City Chic Collective Limited v Insurance and Care NSW

The proceedings before me were commenced by way of summons seeking judicial review of a decision said to have been made by the defendant, Insurance and Care NSW (iCare) in relation to two contracts of compulsory, statutory workers’ compensation insurance issued to the plaintiff, City Chic Collective Limited. It is not necessary to go into the finer points of the decision that was made by iCare. The plaintiff’s complaint, if I may put it that way, relates to premium adjustments made after the period of insurance covered by the respective policies.

These adjustments were made because the policy issued to the plaintiff was written on what is referred to as the “LPR” basis” available to the plaintiff at the time that the policy was written. The LPR scheme, is a reference to the Loss Prevention and Recovery Scheme under which workers’ compensation insurance was written on the basis of a premium deposit paid upfront at the commencement of the period of cover, with adjustments made at various intervals thereafter during the following four years based upon the actual cost incurred during that period of claims made during the financial year covered by the policy. At a factual level, the complaint of the plaintiff is that its circumstances changed during the adjustment period due to the reduction in its workforce (and doubtless its turnover) when most of its business was sold to another employer.

It is important to say that there is no doubt that the relief which it sought by way of declaration of right under s 75 of the Supreme Court Act 1970 (NSW) (Supreme Court Act) was advanced on public law principles in relation to the legality of the defendant’s decision made following the plaintiff’s request for a review of the defendant’s claim for the premium adjustments.

As I understand it, although I have not heard any argument so far, it is accepted that the operative decision was that made by Mr Meighan, the Underwriting Operations Manager of iCare on 16 March 2022. However, from considering the written submissions of the parties, I understand that there was perhaps another request for a review made to the State Insurance Regulatory Authority which was unsuccessful.

The purpose of these reasons is to make a ruling on the plaintiff’s application under r 12.1 of the Uniform Civil Procedure Rules 2005 (NSW) to discontinue the proceedings; the defendant having witheld its consent to such a course. The real dispute about whether leave should be granted is whether I should only grant leave on terms, and if so, what those terms should be. The plaintiff, of course, accepts that it must pay the costs of the proceedings if leave is granted.

The way the argument has developed is that the dispute is about whether I should impose the terms proposed by Mr Robertson SC, who appears with Ms Raad, for the defendant. Mr Villa SC, who appears for the plaintiff, opposes the imposition of any terms save as to costs but, in the alternative, suggests that an appropriate term is one cast in what would be less restrictive language than that contended for by Mr Robertson. I will detail the differences between the parties’ positions as succinctly as I can during the balance of these reasons. But I think it worthwhile setting out what the defendant proposes because that has Taken up most of the argument which has been put to me this morning.

The defendant argues that I should make orders in the form put to me in Short Minutes of Order handed up this morning in these terms:

As pertains to the relevant circumstances of the proceedings, I wish to make clear that, from the outset, even before proceedings were commenced on 28 June 2024, in response to pre-litigation correspondence, the defendant’s solicitors made quite clear that it was the defendant’s position that the decision sought to be impugned by the plaintiff was not affected by jurisidictional error or error of law on the face of the record (to the extent that those concepts are relevant). The defendant made it quite clear that it at least regarded the decision as conforming to law.

The proceedings were initially set down for hearing on 25 and 26 February 2025, but the hearing date was vacated on 20 November 2024 after the plaintiff changed solicitors and a new legal team was engaged. After some disputation between the parties, the plaintiff obtained leave to file its amended summons on 27 March 2025, and the defendant’s response was filed and served on 24 April 2025. There was some minor dispute between senior counsel about whether the response made it clear that the defendant’s position, first and foremost, was that public law remedies, whether by way of declaration or otherwise, were not available; that is, the impugned decision was not susceptible to judicial review.

Essentially, the defendant’s case in that regard, as was made pellucidly clear in its written submissions of 12 November 2025 filed in response to the plaintiff’s written submissions of 28 October 2025 was that, notwithstanding the consideration that the named defendant (and the entity that the defendant said should be named as a defendant) was a creature of statute it was not exercising public power of a type amenable to public law remedies. The defendant reasoned that although the workers’ compensation policies were statutory policies and issued according to the provisions, and in the context, of the Workers Compensation Act 1987 (NSW), the plaintiff’s rights, if any, were contractual and to be determined according to the general law. That is to say, the plaintiff’s rights were governed by the policy actually issued by the defendant and not by the terms of the statute under which it was issued.

The defendant’s position was reinforced when it objected to an expert report served by the plaintiff, which I record was ultimately withdrawn by the plaintiff. The defendant emphasised by its objection, that as a judicial review matter, it was to be determined according to the legality of the decision, and not, I will use the expression, the “factual merits” of the decision to the extent to which they may be relevant elsewhere.

I should also say by way of relevant circumstances that during the course of his address, Mr Villa made clear, in a candid way (as behoves senior counsel), that the decision to seek leave to discontinue the proceedings was made because he had formed the view that the proceedings, framed as a claim for judicial review, had insufficient prospects of success to justify proceeding to a hearing.

Before turning to the cases to which I was referred by counsel, I should say that the thrust of Mr Robertson’s argument was essentially that, given, that circumstance, while the outcome of the proceedings may not have been inevitable, the defendant had effectively been deprived of the fair opportunity of a judicial determination of the dispute. And by reason of an unconditional discontinuance, the defendant would be deprived of the opportunity to obtain a judgment in its favour, by way of a dismissal of the proceedings “following a determination on the merits”: s 91(2) Civil Procedure Act 2005 (NSW).

As can be seen from the form of the orders sought, what the defendant seeks to achieve by way of the imposition of conditions by which the discontinuance should be permitted is a situation which would give it all the advantages which it would have otherwise enjoyed at law if the matter had proceeded to a full and final hearing and, as perhaps seemed likely, it succeeded on its arguments; including the argument that the decision of Mr Meighan was not amenable to judicial review on public law grounds.

Emphasis and argument was placed on three first-instance decisions by counsel: first, the decision of Slattery J in C2C Investments Pty Limited & Ors v Commonwealth Bank of Australia (No 3) [2013] NSWSC 644 (C2C Investments); secondly, that of White J, sitting as an acting judge of the Land and Environment Court, in Gold and Copper Resources Pty Ltd v Minister for Resources and Energy & Anor [2014] NSWLEC 169; and finally, the decision of Colvin J in the Federal Court in Frigger v Trenfield (Application to Discontinue) [2025] FCA 640 (Frigger).

Mr Robertson drew my attention to Colvin J’s adoption of Stewart J’s formulation of the relevant principles in Tydeman v Asgard Group Pty Ltd [2023] FCA 486 at [92]-[94] ( Frigger at [41]) which would inform the exercise of my discretion. Given the width of the discretion to be exercised under r 12.1 UCPR, with great respect to Stewart J, the formulation of the principles is necessarily broad. However, it is useful to set them out, as his Honour formulated them (at [92]):

I should also point out that Colvin J said the following in Frigger (at [36]):

Mr Robertson argued that, given Mr Villa’s statement, this case fell into the category of a late discontinuance, being an attempt to delay or avoid the inevitability of an adverse decision. However, it may well be that it falls into Colvin J’s final category of an attempt to take steps to recast the case that perhaps, I will say, ought to have been taken much earlier. While I am not suggesting that either Stewart J’s formulation of the principles or Colvin J’s statement about different categories are intended by their Honours to be in any way exhaustive, it seemed to me, and perhaps this involves judicial intuition more than anything else, that the choice of making an application to discontinue, coupled with the statement that Mr Villa made, was carefully chosen to convey the correct impression about the nature of the process being undertaken.

I will say that I fully accept Mr Villa’s submission that the circumstances of each of the cases to which I have referred are far different from the circumstances of this case. And in each case, I think it fair to say, without taking time to summarise all the circumstances, one may characterise the conduct of the moving party as involving a degree of forensic delinquency, which, in my judgement, is absent here. What has occurred here is, as Mr Robertson acknowledged, I thought in a likewise candid way as behoves senior counsel, was that Mr Villa, having been briefed late, formed a view about the appropriateness of the remedy sought, and potentially the availability of a more appropriate pathway to achieve the outcome which the client desires. And I do not say that as a matter of criticism.

The fact that the circumstances of these cases, including those concerning the present case, are all different, is to be expected. No two cases are ever truly the same. But, as I have said, this case lacks that aspect of forensic delinquency that characterised some of the other cases.

Moreover, this is not a case like that of Frigger which involved apparently sophisticated and intelligent self-represented litigants who sought to discontinue the case purely for the purpose of taking a pause in the proceedings to recommence, in substance, the same case and, in turn, avoid the effect of interlocutory rulings which had gone against them. I repeat, that is not this case.

I turn then to the form of the orders. But before doing so, I should observe that, in the absence of a modern rule like that found in r 12.1 of the UCPR, a plaintiff was entitled to discontinue without leave and without consent, simply by counsel announcing, even on the day of the hearing, that the case was withdrawn. Modern rules, though, as Colvin J said, give the Court the power to supervise such decisions, principally for the purpose of avoiding unfairness to affected parties but perhaps also to the moving party. After all, both parties are entitled to be dealt with fairly by the courts.

However, a difficulty I have with the formulation of the orders sought by the defendant, notwithstanding the lateness of the application to discontinue, is the reference contained therein to a dismissal following a determination on the merits. This is because a “determination on the merits” is a difficult concept when one is speaking of the type of decision a Court makes in an application for judicial review of an administrative decision, which is purely concerned with the limits of legality of the exercise of the relevant administrative power.

I bear in mind, as Gagelar CJ put it, writing extra-curially, the “canonical” judgment of Brennan J (as he then was) in Attorney-General (NSW) v Quin (1970) 170 CLR 1 at 36, where his Honour said, “The merits of administrative action, to the extent they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone.” If all that is meant in that context is a determination about legality, that is one thing. On the other hand, if one considers the correctness or otherwise of an underlying factual context, that goes beyond the Court’s jurisdiction in relation to the exercise of its supervisory jurisdiction, as confirmed by s 69 of the Supreme Court Act. I am not attracted to the formulation of the orders proposed by the defendant.

In my judgment, given the absence of forensic delinquency, this is a case like the general category of case identified by Colvin J where the requirement that the plaintiff pay the defendant’s costs comes quite close to satisfying the prejudice that will be occasioned by the discontinuance. However, it does seem to me that there should be, contrary to Mr Villa’s preferred position, some terms to avoid the defendant being vexed by a second run over the judicial review target, where for instance, although it may not be very likely, yet other counsel comes into the matter who has a different view about the prospects of success on judicial review.

For that reason, I think there should be a condition along the lines of that imposed by Slattery J in C2C Investments. It does seem to me that in attempting to secure the position which the defendant would have secured had the matter proceeded to a full hearing and resulted in judgment entered in the defendant’s favour goes too far and has the capacity to generate ambiguity about the intent of the order. There is capacity for a good deal of agitation about, as I have said, what “the merits” means in this context and what is or is not available to the plaintiff by way of fresh proceedings, if so advised to commence them.

To make matters clear, and I have not heard counsel on this, I would be of the view, as is agreed between the parties, that I should formally make an order extending time to bring the proceedings under r 59.10 of the UCPR. Also, I should join, as has also been agreed, the nominal insurer as a party so that the scope of the condition which I have in mind will be apparent to all, and clarify that no further proceedings for judicial review on any public law grounds can be brought to impugn the decision under review. Having said that, I am of the view that something along the lines of the formulation adopted by Slattery J ought to be appropriate. The order his Honour made was put in the following terms:

Perhaps my reasons would be given better effect if the second condition as formulated under (1)(b) above was put in terms that the plaintiff may not commence further proceedings against the defendants for judicial review of Mr Meighan’s decision of 16 March 2022 on the same or substantially the same causes of action as are pleaded in this case.

My orders are:

These orders be entered forthwith.

The plaintiff to give effect to Order 3 by filing a notice of discontinuance in the registry by 4pm today.