AGL Sales (Qld) Pty Limited v. Dawson Sales Pty Ltd & Ors

AGL Sales (Qld) Pty Limited (the plaintiff) sought a declaration that the first defendant, Dawson Sales Pty Ltd, and related entities (the defendants) had no entitlement to vary the terms of their gas supply contract by relying on a force majeure clause. The defendants had cited certain geological conditions as a force majeure event that justified their actions, which included curtailing the gas supply. The case was heard in the Supreme Court of Queensland.

The court was tasked with determining whether the geological conditions cited by the defendants constituted a force majeure event under the Gas Sale Agreement, and if the defendants' actions were in line with their contractual obligations, particularly concerning the application of good engineering and operation practices. Additionally, the court had to decide if the defendants' actions constituted a breach of contract.

The court found that the defendants' reliance on the force majeure clause was not justified as the geological conditions did not meet the definition of a force majeure event under the agreement. The court emphasised the need for the defendants to apply good engineering and operation practices and concluded that the defendants' actions were not in line with these requirements. The court also determined that the defendants had not provided sufficient evidence to support their claim that the geological conditions constituted a force majeure event. Consequently, the court declared that the defendants were not entitled to curtail the gas supply under the terms of the agreement.

The court made a declaration that the matters set out in the letter from the first defendant to the plaintiff dated 9 July 2007 did not constitute a force majeure event and did not entitle the first defendant to curtail the supply of gas. The court also declared that the minimum daily quantity within the schedule to that agreement had not been amended. The plaintiff's claim was to be stood over for further submissions, if any, as to other relief, and the counterclaim was dismissed.