Varnhagen v The State of South Australia (No 2)

The case of Varnhagen v The State of South Australia (No 2) involved the respondents’ application for costs. The applicants, Varnhagen, had initially sought and obtained a costs order at the commencement of the trial. However, the proceedings were significantly impacted by extra-curial events, including the revocation of a major emergency declaration related to the COVID-19 outbreak and the subsequent passage of an Amendment Act. These events led to the primary application not being determined on its merits. The applicants made various strategic decisions during the proceedings, including not revisiting the initial costs order and challenging the validity of the Amendment Act within the existing proceedings.

The legal issues before the court centred on the appropriate allocation of costs in light of the procedural history and the applicants’ strategic decisions. Key considerations included the effect of the extra-curial events on the proceedings, the applicants’ decision not to revisit the initial costs order, and their unsuccessful challenge to the validity of the Amendment Act. The court had to balance these factors in determining the costs order.

The court considered the submissions and evidence presented, particularly the affidavits of Loretta Polson and Loretta Foran. The court concluded that the extra-curial events did not constitute intervening events that could not have been anticipated. The court also noted the applicants' strategic decisions and their unsuccessful challenge to the Amendment Act. Based on these considerations, the court ordered that the applicants’ costs of the proceedings were to be fixed at $50,000 if the application was allowed, and the respondents’ costs were to be fixed at $50,000 if the application was dismissed. This order reflected the consent of both parties and was made pursuant to rule 194.2 of the Uniform Civil Rules 2020 (SA).