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  • Overseas Tankship Vs Morts Dock

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    The Wagon Mound No. 1 established that a negligent party is only responsible for consequences of their actions that were reasonably foreseeable. In this case, OT released furnace oil into the harbor near Morts Dock. Hot metal later fell into the oil and caused a fire, damaging Morts' property. The Privy Council found OT was not liable because it was not reasonably foreseeable that furnace oil would burn on water. This case limited liability to foreseeable consequences and rejected liability for all direct harms from a breach of duty. It confirmed the rule that a defendant is only liable for harm caused by their negligence that was reasonably foreseeable.

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    The Wagon Mound No. 1 established that a negligent party is only responsible for consequences of their actions that were reasonably foreseeable. In this case, OT released furnace oil into the harbor near Morts Dock. Hot metal later fell into the oil and caused a fire, damaging Morts' property. The Privy Council found OT was not liable because it was not reasonably foreseeable that furnace oil would burn on water. This case limited liability to foreseeable consequences and rejected liability for all direct harms from a breach of duty. It confirmed the rule that a defendant is only liable for harm caused by their negligence that was reasonably foreseeable.

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    © All Rights Reserved
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    36 views2 pages

    Overseas Tankship Vs Morts Dock

    Uploaded by

    Kamugisha Jsh
    The Wagon Mound No. 1 established that a negligent party is only responsible for consequences of their actions that were reasonably foreseeable. In this case, OT released furnace oil into the harbor near Morts Dock. Hot metal later fell into the oil and caused a fire, damaging Morts' property. The Privy Council found OT was not liable because it was not reasonably foreseeable that furnace oil would burn on water. This case limited liability to foreseeable consequences and rejected liability for all direct harms from a breach of duty. It confirmed the rule that a defendant is only liable for harm caused by their negligence that was reasonably foreseeable.

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    © All Rights Reserved
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    of 2

    Overseas Tankship (UK) Ltd v Morts Dock & Engineering Company (‘The Wagon

    Mound No. 1’) [1961] AC 388


    Chapter 4

    Relevant facts

    Morts Dock & Engineering Company (‘Morts’) carried on the business of ship-building,
    ship-repairing and general engineering at its wharf in Morts Bay in Sydney Harbour. On
    30 October 1951, Morts employees were working on a vessel moored at the wharf using
    electric and oxy-acetylene welding equipment. A vessel owned by Overseas Tankship
    (UK) Ltd (‘OT’), the ‘Wagon Mound’, was moored at Caltex Wharf on the opposite shore
    of the harbour, approximately 600 feet from Morts Wharf, to enable the discharge of
    gasoline products and taking in of furnace oil. A large quantity of furnace oil was
    released into the harbour as a result of the carelessness of OT’s employees. The oil
    spread to Morts Wharf. When the Morts works manager became aware of the presence
    of the oil, he made enquiries with the manager of Caltex. The response he received as
    well as his own belief that furnace oil was inflammable in the open led him to believe
    that the work at Morts Wharf could safely continue. However, he gave instructions that
    safety precautions should be taken to prevent inflammable material falling from Morts
    wharf into the oil. On 1 November 1951, hot metal from the welding at Morts Wharf fell
    on cotton waste in the harbour and ignited the furnace oil. Consequently, the wharf and
    the vessel upon which Morts employees were working caught fire. Considerable
    damage was done to the wharf and to the equipment on it.

    Morts sued OT for negligence. In hearing an appeal from the decision of the Trial judge,
    the Supreme Court of New South Wales held that OT was liable in negligence for the
    damage suffered by Morts. OT appealed to the Privy Council.

    Legal issue

    Is a negligent defendant responsible for all the consequences of their actions including
    those that are not reasonably foreseeable?

    Decision

    On 18 January 1961, the Privy Council unanimously held that OT was only liable for the
    consequences of its actions that were reasonably foreseeable at the time of the
    negligent act. OT was not liable for unforeseeable consequences of its negligence.

    The Privy Council was of the view that a defendant’s liability should be limited to those
    acts that are natural and probable consequences of its carelessness, and that acts that
    were foreseeable were the natural and probable consequences. The Privy Council held
    that although OT had owed Morts a duty of care and that duty had been breached, the
    damage suffered by Morts was not reasonably foreseeable. Critical to this determination
    was the Privy Council’s acceptance of the Trial Judge’s finding, based on the extensive
    expert evidence given at trial, that OT did not know and could not reasonably be
    expected to have known that furnace oil was flammable when spread on water.

    The Privy Council rejected the previous rule that a defendant was liable for all harm
    directly caused by, or a direct consequence of, their breach of duty, even if that harm
    was not reasonably foreseeable. According to Viscount Simonds in his judgement on
    behalf of the Privy Council:

    It is a principle of civil liability, subject only to qualifications which have no present


    relevance, that a man must be considered to be responsible for the probable
    consequences of his act. To demand more of him is too harsh a rule, to demand
    less is to ignore that civilised order requires the observance of a minimum
    standard of behaviour….

    For, if some limitation must be imposed upon the consequences for which the
    negligent actor is to be held responsible - and all are agreed that some limitation
    there must be - why should that test (reasonable foreseeability) be rejected
    which, since he is judged by what the reasonable man ought to foresee,
    corresponds with the common conscience of mankind, and a test (the ‘direct’
    consequence) be substituted which leads to no-where but the never-ending and
    insoluble problems of causation.

    …. [T]he essential factor in determining liability is whether the damage is of such


    a kind as the reasonable man should have foreseen. This accords with the
    general view thus stated by Lord Atkin in Donoghue v Stevenson [1932] AC 562
    at p 580: ‘The liability for negligence, whether you style it such or treat it as in
    other systems as a species of 'culpa,' is no doubt based upon a general public
    sentiment of moral wrongdoing for which the offender must pay.’ It is a departure
    from this sovereign principle if liability is made to depend solely on the damage
    being the ‘direct’ or ‘natural’ consequence of the precedent act. Who knows or
    can be assumed to know all the processes of nature? But if 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 … Thus foreseeability
    becomes the effective test.

    Significance

    This case confirmed the remoteness rule: a defendant who has breached their duty of
    care is only liable for harm caused by the breach that is reasonably foreseeable, and is
    not liable for harm caused by the breach that is too remote or far-fetched.

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