On 31 October 1916, a collision occurred between the steamship Caledonia and the lighter The Marshalls, which was being towed by the steamship Disperser. There was damage to The Marshalls and the Caledonia. The fault for the collision lay with the Disperser.

In April 1918, there was correspondence between counsel for the Disperser, The Marshalls and the Caledonia about, among other things, the limitation of the Disperser’s liability. The intimations up to that point were that the Disperser was bringing a limitation action, against which the charterers of The Marshalls would claim, and that the Caledonia would oppose the claim.

The owner of the Disperser brought a limitation action, and a limitation decree was made on 14 July 1919. That decree provided that all claims were to be brought in by 14 October 1919.

The claim in respect of The Marshalls was filed on 7 October 1919. The owner of Caledonia claimed that the claim for damage to The Marshalls was timebarred by s 8 of the Maritime Conventions Act 1911 (UK) (the Act) (based on art 7 of the Collision Convention 1910).

The Marshalls submitted that the limitation decree had been made directing all claims to be brought in, and its claim had been brought in within the time mentioned in the limitation decree. Therefore, s 8 of the Act was no longer relevant; alternatively, the time for commencing proceedings ought to be extended under the discretion granted by the proviso to s 8.

The Caledonia contended that, apart from limiting the amount for which the wrongdoer was liable, the effect of the limitation decree was not to alter the parties’ rights, and if the right of The Marshalls was timebarred, there were no merits upon which the extension should be granted.

Held: Extension of time granted.

Each claimant against the limitation fund must establish a legal right against the limiting owner, and each claimant may raise against the other any defence that the limiting owner could raise. Therefore, it was impossible to distinguish a defence given by s 8 of the Act from other defences, and it was open to a rival claimant to raise a defence against another claimant that its action was timebarred by the effect of s 8.

There were four parties who had suffered damage, and who would undoubtedly be entitled to claim if they had issued their writ within two years. Whether they ought to have the time extended the Court was bound to the correspondence which passed because, in 1918, it was contemplated by everybody that the claim in question would be dealt with in the limitation proceedings. Therefore, this was a proper case for exercising a discretion under s 8 and for extending the time.

In most cases in which limitation proceedings are ongoing, they will be found to be proper cases for extending the time. When objections based on s 8 are taken in limitation cases, in general, the extension of time ought to be granted if the non-issuing of the writ had merely ensued from the contemplation of the parties that a limitation action would be begun and a limitation reference held.