The appellant in this case was brought in as a third party by the respondent in an action where the respondent was sued for damages for frozen food it ordered from Johor. The respondent was the transporter of the goods and the appellant was the owner of the reefer container used to transport the goods. It was not disputed that the cause of the damage and loss was because the temperature of the container was set at +20^o C and not -20^o C as was required to keep the frozen food in good condition. The respondent was found liable to the goods owner on 25 February 2010 after a full trial by the Sessions Court.

The third party notice against the appellant was issued on 4 February 2008. The respondent’s main allegation was that it was the appellant’s negligence which caused the wrong temperature to be set, which the appellant denied. The Sessions Court Judge found for the respondent. The appellant appealed to the High Court.

Held: Appeal allowed.

The appellant raises the defence of limitation under the bill of lading and under the Merchant Shipping (Implementation of Conventions Relating to Carriage of Goods by Sea to Liability of Shipowners and Others) Regulations 1960 (the Regulations). Clause 4(G) of the bill of lading provides that a suit against the appellant must be brought within a period of nine months from the delivery of the goods or the date when the goods should have been delivered. The container arrived on or about 22 October 2005. The food owner's action against the respondent was filed on 11 October 2006. But the third party notice was only issued on 4 February 2008. Under art 3.6 to the Schedule of the Regulations, the limitation period for a suit to be brought against the carrier is one year after delivery of the goods or the date when the goods should have been delivered.

The appellant's argument is that the word 'suit' in these two provisions include third party proceedings, going by the definition in the Sarawak Limitation Ordinance which defines 'suit' to mean any action or other proceeding. Counsel also cited a Singapore Court of Appeal case: Owners of the Ship or Vessel 'Kusu Island' v The Owners of Cargo Lately Laden on Board The Ship Or Vessel 'Brani Island' [1989] 2 CLJ 1306, [1989] 2 CLJ (Rep) 827 (CMI297) in which a similar limitation provision was stated in the bill of lading and in a provision in Singapore’s Carriage of Goods by Sea Act.

The respondent submitted a decision of the Supreme Court in Mat Abu Man v Medical Superintendent, General Hospital Taiping [1989] 1 CLJ 137, [1989] 1 CLJ (Rep) 98 in which it was held that 'third party proceedings for contribution' are independent of and separate from the main proceedings between plaintiff and defendant. Further, it was held that in respect of third party proceedings, time begins to run from the date the defendant is found liable by the court. The Sessions Court Judge relied on this case to dismiss the appellant's defence on limitation.

Mat Abu Man is distinguishable because it deals with third party proceedings where no specific limitation period has been prescribed for the parties in dispute. In this case, not only does the contract between the parties, as embodied in the bill of lading, provide the limitation period, the relevant law governing the conduct of their business has an express stipulation on the time to sue. The Court in The Kusu Island referred to the judgment in the House of Lords in Aries Tanker Corp v Total Transport Ltd [1977] 1 All ER 398 (CMI2194) in which the House of Lords held that the limitation period found in art 3.6 of the Hague Rules created a time bar of 'a special kind', one which extinguished the claim and not one which merely barred the remedy while leaving the claim intact.

The expression of the law indicated and adopted in these foreign cases are to be preferred in this case because it deals with the same facts, namely, a limitation period in a bill of lading and in a law legislated specifically for carriage of goods by sea. Upon expiry of the one-year period from the date of delivery of the container to the plaintiff, the respondent’s claims against the appellant as the carrier ceased to exist and the third party notice should not have been issued in the first place.