Contracts - Case Summaries
The database contains 27 case summaries relating to Contracts . The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
Contracts – Leases – Constructive Trust
Baines v. Deluney, 2002 CanLII 54020
This case involved the issue of whether or not a shrimp licence transferred to a fisherman was transferred for the purpose of a sale or the purpose of a long-term lease. After reviewing all of the evidence, the court concluded that the transfer was for the purpose of a lease and not a sale. It then imposed a constructive trust on the fishing licence and ordered that the licence be transferred back. In imposing the constructive trust, the court applied the case of Cabot v. Hicks  N.J. 69 (Nfld. S.C.). It also adopted the following quote from Soulos v. Korkontzilas et al. (1997), 212 N.R. 1 (S.C.C.): “a constructive trust is the formula through which the conscience of equity finds expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.”
Editor’s note: For other cases involving constructive trusts on fishing licences see also The “Wa Yas”  F.C.J. 909 (F.C.A.) affirming 1 F.C. 36. and my article in the Fisheries Papers section of this web page entitled, “Licence Trusts”.
Contracts - Right of First Refusal
Native Citizens Fisheries Ltd. v. James Walkus Fishing Co., 2001 BCCA 719
This case involved a dispute over whether or not a right of first refusal to lease two roe herring seine licences was properly exercised. After reviewing a great deal of evidence and some related issues such as res Judicata, mistake of law, and misrepresentation, the court ruled that the rights of first refusal had been properly exercised.
Counsel for the Plaintiffs: M.P. Swanson, P. Thiele, G.Lloyd and I. Tuly-Barn
Counsel for the Defendant: B.S. McAlister and D.C. Henricks
Contracts – Sharing of Losses
458093 BC Ltd v. Dietterle, 2001 FCT 823
This case concerned the interpretation of an agreement between the Plaintiff and Defendant relating to the roe herring fishery. The Plaintiff alleged an agreement between it and the Defendant fishermen the terms of which required the Plaintiff to lease the Defendant fishing licences and to provide specific services such as packing and trucking. Expenses for such services were to be recovered “from the final price payable to the fisherman”. In return for providing the fishing licences and services, the Defendant would fish exclusively for the Plaintiff. The agreement further specified how the profits from the fishing would be split between the parties but was silent on what would happen in the event of a loss. Precisely such an event occurred after the 1997 fishery and the Plaintiff sought to recover from the Defendant a portion of the loss. The Prothonotary dismissed the Plaintiff’s claim holding that there was no provision in the contract imposing personal liability on the fishermen in the event of a loss and that the Plaintiff had failed to establish a “long standing and consistent practice” that such losses were shared.
Contracts – Trusts over fishing licences
Fish Reduction Ltd. v. Malone, 1999 CanLII 2314
This case involved an alleged arrangement whereby in order to get around a restriction upon the holding of fishing licences by companies, two companies arranged for an individual to hold a fishing licence in trust for the companies. In an action to enforce the alleged agreement, the court reviewed the evidence and declined to find such a trust. In doing so, the court said that “[o]ne starts with a basic premise that . . . the registered owner of the licence was the beneficial owner, and that in order to be successful, . . . [the parties alleging the trust] were obliged to establish there was a trust imposed . . .” (para. 24). Upon reviewing evidence that the fish companies normally reduced its trust arrangement to writing, the court took an adverse inference from the fact that the alleged trust agreement at issue had not been reduced to writing.
Upon appeal, the finding of the trial court (Carver, J.) was upheld.
Contracts - Frustration - Contrary to Public Policy
Gaudet v. Landry Estate, 1998 CanLII 12270
This case involved a dispute over an agreement to sell a lobster licence, a herring licence, a mackeral licence and a cod licence along with a small amount of fishing gear. An agreement was entered into with the vendor to sell the licence to a purchaser who was obtaining financing from and giving the use of the licence to his brother in law. A deposit of $3,000 was paid with a deferment of the balance of $30,000 until later so the vendor could attempt to defer tax on the sale. Prior to the final payment, the vendor was offered more money by another party and sold the licence to that party.
In an action by both the purchaser and the brother in law, the vendor attempted to argue that the agreement was void because it was in effect as sale to the brother in law which was against the policy of the Department of Fisheries and Oceans who would not allow such a transfer because the brother in law already held a lobster Licence. This argument was rejected by the court, without any real in depth reasons.
The vendor also attempted to argue that the contract of sale was frustrated because of a moratorium which the Department of Fisheries had imposed upon transfers of Cod licences. This argument was also rejected by the court on the grounds that the cod licence was of little importance or value as was demonstrated by the fact that it was surrendered to D.F.O. when the licence package was sold to the party who offered more money.
Damages were awarded to the purchaser equivalent to the difference in price between the original contract of sale and price which the licences were eventually sold for.
Contracts - rebates
Franoice C. Cormier Fish Inc. v. Bouctouche Fish Market Ltd., No. M/C/663/94 (N.B.Q.B.)
The Plaintiff was a commission fish buyer who purchased fish from lobster fishers on behalf of the Defendant, fish processor. It was standard practice in the lobster industry to pay a base price for lobsters which was later adjusted depending upon the price paid by the major processors. In two different years, there was a post season rebate paid by the major processors. In one of the two years, the Defendant paid a rebate to some of its customers, but not the Plaintiff. The Plaintiff sued the Defendant to recover the unpaid rebate.
The Court held that the requirement to pay a rebate was part of the contract between the commission buyer and the fish processor and gave judgment against the fish processor.
Counsel for the Plaintiff: Stephen J. McNally
Counsel for the Defendant: Yvon G. LeBlanc
Contracts - Lease of fishing Licence - Calculation of Damages - injunctions; constructive trusts
Genge v. Dredge, check citation 2008 NLTD 172
This case involved a dispute over the breach of an oral agreement to lease a shrimp fishing licence by way of failing to make the agreed upon lease payments. In granting judgement to the original licence holder, the court made a number of findings and orders including the following:
A fishing licence is an asset that is capable of being leased (para. 57);
Since the shrimp licence had become married to another licence, the court did not order specific performance of a term of the agreement requiring the licence to be transferred back to the original holder as the original holder would be unjustly enriched by receiving the licence that had become married the shrimp licence;
Since an injunction would prevent the licence from being utilized by either party, the court did not order in injunction;
The decision of the SCC in Saulnier v. Saulnier, 2008 SCC 58 "does not overrule and tends to support previous decisions . . . in which a s. 7(1) Licence has been considered property capable of being subject of a constructive trust;
A constructive trust was imposed by the court by way of order requiring the holder to the licence to hold the licence in trust for the original holder, prohibit the holder from transferring the licence to any other person other than the original holder or his estate and to transfer the licence to the original holder or his estate when and if DFO permits the licence to be transferred without being married to the other licence; and
A copy of the court's order is to be forwarded to the Area Licencing Administrator of DFO so that the constructive trust "may be endorsed or noted on DFO's records" (para 125).
Editor's note: Carwsell provided the neutral citation 2008 NLTD 292, however this citation does not appear to work on CANLII or on the Newfoundland and Labrador court website?
For other cases involving constructive trusts on fishing licences see also The “Wa Yas”  F.C.J. 909 (F.C.A.) affirming 1 F.C. 36. and my article in the Fisheries Papers section of this web page entitled, “Licence Trusts”.