The Wagon Mound (No. 2) [1967] 1 AC 617

Key Point

  • In nuisance, the injury must be reasonably foreseeable to be recoverable in damages (and not just in occupier cases).
  • The difficulty and financial cost of preventative measures should be balanced against the magnitude of risk when assessing the standard of care under both negligence and nuisance (in occupier cases).

Facts

  • Ds were charterers of the vessel, The Wagon Mound, which was moored at Mort’s dock.
  • Oil leaked from the Wagon Mound onto the water but D’s employees failed to remove the spillage.
  • When the oil caught fire, C’s vessels that were under repair at Mort’s Dock were damaged.
  • The trial judge had held that the damage was not reasonably foreseeable as the risk of the oil alighting on water was remote.

Held (Privy Council)

  • D is liable in nuisance to pay damages to C.
  • A reasonable person in the position of D’s chief engineer would have been aware of the risk of the oil alighting.
  • Furthermore, the injury was reasonably foreseeable.

Lord Reid (at p. 639)

Foreseeability in nuisance

  • While in general nuisance does not require fault/negligence, in the Sedleigh-Denfield v O’Callaghan line of cases fault and therefore foreseeability is a prerequisite.
  • It could not be right to discriminate between different cases of nuisance on whether foreseeability is required.
  • Therefore is not sufficient that the injury suffered by the respondents’ vessels was the direct result of the nuisance if that injury was in the relevant sense unforeseeable.

Standard of care

  • Although in Bolton v Stone it was held that the risk of injury was so small that in the circumstances a reasonable man would have been justified in disregarding it and taking no steps to eliminate it, it does not follow that, no matter what the circumstances may be, it is justifiable to neglect a risk of such a small magnitude.
  • A reasonable man would only neglect such a risk if he had some valid reason for doing so, e.g., that it would involve considerable expense to eliminate the risk. He would weigh the risk against the difficulty of eliminating it:  p. 630.

Current case

  • D’s Chief Engineer knew of the spillage of oil and ought to have known of the risk of it igniting on water.
  • It was unreasonable to neglect the risk as action to eliminate it presented “no difficulty, involved no disadvantage, and required no expense”: p.644.
  • There was also no justification whatever for discharging the oil into Sydney Harbour. Not only was it an offence to do so, but it involved considerable loss financially: p. 643A.

Commentary

  • Note that despite the requirement of reasonable foreseeability, nuisance is still a strict liability tort as D can be liable even if he had taken reasonable care to prevent any interference to C’s enjoyment of land provided provided that the interference is deemed an “unreasonable user”.
    • The reasonable user test asks not whether D had acted reasonably but whether the interference is one that C should be reasonably expected to put up with.
  • This case falls within the Sedleigh-Denfield principle and thus fault in the form of negligence must be proven for D to be liable in nuisance. The principles relating to the standard of care is applicable to both the tort of negligence and nuisance.
  • A comparison of this case can be made with Bolton v Stone [1951] AC 850: although both cases involved a minute risk, D cricket club was carrying on a lawful and socially useful activity and would have had to stop playing cricket at that ground whereas here D was acting illegally by permitting the spillage.
  • The different outcome in this case compared to The Wagon Mound (No 1) [1961] AC 388 is due to a finding by the trial judge in Wagon Mound (No 1)  that D’s employees ought not have known of the risk of fire at all whereas here the trial judge found that D’s employees ought to have known of the risk : p 641A – B.