Digby lobster processor facing closure over clerical mistake gets 2-month reprieve

The Nova Scotia government has postponed its decision to terminate the operating licences for a family-owned fish processing company near Digby, N.S., just hours ahead of an emergency court challenge.

SeaBrook Fisheries says it's being shut down as the result of a clerical error during succession planning. The company failed to notify the provincial Department of Fisheries and Aquaculture that control of the company had been passed to the son of the founders.

The department earlier this year ordered the company's fish buyers and fish processors licences to be terminated this Friday, effectively putting the company, which primarily processes lobster, out of business.

SeaBrook was scheduled for an emergency hearing Wednesday afternoon in Nova Scotia Supreme Court where it was seeking a stay. But before the hearing went ahead, the province agreed to suspend the termination until Jan. 18, when a judge will hear a motion to freeze the termination until an appeal of the ministerial decision takes place.

"I feel good about the situation. It's definitely a step in the right direction. But there is still a long way to go," Brent Lewis, the second-generation manager of SeaBrook, said Wednesday following the provincial reprieve.

In an earlier interview with CBC, Lewis said the mistake did not justify putting the company out of business.

"The department is being pretty extreme. We didn't really seem to do much wrong. We simply transferred a few shares inside the family," said Lewis.

In 2020, the majority of voting shares were transferred from Lewis's parents, who founded the company, to Brent Lewis, who had taken over day-to-day running of the business.

But SeaBrook failed to notify the Department of Fisheries and Aquaculture of the restructuring within 30 days as required under provincial regulations.

The department picked up on the change during the annual licence renewal. In April 2021, the department notified SeaBrook it was terminating its licences on the grounds control of the company had changed and notice had not been provided.

Lewis was aware of the 30-day requirement, but did not think the transfer constituted a material change.

"There's no outsiders involved. The plant wasn't sold. It's the same family business. My father, my mother and myself," he said.

His mother recently died.

"It was simply an oversight," said Lewis. "I didn't feel that it was a restructure. I could understand a fine or small penalty, but to go as far as to close SeaBrook down after 40 years, and putting 12 to 15 people out of work in the community of Digby does seem a bit extreme."

The Department of Fisheries and Aquaculture declined an interview request, responding with an emailed statement to CBC on Wednesday evening.

"The decision on this is currently being considered by the courts so it would be inappropriate to comment at this time," wrote spokesperson Bruce Nunn.

Last month, Fisheries and Aquaculture Minister Steve Craig upheld the department's decision following an internal appeal from Lewis and his lawyer.

The licences will be terminated on Nov. 26 before the company can get a hearing on its appeal of the minister's decision in Nova Scotia Supreme Court.

During the last decade, SeaBrook has been primarily a lobster processor with some crab. It handles about one million pounds of lobster each year. Its current licences allow it to process dozens of other species.

The Fisheries and Aquaculture Department gave SeaBrook the option of reapplying for a buyers and processors licence for lobster, but the company would lose its ability to process any other species.

Lewis refused. In the past, the company processed groundfish, scallops, clams, sea urchin and others.

"I'm not only a lobster buyer and processor. I wasn't willing to accept one licence and only have one opportunity when my father has 50 species under licence," he said.

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