would have issued a cheque to Ms Beckett for the balance of $606,564. Fourthly, Ms Beckett could immediately have applied for an assessment of all of these costs. Finally, following assessment of all costs, Ms Beckett would have been entitled pursuant to s 368(4) of the Legal Profession Act 2004 to $32,181 on account of the overpayment of Mr Breen’s costs and $156,706 on account of the overpayment of Turner Freeman’s costs.

2. [15]

   If this course had been adopted, Ms Beckett would have received the sum of $606,564 as long ago as December 2015, and the sum of $188,886 sometime in late 2017 following completion of the assessment process, together with interest on the latter sum for 2 years at approximately 6 percent. I adverted to the wisdom of such an approach in my 18 December 2015 decision at [37]–[38] as follows:

3. [16]

   Turner Freeman submits that essentially the same outcome has now been achieved “after over two years of aggravation” and with the expenditure by Turner Freeman of over $400,000 in its own legal costs and nearly $670,000 in legal costs by Ms Beckett. In summary, Turner Freeman contended that the present proceedings were completely unnecessary and were singularly provoked by Ms Beckett’s own actions and not otherwise. In the events that occurred, the judgment monies were effectively quarantined or frozen by way of payment into court following the interpleader by the State of New South Wales, a course both consented to and indeed applied for by Ms Beckett in her second cross-summons. It follows that the proceedings have not produced or achieved a better outcome for Ms Beckett than would have been the case if she had simply allowed Turner Freeman to receive the funds in the normal course and disburse the balance after deduction of Turner Freeman’s costs and disbursements.

4. [17]

   It is regrettable, and also very difficult to understand, that notwithstanding my orders on 18 December 2015 that the judgment monies should remain in court pending the assessment of the costs, and notwithstanding that this was the principal relief originally sought by Ms Beckett in her cross-summons, why she continued thereafter, with a singular lack of success, to press for the whole amount of the funds in court to be paid out to her. It is unnecessary for present purposes to set forth the details of all of the particular and protracted interlocutory skirmishes between the parties. They are adequately described and addressed in the several judgments that I have published already.

5. [18]

   Penultimately, on 8 December 2017, the parties consented to the making of orders that permitted and facilitated the payment out to Turner Freeman of their outstanding assessed costs and the balance to Ms Beckett. (The sum of $2,500,000 had earlier been paid to Turner Freeman in an apparent recognition and acceptance by Ms Beckett that Turner Freeman would be entitled to at least that amount, whatever might have been the outcome of the assessment process and her appeals). During the course of the hearing on that day, Ms Beckett conceded that she was not going to challenge the costs assessor’s determination, that it would be appropriate for me to assess the costs in a lump sum in the event that I determined that one party was liable to pay the other’s costs, that she had incurred costs in these proceedings in the sum of $657,372 and that she was more concerned that she be paid the balance of the monies that were owing to her than to worry about the approximately $9,000 in interest that would be credited to the account if the funds were switched to the Business Negotiator account before payment out. Significantly, Ms Beckett gave an undertaking to the Court to pay Turner Freeman’s costs within seven days if ordered to do so.

6. [19]

   In the events that occurred, the parties received their respective cheques in late December 2017 and the Controlled Monies account was closed on 24 January 2018.

The ultimate issue – costs

1. [20]

   Turner Freeman contends that the circumstances support the proposition that Ms Beckett should pay their costs of and incidental to the proceedings. They submit that they have been wholly vindicated by the orders finally made in December 2017 and that in contrast Ms Beckett’s extraordinarily combative and confrontational approach to the proceedings has produced nothing of added benefit to her but has on the contrary left her in a worse position than if she had done nothing at all. That approach has, unfortunately for her, resulted in a dismal failure on every front. Her conduct of this litigation has been conspicuously without reasonable direction or purpose other than, intentionally or otherwise, to vex her opponents in every way possible.

2. [21]

   Notwithstanding that assessment, Turner Freeman attempted to truncate the proceedings by offering to settle them at an early stage. In April 2016, Turner Freeman made three consecutive Calderbank offers, under cover of detailed letters explaining why the offers should be accepted, each of which would have resulted in a far better outcome for Ms Beckett than the present circumstances would suggest. The first offer was made on 7 April 2016 and proposed orders be made in the following terms:

3. [22]

   None of the Turner Freeman offers was accepted by Ms Beckett.

4. [23]

   Notwithstanding the contention that Ms Beckett’s failure to accept Turner Freeman’s settlement offers would arguably support an order for indemnity costs, Turner Freeman seeks a specified gross sum costs order in the amount of $350,000 in full payment of their costs of these proceedings. That is a reduction from the amount of $367,104 that is estimated by Christine Davitt, Turner Freeman’s costs consultant, to represent a fair and reasonable amount to be recovered on a party/party basis upon the assumption that Turner Freeman obtained an order for the costs of the proceedings. Ms Davitt’s assessment derives from her report annexed to her affidavit sworn on 21 March 2018. Ms Davitt was not required for cross-examination. However, having regard to the fact that Ms Beckett was unrepresented on this aspect of the proceedings, it is appropriate to include the following extracts from Ms Davitt’s report, which effectively encapsulates her conclusions.

5. [24]

   The chief purpose of the jurisdiction to award a specified gross sum amount for costs is in order to avoid the delay, expense and aggravation involved in protracted litigation arising out of the assessment process: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120; Hamod v State of New South Wales (No 13) [2009] NSWSC 756 at [29]; Hamod v State of New South Wales [2011] NSWCA 375 at [813]–[820].

6. [25]

   Turner Freeman contends that such an order is appropriate in the present case. In Russo & Ors v Russo & Ors (No 4) [2016] NSWSC 1133, Slattery J at [4], citing Harvey v Barton (No 4) [2015] NSWSC 809, considered that:

Ms Beckett’s submissions

1. [26]

   As already noted, Ms Beckett is currently unrepresented in these proceedings. That has not always been so. Indeed, Ms Beckett has been represented by several firms of solicitors, at least one of which retained experienced senior counsel to appear on her behalf. Her submissions on costs, however, have not obviously been prepared with the benefit of legal assistance.

2. [27]

   Ms Beckett’s starting point is that Turner Freeman should pay her costs. Her written submissions commence with the suggestion that “the present proceedings should never have been brought about in the first instance.” Ms Beckett’s submissions thereafter concentrate attention on the importance of the provision by Turner Freeman of an itemised bill of costs and other vaguely related issues. Those submissions are set out hereafter in full:

Consideration

1. [28]

   There is a sad and tragic irony in Ms Beckett’s submission that these proceedings should never have been brought about in the first instance. It is undoubtedly true. Unfortunately, these proceedings were generated by Ms Beckett’s own attempt to subvert the terms of both her costs agreement with Turner Freeman as well as the force and effect of the irrevocable authority to receive given by her.

2. [29]

   I have long pondered what was, or what could have been, Ms Beckett’s motivation for taking the action she took. Why would she not simply have let the usual process take its course? The State of New South Wales would have paid the judgment sum, together with interest, into the trust account of Turner Freeman. An itemised bill of costs would have been provided. If necessary, an assessment of the costs would have taken place. A full and transparent accounting would have been required. Ms Beckett would in addition, presumably, have retained the services of Turner Freeman, the firm most closely and intimately connected with the principal proceedings, to negotiate with the Crown Solicitor’s Office with respect to the payment of the party/party costs, all of which would undoubtedly have gone straight to Ms Beckett without deduction. Ms Beckett would then have been left out of pocket for a sum representing no more than the difference between those costs and the amount payable to Turner Freeman on a solicitor and client basis. She would not have incurred the costs of the present proceedings, whatever the outcome of my present determination, and would in all probability have been paid her full and final entitlement flowing from her success in the principal proceedings long before now.

3. [30]

   There is undoubted animus between Ms Beckett and Mr Goldberg. It is unnecessary for present purposes to examine the likely or possible source of their respective feelings for each other. It does, however, seem likely that Ms Beckett’s expressed distrust of Mr Goldberg has fuelled her manifold forensic miscalculations of what is, and what should have been seen as, in her best interest. I am unable with certainty to determine whether Ms Beckett received perfectly sound legal advice that she chose to ignore, or fundamentally flawed lay opinion, which she chose ill-advisedly to follow.

4. [31]

   Turner Freeman were in my opinion completely entitled to be suspicious, upon receiving notice that their authority to receive had been countermanded and the State of New South Wales had been advised to pay the judgment monies directly to Ms Beckett, that the payment of their costs in an orderly fashion could be imperilled. I have said previously that Turner Freeman demonstrated a commendable loyalty to Ms Beckett, standing by her in difficult litigation with no certain prospect of any success over many years. It is disappointing in those circumstances that Ms Beckett should have chosen so blatantly to discard the firm when the fruits of its labours had finally materialised.

5. [32]

   Ms Beckett is, regrettably, the author of her own misfortune. Why she did not settle the proceedings upon the extraordinarily favourable terms offered to her by Turner Freeman in April 2016 is completely beyond me. I cannot imagine that she received legal advice to reject the offer. I have no way of knowing whether some less informed source of inspiration encouraged her to fight on.

6. [33]

   Turner Freeman was entitled to commence these proceedings to enforce their lien. They are, in accordance with authority, also entitled to the costs of doing so.

7. [34]

   Turner Freeman has been wholly vindicated in these proceedings. Turner Freeman was entirely within their rights to commence these proceedings in order to protect the fund, over which they had a solicitor’s lien, either at general law or because of the specific terms of the costs agreement. These proceedings were never, and should never have become, a forum for Ms Beckett to argue that Turner Freeman’s costs were excessive or that the relevant costs agreement was induced by misrepresentations or otherwise unenforceable. None of the relief sought by Ms Beckett in any iteration of her cross-summons has been achieved. Her claim for some kind of compensation for what she has been through is misconceived.

8. [35]

   In my opinion it is inevitable that Ms Beckett should pay Turner Freeman’s costs of these proceedings. She should do so upon a specified gross sum basis, which I calculate in the amount of $300,000. Although there is no empirical basis for assessing the precise amount of a specified gross sum costs order, or the amount by which an expert’s calculation of a party’s costs should be discounted, I consider that there are possibly some good reasons further to reduce the sum claimed by Turner Freeman.

9. [36]

   First, the proceedings have clearly been driven by Ms Beckett’s arguably impassioned concerns that she was being unfairly treated. I consider that there is absolutely no basis for those concerns. However, it seems to me that within that context there was considerable scope, given the overwhelming strength of Turner Freeman’s litigious position, to have taken a somewhat less combative and reactionary approach to Ms Beckett’s manifestly hopeless and impotent claims for relief.

10. [37]

    Secondly, for reasons that were beyond the control of Ms Beckett, and wholly within the scope and responsibility of Turner Freeman, the issue of whether the funds were placed into an appropriate interest bearing account in accordance with my orders clearly occupied a disproportionate amount of court time which could and should have been avoided by closer attention by Turner Freeman to what was required to allay Ms Beckett’s mounting concerns. In this way what was really a minor issue attained a significance that it did not deserve and correspondingly created for Ms Beckett what became an unnecessary distress in the circumstances.

11. [38]

    My orders are therefore as follows:

    1. (1)

       Order Ms Beckett to pay Turner Freeman’s costs of and incidental to these proceedings.

    2. (2)

       In accordance with s 98(4) of the Civil Procedure Act 2005, I direct that the costs referred to in order (1) be paid as a specified gross sum in the amount of $300,000.

    3. (3)

       The summons and cross-summons are otherwise dismissed.