Rakic v Johns Lyng Insurance Building Solutions (Victoria) Pty Ltd (Trustee) (No 2)

The case of Rakic v Johns Lyng Insurance Building Solutions (Victoria) Pty Ltd (Trustee) (No 2) involves a claim brought by Ms Rakic against Johns Lyng, concerning alleged misleading or deceptive conduct under the Australian Consumer Law, a debt claim, and a declaration in relation to a novated lease. The dispute was heard by the Federal Court of Australia, which was required to decide several legal issues, including the apportionment of costs for particular claims and the application of indemnity costs under the Federal Court Rules.

The court considered whether Ms Rakic's amendment of her statement of claim in July 2015 constituted a substantial departure from the way her case was originally advanced, which would affect the application of the relevant rules concerning costs. The court found that the amendment did not provide a proper basis for departing from the rules. The court also determined that Ms Rakic was not entitled to 10 per cent of her costs due to her failure on the lease issue and because she did not advance the correct argument in relation to the debt claim. Consequently, indemnity costs were awarded from August 2014.

The court reasoned that while there were changes in the amended statement of claim, they did not constitute a substantial departure from the original case. The court held that the amendment did not justify a departure from the rule that generally allows for a 10 per cent reduction in costs for a party who has not entirely succeeded. The court further concluded that the failure on the lease issue and the incorrect argument in the debt claim warranted a reduction in costs.

The final orders of the court included that the respondent pay damages and interest to the applicant under the Australian Consumer Law, pay the debt claim and interest, and cover 90 per cent of the applicant's costs incurred before and after a specified date, on a party and party basis and an indemnity basis respectively.