It is said that the apex court verdict will help fishermen obtain bank loans for gear at a time when credit is tightening. The associations representing both large and small players in the industry welcomed the decision of the court which upheld a ruling that commercial fishing licences are property which can be sold to settle a bankruptcy.
The court has taken the decision after 8-0 vote and ruled against a Nova Scotia fisherman who argued that his four licences didn’t meet the legal definition of property and weren’t subject to sale to cover his debts. Benoit Saulnier and his company Bingo Queen Fisheries Ltd. went bankrupt in 2004. His creditors tried to sell the licences – worth $630,000 – to cover their debts.
Saulnier refused to sign the necessary documents, saying the licences were merely a “privilege” allowing him to fish, not property. Christian Brun, a spokesman for the Maritime Fishermen’s Union, informed that the decision will increase the willingness of banks to loan to his members. He added that it is an advantage in terms of financing to fishermen, because not everyone out there is willing to make loans to fishing enterprises.
Brun pointed out that the court made it clear the decision applies narrowly to bankruptcy situations, rather than weakening the notion that licences are ultimately the property of the Crown. He told that the decision avoids the possibility of diluting the fishery department’s control of the licences.
The collapse of the Glitnir and Landsbanki banks in Iceland has removed a major source of lending for the industry, while the American credit crisis is causing lenders across the globe to tighten credit. Now the biggest problem in West Coast is assessing capital. But the decision is seen as a positive step because it will make access to capital easier for fishermen large and small.
