Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd.

JUDGMENT BY VISCOUNT SIMONDS.
The relevant facts can be comparatively shortly stated, inasmuch as not one of the findings of fact in the exhaustive judgment of the learned trial judge has been challenged. The respondents at the relevant time carried on the business of ship-building, ship-repairing and general engineering at Morts Bay, Balmain, in the Port of Sydney. They owned and used for their business the Sheerlegs Wharf, a timber wharf about four hundred feet in length and forty feet wide, where there was a quantity of tools and equipment. In October and November, 1951, a vessel known as the Corrimal was moored alongside the wharf and was being refitted by the respondents. Her mast was lying on the wharf and a number of the respondents' employees were working both on it and on the vessel itself, using for this purpose electric and oxy-acetylene welding equipment. At the same time, the appellants were charterers by demise of the s.s. Wagon Mound, an oil-burning vessel which was moored at the Caltex Wharf on the northern shore of the harbour at a distance of about six hundred feet from the Sheerlegs Wharf. She was there from about 9 a.m. on Oct. 29, until 11 a.m. on Oct. 30, 1951, for the purpose of discharging gasolene products and taking in bunkering oil. During the early hours of Oct. 30, 1951, a large quantity of bunkering oil was, through the carelessness of the appellants' servants, allowed to spill into the bay, and, by 10.30 on the morning of that day, it had spread over a considerable part of the bay, being thickly concentrated in some places and particularly along the foreshore near the respondents' property. The appellants made no attempt to disperse the oil. The Wagon Mound unberthed and set sail very shortly after. When the respondents' works manager became aware of the condition of things in the vicinity of the wharf, he instructed their workmen that no welding or burning was to be carried on until further orders. He inquired of the manager of the Caltex Oil Co., at whose wharf the Wagon Mound was then still berthed, whether they could safely continue their operations on the wharf or on the Corrimal. The results of this inquiry, coupled with his own belief as to the inflammability of furnace oil in the open, led him to think that the respondents could safely carry on their operations. He gave instructions accordingly, but directed that all safety precautions should be taken to prevent inflammable material falling off the wharf into the oil. For the remainder of Oct. 30 and until about 2 p.m. on Nov. 1, work was carried on as usual, the condition and congestion of the oil remaining substantially unaltered. But at about that time the oil under or near the wharf was ignited and a fire, fed initially by the oil, spread rapidly and burned with great intensity. The wharf and the Corrimal caught fire and considerable damage was done to the wharf and the equipment on it.

It is on this footing that their Lordships will consider the question whether the appellants are liable for the fire damage.

Enough has been said to show that the authority of Polemis has been severely shaken, though lip-service has from time to time been paid to it. In their Lordships' opinion, it should no longer be regarded as good law. It is not probable that many cases will for that reason have a different result, though it is hoped that the law will be thereby simplified, and that, in some cases at least, palpable injustice will be avoided. For it does not seem consonant with current ideas of justice of morality that, for an act of negligence, however slight or venial, which results in some trivial foreseeable damage, the actor should be liable for all consequences, however unforeseeable and however grave, so long as they can be said to be "direct". It is a principle of civil liability, subject only to qualifications which have no present relevance, that a man must be considered to be responsible for the probable consequences of his act. To demand more of him is too harsh a rule, to demand less is to ignore that civilised order requires the observance of a minimum standard of behaviour. This concept, applied to the slowly developing law of negligence has led to a great variety of expressions which can, as it appears to their Lordships, be harmonised with little difficulty with the single exception of the so-called rule in Polemis. For, if it is asked why a man should be responsible for the natural or necessary or probable consequences of his act (or any other similar description of them), the answer is that it is not because they are natural or necessary or probable, but because, since they have this quality, it is judged, by the standard of the reasonable man, that he ought to have foreseen them. Thus it is that, over and over again, it has happened that, in different judgments in the same case and sometimes in a single judgment, liability for a consequence has been imposed on the ground that it was reasonbly foreseeable, or alternatively on the ground that it was natural or necessary or probable. The two grounds have been treated as conterminous, and so they largely are. But, where they are not, the question arises to which the wrong answer was given in Polemis. For, if some limitation must be imposed on the consequences for which the negligent actor is to be held responsible -- and all are agreed that some limitation there must be -- why should that test (reasonable foreseeability) be rejected which, since he is judged by what the reasonable man ought to foresee, corresponds with the common conscience of mankind, and a test (the "direct" consequence) be substituted which leads to nowhere but the never ending and insoluble problems of causation

The validity of a rule or principle can sometimes be tested by observing it in operation. Let the rule in Polemis be tested in this way. In The Edison, the appellants, whose vessel had been fouled by the respondents, claimed damages under various heads. The respondents were admittedly at fault; therefore, said the appellants, invoking the rule in Polemis, they were responsible for all damage whether reasonably foreseeable or not. Here was the opportunity to deny the rule or to place it secure on its pedestal. But the House of Lords took neither course; on the contrary, it distinguished Polemis on the ground that, in that case, the injuries suffered were the "immediate physical consequences" of the negligent act. It is not easy to understand why a distinction should be drawn between "immediate physical" and other consequences, nor where the line is to be drawn.

Their Lordships conclude this part of the case with some general observations. They have been concerned primarily to displace the proposition that unforeseeability is irrelevant if damage is "direct." In doing so, they have inevitably insisted that the essential factor in determining liability is whether the damage is of such a kind as the reasonable man should have foreseen.

It is a departure from this sovereign principle if liability is made to depend solely on the damage being the "direct" or "natural" consequence of the precedent act. Who knows or can be assumed to know all the processes of nature? But if it would be wrong that a man should be held liable for damage unpredictable by a reasonable man because it was "direct" or "natural", equally it would be wrong that he should escape liability, however "indirect" the damage, if he foresaw or could reasonably foresee the intervening events which led to its being done. Thus foreseeability becomes the effective test. In reasserting this principle, their Lordships conceive that they do not depart from, but follow and develop, the law of negligence.

Their Lordships will humbly advise Her Majesty that this appeal should be allowed and the respondents' action so far as it related to damage caused by the negligence of the appellants be dismissed with costs.