Bankruptcy appeal involving fishing licences going to Supreme Court of Canada

By Tina Comeau

THE VANGUARD

NovaNewsNow.com

The Supreme Court of Canada will be asked this month to decide whether a fishing licence held by someone is property that can be sold to pay off a person’s debt if they declare bankruptcy.

Yarmouth lawyer Andrew Nickerson will be in Ottawa on Jan. 23 arguing it should not.

Nickerson represents Meteghan resident Benoit Joseph Saulnier and Bingo Queen Fisheries Limited. Saulnier lost his fishing licences when they were seized and sold following his declaration of bankruptcy.

The Royal Bank of Canada, a receiver and a bankruptcy trustee are named as respondents in the appeal.

Nickerson is arguing that fishing licences are not property defined in the Bankruptcy and Insolvency Act and therefore should not have been treated as an asset to pay his client’s debts. Saulnier held four licences, which court documents say yielded a value of $630,000.

It’s not uncommon for fishermen to sell their licences.

Still, Nickerson argues they shouldn’t be considered property in the bankruptcy act. He says his argument is based on prior precedence set in other courts.

“If you go back to law school 101, a licence is not generally not considered property. It is simply permission to do something which you cannot otherwise do,” he says. “Our position is there is really nothing there by way of property because fishing licences 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.”

But that’s not how the trial court in Nova Scotia saw it, which ruled in favour of the bank.

This case has been weaving its way in the courts for two years, and was also heard by the Nova Scotia Court of Appeal. Nickerson says there are cases from other appeal courts in other provinces that oppose the Nova Scotia Court of Appeal position. But there are also other cases stemming from Ontario courts that support both sides in this case.

“When you apply for leave to appeal to the Supreme Court of Canada and they grant or deny leave, the Supreme Court of Canada does not give reasons so we have no way of knowing why the court felt that it was something worthy of consideration,” Nickerson says. “The only speculation I can give is that there is conflicting precedence across the country and that the court felt that it was appropriate for them to make a ruling to give some uniformity to the interpretation.

“The long and the short of it is, it’s really a bankruptcy case,” he adds. “People have tried to read a lot of other things into it for a lot of other reasons and a lot of other purposes. How much beyond a narrow bankruptcy issue it goes is, in my view, somewhat speculative.”

There are two interveners in this case, one of which is the Attorney General of Canada, which Nickerson says basically supports the position he and his client, as the appellants, are making. There is also a group of fishing industry interests that Nickerson says is siding with the Royal Bank.

The courts earlier denied an injunction filed by Nickerson to stop the sale of his client’s licences until the appeal is heard. He says this is because the Royal Bank has given an undertaking to pay damages if Nickerson and his client are successful in their appeal.

“He can’t get the licences back, the Royal Bank will have to find one that’s for sale,” says Nickerson, should the decision go his way.

It will take months for the Supreme Court to render its decision.