Overseas Tankship (U.K.) Ltd. v. Mort’s Dock & Engineering Co., LTd. (The Wagon Mound)

Citation. Privy Council, 1961. [1961] A.C. 388.

Brief Fact Summary.

Defendant, the ship Wagon Mound was at a wharf and was taking on a large amount of bunker oil. In that process, they spilled quite a bit that concentered on the Plaintiff’s (Overseas Tankship) property. Two days later that oil caught fire and damaged the wharf and Plaintiff’s equipment. Plaintiff sues.

Synopsis of Rule of Law.

The test of liability in a negligence case regarding causation is based on whether a reasonable person would foresee this damage and not whether the damage is a direct result of the negligence.

Facts.

Defendant, the ship Wagon Mound was at a wharf and took on a large amount of bunker oil. In that process, they spilled quite a bit that concentered on the Plaintiff’s (Overseas Tankship) property. The Defendants set sail, making no efforts to disperse the oil. Plaintiff’s manager became aware of the oil and stopped all welding and burning until he assessed the danger. After the assessment, he determined that the furnace oil in open water was okay, so work continues for two days. Then oil under or near the wharf ignited, and fire spread, causing extensive damage to the wharf and the plaintiff’s equipment. The trial determined the fire was caused by a piece of debris floating in the oil-coated water that caught fire from molten metal. At trial, evidence was demonstrated that the defendant could not have reasonably known that the oil could be set afire while on the water. Plaintiff sued Defendant for negligence and won in the trial court.

Issue.

Whether irrespective of foreseeability, the defendant is liable for all direct consequences of his negligence?

Held.

No, a defendant is not liable for all direct consequences because foreseeability is necessary for a negligence claim.

Discussion.

No, a defendant is not liable for all direct consequences because foreseeability is necessary for a negligence claim. The defendant is only liable for what a reasonable man ought to have foreseen. The court discussed Polemis, an older tort case where the defendant would be liable for any direct result of the negligence regardless of whether it was foreseeable. The court disagrees with their precedent stating that it does not promote justice or morality for creating liability based on trivial foreseeability. Who knows or can be assumed to know the processes of nature? Therefore, a man should not be liable for damage unpredictable by a reasonable man because it was “direct,” just as a man should not escape liability for an ‘indirect’ result that was reasonably foreseeable. The true test is the foreseeability of a reasonable person at the time of the act.