Ontario (Attorney General) v. 1140 Aubin Road, Windsor et al.,

• Jurisdiction: Ontario
• Judge: Doherty, Watt and Epstein, JJ.A.
• Neutral Citation: 2011 ONCA 363
• Citation: (2011), 279 O.A.C. 268 (CA),2011 ONCA 363,333 DLR (4th) 326,[2011] OJ No 2122 (QL),279 OAC 268,(2011), 279 OAC 268 (CA),[2011] O.J. No 2122 (QL),333 D.L.R. (4th) 326,279 O.A.C. 268
• Date: 16 November 2010
• Court: Court of Appeal (Ontario)

Ont. (A.G.) v. 1140 Aubin Road (2011), 279 O.A.C. 268 (CA)

MLB headnote and full text

Temp. Cite: [2011] O.A.C. TBEd. MY.017

Attorney General of Ontario (applicant/appellant) v. 8477 Darlington Crescent, Windsor, 10824 Atwater Crescent, Windsor, $29,000 in Canadian Currency (in rem), Van-Xinh Do and Tuoi Le Thi Tran (respondents/respondents in appeal)

(C49874)

Attorney General of Ontario (applicant/respondent) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (in rem) and Elwin James McDougall (respondent/appellant)

Attorney General of Ontario (applicant/respondent) v. 8477 Darlington Crescent, Windsor, 10824 Atwater Crescent, Windsor, $29,000 in Canadian Currency (in rem), Van-Xinh Do and Tuoi Le Thi Tran (respondents/appellants)

(C49934; 2011 ONCA 363)

Indexed As: Ontario (Attorney General) v. 1140 Aubin Road, Windsor et al.

Ontario Court of Appeal

Doherty, Watt and Epstein, JJ.A.

May 10, 2011.

Summary:

The Attorney General of Ontario (AGO) brought two applications seeking forfeiture of a total of four properties under the Civil Remedies Act. Marijuana growing operations had been found by the police at each property. The applications were heard together.

The Ontario Superior Court, in a decision reported at [2008] O.T.C. Uned. R32, ordered that three of the properties be forfeited to the Crown. The owners of the three properties forfeited appealed. The AGO appealed from the order refusing to forfeit the fourth property. Tran, the owner of the fourth property who had successfully opposed the forfeiture application, appealed the application judge's refusal to grant her costs on the application.

The Ontario Court of Appeal dismissed all the appeals.

Civil Rights - Topic 721

Liberty - Charter of Rights and Freedoms - General - [See third Criminal Law - Topic 7062 ].

Civil Rights - Topic 3221

Trials - Due process, fundamental justice and fair hearings - Civil proceedings - General - [See third Criminal Law - Topic 7062 ].

Civil Rights - Topic 8591

Canadian Charter of Rights and Freedoms - Practice - Onus or burden of proof - [See third Criminal Law - Topic 7062 ].

Criminal Law - Topic 7002

Civil remedies for unlawful activity (Civil Remedies Act) - General - Legislation - [See sixth and ninth Criminal Law - Topic 7062 ].

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - In 2004, the police discovered a large marijuana growing operation at a house (the Darlington property) owned by Do - In 2006, Do pled guilty to charges of producing marijuana and possessing marijuana for the purpose of trafficking - The Attorney General of Ontario (AGO) sought forfeiture of the Darlington property under the Civil Remedies Act - In his affidavit filed on the forfeiture application, Do indicated that in 2004 he leased the Darlington property to someone he had met at the casino in Windsor - He knew the person would be using it to grow marijuana, but Do needed the rent money to pay large gambling debts - Do claimed to have a job but did not produce any documents or provide any information referable to his income or the payments made on the mortgage on the Darlington property - The application judge ordered forfeiture of the Darlington property - She found that Do used drug money to finance both the down payment and mortgage payments on the Darlington property - The Ontario Court of Appeal dismissed Do's appeal - There was no evidence from which it could be inferred that drug money was used to fund the purchase of the Darlington property - However, the evidence supported the inference that it was used to pay the mortgage - The property was properly characterized as being the "proceeds of unlawful activity" as defined in s. 2 of the Act - Paying down a mortgage constituted a direct acquisition of an interest in property for the purposes of the Act - See paragraphs 38 to 45.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - In 2004, the police discovered substantial marijuana growing operations at two houses (the Aubin and Halpin properties) owned by McDougall - He lived at one property with two roommates - The other property was leased to someone - McDougall pled guilty to production of a controlled substance respecting the property where he was living - The Attorney General of Ontario (AGO) successfully applied for forfeiture of both properties under the Civil Remedies Act - The Ontario Court of Appeal dismissed McDougall's appeal - The court affirmed the application judge's findings that both properties were the "proceeds of unlawful activity" - The evidence supported the inference that McDougall was in the business of producing and selling marijuana and had been in that business for several years - He was criminally implicated in three separate grow-ops between 2001 and 2004 - He also had a prior conviction for drug trafficking - He refused to provide any details of his income or to identify the sources used to pay down the mortgages on his properties (other than money received from his drug-producing tenant) during cross-examination on his affidavit - In refusing to answer questions, he risked an adverse inference - The application judge was not obliged to draw that inference, but it was within her discretion to do so - She did not misuse McDougall's refusals to answer relevant questions concerning the property - See paragraphs 46 to 51.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - The Attorney General of Ontario (AGO) successfully applied for orders of forfeiture of three properties under the Civil Remedies Act - The property owners appealed, arguing that the application judge erred in holding that the AGO was required to prove that the properties were the proceeds of unlawful activity on the balance of probabilities, rather than beyond a reasonable doubt - They argued that a forfeiture order under the Act made on a balance of probabilities standard violated s. 7 of the Charter in that it infringed an individual's liberty interest (a right to property) in a manner that was inconsistent with the principles of fundamental justice - The Ontario Court of Appeal rejected the arguments - Section 16 of the Act specifically provided that findings of fact in proceedings under that Act "shall be made on the balance of probabilities" - That standard of proof reflected and was consistent with the civil nature of the forfeiture proceedings - Section 7 of the Charter did not protect economic interests - The court was not satisfied that the liberty right included a "right to property" - The application of the balance of probabilities standard in a civil proceeding, even where s. 7 rights were implicated, was not inconsistent with the principles of fundamental justice - Rather, the balance of probabilities standard was a basic tenet of our civil justice system - See paragraphs 52 to 55.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - The Attorney General of Ontario (AGO) successfully applied for orders of forfeiture of three properties under the Civil Remedies Act - The property owners appealed, arguing that the application judge erred in placing the onus on them to demonstrate that they fell within the "legitimate owner" exception to forfeiture in s. 3(3) of the Act - The Ontario Court of Appeal rejected the argument - Section 3(3) required the party claiming to be a "legitimate owner" to "prove" that he or she met the criteria in that definition - Section 16 required the party who carried the onus on a particular fact to meet that onus on the balance of probabilities - The statute was "crystal clear" - The party relying on the "legitimate owner" exception had the burden of proving that the exception applied - See paragraphs 56 and 57.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - In 2004, the police discovered a large marijuana growing operation at a house (Atwater property) owned by Tran and rented by her former boyfriend (Do) - The Attorney General of Ontario (AGO) applied for forfeiture of the property under the Civil Remedies Act - Tran purchased the house in 2001 and lived in it with her children - In February or March 2004, she rented the property to Do - Tran continued to live in the property until June or July 2004 when she learned that Do was married - Tran moved out and went to live with her children - Do and Tran were charged with drug offences - Do pled guilty and the charges against Tran were withdrawn - Tran and Do alleged that Tran had nothing to do with the grow-op - The application judge found that the Atwater property was the proceeds of unlawful activity by virtue of Tran's admitted use of the rent payments from Do to make her mortgage payments - The application judge concluded that Do's income came from the cultivation and sale of marijuana - The application judge declined to make a forfeiture order because, inter alia, a forfeiture order "would clearly not be in the interests of justice" (s. 3(1)) - The Ontario Court of Appeal dismissed the Crown's appeal - Forfeiture of the Atwater property was "clearly not in the interests of justice" - On the application judge's findings, Tran was innocent of any involvement in the unlawful activity, and only a small fraction of her property interest was acquired as a result of unlawful activity - To order forfeiture in those circumstances would constitute a punitive and excessive exercise of the forfeiture order that would not further the purposes of the Act - See paragraphs 77 to 112.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - Section s. 3(1) of the Civil Remedies Act provided that: "... the Superior Court of Justice shall, subject to subsection (3) [the legitimate owner exception] and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is proceeds of unlawful activity." - The Ontario Court of Appeal held that the "interests of justice" exception to forfeiture operated where the Crown had otherwise shown that the property was subject to forfeiture and the respondent had not brought herself within the "legitimate owner" exception - The "interests of justice" exception to forfeiture recognized that, given the very broad definition of "proceeds of unlawful activity" and the narrow exception to forfeiture carved out by the definition of "legitimate owner", there would be cases that fell within the scope of the forfeiture power where, on any reasonable view, forfeiture would be a draconian and unjust result - The Legislature, rather than attempting to identify with specificity factors that would justify granting relief from forfeiture, used the broad phrase "interests of justice" and left it to the court on a case-by-case basis to determine when forfeiture was "clearly not in the interests of justice" - See paragraphs 83 and 84.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - Section s. 3(1) of the Civil Remedies Act provided that: "... the Superior Court of Justice shall, subject to subsection (3) [the legitimate owner exception] and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is proceeds of unlawful activity." - The Ontario Court of Appeal held that s. 3(1) did not contemplate that the question of forfeiture would be decided based on a mere balancing of the pros and cons of making a forfeiture order - The word "clearly" modified the phrase "interests of justice" and had to be given some meaning - The word "clearly" spoke to the cogency of the claim advanced for relief from forfeiture - The party seeking relief had to demonstrate that, in the circumstances, the forfeiture order would be a manifestly harsh and inequitable result - See paragraph 85.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - Section s. 3(1) of the Civil Remedies Act provided that: "... the Superior Court of Justice shall, subject to subsection (3) [the legitimate owner exception] and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is proceeds of unlawful activity." - The Ontario Court of Appeal stated that the application judge analogized the discretion to refuse forfeiture to the discretion to refuse to issue a search warrant even though the statutory preconditions for the issuing of a warrant were met - The court stated that a better analogy was the civil remedy of relief from forfeiture - Courts of equity have always had the power to relieve against the forfeiture of property consequent upon a breach of contract - While the "interests of justice" exception in s. 3(1) was a relief from forfeiture provision that had much in common with the more generic form of that remedy, s. 3(1) did not operate in exactly the same way as did relief from forfeiture in the realm of private law - Relief from forfeiture in the contractual context pit competing private rights against each other - A forfeiture claim under the Act engaged important public concerns - The interests of justice in s. 3(1) encompassed both public and private interests - See paragraphs 86 to 94.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - Section s. 3(1) of the Civil Remedies Act provided that: "... the Superior Court of Justice shall, subject to subsection (3) [the legitimate owner exception] and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is proceeds of unlawful activity." - The Ontario Court of Appeal stated that forfeiture orders were intended to further the purposes of the Act as set out in s. 1 - Therefore, in deciding whether to grant relief from forfeiture under s. 3(1), the court had to consider the effect of granting relief on the achievement of those purposes - The power to relieve from forfeiture could not be allowed to subvert the purposes of the Act - However, the "interests of justice" in s. 3(1) were not limited to the purposes of the Act identified in s. 1 - Those purposes were part of, but could not be equated with, the "interests of justice" - That phrase was a broad one and included maintaining public confidence in the civil justice process - That confidence was promoted by orders that were, broadly speaking, in accord with the community's sense of fairness - A forfeiture order made in circumstances where any reasonable person would regard the order as excessive, while perhaps serving the purposes of the Act in the narrow sense, would do a real disservice to the administration of justice and thereby undermine rather than promote the "interests of justice" - See paragraphs 95 and 96.

Criminal Law - Topic 7062

Civil remedies for unlawful activity (Civil Remedies Act) - Remedies - Forfeiture - Section s. 3(1) of the Civil Remedies Act provided that: "... the Superior Court of Justice shall, subject to subsection (3) [the legitimate owner exception] and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is proceeds of unlawful activity." - The Ontario Court of Appeal stated that a court asked to grant relief from forfeiture under s. 3 had to consider all factors that were relevant to the "interests of justice" - It was not possible to catalogue all of the factors that could properly be taken into account in evaluating the interests of justice in any given case - Those factors certainly included the closeness of the connection between the property and the illegal activity - See paragraph 97.

Estoppel - Topic 1004

Estoppel in pais (by conduct) - General - Against Crown - The Attorney General of Ontario (AGO) successfully applied for orders of forfeiture of three properties under the Civil Remedies Act - The property owners appealed - They had been prosecuted for drug offences by the federal Crown - The federal Crown did not seek forfeiture orders as part of the sentencing process, though it could have done so under the Controlled Drugs and Substances Act - The property owners argued that the application judge erred in holding that the AGO was not estopped from pursuing a forfeiture application - They alleged that the federal Crown in the criminal prosecution and the provincial Crown (AGO) in these proceedings were "indivisible" and that the decision made by the federal prosecutors not to pursue a forfeiture order in the criminal proceedings was binding on the AGO in this proceeding - The Ontario Court of Appeal rejected the argument - Where no forfeiture was sought in the sentencing process, there was no reason why the AGO could not make an application under the Act - See paragraphs 59 to 63.

Estoppel - Topic 1163

Estoppel in pais (by conduct) - Representation - By conduct - Practice or course of conduct - [See Estoppel - Topic 1004 ].

Evidence - Topic 122

Degree, standard or burden of proof - Burden of proof - Burden of proof in civil actions - [See third Criminal Law - Topic 7062 ].

Words and Phrases

Clearly - The Ontario Court of Appeal discussed the meaning of this word as used in s. 3(1) of the Civil Remedies Act, S.O. 2001, c. 28 [para. 85].

Words and Phrases

Interests of justice - The Ontario Court of Appeal discussed the meaning of this phrase as used in s. 3(1) of the Civil Remedies Act, S.O. 2001, c. 28 [para. 96].

Cases Noticed:

Ontario (Attorney General) v. Chatterjee, [2009] 1 S.C.R. 624; 387 N.R. 206; 249 O.A.C. 355; 2009 SCC 19, refd to. [para. 10].

355498 B.C. Ltd. v. Namu Properties Ltd. et al. (1999), 120 B.C.A.C. 64; 196 W.A.C. 64; 171 D.L.R.(4th) 513 (C.A.), refd to. [para. 41].

Coast-to-Coast Industrial Development Co. v. 1657483 Ontario Inc. et al., [2009] O.J. No. 5212 (Sup. Ct.), refd to. [para. 41].

F.H. v. McDougall, [2008] 3 S.C.R. 41; 380 N.R. 82; 260 B.C.A.C. 74; 439 W.A.C. 74, refd to. [para. 54].

McBride v. Comfort Living Housing Co-operative Inc. (1992), 54 O.A.C. 286; 7 O.R.(3d) 394 (C.A.), refd to. [para. 86].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, refd to. [para. 87].

1497777 Ontario Inc. v. Leon's Furniture Ltd. et al. (2003), 176 O.A.C. 380; 67 O.R.(3d) 206 (C.A.), refd to. [para. 87].

Williams Estate v. Revere (Paul) Life Insurance Co. (1997), 101 O.A.C. 280; 34 O.R.(3d) 161 (C.A.), refd to. [para. 89].

Liscumb v. Provenzano et al. (1985), 51 O.R.(2d) 129 (H.C.), affd. (1986), 55 O.R.(2d) 404 (C.A.), refd to. [para. 92].

Ontario (Attorney General) v. 170 Glenville Road, King, [2010] O.T.C. Uned. 3794 (Sup. Ct.), refd to. [para. 97].

Statutes Noticed:

Civil Remedies Act, S.O. 2001, c. 28, sect. 3(1) [para. 83]; sect. 16 [para. 52].

Counsel:

Robin K. Basu and Leslie Zamojc, for the appellant, Attorney General of Ontario;

Kenneth W. Golish, for the respondents, McDougall, Do and Tran.

These appeals were heard November 16, 2010, before Doherty, Watt and Epstein, JJ.A., of the Ontario Court of Appeal. Doherty, J.A., delivered the following decision for the Court of Appeal on May 10, 2011.