On 4 January 2015, the vessel Nur Allya was involved in collisions with the vessels GS Spring and Atika in the Eastern Outer Port Limit of Singapore. Claims arising out of the collision were subject to the two-year limitation period provided for under s 8(1) of the Maritime Conventions Act 1911 (Cap IA3, 2004 Rev Ed) (based on art 7 of the Collision Convention 1910).

On 28 December 2016, the plaintiffs, the owners of the GS Spring and Atika, intimated a claim against the defendant, the owner and/or demise charterer of the Nur Allya, through a letter of demand. On 3 January 2017, the plaintiffs issued separate in rem writs against the defendant for loss and damage to their vessels. The writs were valid for 12 months.

The plaintiffs did not hear from the defendant until 23 February 2017, when the defendant's P&I Club sent an email to the plaintiffs' solicitors, saying that they were aware that two writs had been issued and that they were open to resolving the matter swiftly and amicably. On 11 October 2017, the Club issued two letters of undertaking (LOUs) in consideration of the plaintiffs refraining from arresting any vessel owned by the defendant. The LOUs contained a clause whereby the Club undertook to procure the appointment of a law firm to accept service of originating process on the defendant’s behalf.

The parties agreed on 19 January 2018 as a deadline for the Club's response to the substantive claim. The plaintiffs' solicitors did not hear from the Club by the agreed deadline. They sent an email setting a new deadline of 24 January 2018. On 25 January 2018, the defendant's solicitors sent an email and raised the issue of time bar. At around the same time, the defendant's solicitors realised that the writ had expired on 2 January 2018. On 29 January 2018, they filed applications to extend the validity of the writs. Both applications were granted, and the validity of the writs was retrospectively extended for a period of 12 months from 3 January 2018.

The defendant applied to set aside the extensions. It argued, among other things, that the plaintiffs had sufficient time and ample opportunity to serve the writs on the defendant in the three months prior to their expiry, as the LOUs gave the plaintiffs the right to call on the defendant to appoint a law firm to accept service of the writs, but the plaintiffs failed to do so.

The plaintiffs contended, among other things, that after the issuance of the LOUs there was an implied agreement to defer service of the writs while settlement negotiations were ongoing, and the plaintiffs' failure to extend the validity of the writs before they expired was induced, or contributed to, by the words or conduct of the Club.

Held: Application dismissed. The extension orders were varied to 6 months.

The decision to extend the validity of a writ involves an exercise of discretion by the Court, which is to be approached in two stages. In the first stage, the Court considers whether the plaintiff has shown the existence of matters which constitute good reason for an extension to be granted. If the plaintiff succeeds in showing that there is a good reason for an extension, the Court then goes on to consider all the circumstances of the case, including the hardship or prejudice to either party, to arrive at a value judgment on whether the extension should be granted or refused. Where the application is made after the writ has ceased to be valid and the relevant period of limitation has expired, as in this case, the plaintiff must also give a satisfactory explanation for its failure to apply for an extension before the writ expired.

Since there was no opportunity to serve the writs prior to the issuance of the LOUs, the plaintiffs had established good reason for the period from 3 January 2017-11 October 2017. As to the period from 12 October 2017-29 January 2018, the parties were engaged in ongoing negotiations on the provision of security to avoid arrest and the settlement of the plaintiffs’ claims. It was reasonable for the plaintiffs to have taken the view that service of the writs could be deferred while they awaited the defendant's settlement position, and that service of the writs was not only unnecessary, but could potentially derail the settlement negotiations. When the plaintiffs finally realised on 25 January 2018 that settlement negotiations were off and that their writs had expired, they took immediate steps to extend the validity of the writs. Accordingly, the plaintiffs had established good reason for the extension.

The history of negotiations and the Club's act of asking for time until 19 January 2018 led the plaintiffs' solicitors to believe that the service could be deferred and caused them to put work on the file on hold while they awaited the defendant's settlement position. Therefore, the plaintiffs provided a satisfactory explanation to account for the delay. Further, the length of delay was also minimal relative to the five-and-a-half month delay in Kun Kay Hong v Tan Teo Huat [1984] SGCA 23, [1983-1984] SLR(R) 762, where an extension was granted by the Court of Appeal.

As to the balance of hardship, the Court recognised that the defendant would be deprived of the substantive defence of limitation if the writs were renewed. However, it was appropriate for the writs to be renewed because: (1) the plaintiffs would be left with no remedy against the defendant if the writs were not renewed; (2) the plaintiffs pursued their claims with reasonable diligence; and (3) the plaintiffs took out the applications to renew the writs promptly.