Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd. (Wagon Mound (No. 1))

Brief Fact Summary. Defendants carelessly discharged oil from their ship. Oil was carried by the wind and tide to Plaintiff’s wharf, which was destroyed by fire. Such damage could not have been foreseen.

Synopsis of Rule of Law. Defendant is not liable for the damage solely because it directly resulted from his negligent act. The rule in Polemis is overturned.

Facts. Defendants carelessly discharged oil from their ship while it was berthed in Sydney harbor. After their ship set sail, oil was carried by the wind and tide to Plaintiff’s wharf, which was used for repair work on other ships in the harbor. Plaintiff’s supervisor was concerned about the oil and ordered his men to do no welding or burning in the area. Plaintiff made some inquires and was testified that the oil was not flammable. He accordingly instructed his men to resume welding operations and directed them to take care that no flammable material should fall off the wharf into the oil. About two and a half days later, Plaintiff’s wharf was destroyed by fire. The outbreak of fire was due to the fact that there was floating in the oil, underneath the wharf, a piece of debris on which lay some smoldering cotton waste or rag which had been set on fire by molten metal falling from the wharf. The trial judge found that Defendant knew that oil had been discharged from the ship, however
, he could not reasonably be expected to have known that oil was capable of being set afire when spread on water. Plaintiff was awarded judgment. Defendant appealed.

Issue. Is a tortfeasor liable for all damage, even that which is unforeseeable, directly resulting from a negligent act?

Held. No. Appeal allowed.
* The rule in Polemis plainly asserts the, if the defendant is guilty of negligence, he is responsible for all the consequences whether reasonably foreseeable or not. The negligent actor is not reasonable for consequences that are not “direct.”
* A defendant ought to have anticipated as a reasonable man is material when the question is whether or not he was guilty of negligence. This, however, goes to culpability, not to compensation.
* It seems to be a palpable injustice for the actor to be held liable for all consequences however unforeseeable and however grave, so long as they can be said to be “direct”
* If the ordinary man had been asked, as a matter of common sense, to state the cause of the fire, he would have assigned such cause to the discharge of the oil by the Defendants.

Discussion. A tortfeasor is responsible for the reasonably foreseeable or probable consequences of his negligent acts. In this case, the test for liability for fire is foreseeability of injury from fire. However, this rule is in conflict with the “egg-skull” plaintiff rule, which states that the defendant is liable for all injuries to the plaintiff, i.e., “you take the plaintiff as you find him.”