Overseas Tankship [U.K.] Ltd. v. Morts Dock & Engineering Co. I[The Wagon Mound] (1961) 1 All ER 404 : Case Summary 

Facts:

A large quantity of oil was carelessly allowed to spill from The Wagon Mound, a ship under the defendant’s control, during bunkering operations in Sydney Harbour on October 30, 1951. This oil spread to the plaintiff’s wharf about 200 yards away, where a ship, The Corrimal, was being repaired. The plaintiff asked whether it was safe to continue welding, and was assured (in accordance with the best scientific opinion) that the oil could not be ignited when spread on water. On November 1, a drop of molten metal fell on a piece of floating waste; this ignited the oil, and the plaintiff’s wharf was consumed by fire.
Kinsella J. found that the destruction of the wharf by fire was a direct but unforeseeable consequence of the carelessness of the defendant in spilling the oil, but that some damage by fouling might have been anticipated. He gave judgment for the plaintiff (1958) Lloyd’s Rep. 575. The Full Court of the Supreme Court of New South Wales affirmed his decision (1959) 2 Lloyd’s Rep. 697. The defendant appealed to the Judicial Committee of the Privy Council, and the appeal was allowed.

Issue:

Whether defendant can be held tortiously liable for the outcome of events entirely caused by actions which could not have been forseen?

Ratio Decendi:

1. The polemis rule works in very strange way. After the event even a fool is wise. But it is not the hindsight of a fool; it’ is the foresight of the reasonable man which alone can determine responsibility.
2. The polemis rule by substituting “direct” for “reasonable forseeable” consequence leads to a conclusion equally illogical and unjust.
3. It would be wrong that a man should be held liable for damage unpredictable by a reasonable man because it was “direct ” or ” natural, ” equally it would be wrong that he should escape liability, however ” indirect” the damage, if he foresaw or could reasonably foresee the intervening events which led to its being done (cf Woods v. Duncan). Thus foreseeability becomes the effective test.

Decision:

The appeal was allowed and respondents action so far as it related to damage caused by the negligence of the appellants were dismissed but action for damages caused by nuisance was remitted to the full court.