Overseas Tankship (UK) Ltd v Miller Steamship Co Pty Ltd (Wagon Mound (No 2)) [1967] 1 AC 617 (PC)

Facts

  • Furnace oil was discharged by the defendants into Sydney Harbour, drifting under nearby wharves and ships.
  • The oil later ignited, causing significant fire damage to the property of the plaintiffs.
  • In previous litigation (Wagon Mound (No. 1)), ignition of oil on water was held unforeseeable.
  • In this case, evidence included expert testimony regarding the flammability of oil on water under certain conditions.
  • The defendants could have prevented the oil discharge at minimal cost.
  • The litigation focused on whether the risk of fire, though unlikely, was reasonably foreseeable and whether reasonable measures could have prevented it.

Issues

  1. Whether the type of damage (fire from oil on water) resulting from the defendants' actions was reasonably foreseeable.
  2. Whether the defendants were negligent in failing to take preventative measures when those measures were minimal in cost.
  3. Whether low-probability but foreseeable risks can give rise to liability in negligence if prevention is practical.

Decision

  • The Privy Council held that the risk of fire, while small, was not so improbable as to be disregarded as unforeseeable.
  • The defendants were found liable, as reasonable foreseeability existed considering the expert evidence provided.
  • Liability arose because the cost of taking precautions against the risk was low, and failing to do so constituted negligence.
  • The judgment clarified that duty of care extends to low-probability risks if prevention is reasonable and practicable.

Legal Principles

  • A defendant is liable in negligence if the type of harm was reasonably foreseeable, regardless of its probability.
  • The probability of harm and the cost of precautions must be balanced; even unlikely risks necessitate prevention if cost is minimal.
  • The standard of reasonable conduct is measured by foreseeable risks and the practicality of preventative actions.
  • Foreseeability is a fact-specific assessment, influenced by available evidence and expert testimony.
  • Wagon Mound (No. 2) distinguishes itself from Wagon Mound (No. 1) by focusing on the evidence and the scope of the foreseeability inquiry.

Conclusion

Wagon Mound (No. 2) establishes that liability in negligence turns on the reasonable foreseeability of harm and the cost-effectiveness of precautions. Defendants are required to take preventative measures for foreseeable risks, even if the likelihood of harm is low, when such measures are reasonable and inexpensive. This approach clarified the scope of duty of care and remoteness in negligence law, shaping subsequent legal development.

The answers, solutions, explanations, and written content provided on this page represent PastPaperHero's interpretation of academic material and potential responses to given questions. These are not guaranteed to be the only correct or definitive answers or explanations. Alternative valid responses, interpretations, or approaches may exist. If you believe any content is incorrect, outdated, or could be improved, please get in touch with us and we will review and make necessary amendments if we deem it appropriate. As per our terms and conditions, PastPaperHero shall not be held liable or responsible for any consequences arising. This includes, but is not limited to, incorrect answers in assignments, exams, or any form of testing administered by educational institutions or examination boards, as well as any misunderstandings or misapplications of concepts explained in our written content. Users are responsible for verifying that the methods, procedures, and explanations presented align with those taught in their respective educational settings and with current academic standards. While we strive to provide high-quality, accurate, and up-to-date content, PastPaperHero does not guarantee the completeness or accuracy of our written explanations, nor any specific outcomes in academic understanding or testing, whether formal or informal.
No resources available.

Job & Test Prep on a Budget

Compare PastPaperHero's subscription offering to the wider market

PastPaperHero
Monthly Plan
$10
Assessment Day
One-time Fee
$20-39
Job Test Prep
One-time Fee
$90-350

Note the above prices are approximate and based on prices listed on the respective websites as of May 2025. Prices may vary based on location, currency exchange rates, and other factors.

Get unlimited access to thousands of practice questions, flashcards, and detailed explanations. Save over 90% compared to one-time courses while maintaining the flexibility to learn at your own pace.

All-in-one Learning Platform

Everything you need to master your assessments and job tests in one place

  • Comprehensive Content

    Access thousands of fully explained questions and cases across multiple subjects

  • Visual Learning

    Understand complex concepts with intuitive diagrams and flowcharts

  • Focused Practice

    Prepare for assessments with targeted practice materials and expert guidance

  • Personalized Learning

    Track your progress and focus on areas where you need improvement

  • Affordable Access

    Get quality educational resources at a fraction of traditional costs

Tell Us What You Think

Help us improve our resources by sharing your experience

Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal