Consideration
48 On balance, I consider that Ms Rakic's amendment to her pleadings in July 2015 did not constitute a substantial departure from the way in which her case was advanced in her SOC. In my judgment, the amendment does not provide a proper basis for departing from r 25.14.
49 The case is not, however, entirely straightforward. There were, of course, changes. It is necessary to evaluate their significance. And, there is at least some importance in the manner of amendment. Ms Rakic's ASOC constituted the striking-through of the entirety of her original SOC, and the addition of an entirely-new statement of claim. In her own words, in a chapeau to the ASOC, the SOC was "wholly replaced". That is not to suggest that the new pleading was entirely dissimilar - many of the allegations were identical, or near-enough to it, as between SOC and ASOC. But it required Johns Lyng to completely re-plead its defence and, in at least some senses, constituted for Ms Rakic a fresh start. On the other hand, as I have said, Ms Rakic's ASOC was constructed with many of the planks of the SOC, but in different form and with some additions. Was it the same claim?
50 I think it was. Viewed in its essence, Ms Rakic's case, both as originally pleaded and post-amendment, comprised the following elements:
(1) Ms Rakic was earning a certain amount of money through her employment with Pattersons (SOC [2]-[3]; ASOC [2]);
(2) in (at least) the form of a meeting with Mr Didier and an email from Mr Cameron, Johns Lyng made to Ms Rakic certain statements (SOC [4], [6]; ASOC [6]);
(3) the statements conveyed representations to the effect that Johns Lyng was profitable (SOC[4(a)(iv), (c), (d), (e), (f), (h)], ASOC [11(a)-(c)]), and would remain so into the future (c.f. SOC [17(e)-(g)]; ASOC [11(a)-(c)]).
(4) relevant to whether the representations were misleading or deceptive was that Johns Lyng's financial circumstances were, at the time of making the representations, parlous, or in any event not as favourable as stated or implied (SOC [21(h)-(o)]; ASOC [3]-[4]);
(5) the representations were made without reasonable grounds (SOC [22]; ASOC [12(b], [13(b)], [14(b)], [15(b)]);
(6) Ms Rakic relied upon the representations by leaving her job with Pattersons and taking the job with Johns Lyng (SOC [18], [20]; ASOC [7], [8]);
(7) she suffered damages caused by the misleading or deceptive conduct (SOC [25]; ASOC [17]).
51 Further in relation to point (3) above, many of the statements attributed to Mr Didier in the SOC directly translated into the ASOC. Those include the matters set out at in 4(a)(ii)-(iii) and 4(c)-(f) of the SOC. The matters alleged in 4(a)(i), (a)(iv)-(v), (b), and (g)-(h) were dropped, but these were not especially important. The only real addition in the ASOC to the allegations concerning the Brunetti meeting was the statement pleaded in paragraph 6(a)(iv) ASOC, namely that "[i]f [Ms Rakic] accepted the position, with the 2.5% profit share [Ms Rakic] would not be out of pocket". As is apparent from [35]-[37] of the principal reasons, I did not consider that allegation to have had any significant bearing on whether the pleaded representations were made. This addition, then, is of little moment. The ASOC continued to allege that the 21 March email had been sent, and set out its content at [6(b)]. There is no real change between the SOC and the ASOC in that connection.
52 An arguably-new allegation was made in the ASOC that Johns Lyng "did not inform [Ms Rakic] at any time prior to mid April 2013 of the deterioration in its sales and profit position." However, in relation to that I said as follows at [56] of the principal reasons: "The lack of subsequent qualification or correction is a circumstance to be taken into account in assessing whether the representations pleaded at [11] were made. I have found that they were made, by the statements of Mr Didier and in the 21 March email, in context. The fact of silence thereafter does not either strengthen or weaken the allegation that the representations were made." This addition, again, is of no moment. In any event, I think that Johns Lyng would have read [17] of the SOC as complaining about much the same thing.
53 That is not to say that the pleadings are identical. There are at least these differences. First, in her ASOC, but not in her SOC, Ms Rakic pleaded precisely the deterioration in Johns Lyng's finances in late 2012 and early 2013, and its earlier financial circumstances. That was, in the end, highly relevant to Ms Rakic's claim that Johns Lyng lacked reasonable grounds for its representations. Second, in her ASOC Ms Rakic particularised her damages in far-greater detail than in her SOC. Third, in her ASOC Ms Rakic had dropped the contractual claims alleged in her SOC and added the Debt claim and the Lease issue.
54 I am not persuaded that these differences constitute a sufficient alteration of the claim so as to provide a proper reason for departing from r 25.14. As to the first, Johns Lyng knew what its financial circumstances were in late 2012 and early 2013. It knew that Ms Rakic's case included that its financial circumstances were such that its representations as to profitability were misleading or deceptive. It had the financial information available to it to determine whether it had reasonable grounds for the making of the representations Ms Rakic pleaded. It would not have been in the least surprised by the content of the paragraphs in the ASOC detailing its financial circumstances, which in any event Ms Rakic could not have pleaded until after discovery.
55 As to the second, Johns Lyng referred at [11] of its written submissions to [30] of the SOC and said that it "provides limited particulars of loss and damage with particulars of income lost being $195,000.00, an unspecified 5% equity figure and an unspecified loss of opportunity figure. There was no Debt claim as part of the SOC and no declaration sought as to the novated lease issue." By comparison, said Johns Lyng, the ASOC sought $518,167 in respect of the ACL claim, $71,863 in respect of the Debt claim, and a declaration worth $20,343 to Ms Rakic in respect of the Lease issue.
56 Johns Lyng is looking at the wrong paragraph. Paragraph [30] of the SOC deals with damages in respect of Ms Rakic's dropped contractual claims. It is [25] of the SOC that pleads damages for the ACL claim, and the particular is that "[Ms Rakic's] loss is ongoing loss of income pursuant to the Pattersons Agreement at the rate of $230,000 per annum plus superannuation". That particular did not include any deductions for amounts likely to be received (as the ASOC did), and for some reason the Pattersons salary is given as $230,000 plus superannuation (or around $250,000) rather than as around $275,000 (which is what her Pattersons package was actually worth, c.f. [242] primary reasons). But I am not convinced that either of those matters is of any moment. The point is that Ms Rakic was claiming loss of income as a consequence of Johns Lyng's conduct. The amount she received from Pattersons was pleaded; Johns Lyng knew the amount that it had paid her; it knew that it faced a claim for at least the difference between her Patterson's salary and what she in fact received or was likely to receive. The claim necessarily involved the assessment of hypotheticals, in respect of which perfect information was not possible. The nature of that claim did not change with the ASOC, rather, with the passage of time greater particularity was possible and was provided.
57 The change from $250,000 to $275,000 in the pleading of Ms Rakic's Pattersons salary could, theoretically, be significant. If Johns Lyng could say, for example, that had it known Ms Rakic's Pattersons salary was $275,000 rather than $250,000 that would have substantially altered its consideration of the August 2014 offer, that might provide a proper basis for departing from r 25.14. But this is not such a case. Johns Lyng did not submit that the alteration from $250,000 in the SOC to $275,000 in the ASOC had any effect on its thinking. Indeed, so far as Johns Lyng's thinking is exposed in the evidence, its letter of 18 August 2014 (in response to the August 2014 offer) contains statements that Ms Rakic's claim "lacks merit" and that Johns Lyng is "confident of successfully defending the matter". It said that Ms Rakic had "unrealistic views about how this matter might be settled", and rejected Ms Rakic's offer. Its own offer, made some months later in May 2015, was a walk-away offer. And, in any event, in light of the degree to which Ms Rakic's damages in respect of the ACL claim exceed the 2014 offer, whether Ms Rakic's Patterson's salary was $250,000 or $275,000 would not have made a difference to whether r 25.14 was enlivened.
58 The third matter is that Ms Rakic added in her ASOC the paragraphs giving rise to the Lease issue and the Debt claim. Again, I accept in theory that such an addition could be relevant. Suppose that rejection of a particular offer is entirely right and defensible when only $100,000 is claimed. If good claims worth an additional $1M are thereafter added and damages in that amount ordered, there would be an excess of damages over offer for the purposes of r 25.14. But the fact of the adding of the new claims after the date of the offer may constitute proper reason for departing from r 25.14.
59 Here, however, the two claims that Ms Rakic added made no difference at all to the amount ultimately recovered. She failed on the Lease issue. While she succeeded on the Debt claim, her success resulted in my subtracting its value from her ACL damages to avoid double compensation ([262] principal reasons). Had the Debt claim not been run, there would have been no cause for such subtraction and the total amount recovered by her would have been the same. The only difference - which is not relevant - is that her recovery would have comprised only damages whereas in the event it comprises a debt and damages.
60 Overall, in terms of the various statements of principle I set out at the commencement of this section, the changes in the claim were not significant. Ms Rakic's case did not change substantially. The risk to Johns Lyng was not significantly altered by the amendments in the ASOC. There would have been no real difference in the assessment of the strengths and weaknesses of the parties' cases post-amendment. The claim on which Ms Rakic was successful was substantially the same as that advanced when the offer was made. The full dimensions of her ultimate entitlement could have been foreseen on the original pleadings. I do not consider this to be an exceptional case. It is therefore unlikely that proper basis would be established for departing from r 25.14(3), and in fact none has been established. I would order that Ms Rakic have her costs from 10 August 2014 on an indemnity basis.
61 It was rightly conceded that there would be no proper basis for departing from r 25.14 in respect of the 2015 offer. If I had not reached the conclusions expressed above in relation to the 2014 offer, I would in any event have ordered that Ms Rakic have her costs from 21 August 2015 (not 19 August, c.f. r 25.14(3)(a)) on an indemnity basis.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.