Torts Case of Remoteness

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Overseas Tankship (U.K.) Limited v.The Miller Steamship Co. Pty. Limited and another (Wagon Mound No 2), Judicial Committee of the Privy Council on appeal from the Supreme Court of New South Wales, 1966

There are extracts from this case at p. 80 of Weinrib and then a summary of the result of this case at p 183. The case has some important passages beyond what appear in the p. 80 extract. Please add the following to your reading:

LORD REID, LORD MORRIS OF BORTH-Y-GEST, LORD PEARCE, LORD WILBERFORCE, LORD PEARSON [Delivered by LORD REID]
This is an appeal from a judgment of Walsh J. dated 10th October 1963 in the Supreme Court of New South V/ales in commercial cases by which he awarded to the respondents sums of £80,000 and £1,000 in respect of damage from fire sustained by their vessels ."Corrimal " and" Audrey D" on 1st November 1951. These vessels were then at Sheerlegs Wharf, Morts Bay, in Sydney Harbour undergoing repairs. The appellant was charterer by demise of a vessel. the "Wagon Mound", which in the early hours of 30th October 1951 had been taking in bunkering oil from Caltex Wharf not far from Sheerlegs Wharf. By reason of carelessness of the "Wagon Mound" engineers a large quantity of this oil overflowed from the "Wagon Mound" on to the surface of the water. Some hours later much of the oil had drifted to and accumulated round Sheerlegs Wharf and the respondents' vessels. About 2 p.m. on 1st November this oil was set alight: the fire spread rapidly and caused extensive damage to the Wharf and to the respondents' vessels, An action was raised against the present appellant by the owners of Sheerlegs Wharf on the ground of negligence. On appeal to the Board it was held that the plaintiffs were not entitled to recover on the ground that it was not foreseeable that such oil on the surface of the water could be set alight (Overseas Tankship (U.K.) Ltd. v. Morts Dock and Engineering Co. [1961] A.C. 388). Their Lordships will refer to this case as the Wagon Mound No. I. … Walsh J. had found in their favour in nuisance but against them [the plaintiff shipowners] in negligence. …Their Lordships are indebted to that learned judge for the full and careful survey of the evidence which is set out in his judgment ([1963] 1 Lloyd's Rep. 402). Few of his findings of fact have been attacked, and their Lordships do not find it necessary to set out or deal with the evidence at any length. But it is desirable to give some explanation of how the fire started before setting out the learned judge's findings. In the course of repairing the respondents' vessels the Morts Dock Co., the owners of Sheerlegs Wharf, were carrying out oxy-acetylene welding and cutting. This work was apt to cause pieces or drops of hot metal to fly off and fall in the sea. So when their manager arrived on the morning of 30th October and saw the thick scum of oil round the Wharf he was apprehensive of fire danger and he stopped the work while he took advice. He consulted the manager of Caltex Wharf and after some further consultation he was assured that he was safe to proceed: so he did so, and the repair work was carried on normally until the fire broke out on 1st November. Oil of this character with a flash point of 170op. is extremely difficult to ignite in the open. But we now know that that is not impossible. There is no certainty about how this oil was set alight, but the most probable explanation, accepted by Walsh J., is that there was floating in the oil-covered water some object supporting a piece of inflammable material, and that a hot piece of metal fell on it• when it burned for a sufficient time to ignite the surrounding oil. The findings of the learned trial judge [i.e. in this case – Wagon Mound No 2] are as follows:- " (l) Reasonable people in the position of the officers of the "Wagon Mound" would regard furnace oil as very difficult to ignite upon water. (2) Their personal experience would probably have been that this had very rarely...
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