Ancillary Canadian proceeds-of crime legislation
| Author | Robert Hubbard; Daniel Murphy; Fergus O'Donnell; Peter De Freitas |
| Pages | 159-224 |
CHAPTER
THREE
ANCILLARY
CANADIAN
PROCEEDSOFCRIME
LEGISLATION
A.
Introduction
Proceeds-of-crime
provisions
are now
contained
in
Part
XII.2
of the
Crimi-
nal
Code,1
as
described
in
Chapter
2.
Several other Canadian legislative ini-
tiatives
supplement these tools
to
confiscate
the
proceeds
of
crime. Section
490 of the
Code,
for
example,
has
proved
useful
as an
independent source
for
forfeiture
of
proceeds
of
crime.
The
2001
organized-crime
amendments2
also
add
sections
to the
Criminal
Code
that provide
the
power
to
confiscate
offence-related
property. Moreover, Parliament's recent Financial Transac-
tions
and
Reports
Analysis Centre
(FINTRAC)
initiative creates
a new
arms-length financial intelligence unit
to
track proceeds. (Financial
intelli-
gence units
are
also described
in
chapters
i,
4, and 5. The new
FINTRAC
legislative initiative
is
described
in
chapters
4 and 5.)
Section
490 of the
Criminal
Code—the
offence-related property
provisions
—
and
similar
provi-
sions
contained
in the
Controlled
Drugs
and
Substances
Act,3
however,
are
described below.
In
addition, this chapter
briefly
touches upon
the
Seized
Property
Management
Act4
and
related regulations that provide
for how
seized
property
is to be
managed
and
disposed
of.
B.
A
Criminal
Code
Source
of
Seizure
Independent
of
Part
XI1.2
In
R. v.
Daley,5—as
discussed
in
Chapter
2—the
Alberta Court
of
Appeal
accepted that
cash
seized contrary
to
section
8 of the
Canadian
Charter
of
Rights
and
Freedoms,6
as an
unreasonable search
and
seizure, could
neverthe-
less
be
admissible
as
evidence, under subsection 24(2)
of the
Charter,
in a
hearing seeking
forfeiture
of the
money under subsection 490(9)
of the
Criminal
Code.
In
Daley,
the
court also accepted that crime-tainted money
1
Criminal
Code,
R.S.
1985,
c.
C-46,
as
amended.
2 An Act to
amend
the
Criminal
Code
(organized
crime
and law
enforcement)
and to
make
consequential
amendments
to
other
Acts,
S.C.
2001,
0.32
(subsequently
referred
to as the
2001
organized-crime
amendments).
3
Controlled
Drugs
and
Substances
Act,
S.C.
1996,0.19.
4
Seized
Property
Management
Act, S.C.
1993,0.37.
5
(2001),
156
C.C.C.
(3d)
225
(Alta.
C.A.)
[Daley].
6
Canadian
Charter
of
Rights
and
Freedoms,
enacted
as
Part
I of the
Constitution
Act,
1982,
being Sched-
ule B to the
Canada
Act,
1982
(U.K.),
1982,
c.u
(subsequently
referred
to as the
Charter).
[159]
could
be
forfeited
to the
Crown
pursuant
to
subsection
490(9).
This subsec-
tion, therefore, provides
a
separate source
of
jurisdiction
for
applications
seeking
forfeiture
of
unlawfully obtained property. Subsection
490(9)
of the
Criminal
Code
states:
(9)
Subject
to
this
or any
other
Act of
Parliament,
if
(a)
a
judge referred
to in
subsection (7), where
a
judge ordered
the
detention
of
anything seized under subsection (3),
or
(b)
a
justice,
in any
other
case,
is
satisfied
that
the
periods
of
detention
provided
for or
ordered
under
subsections
(i)
to (3) in
respect
of
anything
seized
have
expired
and
proceedings
have
not
been
instituted
in
which
the
thing
detained
may be
required
or,
where those periods have
not
expired, that
the
continued detention
of the
thing seized will
not be
required
for any
purpose men-
tioned
in
subsection
(i)
or
(4),
he
shall
(c)
if
possession
of it by the
person from
whom
it was
seized
is
lawful,
order
it
to be
returned
to
that person,
or
(d)
if
possession
of it by the
person from
whom
it was
seized
is
unlawful
and the
lawful
owner
or
person
who is
lawfully
entitled
to its
possession
is
known,
order
it to be
returned
to the
lawful
owner
or to the
person
who is
lawfully
entitled
to its
possession,
and
may,
if
possession
of it by the
person
from
whom
it was
seized
is
unlawful,
or if it was
seized
when
it was not in the
possession
of any
person,
and the
lawful
owner
or
person
who is
lawfully entitled
to its
possession
is not
known,
order
it to
be
forfeited
to
Her
Majesty,
to be
disposed
of
as the
Attorney
General
directs,
or
otherwise dealt with
in
accordance with
the
law.7
One of the
first
appellate courts
to
uphold
the
independent
basis
of
sub-
section
490(9)
of the
Code
as an
independent
basis
for
forfeiture
was
British
Columbia
(Attorney
General)
v.
Forseth.&
In
Forseth,
the
Court
of
Appeal over-
turned
the
ruling
of the
provincial court judge
who had
returned over
$i
million
to
Forseth.
The
court
specifically
rejected
the
defence argument that
Part
XII.2
of the
Criminal
Code
is the
only mechanism whereby
the
Crown
can
obtain
forfeiture
of
proceeds.
The
court also rejected
the
notion that for-
feiture
can
only
be
obtained
after
a
conviction.
In
ordering
a new
hearing
under subsection
490(9)
of the
Criminal
Code
to
determine whether money
seized
by the
police should
be
forfeited
to the
Crown,
the
court stated:
7 The
issues
in the
italicized
words
in the
last
paragraph
continues
to
arise
from
time
to
time although
the
statutory
language
would
appear
to
preclude
it.
Criminal
Code,
above note
i,
subs.
490(9),
like
virtually
all
forfeiture
provisions,
requires
forfeiture
to the
Crown,
to be
disposed
of as
directed
by
the
Attorney General
or
some other minister. Although
the
language
has
escaped
the
attention
of
some,
such
sections
clearly
provide
no
authority
for the
forfeiture
of
assets
to
schools, police
forces,
or any
other organization.
Such
orders
are
unlawful.
[Emphasis
added.]
8
(1995),
99
C.C.C.
(3d)
296
(B.C.C.A.),leave
to
S.C.C.
refused,
[1995]
S.C.C.A.
No. 426
[Forseth].
THREE:
ANCILLARY
CANADIAN
PROCEEDS-OF-CRIME
LEGISLATION
[i6o]
The
Provincial
Court
judge relied principally
on two
bases
for
making
the
exclu-
sion order.
One was his
understanding
of
Fleming
v.
Canada
(1986),
25
C.C.C.
(jd)
297,
641,
[1986]
i
S.C.R.
415;
and the
other
was his
concept that
the
Crown
was
obliged
to
follow,
and be
bound
by,
Part
XII.2
of the
Code
—
Pro-
ceeds
of
Crime (ss. 462.3
to
462.5).
His
reliance
was
misplaced
in
both.
Fleming
has
been
distinguished
by
this
court,
and
others,
on the
ground that
it is an
entirely
different
case
on the
facts,
decided
upon
a
differently
worded
statute
where
a
con-
viction
is a
condition
precedent
to
forfeiture.
There
is no
such
condition
in
3.490
of the
Code.
Moreover,
to the
extent that
Fleming
has
application
the
Provincial
Court
judge
seems
to
have overlooked
a
statement
at p. 320
which contemplates
Crown
evi-
dence
at a
"restoration hearing":
In the
absence
of a
specific
finding
at
trial
of the
requisite "tainted
connec-
tion",
the
Crown
may
fill
the
evidentiary
gap by
proving taint
on the
rea-
sonable
doubt standard
at the
restoration hearing.
Where
there
is no
antecedent conviction
and no
basis
for
laying
a
narcotics-related charge, pro-
ceedings
should
be
initiated under
s.
312(1)
[now
s.
354]
of the
Criminal
Code.
But
with respect
to
whether
the
Crown
should have invoked
s.
354,
it was the
appellant
who
initiated these proceedings.
The
Crown
is in the
position
of
responding
to the
appellant's initiative.
It
ought
not to be
condemned
or
placed
at
a
disadvantage merely because another court
on
another
case
would have consid-
ered
a
different
section
of the
Code
to be
more appropriate. Furthermore,
if the
Crown
had
taken
the
initiative under
s. 354 it
would have
had to
accept
the
onus
of
proving
the
appellant
to
have been
in
possession, contrary
to its
position
referred
to
earlier that
the
appellant
was not in
possession,
and of
proving that
the
appellant
had
knowledge that
the
funds
were
the
proceeds
of
crime
in the
face
of
his
consistent denials that
he had any
knowledge
of the
source
of the
funds.
In any
event,
the
mere
fact
that
it is a s. 490
proceeding rather than
as.
354
proceeding
does
not
justify
erecting
an
evidentiary barrier against
the
Crown.
With
respect
to the
relationship between
s.
490(9)
of the
Code
and
Part
XII.2,
the
Provincial
Court
judge
came
to the
curious
conclusion
that
the
provisions
of
Part
XII.2
encompassed
all of the
rights
of the
Crown
to
lead
evidence
to
prove
possession
to
have
been
unlawful.
In
effect,
he
incorporated into
s.
490(9)
the s.
462.37 requirement
to
prove,
as a
condition
to
forfeiture,
that
the
offender
had
been "convicted
or
dis-
charged under
s. 736 of an
enterprise crime
offence":...
There
is, of
course,
no
such
condition
precedent
of
conviction
or
discharge
in
5.490(9).
Furthermore,
the
conclusion
by the
Provincial
Court
judge
is in
direct conflict
with
the
provision
in s.
462.49(1)
to the
effect
that Part
XII.2
does
not
affect
other
forfeiture
provisions:
[i6i]
MONEY
LAUNDERING
AND
PROCEEDS
OF
CRIME
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