CHAN KWAI HA v. WONG CHICK BUN t/a SANG MING SING MOTORBOAT CO

HCAJ85/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO.85 OF 2005

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J U D G M E N T

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1. Pursuant to the Order of this court made on 26 July 2006, this is the trial of two Preliminary Issues :

(I)   whether the plaintiff’s claim herein is time-barred pursuant to section 7 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance, Cap. 508 (“the Ordinance”) and therefore not maintainable;

(II)   whether (if Issue (I) above is determined in the affirmative in favour of the defendant) an extension of time for commencement of the Action should be granted to the plaintiff.

Facts

2. There is no dispute that as result of the towage of the plaintiff’s dumb barge “Wing Cheong No. 1” (“Barge”) by the defendant’s tug “Ming Sing 18” (“Tug”) on a voyage from Sanjianshan Dao in China to Tuen Muen in Hong Kong, the Barge sank on 22 August 1999, thereby causing loss to the plaintiff.  The sinking of the Barge is alleged to be caused by the fault of the Tug and of those responsible for the Tug.

3. The Writ in this Action was issued on 25 April 2005.  Therefore when the Writ was issued, it was more than five years from the date of the complained act and of its consequent damage/loss.  If section 7 of the Ordinance applies, then by the time of the issue of the Writ, the claim of the plaintiff against the defendant was time-barred.

4. Section 7 of the Ordinance provides :

“(1)    Subject to subsection (3), no action shall be maintainable to enforce any claim or lien against a ship or its owners in respect of any damage or loss to another vessel … caused by the fault of the former vessel, whether such vessel is wholly or partly in fault … unless proceedings in the action are commenced within 2 years from the date when the damage … was caused …

 …

 (3)    Any court having jurisdiction to deal with an action to which this section relates may, in accordance with the rules of the court, extend period within which proceedings in the action must be commenced, to such extent and on such conditions as it thinks fit …”

Issue (I) – Was contact between vessels necessary

5. The first issue raised by the plaintiff is that section 7 has no application to the claim because there was no physical contact between the Tug and the Barge, so that it could not be said that there was collision as envisaged by the Ordinance.  At the hearing the point was very quickly seen to be untenable and it was not seriously pressed.

6. I will simply state very shortly that in my view there can be no doubt that physical contact between the vessels is not required in order for section 7 to be applicable.  This is so, firstly because the 1910 Collision Convention based on which the 1911 Maritime Convention Act (and subsequently the Ordinance) was enacted expressly stated in Article 13 that “… even if no collision has actually taken place.”  Secondly, the law in England has long held that the statute is not confined to cases of physical contact collisions (see for example : The Cairnbahn [1914] P.25 at 32 and 37 and The Bataviar III (1923) 23 Ll. L. Rep. 21).  Thirdly, there is no logical reason to exclude navigational fault of ships involving no physical contact between the two ships from the scope of the operation of the Ordinance.  In my view, section 7 clearly applies to the claim herein of the plaintiff and therefore the simple answer to Issue (I) is yes.

Issue (II) – Should time be extended

7. The two-year time limit for collision claim is based on the international convention of 1910.  The much shorter time limit for collision claim (compared to for example ordinary tort claims) is well known in the shipping community.  But it seems that the shorter time limit is not well known to the shipping or legal community at large.  From time to time, the Admiralty Court of England and of Hong Kong are asked to extend time for the commencement of the collision action and whether the court would do so depends entirely on the particular circumstances of the case.

8. At the hearing it was not disputed that the court could only extend time upon “good reason” being shown by the plaintiff.  In the unreported judgment of mine dated 4 August 2006 of Re KMTC Hong Kong (AJ164/2004), I applied the “good reason” test as expounded in The Myrto (No.3) [1987] 1 AC 597.  The parties before me agree that the good reason test is applicable.  The dispute is whether on the facts of the case, “good reason” has been shown.

Good reason shown or not

9. As said by Lord Brandon in The Myrto (No 3) at P. 622R :

“… whether there is or not good reason in any particular case must depend on all the circumstances of that case…”

10. The plaintiff relies on the following matters in support of the case that there is good reason for extension of time :

(1)     it took some time for legal aid to be granted to the plaintiff;

(2)     the plaintiff was advised by several lawyers that there was a six years’ limitation period for the plaintiff’s claim;

(3)     the defendant and his lawyer apparently also took the same view of six years’ limitation period;

(4)     the defendant only took the section 7 limitation point after it was raised by the court at an initial hearing in September 2005; and

(5)     the granting of the time extension would not cause any prejudice to the defendant.

11. I accept that a proper approach to the consideration of whether good reason is shown is to consider two periods of time, firstly from accident in August 1999 to the granting of legal aid in September 2002 and then from the granting of legal aid to the issue of the Writ in April 2005.

12. I am prepared to accept that there may be some justification for the first period of delay of some three years due to the necessity of the plaintiff to seek legal aid in order to properly pursue the legal remedy of launching proceedings.  Although even here, I must observe that the plaintiff seemed to have taken some time (after the accident) before the application for legal aid was made on 25 September 2000, which is one year after the accident.

13. The second period of delay of some two and half years (from September 2002 to April 2005) is however much more difficult to justify.  After the legal aid was granted, it was the duty of the plaintiff to pursue the claim diligently and properly.  There is a paucity of explanation as to what took place exactly between September 2002 and April 2005 by the plaintiff and plaintiff’s lawyer with no Writ being issued.  The references to the plaintiff being told by various lawyers that the limitation period is six years cannot be a justification or constitute good reason.  Ignorance or the mistake of the plaintiff as to applicable time limit cannot constitute good reason.  In my view, a wrong view of the applicable time limit whether by the plaintiff or by his lawyers (or those giving him free advice) simply cannot constitute good reason.

14. It is said that the defendant’s lawyers, namely Holman Fenwick & Willan (“Holmans”) also took the same view of the applicable time period being six years.  But this is strictly speaking not accurate.  What happened is that when the plaintiff’s lawyers wrote to the defendant, Holmans wrote back by its letter dated 7 May 2003 [47-8] and in denying liability relied on a number of grounds but did not rely on the two-year limitation period under section 7.  Apparently in the subsequent negotiation between the parties, Holmans never relied on a two-year limitation defence.  The fact that a party does not rely on a particular limitation defence is not the same as a party asserting that the applicable period of limitation is six years.  If that had been the case, then there might be room for consideration based on estoppel or equity.  But there was no such crossing of the line which led to the mistake of the plaintiff on the applicable time limitation period.

15. There is no affidavit evidence before me that during the second period that there was negotiation between the parties but even if there was such negotiation (as intimated to me at the hearing by Mr Coleman), that would not provide a justification or good reason for the delay.  A claimant is at serious risk if he puts all his eggs into the negotiation basket and he has only himself to blame if he thereby becomes time-barred.

16. The defendant is prima facie entitled to the limitation defence which has accrued and ought not, to be deprived of it merely because of the ignorance or mistake of those representing or acting for the plaintiff or advising in a non-strictly lawyer’s capacity.

17. I have carefully looked at all the circumstances which have been put forward in this case and I regret I have not been able to find that having regard to all the circumstances, there is good reason for the requested time extension to be given.  Issue (II) of the Preliminary Point is determined in favour of the defendant.  The Action of the plaintiff herein must be dismissed with costs.

18. The plaintiff’s own costs of the Action is to be taxed in accordance with the Legal Aid Rules.