Supreme Court rules that fishing licences are property in bankruptcy cases

The Supreme Court of Canada has ruled that fishermen who declare bankruptcy can lose their fishing licences if banks and financial institutions choose to sell the licences to cover a person’s debts.

In a ruling handed down by the country’s top court on Friday, Oct. 24, the court says fishing licences should be treated as property and considered to be assets in bankruptcy cases. In doing so, the court ruled against a Nova Scotia fisherman who had sought to have the court decide otherwise.

Following loses before the trial court in Nova Scotia and the Nova Scotia Court of appeal, Yarmouth lawyer Andrew Nickerson – on behalf of his client Meteghan resident Benoit Joseph Saulnier and Bingo Queens Fisheries Limited – appealed the case to the Supreme Court.

Nickerson and his client argued that fishing licences should not be considered property in bankruptcy law because a licence is something that grants someone permission to do something they otherwise could not legally do. “Our position is there is really nothing there by way of property because fishing liences expire at the end of the year, they have to be renewed and they are not really something that you have any right to or legally protected claim on. They’re really at the discretion of the minister of fisheries,” Nickerson had said prior to arguing his appeal in Ottawa in January.

The lawyer said fishing licences should not have been treated as an asset to pay the debts of his client when he was forced to declare bankruptcy in 2004.

Saulnier held four licences at the time – lobster, herring, swordfish and mackerel. Their value was determined to be in excess of $600,000. Saulnier refused to sign over the licences but the lower courts gave the banks the right to seize them to pay off the debts of Saulnier and his company.

In its ruling, the Supreme Court of Canada states that the fishery is a public resource and a fishing licence permits the holder to participate, for a limited time in its exploitation. “The fish, once caught, become the property of the holder. Accordingly, the fishing licence is more than a “mere licence” to do that which is otherwise illegal.”

The fish caught with licences becomes the property of fishermen who sell the fish. Licences also change hands among fishermen when they are sold for great sums.

Noted the court, “A commercial fisher with a ramshackle boat and a licence to fish is much better off financially than a fisher with a great boat tied up at the wharf with no licence.”

In holding up the decisions of the lower courts, the Supreme Court dismissed the appeal with costs to the respondents, which included the Royal Bank of Canada.