Legal Case Summary
Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound) [1961] AC 388
Tort law – Remoteness Rule – Causation – Negligence – Reasonably Foreseeable – Foreseeability – Contributory Negligence – Duty of Care – The Wagon Mound Case
Facts
The crew members of the Overseas Tankship (UK) Ltd were working on a ship, when they failed to turn off one of the furnace taps. This caused oil to leak from the ship into the Sydney Harbour. Morts Dock & Engineering Co (The Wagon Mound) owned the wharf, which they used to perform repairs on other ships. The leaking oil on the water surface drifted to the site where Morts were welding metal. A supervisor enquired to find out whether the oil was flammable, which he was assured that it was not. However, a spark from welding and mixed with debris, caught fire from the spilt oil and this caused a fire to spread rapidly. This caused significant damage to Mort’s wharf.
Issues
The issue in this case was whether the crew could be liable for the damage to the wharf that was caused by the fire. In addition, would this also be the case even if it was unforeseeable, but a result of a negligent act.
Decision/Outcome
The court held that Overseas Tankship (UK) Ltd could not be held liable to pay compensation for the damage to the wharf. This case disapproved the direct consequence test in Re Polemis and established the test of remoteness of damage. This asks whether the damage would be reasonably foreseeable. In this case, the damage caused to the wharf by the fire and the furnace oil being set alight could not be foreseen by a reasonable person.
Updated 19 March 2026
This case summary accurately describes the facts, issues, and outcome of Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound) [1961] AC 388. The case remains good law and continues to govern the remoteness of damage test in English tort law: a defendant is liable only for damage of a type that was reasonably foreseeable. The overruling of the direct consequence test from Re Polemis [1921] 3 KB 560 stands as settled law.
One clarification worth noting: the article refers to the defendant’s vessel as "The Wagon Mound" and attributes that name to Morts Dock, but "The Wagon Mound" was in fact the name of the defendants’ ship (owned by Overseas Tankship), not the plaintiff’s wharf. This does not affect the legal principles discussed.
Readers should also be aware that a second case arising from the same incident — Overseas Tankship (UK) Ltd v The Miller Steamship Co (The Wagon Mound No 2) [1967] 1 AC 617 — refined the position further, confirming that even a small but real risk of foreseeable damage may found liability in negligence. That development is not addressed in this summary but is relevant to a full understanding of the remoteness rules arising from these facts. The broader legal framework on remoteness has been further considered in later cases such as Hughes v Lord Advocate [1963] AC 837 and Page v Smith [1996] AC 155, though the core Wagon Mound principle remains unchanged.
