On 2 January 1982, the plaintiffs' ship Al Berry and the defendants' ship Gaz Fountain collided. The Al Berry was at anchor near Proti Island, Greece, while the Gaz Fountain was manoeuvring to go alongside. The Gaz Fountain was subsequently scrapped. The Al Berry was entered with the West of England Club. In March 1982, the plaintiffs sought security for their claim from the United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Ltd (the UK club). The clubs negotiated. On 19 September 1983, the West of England informed the UK club that the Al Berry was to be dry-docked in June 1984 during which repairs will take place and sought a one-year time extension from 2 January 1984; the UK club agreed.

In October 1984, Al Berry was dry docked, repaired and surveyed. In November 1984, the West of England sought another one-year extension; the UK club agreed. The time limit became 2 January 1986. On 30 October 1985, the West of England informed the UK club that the plaintiffs were 'anxious as to lack of progress' and 'have requested' for 'proceedings to enforce their claim' to be commenced 'if no reasonable settlement offer is forthcoming in the near future'. In December 1985, the West of England asked for one year's extension, but the defendants were only agreeable to extend time to 30 June 1986. In March 1986, the West of England requested for 'settlement proposals without delay'.

In April 1986, the West of England told the UK club that 'more than ample time' had been given and that the defendants' liability was 'clear'. They insisted that the UK club 'respond with settlement proposals within the next two weeks' or else proceedings, being the 'only reasonable course available', will be commenced. But instead of issuing a writ, the West of England, on 22 April 1986, sought a further extension of six months beyond 30 June 1986. This request was accepted on 6 May 1986: time was extended to 30 December 1986. The relevant officer of the West of England, Mr Wheelhouse, went on holiday from 25 October until 9 November 1986.

The plaintiffs issued their writ on 14 January 1987, more than five years after the collision. They applied to extend time under s 8 of the Maritime Conventions Act 1911 (the MCA) to maintain the action commenced by their writ. The defendants applied to strike out the writ citing the MCA s 8 time bar.

The plaintiffs argued that the Court can do justice between the parties if the time limit is extended because the damage was observed and noted by the masters of the ships at the time of the incident and it was inspected by surveyors in October 1984. The plaintiffs cited the change in judicial attitudes to the granting of an extension of time under s 27 of the Arbitration Act 1950, which empowers the Court to extend time to avoid undue hardship. The plaintiffs asked the Court to consider the hardship which would be caused if the case were not permitted to proceed and also the strength of the plaintiffs' claim.

The defendants argued that the considerations which the Court ought properly to have in mind on an application to extend time under the proviso to s 8 of the MCA are quite different from the considerations which are applicable to s 27 of the Arbitration Act 1950: The Llandovery Castle [1920] P 119 (CMI2651); The Owenbawn [1973] 1 Lloyd's Rep 56 (The Owenbawn) 59.

Held: Plaintiffs' application dismissed; defendants' application allowed.

Under s 8 of the MCA s 8, the Court has the widest possible discretion to enlarge the time for the issue of a writ. The question is whether the Court has found reason to extend the period beyond the very long extensions already agreed between the parties and thereby to deprive the defendants of the right of immunity conferred by the MCA. When exercising its discretion whether to extend time, the Court should apply the principles summarised as follows:

(1) Where the period of limitation laid down by Parliament has expired the defendant has its defence as an absolute right. The defendant is entitled to raise that defence and there is nothing unfair or reprehensible in it so doing.

(2) When the Court has a discretion, as it has under s 8 of the MCA, the Court should not extend time unless the plaintiff can show special circumstances. The special circumstances will nearly always arise because of some conduct of the defendants.

(3) It is never an exceptional circumstance that by reason of the expiration of time the plaintiff will be deprived of his claim. That is the necessary consequence of the time limit.

(4) It is never an exceptional circumstance that the defendant knew of the dispute or that the facts can be easily ascertained.

(5) It is never an exceptional circumstance to show that the defendant will not be prejudiced by the short extension of time usually required to validate the writ. That would be normal. Whether or not the memories of the witnesses have faded by the time when the limitation period expires a few weeks thereafter are unlikely to make any difference.

(6) It is not an exceptional circumstance that failure to protect time by the issue of a writ is due to an oversight. That is the usual circumstance.

There were no grounds for extending time. The Court agreed with the defendants' argument. The starting point is The Llandovery Castle 125 where Hill J said in relation to the discretionary part of the proviso that

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.

'[V]ery similar considerations apply' when a Court is either asked to renew a writ or to extend time under MCA s 8: The Owenbawn 59. There were three kinds of situations where it would be just to renew a writ (The Owenbawn 60):

First, where there has been an express agreement between the parties deferring service of a writ; second where there has been an implied agreement between the parties deferring service of a writ; and third, cases where, although it may not be possible to say that there is an express or implied agreement, nevertheless there has been conduct by the defendant leading the plaintiff to suppose it would be alright to defer service of the writ, with the result that the defendant can be said to have been a party to the delay in serving the writ even though there is no express or implied agreement.

In relation to an application to extend time under s 8 of the MCA, the first situation was where there has been an agreement between the parties to extend the time limit, as there was in this case up to 30 December 1986. There was no implied agreement to extend time beyond that date. There was no conduct by the defendants leading the plaintiffs to suppose it would be alright to defer issuing a writ.

The delay is about 16 days. But the plaintiffs had over five years. It is understandable that the plaintiffs may not wish to issue a writ until the approximate amount of their claim is known. If time is needed to quantify the claim that may be a reasonable explanation. That may explain the delay until the end of 1984. But more than two years have passed since October 1984. When a party says that at the last moment the failure to issue a writ was due to an oversight, that party must give an explanation for not issuing a writ during the whole of the available period, being five years in this case.

The delay was inexcusable. It was entirely due to oversight of the West of England. In April 1986, the West of England were not putting any pressure on the UK club to settle this claim. Issuing a writ was the only way to put pressure. Despite the delay, the plaintiffs were reluctant to issue a writ even though it was described as 'the only reasonable course available'. The cost is minimal and will be recovered if the claim is successful. Given that there appeared to be a very strong case, such reluctance was difficult to understand. By issuing a writ the plaintiffs do not preclude further negotiations but strengthen their own hand in such negotiations. It was extraordinary that, when the plaintiffs were pressing Mr Wheelhouse to obtain satisfaction of their claim, Mr Wheelhouse was obsessed with getting yet another time extension rather than issuing a writ. Mr Wheelhouse, who joined the West of England in October 1985, and took over the Al Berry file, did not explain the failure to issue the writ within time.

As for the plaintiffs' argument under s 27 of the Arbitration Act 1950, the power to extend time was granted without prejudice to the provisions of any enactment limiting the time for the commencement of arbitration proceedings.

As for the plaintiffs' argument on hardship, the apparent strength of the plaintiffs' claim makes their failure to issue a writ within the time limit even more reprehensible. If 'hardship' (in the form of the loss of the claim amount) were a valid point it would follow that the larger the amount of the claim, the more readily the Court would grant an extension of time.