Both parties knew that the use of such a vessel without a license from the Minister was illegal, under the Fisheries Act (c. 73 Revised Statutes of Canada) 1927.

Maritime National Fish did not name the St. Cuthbert from Ocean Trawlers as one of the licensed vessels, and refused to go through with the hire, on the grounds the contract was frustrated.

At first instance, Maritime National Fish prevailed, the trial judge holding that it was "not unreasonable to imply a condition to the effect that if the law prohibits the operation of this boat as a trawler the obligation to pay hire will cease".

There is, however, a reference to the question in the speech of Lord Sumner in Bank Line, Ltd. v. Arthur Capel & Co. What he says is: "One matter I mention only to get rid of it.

"[2]This establishes clearly that frustration must be the fault of neither party; any supervening event must be unforeseeable and vitiated by entirely external factors.