Overseas Tankship (UK) Ltd v The Miller Steamship Co or Wagon Mound (No. 2), is a landmark tort case, concerning the test for breach of duty of care in negligence. The Judicial Committee of the Privy Council held that loss will be recoverable where the extent of possible harm is so great that a reasonable man would guard against it (even if the chance of the loss occurring was very small). Wagon Mound (No. 2) should not be confused with the previous case of the Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd or Wagon Mound (No. 1), which introduced remoteness as a rule of causation to limit compensatory damages. Facts Overseas Tankship chartered a freighter ship named the Wagon Mound which was taking on bunker oil at Mort's Dock in Sydney. The engineers on the Wagon Mound were careless and a large quantity of oil overflowed onto the surface of the water. After several hours the oil drifted and was around two ships owned by the Miller Steamship Co that were being repaired nearby. Sparks from the welders caused the leaked oil to ignite destroying all three ships. At the trial in the Supreme Court of New South Wales, Walsh J found that (1) that the officers of the Wagon Mound would regard the oil as very difficult, but not impossible, to ignite on water (2) ignition of the oil on waters had very rarely happened, and (3) it was a possibility that would only eventuate in very exceptional circumstances. Walsh J held that Overseas Tankship were not liable for negligence, but that the large quantity of oil was a public nuisance and the Overseas Tankship were liable to pay damages for nuisance. Overseas Tankship obtained leave to appeal directly to the Privy Council on the verdict of nuisance and the Miller Steamship Co obtained leave to appeal on the verdict of negligence. Judgment The Privy Council upheld both the appeal and the cross-appeal. They held that it was not sufficient that the damage to the Miller Steamship vessels was the direct result of the nuisance if that damage was unforeseeable. In relation to negligence the Privy Council held that a reasonable person in the position of the ship's engineer would have been aware of the risk of fire. Since the gravity of the potential damage from fire was so great there was no excuse for