Legal Principles and Key Points
- In the case of Overseas Tankship Ltd v Miller Steamship Co  1 ac 617, foreseeability is crucial for the damage because of negligence, in the context of nuisance.
- It is insufficient for damage to be the result of the nuisance without there being foreseeability.
Facts of the Case
- D, who were collectively the owners of the vessel called ‘Wagon Mound,’ moored their vessel during which oil had leaked from the vessel and escaped into the water.
- D failed to clean the spillage, which subsequently caught fire accidently by a third party, thereby damaging C’s vessels.
- The Supreme Court of South Wales based their judgment on the rule in Re Polemis) in that damage which is a direct result from D’s act is actionable regardless of foreseeability.
- Was the subsequent fire, caught by the third party, reasonably foreseeable by the owners of the vessel?
Held by the Privy Council (Australia)
- The defendants should have foreseen the injury that could have subsequently occurred, despite the likelihood of such an injury being low, it was not deemed impossible.
- The defendants were liable in both negligence and nuisance.
- Walsh J, in the Supreme Court of South Wales, was of the view that the most likely explanation for the fire was that an inflammable material on the water effected by the oil had become ignited by coming in touch with a hot piece of metal.
- He believed that the damage to the vessels was “not reasonably foreseeable by those for whose acts the appellant was responsible.”
- As such, Walsh J held that the defendants could be found liable in nuisance but not in negligence.
- Lord Reid, in the Privy Council, believed that this was the crucial finding of Walsh J in this case. He emphasised that the defendants “would regard furnace oil as very difficult to ignite upon water” but not impossible, and the fact that this had “very rarely happened” did not indicate that they could never hear of a situation where this had happened.
- Lord Reid emphasised two types of negligence cases: the first being that the consequential risks should not be perceived as impossible or far-fetched to completely disregard, and the second being those where a real and substantial risk exists
- Lord Reid and their Lordships subsequently allowed the appeal and the cross-appeal; in favour of the defendants on the claim based upon nuisance and in favour of the claimant based upon negligence.
- The Wagon Mound (No 2) is a landmark case in tort law which paved a new way for the English common law of negligence and nuisance by revising the approach of the use of foreseeability.