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Comeau's Sea Foods Ltd. v. Canada respondent Minister, and were assured
(Minister of Fisheries & Oceans) that the appellant would definitely get at
least one offshore lobster licence. On
Supreme Court of Canada December 29, 1987, the Minister sent the
appellant a telex to advise that he had
authorized the issue of four offshore
lobster licences in total to the appellant,
APPEAL from decision reported at (1995), "two offshore lobster licences" and "two
24 C.C.L.T. (2d) 1, 29 Admin. L.R. (2d) experimental offshore lobster/red crab
264, 123 D.L.R. (4th) 180, 179 N.R. 241, licences" for the season from October 15,
[1995] 2 F.C. 467 (C.A.), reversing 1987 to October 14, 1988. The telex
decision reported at (1992), 11 C.C.L.T. specifically allocated the appellant's
(2d) 241, [1992] 3 F.C. 54, 54 F.T.R. 20, allowable catch for the fishing year. It also
allowing action against Ministry of stated that regional officials would contact
Fisheries and Oceans for damages the appellant to discuss specific conditions
pursuant to failure to issue fishing licences of the proposed licences. Several other
that had been previously authorized. applicants received similar authorizations
from the Minister on the same date.
The judgment of the court was
delivered by Major J.: 5 On January 27, 1988, the
Department of Fisheries and Oceans
1 The appellant commenced an action notified the applicants in respect of whom
against the respondent arising out of the an authorization had been issued to
failure of the respondent Minister of submit fishing plans for the balance of the
Fisheries and Oceans ("the Minister") to current season for each vessel intended
issue certain lobster fishery licences which for the lobster fishery. The appellant
had previously been authorized to be provided all the necessary details to the
issued under s. 7 of the Fisheries Act, Department by letter dated January 29,
R.S.C. 1985, c. F-14. 1988. It advised that the vessels that
were to be used to fish lobster were
I. Facts presently geared for the scallop fishery,
and that work to convert them for the
2 The appellant is a Nova Scotia offshore lobster fishery was due to start
integrated fishing company, operating off shortly. The appellant planned that the
the southwest coast of Nova Scotia. It vessels would be ready in April. The
operates some 15 sea-going vessels and evidence was that it had incurred
in peak season employs up to one $500,000 in expenses in converting one
thousand people. scallop dragger into a lobster fishing
vessel.
3 In 1987, the appellant applied for
offshore lobster licences. In all, 13 6 At trial, the Department confirmed
applications for new offshore lobster that had the appellant requested, between
licences were received by the respondent January and March 8, 1988, that the
Minister in that year. At the time, there authorizations for licences be converted to
were 1,601 inshore lobster fishery licences the actual issued licences, it would have
in the area extending approximately 50 issued them subject to appropriate
miles from the southwest coast of Nova conditions, if any.
Scotia and eight offshore lobster fishery
licences operating beyond the inshore 7 On March 8, 1988, the Department
fishery areas. advised its officials that no lobster fishery
licences were to be issued without specific
4 In September 1987, representatives clearance from the Assistant Deputy
Minister. under the authority of the Governor in
Council.
8 In the period following 1987, the
issuance of offshore lobster fishing 9. The Minister may suspend or cancel any
licences had become a political issue lease or licence issued under the authority
owing to heavy lobbying by the inshore of this Act, if
lobster fishermen. The scientific evidence
produced in a report of the Canadian (a) the Minister has ascertained that the
Atlantic Fishery Scientific Advisory operations under the lease or licence were
Committee at about this time indicated not conducted in conformity with its
that no harmful effects would ensue as a provisions; and
result of the new offshore lobster licences.
(b) no proceedings under this Act have
9 Initially, the Minister took the position been commenced with respect to the
that there was no evidence of any likely operations under the lease or licence.
harmful effect from the increase in the
lobster fishery. However, after a meeting III. Judicial History
between the respondent Minister and the
Scotia-Fundy Lobster Advisory Committee Federal Court, Trial Division, [1992] 3
in Halifax on March 30, 1988, the Minister F.C. 54
decided that he would not cancel the new
offshore licences, but was prepared to 12 Only the issue of liability was before
impose the conditions necessary to the trial judge, the question of damages
respond to the concerns of the inshore having been deferred by agreement. In
fishing industry. the original statement of claim, breach of
contract was pleaded. At trial,
10 On April 29, 1988, the Minister amendments were permitted for the
announced in a press release that the four addition of claims in negligence and
experimental offshore licences would not wrongful revocation of an "irrevocable
be issued in the foreseeable future, legal act". The proposed amendment for
pending a study of the issues facing the the inclusion of promissory estoppel as a
lobster industry in the Scotia-Fundy ground for the claim was denied.
region. This decision was confirmed to the
appellant and the other applicants by 13 On the issue of the scope of the
letter dated May 31, 1988. The licences Minister's statutory duty under s. 7 of the
authorized to the appellant were never Fisheries Act, the trial judge considered
issued. that the Minister's authorization to issue a
licence was "definitive" (p. 67). When the
II. Legislation authorization was announced on
December 29, 1987, the Minister allocated
11 Fisheries Act, R.S.C. 1985, c. F-14 an allowable catch to the appellant for
1987-88 in a proportion approximately
7. (1) Subject to subsection (2), the equal to the portion of the 1987-88 fishing
Minister may, in his absolute discretion, season remaining after that date. By
wherever the exclusive right of fishing January 1988, the appellant was treated
does not already exist by law, issue or as if it already were a "licence holder".
authorize to be issued leases and licences When the Minister authorized the issue of
for fisheries or fishing, wherever situated the licences to the appellant, he had
or carried on. exhausted his discretion under s. 7 of the
Fisheries Act. The trial judge noted that
(2) Except as otherwise provided in the the restrictions on the suspension or
Act, leases or licences for any term cancellation of licences provided in s. 9 of
exceeding nine years shall be issued only the Fisheries Act did not apply since no
licence had actually been issued. of s. 7 of the Fisheries Act, the Minister's
revocation of the authorization for the
14 The trial judge considered that even licences was ultra vires. Stone and
if s. 7 of the Fisheries Act had expressly Robertson JJ.A., in separate and different
empowered the Minister to withdraw his reasons, allowed the respondent's appeal
authorization, the withdrawal amounted to on the finding of liability in negligence.
actionable negligence. He held first that Linden J.A. dissented and would have
there was a duty of care owed by the dismissed the respondent's appeal.
respondent to the appellant by virtue of
the proximity created by the Minister's 18 Stone J.A. allowed the Minister's
representation to the appellant on appeal on the basis that the existence of
December 29, 1987 that the licences adequate administrative law remedies in
would be issued. Second, there was a certiorari or mandamus negated the scope
breach of the requisite standard of care of the prima facie duty of care owed by
because it was "perfectly foreseeable that the respondent Minister to the appellant.
any departure from the line of conduct
(i.e. the issue of the licences) previously 19 Robertson J.A. allowed the Minister's
announced by the Minister ... would have appeal on the grounds that the decision to
a harmful effect on the [appellant]" (p. issue the licence was a policy decision and
72). Third, even though the loss suffered therefore the duty to issue the licence was
appeared to be pure economic loss, negated. Under the alternative duty
because it was a direct result of the requiring the Minister to act reasonably in
Minister's change of position, the trial ascertaining whether he had the legal
judge held that there was sufficient authority to revoke the earlier
"circumstantial proximity" (per Canadian authorization, Robertson J.A. found that
National Railway v. Norsk Pacific the Minister did not breach the requisite
Steamship Co., [1992] 1 S.C.R. 1021) to standard of care.
hold the respondent liable for the
appellant's economic loss. 20 Linden J.A. in dissent substantially
agreed with the trial judge that once the
15 On the policy exemption from duty, policy decision to authorize the issuance
the trial judge observed that the rationale of the licences had been made, no policy
for the policy exemption assumes that the issues remained to be resolved and that
policy decision is authorized by statute, the respondent Minister was therefore
but in this case the revocation of the liable in negligence because there was no
authorization was ultra vires and was not policy immunity for the revocation
protected by the policy exemption. decision.
Appeal dismissed.