North Ridge Fishing Ltd (the plaintiff) was the owner of the Savage Fisher. The defendant was the owner of the Prosperity. The latter vessel allegedly cut the Savage Fisher's net on 25 March 1997 while the two vessels were engaged in seine fishing for herrings, resulting in the loss of the plaintiff's catch. The plaintiff claimed that, by virtue of negligence on the part of those operating the Prosperity, it lost the proceeds of the sale of 600 tons of fish and incurred the cost of repairing the damaged net. The plaintiff commenced this action in May 1997. In June 1999, less than three months beyond the two-year time limit, applications were initiated to add JS McMillan Fisheries Ltd (McMillan) as a plaintiff and Walmac Fishing Co Ltd (Walmac) as a defendant. There were two applications before the Court. The first application was to extend the time limit in which an action could be commenced by McMillan and against Walmac, and the second application was to add them as parties to the action.

Held: The plaintiff's application partially allowed.

Under the Canada Shipping Act RSC 1985 S-9 (the Act), the liability of the master and crew of a vessel that causes damage to property is limited. The liability of the owner and any charterer of a vessel may also be limited if it is established that they were not in any way at fault or privy to the loss. Currently, the limitation amount is about CAD 40,000. Generally, in a case of this kind, the only prospect of effecting a worthwhile recovery lies in establishing liability on the part of the owner, or on the part of the charterer in the case of a chartered vessel, and defeating any claim to limitation that may be raised.

The plaintiff's application to add McMillan as a party cannot succeed because the claim that it seeks to advance raises no triable issue. McMillan only alleges that it contracted with the plaintiff to purchase the fish from the Savage Fisher and supplied a licence that the vessel required to participate in the herring fishery. It does not claim to be entitled to any loss of profit it may have enjoyed had the vessel's net not been damaged, and it is not suggested that as a prospective purchaser it could do so. If McMillan cannot claim a loss of profit that is caused by the damage to the net, it is unreasonable to hold that it can claim for the cost of the fishing licence that it supplied to the plaintiff.

The application to add Walmac poses more difficulty. The parties are sharply divided over which of the conflicting lines of authority regarding the extension of time for which s 572(3) of the Act provides is to be followed.

Section 572 of the Act reflects Canada's adherence to the Collision Convention 1910 (the Convention). Article 7 of the Convention reads: 'Actions for the recovery of damages [resulting from a collision] are barred after an interval of two years from the date of the casualty. ... The High Contracting Parties reserve to themselves the right to provide, by legislation in their respective countries, that the said periods shall be extended in cases where it has not been possible to arrest the defendant vessel in the territorial waters of the State in which the plaintiff has his domicile or principal place of business'. Legislation to give effect to the Convention was first enacted in England in the Maritime Conventions Act 1911 (UK) and then three years later in Canada in the Maritime Conventions Act 1914 SC 1914 C-13.

The plaintiff maintains that, by virtue of the Canadian decisions since 1972, it only needs to show that it has a prima facie claim against Walmac for the interests of justice to require that an extension be granted to add Walmac as a defendant in this case. It maintains that its solicitors' failure to apply to add Walmac before the time to commence an action against Walmac expires should not serve to deny the extension it seeks.

Walmac's contention is two-fold. It first says that in keeping with what the law has always been in England, and what was recognised to be the law in this country as late as 1977, the applicant seeking an extension of time to commence an action more than two years after the event must establish the existence of what amounts to special circumstances giving rise to a real reason why the extension should be granted. It then says that, in any event, the authorities do not establish that an extension is to be granted if the need for it is the result of the plaintiff's deliberate choice not to sue the proposed defendant within the time limit.

The Parliaments of both England and Canada go beyond art 7 of the Convention and provide a broad discretion to extend time where it has expired, as well as a compulsory provision governing the inability to arrest (hence the first and second parts of s 572(3)). It is provided that the broad discretion is to be exercised in accordance with the rules of the Court in which the proceedings are being conducted. While international consistency is always desirable in matters of maritime law, the extending of time to commence proceedings in a collision action is one aspect of Canadian maritime law which does not follow the principles of English law.

In Westfjord Fishing Ltd v Chemainus Towing Co (1994) FTR 265, an application for an extension of less than three months to commence an action to overcome a solicitor's oversight was allowed. Walmac says that the principle on which Westfjord is decided is at odds with the purpose of the limitation legislation and with international consistency. However, the principles developed in Westfjord are the product of three former judgments of the Federal Court. Therefore, they provide a sound basis for the exercise of the discretion afforded by s 572(3) of the Act. They represent the current state of Canadian maritime law on the issue.

The second part of Walmac's contention will not succeed. In Teal Cedar Products (1977) Ltd v Dale Intermediaries Ltd Les Intermédiaries Dale Ltée (8 February 1996) Vancouver CA019669, the Court of Appeal has already held that a decision not to sue does not necessarily render the extending of the time limit under the Act unjust.

The plaintiff's application for leave to add Walmac as a party to this action and to amend the pleadings and the style of cause accordingly will be allowed. The plaintiff's application for leave to add McMillan will be dismissed.