The nation's highest court has kept the door open for environmental groups to prosecute law-breaking loggers when regulators won't, dealing another blow to the native timber industry.
The High Court decision on Wednesday was welcomed as a "huge win" in the battle to protect glider habitats.
It confirmed private people or entities can enforce state forestry laws, rather than state government regulators only.
"This is especially important at a time when governments are trying to limit the ability of groups to take such action," WWF Australia land clearing senior manager Stuart Blanch said.
Environmental law expert and state Greens MP Sue Higginson said the decision ended a dark era of communities being denied access to justice on behalf of native forests.
"This is a huge win ... no longer will internal government deals protect the Forestry Corporation from being prosecuted for their illegal actions," she said.
The group behind the case, South East Forest Rescue, said the High Court challenge was an attempt by the state's forestry industry manager to avoid answering damning evidence of illegal activities in native timber forests.
"Rather than engaging with the substance of our claims, Forestry Corporation has fought to deny our right to bring them to court," South East Forest Rescue spokesman Scott Daines said.
The group's case sought to minimise the effects of logging on three forest-dependent marsupials in southeast Australia: the southern greater glider, yellow-bellied glider and squirrel glider.
The southern greater glider, about the size of a house cat, is listed as endangered while the other two are considered endangered or vulnerable.
Forestry Corporation argued third parties had no standing to bring civil enforcement proceedings.
But the High Court found people whose private interests were affected or who had a special interest, such as long-standing concern about logging and its effect on certain species, could bring prosecutions.
A Forestry Corporation spokeswoman told AAP the corporation was reviewing the judgment.
The case will return to the Land and Environment Court later this year.
South East Forest Rescue is seeking orders to restrain Forestry from logging in NSW north and south coast state forests unless proper surveys for greater gliders, yellow-bellied gliders and squirrel gliders are completed.
It also wants appropriate protections around den trees.
An Australian Forest Products Association spokesman said the group was trying to bully the industry out of existence.
The native logging industry has haemorrhaged money in NSW from environmental court battles and loss-making native timber operations.
It also faces large swathes of forest being protected in a proposed Great Koala National Park to be established in the next two years.
Victoria ended native forest logging in 2024, as did Western Australia, the home of sought-after karri, jarrah and wandoo woods.
The WA government said the closure reflected the changing climate and community attitudes about an "unsustainable" part of the industry.
But Tasmania plans to capitalise on mainland jitters, pledging to let loggers into up to 40,000 hectares of native forest previously set aside as a "wood bank".
