Ladd v Carr HC Auckland CIV 2010-404-1211

[2010] NZHC 1602

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-1211

UNDER  Section 72 of the District Courts Act 1947

IN THE MATTER OF     an appeal against a decision of the District

Court at Auckland

BETWEEN  ROY ROWE LADD Appellant

ANDPETER CARR First Respondent

ANDROBYN CARR Second Respondent

Hearing:         22 June 2010

Appearances: RAA Weir for appellant

P Rzepecky & O Collette-Moxon for First and Second Respondents

Judgment:      30 August 2010 at 4.00 pm

JUDGMENT OF WINKELMANN J

This judgment was delivered by me on 30 August 2010 at 4.00 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors:

Goodmans, Takapuna (V E Goodman) McElroys, Auckland (Matthew Flynn)

Counsel:
RAA Weir, Auckland

P Rzepecky, Auckland

LADD V CARR HC AK CIV 2010-404-1211  30 August 2010

[1]      Mr Ladd appeals the decision of Judge Sharp striking out his claim against the respondents, Mr and Mrs Carr.  That claim arises out of a collision between the parties’  respective  motor  launches  on  30  December  2002.    At  the  time  of  the collision Mr Ladd’s motor launch was anchored at Lidgard’s Bay, Kawau Island in the  Hauraki  Gulf.    He  claims  that  because of  the  Carr’s  negligence,  their  boat collided  with  his  as  they  were  attempting  to  anchor.    The  Carrs’  dispute  the allegation of negligence.   They say that the collision occurred because of a mechanical failure on their launch.

[2]      The Judge struck out the proceeding on the basis that by virtue of s 97 of the Maritime Transport Act 1994 the claim was time barred because it was brought outside of the two year limitation period.  The appeal is brought on the basis that the Judge erred in finding that s 97 of the Act applied or alternatively, if that limitation period did apply, in failing to provide Mr Ladd with an opportunity to make an application to the High Court under s 97(4) of the Act for an extension of time.

[3]      This  appeal  proceeds  by  way of  a  rehearing.    The  principles  of  Austin, Nichols & Co Inc v Stichting Lodestar [1] apply.

[1] Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 41.

First issue: does the two year time limit apply?

Statutory provisions

[4]      Section 97 of the Act relevantly provides:

(1)       Subject to subsections (3) and (4), no action may be brought to enforce any claim or lien against a ship (the defendant ship) or the owners of the ship, if the action concerns—

(a)Any damage or loss to another ship, or to cargo or freight of another ship, or to any other property on board another ship, that was caused wholly or partly by the fault of the defendant ship; or

(b)Damages for loss of life or personal injuries suffered by any person on board another ship, that were caused wholly or partly by the fault of the defendant ship,—

unless proceedings are commenced within 2 years after the date when the damage or loss or injury was caused.

…..

(3)       If, in any case to which subsection (1) or subsection (2) of this section  applies,  the  High  Court  is  satisfied  that  there  has  not  been  a reasonable opportunity to arrest the defendant ship—

(a)       At any port in New Zealand; or

(b)       Within New Zealand waters; or

(c)       Locally within the jurisdiction of the country to which the plaintiff's ship belongs or in which the plaintiff resides or has his or her principal place of business,—

within the period specified by subsection (1) or (as the case may require) subsection (2) of this section, the Court shall, on the application of the plaintiff, extend that period to an extent sufficient to give such a reasonable opportunity.

(4)       Without limiting subsection (3) of this section, in any case to which subsection (1) or subsection (2) of this section applies, the High Court may, in accordance with rules of Court, extend the period referred to in the appropriate one of those subsections to such extent and on such conditions as it thinks fit.

[5]      Section 97 sits within Part 8 of the Act.  Section 92 prescribes the application of Part 8 as follows:

This Part of this Act applies to every ship (whether registered or not and whether a New Zealand ship or not) in any circumstances in which the High Court has jurisdiction under section 4 of the Admiralty Act 1973.

[6]      Section  93  is  the  interpretation  section  governing  part  8  of  the  Act.    It contains definitions of the words ‘owner’ and ‘ship’ used in s 97 as follows:

Owner, in relation to a ship at fault, means every person who owns the ship or  any  interest  in  the  ship;  and  includes  every  other  person  who  is responsible for the fault of the ship; and in any case where, by virtue of any charter or demise or for any other reason, the owner is not responsible for the navigation and management of the ship, also includes every person who is responsible for the navigation and management of the ship:

Ship means every description of vessel (including barges, lighters, and like vessels) used or intended to be used in navigation, however propelled; and includes any structure (whether completed or not) launched and intended for

use as a ship or part of a ship; and also includes any ship used by or set aside for the New Zealand Defence Force.

[7]      It is also necessary to have regard to s 4 of the Admiralty Act 1973, because the effect of s 92 is to limit the application of Part 8 to those circumstances in which the High Court has jurisdiction under s 4 of that Act.  Section 4(1) of the Admiralty Act provides:

(1)      The  Court  shall  have  jurisdiction  in  respect  of  the  following questions or claims:

(a)Any claim to the possession or ownership of a ship or to the ownership of any share therein:

(b)Any question arising between the co-owners of a ship as to possession, employment, or earnings of that ship:

(c)Any claim in respect of a mortgage of or charge on a ship or any share therein:

(d)      Any claim for damage done by a ship:

(e)      Any claim for damage received by a ship:

(f)       Any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or of the wrongful act, neglect, or default of the owners, charterers, or persons in possession or control of a ship or of the master or crew thereof or of any other person for whose wrongful acts, neglects, or defaults the owners, charterers, or persons in possession or control of a ship are responsible,   being   an   act,   neglect,   or   default   in   the navigation or management of the ship, in the loading, carriage, or discharge of goods on, in, or from the ship or in the embarkation, carriage, or disembarkation of persons on, in, or from the ship:

(g)      Any claim for loss of or damage to goods carried in a ship: (h)      Any  claim  arising  out  of  any  agreement  relating  to  the

carriage of goods in a ship or to the use or hire of a ship:

(i)        Any claim in the nature of salvage (including claims for services rendered in saving life from a ship or an aircraft or in preserving its cargo, apparel, or wreck pursuant to the provisions of Part 17 of the Maritime Transport Act 1994 or any maritime rules made in relation to salvage]):

(j)        Any claim in the nature of towage in respect of a ship or an aircraft:

(k)       Any claim in the nature of pilotage in respect of a ship or an aircraft:

(l)Any  claim  in  respect  of  goods,  materials,  or  services (including stevedoring and lighterage services) supplied or to be supplied to a ship in its operation or maintenance:]

(m)      Any   claim   in   respect   of   the   construction,   repair,   or equipment of a ship or for dock or port or harbour charges or dues:

(n)      Repealed.

…

Mr Ladd’s argument

[8]      Mr Ladd’s argument in this Court is the same as that made before Judge

Sharp.  It is that s 92 is to be given effect as if it read:

This part applies to every ship …. in any circumstances in which the High Court  has  jurisdiction  and  is  exercising  jurisdiction  under  s  3  of  the Admiralty Act 1973.

[9]      If the italicised words are read in to the text, then when proceedings are before the District Court which fall within the parameters of s 4 of the Admiralty Act

1973 the usual six year limitation period for negligence claims will apply because the High Court is not exercising jurisdiction under s 35 of the Admiralty Act.  It is argued that such a reading is appropriate because claims filed in the High Court admiralty jurisdiction are likely to involve true questions of admiralty law such as claims for liens against ships, issues of arrest or complex international conflict of law issues.  The legislative purpose behind s 97 is to ensure that those types of claims are dealt with within the two year limitation period prescribed for such cases because the exercise of in rem type remedies against ships beyond that period would be undesirable.   By contrast there are no features  of this case that are peculiar to admiralty law.   The claim is really a domestic claim arising from the alleged negligence of the Carrs in attempting to anchor their vessel amongst other vessels. The appropriate interpretation of s 97, consistent with the provision’s purpose, is that there is no need to impose a shorter time limit in cases such as the present.

[10]     In this Court Mr Weir for Mr Ladd argued that this interpretation is consistent with s 4 of the Limitation Act which creates the six year limitation period for tort actions, and in particular with s 4(8) of the Limitation Act which provides:

Subject to the provisions of section 76 of the Shipping and Seamen Act

1952, subsection (1) of this section shall apply to an action to recover seamen's wages, but save as aforesaid this section shall not apply to any cause of action within the Admiralty jurisdiction of the High Court which is enforceable in rem.

Judge’s findings

[11]     The Judge directed herself as to the threshold that must be met before a claim will  be  struck  out,  noting  that  the  jurisdiction  to  strike  out  is  to  be  exercised sparingly.  No issue is taken with that part of her judgment.

[12]     In  relation  to  the  argument  that  the  limitation  period  only  applied  to proceedings in the High Court, the Judge said that to read the provisions in the way suggested for Mr Ladd would be to make a nonsense of the provisions.  She said that filing proceedings in the District Court saying that this is not an admiralty claim does not mean that it is not an admiralty claim.  Merely changing the name of something does not change its true nature.

Analysis

[13]     As the District Court found, the interpretation of ss 92 and 97 proposed by counsel for the appellant is inconsistent with the ordinary meaning of the text of the relevant sections, and with their purpose.   There is no coherent reason why the application of s 97 should be limited as Mr Ladd contends.  It would be invidious were it the case that in personam claims commenced in the High Court were subject to a two year limitation period, but those commenced in the District Court were not. Section  4  of  the Admiralty Act  creates  a broad  jurisdiction  which  includes  the present claim.   It is not limited to in rem claims but encompasses in personam claims.  If the intent was to limit the application of part 8 to proceedings in the High Court, then that could and would have been clearly stated.

[14]     Mr Weir’s reliance upon s 4 of the Limitation Act is misplaced.  Section 33 of  the  Limitation  Act  makes  clear  that  the  general  provisions  of  that  Act  are displaced by limitation provisions of other enactments.  Section 33 provides:

(1)This Act shall not apply to any action or arbitration for which a period of limitation is prescribed by any other enactment, or to any action or arbitration to which the Crown is a party and for which, if it were between subjects, a period of limitation would be prescribed by any other enactment.

(2)Any reference in any enactment to any of the enactments specified in Schedule1 to this Act or to any provision of any such enactment shall be construed as a reference to the corresponding provision of this Act

[15]     In any case, s 4(8) provides that the six year limitation contained in s 4(1) does not apply to any cause of action within the admiralty jurisdiction of the High Court  which  is  enforceable  in  rem.    It  emphasises  that  it  excludes  from  the application of s 4 of the Limitation Act, proceedings in which an in rem claim could be enforced, not only those where such a claim is being enforced.  In terms of s 5 of the Admiralty Act, Mr Ladd’s present claim would, had it been commenced within the relevant time period, have been enforceable in rem.

[16]     For all of these reasons the first ground of appeal must fail.

Second issue: should the Judge have allowed Mr Ladd to apply for an extension of time?

Judge’s findings

[17]     Having determined that the two year limitation period in s 97 applied, the Judge then considered the effect of s 97(4) which allows for application to be made to the High Court for extension of the two year time period.  She referred to Wilson v Nightingale Trading Ltd[2] and noted in reliance on that authority that the onus was on

[2] Wilson v Nightingale Trading Ltd HC AK CP88/99 4 August 1999, Durie J

the applicant to establish good reasons or substantial grounds for leave to be granted. She referred to the following passage from Murray v Morel & Co ltd[3]:

[3] Murray v Morel & Co Ltd [2007] 3 NZCR 721.

[33]I consider the proper approach, based essentially on Matai, is that in order to succeed in striking out a cause of action as statute-barred, the  defendant  must satisfy the  court that the  plaintiff’s  cause  of action is so clearly statute-barred that the plaintiff’s claim can properly be regarded as frivolous, vexatious or an abuse of process. If the defendant demonstrates that the plaintiff’s proceeding was commenced  after  the  period  allowed  for  the  particular  cause  of action by the Limitation Act, the defendant will be entitled to an order striking out that cause of action unless the plaintiff shows that there is an arguable case for an extension or postponement which would bring the claim back within time.

[34]In the end the judge must assess whether, in such a case, the plaintiff has presented enough by way of pleadings and particulars (and evidence, if the plaintiff elects to produce evidence), to persuade the court that what might have looked like a claim which was clearly subject to a statute bar is not, after all, to be viewed in that way, because of a fairly arguable claim for extension or postponement. If the plaintiff demonstrates that to be so, the court cannot say that the plaintiff’s claim is frivolous, vexatious or an abuse of process. The plaintiff must, however, produce something by way of pleadings, particulars and, if so advised, evidence, in order to give an air of reality to the contention that the plaintiff is entitled to an extension or postponement which will bring the claim back within time. A plaintiff  cannot,  as  in  this  case,  simply  make  an  unsupported assertion  in  submissions  that  s  28  applies.  A  pleading  of  fraud should, of course, be made only if it is responsible to do so.

[18]     The Judge then asked herself:

Has the plaintiff been able to persuade me that what looks like a statute barred claim should not in fact be viewed in that way because the plaintiff has an arguable claim for extension?  I cannot say that he has been able to because in fact he has produced nothing to support this contention.  I have no evidence of his reasons for his delay which would be highly relevant to whether or not the High Court would be likely to grant the extension that he would have to seek.

[19]     The Judge took into account that the ground of application for strike out was made known to the plaintiff through lawyers as early as 15 June 2009,  yet no application for extension had been filed.  She said although she did not expect that he should argue his extension claim before the Court he should nevertheless have adduced something before her to substantiate it so that the Court could draw a

conclusion that he would have a reasonably arguable case for extension before the

High Court.  Since he had not done so she struck out the statement of claim.

[20]     For Mr Ladd it is argued that it was wrong for the Judge to concern herself with whether the High Court would grant an extension application.   Having determined that s 97 applied, Mr Ladd should then have been given the opportunity to make his application.  It was unjust for her to pre-empt this Court’s consideration by striking out the claim.  Counsel for Mr Ladd argues that the Judge should have stayed the proceeding to enable firstly an appeal to the High Court to be heard against her determination that the proceedings were time barred, and secondly for the appellant to make an application pursuant to s 97(4) of the Act.

Analysis

[21]     The Judge’s approach to this issue was entirely correct.  She did not attempt to determine the issue of whether an extension would be granted if applied for.  The issue she addressed herself to was whether Mr Ladd had made out an arguable case for an extension.   As is plain from Murray when an application for strike out is brought on the basis of limitation, the plaintiff does not have the luxury of waiting for a ruling on whether or not the proceeding is time barred before placing the material before the Court to give an ‘air of reality’ to arguments that the plaintiff is entitled to an extension.  It is plainly correct that when delay is the issue the Court is considering, the plaintiff should be required to provide some evidence to show the basis of the application for extension.

[22]     Mr Ladd is represented by different counsel before this Court.  But he cannot argue that this omission is the fault of earlier counsel, and should not be visited upon him.  Even if such an argument were valid, Mr Ladd has at this very late stage still placed that material before the Court.  What cannot be disputed is that by the date of the hearing, Mr Ladd was more than six years late (eight years after the collision). Moreover, Mr Ladd was notified by the solicitor for Mr and Mrs Carr more than six months before the hearing that the Carrs would argue that the proceeding was time barred.   In the face of that, it was incumbent upon him to make a precautionary

application to the High Court for an extension, or at least to place the evidence before the District Court of the type the Judge identified.

[23]     The second ground of appeal therefore also fails.

[24]     Mr Ladd’s appeal is dismissed.  Mr and Mrs Carr are entitled to costs on a 2B

basis and disbursements.

Winkelmann J