Coote v Forestry Tasmania

The High Court of Australia considered an appeal by Forestry Tasmania against a decision of the Full Federal Court concerning the interpretation of a contract for the supply of woodchips. The dispute arose from an agreement between Forestry Tasmania and a company, which subsequently assigned its rights to the appellant, Coote. The core of the disagreement lay in whether Forestry Tasmania was entitled to reduce the quantity of woodchips supplied under the contract due to the occurrence of a "force majeure" event, specifically a bushfire that impacted the availability of timber.

The central legal issue before the High Court was the proper construction of the force majeure clause within the woodchip supply contract. Specifically, the Court had to determine whether the bushfire constituted a force majeure event as defined by the contract, and if so, whether it excused Forestry Tasmania from its obligation to supply the full contracted quantity of woodchips, or merely suspended that obligation. The Court also considered the interplay between the force majeure clause and other contractual provisions relating to the quantity of woodchips to be supplied.

The High Court, by majority, held that the bushfire did not excuse Forestry Tasmania from its obligation to supply the contracted quantity of woodchips. The Court reasoned that the force majeure clause was intended to apply to events that made performance impossible, not merely more difficult or expensive. In this instance, while the bushfire affected the availability of timber, it did not render the supply of woodchips impossible. The Court emphasised the importance of clear and unambiguous language in contractual provisions that seek to limit or excuse performance, and found that the wording of the force majeure clause did not extend to the circumstances presented.

Consequently, the High Court allowed the appeal, finding that Forestry Tasmania had breached the contract by failing to supply the full quantity of woodchips. The Court remitted the matter to the Federal Court for determination of the appropriate remedies for the breach.