This appeal concerned the interpretation of section 18.1 of the Civil Remedies Act, 2001, regarding court approval of settlements in forfeiture proceedings.
The Attorney General of Ontario sought approval for a settlement with an interested party (Rosa Norwood) for a payment from seized property proceeds, without a prior judicial determination that the property was tainted by unlawful activity.
The appellants (Michael Norwood's Estate and 947014 Ontario Inc.) argued this was an error.
The Court of Appeal held that a "settlement in relation to a proceeding under this Act" must relate to in rem property interests, which necessitates a prior finding that the property is proceeds or instruments of unlawful activity.
The court found the motion judge erred in approving the settlement without such a finding, as it purported to settle in rem interests of others without their rights being displaced.
The appeal was allowed, and the settlement approval order was set aside.