Torts I, Pages 327–328

Overseas Tankship (U.K.) Ltd. v. Miller Steamship Co. "Wagon Mound No. 2"

Privy Council, 1966

Facts:

While taking on a load of furnace oil, the defendant's crew negligently left a valve open, causing the oil to spill out onto the water. A few days later, the oil was ignited when floating cotton waste was set fire by metal dropped from a nearby wharf. The fire seriously damaged plaintiffs' two ships docked alongside it.

Procedural History:

  • The trial court . . . made more elaborate findings . . ., as follows:

    1. Reasonable people in the position of the officers of the Wagon Mound would regard the furnace oil as very difficult to ignite upon water.
    2. Their personal experience would probably have been that this had very rarely happened.
    3. If they had given attention to the risk of fire from the spillage, they would have regarded it as a possibility, but one which could become an actuality only in very exceptional circumstances.
    4. They would have considered the chances of the . . . spread on the harbour waters as being remote.
    5. I find that the occurrence of damage to the plaintiff's property as a result of the spillage not reasonably foreseeable by those for whose acts the defendant would be responsible.
    . . . .
    1. Having regard to those findings, and because of finding (5), I hold that the claim of each of the plaintiffs, framed in negligence, fails.
  • Judgment for the defendants was affirmed by the Supreme Court of New South Wales.

Issue:

Was the defendant liable for the reasonably foreseeable small risk his negligence posed to plaintiffs' ships?

Rule:

A defendant is liable for a risk that does not have a disadvantage to preventing it, no matter how small the risk is.

Reasoning:

Defendant had no disadvantage to reducing the risk. Spilling the oil was disadvantageous to him as well. There was nothing to balance then and any risk was too much.

Holding:

Yes, defendant was liable for the damage caused by his negligence. Appeal allowed.