Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound (No 1)) [1961] AC 388
Tort; Negligence; causation of harm; the harm foreseeable as a consequence of the breach.
Facts: While refueling a ship, employees of the Overseas Tankship Co negligently spilt fuel oil into Sydney Harbour. The oil spread, some of it to the wharf where the plaintiff company was refitting a ship. However, as it was believed by all concerned that fuel oil lying on water could not ignite, the plaintiff continued work on the ship, including welding work. An unusual series of events then occurred: a piece of molten metal fell onto a piece of floating cotton waste, which caught fire and ignited the oil around the ship and dock. Extensive damage was caused.
Issue: Was there a sufficient connection between the defendant's conduct and the harm that had occurred such that the defendant should be liable in Negligence?
Decision: The trial court held the defendant liable because there was a clear causal link between the negligent act of spilling the fuel oil and the damage caused to the ship and the dock when that oil ignited. On appeal, the Privy Council held that the risk of harm caused by oil fouling the dock was reasonably foreseeable but the risk of harm caused by the oil burning was not.
Reason: Although a causal link between the events was clear, that was not sufficient in itself to hold the defendant liable. The true principle is that a defendant is liable for harm caused by their negligent conduct, but only for harm of a kind that was reasonably foreseeable at the time of that conduct. Viscount Simmonds said (at 413):
"For, if it is asked why a man should be responsible for the natural or necessary or probable consequences of his act...the answer is that it is not because they are natural or necessary or probable, but because, since they have this quality, it is judged, by the standard of the reasonable man, that he ought to have foreseen them."
It was held that, on the facts found proved, the possibility of the oil igniting was not foreseeable, because at the time such oil was not thought to be easily flammable.
See also Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd (The Wagon Mound (No 2)) [1967] 1 AC 617.