UNIT - III

REMOTENESS OF DAMAGES

• It is quite simple, once the damage is caused by a wrong, there have to be liabilities
(conditional to some exceptions). The question remains how much liability can be fixed,
and what factor determines it. The doctrine of the remoteness of damages is one such
principle.
• An event constituting a wrong can constitute of single consequence or may constitute of
consequences of consequences i.e. series of acts/wrongs.

• The damage may be proximate or might be remote, or too remote.

SCOTT V. SHEPHERD:

• A threw a lighted squib into a crowd, it fell upon X. X, in order to prevent injury to
himself, did the same thing and it fell upon Y and Y in his turn did the same thing and it
then fell on B, as a result of which B lost one of his eyes. A was held liable to B. His act
was the proximate cause of damage even though his act was farthest from the damage in
so far as the acts X and Y had intervened in between.
HAYNES V. HARWOOD

• The defendant’s servants negligently left a horse unattended in a crowded street. The
throwing of stones at the horses by a child, made them bolt and a policeman was injured
in an attempt to stop them with a view to rescuing the woman and children on the road.
One of the defenses pleaded by the defendant was novus actus interviniens, or remoteness
of consequences i.e. the mischief of the child was the proximate cause and the negligence
of the servants was a remote cause.
THE TEST OF REASONABLE FORESIGHT

• According to this test, if the consequences of a wrongful act could have been foreseen by
a reasonable man, they are not too remote. If on the other hand, a reasonable man could
not have foreseen the consequences, they are too remote. And, a person shall be liable
only for the consequences which are not too remote i.e. which could be foreseen.
THE TEST OF DIRECTNESS

• According to the test of directness, a person is liable for all the direct consequences of his
wrongful act, whether he could have foreseen them or not; because consequences which
directly follow a wrongful act are not too remote. The only question which has to be
answered in such any case whether the defendant’s act is wrongful or not, i.e., could he
foresee some damage? If the answer to this question is in the affirmative, i.e., if he could
any damage to the plaintiff, then he is liable not only for those consequences which he
could have foreseen but for all the direct consequences of his wrongful act.
CASES

• Smith v. London and South Western Railway Co. FACTS – The railway company was negligent in allowing a
heap of trimmings of hedges and grass near a railway line during dry weather. A spark from the railway engine
set re to the material. Due to high wind, the re was carried to the plaintiff’s cottage which was burnt. The
defendants were held liable even though they could not have foreseen the loss to the cottage.
• Re Polemis and Furness, Withy & Co. FACTS – The defendants chartered a ship. The cargo to be carried by
them included a quantity of Benzene and/or petrol in tins. Due to leakage in those tins, some of their contents
collected in the hold of the ship. Owing to the negligence of the defendants’ servants, a plank fell into the hold,
a spark was caused. Consequently, the owners of the ship were held entitled to recover the loss – nearly
200,000 pounds, being the direct consequence of the wrongful act although such a loss could not have been
reasonably foreseen. The interpretation of ‘direct cause’ by House of Lords in Liesbosch Dredger v. S.S.
Edison had the eect of limiting the scope of Re Polemis.
• Liesbosch Dredger v. S.S. Edison
• FACTS – Owing to the negligence of Edison, the dredger Liesbosch was sunk. The owners of Liesbosch required it for
the performance of a contract with a third party, but since they were too poor to purchase a new one, they hired one at
an exorbitant rate. They sued the owners of Edison for negligence and their claim for compensation included: (1) the
price of the dredger; and (2) the hire charges which they had to pay from the date of the sinking to the date they could
actually purchase a new dredger. The House of Lords accepted their claim under the rst head and allowed compensation
equal to the market price of the dredger comparable to Liesbosch. As regards the second head of claim, the
compensation allowed was for loss suffered in carrying out the contract with the third party from the date of the sinking
of Liesbosch to the date when another dredger could reasonably have been put to work. Thus, the claim after the time
when a new dredger could have been reasonably purchased and put to work was rejected. The reason why a new
dredger could not be purchased by the plaintiff was their poverty and the House considered the additional loss being due
to the extraneous cause of poverty and as such too remote.
• And then in the case of Overseas Tankship (U.K.) Ltd. v. Morts Dock and Engg. Co. Ltd. (Wagon Mound Case) the test of directness was
rejected by the Judicial Committee of the Privy Council and it was held that the test of reasonable foresight is the better test.

• THE WAGON MOUND CASE

• In this case, the appellants’ vessel was taking oil in Sydney Harbor at the Caltex wharf. Through the carelessness of their servants, a large
quantity of oil was allowed to spill into the harbor. The escaped oil was carried by wind and tide beneath a wharf owned by the
respondents, who were ship-builders and ship-repairers. They were retting a vessel and for that purpose, their employees were using
welding equipment. The distance between respondent’s wharf and the Caltex wharf was 600 feet. When the respondents’ manager became
aware of the conditions in the vicinity of the wharf, he instructed the workmen that no welding or burning operations were to be carried
on until further orders. He enquired from the manager of Caltex Co. whether they could safely carry on the welding operations and the
result of the inquiry, coupled with his own belief as to inammability of the furnace oil on water in the open led him to think that he could
safely carry on the operations. He gave instructions accordingly but directed that all safety precautions should be taken to prevent
inammable material falling into the oil.
• On the third day, there was an outbreak of re. The exact cause of the re is unknown, but the most probable
explanation which the Court accepted was that underneath the wharf was oating a piece of debris with some
smoldering cotton waste or rag on it. It was set on re by the molten metal falling from the wharf. Thus,
oating oil was set a re and the wharf was severely damaged.
• The trial as well as the Supreme Court followed the Polemis rule and held the defendant liable, with the
reason that any reasonable man could form the chain of events deduce that the negligence of the defendant
was the direct cause for the re. However, the Privy council ruled in favor of the Overseas Tankship Ltd.
holding that the Re Polemis was no longer valid law. Since a reasonable man could not foresee the damage
caused, the appellants were held not liable, even though the negligence of the servants was the direct cause
of the injury. The test of reasonable foresight has been applied to many other cases thereafter.
• The test of reasonable foresight seems to be well established and widely accepted by now
to determine the question of the remoteness of damage, the facts of the case and the
evidence present shall always be the priority determining factors for the fate of any case.
Note: The test of reasonable foresight stands fairly reasonable in its viability, yet the
decision in the Wagon Mound Case which is said to have given birth to it seems a bit o
beat and contrary to the establishment/principle that it purports.
RULE OF STRICT LIABILITY
(THE RULE IN RYLAND V. FLETCHER)
• Who is not liable for negligence?
• It is general principle that a person who is negligent shall be answerable for his
negligence. And a person who acts like a prudent man is never answerable for act done by
him.
• In Ryland v. Fletcher case for first time (1868) an exception to this is introduced. This is
known as rule of strict liability. This liability may be fixed without negligency.
RYLAND V. FLETCHER

• In this case, defendant was owner of a mill. He got a reservoir built on his land. In fact
the reservoir was built by the engineers who were independent contractors. When
reservoir building process was going on, certain shafts were found old disused under the
site of reservoir. Contractors got those shafts filled and constructed the reservoir. When
the reservoir was filled with water then the water communicated to the mines of the
plaintiff who was a neighbour of the defendant. While constructing, reservoir filled with
marl and sand. On account of the reservoir and its leakage of water, plaintiff suffered. He
brought an action against the defendant. Defendant took defence he was not negligent
because the reservoir was built by an independent contractor
• In the judgment J. Blackburn said, ‘we think that the true rule of law is that the person, who for his
own purposes brings in his land and collects and keeps there anything likely to do mischief it
escapes, must keep it at his peril; and if he does not do so is prima facie answerable for all the
damage which is in the natural consequence if it escape.
• In this case, following principles were laid down... . 1. If a person brings dangerous substance upon
his land which commits mischief and injures the neighbour, then the person who brings dangerous
substance is answerable even if he was not negligent. 2. In case of strict liability a person shall be
held responsible even if he was not negligent. 3. A person may use his land in natural way. But if he
constructs something upon that land which commits mischief the person who does something upon
his land shall be responsible.
• For application of this rule following conditions are required
• 1. Some dangerous thing must have been brought by a person on his land.
• 2. The thing thus brought or kept by a person on his land must escape.
• 3. It must be non natural use.
1. DANGEROUS THING

• Thing which has been escaped must be dangerous. A thing may be dangerous by itself or
it may not be so dangerous but due to its nature, contents, quantity, use may be
dangerous. Ex. Water, gas, poles, electricity, trees, sewage, explosives, noxious fumes etc.
2. ESCAPE

• Thing which is brought on the land must escape. Which means, escape to the area outside
the occupation and control of the defendant.
• Some examples of escape are...
• 1. Water flow (Ryland v. Fletcher)
• 2. Protruding branches of trees (Crowhurst v. Amersham Burial Board)
• 3. Escape of dangerous animals.
• 4. Escape of gas, fumes
3. NON NATURAL USE

• It is difficult to decide what is natural use and what is non natural use of land. From following examples it
will be clear.
• Non natural use –
• i. To collect a large heap of colliery soil upon unstable land.
• ii. To accumulate gas in large quantity in pipe.
• iii. Over use of fire.
• iv. Huge quantity of water, fumes
• v. Planting poisonous plants.
• vi. Loaded gun
EXCEPTIONS TO THIS RULE

• The are some exceptions to the rule in Ryland v. Fletcher, and defendant cannot made liable.
• 1. Damage due to natural use of land.
• 2. Consent of the plaintiff.
• 3. Negligent plaintiff.
• 4. Act of stranger or third party.
• 5. Act of God.
• 6. Statutory authority.
RULE OF ABSOLUTE LIABILITY

• Rule in M.C. Mehta v. Union of India

• The rule of ‘strict liability’ though is ‘strict’; there are some exceptions to it whereby
defendant could avoid his liability. But rule of ‘absolute liability’ which is evolved in
M.C. Mehta v. Union of India leaves no defence to defendant, making him absolutely
liable. In this regard two cases i.e. Bhopal Gas Disaster Case and M.C. Mehta v. Union of
India are important.
M.C. MEHTA V. UNION OF INDIA

• At 4th and 6th December 1985, there was leakage of oleum gas from one units of Shriram
Foods and Fertilisers Industries in Delhi, belonging to Delhi Cloth Mill Ltd. In this
leakage one advocate practising in Tis Hazari court had died and several other were
affected. A writ petition under Art. 32 of the Constitution was filed by way of PIL.
Supreme Court held that, old rule of strict liability was not binding and it could evolve a
rule suitable to which is prevailing the Indian conditions of social and economic
conditions. i.e. the rule of ‘absolute liability’ as part of Indian law in preference to the rule
of strict liability
• In the judgment, Bhagwati CJ has observed that,
• The rule of strict liability was in 19th century where science and technology had not
taken place cannot afford any guidance in evolving any standard of liability consistent
with the constitutional norm an the needs of the present day economy and social
structure.
• Law has to grow in order to satisfy the needs of fast changing society and keep abrest
with the economic developments, taking place in this country. As new situations arise the
law has to be evolved in order to meet the challenge of such new situations.
• About the principle of absolute liability he mentioned,
• That an enterprise, which is engaged in hazardous or inherently dangerous industry which poses a
potential threat to the health and safety of the persons working in the factory and residing in the
surrounding areas owes an absolute and non delegable duty to community to ensure that no harm results to
anyone on account of hazardous or inherently dangerous activity which it has undertaken.
• The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous
activity in which it is engaged must be conducted with the highest standards of safety.
• If any harm results on account of such activity the enterprise must be absolutely liable to compensate for
such harm and it should be no answer to enterprise to say that it has taken all reasonable care and that the
harm occurred without any negligence on its part
DIFFERENCE BETWEEN ‘STRICT’ AND ABSOLUTE
LIABILITY
BHOPAL GAS DISASTER CASE (UNION CARBIDE
CORP V. UNION OF INDIA)
• On the midnight of 2-3 December 1984, mass disaster was caused by the leakage of
Methyl Isocyanate i.e. MICA gas and other toxic gases from a plant set up by the Union
Carbide India Ltd. For the manufacture of pesticides in Bhopal. UCIL was a subsidiary
company of a multinational company registered in USA.
• It resulted in death of around 3000 person and around 600,000 persons were permanently
affected. The Government of India has issued an ordinance The Bhopal Gas Leak
Disaster (processing of claims ) Act 1985. Supreme Court has applied principle of
absolute liability in this case. Suit was settled for 750 crore rupees.
LIABILITY FOR WRONGS COMMITTED BY OTHERS
(VICARIOUS LIABILITY)
• Generally a person who committed wrongful act is liable for that. But sometime a person
may be liable for the wrongful act of another. This is known as ‘vicarious liability’.
• According to Salmond, ‘In general a person is responsible only for his own acts, but there
are exceptional cases in which the law imposes on him vicarious responsibility for the
acts of others, however, blameless he himself is’.
CONSTITUENTS OF VICARIOUS LIABILITY

• So the constituents of vicarious liability are:

(1) There must be a relationship of a certain kind.
(2) The wrongful act must be related to the relationship in a certain way.
(3) The wrong has been done within the course of employment.
PRINCIPLES OF VICARIOUS LIABILITY

• Vicarious liability is based on the following maxims.

• 1. Qui facit per alium per se
• 2. Respondent superior
• 3. Public policy
1. QUI FACIT PER ALIUM PER SE

• Meaning of this maxim is ‘he who acts through another is deemed in law as doing it
himself’.
• A person authorise another in his position, in his absence, and to act with some discretion
according to the circumstances, consequently he will be answerable for work so entrusted
to him.
2. RESPONDENT SUPERIOR

• Meaning of this maxim is ‘let the principal be responsible’ or ‘superior must be

responsible’.
• Generally a superior officer / authority gives order to his subordinates. Consequently who
give order will be answerable for the wrong committed by his subordinate.
3. PUBLIC POLICY

• According to another principle, vicarious liability is developed from social convenience

and public policy.
• Fredrick Pollock said, ‘I am answerable for wrong of my servant or agent not because he
is authorised by me or personally represents me, but because he is about my affairs and I
am bound to see that my affairs are conducted with due regard to the safety of others’.
• Lord Brougham, in Duncan Vs. Findlater, mentioned, ‘the reason that I am liable is this,
that by employing him, I set the whole thing in motion; and what he does, being done for
my benefit under my direction. I am responsible for the consequence of doing it’.
NATURE OF VICARIOUS LIABILITY

• Nature of vicarious liability is jointly and severally

Modes of vicarious liability
• A person may be liable for the wrongful act or omission of another under the following
modes...
• 1. By ratification
• 2. By abetment
• 3. By special relationship
1. BY RATIFICATION

• Where if servant commit tort without authorisation and principal subsequently ratifies
such act and gives assent. Then principal is bound by the act of servant and liable for that.
For a valid ratification following conditions must be fulfilled.
• 1. The wrongful act must have been done on behalf of the principal.
• 2. The principal ratifying the act must have full knowledge about the act committed. A
void act cannot be ratified.
2. BY ABETMENT

• Person who commit tort and one who abets such tort; both are equally liable for that. •
Under the following circumstances, a person is said to have abetted...
• 1. Knowingly for his own benefits induces another to commit a wrong.
• 2. By use of illegal means directed against a third party, induces a person to do an act
which is detrimental to that third party although the person induced may be entitled to do
that act.
3. BY SPECIAL RELATIONSHIP

• Where a person is having special relation with another; he will be responsible for the wrongful
acts of that another person. Such relation could be as...
• 1. Master and servant
• 2. Owner and independent contractor
• 3. Principal and agent
• 4. Company and director
• 5. Firm and partner
• 6. Guardian and ward
SERVANT AND INDEPENDENT CONTRACTOR

• A servant and independent contractor are both employed to do some work of the employer but there is a difference in
the legal relationship which the employer has with them. A servant is engaged under a contract of services whereas an
independent contractor is engaged under a contract for services. The liability of the employer for the wrongs
committed by his servant is more onerous than his liability in respect of wrongs committed by an independent
contractor. If a servant does a wrongful act in the course of his employment, the master is liable for it. The servant, of
course, is also liable. The wrongful act of the servant is deemed to be the act of the master as well. “The doctrine of
liability of the master for act of his servant is based on the maxim respondent superior, which means ‘let the principal
be liable’ and it puts the master in the same position as he if had done the act himself. It also derives validity from the
maxim qui facit per alium facit per se, which means ‘he who does an act through another is deemed in law to do it
himself’.” Since for the wrong done by the servant, the master can also be made liable vicariously, the plaintiff has a
choice to bring an action against either or both of them. Their liability is joint and several as they are considered to be
joint tortfeasors. The reason for the maxim respondent superior seems to be the better position of the master to meet
the claim because of his larger pocket and also ability to pass on the burden of liability through insurance. The liability
arises even though the servant acted against the express instruction, and for no benefit of his master.
TEST FOR DETERMINING MASTER-SERVANT
RELATIONSHIP
• Traditional View – Control Test
• As per this test, for the determination of a master and servant relationship, it should be seen
whether the master has the power to not only instruct what should be done but also the
manner of doing the act and if such power exists then as per this test, the master and servant
relationship exists between the two.
• Illustration: A is the owner of a big area of land on which farming activities are carried out
and he has hired many workers for farming. A, not only instructs them what to do but also
how to do it. Here, by the test of control, the relation between A and his employees is
established as that of a master-servant.
• Modern View
• The old Control test is not applicable as an exhaustive test because in cases of work requiring skill such as a doctor
working in a hospital, the owner of the Hospital cannot instruct the doctor on how to treat a patient and can only
instruct him to treat patients. Thus certain other tests have been developed for determining the Master and Servant
Relationship.
• The test of work being an Integral Part of Business
• In the case of Stevenson Jordan & Harrison Ltd. V Macdonald & Evans (1952) 1 TLR 101, the test of an
integral part of the business was applied. Here, a contract of service was held to be a contract for such work which
is an integral part of the business and a contract for service was held to be a contract for such work which is not an
integral part of the business.
• Illustration: In an IT company the programmers are the employees of the company and there is a master-servant
relationship but if the company has hired catering services, the company does not have a master-servant
relationship because the act of providing food is not an integral part of an IT company.
• Multiple Test
• This test provides that people who are in a contract of service are deemed to be employees whereas the
people who are in contract for service are independent contractors. In the case of Ready Mixed Concrete v
Minister of Pensions and National Insurance (1968) 2 QB 497, three conditions were laid down for a
contract of service
• The servant agrees to provide his skill and work to the master for performing some service in exchange for
wages or some other consideration.
• He agrees to be subjected to such a degree of control so as to make the person his master in performance of
his work.
• The other provisions of the contract are consistent with this provision of being a contract of service.
• This test also includes other important factors that are used to determine the master-
servant relationship such as who owns the tools being used for the work, is the employee
paid wages monthly or on a daily basis and all other relevant factors.
• Thus the old view of using Control test is no longer the only method of determining the
relation of master and servant as it has been realized that in the present complex world
where there are a wide number of factors which affect the process of determining the
relation between the employee and the employer, it is not possible to use just one test and
thus the various aspects of a case are seen to determine the nature of the relationship and
to decide whether such a relation is that of master and servant or not.
DIFFERENCE BETWEEN SERVANT AND INDEPENDENT
CONTRACTOR

• A servant and an independent contractor both do the work at the behest of another person and thus what shall
be done is not decided by them but by some other person and thus on the face of it appears, that both are in the
same category and a master should be liable for the torts committed by both of them but there is a difference
between the two which separates them and consequently, while, in case of tort by servant, the master is liable
but in case of independent contractor the master cannot be held liable.
• In case of a servant there is a contract of service which means that along with instructing what task should be
done by the servant, the master also has the right to instruct the manner in which that act has to be done and thus
the servant does not have autonomy in the performance of his duties.
• Whereas in the case of an independent contractor there is a contract for service which means that he can only
be instructed as to what should be done but how to do the work is left at his will and he does not take any
instructions from the master.
VARIOUS WAYS IN WHICH LIABILITY OF MASTER ARISES

• Wrong done as a natural consequence of an act by Servant for Master with due care
• If the employee does an act which is done in pursuance of the instructions of the master, then the
master will be held liable for any wrong which arises out of such an act even if all due care is
taken by the employee in discharging his work. In Gregory v. Piper(1829) 9 B & C 591, the
defendant and plaintiff had some disputes between them and the defendant, therefore, ordered his
servant to place rubbish across a pathway to prevent the plaintiff from proceeding on that way
and the servant took all care to ensure that no part of it was touching the part of the plaintiff’s
property but with the passage of some time. The rubbish slid down and touched the walls of the
plaintiff and thus he sued for trespass. The defendant was held liable despite his servant taking all
due care.
WRONG DUE TO NEGLIGENCE OF WORKER

• A master is also liable for an act of servant which he does negligently or fails to take due care in
carrying out.
• In Pushpabai Purshottam Udeshi & Ors. v. Ranjit Ginning & Pressing Co. (P), deceased was
travelling in a car driven by the manager of the respondent company and it met with an accident as
a result of which he died. The dependents of the deceased filed a claim and the tribunal allowed
damages but on appeal to the High Court, it was set aside on the grounds that the accident does not
make the respondent company liable. But the Supreme Court in its judgement overruled the
judgement of the High Court and held that from the facts of the case it was clear that the accident
had occurred due to the negligence of the manager who was driving the vehicle in the course of his
employment and therefore, the respondent company was liable for his negligent act.
WRONG BY EXCESS OR MISTAKEN EXECUTION OF A LAWFUL
AUTHORITY

• For making the master liable in such a case it has to be shown that: –
• The servant had intended to do an act on behalf of his master, which he was authorized to do.
• The act would have been lawful if it was done in those circumstances which the servant mistakenly
believed were true or if the act would have been lawful if done properly.
• In Bayley v Manchester S&L Railway (1873) LR 8 CP 148, a porter of a railway company while
working mistakenly believed that the plaintiff was in the wrong carriage even though he was in the right
one. The porter thus pulled the plaintiff as a result of which the plaintiff sustained injuries. Here, the
Court held the railway company vicariously liable for the act of the porter because it was done in the
course of his employment and this act would have been proper if the plaintiff was indeed in the wrong
carriage.
• In Anita Bhandari & Ors. v. Union of India, The husband of the petitioner went to a bank
and while entering inside it, the cash box of the bank was also being carried inside and as
a result, the security guard in a haste shot him and caused his death. The petitioner had
claimed that the bank was vicariously liable in the case because the security guard had
done such act in the course of employment but the bank had contended that it had not
authorized the guard to shoot. The Court held the bank liable as the act of giving him gun
amounted to authorize him to shoot when he deemed it necessary and while the guard had
acted overzealously in his duties but it was still done in the course of employment.
WRONG COMMITTED WILLFULLY BY A SERVANT WITH THE
INTENTION OF SERVING THE PURPOSE OF THE MASTER

• If a servant does any act willfully, recklessly or improperly then the master will be held liable for any wrong
arising out of such act, if such an act is done in the course of employment.
• In Limpus v. London General Omnibus Co. (1862) EngR 839, the driver of the defendant company,
willfully and against the express orders not to get involved in racing or to obstruct other omnibuses, had
driven to obstruct the omnibus of the plaintiff. In the case, the Court held that the defendant company was
liable for the act of driver because the driver’s act of driving the omnibus was within the scope of the course
of employment.
• In Peterson v. Royal Oak Hotel Ltd. (1948) N.Z.I.R. 136, The plaintiff was a customer who on being
intoxicated was refused further drinks by the barman, who was employed under the respondent and thus the
plaintiff threw a glass at him. The barman took a piece of the glass and threw it at him which hit his eye. The
respondent hotel was held liable due to the act of the barman who had a master-servant relation with them.
WRONG BY SERVANT’S FRAUDULENT ACT

• A master can also be held liable for any fraudulent act of the servant.
• In Lloyd v. Grace Smith & Co. (1912) A.C. 716, the plaintiff was a widow who owned
1000 pounds as dues on a mortgage and a cottage. She went to the manager of the
defendant, which was a firm of solicitors, and she asked for his advice to get richer. The
manager told her to sell her cottage and to call up the amount of mortgage. She authorized
the manager to sell the property and to collect her money but he absconded with the money.
Thus, she sued the defendant company. It was held that the defendant was liable for the
fraudulent act of the manager because even a fraudulent act is not authorized, the manager
was authorized to take her signature and thus it was within the course of employment.
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