CDE SA v Sure Wind Marine Ltd Re SB Seaguard

An application to extend the statutory limitation period for maritime collision proceedings requires a two-stage approach. The claimant must first show a good reason why proceedings were not commenced in time. Only then does the court consider whether, in all the circumstances, it should exercise its discretion to grant an extension.

Ignorance of the limitation period, carelessness, continuing negotiations and the absence of a substantive defence do not ordinarily amount to a good reason. Negotiations will assist only where the defendant agreed, or clearly led the claimant to believe, that time would be extended or that the limitation defence would not be relied upon. The introduction of the CPR and its overriding objective did not displace this established approach.

The claimant sought an extension under section 190(5) of the Merchant Shipping Act 1995 to commence proceedings arising from a collision between the vessels SB Seaguard and Odyssée on 17 April 2011. The two-year limitation period under section 190 expired on 17 April 2013.

The claim form was issued on 23 December 2013, after the defendant had indicated that it would rely on the time bar. The application for an extension was made on 20 January 2014. The central issues were whether the court should apply the two-stage test in The Al Tabith [1995] 2 Lloyd’s Rep 336, whether the claimant had shown a good reason for the delay, and whether the CPR had altered the established approach.

1. Application dismissed. The claimant failed to establish a good reason for commencing proceedings outside the two-year period in section 190(3) of the Merchant Shipping Act 1995.
2. Section 190(5) confers a discretion which must be exercised in a principled manner. The court adopted the two-stage test approved in The Al Tabith [1995] 2 Lloyd’s Rep 336: first, the claimant must demonstrate a good reason for the extension; secondly, if that threshold is met, the court must decide whether it is proper to exercise its discretion in the circumstances.
3. The enactment of section 190 in materially similar terms to section 8 of the Maritime Conventions Act 1911 supported continuity of approach. CPR Part 7.6 applies to extensions concerning compliance with service requirements. It does not directly govern an application to commence proceedings after the statutory limitation period has expired. Its introduction, and the overriding objective in CPR Part 1, did not abolish the good-reason requirement.
4. The claimant’s lack of knowledge of the two-year time bar was not a good reason. The continuing negotiations were also insufficient. There was no agreement to extend time, no representation that the limitation defence would not be taken, and no conduct amounting to active misleading. A defendant has no duty to warn a claimant that time is running or that a time bar may be relied upon.
5. The claimant should have obtained legal advice at an earlier stage. Its delay of about three months after the limitation defence was raised before making the application also failed to demonstrate the promptness required when exercising the discretion. Had it been necessary to reach the second stage, the application would still have been refused.
6. The court therefore dismissed the application for an extension of over eight months to the statutory limitation period.