On 22 August 1999, on a voyage from Sanjianshan Dao in China to Tuen Muen in Hong Kong, the plaintiff’s barge sank while under tow by the defendant’s tug. The plaintiff alleged the loss of the barge was caused by the tug and those responsible for the tug.

The writ in the action was issued on 25 April 2005, more than five years later.

This was the trial of two preliminary issues:

1. Whether the plaintiff’s claim was time-barred pursuant to s 7 of the Merchant Shipping (Collision, Damage, Liability and Salvage) Ordinance, Cap 508 (the Ordinance), and was therefore not maintainable.
2. If issue 1 is determined in the affirmative in favour of the defendant, whether an extension of time for commencement of the action should be granted to the plaintiff.

Held: The plaintiff’s case is time-barred. There is no good reason to give a time extension.

The plaintiff argued that s 7 had no application to the claim because there was no physical contact between the tug and the barge so that it could not be said that there was a collision as envisaged by the Ordinance. There can be no doubt that physical contact between the vessels is not required in order for s 7 to be applicable. The Collision Convention 1910 (upon which the Maritime Convention Act 1911 (UK) and subsequently the Ordinance is based) expressly states in art 13 that the 'Convention extends to the making good of damages which a vessel has caused to another vessel, or to goods or persons on board either vessel, either by the execution or non-execution of a manoeuvre or by the non-observance of the regulations, even if no collision had actually taken place'. The law in England has long held that the statute is not confined to cases of physical contact collisions. There is no logical reason to exclude navigational fault of ships involving no physical contact between the two ships from the scope of the operation of the Ordinance.

The two-year time limit for collision claims is based on the Collision Convention 1910. From time to time, the Admiralty Court of England and of Hong Kong are asked to extend time for the commencement of the collision action and whether the Court would do so depends entirely on the particular circumstances of the case. The Court can extend time upon 'good reason' being shown by the plaintiff.

The plaintiff relied on the following in support of its case that there was good reason to grant the extension of time:

1. It took some time for legal aid to be granted to the plaintiff;
2. The plaintiff was advised by several lawyers that there was a six-year limitation period for the plaintiff's claim;
3. The defendant and its lawyer apparently also took the same view of six-year limitation period;
4. The defendant only took the s 7 limitation point after it was raised by the Court at an initial hearing in September 2005; and
5. The granting of the time extension would not cause any prejudice to the defendant.

There is some justification for the first period of delay due to the necessity of the plaintiff to seek legal aid. The second period of delay is more difficult to justify. After legal aid was granted, it was the duty of the plaintiff to pursue the claim diligently and properly. The references to the plaintiff being told by various lawyers that the limitation period is six years cannot be a justification or constitute good reason. Ignorance or the mistake of the plaintiff as to applicable time limit cannot constitute good reason.

The defendant’s lawyers denied liability on a number of grounds but did not rely on the two-year limitation defence. The fact that a party does not rely on a particular limitation defence is not the same as a party asserting that the applicable period of limitation is six years. If that had been the case, then there may have been room for a consideration based on estoppel or equity. But there was no such crossing of the line which led to the mistake of the plaintiff.

The defendant is prima facie entitled to the limitation defence which has accrued, and ought not to be deprived of it merely because of the ignorance or mistake of those representing or acting for the plaintiff. The action is dismissed with costs.

[For the unsuccessful appeal to the Hong Kong Court of Appeal, see CMI555].