"CSAV Tokyo" v "KMTC Hong Kong"

[ Home ] [ Up ]

DMC/SandT/07/12
The Owners of the Vessel "CSAV Tokyo" v. The Owners of the Vessel "KMTC Hong Kong"
Hong Kong High Court: Admiralty Court: Waung J.: HCAJ 164/2004: 4 August 2006
Mr. Nigel Kat, instructed by Messrs Healy & Baillie, for the Plaintiffs
Mr. Charles Sussex SC, instructed by Messrs. Holman Fenwick & Willan, for the Defendants
ADMIRALTY: COLLISION: ADMISSION OF LIABILITY BY THE DEFENDANTS: PLAINTIFFS’ WRIT ISSUED WHEN CLAIM ALREADY TIME-BARRED: HONG KONG MERCHANT SHIPPING (COLLISION DAMAGE, LIABILITY AND SALVAGE) ORDINANCE : EXTENSION OF TIME FOR ISSUING WRIT: TEST TO APPLY: "GOOD REASON" MUST BE SHOWN: IGNORANCE OF THE DEFAULTING PARTY: CONDUCT OF THE DEFENDANTS
Summary
Where, as in this case, Plaintiffs had failed to issue a writ before the expiry of the time limit for suit in a collision case, the fact that liability had been admitted or that the Plaintiff’s advisers did not realize that a writ should still be issued – even though liability had been admitted - did not amount to "good reason" under the relevant legislation for the court to exercise its discretion to grant an extension, in circumstances where the conduct of the Defendant had not contributed to the Plaintiffs’ omission

DMC Category Rating: Confirmed

This case note is contributed by Crump & Co, the International Contributors to the website for Hong Kong

Background
A collision occurred on 22 March 2002 between "CSAV Tokyo" and "KTMC Hong Kong". The Defendant admitted liability on 15 April 2002 and security for the claim was given by the end of May that year. The parties agreed that the claim should be subject to Hong Kong law. The two- year time limit for suit under s.7 of the Merchant Shipping (Collision Damage, liability and Salvage) Ordinance ("the Ordinance") expired on 21 March 2004 and it was not until 6 months after the expiry of the limitation time that the Plaintiffs became aware of the fact that the claim had become time-barred. An in-rem writ was issued by the Plaintiffs on 21 September 2004 and by a summons dated 18 October 2004, the Plaintiffs applied for an extension of time to issue a writ.

Section (3) of the Ordinance provided:

"Any court having jurisdiction to deal with an action to which this section relates may, in accordance with the rules of the court, extend the period within which proceedings in the action must be commenced, to such exent and on such conditions as it thinks fit…"

At the hearing it was not disputed that the court could only extend time upon "good reason" being shown. In The Myrto (No.3) [1987] 1 AC 597, Lord Brandon distinguished between three categories of cases where the application for extension could arise:-

1. Category (1) where at the time of the application for extension, the writ was still valid and the claim was not yet time-barred;
2. Category (2) where at the time of the application for extension, the writ was still valid but the claim was time- barred; and
3. Category (3) where at the time of the application, the writ was not valid and the claim was time-barred.

Although The Myrto was a case concerning the renewal of a writ, the parties in this case agreed that the same principle of "good reason" should be applied to an extension of time under s.7 of the Ordinance. The dispute at the hearing was largely over the application of the agreed principle.

Judgment
The judge took the view that the present case was in a fourth category compared with The Myrto as here the claim was already time-barred when the writ was issued.

The judge rejected the Plaintiffs’ submission, based on The Zirje [1989] 1 Lloyd’s Rep. 493, that the admission of liability on the part of the Defendants was itself a good reason to extend time. Though the judge recognized that the admission was a matter to be taken into account, admission of liability in itself did not, in any way relieve the duty of the Plaintiffs to issue proceedings in time. In his view, "admission of liability does not in any way relieve the duty of the claimants (in collision cases) to issue the writ in time as admission of liability does not impose a longer time limit or provide a "good reason for extension." The lack of any agreement over the quantum of any individual item of damage was important in the judge’s view, as there was "more than the possibility that the disagreement over quantum would have to be resolved by the court." "There is in fact," he said, "the necessity for the plaintiffs (like all cases) to bring the claim in time when there is no agreement on liability or quantum."

The judge held that The Al Tabith [1995] 336 provided a more reliable guide than The Zirje on how the time extension cases should be approached. In that case, an extension was refused at first instance and again on appeal, where the court said (at p343) that "The sole operative cause of the delay in issuing the writ was… the human error [of the plaintiff’s lawyer]. He was not induced to make the mistake by any active or passive conduct on the part of the defendants." So in this case, the judge held that neither ignorance of the need to issue a writ (where quantum had not been agreed) nor, indeed, any oversight or carelessness of the part of anyone acting for the Plaintiff, could provide a good reason for granting an extension. There was nothing in the conduct of the Defendants which led or caused the Plaintiffs not to issue in time. 

Accordingly, the Plaintiffs’ summons was dismissed with costs.

Back to Top

These Case Notes have been prepared with care, but neither the Editor nor the International and other Contributors can guarantee that they are free from error, nor that they contain every pertinent point. Reliance should not therefore be placed upon them without independent verification. The Editor and the International and other Contributors disclaim all liability for any loss of whatsoever nature and howsoever arising as a result of others acting or refraining from acting in reliance on the contents of this website and the information to which it gives access. The Editor claims copyright in the content of the website.