The Nguyen case involved $242,505 in US cash, which had been seized from the Defendant, Mr. Nguyen, during a smuggling bust at the Canada-US border in 2003.
In early 2006, Mr. Nguyen went bankrupt. Shortly afterwards, the Director of Civil Forfeiture filed an action for forfeiture of the money, which had been held by the RCMP. Mr. Nguyen did not defend against the action, but his bankruptcy trustee, E. Sands & Associates Inc., argued that it was an asset that should be considered in accordance with the Bankruptcy and Insolvency Act.
It was an agreed fact, conceded by the E. Sands & Associates Inc., that the money was proceeds of crime, namely Mr. Nguyen’s involvement in trafficking marijuana in the United States. It was also common ground that the Civil Forfeiture Act (which became law in 2006) did not exist at the time of Mr. Nguyen’s offence. However, the Act itself states that its provisions apply “to an unlawful activity occurring before, on or after the date the Act came into force.”
Mr. Justice R. D. Wilson of the BC Supreme Court ultimately determined that the money was never the lawful property of Mr. Nguyen, and therefore was not an asset within the meaning of the Bankruptcy and Insolvency Act. For this reason, he concluded that E. Sands & Associates Inc. likewise had no rightful claim to the money, and that it should be forfeit to the Director of Civil Forfeiture.
Although fairly straightforward and un-contentious on its facts, this case provides a telling example of the retroactive nature of the Civil Forfeiture Act, which is a frightening feature in any quasi-criminal or potentially punitive legislation.
Decided by the BC Supreme Court on February 17, 2009.
Click here for the full text of the decision.