Executive Summary: Key Legal and Evidentiary Issues

• Characterization of the injunction as mandatory or prohibitive, and the resulting threshold (serious issue vs. strong prima facie case) under the RJR-MacDonald framework.
• Alleged fiduciary duties owed by the MFU and Opilio to individual member-captains, and whether boards of directors owe fiduciary obligations to members as opposed to the corporate entity.
• Validity and legal effect of eligibility criterion 12, excluding members engaged in litigation with the MFU or its subsidiaries from the snow crab draw, including its characterization as a legitimate “retaliation” or risk-management clause.
• Assessment of claimed losses from exclusion from the 2026 snow crab draw and fishery, and whether such harm is irreparable or merely pecuniary and compensable in damages.
• Impact of the injunction on the internal democratic governance of the MFU and Opilio, and on the relative chances of other eligible members in the snow crab draw.
• Procedural limits on converting a Rule 69 judicial review application into an ordinary action, and the court’s discretion to abridge time and allow a preliminary motion for an interlocutory injunction.

Background and parties

The dispute arises out of the management of a community snow crab allocation in New Brunswick. The applicants are six inshore fishing boat captains, all members in good standing of the Maritime Fishermen’s Union (MFU). They either won the 2025 draw for the MFU community snow crab fishery or fished the allocation on behalf of the winning captain, a practice accepted by the respondents. To fish the allocation, they signed letters of agreement with Opilio (U.P.M./M.F.U.) Inc. in March 2025. After the 2025 season, each applicant commenced a separate action against Opilio around October 15, 2025, alleging breaches of contractual obligations. Opilio is a corporation created by the MFU to administer the inshore snow crab allocation granted by Fisheries and Oceans Canada. Its sole shareholder is the MFU, and its board, like that of the MFU, is composed of member-fishermen elected by the MFU membership. The MFU, incorporated under the New Brunswick Companies Act, represents approximately 1,300 independent owner-operators in New Brunswick and Nova Scotia and is recognized under the Inshore Fisheries Representation Act as the official representative of inshore fishermen in designated regions. It has no regulatory powers; regulation of commercial fishing rests with Fisheries and Oceans Canada.

The MFU allocation policy and the annual draw

Since 1995, the MFU has managed its community or inshore allocation of snow crab through an internal policy developed democratically by its members and governance bodies. That policy requires that only MFU members harvest crab for the organization, following a selection process. Each year, Opilio, in collaboration with the MFU, prepares a fishing plan for the inshore allocation and sets eligibility criteria for participation in an annual draw open to MFU members in good standing who meet specific conditions. The draw is used to select which member-fishermen will have the opportunity to fish the allocation. Successful captains must then sign a detailed agreement with Opilio, covering the terms and conditions of the fishing activity and compensation. While MFU members currently enjoy the opportunity to fish the inshore allocation, Opilio retains discretion to allow other fleets or non-member fishermen to fish the allocation in future years to optimize profits for MFU members. Over time, Opilio and the MFU have modified and added draw criteria considered appropriate by their boards. A requirement that members not be engaged in litigation with the MFU or its subsidiaries has been in place since at least the 2024 season, and it was retained for 2024, 2025 and 2026.

Criterion 12 and the 2026 snow crab draw

On January 15, 2026, the applicants received an email from the respondents giving notice of the draw for the 2026 community snow crab fishery and setting out eligibility criteria. Criterion 12 of the 2026 eligibility criteria provides that a member who is involved in or initiates active legal proceedings that could be detrimental to the MFU or one of its subsidiaries, or to persons directly or indirectly connected to them, is ineligible to participate in the draw or the community snow crab fishery “until further notice.” The applicants argued that, because they had filed lawsuits against Opilio on October 15, 2025, criterion 12 rendered them ineligible for the 2026 draw and barred them from participating in the community fishery. They sought to prevent the respondents from applying criterion 12 so that they could enter the draw scheduled for February 12, 2026. Other provisions of the criteria were relevant to how the court characterized the relief sought. Criterion 9 required members to confirm participation in the draw by calling designated telephone numbers for the relevant zones, placing responsibility for registration on the fishermen themselves. Criterion 10 provided that ineligible members who nonetheless entered the draw and were selected would receive written notice of disqualification within a reasonable time.

Procedural history and attempts to reframe the proceeding

The litigation began with a Notice of Application under Rule 69 (judicial review) filed on January 27, 2026. The applicants sought, among other remedies, to have criterion 12 set aside. Concurrently, they filed a Notice of Motion for a prohibitive interlocutory injunction to prevent the application of criterion 12. An amended Notice of Motion was filed on January 30, 2026 seeking, in the alternative, a suspension of criterion 12 until a hearing on the merits under Rule 69.06(1)(a). On February 3, 2026, the applicants also filed a motion seeking to convert the Rule 69 application into an ordinary action pursuant to several procedural rules (Rules 1.02.1, 1.03(2), 2.01, 2.02 and 2.03), accompanied by an affidavit and draft statement of claim that would form the basis of an original action. Faced with an imminent deadline—applications for the draw were due February 6, 2026, and the draw itself set for February 12, 2026—the court granted an abridgment of time in order to hear the injunction motion, recognizing the urgency and time-sensitive nature of the relief sought. However, relying on the New Brunswick Court of Appeal’s decision in Henrie, the judge concluded that the court lacked jurisdiction to convert a Rule 69 judicial review application into an ordinary action. Rule 38.09(c), which allows conversion of an application into an action, applies only to applications commenced under Rule 16, not to Rule 69 review proceedings, which codify historic administrative law remedies and can only be pursued via Rule 69. On that jurisdictional basis, the motion to convert was dismissed.

Preliminary motion and the court’s discretionary powers

Given the jurisdictional bar to conversion, the applicants then sought to re-characterize their amended Notice of Motion as a preliminary motion for an interlocutory injunction, with an undertaking to commence an originating proceeding within a court-ordered time frame. The court accepted that it had broad discretion under Rule 40.01 and Rule 40.05 to allow such a procedural adjustment, including permitting an injunction application prior to the commencement of a formal action, on terms requiring the commencement of proceedings without delay. The judge noted that, even at the hearing stage, the court may allow amendments if doing so is just, equitable and efficient and any prejudice to the other party can be addressed, typically by costs. Here, although the respondents would have preferred more time, they were ready to proceed, and the court determined that any prejudice from the shortened timelines could be compensated by a costs award. The judge therefore treated the matter as a properly constituted preliminary motion for an interlocutory injunction, while expressly indicating that no decision was being made on the ultimate merits of the underlying contractual and governance claims.

Characterizing the injunction: prohibitive versus mandatory

A central issue was whether the injunction sought was prohibitive (preventing the respondents from doing something) or mandatory (compelling them to take positive steps). The characterization matters because under RJR-MacDonald the usual interlocutory test requires only a “serious issue to be tried,” whereas a mandatory injunction, given its potentially final and disruptive effects, demands a more exacting “strong prima facie case” standard, as clarified in R. v. Canadian Broadcasting Corp. The respondents argued that in substance the applicants were seeking a mandatory injunction: if the court prohibited reliance on criterion 12, it would effectively require the respondents to register the applicants in the draw. The applicants responded that they were not seeking to force registration, but simply to prevent the application of an unlawful eligibility criterion. The court examined the practical consequences against the text of the criteria. Because the rules required each member to confirm participation in the draw by telephone and provided for later disqualification of ineligible winners, the judge concluded that registration was the responsibility of the fishermen, not the respondents. If criterion 12 were suspended, the applicants could themselves register for the draw, and the respondents would not be obligated to take any positive action to place them on the list. On this basis, the court held that the relief sought was properly characterized as a prohibitive injunction directed at restraining reliance on criterion 12, not a mandatory order compelling registration. The ordinary RJR-MacDonald test therefore applied.

Alleged fiduciary duties and the “serious issue to be tried” test

Under the first branch of the RJR-MacDonald test for a prohibitive injunction, the applicants needed to show a serious issue to be tried—something neither frivolous nor vexatious—on at least one core claim. They asserted that the MFU and Opilio owed them fiduciary duties, either as a matter of principle or because of the particular circumstances of their relationship with member-captains. They alleged duties of loyalty, duties to act in members’ best interests, duties to avoid conflicts of interest, and obligations not to leverage their position as fiduciaries to the detriment of specific members. The applicants claimed these duties were breached when the MFU and Opilio adopted, maintained and applied criterion 12, which they framed as an oppressive or retaliatory provision designed to pressure them to abandon their lawsuits. The court undertook a preliminary review of the legal foundation for these fiduciary claims. Relying on Gauvin v. Association coopérative des pêcheurs de l’île and BCE Inc. v. 1976 Debentureholders, the judge emphasized that boards of directors generally owe their primary fiduciary obligations to the entity—the corporation, co-operative or association—not to individual members or shareholders. While directors certainly have obligations to be fair and act in the best interests of the entity as a whole, they are not ordinarily fiduciaries to particular members in their individual capacity. Applying this framework, the court found that the applicants’ contention that the MFU and Opilio stood in a special, elevated fiduciary relationship to them as individual member-captains was unsupported by the evidence or the case law cited. As a result, the judge held there was no serious issue to be tried on the alleged fiduciary duty theory, even under the relatively low RJR-MacDonald threshold. The court expressly noted that if the injunction had been mandatory, the more demanding “strong prima facie case” test would not have been met in any event, given the lack of a recognized fiduciary duty of the kind alleged.

Irreparable harm and the nature of the claimed losses

On the second branch of RJR-MacDonald, the court assessed whether the applicants would suffer irreparable harm if the injunction were refused. The harm asserted included exclusion from the 2026 draw and any resulting loss of opportunity to fish the community snow crab allocation and earn associated income. The judge stressed that irreparable harm means loss that cannot be quantified in monetary terms or cannot be cured by an award of damages, such as permanent loss of business, irreversible reputational damage, or destruction of a non-renewable resource. Here, entry into the snow crab fishery was contingent on success in a random draw. Meeting the eligibility criteria, including criterion 12, did not guarantee selection, and so any harm was inherently probabilistic. The applicants were all boat-owning captains who also engaged in other fisheries; the evidence did not show that their livelihoods depended solely on this particular fishery. The judge considered their assertions of harm to crew members—such as deckhands who would also lose potential income—but found that, fundamentally, the losses were financial and could be quantified. The applicants themselves acknowledged that the real issue was income from the allocation, citing figures from 2025, when the allocation was 77,000 pounds at $1.50 per pound (though that amount remained in dispute). The court held that any loss of profit flowing from exclusion from the 2026 draw, or from not being able to harvest the allocation if they were selected, would be strictly pecuniary and could be measured with reasonable accuracy using historical data and reasonable assumptions. The judge relied on authorities such as Burns v. Lynch and Dugas v. Gaudet to emphasize that courts can and do assess damages in such circumstances, and that bald assertions of ruin or catastrophic harm are insufficient without supporting evidence. On this analysis, the applicants failed to demonstrate irreparable harm.

Validity of criterion 12 as a “retaliation” or risk-management clause

The applicants also attacked criterion 12 as a retaliatory, coercive measure: a “retaliation clause” that effectively punished them for pursuing legal remedies by excluding them from the draw unless they abandoned their lawsuits. They argued this was abusive, oppressive, contrary to public policy and inconsistent with the respondents’ obligations toward their members. The court took a broader view of how similar clauses have been treated in Canadian law. Drawing on the J. Cote & Son Excavating Ltd. v. City of Burnaby decisions, the judge noted that public authorities have been permitted to adopt procurement clauses allowing exclusion of bidders who are in litigation with the contracting authority. Such clauses are recognized as valid, provided they are clearly drafted and applied in a non-arbitrary manner; they are understood as contractual eligibility conditions rather than punitive measures or denials of access to the courts. In that light, the court characterized criterion 12 as a legitimate contractual choice by the MFU and Opilio, adopted to manage legal and relational risks associated with entering into or continuing commercial arrangements with parties who are simultaneously suing them. The judge stressed that the respondents are not public bodies, and so enjoy even greater freedom to define how they will select counterparties to their commercial arrangements. It was considered reasonable for them to conclude that parallel litigation and a contractual fishing relationship could undermine trust and the smooth administration of the inshore allocation. The fact that such a clause may deter some members from suing does not, by itself, render it unreasonable or contrary to public policy.

Past acceptance of the litigation-exclusion criterion

An additional factor was that the litigation-exclusion requirement had been part of the eligibility criteria for at least the 2024 and 2025 seasons, yet the applicants had not previously challenged it. They participated in the MFU system and the draw process without raising concerns about criterion 12 until they themselves became subject to it as active litigants. Their prior acceptance of the policy undermined the assertion that the clause was obviously oppressive or unreasonable. The court held that criterion 12 should be seen as a legitimate risk-management mechanism designed to preserve the integrity, effectiveness and stability of the respondents’ contractual relationships, not as an unconstitutional or quasi-constitutional sanction. While the clause might have commercial consequences for members who sue, it did not deny them the right to commence proceedings; it simply required them to accept the commercial trade-off of reduced access to this particular opportunity while litigation was ongoing. This analysis dovetailed with the finding that the resultant harms were pecuniary and compensable, reinforcing the conclusion that irreparable harm was not established.

Balance of convenience and internal governance considerations

On the third branch of RJR-MacDonald, the court weighed which side would suffer greater harm from granting or refusing the injunction, including broader interests such as the functioning of the association’s internal democracy. The applicants pointed to three main inconveniences: denial of access to the draw because of their lawsuit, loss of the chance to obtain an allocation and earn revenues in 2026, and an asserted inability to claim damages later if excluded now. They contended that they alone bore any real harm and that the respondents would not be affected if the injunction issued. The respondents countered that their internal governance is based on a democratic structure where member-elected boards make policy decisions, including the adoption of eligibility criteria like criterion 12. Judicial interference with those internally approved rules—especially on an interim basis—could erode members’ confidence in their governance system. The court accepted that perspective, stressing that compelling the respondents to disregard criterion 12 or to treat the applicants as if the criterion did not exist would disturb the autonomy of these governance systems and impact other members who meet all existing requirements. From the respondents’ standpoint, granting the injunction would alter the relative chances of all participants in the draw and override a democratically adopted risk-management policy. Weighing both sides, the judge concluded that any inconvenience or loss suffered by the applicants from missing the 2026 fishery would, at most, translate into a quantifiable, compensable financial loss. In contrast, ordering the respondents to depart from their policies would undermine their democratic decision-making and the expectations of compliant members. The balance of convenience therefore favoured denying interlocutory relief.

Outcome of the interlocutory motions and costs

Having applied all three branches of the RJR-MacDonald test, the court dismissed the application for an interlocutory injunction. The applicants failed to demonstrate a serious issue to be tried on their key fiduciary theory, did not establish irreparable harm, and could not show that the balance of convenience favoured overriding the respondents’ democratically adopted eligibility policies. Separately, the motion to convert the Rule 69 judicial review into an ordinary action was dismissed for lack of jurisdiction, though the court allowed the matter to proceed by way of a properly constituted preliminary motion for an injunction. On costs, the court ordered the applicants to pay $1,500 to each respondent (a total of $3,000) in connection with the dismissal of the conversion motion, and another $1,500 to each respondent (another $3,000) for the dismissal of the injunction motion, a second award that also compensated the respondents for the prejudice arising from the abridgment of time. In total, the applicants were ordered to pay $6,000 in costs to the respondents, inclusive of HST and disbursements. The successful parties at this interlocutory stage were therefore Opilio (U.P.M./M.F.U.) Inc. and the Maritime Fishermen’s Union, in whose favour the total monetary award of $6,000 in costs was made.