The Wagan Mound Case discusses:

Solution

In order to calculate the damages remoteness test of directness was replaced with foreseeability in the Wagan Mound case. In this case a large quantity of oil was spilt into Sydney Harbour from the Wagon Mound and it drifted under the wharf where the claimants were oxyacetylene welding. The resulting fire caused extensive damage to the wharf and to vessels moored nearby. The Privy Council replaced the direct consequence test with the requirement that, in order to be recoverable, damage must be foreseeable in all the circumstances, thus, although pollution was a foreseeable consequence of the spillage, an outbreak of fire was not.