Fisheries Practice

Case Summaries - (see also Recent Cases page)

Practice - Bankruptcy and Insolvency - Fishing Licences Treated as Assets of Estate - Saulnier Applied Retrospectively - No Estoppel Against Trustee

Caines Re.2010 NLTD 72

Practice - Bankruptcy and Insolvency Act s. 38 - Proceedings after Discharge Against Fishing Licence not Listed in Disclosure Statement

RE Burt Bankruptcy, 2009 NLTD 19 [link]

This case involved a fish company that had loaned money to an individual for the purchase of a fishing licence. The fish harvester made an assignment into bankruptcy, but did not list his fishing licence as an asset. Despite a request by the fish company, the Trustee in Bankruptcy refused to take legal proceedings against the licence. Based upon an apparent consent received from an encumbrance holder and the court taking judicial notice of the fact that "commercial fishing licences can be sold to satisfy outstanding debts and judgements and the Department of Fisheries and Oceans Canada DFO will issue new licences if it receives the appropriate documentation relinquishing and requesting re-issuance of fishing licences ..." the court granted an order under s. 38 of the Bankruptcy and Insolvency Act allowing the fish company to take proceedings against the discharged bankrupt. The court also enjoined the bankrupt from disposing of its licence pending completion of the legal proceedings to be commenced by the applicant against the licence.

Editor's note: For a related proceeding where the Superior Court confirmed the Bankruptcy Court order enjoining the Bankrupt from selling its licence see: Beothic Fish Processors ltd. v. Burt, 2009 NLTD 65 [link]

Fisheries Practice - PPSA - Bankruptcy - Whether or Not Fishing Licence is Property for the Purpose of PPSA and Bankruptcy and Insolvency act

Saulnier v. Royal Bank of Canada, 2008 SCC 58[link]

This case involved the holder of a lobster licence, a herring licence, a swordfish licence and a mackerel licence, the combined value of which exceeded $600,000. Upon the holder of the licence making an assignment into bankruptcy (after being placed in receivership by the bank), an application was made by the Royal Bank for a declaration that these fishing licences were intangible personal property so as to be encumbered pursuant to a general security agreement granted by the licence holder to the bank under the Nova Scotia Personal Property Security Act (PPSA). Since the value of the licences was sufficient to cover more than just the debt owed to the Bank, an application was also made by the Trustee in Bankruptcy seeking a declaration that the licences were property for the purposes of the Federal Bankruptcy and Insolvency Act (BIA). This would give the Trustee the ability to require the bankrupt to execute a transfer of the licences to a purchaser.

Judicial History

At trial, the court accepted evidence that these licences had a high commercial value, were regularly bought and sold, and sometimes accepted as security by financial institutions. After reviewing authorities including some obiter (non binding comments) of the Ontario Court of Justice as affirmed by the Ontario Court of Appeal in Sugarman v. Duca Community Credit Union (1988), 13 P.P.S.A.C. (2d) 117, affirmed (1999), 44 OR. (3d) 257 (Ont. C.A.), National Trust Co. v. Bouckhuyt (1987), 7 P.P.S.A.C. 273 (Ont. C.A.) and F.A.S. Seafood Producers Ltd. v. Her Majesty the Queen 98 TTC 2034 (digested herein), the Court concluded that "it is not necessary that the holder have the complete power of exclusion [as suggested in Bouckhuyt] to allow those rights to be property in the real and practical context" (para. 48 of trial level decision as quoted at para. 10). On the basis of this conclusion the court declared that the licences were intangible property for the purposes of the PPSA and property for the purposes of the B.I.A. (see 2006 NSSC 34)

Upon appeal, the appeal court rejected the trial judges finding that the licence holder had a property interest in the licence based upon the commercial reality of licences being treated as property. It held that the proper approach was to review the definition sections of both the BIA and PPSA.

With respect to the BIA, the court followed earlier decisions such as Re Bennett (1987), 67 C.B.R. (N.S.) 314 to hold that a licence holder's interest in earnings from a subsisting licence during its annual term were rights that could be assigned to a trustee in bankruptcy (para 378). With respect to a licence holder's right to future renewals of a licence, after reviewing a number of authorities that limit the discretion of the Minister of Fisheries to issue licences under s. 7 of the Fisheries Act, the court concluded that the licence holder's "rights to apply for, and resist an arbitrary denial of, a renewal or reissuance of his license are [intangible] 'property' passing to the trustee under each of ss. 67(1)(c) and 67(1)(d) of the BIA.' (para. 55). Accordingly, under s. 158(1) of the BIA, the licence holder was required to sign documents required by the trustee in bankruptcy to re-designate the licence to the trustee's designate.

With respect to the PPSA, for similar reasons, the court found that the licence holder's rights to the fishing licence were intangible property for the purposes of that Act. (see 2006 NSCA 91)

Decision of the Supreme Court of Canada

Upon further appeal to the SCC, the court conducted an analysis of the different approaches taken by the courts to the issue of whether or not a licence is property for the purposes of the BIA and PPSA.

When reviewing the traditional property approach, the court endorsed the movement to restrict Bouckhuyt to its facts and "consider traditional common law notions of property as less of a stumbling block . . ." The court also noted that a licence to fish is similar to a "profit of piscary" (a type of profit a prendre) which could be a type of "profit" referred to in the definition of property in s. 2 of the BIA. (para. 26-35)

When reviewing the regulatory approach, as adopted by the Sugarman case, the court was unable to find sufficient fettering of the Minister's discretion to convert a fishing licence into a property right. (para. 36-40)

When reviewing the commercial realities approach as adopted by the trial judge in Saulnier, although the court recognized that fishing licences have a commerical value (para. 23-4), it was not prepared to adopt this approach. (para. 41-2)

Preferred Approach

With respect to the BIA, the court noted that the definition of "property" was very broad with the "intention to sweep up a variety of assets of the bankrupt not normally considered 'property' at common law". This broad definition includes "any type of property . . . and profit . . . arising out of or incident to property". As such, "a licence to participate in the fishery coupled with a proprietary interest in the fish caught" would fall within the scope of that definition. (para. 43-9)

With respect to the Nova Scotia PPSA, the court noted that its purpose was to "enable holders of personal property to use it as collateral, and to enable lenders to predict accurately the priority of their claims against the assets in question (para. 19). As with the BIA, the court found that the definition of personal property, including intangible personal property, was sufficiently broad so as to include "a licence coupled with an interest at common law" (para. 50).

In response to concerns raised by the Attorney General of Canada, the court rejected the notion that the treatment of a fishing licence as property for the purposes of the BIA and PPSA could be raised in future litigation so as to fetter the Minister's discretion.

Editor's notes:

Beware that not all PPSA legislation has the same wording. For example in the British Columbia PPSA [link], the the term “intangibles” as defined by the Act includes a "licence", that is further defined to "mean" a right to harvest timber or Christmas trees. Query whether this definition excludes other types of licences?

See Also: Article dealing with the trial level decision.

For other cases involving the treatment of fishing licences upon bankruptcies see: Dugas (Re Bankruptcy) 2004 NBCA 15 (digested herein); 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).

Practice - Express trusts over fishing licences

Fleming Estate v. Fleming, 2008 NLTD 123, 854 A.P.R. 354, 278 Nfld. & PE.I.R. 354 [link]

This case involved a groundfish licence that was transferred by a father to one of six sons. After his death, the father's estate commenced an action alleging that the licence was held pursuant to an express trust to hold it for the benefit of the holder's other siblings. After citing recent jurisprudence involving express trusts over fishing licences, the court declined to find a trust on the grounds that the the plaintiff failed to establish certainty of intention and certainty of object.

Practice - Ascertainment of Income From Fishing Licences - Effect of Deliberate Obstruction of Evidence

Harnum v. Green 2007 NLCA 57, (link); leave to appeal denied [2007] S.C.C.A. 538

This case involved a fishing enterprise type partnership where one partner continued to carry on the enterprise after the break up of the partnership. This appeal concerned the following issues:

(1) Whether the trial judge erred in law in determining that the value of the assets, for the purpose of sharing between the partners, is the value at the time of distribution and sale of the assets rather than the estimated value as at dissolution;

(2) Whether the trial judge erred in determining the share of post-1999 income of the partnership payable to the departing partner on the basis of the estimates, without admitting the income tax returns of the partner who continued the business; and

(3) Whether the trial judge erred in ordering that the licences and the boat be sold.

With respect to item one (time of valuation), the appeal court ruled that the time of the valuation would be the time at which the assets are distributed. As a result the departing partner retained the benefit of an increase in value of the assets.

With respect to item two (entitlement to post break up income), the court ruled that "[w]here a partnership has existed and has either been dissolved, or if there has not been a formal dissolution but a partner has 'otherwise stopped being a partner', without a final settlement of accounts as between the partners, and one or more partners continue to use the assets, name or business connections and earn income, that income must be accounted for to the partner or partners who have not continued to make use of the partnership assets, name or business connections" (para. 60).

In this case, the only real income producing assets were the fishing licences. Since the partner that continued to carry on the business deliberately obstructed the court's ability to provide the other partner with an accounting, the court relied upon the unchallenged expert evidence of the departing partner regarding the the type of income that fishing enterprises of the same type normally earned during the relevant time period.

With respect to item three (order for sale of licence and vessel), since there was a true dissolution of the partnership, under the provisions of the Partnership Act, a partner is entitled to insist that the partnership property be sold to ascertain its true value.

Practice - Interlocutory Injunctions against the Crown
Judicial Review/Crown Liability - Interlocutory Injunctions and Declaratory Relief

Summerside Seafood Supreme Inc. v. Prince Edward Island (Minister of Fisheries, Aquaculture and Environment [2006] P.E.I.J. No. 32, 2006 PESCAD 11 (P.I.E.S.C. Appeal Div.) (link)

This case involved a fish processing plant that was refused a fish processing licence from the Provincial Minister of Fisheries because of its alleged indebtedness to the Provincial Government arising from a loan guarantee. The fish processor commenced a judicial review proceeding against the Government and its officials and then obtained an interim declaration that the fish processor had a right to have its 2004 processing licence issued to it and order that the licence be issued pending litigation.

On appeal by the Crown, the appeal court vacated the interim declaration on the grounds that it was unnecessary as an interlocutory injunction was available.

With respect to the issue of whether or not an interlocutory injunction should be issued, after a lengthy review of the applicable authorities on injunctions and related authorities on stays of proceedings, the court the court set out the following test:

All these comments suggest that it is time to set aside attempts to develop separate jurisprudence for mandatory versus prohibitory interlocutory injunctions or to make distinctions between interlocutory injunctions and stays of proceedings. Rather, there needs to be a focus on the principles applicable to all these analyses.

I would adopt the view that, while there must be a serious issue to be tried, to begin with all that is required is a finding that the issue is neither frivolous not vexatious. Once that is determined the court must consider the issues of irreparable harm and balance of convenience. Those latter two issues may be weak for the applicant, in which case it may be necessary to take another look at the seriousness of the issue to be tried. Where the case for the applicant appears almost certain to be found in his favor, then the other issues may not need to have a particularly strong weight in their favor, they could even be neutral. However, even where a judge is doubtful about the success of a case, but cannot find the issue to be frivolous, then irreparable harm to the applicant and/or overwhelming inconvenience to the applicant as opposed to very little inconvenience to the respondent, can decide the issue in the applicant’s favor. (para. 64-5).

Although the trial level judge granted an injunction, he did not state state what test, if any, he applied in granting the injunction. Accordingly, his decision amounted to an error of law. Since all of the material in support of the original application was before the appeal court, it considered the injunction application on its merits.

With respect to the first part of the three part test, although the material put forward was not strong, it convinced the court that there was a serious issued to be tried, because of the allegations that the discretion of the Treasury Board on whether or not to direct the minister to issue a processing licence was fettered by public announcements of the premier of the province. In addition, there was some evidence to suggest that the fish processor was not truly indebted to the province. However, given the existence of a strong privative clause, the existence of a serious issue to be tried was not sufficient to support an injunction without strong evidence of irreparable harm or balance of convenience.

In this regard, the Government provided no evidence of irreparable harm. Conversely for the fish processor there was evidence that: (1) the processor had been issued licences for the 12 previous years; and (2) the failure to obtain a licence would mean it could not hire its workers, process fish, meet the requirements of its suppliers and possibly go out of business.

Based upon all of the above, the appeal court was prepared to issue an interlocutory injunction. Although it was not prepared to order the government to issue a licence in the future, it granted an order enjoining the Minister of Fisheries, Aquaculture and the Environment from refusing to issue a fish processing licence to the fish processor on the basis that it was indebted to the province (para. 101).

Practice - denial of Application for Extension of Time to file judicial review application

Barnard v. Geof Regan, Minister of Fisheries and Oceans, Fisheries and Oceans Canada and Azulemar Fishing Ltd. 2006 F.C. 203 (reasons)

This case involved the ranking of Canadian fishing vessels on a list that allowed these vessels to participate in the U.S. tuna fishery. Under this list, it was anticipated that only the first 94 fishing vessels would be able to participate in this fishery in 2007 and thereafter. After being placed at 97th position on the list, the applicant appealed its ranking to the Minister of Fisheries by way of appeal to the Pacific Region Licence Appeal Board ("PRLAB"). Based upon a non binding recommendation from the PRLAB, the Minister refused to change the applicant's position on the list. Approximately three weeks after the thirty day deadline for filing an application for judicial review of the Minister's decision, the applicant filed an application for an extension of time. Shortly thereafter, Azulemar Fishing Ltd. was added to the proceeding as a respondent, as it occupied the 94th position on the list and would be unable to fish in 2007 if bumped off of the list by the applicant.

Upon hearing the application, the court denied the extension for the following reasons:

1) With respect to the existence of a reasonable explanation for the delay, the court concluded that the applicant did not form the intention to appeal until three weeks after the due date. Efforts to determine what is behind an impugned decision and determining what remedies to take do not constitute adequate explanations for delay.

2) With respect to the existence of an arguable case, the court concluded that judicial review of a decision not to vary a policy is not readily available.

3) With respect to prejudice, there was prejudice to the public in that there is a public interest in finality of decisions (Grenier v. Canada 2005 FCA 348). There was also clear prejudice to Azulemar Fishing Ltd., because it expended funds for the refit of its fishing vessel for the tuna fishery after the 30 day appeal period expired. This prejudice was compounded by the failure of the applicant to serve Azulemar with notice of its application in a timely manner.

Practice – No duty to pay interest on proceeds of sale of fish - Offences – Forfeiture – No duty to pay interest on proceeds of sale of fish - Aboriginal - Rights and Defences – No Duty to pay interest on proceeds of sale of fish

Gladstone v. Canada 2005 SCC 21

This case involved a quantity of herring spawn on kelp that was seized pursuant to s. 58(1) of the Fisheries Act (1970) and subsequently sold pursuant to s. 58(1) and paid into the consolidated revenue fund. After a successful appeal by the fishermen to the Supreme Court of Canada, the matter was eventually stayed by the Crown and the proceeds of sale were paid out to the fisherman eight years later pursuant to s. 73.1 of the Fisheries Act without interest. It was agreed that if interest were payable, it would be $132,000.

The issue before the Supreme Court was whether or not the Crown was required to pay interest on the funds for the period in which the funds were held.

Although there was a dearth of authority directly on point, the trial court canvassed a great deal of jurisprudence dealing primarily with non fisheries cases to reject all of the fishermen’s arguments and conclude that the Fisheries Act is a complete code and “in the absence of statutory authority there is no obligation on the Crown to pay interest.” (2002 BCSC 1447)

Upon appeal, the decision of the trial court was reversed in a decision written by Madam Justice Huddart. In making an order for the payment of interest, the court based its order upon a breach of fiduciary duty, though not one arising from the fact that the fisherman was aboriginal. The court classified the Crown as an “administrator of special purpose funds” who by virtue of its discretionary power and other factors became a fiduciary.

Upon further appeal, the Supreme Court of Canada reversed the B.C.C.A. and held that no interest was payable by the Crown. In doing so, it relied upon R. v. Ulybel Enterprises Ltd. [2001] 2 S.C.R. 867 in support of its finding that the Fisheries Act was a complete code dealing with the return of seized property. The Act provides for payment of interest in other circumstances (s. 71.1(2) and s. 79.4(1)), but not when the proceeds of seized items are returned under s. 73.1. Since no provision is made by the Fisheries Act for the payment of interest, no payment is required. In making its decision, the court rejected arguments based upon the requirements of the Financial Administration Act, unjust enrichment, fiduciary duty and trust. With respect to unjust enrichment, the court found that the provisions of the Fisheries Act referred to above fell into the "disposition of law" category of juristic reasons for an enrichment. With respect to breach of fiduciary duty, the court distinguished the case of Authorson v. Canada (2002), 58 O.R. (3d) 417 that had been relied upon by the B.C..C.A.

Practice - 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

Practice - Judicial review of decision of Provincial court judge for breaching rules of natural justice

Armstrong v. Gill [2004] B.C.J. No. 2392, 2004 BCSC 1480

This case involved a prosecution under the Fisheries Act. In the course of a pre-trial application by the defence for disclosure of Crown documents, the matter was adjourned so that the parties could exchange and file written submissions. Although written submissions from both parties were filed, for some unexplained reason only the Crown's submissions were provided to the judge hearing the motion. In the course of the subsequent hearing it became apparent that the judge had not received the written submissions of the defence and attempted to remedy the situation by hearing oral submissions from counsel for the defence.

Upon receiving an adverse ruling on the disclosure motion, the defence brought an application for certiorari of the ruling and an order of mandamus directing that the disclosure application be heard afresh before a different judge.

After reviewing the evidence and the applicable authorities, the court concluded that "an informed person viewing the events realistically and practically would concluded that in the circumstances that occurred here there was an appearance of bias" (para 39). Accordingly the requested remedies of certiorari and mandamus were granted.

Practice – Bankruptcy
Contracts - Bankruptcy - No discharge granted pending further payments of licence revenue

Dugas (Re Bankruptcy) [2004] N.B.J. No. 187; 2004 NBQB NO. 200

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).

This case was upheld on appeal.

See also 2004 NBQB 200 where an application for discharge is refused.

Practice - Liability of Crown for improper storage of seized items

144096 Canada (USA) v. Canada (Attorney General) [2003] O.J. No. 5014

Note: Although not a fisheries case, this case could be applicable to a case involving failure to maintain a fishboat that has been seized by the Department of Fisheries.

Practice – Release of Fishing Vessels from Seizure
Offences – Search and Seizure

R. v. McDonald 2002 NSCA 135 (N.S.C.A.) affirming 2002 NSSC 66

This case involved an application under s. 71(4) of the Fisheries Act on behalf of a number of First Nations fishermen to have seized gear returned pending trial on charges of illegal fishing. At issue was whether or not the Crown had to make application under s. 71(4) of the Act if they wished to retain seized gear for more than 90 days. The fishermen argued that such an application was always necessary, but the court held that such an application was only necessary if proceedings were not instituted within 90 days. The Motions Judge accepted the argument of the Crown and held that such an application was only required if proceedings were not commenced within 90 days.

Upon denying an application for certiorari against the decision of the trial judge, the court held that although “it seems there is a failure in the legislation to have the issue of interim possession of important items determined judicially”, in quasi-criminal matters such as Fisheries Act prosecutions there are no interlocutory appeals except in exceptional circumstances.

Upon appeal, the court upheld the decision of the motions judge. In doing so, the court refused to follow the obiter comments of the court in R. v. Hung Van Nguyen (2000) Surrey Registry No. 107078-01 (B.C. Prov. Ct.).

Editor’s Note: With respect to the obiter comments in R. v. Hung Van Nguyen, in a subsequent case the judge in R. v. Hung Van Nguyen also made a decision that was inconsistent with his prior obiter comments. For another case, which also holds that a Crown application is only required if proceedings are not instituted within 90 days, see: R. v. Peter Paul 2001] N.S.J. NSPC 1 (N.S. Prov. Ct. – Batiot C.J. Prov. Ct.) (digested herein).

Practice – Admiralty Jurisdiction

Roberts v. Andrews [2003] B.C.J. No. 1521, 2003 BCSC 1002 (Lowry J.)

This case involved an application to set aside the arrest of a commercial fish packing vessel. The Plaintiff alleged that gillnet herring licences supplied to a herring joint venture for vessels that caught fish and then delivered them to the fish packer were necessaries or services supplied to the packer. The court rejected this argument and struck the in rem part of the plaintiff’s claim for the following two reasons:

Based upon Radil Bros. Fishing Co. v. Canada (2001) 207 D.L.R. (4th) 82 (F.C.A.) (digested herein), the supply of fishing licences is not considered a necessary or services supplied to a ship; and
Even if the fishing licences or the services in providing them could be considered a necessary, they were not supplied to the arrested packing vessel, they were only supplied to the vessels that delivered fish to the packer.

Practice – Bankruptcy
Contracts - Bankruptcy

Dugas (Re Bankruptcy) [2003] N.B.J. NO. 210, 2003 NBQB 220

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).

This case was upheld on appeal. See: 2004 NBCA 15

Practice – Bankruptcy – Order Granting Trustee to Sign Licence Documents
Contracts – Breach - 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

Practice – Priorities Upon Judicial Sale

Canada v Neves (The “Kristina Logos), 2002 FCA 502, affirming in part 2001 FCT 1034

This was an appeal from an order of a motions Judge setting priorities to the sale proceeds of the Defendant vessel. The vessel had been seized by the Crown for violations of the Fisheries Act and was later arrested and sold at the application of the Crown. The claimants were the Crown, the mortgagee, and the co-owners of the vessel. The Crown claimed a priority for the costs of sale, the costs of maintaining the ship, for $50,000.00 ordered forfeited to the Crown and for a $120,000.00 fine imposed by the Supreme Court of Newfoundland for violations of the Fisheries Act. The Prothonotary granted the Crown priority ahead of the mortgagee for the costs of sale and for the $50,000.00 ordered forfeited. The Prothonotary refused to grant the Crown a priority for the $120,000.00 fine or for the costs of maintaining the vessel. The Prothonotary further ordered that the amount owing to the mortgagee should rank after the claim of one of the co-owners of the vessel to the surplus. On appeal the motions Judge altered the priorities. The motions Judge gave the highest priority to the Crown for the costs relating directly to sale. Second priority went to the mortgagee. Third in priority came the costs of the Crown incurred for the care of the crew. Fourth and fifth in priority, respectively were the claims for the $50,000.00 forfeiture and $120,000.00 fine. The balance of the fund was to be distributed to the owners of the ship. The Crown’s claim for the costs of preserving the ship were disallowed. On further appeal, the Federal Court of Appeal upheld the decision of the motions Judge except with respect to the $50,000.00 forfeited. With respect to the forfeiture, the Court of Appeal held that this was an in rem claim pursuant to s. 72(1) of the Fisheries Act and that pursuant to s. 75 of that act such a claim should be ranked in priority to all other claims.

Practice – Fixing of Security under S. 71(2) of the Fisheries Act
Offences – Forfeiture

R. v. Tammark 2003 BCPC 6m [2003] B.C.J. No. 93

This is not a fisheries case, but the decision of R. v. Hertel (1986) 32 C.C.C. 93d) 335 (B.C.S.C.) referred to herein, could be useful when interpreting s. 71(2) of the Fisheries Act. This section provides that “a court may order any fish or other thing seized under this Act to be returned to the person from whom it was seized if security is given to Her Majesty in a form and amount that is satisfactory to the Minister.” On the basis of Hertel, it could be argued that the portion of this section giving the Minister rather than the court the discretion to fix the amount of security is contrary to the doctrine of separation of powers and independence of the judiciary.

Practice – Stay Pending Appeal of Order for Transfer of Licence
Contracts – Enforcement of Agreement to Hold Licence as Nominee

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:

The applicant satisfied the first part of the test by establishing it had an arguable case on the appeal;
Since the applicant could be compensated in damages and the respondent appeared to have the financial ability to pay the damages, there was no irreparable harm; and
There were no exceptional circumstances, such as an egregious error on the face of the judgement, which would make it fit and just to grant a stay.

Practice – Application to Strike because Action is Judicial Review Dressed Up as Tort action
Judicial Review/Crown Liability – Damages for delay in Issuing Hake Licence

Oak Island International Group Ltd. v. Canada (Attorney General) 2003 NSSC 47; [2003] N.S.J. No. 79 (N.S.S.C.) (Edwards J.)

This case involved a Nova Scotia corporation involved in the business of fishing for silver hake and selling it to an offshore market. The company alleged that it was injured as a result of : (1) a delay in approving its fishing licence and quota in 1995; (2) it received a shortfall in its quota allocation in 1995; and (3) in 1996 it was denied a licence because it did not meet a 15 per cent Canadian processing requirement.

The Crown made a pre-trial application to strike the statement of claim on the grounds that under s. 28 and 18.1 of the Federal Court Act the Nova Scotia Supreme Court did not have jurisdiction because the action was really judicial review dressed up as a tort action.

In denying the Crown’s motion, the court applied the test set out in Horseman v. Horse lake First Nation [2002] A.J. No. 1020 (Q.B.) to the effect that the plaintiff need only show that it was not plain and obvious at this stage that its action was not based on a cause of action other than judicial review. In applying this test, the court reviewed the plaintiffs claims of: (1) abuse of public office; (2) interference with the respondent’s economic interests; and (3) interference with the Respondent’s economic relations to conclude that these were clearly issues of tort law and not within the scope of judicial review.

Editor's note: For more cases dealing with this issue see footnote 17 in the paper CROWN LIABILITY C.L.E. of British Columbia FEDERAL COURT PRACTICE UPDATE - 2003 by Brad Caldwell and Robin Whittaker.

Practice - Parallel Jurisdiction with respect to the seizure of fishing vessels of the Superior Courts under the Fisheries Acts and the Federal Court under its In Rem Jurisdiction

R. v. Ulybel Enterprises Ltd. 2001 SCC 56

This case involved a Canadian registered ship which was given a provisional registration in Panama without first obtaining a deletion certificate from the Canadian Registrar of Ships. It then fished in the NAFO fishing zone without a licence, which it could do legally if it was a foreign ship, but not as a Canadian ship.

Pending the trial, the ship was seized pursuant to section 51 of the Fisheries Act. During that time, it was also arrested by two claimants in two separate Federal Court admiralty proceedings. One claimant was a bank suing for default under a marine mortgage and the second claim involved a claim to title by some shareholders of the vessel’s owner. Both claimants arrested the vessel. The Crown intervened in one of the Federal Court proceedings and obtained an order that the vessel be released from arrest and sold pending litigation. The stated reason for the Crown’s application was to avoid the heavy costs being incurred by the Crown for the preservation of the vessel. Subsequent to the sale of the vessel, the owner of the vessel was convicted of fishing without a license and sentenced with a term of the sentence providing for forfeiture of $50,000 from the proceeds of sale.

Upon appeal, to the Newfoundland Court of Appeal one of the issues raised was whether or not the sale of the vessel prior to the determination of the criminal proceedings prevented the Crown from claiming forfeiture of the proceeds of sale of the vessel. The court analyzed sections 71 & 72 of the Fisheries Act and concluded that the legislation did not authorize the court to dispose of a seized vessel prior to trial and retain the proceeds of sale. The court concluded that by selling the vessel, the Crown had released it from detention which terminated any forfeiture rights the Crown had in the criminal proceeding pursuant to the provisions of the Fisheries Act.

Upon appeal to the Supreme Court of Canada, this decision was reversed. In doing so, the court relied upon the following principles of statutory interpretation to arrive at the following conclusions:

1. Using the grammatical and ordinary meaning of the words in section 72 of the Fisheries Act, the court concluded that an order of forfeiture could include the forfeiture of the proceeds of a fishing vessel.

2. From a review of the legislative history of the Fisheries Act, the court concluded that the 1991 amendments to the Act broadened the scope of the forfeiture provisions beyond that of forfeiture of proceeds of perishables.

3. Looking at the scheme of the Act, the court concluded: (a) section 489.1 of the Criminal Code (restitution of seized property) has no application; (b) a person charged under the Fisheries Act cannot rely upon the presumption of innocence to delay a person with an in rem action from obtaining his remedy and correspondingly, after a person charged under the Fisheries Act has been found guilty and the presumption of innocence is spent, there is nothing in the Fisheries Act that would immunize the proceeds of sale realized pursuant to a civil (presumably in rem) proceeding from forfeiture.

4. Looking at the legislative context, the court concluded that the words “any proceeds” in section 71(1) of the Fisheries Act are not limited to proceeds of perishables.

5. Looking at the legislative context, the court concluded that the bail provisions (s. 71(2) of the Fisheries Act were inconsistent with an Court of Appeal’s interpretation of the Act which concluded that the right to forfeiture was lost upon the vessel the Crown losing physical detention. In doing so the court noted that although the Act does not provide for forfeiture of a security deposit granted as bail, the right to forfeiture upon the posting of security was contractual. The Act should be interpreted so as to “harmonize the interest of the accused, the Crown, the employees and creditors that have an interest in getting productive, income-earning property back into circulation.

6. Looking at the legislative context, the court noted that parallel in rem proceedings were contemplated as demonstrated by section 75 of the Act which allows a person who has an interest in property ordered forfeited by the court to apply for relief from forfeiture. Although this is ordinarily done in a provincial superior court, it is also possible to do by way of in rem action in the Federal Court.

7. Looking at the legislative context, the “provisions of the Federal Court Act and the provisions of the Fisheries Act can and should be read as a consistent, harmonious scheme for the regulation of maritime matters.” For example, if a fishing vessel were seized pursuant to the provisions of the Fisheries Act and the owner was unable to obtain its release by posting a bail, a mortgage holder ought to be able to obtain a court ordered sale of the vessel in admiralty court and have the Crown’s claim to forfeiture dealt with in the same court.

In allowing the Crown to claim forfeiture of the proceeds of sale, the court suggested that it might have held otherwise, if the Crown had instituted proceedings in the Federal Court itself for the sole purpose of an “end run around the limitations in the Fisheries Act”.

Editor’s note: This case is very useful because of its thorough review of the forfeiture provisions of the Fisheries Act. Although it appears to confirm the discretion of the Minister to refuse to accept a security deposit to secure the release of a vessel (para. 48), it only does so in obiter and does not consider whether or not this would be contrary to the Charter (see R. v. “Peonia No. 7” and Jeon Meang Yel (20 March 1986) (Prov. Ct. of Nfld. District of St. John’s) (Wicks, L.W., P.C.J.). It deals with the issue of whether or not the seizure provisions of the Criminal Code apply and it also suggests that parties releasing vessels on bail should include a contractual provision governing what happens in the event of a conviction. With respect to the priority between a Crown claim to forfeiture and a mortgage, see an early proceeding between these parties at 2001 FCT 1034 which at the time of writing, was under appeal.

Practice – Stays of proceeding under s. 10 of the Worker Compensation Act

Greyhound Canada Transportation Corp. v. Brzozowski 2000 BCCA 360 (B.C.C.A.)

This case involved section 10 of the British Columbia Workers Compensation Act which bars civil actions arising from injuries occurring during the course of employment.

In this case, at the time of the injury, the plaintiffs were going home from Prince Rupert (a fishing port on the north coast of British Columbia) on a regularly scheduled bus which they paid for themselves. The Appeal Division of the Workers Compensation Board ruled that if they had been traveling to a remote location or if the employer had paid for the transportation they might have been considered to have been injured in the course of employment. However, they were not prepared to make such a finding in this case. Accordingly there was no bar to civil proceedings.

Upon appeal, the British Columbia Court of Appeal upheld the decision on the grounds that it was not patently unreasonable.

Leave for appeal to the Supreme Court of Canada was denied on March 15, 2001 (Doc. 28097).

Editor’s Note: See also Decision No. 96-0527 of the Appeal Division of the British Columbia W.C.B. where it was found that a deckhand was acting in the course of employment when he was off duty having a cigarette on deck while the fishing vessel was anchored for the night during a voyage to port to deliver its catch of fish.

Practice – Limitation of Liability – Calculation of damages for net damage claim – consequently economic loss – unjust enrichment – punitive damages

Capilano Fishing Ltd. v. Qualicum Producer (The) 2001 BCCA 244 (B.C.C.A.)

This was a net damage case involving a claim for damages incurred by a vessel when its net was fouled by another vessel during a very short opening in the 1997 herring seine fishery. The issues raised by this case included the following:

Recovery for contractual relational economic loss;
Limitation of Liability;
Restitution for unjust enrichment with an accounting of profits earned by the defendants; and
Punitive damages;
Quantification of damages.

At the trial level, Warren J. applied the former provisions of the s. 574 of the Canada Shipping Act to allow the defendants to limit their liability to approximately $40,000 dollars.

Although damages were limited to $40,000, the trial court also addressed the issue of how damages should be quantified.

With respect to unjust enrichment, the trial judge applied the reasons of Lowry J. in the “Cape Flattery” (1 December 1997) Vancouver C953623 (B.C.S.C.) to reject this claim. With respect of quantification of the loss of fish, the court based its award upon the daily average of the vessels fishing in the area. In doing so, the court said “[f]rom time immemorial fish have been among the more elusive of prey. The only certain catch is the one stored on board.”

The trial court also rejected the claim for punitive damages.

With respect to contractual relation economic loss, the trial court followed the decision of Lowry J. in the “Cape Flattery” to allow the claim of members of a fishing pool who had an interest in the catch of the plaintiff vessel. However, it rejected the claim of a fish processor, which had supplied a licence to the plaintiff vessel at a discounted rate in exchange for the right to purchase its catch.

Upon appeal, the decision was varied as set out below.

With respect to limitation of liability, the court reversed the trial court and prevented the defendants from limiting their liability. In doing so, it adopted the following quote from Lowry J. in Savage Fisher (The) v. Prosperity (The) (2000) 78 B.C.L.R. (1124) (B.C.S.C.):

I would have considered that the owner or the charterer of a vessel that participates in a shotgun herring opening must be privy to damage to the property of others its vessel may cause. I say that because of the nature of the activity. As indicated at the outset, large trawlers are operated in a high stakes competition for fish which forces them to maneuver (sic) at speed in close proximity. Masters are encouraged to catch as much herring as they can in what is most often a very short period of time. . . It is an activity where an owner’s instruction to exercise caution, end even to put safety first, must for all practical purposes be lost in the priority of making a large catch. As I said at the outset, it is a most unusual kind of maritime adventure – one that compels masters to sacrifice good seamanship for profit as happened in this case. [para. 51]

. . . I have difficulty seeing on what basis an owner or charterer that engages its vessel in that activity could meet the standard of care required to be permitted the privilege of limiting its liability. [para. 52]

With respect to quantification of damages, instead of basing it award on the daily average as did the trial court, the court made a larger award based upon ½ of the amount caught by the offending vessel. In doing so, the court considered the maxim omnia praesumuntur contra spoliatorem (all things presumed against a wrongdoer) as well as the fact that “[f]rom time immemorial fish have been among the more elusive of prey. The only certain catch is the one stored on board” (para. 36).

With respect to the claim of a fish processor for the value of a herring licence given to the claimants at a discounted price in exchange for a promise by the claimants to sell their catch to the fish processor, the court was unable to find any evidence to support the claim, as the processor had led no evidence regarding its profits. The court also cautioned that it did “not wish to be taken as holding that such a claim for economic loss would lie” (para. 50).

With respect to the claim based on unjust enrichment, the court said “actions for negligence in the operation of vessels are actions for compensation for losses caused. There is no need to complicate such actions with notions of unjust enrichment” (para. 49). Similiarly, with respect to the claim for punitive damages the court said, “it is not for this Court to introduce into maritime law a concept which is unknown to it” (para. 49).

Practice – Canadian Maritime Law - Admiralty jurisdiction over agency and fisheries matters”

Radil Bros. Fishing Co. Ltd. v. Her Majesty the Queen et al. 19 October 2001 (No. A-786-00) (F.C.A.)

This case involved an appeal from an order of the trial division of the Federal Court (2000 F.C.A. 1885) allowing an appeal from an order of a Prothonotary (reported at (1999) 175 F.T.R. 182). The alleged facts, as taken from several of the judgements, are quite complicated as the case arose out of what is commonly called a “licence swap” transaction. The aggrieved party in this case was the owner of an 86-foot fishing vessel with a category “T” trawl licence (the “Owner”) which had both a good history of landings and a high priority position in the Hake Consortium selection process. In 1993, the Owner was using the services of a fish processor for “administrative, financial and management services”. It was alleged that these services included applying for licences on behalf of its fishermen and advising of changes to fishing regulations. At the time these services were being provided, the Owner entered into an agreement to purchase a category “A” salmon licence from the fish processor for placement upon its vessel. Without the knowledge of the Owner, an “A” licence was then transferred by the fish processor to the Owner’s vessel by way of a transaction whereby a married set of “A” and “T” licences belonging to the fish processor were transferred to the Owner’s vessel and the Owner’s single “T” licence was transferred back to the vessel from which the married licences had come. The result was a classic “swap” transaction.

It was alleged by the Owner, that prior to the swap it was known to all parties that a quota system would likely be introduced in the ground fish fishery and that catch history would be a factor in calculating individual vessel quotas. Subsequently, when the individual quota fishery was instituted into the ground fish fishery in 1997/8, the quota allocation was based 70 per cent upon the catch history of the vessel. Since the swapped “T” licence obtained from the fish processor did not have as good a landings record as the original “T” licence, the Owner lost a considerable amount of quota. In addition, it lost its priority on the Hake Consortium selection process.

It was alleged by the fish processor that prior to the swap, it had discussed the proposed transaction with the director of licensing for D.F.O., and had been given a verbal assurance that the transfers would be affected so that the catch histories of the vessels would stay with the vessels and not be transferred with the licences. Unfortunately for the Owner and fish processor, the director of licensing had died and there was no written record of the alleged agreement with him.

To make matters worse, the vessel to which the original “T” licence was transferred, was subsequently sold by the fish processor to a third party who claims to have specifically purchased the vessel because of the high landings associated with the swapped licence. It claimed to have had no knowledge of the alleged agreement with D.F.O. and opposed the enforcement of any such agreement.

After some preliminary motions over whether or not the Owner could proceed by way of (originating) application, the Owner then commenced an action in Federal Court claiming both the declaratory relief and damages. This action was against the Crown, the fish processor and the third party purchaser. The action against the fish processor was based upon a claim that the fish processor, as agent of the Owner failed to ensure that there was a proper transfer of the category “A” fishing licence. An identical action was also commenced in the Supreme Court of British Columbia. In response, the Crown brought an application in Federal Court to, amongst other things, strike the portions of the Owner’s statement of claim under section 222(1)(a) of the Federal Court Act as disclosing no reasonable cause of action.

At first instance before Prothonotary Hargrave, the court denied the motion to strike, provided the Owner amended its statement of claim within 14 days.

Upon Appeal by the Crown to the trial division of the Federal Court (McKeown J.), the decision of the Prothonotary was reversed by striking out the statement of claim.

Upon further appeal by the Owner to the Federal Court of Appeal, the Crown raised, amongst other things, the issue of whether or not the Federal Court had the jurisdiction to hear the claim against the fish processor. In a lengthy judgement, the court of appeal concluded that it did not have jurisdiction. In doing so, it applied the following test:

1. There must be a statutory grant of jurisdiction;

2. There must be an existing body of federal law which is essential to the disposition of the case and nourishes the grant of jurisdiction;

3. The law on which the case is based must be “law of Canada” as the phrase is used in section 101 of the Constitution Act.

With respect to a statutory grant, the court concluded that claim against the fish processor could not fall under section 91(10) (navigation and shipping) because it was more specifically dealt with under section 91(12) (Sea Coast and Inland Fisheries). The court also extensively reviewed the jurisprudence governing the definition of Canadian Maritime Law to conclude that Canadian Maritime Law does not include a claim arising out of an agreement to purchase a fishing licence or to matters arising out of a breach of an agency contract entered into for the purpose of purchasing a fishing licence (para. 56). In doing so, the court distinguished Kuhr v. The “Freidrich Busse”, [1982] 2 F.C. 709 where the Federal Court found that a dispute involving an agreement to supply fish at sea to a vessel was within the court’s jurisdiction. The court relied upon a number of cases including:

1. Bornstein Seafoods Canada Ltd. v. Hutcheon et al. (1997), 140 F.T.R. 245 where the trial division of the Federal Court held that a dispute over the ownership of a fishing quota does not come within the definition of Canadian maritime law; and

2. Inter Atlantic Canada Ltd. v. The Rio Cuyaguatije, [2001] F.C.J. No. 549 where the trial division confirmed a Prothonotarie’s ruling to the effect that a dispute over an agreement to exploit a fishing quota did not fall within the jurisdiction of the Federal Court.

In looking at the specific subsections of section 22(2) of the Federal Court Act, the court also rejected the notion that a fishing licence could be considered a “necessary” and relied upon Joys v. M.N.R. (1995), 128 D.L.R. (4th) 385 (F.C.A.) to reject the argument that a fishing licence should be equated with “goods, materials, or services . . . supplied to a ship”. In any event, the court relied upon Quebec and Ontario Transportation Co. v. the Ship Incan St. Laurent, [1979] 2 F.C. 834 (F.C.A.) (a case involving a claim to a beneficial interest in a vessel based on a joint venture agreement) to suggest that even if s. 22(2) applied, there may be no existing federal law to nourish that jurisdiction.

In concluding that the court had no jurisdiction the court said as follows:

[T]he Court will not assert its admiralty jurisdiction in agency claims unless the true essence of the contract relied upon is maritime. This is not the case here, where the sole factor possibly connected to maritime law is the fact that the licence with respect to which the agency contract was entered into happens to be issued in relation to an activity occurring at sea. There is no contract for carriage of good by sea. There is no issue as to the seaworthiness of the ships. The ships are not party to the action. There are no in rem proceedings. There are no shipping agents. There are no admiralty laws or principles or practices applicable. The claim, at best and incidentally, may be said to relate to the ability of a ship to perform certain fishing activities in accordance with requirements that have nothing to do with navigation and shipping and everything to do with fisheries (para. 60)

The court did, however, note that the Federal Court does have jurisdiction with respect to fisheries issues coming under its jurisdiction with respect to judicial review and actions in tort against the Crown.

Editor's Note: See my critique of this case in the paper "Federal Court Fisheries Issues" at page 8. This paper is located in the papers section of this Fisheries Web Page.

Aboriginal Rights and Defences – Availability of Interlocutory Relief to stop Enforcement Measures
Practice – Injunctions that Finally Determine Rights Ought not be made on an Interlocutory Basis
Crown Liability Judicial Review – Availability of Injunctive Relief Against the Crown

Shubenacadie Indian Band v. Canada (Minister of Fisheries and Oceans) [2000] F.C.J. No. 1445 (Fed. Ct. T.D.) (Pelletier J.)

This case involved a Nova Scotia Indian Band which was relying upon the two R v. Marshall decisions (digested herein) in support of an application for an interlocutory injunction to enjoin D.F.O. from taking enforcement measures to prevent its members from participating in a Band regulated lobster fishery.

The two main issues in the case were:

Whether the relief claimed was available on an interlocutory basis; and
Whether the balance of convenience favoured the granting of an injunction.

With respect to the first issue, the court reconciled two somewhat inconsistent authorities to hold that “injunctions which finally determine rights, and therefore amount to a declaration of rights, ought not be made on an interlocutory basis” (para. 44) except in situations where (1) “the rights must be exercised immediately or not at all” or (2) “when the damage caused by the refusal of the injunction will make success at trial nugatory” (para. 51). Since the issue of treaty rights to fish for lobster would likely “stretch a long way into the future (para. 52), the court did not apply any of the exceptions to the general rule. Accordingly the Court ruled that the motion for interlocutory relief be dismissed.

Despite its dismissal of the motion, the court also gave its view on the application of the tripartite test for the availability of an injunction. In reviewing the test for determining the balance of convenience the court applied RJR-MacDonald Inc. v. Canada [1991] 1 S.C.R. 311 to find that in constitutional type cases, one must look at the public interest. Once it is established that the government authority is charged with the duty of promoting the public interest and that the “impugned legislation, regulation, or activity was undertaken pursuant to that responsibility” . . . “the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action” (para. 65). Since the impugned conduct was the enforcement activities of the Department Fisheries against persons fishing without licences, the court ruled, that “the public interest is against creating a vacuum of authority”. Accordingly the court found that the balance of convenience did not favour granting an injunction.

Practice – Application of Collision Regulations to “Shotgun Herring Opening” – Limitation of Liability

North Ridge Fishing Ltd. et al. v. The “Prosperity” 2000 B.C.S.C. 1124 (Lowry J.)

This case involved a collision between the net of the fishing vessel Savage Fisher (plaintiff) and the fishing vessel “Prosperity” in the 1997 herring seine fishery. This fishery was described by the trial judge as a “high stakes race . . . where from an opening ‘gun’, many vessels – sometimes dozens – would set their nets at speed in very close proximity during a short period of time.” The issues in this case included:

The application of Rule 15 (Crossing Situation) of the Collision Regulations;
Apportionment of fault;
Tonnage of fish caught; and
Limitation of Liability.

Rule 15

With respect to the application of Rule 15, the court ruled that this was not a crossing situation because “the Crossing Rule can only apply where what would be a give-way vessel can ascertain the future course of the stand-on vessel from observing her movement and making due allowance for the nature of the locality”. In rejecting the application of the Crossing Rule, the court pointed out that the Crossing Rule must always be read with the Responsibility Rule (Rule 2), which refers to the precaution to be taken by ordinary seam or by the special circumstances of the case.

Apportionment of Fault

With respect to apportionment of fault, the court apportioned 75% of the fault to the plaintiff based primarily upon the “woefully inadequate” look out being kept by the vessel (there was no assistant in the wheel house). In addition, the court found that the master of the plaintiff vessel also failed to exercise the caution that good seamanship dictated because he was being driven by his desire to maximize his catch.

The court also assessed 25% of the fault to the defendant vessel for not taking earlier measures to avoid the collision when it ought to have been apparent that one was going to occur.

Tonnage of Fish Caught

Given the uncertainties in the evidence regarding the amount of fish caught in the damaged net, the court followed the approach taken in two previous cases and made an award based upon the daily average of all of the vessels at the opening.

Limitation of Liability

Although the amount of the award made this issue largely academic, the court reviewed limitation of liability under the pre-1997 amendments to the Canada Shipping Act and found that it would have allowed the vessel to limit. The court advised that it would have done so based upon two previous decisions of the court. However, it questioned the correctness of those earlier decisions by expressing the view that it would not have been prudent for any owner to allow its vessel to partake in such a shotgun style opening.

Editor’s Note: As a result of a change of management approach from an overall quota fishery to an individual (shared) quota type fishery, these types of high intensity shotgun openings no longer occur at same intensity as they used to on the British Columbia coast.

Practice – striking pleadings – setting aside arrests

Inter Atlantic Canada Ltd. v. Rio Cuyaguateje (The) (18 January 2000) F.C.J. No. 68 (Fed. Ct.) (oral Judgement – Prothonotary Morneau)

This was a motion for an order that an in rem statement of claim and warrant of arrest be struck. Amongst other things, the applicant argued that the following provisions from the statement of claim be struck:

[T]he provision of the fishing licence to the Defendant ship, a fishing ship, is the supply of a necessary, or in the alternative, is the supply of goods, materials or services to the Defendant ship.

Without giving any reasons, the court accepted the applicant’s argument and struck the above described portion of the statement of claim. It also followed Bornstein Seafoods Canada Ltd. v. Hutcheon (1997), 140 F.T.R. 241 (digested herein) to hold that the court did not have any jurisdiction over the claim pursuant to section 22(1).

Editor’s note: It is unfortunate that the court did not give any explanation for striking the portion of the statement of claim set out above. While a fishing licence does not fit neatly into any of the categories set out in section 22(2)(m) of the Federal Court Act, a fishing licence is clearly necessary for the operation of a fishing vessel.

Practice - Limitation Periods for Judicial Review - Summary Judgement

Radil Bros. Fishing Co. v. Canada (Department of Fisheries and Oceans) (1998) No. T-192-98 (Fed. Ct. T.D.) (Rouleau J.)

This case involved a dispute over the entitlement to ground fish quota which was lost when a ground fish licence with a history of large landings was "swapped" with a licence from another vessel (with smaller landings) in order to facilitate the purchase of a salmon licence. In dismissing an application by the Defendant for summary judgement on the basis of a time bar, the court ruled that the Plaintiff should not be penalized for exhausting its right to apply for a hearing before the Licence Appeal Board, before bringing its application for judicial review. Given the nature of the dispute, the court also ruled that the matter was not suitable for disposition by way of affidavit evidence at a summary trial.

Counsel for the Plaintiff: Raymond Pollard

Counsel for the Defendants Paul Partridge, Murray Blok, David Brown

Practice - Injunctions - setting aside injunction regarding disposition of fishing quota -

In rem actions - whether or not allegations of conspiracy and misappropriation of a ground fish quota amounts to a maritime tort -

Bornstein Seafoods Canada Ltd. v. Hutcheon (30 Dec. 1997) T-2059-97 (Fed. Ct. T.D.) (Gibson J.)

This case involves a claim by a fishing processor that the two defendants to the action conspired to transfer ground fish quota from one defendant to another, when the defendants knew the quota had been previously purchased by the plaintiff. When the action was commenced, the plaintiff arrested one of the defendant's vessels (upon which the quota had allegedly been fished) and obtained an ex parte injunction which enjoined the defendants from transferring or otherwise dealing with the ground fish quota. One of the defendants, brought on an application to set aside both the injunction and the arrest.

With respect to the injunction, the court applied the law as set out in RJR MacDonald Inc. v. Canada (A.G.) [1994] 1 S.C.R. 311. With respect to the issue of irreparable harm, the court found that since the plaintiffs operations would only be "disrupted" and since tracing would not be "impossible", there was no irreparable harm. Regarding the issue of balance of convenience, the court ruled that since the continuation of the injunction would cause the defendant to "become insolvent in the near future", the balance of convenience did not favour a continuation of the injunction. Consequently, the injunction was set aside.

With respect to the warrant of arrest, the plaintiffs argued that their claim amounted to a maritime tort which formed part of Canadian Maritime Law by virtue of section 22(2)(d) of the Federal Court Act. The court rejected the plaintiff's argument and concluded that the court had no in rem jurisdiction. Consequently it set aside the arrest of the vessel.

This case also contains some interesting comments regarding the role of the court in attempting to salvage warrants of arrests, when possible.

Counsel for the applicant: David F. McEwen

Counsel for the plaintiff: Gary Wharton

Practice - Sale of Fishing Licence - Term for sale included in Order for Sale

Brotchie v. Karey T (9 January 1997) T-2369-93 (Taxing Officer Stinson)

This was a taxation of a Deputy Marshal's account incurred in connection with the sale of a fishing vessel. It is of interest from a fisheries perspective, because it makes reference to the order of sale which specifically included the sale to the vessel's category "A" fishing licence.

Fisheries Content

Main Content

Other Pages

Fisheries Practice

Case Summaries - (see also Recent Cases page)