Judicial Committee Of The Privy Council Law Report, January 18 Before VIscOUNT SINMONDS. LoaD REID, LoaD RADCLIF:FE, LORD TtICKLR cland LoXD MORRIS OF BOITM-y-Gr.ST. Their Loatesmps allowed th's appeal by Overscas Tankship (U.K.) Ltd.. chartcrzrs of the ss. Waggon Mound, from an order of the Fuli Court of the Supreme Court of New South Walcs dated Decem- bar 3. 1959. affirming thc judgm-nt of the rial Judge in favour of the rcspondents, Morts Dock and Engineering Co. Ltd.. in an action brought by them to recover from the appci!ants compensation for damage caused by fire to their Sheerlegs Wharf and equipmznrt, in Mori's Bay, Sydney Harbour. On Oe obcr 30. 1951. as a result of the carele;sness of the appellants' servants, a quantity of furnace oil e-caped on to the waters of the bay, while the " Waggon Mound " was bunkering, and latcr caught fire. In the coursc of the two days follow- ing its cs,ape the furnace oil spread and- was carried by the wind and tides beneath and around Sheer'ees Wharf and around thc vesscl Corrimal. lying alongside Sheerlegs Wharf, on which the respondents were carrying out oxy-acetylene and electric welding operatlons. The finding of the trial Judge. which wac not disputed. was that immediately before the outbreak of the fire, on Novem- ber 1, there was floating in the oil under- neath the wharf a piece of debris on which lav some smouldering cotton waste or rag which had been set afire by molten metal falling from the wharf: that the cotton waste or rag burst inta flames which set the floating oil afire either directly or by first setting fire to a wooden pile coated with oil; and that the ignited oil auickly developed into a fire which severely damaged the wharf. One of the issues in this appeal was whether the statements of principle in the judgments of the Coturt of Appeal in In re Polemis and Furness Withy and Company Ltd. ([19211 3 K.B. 560), were correct in law. and. if so. whether they werc appli- cable to the facts of this case. Mr. Ashton Ros,kill. Q.C.. Mr. C. L. D. Meares. Q.C. (Australia), and Mr. Michael Kerr appeared for the appellants: Mr. R. L. Taylor, Q.C.. and Mr. Russell Bain- ton (both of Australia) for the respondents. JUDGMENT VIscouNTr SIMONDS, giving the advice of the Board, said that the trial Judge made theallimportant finding that the defendants did not know and could not reasonably be expected to have known that the furnace oil was capable of being set afire when spread on water. The Judge also held that apart from damage by fire the respondenLs had suffered some damage from the spillage of oil in that it had got upon their slipways and congealed upon them and interfered with their use of the slips. He said: " The evidence of this damage is slight and no claim for compensation is made in respect of it Nevertheless it does establish some damage which may be insignificant in com- parison with the magnitude of the damage by fire. but which nevertheless is damage which beyond question was a direct re.ul: of the escape of the o.l." It was upon this footing that their Lordships would consider the question whether the appellants were liable for the fire damage. It was inevitable that first consideration should be given to In Re Polemis and Fur- ness Withy and Company Ltd.. for it w-as avowedly in deference to that d_cision and to decisions of the Court of Appeal that followed it that the Full Court was con- strained to decide the present case in favour of the respondents. In doing so Mr. Justice Manning expressed the hope that in the near future the decision would be pronounced upon by the House of Lords or the Privy Council. That ci de coeur would in any case be irresistiblc but in the years that had passed since its decision Polcmis had been so much dis- cusscd and qualified that it could not claim, as counsel for the respondents urged for it, thz status of a decision of such long szanding that it should no, be reviewed. HOW POLEMIS WAS DECIDED NVhat, then, did Polemis decide ? It was clear that before Mr. Justice Sankey and the Court of Appeal the case proceeded as one in which. independently of contrac- tual obligations, the c'aim was for damages for negligence. It was upon that footing that the Court of Appeal held that the charterers were responsible for all the con- sequences of their negligent act even though those consequences could not reasonably have been anticipated. The negligent act was nothing more than the carelessness of stevedores (for whom the charterers were assumcd to be responsible) in allowing a sling, or rope by which it was hoisted, to come into contact with certain boards, causing one of them to fall into the hold. The falling board hit some substances, in the hold and caused a spark: the spark ignited petrol vapour in the hold, there was a rush of flames and the ship was destroyed. The special case submitted by the arbitrators found that the causing of the spark could not reasonably havc been anticipated from the falling of the board, though some damage to the ship might reasonably have been anticipated. They did not indicate what damage might have been so anticipated. There could be no doubt that the deci- sion of the Court of Appeal in Polemis plainly asserted that, if the defendant was guilty of negligence, he was responsible for all the consequences whether reasonably foreseeable or not. The generality of the proposition was perhaps qualified by the ,act that each of the Lords Justices referred to the outbreak of fire as the direct result of the negligent act. There was thus introduced the conception that the negligent actor was not responsible for consequences which were not "direct'" whatever that might mean. It had to be asked, then, why that conclusion should have been reached. '[he answer appeared to be that it was reached upon a considera- tion of certain authorities, comparatively few in number, that were cited to the Court. Of these, three were generally regarded as having influenced the decision. In Smith v. London & South Westem Rail- way Co. (L.R. 6 C.P. 14) it was said that ' when it has once been determined that there is evidence of negligence the person guilty of it is equally liable for its conse- quences whether he could have foreseen them or not *. For that sweeping proposi- tion no authority was cited. The second case was H.M.S. London ([1914] P.72), where the statement in Smith's case was followed, and it was said: "What the de- fendants might reasonably anticipate is only material with reference to the question whether the defendants were negligent or not and cannot alter their liability if they were guilty of negligence." That proposi- tion, which provided a different criterion for determining liability and compensation went to the root of the matter. It was repeated by Lord Sumner in the third case which was relied on in Polemis-namelv, Weld-Blundell v. Stephens ([19201 A.C. 956, 983). NOT EASY TO FOLLOW Lord Sumner. whose speech their Lord- ships, like others before them, had not found in all respects easy to follow, said: "What a defendant ought to have antici- pated as a reasonable man is material when the question is whether or not he was guilty of negligence, that is of want of due care according to t,he circumstances. This, how- ever, goes to culpability not to compensa- tion." But that observation followed a passage in which his Lordship, direc.ting his mind to the problem of causation, had asked what were " natural probable and necessary consequences " and had expressed the view that " direct cause " was the best expression. Adopting that test he rejected the plaintiffs claim as too remote. The question of foresecability, became irrelevant and the passage cited from his speech was unnecessary to his decision. Their Lord-. ships were constrained to say that that dictum (for such it was) perpetuated an error which had introdaced much confusion into the law. After referring to a number of older cases his Lordship said that the impression that might well be left on the reader of the scores of earlier cases in which liability tor negligence had been disoussed was that the Courts were feeling their way to a coherent body of doctrine and were at times in grave danger of being led astray by scholastic theories of causation and their ugly and barely intelligible jargon. Their Lordships assumed that the Court in Polemis purported to propound the law in regard to tort. But up to that date, it had been universally accepted that the law in regard to damages for breach of contract and for tort was, generally speaking, and particularly in regard to the tort of. negli- gence, the same. Yet Hadley v. Baxendale (11854] 9 Exch. 341) was not cited in argu- ment nor referred to in the judgments in Polemnis. 'I hat was the more surpris:ng when it was remembered that in that case. dS in many; another case, the' claim was laid alternatively in breach of contract and in negligence. Their Lordships 'referred to thataspect of the matter not because they wished to assert that in all respects today the measure of damages' was in all cases he same in tort and in breach 6f contract hut because it emphasized how far Polemis was out of the current of contemporary thought. The acceptance of the rule in Polemis as applicable to all cases of tort would directly conflict with the view there- tofore generally held. If the lin4 of relevant authoritv had stopped with Polemis, their Lordships might, whatever their own views as to its unreason, have felt some hesitation about overruling it. But it was far otherwise. It was true that both in England and in many parts of the Commonwealth that decision had from time to time been followed: but in Scotland it had been rejected with deter- mination. It had never been subject to the express scrutiny of either the House of Lords or the Privy Council, though there had been comments upon it in those Supreme Tribunals. Even in the inferior Courts Jtudges had,.sometimes perhaps un- wittingly, declared themselves in a sense adverse to its principle. AUTHORITY SHAKEN Instances might be multiplied of devia- tion from the rule in Polemis but their Lordships thought it sufficient to refer to certain later cases in the House of Lords and then to attempt to state what they con- ceived to be the true principle. Reference was made to' Glasgow Corporation v. Muir ([19431 A.C. 448. 454), Bourhill v. Young (119431 A.C 91, 101). Woods v. Duncan ([19461 A.C. 401).] Enough had been said to show that the autbority of Polemis had been severely shaken though lip-service had from time to time been paid to it. In their Lordships' opinion it should no longer be regarded as good law. It was not probable that many cases would for that reason have a different result, though it was hoped that the law would be thereby simplified and that in some cases at least palpable injustice would be avoided. For it did not seem consonant with current ideas of justice or morality that for an act of negligence. however slight or venial, which resulted in some trivial, foreseeable damage the actor should be liable for all consequences however unfore- seeable and however grave, so long as they could be said to be "direct". It was a principle of civil liability, subject only to qualifications which had no present rele- vance, that a man must be considered to be responsible for the probable con- sequences of his act. To demand more of him was too harsh a rule, to demand less was to ignore that civilized order required the observance of a minimum standard of behaviour. That concept applied to the slowly developing law of negligence had led to a great variety of expressions which could, as it appeared to their Lordships, be har- monized with little difficulty with the single exception of the se-called rule in Polemis. For, if it was 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 was that it was not because they w were natural or necessary or probable but because, sincc they had that quality, it was judged by the standard of the reasonable man, that he ought to have foreseen them. If some limitation must be imposed upon the consequences for which the negligent actor was to be held responsible-and all were agreed that some limitation there must be-why should that test (reasonable foreseeability) be rejected which. since he was judged by. what the rcasonable maoi ought to foresee, corrcsponded with the common conscience of mankind, and a test (the '-direct" consequence) be substituted which led to nowhere but the never ending and insoluble problems of causation. " The lawyer ", said Sir Frederick Pollock, " can- not afford to adventure himself with philo- sophers in the logical and metaphysical controversies that beset the idea of cause". Yet that was just what he had most unfor- tunately done and must continue to do if the rule in Polemis was to prevail. FORESEEARILrTY THE TEST Their Lordships concluded this. part of the case with some general observations. They had been concerned primarily to dis- place the proposition that unforeseeability was iirelevanit if 'damage was " direct ". Tn' doing so they had inevitably insisted that ttin'essential factor'in 'determiningiliability was whether the damage was of such"a kind as the'reasonable man should have foreseen. That accorded with' the general view thus stated by Lord Atkin in Donog- hue v. Stevenson ([1932] A.C. 562, 580); " The liability for negligence whether you style it such or treat it as in other systems as a spe es of cutlpa is no doubt based on a general public sentiment of moral wrong- doing for whi^h the offender must paY." It was a departure from that sovereign principle if liability was made to depend solely on the damage being the "direct" or " natural " consequence of the precedent act. Who knew or could 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 fore- saw or could reasonably foresee the inter- vening events which led to its being done; cf. Woods v. Duncan ([1946] A.C. at P. 442). Thus foreseeability became the effec- tive test. In reasserting that principle their Lordships conceived that they did not de- part from, but followed and developed, the law of negligence as laid down by Baron Alderson in Blyth v. Birmingham Water- works Coy. ((1856) 11 Exch. 784). It was proper to add that their Lord- ships had not found it necessary to consider the so-called rule of "strict liability " exemplified in RN-lands v. Fletcher and the cases that had followed or d'stinguished it. Nothing that they had said was intended to reflect on that rule. Their Lordships would '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, but that the action so far as it related to damage caused by nuisance should be remitted to the Full Court to be dealt with as that Court might think fit. The respondents mu.t pay the costs of the appellants of this appeal and in the Courts below. Solicitors.-Messrs. William A. Crumo & Son; Messrs. Light & Fulton. JUDICIAL COMMITTEE OF THE PRIVY COIJNCII. POLEMIS OVERRULED OVERSEAS TANKSHIP (U.K.) LTD. v. AIORTS DOCK & ENGINEERING CO. LTD.