Kalimantan Timbers Co (the appellant) sold cargo to Cosmos Enterprise Corp Ltd (the notify party). The cargo was shipped on the King Dragon I from Indonesia to Hong Kong. On 5 February 1978, the King Dragon I sank and the cargo was lost.

On 20 May 1978, the appellant brought an action against the shipowner, Mighty Dragon Shipping Co SA (the respondent), for the cargo loss. The notify party sought to join the proceedings as the second plaintiff but was unsuccessful. The Registrar required the writ to be served again, but the appellant missed the deadline and had to apply for a time extension. The time extension application for the amendment of the writ to join the notify party as the second plaintiff was finally fixed for 3 April 1979, which was more than one year from 'the date when the goods should have been delivered' (art 3.6 of the Hague Rules).

The Registrar ordered an extension of time for an unspecified period provided that any claim by the second plaintiff was limited to a claim as owner of the cargo, but the Judge in chambers reversed that decision because: (i) the Hague Rules were incorporated; (ii) the time limit under the Rules had expired; and (iii) there was no jurisdiction to extend the time once that time limit had expired. The appellant appealed.

Held: Appeal allowed. Order of the Registrar restored with the addition of a time limit of four days.

The appellant argued that the Hague Rules were not applicable by reason of a deviation and that it would be wrong at this stage to assume that, if the Hague Rules would otherwise apply, they could necessarily be relied upon by the respondent. The respondent contended that the appellant had to demonstrate a prima facie case of fundamental breach, and that the true interpretation of art 3.6 of the Hague Rules was that the immunity could be claimed in spite of a fundamental breach. The Court agreed with the respondent. The Court held that there was no evidence that deviation or other fundamental breach was in issue.

The material part of art 3.6 of the Hague Rules was that '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'. The appellant contended that this immunity was confined to liability for damages for breach of the contract of carriage and that, as the present action was also framed in tort, it would be wrong to refuse an extension of time solely on the ground that the extension would defeat that limited immunity. The respondent submitted that the immunity conferred by the rule was a complete discharge 'from all liability in respect of loss or damage' and that there was no justification for a restrictive interpretation of those words. The Court agreed that there was no reason to give art 3.6 of the Hague Rules a restrictive interpretation.

Although the words 'loss or damage' were ambiguous, one must have regard to the intention of the Rule, which was to relieve the carrier from liability to an action for damages, and an action must always be founded upon the particular loss or damage alleged to have been suffered by the plaintiff. The object of art 3.6 of the Hague Rules was not to specify any particular mode of procedure for the settlement of disputes, but rather to ensure that such disputes are speedily notified and speedily settled.

The question regarding whether the suit had been brought within one year resolved itself into a further question: by whom must suit be brought? The appellant was correct in saying that the Judge's decision involved construing the word 'suit' as 'suit brought by the person concerned', but Roskill J was able to construe 'unless suit is brought within one year' as 'unless suit is brought before the court within one year': Compania Colombiana de Seguros v Pacific Steam Navigation Co [1965] 1 QB 101. Indeed, at p 129 he said: '"Suit brought" must mean suit brought by the person properly entitled to bring it.'

Here, the notify party neither became a party upon the appellant's application, with the consent of the notify party, to join it as a party, nor upon the order that it be joined as a party, nor upon the filing of the application for a time extension for amending the writ. It would not become a party until the writ was in fact amended. Regarding the claim for cargo loss, time had stopped running when suit was brought by the appellant as cargo owner. This finding was enough to dispose of the appeal. However, the Court clarified that there was a discretion to extend time despite the limitation period, and further held that a time extension could be granted in this case 'without injustice'.