Gladstone v. Canada

In Aboriginal Rights/Defences, Fish Cases, Fisheries Practice on (Updated )

This case involved a quantity of herring spawn on kelp that was seized pursuant to s. 58(1) of the Fisheries Act (1970) and subsequently sold pursuant to s. 58(1) and paid into the consolidated revenue fund. After a successful appeal by the fishermen to the Supreme Court of Canada, the matter was eventually stayed by the Crown and the proceeds of sale were paid out to the fisherman eight years later pursuant to s. 73.1 of the Fisheries Act without interest. It was agreed that if interest were payable, it would be $132,000.

The issue before the Supreme Court was whether or not the Crown was required to pay interest on the funds for the period in which the funds were held.

Although there was a dearth of authority directly on point, the trial court canvassed a great deal of jurisprudence dealing primarily with non fisheries cases to reject all of the fishermen’s arguments and conclude that the Fisheries Act is a complete code and “in the absence of statutory authority there is no obligation on the Crown to pay interest.” (2002 BCSC 1447)

Upon appeal, the decision of the trial court was reversed in a decision written by Madam Justice Huddart. In making an order for the payment of interest, the court based its order upon a breach of fiduciary duty, though not one arising from the fact that the fisherman was aboriginal. The court classified the Crown as an “administrator of special purpose funds” who by virtue of its discretionary power and other factors became a fiduciary.

Upon further appeal, the Supreme Court of Canada reversed the B.C.C.A. and held that no interest was payable by the Crown. In doing so, it relied upon R. v. Ulybel Enterprises Ltd. [2001] 2 S.C.R. 867 in support of its finding that the Fisheries Act was a complete code dealing with the return of seized property. The Act provides for payment of interest in other circumstances (s. 71.1(2) and s. 79.4(1)), but not when the proceeds of seized items are returned under s. 73.1. Since no provision is made by the Fisheries Act for the payment of interest, no payment is required. In making its decision, the court rejected arguments based upon the requirements of the Financial Administration Act, unjust enrichment, fiduciary duty and trust. With respect to unjust enrichment, the court found that the provisions of the Fisheries Act referred to above fell into the "disposition of law" category of juristic reasons for an enrichment. With respect to breach of fiduciary duty, the court distinguished the case of Authorson v. Canada (2002), 58 O.R. (3d) 417 that had been relied upon by the B.C..C.A.