Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd

Majeau Carrying Co Pty Ltd (the appellant) appealed to the High Court of Australia from a judgment of the Supreme Court of Queensland. The dispute concerned the interpretation of a contract for the carriage of goods by sea, specifically whether the appellant was entitled to recover freight charges from the respondent, Coastal Rutile Ltd, for the carriage of rutile from the Republic of Vietnam to Australia. The Supreme Court had found in favour of the respondent, holding that the appellant was not entitled to recover the freight charges.

The High Court was required to determine whether the contract of carriage was frustrated by the outbreak of war in Vietnam, thereby discharging the parties from their obligations. Specifically, the court had to consider whether the continued performance of the contract had become impossible or radically different from what was contemplated by the parties at the time of its formation, due to the hostilities and the subsequent requisitioning of the vessel by the Vietnamese government.

The High Court, in allowing the appeal, held that the contract was not frustrated. Their Honours reasoned that the outbreak of war, while creating difficulties and delays, did not render the performance of the contract impossible or fundamentally different from what was agreed. The requisitioning of the vessel, although a significant event, was considered a consequence of the war and not an event that fundamentally altered the nature of the contractual obligation itself. The court applied the principles of frustration, emphasizing that frustration requires a supervening event that makes performance impossible or radically different, not merely more difficult or expensive.

The High Court ordered that the appeal be allowed, setting aside the judgment of the Supreme Court of Queensland and entering judgment for the appellant for the amount of the freight charges claimed.