Category Archives: Civil Forfeiture in Ontario

Governed by Ontario’s Civil Remedies Act, S.O. 2001, CHAPTER 28

A.G. Ontario v. Kittiwake Sailboat, 2015 ONSC 6106 – Impaired Operation of Sailboat Outside Proper Scope of Civil Forfeiture Legislation

The Attorney General of Ontario sought forfeiture of a sailboat on the basis that its owner, Valentin Chygyrynskyy “was seen operating his sailboat in Toronto harbour … struck a moored power boat [then] was observed falling out of his boat into the water.” Mr. Chygyrynskyy provided breath samples of “158 mgs and 147 mgs of alcohol per 100 ml of blood,” almost twice the legal limit.

Although there was no doubt that Mr. Chygyrynskyy had operated the sailboat while impaired, Corbett J. of the Ontario Superior Court of Justice concluded that this type of conduct fell outside the proper scope of the Civil Remedies Act:

“The general forfeiture provisions of the CRA do not authorize forfeiture of a leisure sailboat because the owner operated it while impaired. The CRA was intended to target organized crime, persons who make money from criminal conduct, and persons engaged in the most serious of criminal offences. It was never intended to cast such a wide swath as contended for by the A.G. Ontario in this application.”

Corbett followed the British Columbia case of Director of Civil Forfeiture v. Robinson and Allwright, and concluded that although it was possible Mr. Chygyrynskyy would re-offend, it could not be proven on the balance of probabilities that he would re-offend. Furthermore, it could not be proven on the balance of probabilities that his offence was “likely to result in … serious bodily harm to any person,” as required by s. 7(2) of the Civil Remedies Act.

Accordingly, the sailboat was ordered returned to Mr. Chygyrynskyy.

Decided by the Ontario Superior Court of Justice on September 30, 2015.
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Ontario (Attorney General) v $205,100 In Canadian Currency (In Rem), 2015 ONSC 2097 – Ontario Court Rubber-Stamps Speculative Forfeiture Claim

The Attorney General of Ontario applied for a preservation order pertaining to $205,100 in cash, seized from the Defendant’s apartment. The money was allegedly “tainted with the odour of controlled substances,” although the Attorney General presented no direct evidence as to the origin of the money.

The Court noted that “the threshold to meet for a preservation Order is reasonable grounds,” and “this is a lower standard of proof than that of balance of probabilities.” On this standard, it was determined that the Attorney General had satisfied the necessary standard for a preservation order.

This decision represents a frightening level of deference by the courts to the speculative judgments of police officers and bureaucrats. The Attorney General articulated some grounds for suspicion, but as Justice Macaulay of the BC Supreme Court noted in the Trimble case, “suspicions are not evidence.”

Justice Whitaker’s decision in Ontario v. $205,100 appears to shift the onus of proof onto Defendants to provide a credible explanation regarding the origin of money. Inevitably, this will lead to what the BC Supreme Court has referred to as “zealous measures outside the proper bounds of [civil forfeiture legislation] with the unfortunate effect of depriving [citizens] of lawful possession and use of … property.”

Regrettably, even as British Columbia’s courts have sought to reign in the civil forfeiture process and impose a degree of fairness, Ontario’s courts remain willing to rubber-stamp even the most speculative attempts at forfeiture.

Decided by the Ontario Superior Court of Justice on March 24, 2015.
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Ontario (Attorney General) v. 714 Railton Avenue, 2014 ONCA 397 – Criminal Sentencing Relevant to “Interests of Justice” Defence

The Railton Avenue appeal involved judicial consideration of the scope of the “interests of justice defence,” and specifically the implications of the criminal sentencing process in determining whether a given forfeiture application is “contrary to the interests of justice.”

The Defendant owner of the Railton Avenue property had pleaded guilty to a marijuana production offence and paid a fine of $10,000, on the understanding that the Crown would not seek forfeiture of his home. Almost three years after the guilty plea, the Attorney General of Ontario applied for forfeiture of the home under the province’s Civil Remedies Act.

The Ontario Court of Appeal upheld the trial judge’s decision that forfeiture in the circumstances was contrary to the interests of justice:

“In this case, the federal Crown obtained restraint and management orders, prosecuted and obtained a conviction, and formally agreed to an order lifting the restraint order, and did so in language that a reasonable person could assume meant that although he would have to pay a $10,000 fine and forfeit chattel property worth about $8,000, at least his house was safe.”

Railton Avenue highlights the disturbing double jeopardy issues which arise when the civil forfeiture process is used to take a second shot at an accused after criminal sentencing. Similar concerns arose in the British Columbia case of Director of Civil Forfeiture v. Wolff. Both Railton and Wolff involved the invocation of the “interests of justice” defence to avert what could otherwise have amounted to an unconstitutional form of double punishment.

Decided by the Ontario Court of Appeal on May 16, 2014.
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Ontario (Attorney General) v. 20 Strike Avenue, 2014 ONCA 395 – Court Refuses Forfeiture of Father’s Property Based on Son’s Drug Use

In Strike Avenue, the Ontario Court of Appeal considered the “interests of justice” exemption from forfeiture in circumstances where a property owner had rented a home to his son, who was involved in the drug trade.

The trial judge had found forfeiture to be “contrary to the interests of justice,” on the basis that the Province had waited six years to pursue its forfeiture application against the property. The Court of Appeal agreed that “the timeliness of a forfeiture application may be relevant to the analysis whether the Interests of Justice Exception to forfeiture is implicated,” but found that “an undue delay claim must be assessed in the context of the full record,” and “this was but one factor to be considered in the analysis whether the court should exercise its discretion under the Interests of Justice Exception.” On this basis, the Court found that delay alone was not sufficient to trigger the interests of justice defence in the context of the Strike Avenue case.

Nevertheless, the Court of Appeal pointed to other factors, which supported the end result of relief from forfeiture. The Court noted that “the connection between the Property and Fred’s illegal activities is neither consistent nor overwhelming.” Furthermore, “there was no evidence at the forfeiture hearing that (the property owner) Roger was complicit in, or profited from, his son’s unlawful activities.”

The Court of Appeal’s interpretation of the interests of justice defence therefore places a reduced emphasis upon the factor of delay, and a greater emphasis upon the culpability of the property owner, which in the Strike Avenue case was found to be very low:

“(C)ontrary to the AGO’s contention at the forfeiture hearing, the application judge accepted that the Property was acquired for a legitimate purpose, that Roger was the sole and exclusive beneficiary of it, and that Roger rented the Property to his son – deducting the rental payments from his son’s salary – for legitimate reasons connected with his son’s lawful employment by Parker Brothers. There was simply no evidence that Roger sought to facilitate, encourage or sanction Fred’s unlawful activities. To the contrary, the evidence established that Roger furnished the Property to Fred to provide him, as well as his grandchild and his son’s girlfriend, with a place to live.”

In these circumstances, the end result from the Court below was upheld, and the remedy of forfeiture was rejected as “a manifestly harsh and inequitable result.”

Decided by the Ontario Court of Appeal on May 16, 2014.
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Ontario (Attorney General) v. $104,877 in U.S. Currency, 2013 ONSC 2955 – Defendant Entitled to Use Seized Cash for Legal Defence

The Defendant, Alexander Bourgeois, was subject to criminal charges for over ten years after he was intercepted at Pearson International Airport carrying a small quantity of cocaine and $104,877 in US cash. He claimed that the cash was lawfully acquired and the criminal charges were eventually dropped.

The Civil Remedies Act, of course, allows the provincial government to proceed against an individual and justify their claim on the “balance of probabilities” rather than proving that the Defendant is guilty. In 2012, after the criminal charges were dropped, the Attorney General of Ontario decided to take a second run at Mr. Bourgeois under the Civil Remedies Act.

Unfortunately, given that Mr. Bourgeois’ life savings had been confiscated in 2001 and he had had difficulty maintaining employment ever since, he was unable to afford counsel to oppose the civil forfeiture action. Mr. Bourgeois attempted to prove this, but the Attorney General objected on the basis of not having provided full financial disclosure.

The court found that Mr. Bourgeois had provided financial disclosure in good faith:

“[35] A person bringing a motion under sections 5 or 10 of the Civil Remedies Act, 2001 is confronted with the difficulty of trying to prove a negative, i.e. that he or she does not have property or financial resources. It is never an easy thing to prove a negative, and in the case at bar, I do not think it is procedurally fair for the Attorney General, practically speaking, to set the standard of disclosure by serving a demand for disclosure of documents that goes beyond the needs of section 5 and far into the merits of the forfeiture application.

[36] I wish to be clear. It was fair game for the Attorney General to serve the Notice of Examination and to extensively cross-examine Mr. Bourgeois on his affidavit on the section 5 motion and to gain ground on the forfeiture application. However, the section 5 issues are different from the issues for the forfeiture application, and I do not think that it is procedurally fair on a section 5 application to set a standard of disclosure that goes beyond the issues of the section 5 motion. Further, I do not think, it is necessary for Mr. Bourgeois to show that he applied for and was not able to obtain legal aid or a lawyer who would take the case on based on a contingency fee arrangement or pro bono services.”

Mr. Bourgeois was therefore allowed to take $6,000 out of the $104,000 in seized funds to pay for his legal defence, pursuant to Section 5 of the Civil Remedies Act.

Decided by the Ontario Superior Court of Justice on May 21, 2013.
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Attorney General of Ontario v. 714 Railton Avenue, 2013, ONSC 1291 – Forfeiture After Conviction Has Punitive Component

The Attorney General applied for forfeiture of a house in London, Ontario on the grounds that it had been used to facilitate a 342-plant marijuana grow operation. The homeowner, Russell Dowdle, claimed that the marijuana in his home was for personal use, but Justice Rady of the Ontario Superior Court of Justice disbelieved his testimony on this point, concluding at paragraph 53 of the decision:

The only reasonable inference to be drawn is that Mr. Dowdle was engaged in a commercial enterprise to generate income.

Mr. Dowdle had already pleaded guilty to possession of marijuana for the purpose of trafficking and received a fine of $10,000. He claimed that his understanding at the time of the plea was that no further forfeiture actions would be pursued against his property.

Although there was no question that the property in question was an instrument of crime, the court was required to engage in an analysis of whether forfeiture in the circumstances was “clearly not in the interests of justice”:

[61] In this case, the conduct of the breaching party is of central importance. Mr. Dowdle was involved in a marijuana grow scheme designed to generate profit, the very conduct that the CRA seeks to curtail.

[64] These factors tend to support an order for forfeiture.
[65] However, there can be no doubt that “taking a person’s property away from that person has a punitive component” and such orders “must be reasonably perceived by the community as being deserved by those against whom they are made”. This is perhaps the most troubling aspect of the case.

In light of all the circumstances, and upon reading the transcript of proceedings at Mr. Dowdle’s criminal plea, Justice Rady concluded that forfeiture was “clearly not in the interests of justice”:

[68] However, there is evidence that Mr. Dowdle was misled or at the least, lulled into a false state of security that his home would not be the subject of forfeiture.
[69] One must wonder whether he would have pleaded guilty had he been aware of the possibility that his house might be in jeopardy in future. It is undoubtedly a good practice to seek an undertaking from both the federal and provincial Crowns that forfeiture proceedings will not be taken. That was not done in this case. Of course, Mr. Dowdle is presumed to know the law (and therefore the provisions of the CRA) but I am not certain that an average member of the public would appreciate the distinction between the federal and provincial Crowns and that the undertaking of one might not bind the other.

The forfeiture order was therefore refused in its entirety with each party to bear their own costs.

This decision is an important demonstration of the fact that civil forfeiture includes a punitive component, and that courts should not condone those civil forfeiture actions which take the form of a second criminal sentencing.

Decided by the Ontario Superior Court of Justice on April 16, 2013.
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ATTY.-GEN. (ONT.) v. $51,000 CDN. (IN REM), 2013 ONSC 1321 – Forfeiture of Life Insurance Proceeds Not in the Interests of Justice Where Intent Not Criminal

Ved Dhingra had been prosecuted for the second degree murder of his wife, Kamlesh Dhingra. Mr. Dhingra was found not criminally responsible for the murder on the grounds of severe schizophrenia.

In an earlier decision, the Ontario Superior Court of Justice had found that there was a serious issue to be tried and that a finding that the accused is “not criminally responsible” is not, in itself, a bar to civil forfeiture.
At trial, however, Justice Stewart considered the matter in light of the “interests of justice,” as required by recent civil forfeiture decisions in other provinces, such as Crowley (in British Columbia) and Allen (in Nova Scotia).

Justice Stewart ultimately found that Mr. Dhingra’s lack of moral culpability was a factor that must be taken into account when considering the interests of justice:

“[48] Dhingra was found not criminally responsible for Kamlesh’s death on the basis of extensive psychiatric evidence. There is no suggestion whatsoever that he was capable at the time of forming an intent to kill his wife, and certainly no evidence that the possible availability of the life insurance proceeds played any role in these events or his conduct. I fail to see how the granting of the order would serve to deter others in any general sense from doing what Dhingra did. The very essence of having been found not criminally responsible for the offence denotes an absence of awareness or understanding of its meaning or consequences. Any person who might replicate Dhingra’s actions would, by definition and by reason of mental disorder, be impervious to any caution a forfeiture order in this instance could provide.”

Furthermore, Justice Stewart considered Mr. Dingra’s personal circumstances:

“[52] Dhingra is now an elderly psychiatric patient living alone in inexpensive rental accommodation in Toronto on very modest income from pension and old age security payments. He has no exigible property of any appreciable value. Legal representation was provided to him for the criminal and ensuing proceedings by Legal Aid or by amicus curiae appointed for that purpose. He is not named as a beneficiary under Kamlesh’s will which leaves whatever is in her estate to their two children. Although need is not a consideration for the purposes of applying the exemption under the Act, I am of the view that Dhingra’s personal circumstances may be taken into account when determining the factors of proportionality and fairness which comprise part of the exercise of deciding what the interests of justice require in any individual instance.”

As a result of these considerations, the court determined that forfeiture in the circumstances would be “manifestly harsh and therefore clearly not in the interests of justice,” and dismissed the Attorney General’s application for forfeiture.

Decided by the Ontario Superior Court of Justice on March 26, 2013, 2013.
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Ontario (Attorney General) v. $51,000 CDN (in rem), 2012 ONSC 4958

The Ontario Civil Remedies for Illicit Activities office applied for an interim preservation order of a $51,000 life insurance policy on the grounds that the beneficiary of the life insurance policy (Ved Dhingra) had killed the policyholder, his estranged wife Kamlesh Dhingra. A jury found that Mr. Dhingra was not criminally responsible for the killing due to severe mental health problems. Mr. Dhingra’s counsel therefore argued that he should be entitled to the $51,000 life insurance payout. The Attorney General, on the other hand, argued that the funds should be transferred to the province as “proceeds of unlawful activity.”

Although this was an interlocutory decision, dealing with an application for an interim preservation order of the funds held in court, the decision of Justice O’Marra demonstrates the broad definition of “unlawful activity” in Ontario’s Civil Remedies Act:

“The proceedings do not seek to establish fault for a person. An offence may be found to have been committed even if no person has been charged with the offence, or a person was charged with the offence but the charge was withdrawn or stayed or the person was acquitted of the charge … Proof that a person was convicted, found guilty or found not criminally responsible on account of mental disorder in respect of an offence is proof that the person committed the offence.”

On this basis, the funds from Kamlesh Dhingra’s life insurance policy were deemed to be “proceeds of unlawful activity” and were therefore made subject to an interim preservation order, pending the final conclusion of the legal action. Furthermore, Mr. Dhingra’s application to pay legal expenses out of the insurance proceeds was denied on the grounds that he had not provided full financial disclosure.

Decided by the Ontario Superior Court of Justice on September 14, 2012.
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Attorney General of Ontario v. 2000 Mercedes Benz, 2012 ONSC 3182

This case involves a number of vehicles, a home, and bank accounts owned by the Defendants, Arif and Sanjida Syed. The provincial government established that there was a serious issue to be tried and thereby obtained an interim preservation order preventing the Defendants from selling the items in question. The Defendants argued that they were behind on their expenses and deeply in debt and should be allowed to access their equity in order to remedy this situation.

The Ontario Superior Court of Justice rejected the Defendants’ submission, stating that while the province’s Civil Remedies Act expressly allows Defendants to use equity in suspect property to finance their reasonable legal expenses, it does not contain such a provision for living expenses or the payment of debt. A key legislative intent of the Civil Remedies Act, the court observed, is to preserve the value of property that may be subject to forfeiture, and allowing Defendants to use their equity for living expenses pending a trial would clearly subvert this goal.

This case demonstrates that the mere existence of a civil forfeiture action against a piece of property can tie up the equity in that property for years at a time, often prejudicing the ability of defendants to mount a defence.

Decided by the Ontario Superior Court of Justice on June 6, 2012.
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Ontario (Attorney General) v. Lee, 2011 ONCA 444

The Ontario Court of Appeal rejected this appeal by Wing Kwong Lee, whose home had been ordered forfeit after a large marijuana grow operation had been discovered there.

Mr. Lee claimed that he had purchased the home as an investment for his teenaged daughter, and in the meantime rented it to a man who he knew only as “Stephen.” This tenant paid the rent in cash and Mr. Lee claimed he did not know how to reach him. The Ontario Superior Court of Justice rejected this submission and ordered forfeiture of the home. The Court of Appeal upheld this decision, stating that the trial judge’s findings were reasonable and there was no reason to interfere.

Despite the seemingly doubtful nature of Mr. Lee’s story, no criminal charges were ever laid against him in connection with the marijuana grow op. This case demonstrates that in situations where there is little evidence of criminal activity but the accused does not have a strong explanation to the contrary, the Crown can circumvent many of a person’s legal rights by simply seeking forfeiture of his or her property.

Decided by the Ontario Court of Appeal on June 2, 2011.
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