5—LIMITATION OF ACTIONS

16 Oct, 2015 MARITIME LAW 0

Chapter 5

Limitation of Actions

Introduction

5.1 Certain claims falling within the scope of the subject-matter jurisdiction of the Admiralty Court have limitation periods which differ from the ordinary six-year period applicable to claims in contract¹ and tort,² and the three-year period applicable to claims for personal injury³ and death⁴ as provided by the Limitation Act 1980. More importantly, these different limitation periods are shorter than, and override, the periods that would ordinarily be applicable. In this chapter will be considered the particular limitation provisions, in order of their length, the equitable doctrine of laches as it applies in Admiralty proceedings, and the Foreign Limitation Periods Act 1984.

One-Year Time Bar

Cargo claims against carrying ship⁵

5.2 Although it is possible that a cargo claim against the ship in which the goods were carried may be subject to some shorter contractual period of limitation, the majority of cargo claims will be brought under bills of lading to which a one-year time bar is applicable as a result of the incorporation of the Hague Rules or the Hague-Visby Rules. However, where the claim is being handled by parties to the Gold Clause Agreement, the cargo interests will be entitled to a further extension of one year, and where the Hamburg Rules are incorporated the limitation period will be two years as considered below.⁶

Application of the Hague and Hague-Visby Rules

5.3 The Hague-Visby Rules were given the force of law in England by the Carriage of Goods by Sea Act 1971. However, where the Hague-Visby Rules would not be compulsorily applicable, and the proper law of the contract is not English law, the Hague Rules may apply. For the purposes of limitation of actions this is of no real consequence as the terms of the applicable time bar are to all intents and purposes the same.

5.4 Article X of the Hague Rules provides:

“The provisions of this Convention shall apply to all bills of lading issued in any of the Contracting States.”

5.5 Article X of the Hague-Visby Rules provides:

“The provisions of these rules shall apply to every bill of lading relating to the carriage of goods between ports in two different States if:

(a) the bill of lading is issued in a Contracting State, or
(b) the carriage is from a port in a Contracting State, or
(c) the contract contained in or evidenced by the bill of lading provides that these Rules or legislation of any State giving effect to them are to govern the contract,

whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person . . . “

5.6 The Hague Rules⁷ are in operation in many countries⁸ throughout the world, and there will in practice be very few bills of lading issued which do not incorporate the Rules.

Time bar provisions

5.7 Article III, rule 6 of the Hague Rules⁹ provides:

“In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.”

5.8 Article III, rule 6 of the Hague-Visby Rules provides:

“Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.”

Substantive nature of time bar

5.9 It is well settled that the Hague Rules time bar is substantive in that its effect is not simply to bar the remedy, but to extinguish altogether the cause of action. Thus it cannot even form the basis of a set-off. In The “Aries”¹⁰ Lord Wilberforce said¹¹:

“The contract . . . expressly provides by incorporation of article III, rule 6, of the Hague Rules that the carrier and the ship shall be discharged unless suit is brought within one year after the date of delivery or the date when delivery should have been made. This amounts to a time bar created by contract. But, and I do not think that sufficient recognition to this has been given in the courts below, it is a time bar of a special kind, viz., one which extinguishes the claim (cf. article 29 of the Warsaw Convention 1929) not one which, as most English statutes of limitation (e.g. the Limitation Act 1939, the Maritime Conventions Act 1911), and some international conventions (e.g. the Brussels Convention on Collisions 1910, article 7) do, bars the remedy while leaving the claim itself in existence. Therefore, arguments to which much attention and refined discussion has been given, as to whether the charterer’s claim is a defence, or in the nature of a cross-action, or a set-off of one kind or another, however relevant to cases to which the Limitation Act 1939 or similar Acts apply, appear to me, with all respect, to be misplaced. The charterer’s claim, after May 1974 and before the date of the writ, had not merely become unenforceable by action, it had simply ceased to exist…”

5.10 In order to save the claim from being extinguished, it is necessary that “suit is brought” within the one-year period. ” Suit” may in an appropriate case be the commencement of an arbitration.¹² An action brought by a party without title to sue does not suffice to prevent the carrier from being discharged of all liability because “suit is brought” means suit brought by someone properly entitled to bring it.¹³ An action brought in an incompetent court or brought in breach of an exclusive jurisdiction clause or an arbitration clause may not be sufficient,¹⁴ but an action brought in one competent jurisdiction will be sufficient to prevent the discharge of the carriers liability so that suit may also be brought after the expiry of the one-year time bar in another jurisdiction.¹⁵ Where a suit is brought within time, but is not prosecuted thereafter in accordance with the civil procedure rules it has been held not to qualify as a ” suit” for the purposes of the Hague Rules.¹⁶ On the other hand, ” errors of detail in the pleaded case . . . cannot have the effect of rendering the suit one which fails to satisfy the requirements of art. III, r. 6.”¹⁷

5.11 In addition to preventing the claim being raised by set-off, the effect of a substantive time bar will be to prevent an application being made after the expiry of the limitation period for substitution of parties under CPR Part 19.4.¹⁸ Section 35 of the Limitation Act 1980 has no application to a Hague Rules time bar. Thus in The “Jay Bola”¹⁹ Hobhouse J said in relation to section 35 of the Limitation Act 1980²⁰:

“The plaintiffs argued before me that section 35 of the Act of 1980 and, as a rule made under that rule-making power, Order 20, rule 5(3) were capable of applying to a contractual time limit under the Hague Rules. This contention, despite the fact that it appears to have been accepted in The ‘Joanna Borchard’,²¹ is in my judgment unsustainable. Section 35 starts with the words, ‘For the purposes of this Act’ and subsection (3) expressly says ‘after the expiry of any time limit under this Act’. Similarly section 39 is also unequivocal. The scheme of these provisions is confined to the statutory time limits under that Act and has no application to contractual or substantive time limits. They have no application to the Hague Rules time limit whether it becomes effective, as in this case by contract, or by statute under the Carriage of Goods by Sea Act 1971.”

5.12 In relation to RSC, Order 20, rule 5, he said²²:

” In any event Order 20, rule 5, cannot deprive a party of a substantive defence. Neither the statutory provisions under which the rule was made nor any general power to regulate the procedure of the courts can deprive a person of an accrued substantive legal right or, more precisely in the present context, create a substantive legal cause of action which did not previously exist. If Order 20, rule 5, and the inclusion in it of the words ‘any applicable limitation period’ is to be construed as referring to substantive provisions which extinguish causes of action, it would, in my judgment, be ultra vires; but the correct approach is that the words must be read as referring only to limitation periods properly so called which impose a procedural restriction only. Where the Hague Rules time limit is involved, the rule will not assist a party whose cause of action has already been extinguished.”

The Gold Clause Agreement²³

5.13 In 1950²⁴ an agreement negotiated under the auspices of the British Maritime Law Association was entered into between certain cargo interests, shipowning interests and insurers whereby it was agreed that upon the request of any party representing the cargo whether made before or after the expiry of the one-year period, the shipowners will extend the time for bringing suit for a further 12 months provided notice of the claim with the best particulars available has been given within the one-year period.²⁵

Contribution in collision cases

5.14 Section 190(4) of the Merchant Shipping Act 1995 provides:

” . .. no proceedings under any of sections 187 to 189 to enforce any contribution in respect of any overpaid proportion of any damages for loss of life or personal injury shall be brought after the period of one year from the date of payment.”

5.15 Unlike the liability for damage to cargo where the owners of the non-carrying ship are only liable to the cargo owners in proportion to fault, where loss of life or personal injuries are suffered by any person owing to the fault of two or more vessels, the liability of the shipowners is joint and several, and recovery may be made against any ship in full.²⁶ However, if damages are recovered against one ship in excess of the proportion to which that vessel was at fault, the owners may recover any overpayment by way of contribution from any other vessel in proportion to its fault.²⁷ Such an action has to be brought within one year from the date of payment. This is to be contrasted with the period of two years from the date of judgment or agreement to pay which applies to claims for contribution under section 1 of the Civil Liability (Contribution) Act 1978.²⁸

Two-Year Time Bar

Cargo claims against carrying ship²⁹

5.16 Although as discussed above, the majority of cargo claims against the ship in which the goods were carried will be subject to a one-year time bar, where the Hamburg Rules³⁰ are applicable a two-year time bar will apply.

Application of the Hamburg Rules

5.17 Although the Hamburg Rules do not form part of English law, they may be applicable to a claim brought in the Admiralty Court, particularly if the claim is brought in rem, because the Rules may be incorporated into the contract of carriage by the proper law or by some contractual provision. Article 2 of the Hamburg Rules provides:

“1. The provisions of this Convention are applicable to all contracts of carriage by sea between two different States, if:

(a) the port of loading as provided for in the contract of carriage by sea is located in a Contracting State, or
(b) the port of discharge as provided for in the contract of carriage by sea is located in a Contracting State, or
(c) one of the optional ports of discharge provided for in the contract of carriage by sea is the actual port of discharge and such port is located in a Contracting State, or
(d) the bill of lading or other document evidencing the contract of carriage by sea is issued in a Contracting State, or
(e) the bill of lading or other document evidencing the contract of carriage by sea provides that the provisions of this Convention or the legislation of any State giving effect to them are to govern the contract.

2. The provisions of this Convention are applicable without regard to the nationality of the ship, the carrier, the actual carrier, the shipper, the consignee or any other interested person.

3. The provisions of this Convention are not applicable to charterparties. However, where a bill of lading is issued pursuant to a charterparty, the provisions of this Convention apply to such a bill of lading if it governs the relation between the carrier and the holder of the bill of lading, not being the charterer.

4. If a contract provides for the future carriage of goods in a series of shipments during an agreed period, the provisions of this Convention apply to each shipment. However, where a shipment is made under a charterparty, the provisions of paragraph 3 of this Article apply.”

Contracting States³¹

5.18 The following are Contracting States to the Hamburg Rules: Albania, Austria, Barbados, Botswana, Burkina Faso, Burundi, Cameroon, Chile, Czech Republic, Dominican Republic, Egypt, Gambia, Georgia, Guinea, Hungary, Jordan, Kazakhstan, Kenya, Lebanon, Lesotho, Liberia, Malawi, Morocco, Nigeria, Paraguay, Romania, Saint Vincent and the Grenadines, Senegal, Sierra Leone, Syria, Tanzania, Tunisia, Uganda and Zambia.

Time bar provision

5.19 Article 20 of the Hamburg Rules provides:

“1. Any action relating to carriage of goods under this Convention is time barred if judicial or arbitral proceedings have not been instituted within a period of two years.

2. The limitation period commences on the day on which the carrier has delivered the goods or part thereof or, in cases where no goods have been delivered, on the last day on which the goods should have been delivered.

3. The day on which the limitation period commences is not included in the period.

4. The person against whom the claim is made may at any time during the running of the limitation period extend that period by a declaration in writing to the claimant. This period may be further extended by another declaration or declarations.

5. An action for an indemnity by a person held liable may be instituted even after the expiration of the limitation period provided for in the preceding paragraphs if instituted within the time allowed by the law of the State where proceedings are instituted. However, the time allowed shall not be less than 90 days commencing from the day when the person instituting such action for indemnity has settled the claim or has been served with process in the action against himself.”

5.20 This provision states that the claim will be “time barred”. This phrase should be distinguished from the phrase used in the Hague and Hague-Visby Rules which refers to the carrier being “discharged from all liability”. The question arises as to whether the Hamburg Rules time bar is substantive in its effect: whether it is only procedural. It is submitted that if this question had to be decided according to English law, the time bar ought to be held to be procedural because Article 20 refers to “any action” being ” time barred”. This is similar to the procedural time bars contained in the Limitation Act 1980³² which uses the phrase “no action shall be brought” .

Rotterdam Rules

5.21 On 11 December 2008, the United Nations adopted the final text of a new convention which seeks to replace the Hague, Hague-Visby and Hamburg Rules.³³ Signatories to date include the United States, France, Greece, Denmark, Spain and Switzerland. The Rotterdam Rules will enter into force when 20 countries ratify the treaty. Spain became the first country to ratify the treaty on 19 January 2011.

Time bar provision

5.22 Article 62 of the Rotterdam Rules reads as follows:

“1. No judicial or arbitral proceedings in respect of claims or disputes arising from a breach of an obligation under this Convention may be instituted after the expiration of a period of two years.

2. The period referred to in paragraph 1 of this article commences on the day on which the carrier has delivered the goods or, in cases in which no goods have been delivered or only part of the goods have been delivered, on the last day on which the goods should have been delivered. The day on which the period commences is not included in the period.

3. Notwithstanding the expiration of the period set out in paragraph 1 of this article, one party may rely on its claim as a defence or for the purpose of set-off against a claim asserted by the other party.”

The time bar provision is procedural not substantive.³⁴ Article 62.3 is significant in that it permits a time-barred cargo claim to be used as a defence to a claim by the carrier for freight. Article 63 provides for the extensions in the following terms:

“The period provided in article 62 shall not be subject to suspension or interruption, but the person against which a claim is made may at any time during the running of the period extend that period by a declaration to the claimant. This period may be further extended by another declaration or declarations” .

The time limit for bringing an indemnity claim is separately provided for in Article 64. It is similar in effect to Article III.6 bis of the Hague Visby Rules.

Claims under the Inter-Club Agreement

5.23 Where a claim arises between owners and time-charterers under a charterparty on the New York Produce Exchange Form which incorporates the provisions of the Inter-Club New York Produce Exchange Agreement (1996) which deals with the allocation of liability for cargo claims as between owners and charterers in respect of cargo carried on bills of lading to which the Hague or Hague-Visby Rules are incorporated, there is a two-year time bar.

5.24 Clause (6) of the Agreement provides:

“(6) Recovery under this Agreement by an Owner or Charterer shall be deemed to be waived and absolutely barred unless written notification of the cargo claim has been given to the other party to the charterparty within 24 months of the date of delivery of the cargo or the date the cargo should have been delivered, save that, where the Hamburg Rules or any national legislation giving effect thereto are compulsorily applicable by operation of law to the contract of carriage or to that part of the transit that comprised carriage on the chartered vessel, the period shall be 36 months. Such notification shall if possible include details of the contract of carriage, the nature of the claim and the amount claimed.”

The predecessor to the 1996 Agreement, the 1984 Inter-club agreement, was in substantially similar terms.³⁵

Passenger claims against the carrying ship

5.25 Claims by a passenger in respect of loss of life or personal injury or loss of or damage to luggage arising out of a contract of carriage to which the Athens Convention 1974 is applicable are subject to a two-year time limit. Article 16 of the Athens Convention provides:

“1. Any action for damages arising out of the death of or personal injury to a passenger or for the loss of or damage to luggage shall be time-barred after a period of two years.

2. The limitation period shall be calculated as follows:

(a) in the case of personal injury, from the date of disembarkation of the passenger;
(b) in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death, provided that this period shall not exceed three years from the date of disembarkation;
(c) in the case of loss of or damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later.

3. The law of the court seised of the case shall govern the grounds of suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of a period of three years from the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later.

4. Notwithstanding paragraphs 1, 2 and 3 of this Article, the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing.”

A package tour operator who provides international carriage by sea as part of a package holiday may rely on Article 16 as a defence to a claim under the Package Travel Regulations without expressly incorporating the terms of the Athens Convention into the holiday contract. See Norfolk v My Travel Group plc.³⁶

Application of the Athens Convention 1974

5.26 The provisions of the Athens Convention 1974 have force of law in England and Wales by virtue of section 182 of the Merchant Shipping Act 1995.³⁷ The Convention applies to contracts for the carriage by sea of passengers and their luggage. Article 2(1) of the Convention provides:

“This Convention shall apply to any international carriage if:

(a) the ship is flying the flag of or is registered in a State Party to this Convention, or
(b) the contract of carriage has been made in a State Party to this Convention, or
(c) the place of departure or destination, according to the contract of carriage, is in a State Party to this Convention.”

5.27 By Article 1(9) of the Convention:

” ‘international carriage’ means any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State.”

Contracting States³⁸

5.28 The following are Contracting States to the Athens Convention 1974: Albania, Argentina, Bahamas, Barbados, Belgium, China, Croatia, Dominica, Egypt, Equatorial Guinea, Estonia, Georgia, Greece, Guyana, Ireland, Jordan, Liberia, Luxembourg, Malawi, Marshall Islands, Nigeria, Poland, Russian Federation, Saint Kitts and Nevis, Spain, Switzerland, Tonga, United Kingdom (including Jersey, Guernsey, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Hong Kong, Isle of Man, Montserrat, Pitcairn, St Helena and Dependencies), Vanuatu and Yemen.

The 2002 Protocol to the Athens Convention

5.29 In November 2002, the IMO adopted a protocol to amend the Athens Convention 1974. As at 31 March 2011, the 2002 Protocol had only four contracting states and six signatories and is therefore not yet in force. However, in 2003 the European Commission proposed a measure to permit the then European Community (now European Union) to become a party to the Protocol. On 23 April 2009, Regulation 392/2009 was passed which adopts the provisions of the 2002 Protocol and applies them to carriage within a single member state for certain classes of vessel.³⁹ The Regulation will apply from the date of entry into force of the Athens Convention (as modified by the 2002 Protocol) for the European Union or 31 December 2012 whichever is the earlier.

5.30 Under the 2002 Protocol the time limits are somewhat modified compared with the 1974 Convention. Article 16 of the Convention as amended by the Protocol provides as follows:

“1. Any action for damages arising out of the death of or personal injury to a passenger or for the loss of or damage to luggage shall be time-barred after a period of two years.

2 The limitation period shall be calculated as follows:

(a) in the case of personal injury, from the date of disembarkation of the passenger;
(b) in the case of death occurring during carriage, from the date when the passenger should have disembarked, and in the case of personal injury occurring during carriage and resulting in the death of the passenger after disembarkation, from the date of death, provided that this period shall not exceed three years from the date of disembarkation;
(c) in the case of loss of or damage to luggage, from the date of disembarkation or from the date when disembarkation should have taken place, whichever is later.

3 The law of the Court seized of the case shall govern the grounds for suspension and interruption of limitation periods, but in no case shall an action under this Convention be brought after the expiration of any one of the following periods of time:

(a) A period of five years beginning with the date of disembarkation of the passenger or from the date when disembarkation should have taken place, whichever is later; or, if earlier
(b) a period of three years beginning with the date when the claimant knew or ought reasonably to have known of the injury, loss or damage caused by the incident.

4 Notwithstanding paragraphs 1, 2 and 3 of this Article, the period of limitation may be extended by a declaration of the carrier or by agreement of the parties after the cause of action has arisen. The declaration or agreement shall be in writing.”

Claims against the non-carrying ship

5.31 Section 190 of the Merchant Shipping Act 1995⁴⁰ provides that no proceedings shall be brought to enforce any claim or lien against a ship or her owners in respect of damage or loss caused by the fault of that ship to another ship, its cargo or freight or any property on board it, or for damages for loss of life or personal injury caused by the fault of that ship to any person on board another ship after the period of two years from the date the damage or loss was caused or the loss of life or injury was suffered. The two year limit was introduced into English law in 1911.⁴¹ Before 1911 the rule was that proceedings against a vessel or her owners in respect of any damage or loss to another vessel or her cargo or any property on board or damages for loss of life or personal injuries had to be brought “within a reasonable time”.⁴² Under the 1995 Act there is a two-year time bar in the following cases:

(i) damage to a ship caused by the fault of another ship;
(ii) damage to cargo carried on board a ship caused by the fault of another ship;
(iii) personal injuries or death of a person on board a ship caused by the fault of another ship.

5.32 The important point to note about these claims is that the two-year time limit only applies where another ship is involved and the claim is being made against the other (non-carrying) ship. It does not apply to claims for damage to cargo brought against the ship on board which the cargo is carried, nor to claims for personal injury or death against the ship on which the person killed or injured was on board.⁴³ The two-year period under section 190 of the Act overrides the three-year period prescribed by the Limitation Act 1980.⁴⁴ Time is sufficiently protected if a claim form in rem is issued within two years.⁴⁵ The time limit applies to cases of fault in the management of the ship as well as in her navigation.⁴⁶ The time bar must of course be specifically pleaded.⁴⁷

Extending time under the Act

5.33 Section 190(5) of the Act provides:

“Any court having jurisdiction in such proceedings⁴⁸ may, in accordance with rules of court,⁴⁹ extend the period allowed for bringing proceedings to such extent and on such conditions as it thinks fit.”

And section 190(6) provides:

“Any such court, if satisfied that there has not been during any period allowed for bringing proceedings any reasonable opportunity of arresting the defendant ship within—

(a) the jurisdiction of the court, or
(b) the territorial sea of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has his principal place of business,

shall extend the period allowed for bringing proceedings to an extent sufficient to give a reasonable opportunity of so arresting the ship.”

5.34 These provisions permit the extension of validity of an existing claim form, as well as extending time so as to validate the issue of a claim form out of time.⁵⁰ However, it is not necessary to obtain an extension of time before issuing a claim form out of time;⁵¹ the claim form may be issued and the action may continue unless and until the defendants raise the time bar point, at which time the court can consider whether an extension of time should be granted.⁵² It should be noted that section 190(6) provides for a mandatory extension where the court is ” satisfied that there has not been during any period allowed for bringing proceedings any reasonable opportunity of arresting the defendant ship within the jurisdiction of the court, or the territorial sea of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has his principal place of business”. Section 190(5) provides for a discretionary power to extend time.

Principles to be applied to mandatory extension under s. 190(6) of the Act

5.35 The court is obliged to extend time if there has not been a “reasonable opportunity” to arrest the ship or a sister ship in the country where the claimant resides or carries on business. It is important to note that the section refers to a “reasonable” opportunity, and not simply to “an opportunity”. Thus the mere fact that a ship has been within the territorial waters does not of itself establish that there was a reasonable opportunity to arrest.⁵³ In The “Berny”⁵⁴ Brandon J said in connection with an application for renewal of a claim form⁵⁵:

” . .. the question arises whether the presence of a ship at anchor within territorial waters of England and Wales but not within the limits of a port, affords reasonable opportunity for effecting service on her and arresting her. In my view the answer to this question should, in general, be in the negative. This is not because there is any magic in a ship being within the limits of a port, but because, if she is not, it is likely that there will be practical difficulties, and there might well in certain circumstances be various dangers, in seeking to serve a writ on her and arrest her. The Court has to bear in mind that the duty of arresting a ship, and often at the time of serving a writ on her, falls on the Admiralty Marshal or his deputies, and it should not adopt an approach to the matter which would or might expose these persons to unreasonable difficulties or dangers.”

5.36 In that case the court held that there had not been a reasonable opportunity to arrest a ship which had anchored for five days in Tees Bay, probably in order to shelter from bad weather and there had not been a reasonable opportunity of arresting a ship which left on a Sunday, and whose presence did not appear in Lloyd’s List until the next day.

5.37 The mandatory extension of time does not extend to Crown ships.⁵⁶

Principles to be applied to discretionary extension under s. 190(5) of the Act

5.38 In The “Seaspeed America”⁵⁷ Sheen J said⁵⁸:

“The period of two years is agreed internationally. The Court will only extend that period if in all the circumstances of the case there is a good reason for doing so.

In The ‘Llandovery Castle’⁵⁹ Hill J said: ‘The section fixes a period of two years and the discretion can only be used in favour of a plaintiff if there are special circumstances which create a real reason why the statutory limitation should not take effect.’ I cannot see any difference between ‘a real reason’ and ‘a good reason’.

Parliament has not defined or sought to limit the circumstances in which or the extent to which the Court may extend the time limit. Parliament has left those matters to the Court and has given the Court power to impose conditions. As Lord Brandon said in The ‘Myrto (No. 3),’⁶⁰ it is not possible to define or circumscribe the scope of the expression ‘good reason’. Whether there is or is not good reason in any particular case must depend on all the circumstances of that case. If, as Lord Brandon said, the expression ‘exceptional circumstances’ conveys a large degree of stringency, then I would prefer not to use it, as I did in The ‘Gaz Fountain’.⁶¹“

5.39 This echoes what Sheen J had previously said in The “Zirje”⁶²:

“A Judge who is invited to extend the time limit set by section 8 of the Maritime Conventions Act 1911 should grant an extension if in all the circumstances of the case it appears to him that there is good reason for doing so. The exercise of his discretion to extend time should not be confined only to those cases where there appear to be exceptional or special circumstances.”

5.40 In The “Albany” and The “Marie Josaine”⁶³ Sheen J had attempted to indicate the type of circumstances which the court ought to take into account in considering whether to extend time when he said⁶⁴:

“I must bear in mind, as was said by Mr Justice Willmer that the period of limitation of two years is a period agreed in an International Convention and that I am now concerned with an action between two ships, both of which fly the flag of a foreign state.

Under the proviso to s. 8, it appears on the surface that there is a wide discretion and that I should take into account all the circumstances of the case. It seems to me that the relevant circumstances to take into account are these. First the degree of blameworthiness. I must ask the question: is the delay before the issue of the writ excusable? . . . Second, the length of the delay . . .

Next it is relevant to consider whether the circumstances which caused the delay were beyond the control of the party who has been dilatory, and whether there are very special circumstances . . .

A further consideration, it seems to me, is whether, if I were to grant this application, I would have confidence that I would be able to do justice between the parties . . . “

Section 190(5): a one or two stage test?

5.41 Between its introduction in 1911 and 1995, the English Admiralty Court approached the question of whether or not to grant an extension as a simple one stage test. The Court would look at all the circumstances of the case and decide whether or not to exercise the discretion in the applicant’s favour. The application would only succeed if good reason for exercising the discretion was made out on the evidence before the Court.⁶⁵

5.42 Given that the power to extend was discretionary, the issue of how it ought to be exercised did not often get as far as the Court of Appeal. However, in 1993 in The Owners of the ship “Igman” v The Owners of the ship “Atilim 2” (formerly named Maladnrinon)⁶⁶ the Court of Appeal heard an appeal under s. 8 of the Maritime Conventions Act 1911. The owners of the ‘‘Igman’’ appealed against the dismissal by Sheen J of their application for an extension of time. Before Sheen J the solicitors representing the owners of the “Igman” admitted that they had negligently issued and served a writ in the wrong form⁶⁷ with the consequence that by the time the correct form of writ was issued the claim was time barred. The Court of Appeal noted that Sheen J had asked himself whether the owners of the “Igman” could show good reason why the discretion to extend time should be exercised in their favour. Sheen J had held that balancing all the countervailing factors of prejudice and hardship they could not. One factor which appears to have weighed heavily against the applicant was that having admitted a negligent mistake, the solicitors acting for the owners of the ‘‘Igman’’ would be bound to indemnify their client. It followed that no financial prejudice would be suffered by them if the application were refused. Another factor which Sheen J identified as militating against an extension was that the issue of the writ had been left to the very end of the period of limitation (as extended by agreement).⁶⁸ The Court of Appeal held that Sheen J had been wrong to identify as a fault on the part of the appellants leaving the issue of the writ to the very end of the extended period of limitation. The Court of Appeal then proceeded to exercise the discretion afresh and said the following:

“The fact that all the circumstances are relevant means that the canvas is of potentially unlimited scope. But clearly it is necessary to identify and emphasise what are the most important and weighty factors in any particular case. The nature of the exercise as disclosed in The ‘Myrto’⁶⁹ is to balance one against the other, the respective hardships which will be caused to one or other of the parties depending on whether or not the extension is allowed.”

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