In its historic rule the Supreme Court of Canada has said that commercial fishing licences should be treated as property and considered assets when settling bankruptcy claims. The decision was an 8-0 voted in which the court ruled against a bankrupt Nova Scotia fisherman who argued that his four licences were merely a privilege that didn’t meet the legal definition of property and weren’t subject to sale to cover his debts.
Justice Binnie said the licence is more than something that just confers “a ‘mere’ permission to do something which is otherwise illegal. According to him the fishery is a public resource. The fishing licence permits the holder to participate for limited time in its exploration. Binnie also wrote that 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. It is a licence coupled with a proprietary interest in the harvest from the fishing effort contingent, of course, on first catching it.
The court was deciding on the case centres around a dispute between the Royal Bank and Benoit Saulnier. Saulnier’s company Bingo Queen Fisheries Ltd., went broke in 2004, and creditors tried to sell the licences — worth $630,000 — to cover debts. The bank argued Saulnier’s fishing licences were company assets, and it won the right to seize those licences to pay off his company’s debts.
Binnie stressed the importance of the licence, saying the value of a fisherman’s assets is contingent on the licence. He told that in an industry where holding one of a very restricted number of licences is a condition precedent to participation, the licence unlocks the value in the fisher’s other marine assets.
