Goldberg v Beckett

Turner freeman's submissions

1. 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. 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: "[37] In support of the proposition that the whole of the fund should be paid to them now, Turner Freeman have proffered an undertaking to restore so much of the fund that they may be permitted to utilise in payment of their fees as may exceed their entitlement when ultimately determined. One presumable consequence of that proposal would also see the presently anticipated differential between the costs claimed by Turner Freeman and the total amount of the fund immediately released to Ms Beckett. The proposal seems to me to be eminently sensible. It would coincidentally discharge Ms Beckett's extant and undiminished (albeit lately contested) contractual obligation to permit Turner Freeman to deduct their costs from the judgment sum in accordance with the terms of the costs agreement and thereby staunch the flow of accruing interest on unpaid disbursements and accounts rendered by those entitled or determined to charge it. [38] However, Ms Beckett is not prepared to agree to any such regime, despite what seem to me to be the obvious advantages of doing so. In the absence of any such agreement, I do not consider that I can authorise the payment of the funds in court to Turner Freeman for disbursement by them in accordance with their bill of costs. There is little utility in doing so if the funds only remain untouched in their trust account, particularly as they attract interest in their present location where Turner Freeman's lien is also not imperilled. Correspondingly I consider that it would be wholly inimical to the security provided by their equitable lien to direct the payment of the judgment amount to Ms Beckett upon the basis of some equivalent undertaking."
3. 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. 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. 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. 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.

Failure to accept reasonable Calderbank offers

1. 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. 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: "The Court NOTES the agreement of the plaintiffs (Turner Freeman) and the first defendant (Ms Beckett) that 1. Turner Freeman will apply for assessment of their costs and disbursements of acting for Ms Beckett in Beckett v State of New South Wales 2008/20334 in this Honourable Court and in Beckett v New South Wales S144/2012 in the High Court of Australia within 35 days of receipt by them of the itemised bill of costs currently being prepared by Chris Davit, legal costs consultant. 2. Unless findings are made by a costs assessor or costs review panel that section 317 (effect of failure to disclose) of the Legal Profession Act 2004 (NSW) applies to the costs the subject of either costs assessment, Ms Beckett agrees to pay the costs assessment application fees, which shall be paid in the first instance by Turner Freeman. 3. Turner Freeman will not enforce the costs order made in their favour on 18 December 2015. 4. Turner Freeman will promptly take all reasonable steps to arrange for: a. an itemised bill of costs to be prepared by Chris Davit, legal costs consultant in respect of the costs and disbursements of Peter Breen & Associates of acting for Ms Beckett in Beckett v State of New South Wales 2008/20334 in this Honourable Court; and b. Peter Breen & Associates to apply for assessment of his costs and disbursements of acting within 35 days of receipt of the itemised bill of costs. The Court ORDERS by consent: 5. Upon registration, pursuant to Uniform Civil Procedure Rules 36.10, of one or more Certificates of Determination issued by a costs assessor or costs review panel in relation to Turner Freeman or Peter Breen & Associates' costs and disbursements of acting for Ms Beckett in Beckett v State of New South Wales 2008/20334 in this Honourable Court or Beckett v New South Wales S144/2012 in the High Court of Australia, the registrar is to pay from the funds paid into court pursuant to the order made on 2 December 2015: a. to Turner Freeman and Peter Breen & Associates, such sum as is certified as payable to them in the Certificates; and then b. to Ms Beckett, the balance of the funds. 6. The Summons is otherwise dismissed with no order as to costs. 7. The Further Amended Second Cross Summons is otherwise dismissed with no order as to costs."
3. None of the Turner Freeman offers was accepted by Ms Beckett.

Specified gross sum costs order

1. 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. Below is a table of the amounts of profit costs claimed on behalf of each person who worked on the matter as shown in the billing guide up to and including 15/03/18 compared with the amount which, in my view, is likely to be allowed for each person on a party/party costs assessment, all figures ex GST:- Billing Guide Deductions Allowed Terence Goldberg $166,860.00 $20,930.00 $145,930.00 Fiona Seaton 23,645.00 2,160.00 21,485.00 Kit Biagent 6,060.00 420.00 5,640.00 Oni Roy 360.00 Nil 360.00 Paralegals: A Donley 210.00 Nil 210.00 A Joseph 2,400.00 360.00 2,040.00 N Maher 420.00 Nil 420.00 A Reisen 382.50 120.00 262.50 G Constantine 75.00 Nil 75.00 J Theos 45.00 Nil 45.00 K Gonzalez 45.00 Nil 45.00 M Koshan 105.00 Nil 105.00 D Pink 5,327.50 2,646.25 2,681.25 M Lacsina 300.00 185.00 115.00 S Rastogi 75.00 30.00 45.00 V Tawk 60.00 15.00 45.00 Subtotal $206,370.00 $26,866.25 $179,503.75 Profit Costs

I am instructed that the abovementioned estimates of costs should include a further component for the anticipated costs of conducting the proceedings up to and including 06/04/18 when the matter is next before the Court. The further component includes work undertaken by Mr Goldberg, Partner, and Mr Baigent, Solicitor. I am instructed that it is expected that Mr Goldberg is reasonably likely to spend some 10 hours on the matter @ $650 per hour ($6,500.00) and Mr Baigent is reasonably likely to spend some 10 hours on the matter @ $300 per hour ($3,000.00). Mr Baigent will attend to instruct Counsel in Court on 06/04/18. Accordingly, the total claims for profit costs will be increased by the estimates of future costs as follows:- Subtotal Costs $206,370.00 $26,866.25 $179,503.75 T Goldberg 6,500.00 650.00 5,850.00 K Baigent 3,000.00 300.00 2,700.00 Total Profit Costs $215,870.00 $27,816.25 $188,053.75

Disbursements Following the methodology applied in the calculations of reduction of Counsels' fees incurred, as outlined above, the total fees have been reduced on a party/party basis by way of a global reduction applied to the total of Senior and Junior Counsels' fees calculated at 10% of the total amounts charged respectively. As noted above in relation to claims for profit costs, changes to the previous calculations of disbursements are indicated by being in bold type and underlined. Fees Charged Less 10% Total Claimed Rees SC $107,455.00 $10,745.50 $96,709.50 McDonald 69,900.00 6,990.00 62,910.04 McDonald - prospective fees re Submissions and 7,000.00 700.00 6,300.00 hearing on 06/04/18 Courier fees 1,051.39 Nil 1,051.39 DGT room hire 178.79 Nil 178.79 LitSupport 2,579.75 Nil 2,579.75 McHugh Mediator 5,211.11 Nil 5,211.11 Wise McGrath 57.00 Nil 57.00 Search fees 203.49 Nil 203.49 Transcripts 1,868.00 Nil 1,868.00 Conduct Money 50.00 Nil 50.00 Filing fees 1,931.00 Nil 1,931.00 $197,485.57 $18,435.50 $179,050.07 TOTAL COSTS $215,870.00 $27,816.25 $188,053.75 TOTAL DISB. $197,485.57 $18,435.50 $179,050.07 TOTAL C&D $413,355.57 $46,251.75 $367,103.82

1. 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].
2. 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: "… if a Court can say, based upon its prior experience of the litigation in question, that any further costs assessment is likely to be unduly protracted and will add costs unnecessarily, then the Court may take that into account in deciding whether to make a lump sum costs order."

Ms Beckett's submissions

1. 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. 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: "1. I seek that the plaintiffs pay the costs of these proceedings. I will leave it up to the Honourable Court to decide the manner of these costs. 2. These present proceedings should never have been brought about in the first instance. a. As specified in the affidavits of the first defendant of 24 January 2018 and 7 March 2018, the first defendant on a number of occasions sought from the plaintiff an itemised bill of costs and stated to the plaintiff that payment would be made when such bill of costs was produced. b. The plaintiff did not abide by section 332A(2) of the Legal Profession Act 2004, which provides that the plaintiff, upon request, must provide an itemised bill of costs within 21 days. c. As specified in the affidavit of the first defendant of 7 March 2018, the first defendant offered to compromise and enter negotiation with the plaintiff in the matter and made an offer of a first payment in the amount of $2,000,000.00 in order that both the first defendant and the plaintiff would achieve part payment, with further payments to be made thereafter. The plaintiff in his submissions and affidavits fails at all times to mention this attempt of negotiation on the part of the first defendant. d. The State of NSW had been ordered to pay the first defendant's costs, with some of those costs on an indemnity basis. The plaintiff's costs in this matter were assured. The Attorney General's office stated that no objection would be made in the payment of the first defendant's legal costs (see paragraph 23 of first defendant's affidavit of 7 March 2018). 3. The plaintiff provided to the first and second defendants on 25 November 2015, two days before the plaintiff commenced these proceedings, a lump sum bill of costs for payment in the amount of $3,388,475.61. As these proceedings were commenced to enforce a supposed solicitor's lien over the first defendant's compensatory award of $4,091,717.00, the plaintiff is attempting to place moneys into his firm's trust account which therefore deprive the first defendant of moneys belonging to her. There was no signal by the plaintiff that such funds would earn interest during the time the first defendant was to be deprived of her moneys. A solicitor's trust account does not earn interest on funds belonging to the client. Also, at this point in time, by the plaintiff's own admission, the first defendant was no longer his client. 4. The plaintiff provided a lump sum bill of costs to the State of NSW for payment, which the State of NSW, given the lump sum format of the bill of costs, refused to pay such costs until the plaintiff submitted a bill of costs in the proper and fully itemised form. The first defendant cannot be held responsible for the inaction of the plaintiff, and the plaintiff's delay in providing an itemised bill of costs is due to the actions of the plaintiff alone. The first defendant cannot be held accountable for the inaction of the plaintiff. 5. On 24 May 2016, some six months after first submitting his lump sum bill of costs, the plaintiff submitted an itemised bill of costs in the amount of $3,682,752.60 for assessment as part of the Supreme Court Costs Assessment Scheme. As is quite obvious, this itemised bill of costs, while exceeding his lump sum bill of costs, again falls well short of the sum over which the plaintiff sought a lien, with such lien being sought to cover such costs. 6. On assessment, the plaintiff's costs were reduced to $3,192,164.30. The plaintiff's costs having been assessed and his bill of costs being reduced by the sum of $490,588.30 would indicate that the plaintiff ultimately attempted to disadvantage the first defendant and deprive of her funds in the amount of $899,552.70. 7. Additionally, pursuant to an Order made by the Honourable Justice Harrison of 23 November 2016 (Goldberg v Beckett [2016] NSWSC 1646) that the sum of $1,656,089.93 be placed into a controlled moneys account in order that the said moneys at that time belonging to the first defendant earned the 'notionally available commercial rate' of interest, the plaintiff together with DG Thompson Lawyers, placed such sum into a non-interest bearing account, with such therefore, once again, depriving the first defendant of moneys belonging to her, with the plaintiff being the architect of such deprivation. 8. As stated in paragraph 1 of these submissions, on the points raised above, such dictates that the entire premise of the plaintiff's claim must fail and costs be ordered against the plaintiff in the matter. 9. Further, the suffering caused to the first defendant in these long-running proceedings unnecessarily brought against her by the plaintiff requires some compensation in some form."

Consideration

1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. My orders are therefore as follows: 1. Order Ms Beckett to pay Turner Freeman's costs of and incidental to these proceedings. 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. The summons and cross-summons are otherwise dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 May 2018