On 6 October 1918, the Otranto, then under requisition to the Admiralty, and the Peninsular & Oriental Steam Navigation Co (P&O) liner Kashmir collided. Both vessels were transporting US troops to Europe. The Otranto sank with a loss of over 400 lives. Prior to the collision with the Kashmir, the Otranto had had a collision with the French sailing vessel Croisine. The Croisine sank and its crew were taken on board the Otranto. Some of the crew of the Croisine lost their lives in the collision between the Otranto and the Kashmir. An agreement had been come to within the prescribed time whereby the rights of the relatives of the deceased French sailors were preserved without going through the formality of issuing writs, but no sums had in fact been paid in respect of the loss of life claims.

The Admiralty sued the owners of the Kashmir. On 21 May 1920, it was held that both vessels were equally to blame for the collision: Lords Commissioners of the Admiralty (HMS Otranto) v Owners of the Steamship Kashmir (1920) 3 Ll L Rep 240. This was upheld on appeal on 7 December 1920: Admiralty (HMS Otranto) v Kashmir (1920) 5 Ll L Rep 307 (CA).

In January 1921, limitation proceedings were instituted on behalf of the Kashmir. A limitation decree was made on 11 April 1921, giving leave to P&O to give bail for claims for loss of life or personal injuries. The decree limited the time for bringing in claims to three months from the date thereof, but the court gave liberty to apply within the three months to extend the time for bringing in claims. The decree also directed advertisements in three newspapers including the New York Times: see Kashmir v Otranto (1921) 7 Ll L Rep 19.

In May 1922, the US Government instructed their London agents to institute proceedings on behalf of the representatives of the deceased soldiers. There was more delay in obtaining the particulars as to the various claimants.

On 5 December 1922, Mary Trimpe, the mother of one of the deceased, issued a writ in personam against P&O. She claimed that the defendants' negligence in and about the navigation of the Kashmir caused her son's death and claimed damages. The defendants appeared under protest. She applied under s 8 of the Maritime Conventions Act 1911 (UK) (the MCA) for leave to maintain an action notwithstanding the time bar on the ground that until informed of the fact by the US Government she was unaware that she had any right of action until the summer of 1922. She argued that no injury will be done to anybody - other than the defendants; that no competitors to the fund will be prejudiced; and that there had been no laches on the part of the plaintiff or of the tentative plaintiffs.

The defendants argued that the plaintiff's ignorance of her right of suit was insufficient reason for extending time. Besides, if the time-bar action could proceed, the defendants and the relatives of the deceased French sailors would be prejudiced because some 400 representatives of US soldiers would be competing against the limited fund. The plaintiff argued the Court could exercise its discretion in such a way to let the French have a first claim upon the fund, and that the US should only rank as claimants to the balance.

At first instance, Hill J refused to extend neither the time during which an action might be brought by the plaintiff against the defendants, nor the time within which a claim might be made against a fund which is in Court in a limitation suit brought by the defendants on admitting their liability: The Kashmir [1923] P 85 (CMI2689). The plaintiff appealed.

The appellant argued that Hill J was misled by the observations of Lord Parker in The James Westoll [1923] P 94 (CA) (The James Westoll) into holding that there was a heavy onus on the applicant for the exercise of the Court's discretion, and accordingly refused to exercise his discretion under a misapprehension. There were no merits in the application in The James Westoll and it was obvious that MCA s 8 was expressly designed to shut out a belated claim under such circumstances. It was true that Lord Parker said that to allow a statute-barred action to proceed might cause serious inconvenience and injustice to defendants. But that would follow in every case in which the discretion was exercised in a plaintiff's favour. All the plaintiff knew was that her son had been drowned at sea. It was war time; the circumstances of the loss of the transport would have been concealed; and unless she had seen the advertisement for claims in the limitation proceedings which was inserted in the New York Times - a paper which does not circulate in Illinois, US - she could not have known that she ought to file her claim before 11 July 1921. Claims against a fund paid into Court in a limitation action are not necessarily excluded by the fact that the time fixed by the order of the Court for filing claims has expired: The Zoe (1886) 11 PD 72; and the Court, in the limitation proceedings, gave liberty to apply for an extension of time: see also The Disperser [1920] P 228. In any event, the period of one year fixed for bringing in life claims under Lord Campbell's Act is extended to two years by MCA s 8: The Caliph [1912] P 213 (The Caliph). The appellant argued that it had not been guilty of negligence, nor of laches.

The respondents argued that the Court was not bound by The Caliph, which was wrongly decided.

Held: Appeal dismissed.

In this case, a long time had elapsed since the two-year time limitation imposed by MCA s 8.

The Court found it unnecessary to decide whether The Caliph was rightly decided. The Court assumed that it was there rightly decided that the limitation of time for bringing an action under Lord Campbell's Act is, since the passing of the MCA, two years, and not one year, as it was before.

This plaintiff wishes to assert a right under Lord Campbell's Act. Before the MCA she could not possibly have done so, because the action would have been irrevocably barred after 12 months.

But assuming that the period of limitation is two years with power in the Court to extend it, it was argued that the power ought to be exercised because the appellant was living in one of the middle States of America and did not hear, and could not hear of what had happened, and that all she knew was that her son had been lost at sea. It was also argued that the British authorities concealed the loss of the Otranto, which was a transport, so far as possible. Hill J has held that these grounds are not sufficient.

The Court should not interfere with Hill J's exercise of discretion unless very strong grounds exist. Hill J did not proceed upon any wrong principle. Hill J was correct in stating and applying the principle drawn from The James Westoll ie that the defendant's limitation defence 'must not be interfered with unless there is good reason'. Although the facts in The James Westoll were different, the Court rejected the appellant's argument that Hill J was misled by the facts in The James Westoll.