Limitation Periods for Causes of Action falling within the Admiralty Jurisidiction of the New Zealand High Court
Introduction
In Ladd v Carr [1] the New Zealand High Court confirmed that the statutory two year limitation period for claims arising out of vessel collisions applies whenever the proceeding is one in which High Court has admiralty jurisdiction. The limitation applies whether the plaintiff chooses to bring the claim in the High Court or in the District Court as long as, under the Admiralty Act, the High Court would have jurisdiction. The Court also noted that the six year limitation period under the Limitation Act 1950 is explicitly excluded for claims within the admiralty jurisdiction which are enforceable in rem. On 1 January 2011, the new Limitation Act 2010 will come into force. The new act does not contain an exclusion for claims enforceable in rem and the six year time limit will apply to such claims unless another more specific limitation applies. The specific limitation for collision claims will still apply.
Background
The High Court of New Zealand has jurisdiction over admiralty claims in rem and in personam under the Admiralty Act 1973. The District Courts have no jurisdiction in rem but have jurisdiction in personam for claims of up to $200,000 that fall within the admiralty jurisdiction conferred by the Admiralty Act.
Many causes of action in New Zealand have limitation periods specified under the Limitation Act 1950. For example, unless otherwise provided, actions founded on simple contract or on tort cannot be brought after the expiration of six years after the cause of action accrued. If another enactment contains a different limitation period, it will override the general limitation periods set out in the Limitation Act. For example, under section 97 of the Maritime Transport Act 1994, no action can be brought to enforce any claim against a ship or its owners if the action concerns any damage or loss to another ship that was caused wholly or partly by the fault of the defendant ship (i.e. collisions between vessels) unless proceedings are commenced within two years.
District Court Decision
In Ladd v Carr [2] Mr Ladd sought to bring a claim against Mr and Mrs Carr in relation to a collision between their respective motor launches on 30 December 2002. Mr Ladd brought the claim in the District Court. Mr Ladd claimed that, because of the Carrs' negligence, their boats collided at a bay in Kawau Island, about 45km north of Auckland, New Zealand. The Carrs disputed the allegation of negligence and said that the collision occurred because of a mechanical failure.
The Carrs also sought to strike out Mr Ladd's claim on the basis that it was time barred because it was brought outside the two year time limit specified under section 97 of the Maritime Transport Act. The Carrs were successful on this point and the District Judge struck out the claim.
High Court Decision
Mr Ladd appealed the District Court decision to the High Court on the basis that the District Court Judge erred in finding that section 97 applied. Section 97 is found in Part 8 of the Maritime Transport Act. Before both Courts, Mr Ladd argued that the two year limit did not apply as Part 8 of the Maritime Transport Act did not apply to this case.
Part 8 applies to proceedings by virtue of section 92 which relevantly reads:
This Part of this Act applies to every ship... in any circumstances in which the High Court had jurisdiction under section 4 of the Admiralty Act 1973.
Mr Carr argued that, as his claim was brought in the District Court, not the High Court, Part 8 did not apply by virtue of section 92.
On appeal, Justice Winkelmann, rejected Mr Ladd's argument. Justice Winkelmann summarised Mr Ladd's argument as attempting to give effect to section 92 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 section 3 of the Admiralty Act.
Her Honour agreed with the District Court Judge that the interpretation of sections 92 and 97 proposed by Mr Ladd is inconsistent with the ordinary meaning of the text of the relevant sections, and with their purpose. It would be unjust if in personam claims commenced in the High Court were subject to the two year limitation period but those commenced in the District Court were not. If the intent was to limit the application of Part 8 to proceedings in the High Court, then that could have been clearly stated.
Justice Winklemann also found, in any case, that the six year limitation contained in section 4(1) of the Limitation Act 1950 on which Mr Ladd was relying, is expressly not applicable to any cause of action within the admiralty jurisdiction of the High Court which is enforceable in rem (section 4(8), Limitation Act 1950). Proceedings in which an in rem claim could be enforced are excluded, as well as proceedings in which an in rem claim is being enforced. Mr Ladd's present claim could have been enforceable in rem, if it had been commenced in time, and therefore the section 4(1) six year limitation period would not have applied, in any case.
Accordingly, Mr Ladd's appeal failed. The High Court also upheld the District Court's ruling dismissing Mr Ladd's application for an extension of time to bring the claim.
Justice Winklemann also found, in any case, that the six year limitation contained in section 4(1) of the Limitation Act 1950 on which Mr Ladd was relying, is expressly not applicable to any cause of action within the admiralty jurisdiction of the High Court which is enforceable in rem (section 4(8), Limitation Act 1950). Proceedings in which an in rem claim could be enforced are excluded, as well as proceedings in which an in rem claim is being enforced. Mr Ladd's present claim could have been enforceable in rem, if it had been commenced in time, and therefore the section 4(1) six year limitation period would not have applied, in any case.
Accordingly, Mr Ladd's appeal failed. The High Court also upheld the District Court's ruling dismissing Mr Ladd's application for an extension of time to bring the claim.
Conclusion
Ladd v Carr is a useful reminder of the limitation periods which apply to causes of action falling within the admiralty jurisdiction of the New Zealand High Court and enforceable in rem. Claimants need to be aware that, currently, the usual six year limitation which applies to simple contract and tort claims does not apply to such causes of action. It also highlights that the general limitation periods contained in the Limitation Act 1950 do not apply when a specific period of limitation is prescribed in an another enactment. Presently, there is no general statutory time limitation period for causes of action falling within the admiralty jurisdiction of the High Court which are enforceable in rem. The equitable doctrine of laches applies and specific time limits apply to certain admiralty claims by statute or contract, for example in collision cases or where the Hague-Visby Rules apply. However, from 1 January 2011, the new Limitation Act 2010 will be in force and will apply to claims based on acts or omissions occurring after 31 December 2010.
The 2010 Act applies a six year limitation period to all money claims and no longer includes a general exception for causes of action falling within the admiralty jurisdiction of the High Court which are enforceable in rem. On the High Court's reasoning, the outcome of the appeal in Ladd v Carr would not have been different if the collision had occurred after 31 December 2010, as the shorter time limit of two years for claims in relation to collisions will remain under section 97 of the Maritime Transport Act 1994 and will prevail over the general money claims limitation period in the Limitation Act 2010. However, it is important to note that from 1 January 2011, the six year time limit will apply to claims based on acts or omissions occurring after 31 December 2010 and which fall within the admiralty jurisdiction of the New Zealand High Court unless otherwise excepted in another enactment or by contract.
[1] HC Auckland, CIV-2010-404-1211, 30 August 2010 (Winklemann J)
[2] DC Auckland, CIV-2008-004-3242, 2 February 2010 (DCJ Sharp)
Limitation Periods for causes of action falling within the admiralty jurisdiction of the New Zealand High Court — A vesion of this article appears in the International Law Office Shipping & Transport newsletter - 24 November 2010
byA specialist litigation firm