Decision: The appeal was dismissed.

Held: (1) The fundamental question was whether the occurrence of a fortuitous event satisfied insurance law’s test for proximate cause. If so, the fact that the fortuitous event was able to inflict the damage by reason of its impact upon or interaction with some preexisting characteristic of the insured property did not provide the insurer with a defence based upon inherent vice. (2) The foreseeability of an event as a possible occurrence was not incompatible with the concept of fortuity: Mayban General Insurance v. Alston Power Plants 2 overruled. (3) On the facts, the legs of the oil rig possessed an inherent susceptibility to wave damage, which manifested itself in the development of stress fractures. However, the loss was occasioned by the complete fracturing of one of the legs, which in turn led to the fracturing of the remaining two legs. The proximate cause of the loss of the first leg was not simply progressive development of stress fractures, but the particular impact of a particular “leg breaking” wave.

Comment: The decision of the Supreme Court directs attention to the proximate cause of the loss. In accordance with the Marine Insurance Act 1906, s 55, the result of finding that a loss is proximately caused by inherent vice is that it is not caused by an insured peril. Where, however, the goods are damaged because an inherent susceptibility interacts with a fortuitous peril, the peril will be considered as the proximate cause.3 It is unclear whether it will be possible as a matter of legal principle to arrive at the conclusion that an