Anthony Clowe Plaintiff And: TerrAnce Durdle First Defendant And: T. Durdle Fisheries Limited Second Defendant, 2022 NLSC 40

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Clowe v. Durdle , 2022 NLSC 40 Date : March 16, 2022 Docket : 202101G5593 Between: Anthony Clowe Plaintiff And: TerrAnce Durdle First Defendant And: T. Durdle Fisheries Limited Second Defendant Before: Justice Sandra R. Chaytor Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: March 1, 2022

Summary: In this action, the Plaintiff seeks a declaration that he and the First Defendant are partners in a fishing enterprise. The Plaintiff brings this Application seeking an interlocutory injunction pursuant to Rule 22 of the Rules of the Supreme Court , S.N.L. 1986, c. 42, Sch. D to prevent the sale of a fishing licence issued to the Second Defendant. In denying the Application, the Court found that the Plaintiff had not established he would suffer irreparable harm if the injunction were not granted and that the balance of convenience weighed in favour of the Defendants. Held: The Application is dismissed with costs to the Defendants on column 3 basis.

Appearances: John F.E. Drover Appearing on behalf of the Plaintiff James D. Hughes, Q.C. Appearing on behalf of the Defendants Authorities Cited: CASES CONSIDERED: RJR-MacDonald Inc. v. Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311;Metropolitan Stores (MTS) Ltd. v. Manitoba Food & Commercial Workers, Local 832, (SCC), [1987] 1 S.C.R. 110; Hurley v. Slate Ventures Inc., (NL SC), [1996] 136 Nfld. & P.E.I.R. 341, 60 A.C.W.S. (3d) 285 (Nfld. S.C. (T.D.));Tall Boys Ltd. v. Bennett, 2002 NFCA 50; Green v. Harnum, 2007 NLCA 57; Tremblett v. Tremblett, 2012 NLTD 166; Tremblett v.Tremblett, 2013 NLCA 53; Elson v.

Canada (Attorney General), 2019 FCA 27 STATUTES CONSIDERED: Fisheries Act, R.S.C., 1985, c. F-14; Atlantic Fishery Regulations, 1985, SOR/86-21; Partnership Act,R.S.N.L. 1990, c. P-3. RULES CONSIDERED: Rules of the Supreme Court, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Chaytor, J.: INTRODUCTION AND BACKGROUND [1] Anthony Clowe brings this Application seeking an interlocutory injunction pursuant to Rule 22 of the Rules of the SupremeCourt, S.N.L. 1986, c. 42, Sch.

D to prevent the sale by of a crab fishing licence by the Defendants pending the outcome of the trial ofthis action. [2] In March 2012, Terrence Durdle and T. Durdle Fisheries Ltd. (“TDL”) purchased fishing licences along with a fishing vessel.Mr. Clowe and companies owned by him assisted in the financing of the purchase. [3] The licences were issued by the Department of Fisheries and Oceans (“DFO”) to TDL (of which Mr. Durdle is the soleshareholder and director) as “Enterprise C502388”.

The fishing enterprise includes several licences including the crab licence (the“Licence”) which is the subject of this Application. [4] Contemporaneously with the purchase of the licences, Mr. Durdle and TDL entered into an agreement, accompanied by apromissory note, with 67148 Newfoundland & Labrador Inc. (“67148”) a company of which Mr. Clowe is the sole director andshareholder (the “2012 Agreement”). [5] The 2012 Agreement provides security to 67418 for funding used to purchase the licences and permits 67418 to have the useand benefit of the Licence during the term of the agreement. Mr.

Clowe is not a party to the 2012 Agreement but he executed it on behalfof 67148. [6] Mr. Clowe claims that since 2012, he has fished under the Licence and that he and Mr. Durdle have been in a partnership withrespect to TDL’s fishing enterprise.

[7] Mr. Durdle denies he has ever been in a partnership with Mr. Clowe. He states that the only arrangement he and TDL had waswith 67148, as evidenced by the 2012 Agreement. [8] Mr. Durdle became concerned that the 2012 Agreement may be an inappropriate controlling agreement in contravention ofDFO policy and took steps to regain control of the fishing enterprise which he claims he did prior to April 2021. [9] In May 2021, Mr.

Durdle entered into an agreement of purchase and sale (the APS”) with William Newell to sell the Licence.Approval has been received from DFO for the transfer of the Licence pursuant to the APS. [10] Mr. Durdle has also entered into agreements to sell the shrimp and mackerel licences. Those agreements are contingent on thesale of the Licence. [11] In October 2021, Mr. Clowe commenced this action seeking a declaration that he and Terrance Durdle are partners in TDL’sfishing enterprise. He seeks a determination of the relative shares of the partnership to which he and Mr.

Durdle are entitled. [12] If such a partnership is established at trial, the Court will need to determine the assets of the partnership including whether theLicence constitutes a partnership asset. [13] Mr. Clowe brings this Application seeking an injunction to prevent the sale of the Licence pending the outcome of the trial. issue: [14] The issue to be determined is whether Mr. Clowe is entitled to an interlocutory injunction to prevent the sale of the Licencepending the outcome of this action. [15] For the reasons that follow, I will not grant the injunction.

I will now explain why. analysis The legal principles [16] Pursuant to Rule 22.01(1), an application for an injunction may be made by a party at any time after the commencement of theproceeding, whether or not the claim for the injunction was included in the party's statement of claim. [17] Pursuant to Rule 22.01(4), the Court has a broad discretion in dealing with an interlocutory injunction. It may grant, refuse orotherwise deal with the application “on such terms as are just”. [18] In RJR-MacDonald Inc. v.

Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311, the Supreme Court ofCanada endorsed the three-stage test set out in Metropolitan Stores (MTS) Ltd. v. Manitoba (Attorney General), Local 832, (SCC), [1987] 1 S.C.R. 110, as the test to apply when deciding whether to grant an interlocutory injunction. That test is as follows:

(1) Is there a serious issue to be tried?

(2) If I refuse the injunction, will the party seeking the injunction suffer irreparable harm? and

(3) Which of the parties would suffer greater harm from the granting or refusal to grant the injunction? [19] Mr. Clowe, as applicant, must prove each part of this test on the balance of probabilities. [20] In Hurley v. Slate Ventures Inc., (NL SC), [1996] 136 Nfld. & P.E.I.R. 341, 60 A.C.W.S. (3d) 285 (Nfld.S.C. (T.D.)), at paragraph 25, the Court set out the following principles applicable to an application for an interlocutory injunction: 1. The applicant must show that there is a serious issue to be tried, in the sense that the claim is not frivolous or vexatious. 2.

The applicant must show he or she is suffering or will likely suffer irreparable harm, namely, loss that cannot be readily assessed interms of money or, if it can be so assessed, a loss that will be uncollectible. 3. The applicant should give an undertaking in damages that would be adequate, if the respondent were to succeed at trial, to compensatethe respondent for loss sustained because of the granting of the injunction. The person giving the undertaking ought, as a general rule, tobe in a financial position to honour the undertaking if called upon. 4.

Where there is doubt as to the adequacy of the respective remedies in damages available to either party, the applicant must then satisfythe court that the balance of convenience favours the granting of the injunction. In considering this factor, the court must look at andbalance, among other things, the degree of irreparable harm that may be suffered by the Plaintiff, if the injunction were not granted andby the Defendant, if the injunction were granted. The existence and strength of the undertaking offered by the applicant is a factor to beconsidered in the determination of the balance of convenience.

5. Where the application of the balance of convenience test leads to no clear resolution, the court will normally seek to preserve the status quo. 6. Where the status quo is uncertain or its preservation is not a desirable result the court may consider the relative strength of each party's case and if the merits on one side appear to be disproportionately greater than the merits of the other then the injunctive relief should be granted or denied accordingly. [ 21 ] This approach was adopted in Tall Boys Ltd. v.

Bennett , 2002 NFCA 50 (at paragraph 18 ). [ 22 ] I will now apply these principles to the facts of this case. Application of the legal principles to the facts Evidence on the Application [ 23 ] The Application was supported by a standard affidavit of Mr. Clowe attesting to the truth of the statements contained in the Application. At the hearing, Mr. Clowe filed the requisite undertaking and supporting affidavit. That is the extent of the evidence filed by Mr. Clowe. [ 24 ] In response to the Application, the Defendants filed affidavits of Terrence Durdle and William Newell, the intended purchaser of the Licence.

There were several exhibits attached to Mr. Durdle’s affidavit including the 2012 Agreement, which Mr. Clowe did not bring to the Court’s attention.

Part 1: Is there a serious issue to be tried? [ 25 ] To meet the first part of the test, Mr. Clowe must demonstrate that his claim is not frivolous or vexatious; in other words, that there is a serious issue to be tried ( RJR-MacDonald , at paragraph 49). [ 26 ] There are no specific requirements, which must be met to satisfy this stage. The threshold is a low one. I must make a preliminary [1] , not an extensive assessment of the merits of the case to determine if a serious issue has been raised. If Mr.

Clowe satisfies me that the case is neither vexatious nor frivolous, I must move on to consider the second and third parts of the test even if I am of the opinion that Mr. Clowe is unlikely to succeed at trial ( RJR MacDonald , at paragraph 54). [ 27 ] On filing the Application, Mr. Clowe submitted that there is a serious issue to be tried “namely the ownership of the fishing licence held by the First and/or Second Respondents”. This is not the remedy sought however in the Statement of Claim where Mr.

Clowe asks the Court for a declaration of a partnership and a determination of the partners’ shares. [ 28 ] During submissions, counsel for Mr. Clowe clarified that the serious issue to be tried is the existence of a partnership and whether the Licence constitutes an asset of the alleged partnership. Mr. Clowe does not contest that the Licence is issued to TDL. He submits that this is because DFO only permits the holding of the Licence in one party’s name. [ 29 ] Mr. Clowe relies upon the cases of Green v. Harnum , 2007 NLCA 57 and Tremblett v.

Tremblett , 2012 NLTD 166, as examples of cases where although a fishing licence was held in one party’s name, another party could have an interest in it as a partnership asset of a fishing enterprise. [ 30 ] Mr. Clowe attested that he and Mr. Durdle operated a fishing partnership from 2012 until the present. He claims they shared profits and losses and participated in the joint management of the enterprise but that he took a larger role. [ 31 ] Mr. Durdle’s evidence is that he has never been in a partnership with Mr. Clowe. He attests that the only arrangement he and TDL had was with 67148, not Mr.

Clowe, as evidenced by the 2012 Agreement. [ 32 ] The Defendants contend that by virtue of the alleged partnership, Mr. Clowe is asserting he is entitled to control the rights and privileges conferred under the Licence including the ability of the Defendants to transfer it to Mr. Newell. Hence, he is seeking an injunction to prevent the transfer pending the adjudication of the partnership issue. [ 33 ] The Defendants acknowledge the low threshold that Mr. Clowe has to meet to satisfy the first aspect of the test but contend that there is no serious issue to be tried. This is because, they say, Mr.

Clowe is prohibited by the Atlantic Fishery Regulations , 1985, SOR/86-21 (“the Regulations ”) from preventing TDL from exercising the rights and privileges conferred on it by the Federal Crown in the issuance of the Licence, including the transfer of the Licence. As such, the claim by Mr. Clowe to any interest that would give him control over the transfer of the Licence is frivolous and vexatious. It cannot constitute a serious issue to be tried. [ 34 ] I find that the issue of whether Mr.

Clowe can exert control over the transfer of the Licence is more pertinent to the irreparable harm prong of the test. [ 35 ] The serious issues to be considered at this stage of the test are the issues to be adjudicated at trial. Those issues are as set out in the Statement of Claim – namely whether a partnership exists between Mr. Clowe and Mr. Durdle and if so, a determination of the respective shares of the partners. If Mr.

Clowe is successful in establishing the existence of a partnership, it will be determined at trial what assets constituted partnership assets. [ 36 ] The terms of the 2012 Agreement cause me to question whether Mr. Clowe will ultimately be successful in this action at trial. The 2012 Agreement covers the time period and largely addresses the same subject matter as the allegations contained in the Statement

of Claim which Mr. Clowe claims forms the basis of the alleged partnership. Mr. Durdle claims there was no partnership with Mr. Clowe and that the 2012 Agreement captures the entirety of the arrangement he and TDL had with 61748. [ 37 ] This may be a hurdle for Mr. Clowe to overcome if he is to establish the existence of a partnership agreement between himself and Mr.

Durdle with terms beyond what was negotiated and agreed upon between the Defendants and 61748 at the time of financing the purchase of the Licence. [ 38 ] I am not to make a detailed inquiry however into the merits of the action on an interlocutory injunction application. It is not my role as the Application judge to decide the issues identified in the main action on the basis of limited evidence. These are matters to be determined by a trial judge. [ 39 ] Mr. Clowe may be able to establish at trial the existence of a partnership and that the assets of that partnership included the Licence.

Those are the serious issues to be tried.

Part 2: If I refuse the injunction, will Mr. Clowe suffer irreparable harm? [ 40 ] To meet the second branch of the test, Mr. Clowe must show that a refusal to grant the injunctive relief could so adversely affect his own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application.

In other words, he would suffer “irreparable harm” if the injunction is not granted ( RJR-MacDonald , at paragraph 62). [ 41 ] The Supreme Court said in RJR-MacDonald , at paragraph 64, that in determining irreparable harm it is not the magnitude of the loss that is relevant but the nature of the loss. Mr.

Clowe must prove that he will likely suffer loss that either cannot be quantified in monetary terms or cannot be cured, usually because it will be uncollectible. [ 42 ] The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration ( RJR- MacDonald at paragraph 64 citing Hubbard v. Pitt , [1976] Q.B. 142 (C.A.)). [ 43 ] In the Application, Mr.

Clowe claims that he will suffer irreparable harm arising from the loss of the fishing income if the Licence is transferred, or loss of profit from the sale of the Licence if it is sold for less than its fair market value. He contends these losses would not be collectible from the Defendants as they have no substantial assets other than the Licence. [ 44 ] At the hearing, counsel for Mr. Clowe advanced another ground of irreparable harm which was not set out in the Application and therefore there was no affidavit evidence from Mr. Clowe to support this submission.

Counsel submitted that if I do not grant the injunction, the transfer of the Licence will likely proceed before the adjudication of the partnership issue. Thus, Mr. Clowe would lose any control he may be entitled to exercise over the decision to transfer of the Licence including whether to transfer, to whom to transfer, and the timing and terms of any transfer. [ 45 ] Although this aspect of the claim lacks an evidentiary basis by Mr.

Clowe, I will address it to determine whether it raises a legal issue that may be supported by the evidence put before the Court by the Defendants. [ 46 ] The Defendants submit that if Mr. Clowe is successful in the action in establishing a partnership, at best, he may be entitled to a portion of the proceeds from the sale of the Licence. This being monetary relief as opposed to specific performance means he would not suffer irreparable harm. The Defendants contend that Mr. Clowe cannot have any control over the transfer of the Licence.

Only the Defendants, as the parties who hold the Licence, can have that control. [ 47 ] I will now discuss the three possible grounds of irreparable harm. 1. Loss of Control by Mr. Clowe over the Transfer of the Licence [ 48 ] This ground of irreparable harm was raised by Mr. Clowe’s counsel at the hearing. The argument is that if the injunction is not granted, Mr. Clowe will lose any control he may, as a partner, be entitled to exercise over the transfer of the Licence. [ 49 ] Mr. Clowe may be able to establish a partnership at trial and that he is entitled to a share of the value of the partnership assets.

He may also be able to establish that the Licence was an asset of the partnership. It is not for me on this Application to make that determination beyond what I have said in terms of my concerns as to the strength of his action under the “serious issue” portion of this decision. [ 50 ] The question at this stage is whether a potential interest in the Licence as a partnership asset, gives Mr. Clowe the right to control whether it is transferred. [ 51 ] Mr. Clowe relies upon Tremblett to support his position that he may have an interest in the Licence as a partnership asset.

In that case, William Tremblett and his brother, Douglas Tremblett had fished together for many years. After their relationship broke down, they ceased working together. William Tremblett continued to operate the enterprise and fished the crab licence, which was in his name.

Although there was no written agreement between the brothers, Douglas Tremblett was successful in an action against his brother claiming that he and William Tremblett had operated the fishing enterprise in equal partnership. [ 52 ] In Tremblett , the trial judge held that the partnership covered all aspects of the fishing enterprise, including the crab licence. [ 53 ] Tremblett , did not address the issue of whether a partner in whose name the Licence is not held can exert control over the transfer of the Licence.

The relief granted in that case to the partner who did not hold the licence was as provided by sections 39 (winding up) and 42 (sharing profits or interest on partnership share since dissolution) of the Partnership Act , R.S.N.L. 1990, c. P-3 .

[ 54 ] The litigation involving the Tremblett brothers did not end with the trial. There were a number of post-trial decisions including the decision Tremblett v. Tremblett 2013 NLCA 53 , which dealt with an appeal by William Tremblett of an order denying a stay of execution of a previous order pursuant to which he was to pay Douglas Tremblett the judgment owed by a certain date in default of which the crab licence would be sold to satisfy the debt.

The Court of Appeal allowed the appeal and granted a short stay of execution to allow William Tremblett, the licence holder, more time to arrange finance to pay the judgment. [ 55 ] Mr. Clowe relies on the Court of Appeal decision as support of his position that he would suffer irreparable harm if the injunction were not granted.

In particular, he points to paragraphs 71 and 75 where Green, C.J.N.L. (as he then was), wrote as follows: 71 With respect to the second part of the test (irreparable harm to William), the judge failed to focus at all upon the impact of having to pay the judgment without further delay would have on William.

There was, of course, much evidence before the judge, including affidavit evidence from previous stay hearings (which was available for use on the current proceeding - see rule 48.14) which itemized the impact on the continued viability of William's enterprise and on the employment conditions of Bonavista residents dependent on it. His point was that if a short further extension could be granted, Douglas would likely receive payment of the judgment in full and all of the negative economic impact on William and those dependent on him could be avoided.

None of this was addressed by the judge in his reasons for denying the stay. Failure to do so was, in these circumstances, an error in principle. … 75 Here, there was irreparable harm that would be suffered by William if a stay were not granted and a sale of the licence proceeded forthwith. It would involve the potential destruction of an economically viable business enterprise with consequential impacts on those dependent on it.

While it is true that William might over time establish a new enterprise, if he could acquire a new licence, that might have the potential of being as profitable as the current one, that would not account for the loss of income in the meantime. The harm resulting from the closing of the existing enterprise is therefore effectively irreparable. [ 56 ] The context however, in which those comments were made by the Court of Appeal differs substantially from the circumstances before me. The Court of Appeal was dealing with a post-trial stay of execution.

The stay sought was for a brief period of time to allow the party who held the fishing licence in his name, additional time to arrange financing to pay out the trial judgment so that his fishing enterprise could continue. [ 57 ] The Court of Appeal found that to not allow William Tremblett the extra time could mean the destruction of an economically viable business enterprise. It was the closing of the enterprise of the holder of the licence that the court found would effectively be irreparable harm. [ 58 ] In this case, Mr. Clowe is not the holder of the Licence.

There is no concern that if the injunction were not granted in this case, that the fishing enterprise would be at risk of being lost by the party that holds the Licence. Further, the injunctive relief sought by Mr. Clowe would not be for a brief period of time as this litigation is in its early stages. [ 59 ] Even if Mr. Clowe can establish at trial the existence of a partnership, he did not provide any evidence on this Application of terms of the alleged partnership which would cause me to conclude that he would suffer irreparable harm if the transfer of the Licence proceeds before the trial.

For example, he did not attest to having any right over the transfer of the Licence such that he could control if, when, to whom and on what basis the Licence is transferred. Nor has he attested that he has a right of first refusal over any transfer of the Licence. [ 60 ] The Defendants contend that the 2012 Agreement was the only arrangement regarding the Licence and that agreement was with 61748, not Mr. Clowe.

Through the 2012 Agreement, the Defendants retained the sole and exclusive right to transfer the Licence, with the approval of DFO. [ 61 ] The Defendants also submit that the Licence is issued at the pleasure of the Federal Crown with the restrictions specific to the Licence holder. They raise the concern that Mr.

Clowe cannot have a controlling interest in the Licence as that would be contrary to the Preserving the Independence of the Inshore Fleet in Canada’s Atlantic Fisheries policy (“PIICAF Policy”) and the Regulations . [ 62 ] On April 1, 2021, the Regulations were amended by the addition of sections 18 - 22 .

Section 18 defines the licences to which the Regulations apply which includes the Licence. [ 63 ] Sections 19(3) provides as follows: 19(3) A licence referred to in paragraph 18(

a) or (

c) shall not be issued if, at the time of the application, the applicant has transferred the use or control of the rights and privileges conferred under the license for which the applicant is the licence holder or was the licence holder in the 12 months prior to the application or conferred under a licence that may be issued to the applicant. [ 64 ] Prior to the enactment of this provision, restrictions on the control of the rights and privileges of fishing licences were governed by the PIFCAF Policy. [ 65 ] A prohibited controlling agreement under the PIFCAF Policy meant an agreement between the licence holder and another party that would permit a person other than the licence holder to control or influence the licence holder’s decision to submit a request to DFO for issuance of a replacement licence to another fish harvester (commonly referred to as a “licence transfer”). [ Elson v.

Canada (Attorney General) 2019 FCA 27 ]. [ 66 ] It appears that the parties to the 2012 Agreement addressed the issue of compliance with the PIFCAF Policy. The 2012

Agreement stipulates that TDL maintains the sole and exclusive right to transfer the Licence with the approval of DFO. Further, pursuant to clause 2(

f) of the 2012 Agreement, TDL represented and warranted in favour of 61748 that it was in compliance with the PIFCAF Policy and that it was not a party to a controlling agreement. [ 67 ] Whether the 2012 Agreement itself was in compliance with the PIFCAF Policy is not an issue that I need to examine on this Application. I simply reference clause 2(

f) as it is evidence that supports the Defendants’ position that there was no arrangement with Mr. Clowe that would give him a right to control the transfer of the Licence. [ 68 ] Mr. Clowe did not provide any evidence to show otherwise. Assuming Mr. Clowe may be able to establish a partnership at trial, it was incumbent on him on this Application to substantiate his claim of irreparable harm by showing that the terms of the alleged partnership agreement conferred upon him a right to control the transfer of the Licence.

He did not do so. [ 69 ] I find the Defendants’ submission regarding the concerns of a party other than the Licence holder exerting control over the Licence, compelling. On the other hand, Mr. Clowe has not established that he has a right to interfere with or prevent the transfer of the Licence. Therefore, Mr. Clowe has not established that the transfer of the Licence prior to the adjudication on the partnership issue will cause him irreparable harm due to losing the right to have input or control over the transfer. There cannot be irreparable harm to Mr.

Clowe in the loss of something to which he has not established an entitlement. [ 70 ] If Mr. Clowe is successful at trial in establishing the existence of a partnership and that the Licence was a partnership asset, I would expect that the remedy would be similar to that conferred on the party who did not hold the licence in Tremblett ; namely a winding up of the partnership and a share of the value of the partnership assets including the sale proceeds from the transfer of the Licence.

(2) Loss of Fishing Income, and

(3) Loss of Proceeds of the Sale of the Licence Being Under Fair Market Value [ 71 ] Mr. Clowe’s alleged loss of fishing income and proceeds of an undervalued sale of the Licence are losses that are capable of being assessed as monetary losses. The question then is whether those losses are such that they would not be collectible if he is successful at trial in establishing the existence of a partnership. [ 72 ] Mr.

Clowe claims that these losses would not be recoverable from the Defendants as they have no substantial assets other than the Licence and that it is worth approximately double the sale value that has been negotiated by the Defendants pursuant to the APS. 2. Loss of Fishing Income [ 73 ] Mr. Clowe claims that since the purchase of the Licence up to the present, he has fished the quota annually under designation from Mr. Durdle. Mr. Durdle disputes that.

His evidence is that after he regained control of the enterprise, he designated another person to fish the Licence during the 2021 fishing season. [ 74 ] In any event, Mr. Clowe contends if the Licence were sold, his loss of fishing income would be irreparable because crab licences are scarce and it is unlikely he would be able to replace it. For support of this submission, Mr. Clowe relies upon Mr.

Newell’s affidavit in which he attested that he would be “ irrevocably harmed” by the frustration of the sale of the Licence given that the market for such licences is becoming increasingly competitive because of the limited supply. [ 75 ] The difficulty with Mr. Clowe’s claim that he would suffer irreparable harm from the loss of fishing income is that he did not provide evidence to establish why he would be entitled indefinitely to fish the Licence. The Application simply states that Mr. Clowe fished the quota from the date of purchase and that he was in a partnership arrangement. [ 76 ] Mr.

Clowe did not provide any evidence as to any terms of the alleged partnership agreement that would give him an entitlement to fish the quota indefinitely. Nor is there any evidence that pursuant to the alleged partnership agreement, Mr. Clowe had a right of first refusal to the Licence on transfer. [ 77 ] On the other hand, the Defendants rely on the 2012 Agreement. Mr. Durdle attests the only arrangement the Defendants had was with 67148. His evidence is that the 2012 Agreement was given to help secure the $582,000.00 paid by 67148 and dictated the terms between the parties to the agreement. [ 78 ] Mr.

Durdle’s assertion that this was the only arrangement is supported by clause 13 which provides that the agreement constitutes the entire agreement between the parties with respect to the subject matter of the agreement and supersedes any and all other existing agreements between the parties oral or written, or arising out of a course of dealing. Further, it is stipulated that no amendment to the agreement shall be valid unless in writing. [ 79 ] Again, Mr. Clowe is not a party to the 2012 Agreement. 61748 is a party to the agreement. That company is not a party to this litigation. [ 80 ] Although Mr.

Clowe is not a party to the 2012 Agreement, he signed it on behalf of 61748 and would be aware of its terms. Pursuant to the 2012 Agreement, TDL gives permission to 61748, not Mr. Clowe, during the term of the agreement, to have the use and benefit of the Licence, and assigns to 61748 all catch and quota, together with the proceeds thereof under the Licence. [ 81 ] If Mr. Clowe is able at trial to establish a partnership and that the Licence was a partnership asset, his remedy will be his share of the value of the Licence.

The capital value of the Licence would generally be expected to represent its future income stream as one of its indicators of its value. This is a monetary loss which is quantifiable. 3. Loss of Proceeds of the Sale Being Under Fair Market Value [ 82 ] If Mr. Clowe is able to establish a partnership at trial and that the Licence is an asset of that partnership, he would be entitled to a share of the proceeds of the sale of the Licence.

[ 83 ] The price negotiated for the sale of the Licence to Mr. Newell is $4.325 million. Mr. Clowe contends this is grossly under the true value of the Licence. [ 84 ] He attested that since the Spring of 2021 he had received “several offers” for the transfer of the Licence from other interested parties for amounts over “$8 million.” If this is an accurate assessment of the value of the Licence and it is sold for almost half that price before trial, there could be concern as to the Defendants’ ability to pay any share to which Mr. Clowe may be determined to be entitled. [ 85 ] Mr.

Clowe did not however provide any specific details of the “several offers” in terms of timing of these offers, whether the offers were verbal or in writing, the exact amounts, whether they were with arm’s length third parties, or any other terms and conditions that may have been associated with these offers. Nor did Mr. Clowe proffer any independent evidence such as an opinion from an appraiser to support his contention as to the value of the Licence. [ 86 ] On the other hand, William Newell, the purchaser in the APS, attests that he is a bona fide third party purchaser and has no connection or relation to Mr.

Durdle. He states that he made an offer based on fair market value and understands there were two other offers and his was the highest. [ 87 ] Mr. Newell further attests that the snow crab and groundfish quota are being divided up between himself and two other fishermen for the total purchase price of $4.325 million. The other purchasers also have no connection to Mr. Durdle to best of his knowledge and belief. They came into the transaction through him. [ 88 ] Mr.

Durdle likewise attested that the offer he has accepted for the Licence was for fair market value to an arm’s length purchaser. [ 89 ] I accept the evidence of Mr. Newell and Mr. Durdle that the negotiated sale of the Licence is an arm’s length transaction and based on the evidence before me, I accept that the price negotiated was for fair market value. Mr. Clowe’s claims that he had offers for twice that amount are vague and lacking in details. [ 90 ] The Defendants, on the other hand, proffered the APS that has been negotiated.

Upon review, there is nothing in the APS to cause me concern that the price negotiated is less than fair market value or is other than arm’s length. It is difficult to believe that Mr. Durdle would transfer the Licence for half of its value to an arm’s length third party. [ 91 ] If Mr. Clowe is successful at trial in establishing the existence of a partnership, that he is entitled to a share of the value of the Licence as an asset of that partnership, and that the sale of the Licence was less than fair market value, he can pursue this as damages for loss of profit.

This is a monetary loss, which should be easily quantifiable. Collectability of the Potential Losses [ 92 ] Mr. Clowe did not provide any evidence to support his claim that the Defendants have no substantial assets other than the Licence. [ 93 ] On the other hand, there was evidence that there would be money available to pay potential losses which Mr. Clowe may incur. The evidence of Mr. Durdle is that the fishing proceeds for the 2021 fishing season are being held in trust pending the outcome of this litigation. The affidavit evidence of Mr.

Newell is that based on his due diligence during the purchase, he is not aware of any other lienholders in relation to the Defendants’ enterprise. Mr. Newell has offered to tender the sale proceeds for the purchase of the Licence into court and believes the other two purchasers have agreed to do likewise. [ 94 ] Mr. Clowe has not satisfied me on this Application that any potential losses he may suffer would be uncollectible and thereby constitute irreparable harm. Conclusion on

Part 2 of the Test [ 95 ] Mr. Clowe bore the burden on the Application of establishing he would suffer irreparable harm if the injunction were not granted. He fell short of meeting the onus. On this basis I would deny the Application. I will nonetheless deal with the third prong of the test.

Part 3: The Balance of Convenience [ 96 ] At the third stage of the test, referred to the balance of convenience, I must assess which of the parties would suffer the greater harm from the granting or refusal of the interlocutory injunction pending a decision on the merits of the action. [ 97 ] Where the application of the balance of convenience test leads to no clear resolution, the Court will normally seek to preserve the status quo. [ 98 ] In determining the balance of convenience, a factor to be considered is whether an undertaking in damages has been given by the party requesting the interlocutory injunction and, if so , an analysis of the strength of that undertaking. [ 99 ] In accordance with the direction given in Hurley , the party requesting the interlocutory injunction should give an undertaking in damages that would be adequate, if the responding parties were to succeed at trial, to compensate them for loss sustained because of the granting of the injunction.

The party giving the undertaking ought, as a general rule, to be in a financial position to honour the undertaking if called upon. [ 100 ] At the hearing, Mr. Clowe filed an undertaking to indemnify and save harmless the Defendants for any damages sustained at law by them because of the injunction preventing the sale of the Licence pending the outcome of the trial. This undertaking was accompanied by an affidavit by Mr. Clowe attesting to his net worth of approximately $10,000,000 in personal and corporate holdings

including various real estate holdings. [ 101 ] Mr. Clowe contends that the balance of convenience weighs in his favour. He claims he would suffer loss of fishing income, proceeds from the undervalued sale of the fishing licence and the opportunity to be involved in decisions regarding the transfer of the Licence. He submits that the Defendants would merely be inconvenienced by the delay in the sale of the Licence if they are successful at trial. He contends the Defendants would suffer no loss if they were successful at trial as the sale price would be the same or higher at the end of trial as it is today.

In the interim, the fishing licence can be fished and the catch proceeds paid into trust pending the resolution of this matter. [ 102 ] Mr. Clowe provided no evidence other than his own assertion to substantiate that the sale price for the Licence would remain the same or increase between now and the end of trial. [ 103 ] For their part, the Defendants submit that if I grant the injunction, it will prevent them from fulfilling the pending agreements they have entered into regarding the sale of all the fishing licenses.

In addition to the significant financial consequences to them, it puts them at risk of litigation over the sale of the licences. [ 104 ] Furthermore, the Defendants submit that the granting of injunctive relief sought could put the Licence at risk of being suspended or cancelled because it would lend credibility to the existence of a partnership agreement that gives Mr. Clowe, a party other than the Licence holder, control over the rights and privileges conferred by the Licence, including the right to restrict the transfer of the Licence.

This would violate the Regulations . [ 105 ] Section 9 (1) of Fisheries Act states as follows: 9(1) Suspension or cancellation Subject to subsection (2), the Minister may suspend or cancel any lease or licence issued under the authority of this Act, if (

a) he or she determines that any provision of that lease or licence was not complied with; (

b) he or she determines that the lease or licence holder has, with respect to the lease or licence, entered into an agreement that contravenes any provision of this Act or of the regulations; or (

c) the lease or licence holder is in default of payment of a fine in relation to a contravention of this Act and the proceeds of the fine belong to Her Majesty in right of Canada or of a province or to any other person or entity. … [ 106 ] The Defendants submit that in the event Mr. Clowe is successful in establishing a partnership, the presumption remains in favour of a sale of the assets, because the parties are unwilling to continue working together . Mr.

Clowe would be entitled to his share of the partnership assets including a share of the value of the Licence, if it is determined to be a partnership asset. [ 107 ] I have already decided that Mr. Clowe did not establish any loss that would constitute irreparable harm. I also concluded that Mr. Clowe did not establish an entitlement to control the decision to transfer the Licence. Mr.

Clowe can continue his action to claim the existence of a partnership, which, if successful, would allow him to recover monetary damages similar to the outcome in the Green and Tremblett cases. [ 108 ] I conclude that the Defendants would suffer the greater harm if the injunction were granted than the harm suffered by Mr. Clowe if it is not. Although Mr.

Clowe’s undertaking may be broad enough to indemnify the Defendants for any damages they are required to pay as a result of the breach of contracts arising from not being able to complete the sales of the licences, it does not protect the Defendants from the non-monetary aspects of being embroiled in litigation. Nor does it protect the risk of the licence being suspended or cancelled. [ 109 ] Therefore, I find that the balance of convenience favours not granting the injunction. [ 110 ] Having found that Mr.

Clowe failed to establish irreparable harm and that the balance of convenience favours the interlocutory injunction not being granted, it is unnecessary to consider the desirability of preserving the status quo or the relative strength of each party’s position.

summary and conclusion [ 111 ] Mr. Clowe has not established that this is an appropriate case in which the Court should exercise its discretion and order an interlocutory injunction pending the trial of this action. The Application is dismissed. [ 112 ] It was apparent that the Defendants put significant effort into responding to this Application. They shall have their costs on a Column 3 basis. _____________________________ Sandra R Chaytor Justice