The problem here is simple human nature.
People's perception of truth and fair play will always eclipse simple logic.
That means the lady's belief in the rightness and honesty of her cause prevented her from taking the more practical, and less expensive route of paying, which in her view was wrong, and fighting retrospectively.
As the issue progresses, the sense of 'rightness' increases, in proportion to the rising costs, and heels are ever more firmly dug in.
And that's how the final situation occurs - a continuing belief in being 'right', and a heavy price paid for it.