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Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd. [Wagon Mound No. 1]

Privy Council
[1961] A.C. 388 (P.C. Aust.)


Facts

Morts Dock & Engineering Co., Ltd. (Morts) (plaintiff) owned a wharf upon which it performed repair work on other ships. Morts used welding and burning techniques. A ship owned by Overseas Tankship (U.K.) Ltd. (Tankship) (defendant) was docked at the Sydney harbor at a neighboring wharf to Morts’. During this time, Tankships’ ship leaked oil into the harbor. After the ship set sail, the tide carried the oil near Morts’ wharf and required its employees to cease welding and burning. Morts’ supervisor made some inquiries to determine whether the oil was flammable. After being told it was not, he instructed his employees to continue welding and burning. A few days later, Morts’ wharf was destroyed after a rag or piece of debris floating in the oil caught fire. Morts brought suit against Tankship. At trial, the trial judge found that Tankship did not know and could not reasonably have been expected to know that the oil was capable of being caught on fire when spread over the surface of water. Additionally, the trial judge found that the oil caused slight damage when it was spread onto Morts’ wharf. The trial court granted judgment for Morts, and Tankship appealed.

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