Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound No 1)
[1961] AC 388
Ratio Decidendi
The test for remoteness of damage in negligence is reasonable foreseeability, not directness. The defendant is only liable for damage of a kind that was reasonably foreseeable as a consequence of the negligent act.
Facts
Oil was carelessly spilled from a ship in Sydney Harbour. The oil spread to the claimant's wharf where welding was being carried out. The oil ignited and caused extensive fire damage.
Judgment Summary
The Privy Council held the defendants were not liable. Fire damage from the oil spillage was not reasonably foreseeable because furnace oil on water was not known to be easily ignitable. This overruled the directness test in Re Polemis.
Key Quotes
"It is the foresight of the reasonable man which alone can determine responsibility."
— Viscount Simonds
Subsequent Treatment
Replaced the direct consequence test from Re Polemis with the foreseeability test for remoteness in negligence.