Philpott and Hopkins v. Sullivan

In Contracts, Fish Cases on (Updated )

This case involved a dispute between a fish processor and a fisher over the enforceability of a trust agreement, which provided that the fisher would hold a crab licence as bare trustee for the processor. When the processor commenced and action to enforce the trust, the fisher raised a number of defences including non est factum, unconsciounability, and contrary to public policy. After reviewing all of the evidence, the court rejected all of these defences. With respect to the argument that the agreement was void as being contrary to public policy, the court said as follows:

The agreement is not unenforceable on public policy grounds. It is true that the License-holding arrangement was structured as it is because of the regulatory requirements of the Department of Fisheries and Oceans. However, the parties to the agreement are not seeking to act or conduct themselves in a manner contrary to the regulations. The fishing activity contemplated by the License is not being carried on in a manner contrary to the regulations. Similar agreements have been considered enforceable by the Courts. I restrict my comments on the enforceability of the agreement to the particular circumstances of this case, noting in particular that it is a dispute between the parties to the agreement. Where third-party interests are involved, or where the purpose of the trust arrangement clearly is to effect a result which is contrary to the intent of the regulatory structure, the result may be different. [para 38,footnotes omitted]