British Columbia (Director, Civil Forfeiture Act) v. Wong, 2014 BCSC 359 – Director Freezes Defendant’s Accounts Despite Prior Civil Settlement

The Defendants, Arthur and Jessie Wong, were accused of defrauding their employer, Unique Real Estate Accommodations Inc., for upwards of $350,000. The Director of Civil Forfeiture sought an Interim Preservation Order, so as to effectively freeze the contents of the Defendants’ bank accounts.

The Defendants had apparently acknowledged the existence of a debt to their employer, and had already settled that debt on mutually-agreeable terms. Furthermore, there was no evidence to connect the impugned bank accounts to the alleged fraud.

Nevertheless, the Director was successful in obtaining an Interim Preservation Order against the bank accounts with deposit activity after May 28, 2007, the date upon which Mr. Wong commenced his employment with Unique.

Courts have previously recognized that, for public policy reasons, the criminal process should not be used as a means to collect private debts (see: R. v. Thore, 2001 BCSC 507). The Wong case represents a troubling reversal of this principle, and establishes a back door by which the machinery of the state might be used against civil debtors, even after the debt in question has been settled. The effect of this decision may be to disincentivize the amicable settlement of debts through the normal channels of civil litigation.

Decided by the BC Supreme Court on March 4, 2014.
Click here for the full text of the decision.

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