XYZ Limited could mount a defense against the tort of nuisance under the provisions of the Prescription Act 1832, which provides that if the action that precipitated the loss has occurred for more than 20 years, the claimant is not entitled to compensation. Given that XYZ had been operating in the neighborhood for more than 27 years, this defense could be used in a court of law. In other words, the company can claim defense against tortuous actions because it has been in existence for years prior to the development of the housing estate where the fire occurred.
Indeed, since its inception, it had been involved in the business of wholesale fireworks distribution, and the owners of the housing estate knew about that before coming up with the development next to the company. Therefore, XYZ Limited could claim that the claimant knew or was aware of the risks involved in setting up their housing estate next to the company. The nature of the business that XYZ Limited is involved in (fireworks distribution) also lends credence to this claim because the risk of fire is foreseeable in such circumstances.
To protect against the action of negligence, XYZ limited could mount a defense based on the conditions necessary for proving negligence. Relative to this strategy, the Chartered Insurance Institute says it is essential to satisfy three conditions outlined below:
- A defendant has to owe a duty of care to the claimant or aggrieved party
- There must be a breach of duty
- The claimant must suffer damages arising from a negligent action
Based on the above conditions, XYZ Limited could defend itself against the actions of the aggrieved neighbors based on the principle of causation and remoteness of damage. It offers a defense to claimants who are sued for negligent actions because it presupposes that they cannot be liable for every action that emerges as a result of their wrongful actions. Subject to this statement, the law strives to impose limits on responsibilities placed on defendants in cases involving actionable acts of negligence. Particularly, it seeks to absolve them of responsibility when the loss incurred is considered “too remote.”
It can be reasonably argued that the fire that caused damage to property could be too remote to impose liability on XYZ Limited using the principle of causation and remoteness to evaluate the conduct of XYZ Limited and its interactions with its contractor and the neighbors. Indeed, it could be argued that the fire was caused by explosions that occurred when a roofing contractor was doing repair works on the roof of a building that was not an employee of XYZ Limited.
Therefore, using the principle of causation and remoteness, XYZ Limited could argue that the fire, which was caused by roof repair works, could be too remote to expect that the company takes reasonable care to prevent it. In other words, it would be reasonable to assume that XYZ Limited should be prepared to compensate neighboring residents for a fire that emerged from its roofing repair works. Therefore, XYZ could argue that it is unreasonable to assume that XYZ Limited should anticipate a fire resulting from roofing repair works, which is not the main activity the company is involved in.
In Tankship (UK) Ltd v. Mort’s Dock and Engineering Co Ltd (1961), the causality and remoteness of damages were also used as a defense against a tort of negligence when it was held that the principle of insurance could be used as a legal defense when the damage was not reasonably foreseeable. The facts of the case were that the defendant’s employees working in an oil operation spilled petroleum into Sydney harbor, and it mixed with waste and other debris surrounding the plaintiff’s wharf to cause a fire, which started when welding works were being carried out on the premise mixed with oil.
The court ruled that although the defendant was negligent in spilling oil that caused the fire to spark, the damages were too remote for the oil company to foresee. This decision was made in Australia and has gained a legal foothold in other jurisdictions, including England and Wales. Overall, the case shows that XYZ Limited could use the principle of causation and remoteness to mount a defense against the claim.