On 16 June 1953, the plaintiffs' motor vessel Mount Blair was stationary and moored alongside a quay somewhere in the Pool of London, before being struck by the barge Trent which, in its turn, was being towed by the tug Sauria, the tug and the barge both being the property of the defendants. Thereafter, the master of the Mount Blair told the master and owners of the Sauria about the impact and alleged that a heavy indent had been caused. He stated that the defendants would be held fully responsible. There followed a considerable period of silence. In August and September 1954, the plaintiffs pressed the defendants to admit that the defendants were solely responsible for the collision. But the parties' correspondence was protracted because the defendants' solicitors did not answer any letter unless they had at least received one reminder of the fact that they had received it. In October 1954, the plaintiffs' solicitors requested that the defendants admit liability. Following the receipt of the usual reminder, the defendants' solicitors on 8 November 1954, wrote to say that they did admit that the Trent had lightly struck the Mount Blair, but that the damage claim was denied.

The plaintiffs' solicitors in the following month discussed the question whether the matter of the quantum of damage should be dealt with by arbitration. On 7 December 1954, the defendants' solicitors responded that 'the sole point to be decided is as to how much damage the barge Trent in fact inflicted to the Mount Blair'. On 8 December 1954, the plaintiffs' solicitors wrote about the question of arbitration. That letter again is not acknowledged until a reminder had been sent, but, on 19 January 1955, the defendants' solicitors responded that '[l]iability is admitted for the contact between the Trent and the Mount Blair'. The correspondence proceeded upon the matter of the form of arbitration for another few months, and the last letter to which it is necessary to refer was written by the plaintiffs' solicitors on 14 June 1955, which was an acknowledgment of a letter from the defendants' solicitors answering certain questions in regard to the dimensions, type, and so forth of the barge.

There was a second period of silence from 14 June 1955 until 16 October 1956, when the plaintiffs' solicitors wrote again, and the correspondence was resumed with the same reminders. The plaintiffs only commenced proceedings on 18 January 1957. The defendants applied to have the proceedings stayed on the ground that they were out of time under s 8 of the Maritime Conventions Act 1911 (UK) (MCA). That section provides:

No action shall be maintainable to enforce any claim ... against a vessel or her owners in respect of any damage or loss to another vessel ... unless proceedings therein are commenced within two years from the date when the damage or loss or injury was caused or the salvage services were rendered ...

The proviso in that section states:

Provided that any Court having jurisdiction to deal with an action to which this section relates may, in accordance with the Rules of Court, extend any such period, to such extent and on such conditions as it thinks fit ...

The plaintiffs relied upon Lubovsky v Snelling [1944] KB 44 (CA) (Lubovsky). But the Judge below held that there was no ground shown for exercising his discretion under the proviso and that there was no other reason for holding that the defendants were disabled from pleading the MCA s 8 time bar. The plaintiffs appealed. Two issues were raised. The first was whether there was a contract made by the defendants that they would not plead and rely upon MCA s 8. The second was whether the Judge below erred in the exercise of the discretion given to him by MCA s 8.

Held: Appeal dismissed.

There is no contract which bars the defendants from raising the MCA s 8 plea. Considering the very great delay after June 1955, there is no ground shown which will justify an extension of the limitation period.

The substantive part of MCA s 8 operates in the same way as the Limitation Act 1939 (UK). It enables a party, sued for loss or damage of the kind covered by the legislation, to plead the relevant section of the legislation as a bar to the proceedings, if they are started more than two years after the cause of action arose. If the MCA s 8 time bar is not pleaded, the plaintiffs can proceed, notwithstanding the lapse of time, to recover any damage they can prove and for which the other party is responsible. In this case, two years had long since elapsed before the proceedings were started so the defendants are prima facie able to plead the MCA s 8 time bar subject to its proviso. The defendants are neither disreputable nor dishonest in raising this defence.

In Lubovsky, the plaintiff was the widow of a man who had died as the result of injuries caused by the alleged negligent driving of a motor car of the defendant, he himself being insured against third-party liability with a certain insurance society. The accident had taken place on 28 December 1940. Under the Fatal Accidents Act 1846 (UK), any claim to recover damages under s 3 of that Act had to be commenced within twelve months of the cause of action having arisen. In August 1941, the matter had reached the stage that the defendant was to admit liability but that a writ would have to be issued because, whether they agreed about the quantum of damages or not, the Court would have to approve it and apportion it. The plaintiff claimed not only in her own right, but as personal representative of the deceased man. A writ was issued by the plaintiff on 7 November 1941, well within the time limit. Unfortunately, the plaintiff had failed by that time to take out letters of administration to her husband's estate, so that in that capacity, as representing her husband's estate, she was not in a position to lay the necessary foundation for her claim. That writ was withdrawn in order that she could take out letters of administration, as she did. As soon as that was done a new writ was issued on 14 February 1942, a little more than six weeks out of time. The defendant pleaded s 3 of that Act. But it was held that, having regard to the agreement made in August 1941 (Lubovsky 45), the defendant was not able to raise this plea at all. Scott LJ (with whom MacKinnon LJ agreed) said that the agreement of August 1941 meant (Lubovsky 46):

that liability in damages to the plaintiff's cause of action for the money loss resulting to the dead man's dependants was once and for all definitely accepted by both the defendant and his insurers, and both of them were thereafter precluded from putting forward any defence whatever which would impeach that liability. It was just as much a contract not to plead Sect. 3 of the Act, as if that undertaking had been put in words. ... The arrangement that a writ should be issued was both natural and necessary.

Goddard LJ's judgment in Lubovsky contains its ratio decidendi, namely, it was an essential part of the bargain made that proceedings should be started without unreasonable delay, the parties agreeing that in those contemplated proceedings the question of quantum of damage and apportionment should be determined. In Lubovsky 47, Goddard LJ relied upon Wright v John Bagnall & Sons Ltd [1900] 2 QB 240 (CA) (Wright). In Wright, there 'was an agreement that compensation was to be fixed, the only question left open being the amount'. It was held in Wright that in such circumstances the time-bar defence cannot be raised.

Lubovsky is binding but distinguishable. In Lubovsky it was an essential part of the bargain made that proceedings in Court were to be commenced for the purpose of ascertaining the quantum and the apportionment. In this case, the correspondence reveals that what was being discussed was the proposal that no proceedings in Court would be necessary but that this should be an arbitration as the most economical way of settling the matter of quantum.

The Court disagreed with the Judge below and rejected the defendants' argument that there was no unequivocal admission of liability. The letters constitute an unequivocal admission of liability. This was an admission that the plaintiffs, from and after January 1955, need not concern themselves with proving negligent navigation. That left the question of the quantum of damage to be ascertained. The defendants appear to have accepted the view that some damage had been caused, but not the quantum of GBP 225. But the correspondence did not involve any concession which would amount to an enforceable promise to waive the right to plead s 8 MCA if the plaintiffs did not start proceedings until the statutory period had run out.

The parties' solicitors appeared to have conducted this correspondence with very slow speed. Had the summons been issued somewhat late, a week or two after the two years had expired from 16 June 1953, the Court should and would have extended time. But proceedings were only commenced much later. If a long period elapses before the collision dispute is tried, the question of witness' recollections and even the availability of witnesses may become a source of serious embarrassment to one side or the other.

Separately, the summary form of procedure used in this case, ie summons to stay proceedings, is a convenient and expeditious way of dealing with the issues raised in a case of this sort. It follows the practice in the Admiralty Court and is accepted by the parties. But in other cases, these issues may more properly or conveniently arise after the close of pleadings. A limitation statute is prima facie a matter for pleading. There might also be another point taken, namely, estoppel. If a defendant in a case of this sort makes an admission of the kind made in this case it might be alleged against that defendant that the defendant was estopped from alleging, as a matter of fact, that the date of the proceedings was more than two years from the date of the collision. That might be a valid, effective plea, for the plaintiffs might go on to allege that they had relied upon the representations. In this case, there is no basis for saying that the plaintiffs relied upon the alleged representation of the defendants to forbear starting proceedings from June 1955 to January 1957.

Morris LJ agreed and added that Lubovsky 46 was a finding that it was really an implied term of what the parties in Lubovsky had agreed in August 1941, that neither side would plead the statute and so make their agreement inoperative. The reasoning in Lubovsky is that the agreement made between the parties in that case was one which contemplated, and stipulated, that an action would be brought; and it was an implied term of the agreement that neither side would take any step which would make it impossible to have the matter settled in Court in an action. But in this case, it was doubtful whether the parties had in mind the question of the statutory time limit.