YIP KAM AND ANOTHER v. ZHONGSHAN FOODSTUFFS & AQUATIC IMPORT & EXPORT GROUP COMPANY LTD OF GUANGDONG AND ANOTHER

CACV 225/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 225 OF 2009

(ON APPEAL FROM HCAJ NO. 31 OF 2008)

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J U D G M E N T

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Hon Le Pichon JA:

1.  This was an appeal the plaintiffs from an order of 4 August 2009 of Reyes J whereby he struck out the plaintiffs’ writ of summons and dismissed their action against the defendants.  At the conclusion of the hearing judgment was reserved which we now give.

Background

2.  On 21 December 2005 a barge owned by the first defendant collided with a motor vessel.  Its coxswain and owner, Chow Muk Tai (“the deceased”), fell into the water and drowned.  The collision took place just outside Yaumatei Typhoon Shelter.

3.  Madam Yip who is the deceased’s widow brought an action as representative of the deceased’s estate and also on behalf of his dependents.  The writ was issued on 11 February 2008 claiming damages arising out of the deceased’s death against the first defendant as owner of the barge and the second defendant as its manager.

4.  Under section 7 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Cap. 508), the limitation period is two years.  However, subsection (3) empowers the court, “in accordance with the rules of court” to extend the period “to such extent and on such conditions as it thinks fit”.  It is common ground that notwithstanding the reference to “the rules of court”, no rules have yet been prescribed.

5.  There were two summonses before the judge: the first defendant applied to strike out the writ which was issued 52 days out of time and Madam Yip sought an extension of the time limit for commencing the action to enable her to pursue the action.

6.  Madam Yip’s circumstances and her explanation of the delay in issuing proceedings may be summarised as follows.  She is 74 years of age and illiterate.  She and the deceased married at a young age and for over 50 years they earned their livelihood first as fishermen and later as self-employed coxswains carrying passengers to vessels on their motor launch.  They had seven children.  Since the deceased’s death, she has relied on one of her children, Chow Tak Ming (“Madam Yip’s son”) to take care of her.  He was educated up to primary two.

7.  There was a newspaper report that the captain of the barge was suspected to be drunk at the time of the collision.  Madam Yip said that the Marine police assured her that they would investigate into the circumstances of the accident.

8.  An officer named Ms Yu of the Marine police interviewed and took a statement from Madam Yip’s son shortly after the accident.  Thereafter, throughout 2006 and 2007 Madam Yip asked her son to contact Ms Yu regularly for the investigation results.  For reasons that are unclear, the report into the collision prepared by the Marine Department (“the report”), completed in July 2006, was never provided to the plaintiffs until late 2007 notwithstanding Madam Yip’s son’s contact with Ms Yu.

9.  In early October 2007, Ms Yu informed Madam Yip’s son that the police investigations had been completed and that the Department of Justice would inform him of the outcome.  The Department of Justice’s letter (dated 9 October 2007) sent to Madam Yip’s son was to the effect that no charges would be instituted because of insufficient evidence.

10.  The report concluded that:

   ●  the master of the barge had failed to make arrangements to maintain a proper lookout as the quartermaster was the only person responsible for steering the vessel and keeping a lookout at the relevant time

   ●  the barge being an overtaking vessel was required to give way to the motor launch but that there appeared to have been no effective alteration of course and speed

   ●  the quartermaster admitted to having consumed alcohol before reporting to duty

   ●  the coxswain of the motor launch appeared not to have taken any action to avoid collision.

11.  Madam Yip was extremely disappointed with the decision not to press criminal charges.  She had heard that if the quartermaster was convicted, she could rely on the criminal conviction and win the civil claim.  While the family decided that, in the circumstances, a civil claim should be brought, they could not afford legal fees.  In desperation, in November 2007, Madam Yip asked her son to discuss the matter with one of his district councillors with a view to obtaining free legal advice from duty lawyers.  Sometime in December, Madam Yip and her son did meet with a duty lawyer through the district councillor.  He advised that Madam Yip had a cause of action but, erroneously, that the limitation period was three years.

12.  Having received that advice, within a few weeks, Madam Yip applied for legal aid and was granted it on 30 January 2008.  An in rem writ against the barge was issued on 1 February 2008 but had to be discontinued in October 2008 on learning that the barge had been scrapped in September. The writ in this action was issued on 11 February 2008 which was 52 days out of time.

13.  To complete this chronology of events, it is to be noted that by letter dated 23 August 2008, the plaintiffs’ solicitors requested the first defendant to nominate a process agent in Hong Kong to accept service of legal proceedings for damages arising out of the fatal injury.  This went unanswered.  Meanwhile, on 14 November 2008, the plaintiffs obtained an ex parte Rule B attachment order from the United States District Court in a maritime attachment and garnishment application, seeking security for the plaintiffs’ claim.

14.  While by late November 2008 DLA Piper had been retained by the first defendant as its solicitors in respect of the Rule B attachment order and was actively opposing it, DLA Piper failed to respond to numerous enquiries made during the first two weeks of December 2008 as to whether they had authority to accept the writ in the present proceedings.  Nevertheless, a copy of the writ was delivered to them on 4 December 2008 for their information.

15.  In view of DLA Piper’s lack of response, the plaintiffs’ solicitors obtained leave to issue and serve the concurrent amended writ out of the jurisdiction on 17 December 2008.  While the documentation was being finalized for service, on 18 February 2009, DLA Piper acknowledged service of the writ on behalf of the first defendant.

The judgment below

16.  It was common ground that for the discretion under section 7(3) to be exercised, “good reason” has to be shown.  The concept has its origins in the jurisprudence relating to the extension of the validity of writs.

17.  The judge considered that the relevant factors to be taken into account might include the following:

“7.    …

    (1)    the length of delay in issuing a Writ;

    (2)    whether a defendant is to blame for any delay on the plaintiff’s part;

    (3)    whether the delay is due to circumstances beyond the plaintiff’s control; and,

    (4)    whether, if time is extended, there will be material unfairness, prejudice or injustice to the defendant.”

The judge cited The “Albany” and “Marie Josaine” [1983] 2 Ll R 195 in support.  I will need to return to this in due course but suffice it to say here that it seems not to have been controversial below that Sheen J’s approach in the Albany and the factors he set out (“the Albany factors”) were considered to be correct.  No reference to the two-stage approach can be found in either the judgment or the skeleton submissions below of Mr Sussex SC (who appeared for the first defendant both here and below).  As will become apparent, the two-stage approach was at the forefront of his submissions in this court.

18.  The judge went on to consider the circumstances highlighted by the plaintiffs’ counsel, which he set out as follows:

“8.    …

    (1)    She is elderly (74 years old) and illiterate.

    (2)    From December 2005 and in the course of 2006 and 2007, Madam Yip (through her son) repeatedly asked the marine police about the result of their investigations into the collision.  A “Ms. Yu” of the marine police apparently told Madam Yip “to wait for the investigation results”.

    (3)    Madam Yip did not learn that the marine police had completed their investigation until October 2007.  She was informed by a letter dated 9 October 2007 from the marine police that no criminal charges had been brought due to insufficient evidence.  But she could not afford any legal fees at the time to pursue a private action.

    (4)    In December 2007 Madam Yip’s son was erroneously advised by a Mr. Sammy Yip of Messrs. Y. C. Lee, Pang, Kwok & Ip during a duty lawyer session at the Wong Tai Sin District Office that the time limit was 3 years.

    (5)    It was only in January 2008 when Madam Yip went with her son to the Legal Aid Department to apply for legal aid that she learned that the limitation “might be 2 years”.

    (6)    Legal aid was not granted to Madam Yip until 30 January 2008.  Immediately following that grant, an in rem Writ against the cargo vessel was issued on 1 February 2008 and the present in personam Writ was issued on 11 February 2008.  Having discovered that the cargo vessel had been turned into scrap in September 2007, Madam Yip discontinued the in rem action on 8 October 2008.”

19.  For the purposes of this appeal, the judge’s treatment of Madam Yip’s explanation for the delay in applying for legal aid and the issue of prejudice to the first defendant are of particular relevance.

20.  The judge took the view that there was no “cogent” explanation why Madam Yip had delayed going to legal aid until January 2008 and that there was nothing “preventing” her from consulting the Legal Aid Department at an early stage.

21.  On the issue of prejudice, the first defendant had filed evidence to the effect that, by November 2008, three potential witnesses (the master of the barge, the quartermaster and a crew member) had left its employment.  The first defendant stated that it had lost contact with them.  The judge appeared to have accepted that the first defendant would be seriously prejudiced if time were to be extended.

22.  For, inter alia, those reasons, the judge declined to exercise his discretion to grant the extension.

This appeal

23.  Before turning to the matters raised by Ms Ho (who appeared for Madam Yip), it would be convenient to revert to the relevant factors stated by the judge and set out in § 16 above.

24.  As earlier noted, seemingly, the relevant factors to be taken into account in deciding whether there was ‘good reason’ to extend time were derived from The Albany.  On closer consideration, there are significant differences between the Albany factors (stated by Sheen J in The Albany) and those stated by the judge.  In particular, in relation to the degree of ‘blameworthiness’, Sheen J considered that the question to be addressed was whether the delay before the issue of the writ was excusable.  The judge’s approach to ‘blameworthiness’ was markedly different: namely, whether the defendant was in some way to blame for the plaintiff’s delay which, in my view, is an entirely different question.  Further, in relation to factor (3), the judge appeared to have narrowed Sheen J’s formulation by omitting the additional words, namely, “and, whether there were very special circumstances”.

25.  It would be fair to say that in deciding whether or not to exercise his discretion, the judge applied, not the Albany factors to the circumstances of the case, but those factors as modified by him, whether consciously or unconsciously.  See, for example, § 15 of the judgment where the judge was clearly applying his own formulation of factor (2) and his reformulation of factor (3) which effectively excluded consideration being given to the existence or otherwise of “very special circumstances”.  While the Albany factors were not intended to be a comprehensive list of the only factors to be taken into account, reformulations of the factors are another matter where the focus or substance of a particular factor is altered.

26.  In § 10 of his judgment, the judge stated that no “cogent” explanation had been given by Madam Yip for not going to legal aid until January 2008.  In § 12 of his judgment, the judge elaborated on this.  He said:

“There was nothing preventing Madam Yip from consulting the Legal Aid Department at an early stage, pressing them to look into the matter, and asking them to bring proceedings on her behalf.  That is precisely what Madam Yip did when the police investigation decided that there was insufficient evidence to prosecute. Inexplicably, she waited many years before doing so.”

A number of difficulties arise from this passage.

27.  By using the word “preventing”, which is redolent of matters beyond one’s control, it would appear that the judge was applying his own formulation of factor (3) to the facts.  I have already drawn attention to the discrepancy between that formulation and Sheen J’s broader formulation in The Albany which encompasses “very special circumstances”.  The judge’s narrower formulation necessarily meant that no consideration was given to the existence or otherwise of “very special circumstances” and what might come within that phrase.  In other words, the ‘wrong’ yardstick had been used.

28.  The question whether “very special circumstances” exist in any particular case is necessarily fact- sensitive.  But implicit in the judge’s finding of no “cogent” explanation is that irrespective of a litigant’s background, personal circumstances, age and education, he or she must be taken to know about the availability of legal aid.  In my view, there is no valid basis for adopting that as an absolute.  It cannot be correct to consider as irrelevant, and so disregard, the background, personal circumstances, age and education of  Madam Yip when considering whether her explanation was satisfactory.

29.  Further, I have some difficulty with the second sentence of the passage cited.  As a summary of what happened after learning of the decision not to prosecute, it is inaccurate.  Madam Yip did not, as is suggested, immediately seek legal aid.  Rather, she said that out of desperation through lack of resources, she asked her son to approach a district councillor in order to access the free services of a duty lawyer.  This tends to suggest that Madam Yip did not know about the availability of legal aid at that stage.  Why else would Madam Yip and her son have gone to all that trouble to get advice from a duty lawyer through the auspices of a district councillor?  While there is no evidence as to how she came to know about the availability of legal aid, in December 2008, she did meet with a duty lawyer who advised that she had a cause of action.  Within weeks of receiving that advice, Madam Yip applied for legal aid.

30.  In my view, the evidence did not justify the judge to proceed on the footing that Madam Yip had known or must be taken to have known about legal aid all along.  As earlier noted, his reasoning was premised on an absolute, the validity of which had not been established.

31.  Be that as it may, Ms Ho submitted that the judge had made an error of law on the issue of prejudice that would taint the exercise of his discretion.  It was submitted that the evidence did not warrant a finding of prejudice.

32.  The only evidence concerning the three relevant witnesses who, by November 2008, were no longer in the first defendant’s employ is to be found in the affirmation of Li Xianghui:

“ 17. By November 2008, among the 3 witnesses … Mr Au Yu Chow [the quartermaster] was retired.  Mr Lam [the master] and Mr Wan [a crew member] are no longer working as crew members.  The 1^st Defendant tried to make contact with the said witnesses.  However, their effort is still unsuccessful up to the present moment.

  18. Should the 1^st Defendant possess knowledge of the present claim within 2 years after the accident, there would be a far better chance for the 1^st Defendant to locate the 3 witnessess.

  19. The 1^st Defendant’s Defence is heavily relying on the evidence of the 3 witnesses whose evidence could show that sufficient evasive actions was taken by the crew members of the Defendant’s Vessel.  Without the evidence of the 3 witnesses, the 1^st Defendant’s defence on liability is seriously prejudiced.”

33.  A related matter is when the first defendant became aware of the proceedings.  The first defendant asserts that it did not know until November 2008 in connection with the attachment order in the U.S. proceedings although there is evidence of the letter from the plaintiffs’ solicitors of 23 August 2008 (referred to in § 13 above), some 3 months earlier.

34.  Mr Li’s evidence in this regard is unsatisfactory in that it does not state when each of the three witnesses ceased employment, much less what attempts had been made to contact them and when.  On one reading, they only ceased employment in November 2008 or shortly before.

35.  In any event, it is wholly unclear how the 52-day delay could have caused prejudice to the first defendant.  Had the writ been issued immediately before the two-year time limit, the plaintiffs would still have had another year (until 20 December 2008) within which to serve it on the first defendant.  On that basis, the first defendant would have found itself in the same position as now and would not have been any better off had there been no 52-day delay.

36.  For these reasons, I am inclined to agree with Ms Ho that the judge did make an error on the prejudice issue.

37.  In conclusion, for the reasons stated above, I am satisfied that the order must be set aside and the discretion exercised afresh.

38.  In the court below, it would appear that the judge was not referred to the two-stage approach to be adopted in considering the exercise of the discretion for extensions of the validity of writs and thus for section 7(3).  The parties as well as the judge proceeded on the basis of the approach in The Albany.  It is to be noted that there is no respondent’s notice and it is not suggested that The Albany is no longer good law, only that the approach has been refined by the House of Lords in four cases decided in the late 1980s and early 1990s, with Lord Brandon giving the leading speech in three of them.  Those decisions were considered in The “Al Tabith” and “Alanfushi” [1995] 2 Ll R 336 where Hirst LJ (at 340-341) traced the evolution of the two-stage test.  I should mention that while The Al Tabith did feature in the skeleton submissions of Mr Sussex below, the citation was from the judgment of Rose LJ in relation to a different topic.

39.  As regards the two-stage test, at stage one, it must be shown that there are

“… matters which could, potentially at least, constitute good reason for extension …”

(see per Lord Brandon in Waddon v Whitecroft Scovell Ltd [1988] 1 WLR 309 at 318A) (emphasis added).

or

“… matters amounting to good reason for extension, or at least capable of so amounting …”

(see per Lord Brandon in Baly v Barrett [1988] NI 369 at 417A)

Once stage one has been satisfied, the court can have regard to all relevant factors in the exercise of its discretion including the question of hardship.

40.  There is a useful passage from the judgment of Waite LJ In Lewis v Harewood [1997] PIQR P58 at P 60-61 explaining the practical application of the two-stage test:

“A judge exercising the discretion to extend time, at the suit of a party seeking an extension of time for service after the validity of the proceedings has expired and after expiry of any relevant limitation period, has to conduct the inquiry in two stages.  He must first be satisfied, at stage one, that there is good reason to extend time, and also that the plaintiff has given a satisfactory explanation for his failure to apply before the validity of the proceedings expired.  If he is not so satisfied, that is the end of the application and stage two will never arise.  If he is so satisfied, then he must go on, at stage two, to a general exercise of a discretion involving a consideration of all the circumstances including the balance of prejudice or hardship.  Matters relevant at stage two are not, however, irrelevant at stage one.  There is a degree of overlap, and a judge addressing the inquiry at stage one is entitled and bound to take into account any matters which appear to him to be relevant to the issues of good reason and satisfactory explanation, notwithstanding that the same matters will also be relevant (assuming it arises at all) to the exercise of his discretion at stage two.”

41.  Mr Sussex submitted that despite the generality of the wording of section 7(3) of the Ordinance, a strict construction is required and appropriate.  It was said that it was made clear in the English maritime cases that a principled approach must be adopted.  But a principled approach does not mean that the ordinary canons of construction do not apply.  In my view, the fact that maritime cases are involved does not make a difference.  The words must be accorded their natural and ordinary meaning.  There is nothing in the provision itself that mandates a strict or narrow construction.

42.  The issue in the present case is whether Madam Yip’s explanation for the delay could, potentially at least, constitute good reason for extension.  I do not see why not.  In cases where the court has refused extension, the delay was almost invariably attributable to oversight or mistake per se of the party’s legal adviser.  See, for example, Waddon (solicitor’s failure to obtain the removal of a legal aid restriction when he could have done so within time), The Al Tabith (slip-up on the part of the plaintiff’s adviser who had miscalculated the time extension), and Baly (where the effective reason for the delay was the failure of the receivers to provide the plaintiff with necessary funds to prosecute the action rather than complexity of issues and volume of documentation and the absence of evidence to show that had funds been available such difficulties could not have been overcome).  Such errors have been held not to amount to  “good reason”.

43.  The facts of the present case can be said to be unique.  We are here dealing with an elderly and illiterate sampan lady.  While the report is information in the public domain, someone in her circumstances could not reasonably have been expected to know how to access that information.  It is true that some 20 months elapsed before she knew that the investigation had been completed but it was not a question of her sitting on her hands during this period.  Her evidence was that she did request her son to chase Ms Yu on a regular basis during this time.  I am unable to agree with Mr Sussex that her explanation could not “potentially at least” constitute good reason for extension.

44.  On the question whether the discretion should be exercised in her favour, I have no hesitation in coming to the conclusion that it should.  The report supports the view that Madam Yip’s claim is meritorious.  If an extension is not granted, it will cause considerable hardship given that it will be the end of the road for the plaintiffs.  I have already explained why I am not persuaded that the first defendant would suffer serious prejudice as a result.  The answer to the question of the balance of hardship is therefore clear.

Conclusion

45.  For all those reasons, I would set aside the order below and allow the appeal.  I would extend the time limit for commencing the action to the date when the writ of summons was issued.

46.  I would also order nisi that there be an order of costs in favour of the plaintiffs, such costs to be taxed in accordance with the legal aid regulations.

Hon Suffiad J:

47.  I had the privilege of reading the judgment of Hon Le Pichon JA in draft and am in total agreement with all that has been said therein.

48.  In so far as Madam Yip’s explanation for the delay goes, the judge took a far too simplistic approach in dismissing her explanation by saying in paragraph 10 of his Judgment that “awaiting the results of a marine police investigation cannot be good reason” (for the delay) and that there was nothing preventing her from consulting the Legal Aid Department at an early stage.

49.  Madam Yip had given her reason for why she had waited for the outcome of the police investigation.

50.  In 2006, a brother of Madam Yip by the name of Yip Muk Kam also died as a result of a vessel collision.  In that case, there was a death inquest and subsequently, the master of the opposing vessel was convicted and imprisioned. (paragraph 9 of the 2^nd Affirmation of Yip Kam refers).

51.  There is also evidence from Madam Yip that she heard that if the quartermaster of the barge was convicted, she would simply win the civil claim by relying on the criminal conviction. (paragraph 20 of the 2^nd Affirmation of Yip Kam refers).

52.  There is also evidence from her in paragraph 19 of her 2^nd Affirmation that she did not know in the first place whether she had a right or a course of action in making the claim.

53.  Therefore given the above matters as stated by her, as well as the condition of Madam Yip, being elderly and illiterate, it is hardly surprising that she genuinely believed that the entire matter of her civil claim would hinge upon the outcome of the police investigation.

54.  This further lends credence to the fact that she had constantly urged her son to chase up Miss Yu of the Sai Wan Ho Marine Police Regional Headquarters as to the development and outcome of the police investigations.

55.  All of the above show that she was not sitting back and doing nothing while the police investigations were ongoing.

56.  Even when she learned in October 2007 that no criminal charges would be brought by the police against the other parties to the collision, she still got her son to approach the District Office in November 2007 with a view to obtain free legal advice from the Duty Lawyer scheme.

57.  The advice that she was given in December 2007 from Mr. Sammy Ip of Messrs Y C Lee, Pang, Kwok & Ip Solicitors was that she had a right and a course of action, but unfortunately, she was also given wrong advice as to the limitation period being three years.

58.  It should however be noted that Mr. Sammy Ip was neither the legal representative of Madam Yip, nor was he acting for her in this matter, but merely a solicitor engaged by the Duty Lawyer Scheme to give free legal advice.  In that sense that error cannot be viewed as having been committed by an agent for which Madam Yip is the principal, but rather she was the victim of that erroneous advice.

59.  Despite that erroneous advice as to the limitation period which was given some time in December 2007, Madam Yip did approach the Legal Aid Department in January 2008.  As a result the present Writ was issued on 11^th February 2008, being 52 days outside of the limitation period.

60.  Given the matters stated above and all the attendant circumstances, I would have thought that this is a unique case in itself and that these are “very special circumstances” which a court ought to have regard to when dealing with the question as to whether good reason had been shown for the delay.

61.  The judge failed to adequately deal with these matters and thereby had not exercised the discretion which he was required to do in coming to his decision.

62.  As for the second stage test, I agree with all that has been said by Hon Le Pichon JA and there is nothing which I wish to add to what has already been said by her ladyship.

Hon Wright J:

63.  I have had the opportunity of reading the draft judgments of Le Pichon JA and Suffiad J.  For my part, I would not be prepared to disturb the judge’s finding, which appears to me to have been exercised on sound principles.

64.  The legislation which creates the two-year limitation provision, s. 7, Cap. 508, is consequent upon international treaties and is in the same or substantially similar terms as legislation in other jurisdictions.  The relief that the plaintiff sought was to deprive the defendants of a statutory defence which had already accrued to them.  To lightly grant that relief would be to render the statutory provision ineffective.  In order to succeed, a plaintiff must show “good cause” or “good reason”: as Sachs LJ explained in Jones v Jones [1970] 2 QB 576 at 586-587:

“Where it is desired to deprive a defendant of his ability to plead a Statute of Limitations, naturally the good cause to be put forward must be strong.”

65.  A chronology of relevant events, extracted from the various affirmations, annexures and documents before the judge, is:

21 December 2005:	barge owned by 1st defendant collides with a launch owned and being helmed by the deceased
30 December:	Chow Tak-ming (plaintiff’s son) makes statement to Marine Police
“in 2006”:	plaintiff’s brother dies in a marine accident
22 March:	coxswain of barge makes statement to Marine Police
26 July 2006:	publication of the Marine Department's report into the collision
9 October 2007:	Department of Justice writes to plaintiff indicating that no criminal charges would be instituted against the coxswain of the barge
“in October”:	plaintiff and children “agree to make claim”
“around November”:	plaintiff’s son asked by plaintiff to discuss claim with district councillor
“around December”:	plaintiff’s son meets solicitor Sammy Ip for free legal advice, arranged by a district councillor: at that meeting Ip is said to advise that a three-year limitation period applies to the claim
20 December:	cause of action expires by virtue of s.7, Cap. 508
“early January 2008”:	plaintiff applies for legal aid (2nd affirmation of plaintiff)
“mid-January”:	plaintiff applies for legal aid (affirmation of Nick Lee – Legal Aid Department)
30 January:	Legal Aid granted to the plaintiff
1 February:	in rem writ issued
11 February:	the writ in this action issued
14 July:	Holman Fenwick Willan instructed by Legal Aid Department to act for plaintiff
23 August:	plaintiff’s solicitors write to 1st defendant requesting it nominate a process agent in Hong Kong to accept service of proceedings
8 October:	in rem action discontinued – barge scrapped
	“by November”: the quartermaster retires from and the master and crewmember on board the barge at time of the collision had both leave the employment of 1st defendant
14 November:	Rule B attachment order granted in the United States District Court for security
before 28 November:	1st defendant retains DLA Piper in respect of the United States proceedings
28 November:	DLA Piper replies to letter dd. 23 August asserting claim is time barred
4 December:	copy of the writ delivered to DLA Piper for their “information"
17 December:	leave granted to issue and serve writ out of the jurisdiction
31 December:	1st defendant files opposition to Rule B attachment order
15 January 2009:	1st defendant’s solicitors informed arrangements being made for service of writ in PRC
19 January:	12 months extension for service of writ granted
18 February:	before service, 1st defendant’s solicitors acknowledge service

66.  I concur that the approach advocated before the judge, that set out in The Albany and “Marie Josaine” [1983] 2 Ll LR 195, remains an sound exposition of the appropriate approach where the exercise of discretion for the extension of validity of a writ is concerned. Sheen J said at 196:

“Under the proviso to s. 8, it appears on the surface that there is a wide discretion and that I should take into account all the circumstances of the case. It seems to me that the relevant circumstances to take into account are these. First, the degree of blameworthiness… Second, the length of the delay…

Next, it is relevant to consider whether the circumstances which caused the delay were beyond the control of the party who has been dilatory, and whether there are very special circumstances…

[197] A further consideration…is whether…I would be able to do justice between the parties.” [my emphasis]

67.  In The “Al Tabith” and “Alanfushi” [1995] 2 Ll LR 336 Hirst LJ noted, at 339, that the judge below, again Sheen J:

“As a matter of law, [had] directed himself that the proper test is that:

The Court will only extend the period of limitation if in all the circumstances of the case there is good reason for doing so.

In the light of the authorities to which I am about to refer Mr Charlton QC, on behalf of the appellants, accepts that is a correct statement of the law” [my emphasis]

68.  Hirst LJ went on to quote from the judgment of Sheen J.  The following passage is of particular relevance:

“It seems to me that plaintiffs who seek to establish that there is good reason to extend the normal period of limitation must show that their failure was not due to their own mistake. It cannot be a good reason for extending the time limit that the defendants are unable to show that there would be any specific prejudice to them in conducting their defence.”

for, in arriving at his decision, Hirst LJ later said of this passage [342]:

“It follows that in my judgment Mister Justice Sheen’s ratio... was… sound in law as a matter of general principle. Furthermore, the first sentence... which lies at the very heart of the … reasoning and which states categorically that plaintiffs must demonstrate that their failure was not merely due to their own mistake, is unimpeachable. Mere carelessness has never been a good reason for an extension.”

69.  In The “Al Tabith” the court recognized that the “correct approach” when considering whether or not to extend the validity of a writ had been authoritatively laid down in four decisions: Kleinwort Benson Ltd v Barbrak Ltd [1987] 2 Lloyd’s Rep 1; [1987] A.C. 597; Waddon v Whitecroft Scovell Ltd [1988] 1 W.L.R. 309; Baly v Barrett [1988] N.I. 369; and Dagnell v Freedman [1993] 1 W.L.R. 388.

70.  In Kleinwort Benson Ltd Lord Brandon stated at 622-623:

“The question then arises as to what kind of matters can properly be regarded as amounting to “good reason”. The answer is, I think, that it is not possible to define or circumscribe the scope of that expression. Whether there is or is not good reason in any particular case must depend on all the circumstances of that case, and must therefore be left to the judgment of the judge...” [emphasis supplied]

71.  Hirst LJ in The “Al Tabith” noted that in Waddon Lord Brandon had summarized the applicable principles laid down in Kleinwort Benson as being:

“(1) On the true construction of (the section) the power to extend the validity of writ should only be exercised for good reason. (2) The question whether such good reason exists in any particular case depends on all the circumstances of the case. Difficulty in effecting the service of the writ may well constitute good reason but it is not the only matter which is capable of doing so. (3) The balance of hardship between the parties can be a relevant matter to be taken into account in the exercise of the discretion. (4) The discretion is that of the judge and his exercise of it should not be interfered with by an appellate court except on special grounds of nature which is well established.” [emphasis supplied]

72.  Hirst LJ went on to point out that in Baly Lord Brandon had repeated that the decision-making process by the judge required two separate considerations:

“In the Waddon case the House corrected an apparent misunderstanding of principle (3) … by emphasising that the question of the balance of hardship between the parties can only arise if matters amounting to good reason for extension, or at least capable of so amounting, have first been established. In that case the balance of hardship between the parties may be a relevant factor in the exercise of the court’s discretion. But, if no matters amounting to good reason for extension, or capable of so amounting, have been established, the effect of principle (1) is that there is no room for the exercise of discretion at all, and the question of the balance of hardship between the parties does not therefore arise.”

73.  This approach was encapsulated by Hirst LJ who said at 342:

“At stage one the court must consider whether good reason for an extension has been demonstrated by the plaintiff, which is essentially a question of fact. If, and only if, the plaintiff succeeds at stage one in establishing good reason does the court proceed to stage two, which is a discretionary exercise involving value judgements including, where appropriate, the balance of hardship, which then enters the arena for the first and only time.”

which was echoed in the judgment of Russell LJ who said, at 343:

“Wherever the balance of hardship lies, it is, in my view, immaterial, unless and until the plaintiff overcomes the first hurdle which confronts him, namely of demonstrating some legally excusable lapse responsible for the delay.”

74.  It seems to me, with respect, that the four factors identified by Sheen J in The Albany were not intended to comprise a comprehensive and rigid framework to be applied in every instance but were an indication of matters which may properly be taken into account.

75.  What is required is that in arriving at a decision as to whether good cause exists the judge is to take into account “all the circumstances of the case”, the overriding theme which is consistent throughout the decisions.  That is understandable given the infinite variety of circumstances which may arise, differing from case to case, which a plaintiff may contend would justify a finding that good cause exists.

76.  Whilst I acknowledge that the judge did not, in terms, categorise the approach which he was adopting as being the “two-stage test” I am satisfied from a reading of the judgment as a whole that that is precisely the approach he followed.  He gave careful consideration to all the circumstances which gave rise to the delay and rejected those circumstances as satisfying him that good cause in fact existed.

77.  As was inevitable in view of his finding, he found himself unable to exercise his discretion to extend the time period: significantly, what he did not do was to find that he was able to exercise his discretion and then to do so adversely to the plaintiff.  He was aware of the correct approach which he was to adopt.

78.  At paragraph 12 of the judgment the judge found, correctly in my view, that:

“Whatever one's educational background, it would have been apparent from the outset that something wrong had happened. A large cargo vessel should not normally run into a small motor launch. There was nothing preventing Madam Yip from consulting the Legal Aid Department at an early stage, pressing them to look into the matter, and asking them to bring proceedings on her behalf. That is precisely what [she] did when the police investigation decided that there was insufficient evidence to prosecute....”

79.  This was not a matter where the plaintiff, albeit of advanced age and illiterate as the judge appreciated, was misled or, at least until October 2007 when she received the letter from the Department of Justice, misinformed.  She asserts that she regarded the publication of the Marine Department report as important, perhaps even fundamental, to her civil action and it is her case that she made a conscious decision to await the release of the report.  That report was, as a matter of fact, published in July 2006.  Whatever enquires might have been made on her behalf post that date were obviously wholly inadequate.

80.  It seems to me quite clear from paragraph 20 of the plaintiff’s affirmation that she was well aware of the existence of a potential civil claim: she says “I heard that if the quartermaster of the vessel was convicted, I would simply win the civil claim by relying on the criminal conviction”.

81.  Moreover, she plainly was aware of the fact that the legal aid may be available to support her claim for, albeit belatedly, she applied to the Legal Aid Department: nowhere in her affirmations does she say that she only became aware at a late stage, possibly after meeting between her son and the solicitor, of this facility being available to her.

82.  The plaintiff asserts in her affirmations that since the death of the deceased she has relied on her son to take care of her and, apparently, to pursue the claim.  The plaintiff describes her son’s meeting with the solicitor, at which she was not present, as “in around December 2007”.  Given that the claim expired on 20 December 2007, the date of that meeting with the solicitor is of importance.  The son therefore was the person in a position to have put before the court details of just what it was he had done and when he had done it - particularly, insofar as his dealings with the Marine Police and the solicitor are concerned.  Yet nothing of the kind was placed before the court which was being asked to grant an indulgence after the claim had already become time-barred.

83.  It was urged upon the judge that the conclusion of the Marine Department report was that the quartermaster of the barge had failed to give way and to keep a proper lookout.  Implicit, therefore, was that the plaintiff must have a very strong case indeed against the defendants given the nature of the claims being pursued.  All the more reason to initiate the claim at an early stage rather than, for whatever reason, to do nothing other than make inadequate enquiries for such an extended period of time.

84.  The judge’s finding that the defendants had shown prejudice as a result of the delay was criticised by the appellant.  That criticism does not seem to me to be well founded.  The 1st defendant specifically asserted, on affirmation, that it had only received notification of a potential claim for damages for the first time on 20 November 2008.  The assertion in the affirmation of WU Pui-sze that Holman Fenwick Willan had sent a letter dated 23 August 2008 to the 1st defendant which had not been returned and, consequently, “there is no reason why the first defendant did not receive and read that letter in August 2008” was considered and dealt with by the judge although it may be thought that the assertion on behalf of the plaintiff is little more than speculation gainsaid by the direct assertion in the affirmation on behalf of the 1^st defendant.

85.  More to the point is the fact that the 1^st defendant asserts that the three persons on board the barge who might have been able to testify on its behalf had either resigned or left its employment “by November 2008”.  It further asserts that it had attempted to make contact with the witnesses but that, up until the time of the affirmation, July 2009, it had been unsuccessful.  True, it may have been able to have furnished greater detail as to precisely the date of retirement/cessation of employment of the three crew members and of the nature of its enquiries but it must be a commonsense that when there are only three witnesses to an event known to a party to proceedings, and it has been unable to contact any of them then, prima facie, that party will be prejudiced.

86.  I do not believe that the judge erred in coming to the conclusion that he did on the question of prejudice which was an appropriate factor which he was entitled to take into account when deciding whether the plaintiff had shown good cause.

87.  In my judgment, the judge appropriately considered all the circumstances of the case and correctly concluded that the plaintiff had not shown good cause for an extension. He properly appreciated that he was “unable to exercise [his] discretion to extend the two-year time limit” rather than exercising it and doing so against the plaintiff.

88.  I would dismiss the appeal.

Hon Le Pichon JA:

89.  The appeal is allowed by a majority.  There will therefore be an order as proposed in §§ 45 to 46.