British Columbia (Director of Civil Forfeiture) v. Rai, 2011 BCSC 186

In the Rai case, Mr. Justice Silverman of the BC Supreme Court articulated the factors that must be taken into account in order to determine whether forfeiture is “clearly not in the interests of justice,” thus establishing a defence pursuant to Section 6(1) of the Civil Forfeiture Act.

In Rai, the Director of Civil Forfeiture sought forfeiture of three homes owned by the Defendant, Sarban Singh Rai. It was common ground that the homes in question had been used for marijuana grow operations. Rai, however, who owned a total of twelve rental properties, claimed that he was unaware of an uninvolved in the grow operations.

Justice Silverman believed Rai’s testimony only partially, finding that although he had no direct involvement in the grow ops, he was aware of them, turned a blind, eye, and collected rental income from those responsible. It was in this context and based on these factual findings that Silverman applied his analysis as to whether forfeiture of the properties, which were valued at a combined total of approximately $1.5 million, was “clearly not in the interests of justice.” He articulated the relevant principles as follows:

“[111] A non-exhaustive list of relevant factors to be considered in cases of this kind includes the following:

1. proportionality;

2. fairness;

3. the degree of culpability, complicity, knowledge, acquiescence, or negligence;

4. the extent of the problem in the community of the sort of unlawful activity in question;

5. the need to remove profit motive;

6. the need for disgorgement of wrongfully obtained profits;

7. the need for compensation;

8. prevention of future harm;

9. general deterrence.

[112] The degree of culpability, complicity, knowledge, acquiescence, or negligence is not relevant to any consideration of a punitive remedy. However, where the degree of those factors is minimal or reduced, their consideration may be relevant to the question of whether the interests of justice call for some relief from forfeiture.

[113] Proportionality and fairness will always be the dominant considerations. They are necessarily related and will often include a consideration of the following:

1. A balancing of the impact of a forfeiture order on, and a balancing of the interests of, the state, the defendant, and other affected parties, such as innocent victims, and/or innocent spouses or children of the defendant.

2. Where the extent of forfeiture of real property is under consideration, the following questions become relevant:

(a) how much equity is there in the property?

(b) how much was the defendant’s legitimate investment in the property before criminal activity commenced?

(c) how much equity has built up as a result of market conditions?

(d) how much equity has built up since an interim preservation order was granted under the Act?

3. Would forfeiture require a drastic lifestyle change for the defendant and/or for innocent family members?

4. Would forfeiture affect employment opportunities?

5. The magnitude of the unlawful activity and/or of its profits, or potential profits.

[114] A purely mathematical analysis will rarely, if ever, be the most suitable approach.”
Ultimately, Justice Silverman concluded that in the circumstances, full forfeiture of all the properties would not be in the interests of justice, but that the relief granted to the Defendant should be less than 50% of the total value. Based on this conclusion, he ordered two of the houses forfeit to the Director, while allowing the Defendant to retain ownership of one house with an assessed value of $528,000.

Rai stands for the proposition that Section 6(1) of the Civil Forfeiture Act can provide some meaningful relief from forfeiture, but is based on a balancing act where the onus falls squarely on the Defendant to demonstrate that they should be able to keep some of their property. Once the Director establishes that a property is probably proceeds and/or an instrument of crime and that the Defendant is probably not an uninvolved interest holder, avoiding a massive forfeiture order becomes an uphill battle indeed.

Decided by the BC Supreme Court on February 16, 2011.
Click here for the full text of the decision.

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