Maritime claim time bar almost leaves claimant in hot water

As shipping sector participants will be aware, maritime claims often have shorter statutory time limits to other claims in, for example, contract or common law. As an example, international liability conventions, such as the Hague Rules and Hague-Visby Rules, have one-year time limits on claims. Parties, or their advisors, who fail to take note of these time limits or otherwise do not request any necessary extensions, may be left without a course for recovery.

This is what happened in the case of Newcastle Port Corporation trading as Port Authority of NSW v Svitzer Australia Pty Ltd [2022] NSWDC 217. In this case, the plaintiff’s solicitor was under the misapprehension that a maritime claim arising from a collision was subject to Australia’s general six-year limitation period under section 14 of the Limitation Act 1969 (NSW) (Act) and comparable provisions in other Australian jurisdictions, and failed to issue proceedings in time. The plaintiff was then forced to seek an extension from the Court in order to commence proceedings out of time. Ultimately, the Court granted the extension.

What follows is an overview of the Court’s reasoning behind its decision to grant the extension and a summary of the key takeaways from this case.

When will a court grant an extension of a limitation period?

A plaintiff may seek an extension of the time within which to issue proceedings under the relevant State/Territory Limitation Act, which allow a court to grant an extension on any terms it sees fit. The discretion to grant an extension is wide and unfettered, with the ultimate question for the Court being whether the justice of the case requires the limitation period be extended. Consideration of what the justice of the case requires includes issues such as:

• the strength of the plaintiff’s claim
• any prejudice associated with the delay
• the length of the delay
• whether the plaintiff is itself responsible for the delay
• whether the plaintiff acted promptly in filing the application after the limitation period was raised.

Each of these considerations was considered by the Court in this case.

Strength of the plaintiff’s claim

In this case, the defendant had admitted liability for the collision, the subject of the maritime claim. This was given substantial weight by the Court. On this basis, it was accepted that, absent some significant prejudice likely to be suffered by the defendant, it would not be just and reasonable to shut the plaintiff out from pursuing such a claim.

Prejudice

Prejudice in this context is said to focus on whether the delay makes the chances of a fair trial unlikely. The defendants were unable to prove any such prejudice. The mere fact of facing a claim that would otherwise have been time-barred was held by the Court not to amount to prejudice in the sense required.

Length and explanation for the delay

The length of the plaintiff’s delay was relatively short, being just over four months after the expiry of the limitation period. As mentioned, the plaintiff failed to issue proceedings in time because neither its solicitors nor executives were aware of the unique maritime claim time bar.

The Court accepted that the length of the delay was not substantial and the reason for the delay was not due to knowing fault on the part of the plaintiff, who reasonably relied on their lawyer’s (unfortunately incorrect) advice.

Outcome and decision as to costs

The Court granted an extension to the plaintiff to file its statement of claim. But the extension did not come without cost – the plaintiff was ordered to pay the defendant’s application costs.

Key takeaways

• for shipping and maritime cases, it is probably best to engage lawyers experienced in the area and are familiar with matters such as special limitation periods of liability limitations, etc
• always take note of when the limitation period is about to expire and set reminders weeks and months ahead, so that you can request an extension from your opponents if necessary
• should you fail to issue proceedings within the relevant time period, you will need to apply to the Court for an extension of time to do so
• whether this extension is granted is ultimately a question of whether the justice of the case requires that the limitation period be extended
• if your application to the Court for an extension is successful, you will need to bear the defendant’s costs, unless their opposition was wholly unreasonable. Accordingly, in most circumstances, the defendants will defend any such application
• even if you successfully obtain an extension of time, it may be a costly exercise – so it pays to revisit our first key takeaway.

How we can help

Holding Redlich’s Transport, Shipping & Logistics team can assist you with understanding the various time limitations and any applications to the court for extensions. If you have any questions, please contact us below or send us your enquiry here.

Authors: Nathan Cecil & Melanie Long

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Nathan Cecil

Melanie Long

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