Copies of many of the decisions referred to can be obtained from the web site of the Canadian Legal Information Institute. At this site, these cases can also be noted up using the Reflex Record to determine whether they have been changed upon appeal. Contracts - Agreement with Processor - Implied Terms re Liability for shortfall Ocean Fisheries Ltd. v. Mitchell [2006] B.C.J. No. 994, 2006 BCSC 713 (link) This case involved an agreement between a herring fish harvester and a fish processor whereby the fish processor advanced money to the fish harvester in exchange for an agreement to deliver fish. The agreement did not address the issue of what would happen if there were not enough fish landed to cover the funds advanced. At trial evidence was lead that it was the custom of Ocean Fisheries Ltd. to require its fish harvesters to assume the risk of a shortfall. There was no evidence either way with respect to the practice of other fish harvesters. Based upon the conclusion that it would not be commercially sensible for a fish processor to advance funds and not expect to get it back, the court implied a term into the contract that the fish harvester would be liable for any shortfall. Contracts - Frustration by Change in Minister's Policy Doucette v. Jones [2006] N.B.J. No. 225, 2006 NBCA 63 See: Article about trial level decision as upheld by court of appeal: Licence Trusts and Frustration of Contracts (article). Contracts - Partnerships - accounting And Valuation Garland Estate v. Garland [2005] N.J. 260, 2005 NLTD 140 This case involved a application by the estate of a deceased partner for an accounting from the remain partner with respect to a fishing partnership. After reviewing the applicable law and the fishing assets, the court found that the property in question, including fishing licences, was partnership property , valued the property and ordered a pay out. Contracts - Existence and scope of partnership Caul v. Caul [2004] N.J. No. 398, 2004 NLTD 223 (Nfld. & Lab. S.C.) This case involved a family fishing business. After the father retired, the five sons sought direction from the court as to who if any of them were partners. After reviewing the law of partnership in general and as it applies in fishing enterprises, per Johannes Estate v. Sheaves (1996), 23 B.C.L.R. (3d) 283, the court held that two of the five sons were partners. Some of the factors that influenced the finding of partnership between the two brothers were:
Some of the factors that influenced a finding that the remaining three brothers were not partners were:
Contracts for lease of lobster licence - Mandatory injunction for return to original holder of licence Shand v. Goreham [2004] N.S.J. No. 512, 2004 NSSC 272 Contracts -
Bankruptcy Dugas (Re Bankruptcy) 2004 NBCA 15 This case involved a bankrupt fisher who because of poor health, arranged for another person to fish his crab licence. At issue was the extent to which the trustee in bankruptcy could collect the revenue received from the licence revenue. Although it was agreed that the licence itself was exempt from seizure (see s. 2 of the Bankruptcy Act), the court ordered that the revenue from the licence in 2003 was payable to the trustee. From that money the trustee was obliged to pay all necessary expenses relating to the fishery. Editor’ note: For other cases on Bankruptcy as it relates to fishing licences see: Re Bennet (1988), 67 C.B.R. (NS) 314 (B.C.S.C.); Waryk v. Bank of Montreal (1990) 80 C.B.R. (N.S.) 44 (B.C.S.C.); Caisse Populaire de Shippagan Ltee v. Ward [2000] N.B.J. No. 378 (N.B.Q.B.); Careen v. Fewer & Strathie Ltd. 2003 NLCA 33 (digested herein); RBC v. Saulnier 2006 NSCA 91 This case was upheld on appeal. See also 2004 NBQB 200 where an application for discharge is refused. Contracts –
Breach - Order Granting Trustee to Sign Licence Documents Practice –
Bankruptcy – Order Granting Trustee to Sign Licence Documents Careen v. Few
& Strathie Ltd. [2003] N.J. No. 164, 2003 NLCA 33 (Nfld. and Labrador C.A.)
This case involved the breach of agreement respecting the purchase and sale of a fishing licence. This agreement included a declaration of trust concerning the status of the licence prior to it being transferred to the purchaser. Prior to the licence being completely paid for and prior to the transfer of the licence, the vendor made an assignment in bankruptcy. In order to facilitate the completion of this transaction by the trustee, a court made an order authorizing the trustee to sign documents in place of the bankrupt vendor. Upon appeal by the bankrupt, the court refused to set aside the order and revised the order to provide that “any benefits, and any obligations necessary to claim those benefits, of the agreement . . . flow through to the trustee in bankruptcy, and for greater certainty, the authority of the trustee in bankruptcy to sign, in the place of [the bankrupt] any and all documentation required by the Department of Fisheries and Oceans, or others, to effect the transfer of fishing licences . . . is confirmed.” Editor’s note: It is not known whether or not D.F.O. recognized the validity of this order and transferred the licence? Post script: The use of trust agreements on the East coast of Canada has been challenged in a discussion paper released by D.F.O. entitled "Preserving the Independence of the Inshore Fleet in Canada's Atlantic Fisheries" December 2003 www.dfo-mpo.gc.ca/afpr-rppa. Contracts –
Enforcement of Agreement to Hold Licence as Nominee Practise
– Stay Pending Appeal of Order for Transfer of Licence D.E. & Sons Fisheries Ltd. v. Goreham [2003] N.S.J. No. 71, 2003 NSCA 31 (N.S.C.A.) This case involved an action by a fish processing company to enforce an alleged agreement by a fisherman to hold a lobster licence as nominee for the company. Upon a summary judgement application, the court gave judgement for the fish processing company and ordered the fisherman to execute all necessary documents to transfer the licence to a nominee of the fish processor. The fisherman appealed the decision and sought a stay of execution of the order pending appeal. The Court of Appeal applied the test set out in Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R. 92d) 341 (C.A.) to deny the stay for the following reasons:
Contracts – For
Sale of Licence Baker v. Smith [2002] N.S.J. No. 348; 2002 NSCA 98 (N.S.C.A.) This case involved an application for specific performance of a contract to whereby a purchaser would fish a vendor’s snow crab licence and purchase it when it became transferable. The Court of Appeal upheld the ruling of the trial judge refusing to enforce the contract for the following reasons:
Contracts – Sharing of Losses 458093
BC Ltd. v Dietterle et al., 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
– Leases – Constructive Trust Baines
v. Deluney [2002] N.J. 48
(Nfld. S.C.) 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 [1999] 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” [1993] F.C.J. 909 (F.C.A.)
affirming [1993]1 F.C. 36. and my article in the Fisheries Papers section of
this web page entitled, “Licence Trusts”. Contracts
– Trusts over fishing licences Fish
Reduction Ltd. v. Molone [1997] N.S.J. NO. 467 (N.S.C.A.) 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 - Right of First Refusal Native Citizens Fisheries Ltd. v. James Walkus Fishing Co. (27 July 1998) No. C884030 (B.C.S.C.) (Downs J.) 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 - Frustration - Contrary to Public Policy Gaudet v. Landry Estate (2 June 1998) No. N/C.140/93 (N.B. Q.B.) (Riordon J.) 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. (10 December 1996) No. M/C/663/94 (N.B.Q.B.) (Dodin J.) 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
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