0 0
UKPC 2
Tags: Torts, Proximate Cause
See also: In re Polemis, Wagon Mound No. 2
The Wagon Mound No. 1 case in 1961 involved a disagreement between a shipowner, Overseas Tankship, and a wharf owner, Mort's Dock, regarding negligence and damage caused by a fire started from an oil spill. The ship, Wagon Mound, carelessly released furnace oil into Sydney Harbour, which spread to Mort's Dock and was ultimately ignited by a spark from workers welding, causing damage to the dock and equipment.
Mort's Dock sued for negligence and damages, and the trial court initially found Overseas Tankship at fault. However, the Privy Council overturned this ruling, stating that the damage was not reasonably foreseeable by the shipowner, as the fire resulted from an unlikely chain of events.
The Privy Council rejected a previous legal standard, known as the direct consequence test, that held defendants responsible for any direct results of their negligence, no matter how unforeseeable. Instead, they established a new standard for damage in negligence cases, requiring that the damage be reasonably foreseeable by the defendant at the time of the negligent act.
This case was significant because it changed the standard for negligence, emphasizing that liability should be based on fault rather than strict liability and should not include improbable or unforeseeable consequences. The Privy Council also stressed the need for common sense and justice when determining damage liability.
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