Maritime claims – limitation decree – extension of deadline under decree for additional claimants to file claims against limitation fund – whether claims time-barred under s. 7(1) – whether claim “action” within meaning of s. 7(1)
After a collision with P’s vessel (The Eleni) in Vietnamese waters on 7 November 2013, D1’s vessel (The Heung-A Dragon) sank with all its cargo. P admitted and agreed liability with D1 at 70:30 respectively. P brought a limitation action against D1 and three other potential claimants (D2–4). On 14 May 2014, P obtained a decree of limitation under the Merchant Shipping (Limitation of Shipowners Liability) Ordinance (Cap. 434) which applied the Convention on Limitation of Liability for Maritime Claims 1976 (the “1976 Convention”) (the “Decree”), P constituted the limitation fund (the “Fund”). In mid-2015, well after the expiry of the extended final deadline of 28 January 2015 under the Decree for filing claims, but about six months before the expiry of the two-year limitation period under s. 7(1) of Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Cap. 508) (the “Ordinance”) for claiming damages arising out of a collision at sea, D2–4’s solicitors (“S“) received instructions from some 22 additional claimants overseas including from the PRC and Vietnam (“Cs“) in respect of further claims against P. On 6 November 2015, one day before the expiry of the s. 7(1) limitation period, D2–4 and Cs filed protective writs of summons against P. On 14 October 2016, S sought an extension of the deadline under the Decree for D2–4 and Cs to file claims against the Fund. D1 objected, arguing that Cs’ claim against the Fund was statute-barred under s. 7(1) of the Ordinance, as “an action” to enforce a claim or lien in s. 7 did not involve only the issue of a writ but included the filing of a claim pursuant to a decree in the reference to the Registrar for decision under O. 75 r. 41 of the Rules of the High Court (Cap. 4A) (the “RHC”). Under Art. 13(1) of the 1976 Convention, any person having made a claim against a limitation fund shall be barred from claiming against any other assets of a person by or on behalf of which the fund had been constituted.
Held, granting leave to D2–4 to file their claims in the reference to the Registrar out of time, that:
- An “action” in s. 7(1) of the Ordinance meant an action to enforce any claim or lien against a vessel or its owners. On the constitution of the limitation fund, the vessel was released and the maritime lien for collision damage ceased to exist. Thus, the reference to the Registrar in which Cs sought to participate was not an action within s. 7(1), but an action against the Fund and thus, the s. 7(1) time bar did not apply.
- The deadline under a limitation decree was a procedural and administrative time limit. It did not override the s. 7(1) limitation period so that the defence of time bar was unavailable to a defendant. The fact that the administrative deadline expired before the statutory limitation period was alone a good reason for granting an extension of time under the decree.
- If, as here, a claimant had commenced an action against the shipowner within the statutory time limit, but filed his claim in the reference after the administrative deadline expired, leave to extend that deadline was required and, subject to showing good reasons for the delay and lack of prejudice to other claimants, such leave invariably would be granted.