THE TREATMENT OF FISHING LICENCES AS FAMILY ASSETS UPON THE BREAKUP OF A MARRIAGE Western Fish and Seafood June 2003
As has been discussed in a number of previous articles, when dealing with licence disputes between individual fishermen and the Department of Fisheries and Oceans, the individual is usually the loser. This is because of the tendency of the courts to treat fishing licences not as property but as privileges renewable annually at the absolute discretion of the Minister of Fisheries. In a previous article (Fisherman Life July 2002), I described how the courts have employed the trust concept when dealing with disputes between private individuals, so as to treat licences much more like property. This article will briefly review how the courts have similarly employed the provisions of the British Columbia Family Relations Act (“F.R.A.”) to treat licences more like property when adjudicating disputes between spouses over the division of family assets.
When dividing assets upon the breakdown
of a marriage in British Columbia, the courts look to Part V of the F.R.A.. This
part of the Act provides that upon a triggering event, such as the making of an
order for dissolution of the marriage, each spouse is prima facie entitled
to an undivided one-half interest in all assets that are family assets.
In general, the Act provides that an asset is a family asset if it is
owned by one or both of the spouses and ordinarily used by a spouse or minor
child of either spouse for a family purpose. Conversely, the Act also
provides that where property is owned by one spouse to the exclusion of the
other and is used primarily for business purposes and the non-owning spouse has
made no direct or indirect contribution to the acquisition of the asset or the
operation of the business, the property is not a family asset.
Courts interpreting this section have concluded that the non-owning spouses may establish that a business asset is a family asset by showing: (1) family assets were used to acquire the business asset; (2) family assets were placed at risk or used as security to acquire the funds to obtain or maintain the business asset; (3) the spouse claiming the asset made direct or indirect contributions to the acquisition of the business asset (contribution may be presumed if the claiming spouse establishes that he or she was an effective spouse, parent, and manager of the household); or (4) income derived from the business asset was used for family purposes.
Given the large number of cases that have decided that one cannot have a property interest in a fishing licence, it has not always been clear whether or not a fishing licence would be considered “property” for the purpose of division of assets under the Family Relations Act. In 1992 this issue was addressed by the British Columbia Supreme Court in the case of S. v. S. 71 (1992) B.C.L.R. (2d) 218. This case involved a fisherman who held, amongst other things, a category “J” roe-on-kelp fishing licence that was non-transferable and non-assignable. After a court granted a decree of divorce to the fisherman and his wife, a dispute arose as to whether or not the “J” licence was a family asset. The husband argued that the licence was not property and therefore not subject to division with his wife. In rejecting this argument the court said as follows:
“Property” is not defined in the Act but has acquired meaning in the jurisprudence. “Property” has been more liberally interpreted under the Family Relations Act than under any other statutes . . .
The husband also tried to argue that even if the licence was property, it was a business asset and not a family asset. This argument was also rejected by the court on the grounds that: (1) the wife had made an indirect contribution to the business venture as an effective mother and homemaker; and (2) the income generated from the “J” licence had been used to support the family.
This issue was quite recently addressed by the British Columbia Court of Appeal in the case of P.C.J.R. v. D.C.R. 2003 BCCA 207. This case involved, amongst other things, a fisherman who had a one-half beneficial interest in a salmon licence that was held in his brother’s name. The evidence was that the fisherman and his brother purchased the licence from their father approximately four years before the break up of the marriage for about half of its real value. Apparently the reduced price represented an early inheritance from their father. The fisherman also contributed some fishing gear (categorized by the court as a family asset) to his brother as a partial contribution to the cost of acquiring the licence. The licence was then married to a pre-existing licence on the brother’s boat. During the three years the licence was fished, the fisherman only received approximately $1,000 per year as his share of the net revenue from the licence. Based upon all of this evidence, the Court of Appeal had no difficulty categorizing the licence as a family asset. It did concede, however, that under some circumstances the manner of acquisition of the licence (partially through inheritance) could properly be considered as a ground for departing from the normal 50/50 division of assets. However in this particular case, other factors favouring the wife (see s. 65 of the F.R.A. for other grounds) mitigated against departing from the 50/50 rule.
As with the trust cases described in my previous article, despite the fact that fishing licences are not normally considered to be property, the courts have found ways of getting around this technicality in order to do justice between private individuals.
Brad Caldwell is a Vancouver based lawyer and former fisherman and towboat worker whose practice is primarily devoted to fisheries, insurance and maritime matters.