Gaudet v. Landry Estate

In Contracts, Fish Cases on (Updated )

This case involved a dispute over an agreement to sell a lobster licence, a herring licence, a mackeral licence and a cod licence along with a small amount of fishing gear. An agreement was entered into with the vendor to sell the licence to a purchaser who was obtaining financing from and giving the use of the licence to his brother in law. A deposit of $3,000 was paid with a deferment of the balance of $30,000 until later so the vendor could attempt to defer tax on the sale. Prior to the final payment, the vendor was offered more money by another party and sold the licence to that party.

In an action by both the purchaser and the brother in law, the vendor attempted to argue that the agreement was void because it was in effect as sale to the brother in law which was against the policy of the Department of Fisheries and Oceans who would not allow such a transfer because the brother in law already held a lobster Licence. This argument was rejected by the court, without any real in depth reasons.

The vendor also attempted to argue that the contract of sale was frustrated because of a moratorium which the Department of Fisheries had imposed upon transfers of Cod licences. This argument was also rejected by the court on the grounds that the cod licence was of little importance or value as was demonstrated by the fact that it was surrendered to D.F.O. when the licence package was sold to the party who offered more money.

Damages were awarded to the purchaser equivalent to the difference in price between the original contract of sale and price which the licences were eventually sold for.