This was an appeal by the defendants (appellants) from Hill J's decision in The Arraiz (1924) 19 Ll L Rep 235 (CMI2653), where Hill J dismissed the defendants' motion to set aside the writ on the ground that the action was time-barred. Hill J affirmed his previous order extending time and granting leave to the plaintiffs (respondents) to maintain an action in rem against the defendants' ship, the Arraiz. The facts have been summarised in CMI2653 and the same abbreviations are used here.

The appellants argued as follows: there was no jurisdiction to grant the extension and that Hill J baselessly exercised his discretion to extend time. Under the MCA, an action for damage to a vessel could not be maintained unless commenced within two years. When that period had passed, the owners of the offending ship acquired prima facie immunity from action against them, but there was a proviso giving the Court the power to extend the period under certain conditions. There was an imperative part of the proviso dealing with actions in rem and a permissive part dealing with actions in personam. Hill J found that the imperative part did not apply, because he was satisfied that, during the two years, the respondents had reasonable opportunity of arresting the ship. Accordingly, because the respondents had neglected to avail themselves of the opportunity, they were barred from applying for extension of time under the permissive part of the section. Furthermore, since November 1920, there had been many opportunities for the respondents to arrest the Arraiz in England. But the respondents did nothing until April 1924, when they applied for leave to maintain the action. Even then it was not until June 1924 that they issued their writ for the collision of February 1918. The proceedings were time-barred. It would be a great hardship on the appellants to compel them to defend a collision action more than six years later, when evidence is difficult to obtain and witnesses have disappeared.

Held: Appeal dismissed.

Section 8 of the MCA, which carries out the Convention entered into at the Conference in Brussels in 1910, provides that no action shall be maintainable unless proceedings are commenced within two years from the date that the damage was caused.

The appellants argued that MCA s 8 was a reasonable limitation to obviate the difficulties which must arise when proceedings were delayed. While the appellants' argument is quite true, MCA s 8 has a proviso. It is in two parts. The first says that the Court may extend the period to such an extent and on such conditions as it thinks fit. These words give the widest possible discretion to the Court. The second part of the proviso says that the Court shall, if satisfied in a particular way, extend the period to an extent sufficient to give reasonable opportunity to arrest the ship.

The appellant argued that the proviso ought to be read as if there were an antithesis between its two limbs. But there is no antithesis between them. The discretion given is intended to be wide and to extend to all the matters which have been dealt with in the first part of the section. In addition, if certain conditions are satisfied then the discretion of the Judge must be exercised in a particular way. There is no contradistinction between the two parts of the proviso, but the second part is cumulative and gives an indication of how the discretion rightly falling within the earlier part of the proviso is to be exercised.

Hill J stated that the second part of the proviso is not satisfied by the facts. Therefore, the issue that Hill J had to decide was whether there was reason to extend the period. The appellant argued that there is abundant evidence that the respondents were not diligent in commencing proceedings; as such, it is wrong to remove the appellants' entitlement to prima facie immunity.

The wide discretion given to the judge ought not to be interfered with unless there is some reason for doing so or if the discretion has not been exercised judicially: The Kashmir [1923] P 85 (CA) (The Kashmir). Unless an appeal court can say that a judge below has acted upon and applied some incorrect principle, the appeal court ought not to interfere. In deciding that an incorrect principle has been adopted there ought to be strong grounds for thinking so. The exercise of the power ought not to be interfered with unless a judge below was shown to have exercised discretion on any wrong principle: The James Westoll [1923] P 94 (CA). These binding authorities show that this proviso gives a wide jurisdiction to a judge to exercise discretion. The appeal court will not interfere with a discretion properly exercised.

Hill J exercised his discretion properly. He did not apply any irrelevant or improper principle when arriving at his decision. He has decided the matter upon these grounds. He found that there were proceedings pending between the parties which were alive down to 17 August 1923. He indicated a possible reason why the proceedings were not brought to a conclusion earlier. The outstanding feature is that there were proceedings by both parties up to August 1923. Hill J thought that if the respondents had applied for leave in September 1923, he would have granted leave. Hill J found that the time between September 1923 and April 1924 was not a reason to refuse leave.

Sargant LJ agreed and had the same opinion as to the effect of the proviso. The argument that the discretion extends only to actions in personam and not to actions in rem is baseless. The words of the proviso make it apply to any action to which MCA s 8 relates.