Her Majesty the Queen v. Fercan Developments Inc. and GRVN Group Inc.

Court File No.: Central East Region-Newmarket 11-04549 and 11-04550

Date: 2013-09-11

Ontario Court of Justice

Parties and Counsel

Applicant on Forfeiture: Her Majesty the Queen

Respondents on Forfeiture:

• Fercan Developments Inc.
• GRVN Group Inc.

Before: Justice Peter C. West

Counsel:

• Mr. J. Selvaratnam, Ms. K. Healey, Ms. A. Elbaz — Applicant on Forfeiture, Crown
• Mr. Brian H. Greenspan, Ms. Naomi Lutes — Respondent on Forfeiture, Fercan Developments Inc.
• Mr. William Friedman, Mr. Patrick Bakos — Respondent on Forfeiture, GRVN Group Inc.

Evidence Heard: October 1, 2, 3, 4, 9, 10, 11, 12, 2012; November 27, 28, 2012; December 3, 5, 6, 7, 10, 12, 13, 14, 17, 2012; January 7, 9, 10, 11, 2013; February 6, 7, 2013; March 18, 20, 2013

Oral Submissions Heard: June 17 & 18, 2013

Reasons for Judgment Released: September 11, 2013

Introduction

[1] This application is brought by the Applicant pursuant to sections 16 and 19 of the Controlled Drugs and Substances Act, R.S.C. 1996, c. 19 (the "CDSA"), which permit courts to order forfeiture of "offence-related" property, for forfeiture of the properties at 1 Big Bay Point Road, Barrie, Ontario and 1408 Rainbow Valley Road, Phelpston, Ontario.

[2] Fercan is the registered owner of lands upon which the former Molson Brewery Plant was situated on 1 Big Bay Point Road, Barrie, Ontario. GRVN is the registered owner of a residential dwelling located at 1408 Rainbow Valley Road West, Phelpston, Ontario.

[3] The sole shareholder of Fercan is Vincent DeRosa. He is also the corporation's sole officer and director. The sole shareholder, officer and director of GRVN is Nicola DeRosa.

[4] In January 2004, a search warrant was executed with respect to the Fercan property, the former Molson Plant, and two large indoor marihuana grow operations were discovered in two of the leased premises located in separate parts of the Molson Plant. A number of individuals were charged with designated substance offences under the CDSA in respect of the two marihuana grow operations (Project Plants). The police investigation continued after the execution of the search warrant (Project Plants and Project 3D); however, this did not lead to any charges being laid against Fercan or Vincent DeRosa.

[5] In 2009, a further police investigation (Project Birmingham) was commenced utilizing a police agent. Further designated substance offences were laid against additional individuals who were involved in the two indoor marihuana grow operations originally discovered in 2004, as well as new CDSA and Criminal Code offences. In addition, individuals were charged with designated substance offences, which were committed during this new police investigation at the property situated at 1408 Rainbow Valley Road West, Phelpston. This further police investigation also did not lead to any charges being laid against Fercan, Vincent DeRosa, GRVN or Nicola DeRosa.

[6] It is my understanding from the submissions of counsel and from the two Forfeiture Applications brought by the Crown that many, if not all, of the individuals who were charged as a result of these police investigations have pleaded guilty and have been convicted of designated substance offences contrary to the CDSA in relation to the two above-noted properties. These individuals include Robert Bleich, Scott Walker, Thomas Gates, Rayne Sauve, Craig Walker, Scott Dillon and Michael Dicicco (all charged in 2004) and Robert DeRosa, Jeffrey DaSilva, Dennis Hould, Robert Bleich, Larry McGee and Davorka Pelican (all charged in 2010). Two further individuals, Jeffrey Lawson and Dan Dolic, who from the evidence appear to be the individuals in charge of the various marihuana grow operations, have not been brought before the courts. No evidence was led respecting Jeffrey Lawson, however, the Crown indicated in their factum, at paragraph 8, that his charges were stayed by the Crown. Dan Dolic is apparently serving a lengthy federal penitentiary sentence in Louisiana for importing and trafficking in cocaine. His charges in Canada are still outstanding while he is serving this sentence.

[7] The Crown brought two Applications for Forfeiture in 2011, pursuant to section 16(1) of the CDSA in respect of the above-noted two properties. Notice, pursuant to section 19(1), was provided by the Crown to the owners, Fercan and GRVN, of the two properties and to First Ontario Credit Union Ltd. (First Ontario), which is the mortgagee in respect of 1 Big Bay Point Road. These applications arise from the conviction of a number of persons with designated substance offences, which include, inter alia, production of marihuana in association with a criminal organization.

[8] Both properties are subject to ex parte Restraint Orders, dated September 21, 2010 respecting the 1 Big Bay Point Road property and April 11, 2011 respecting the 1408 Rainbow Valley Road property.

[9] This matter has been extensively litigated and I have written two previous rulings; first, upholding the constitutional validity of sections 16 and 19 of the CDSA (September 27, 2012) and second, holding that the Crown bears the onus, on a balance of probabilities, throughout the forfeiture application, including the burden, pursuant to section 19(3) of the CDSA, of satisfying the court that the lawful owner or person lawfully entitled to possession does not appear innocent of complicity in the designated substance offences or of collusion in relation to such offences and therefore is not entitled to the return of the property (January 9, 2013).

[10] It was agreed at the commencement of the forfeiture hearing that the Crown would lead evidence to first establish that the properties were offence-related properties, as defined in sections 2 and 16 of the CDSA, and second, that the Crown would call any evidence, in its possession, on the issue of complicity or collusion. A total of 38 witnesses were called by the Public Prosecution Service of Canada (the Crown) and by Fercan and First Ontario. The Crown's forfeiture application was heard over 36 days. The Crown ultimately abandoned their application for forfeiture in respect of First Ontario on February 6, 2013 (Day 31).

[11] I have received extensive written factums and casebooks from all parties, as well as detailed oral submissions from counsel and I would like to express my thanks to counsel for their assistance.

Factual Background

(a) The Former Molson Brewery (Molson Plant)

[12] Vicar Properties Inc. (Vicar) purchased the former Molson Brewery Plant (hereinafter referred to as the Molson Plant) on October 1, 2001 for $8 million. Vicar was a company owned solely by Vincent DeRosa. The purchase price was split into two amounts; $7.5 million for the property and $500,000 for the chattels. Another company owned by Mr. DeRosa purchased the chattels, namely, Gab Capital Corp.

[13] Mr. DeRosa testified that he purchased the property for three reasons: as a real estate opportunity, particularly given its location on Highway 400; for the purpose of selling the chattels, which were included in the purchase price, for which Mr. DeRosa testified he had received estimates could be sold between $3 and $10 million; and, as the closing date approached, Mr. DeRosa became interested in establishing a water bottling operation, utilizing the Formosa Springs well, which was on the property. In light of the totality of the evidence I heard on this application, I accept Mr. DeRosa's explanation as to why he decided to purchase the Molson Plant.

[14] On January 1, 2003, Fercan Developments Inc. (hereinafter referred to as Fercan), another company owned solely by Vincent DeRosa, amalgamated with Fermanaugh Realty Holdings Ltd., another company owned solely by Vincent DeRosa and Vicar, referred to above, and retained the name Fercan Developments Inc. (Fercan). As a result, Fercan became the owner of the Molson Plant. Vincent DeRosa remains the sole shareholder, officer and director of Fercan.

[15] In May or June 2001, prior to the agreement of purchase and sale closing, Mr. DeRosa engaged his brother Robert to act as the property manager respecting the Molson Plant. One of Robert DeRosa's responsibilities was to oversee the work being done by Moonstone Mechanical respecting the sale of the Molson chattels. Initially, Moonstone Mechanical was hired by Vincent DeRosa to provide the estimate of the value of the Molson chattels prior to the purchase, and subsequently, they were involved in the sale of those chattels, as well as the conversion of some of the Molson equipment and the purchase of new equipment to be used by the water bottling operation, Aurora Beverages. Robert DeRosa had an office at the Molson plant in the Canadiana Room, although there was evidence from a number of witnesses that in the beginning he maintained an office in the guardhouse. Robert DeRosa was also responsible for leasing areas within the Molson plant and collecting the rents from the various tenants.

[16] The Molson Plant had approximately 450,000 square feet of space situated on 35 acres of land. After the plant purchase closed in October 2001, J.J. Barnicke put up a large sign facing the 400 Highway advertising the availability of leasing space at the Molson Plant.

[17] Shortly after Vicar purchased the Molson Plant, Robert DeRosa advised Vincent DeRosa that he had a pallet company, Ontario Pallet, that wanted to lease space in the south/east corner of the building. The lease, Exhibit 40, was signed on October 23, 2001, by Brian McIntyre as President of 1477990 Ontario Inc. (Ontario Pallet). The lease commenced on November 1, 2001. The leased area was approximately 30,000 square feet.

[18] Sometime in November 2001, Robert DeRosa advised that he had a group of people who were interested in leasing the space containing the stainless steel fermentation tanks to grow fish. Their company was called Barrie Good Fish Company. Robert DeRosa sketched an area on a plant diagram, which became part of the Offer to Lease, Exhibit 10, signed by Mike Dicicco and Vincent DeRosa on November 21, 2001. The lease commenced on January 1, 2002. The leased area was approximately 33,000 square feet and included the old Beer Store where Mike Dicicco lived. There was what was purported to be a fax from Robert DeRosa to Vincent DeRosa respecting the Barrie Good Fish Offer to Lease; however, there was no fax header on the document to indicate that it was in fact sent and Vincent DeRosa testified that he had no recollection of receiving such a fax from his brother.

[19] I will deal with Ontario Pallet and Barrie Good Fish Company in more detail later in my reasons.

[20] Between late 2001 and 2004, various companies leased space in the Molson Plant, including Kumi Canada, RK Trucking, Karlea Trucking, First Transport, Simcoe Steam Brewing, Smitty's Enterprises, Barrie Good Fish, Ontario Pallet (1477990 Ontario Inc.), National Roasters and Aurora Beverage Corporation. The Crown and defence called a number of witnesses from these tenants.

[21] The evidence from numerous witnesses was that Vincent DeRosa often came to the Molson Plant on Saturday mornings, where he would meet with his brother, Robert, with George Arnold, who had been hired to set up the Aurora Beverages water bottling operation and to decommission National Roasters and sell off the overstocked coffee, and with Ken and/or Andy Fraser from Moonstone Mechanical to discuss the sale of the Molson's chattels and conversion of Molson's equipment for use with Aurora Beverages. He would usually stay at the Molson Plant for about an hour.

(b) Oro Centre Property

[22] On May 1, 2002, Vincent DeRosa purchased a 50,000 square foot commercial building at 2921 Highway 11 North in Oro-Medonte for $950,000. Robert DeRosa was given the responsibility of acting as the property manager for this property. Vincent DeRosa testified he had different property managers in each of the geographic areas that he owned commercial properties, for example: Hamilton, St. Catharines, Windsor, Montreal, Barrie and Oshawa.

[23] The main tenant in the Oro Centre was Canada Post. The building was in a state of disrepair and needed a new roof, exterior brick and stucco work. Mr. Davood Shogi-Baloo was hired by Robert DeRosa to act as an on-site property manager, responsible for showing prospective tenants the units, collecting the rent and for overseeing the renovation work.

[24] Unit 3 of the Centre was rented to an individual called Jeff Dylan, to store mattresses. Mr. Shogi-Baloo testified that he showed Unit 3 to Jeff and then referred him to Robert DeRosa to negotiate pricing for the lease.

[25] After the lease was signed, Mr. Shogi-Baloo only entered Unit 3 on a couple of occasions to show fire or city inspectors around. He observed that Jeff had been doing renovations by putting up drywall and repairing the floors. According to the Agreed Statement of Facts filed on Robert DeRosa's guilty plea, Robert DeRosa conducted walk-through inspections as the construction of the grow site was being completed.

[26] The evidence disclosed that Vincent DeRosa never attended the Oro Centre.

(c) Ssonix Property

[27] Vincent DeRosa purchased Ssonix as a business in the early 1990s from his brother Robert DeRosa, as a result of Robert and his partner running into financial difficulties. Ssonix recycled water from products received from gas stations and was profitable until technological changes took place in the industry. In 2001 or 2002, Vincent DeRosa purchased the building where Ssonix was located, along with other tenants.

[28] Brian Payne was hired by Vincent DeRosa to be the general manager of Ssonix. He held that position from 1992 or 1993 until sometime in 2003. The building that Ssonix occupied was located at 20 Keefer Road in St. Catharines. There were 10 units and Ssonix occupied Units 7, 8, 9 and 10 and the remaining units were leased to other businesses. Vincent DeRosa rarely visited this property. Mr. Payne testified that Mr. DeRosa came to Ssonix on only two or three occasions during the entire time he was general manager. In 2003, it was Mr. Payne's understanding that the building was being sold to someone called Jeff (Lawson). Mr. Payne was instructed by Vincent DeRosa to assist Jeff in making the necessary changes to the certificates held with the Ministry of the Environment, although Mr. Lawson never asked him to provide that assistance.

[29] Mr. Payne testified that it was his understanding there was a firm offer between Mr. DeRosa and Jeff Lawson in the summer of 2003 to purchase the Ssonix business and the building at 20 Keefer Road. Mr. Lawson requested early access from Mr. Payne in order to move in. After Mr. Lawson obtained access he changed the locks and Mr. Payne no longer had keys to Unit 6.

(d) The Tenants at the Molson Plant

(i) Smitty's Enterprises

[30] Marie Carere-Smith and her husband operated Smitty's Enterprises, which had one large transport truck and a straight truck. They had one employee. They attended the Molson Plant to see whether they could lease space for their trucks and they met with James Hayes in the guardhouse. On October 31, 2002, they signed a lease with Mr. Hayes, Exhibit 46, and began parking in the truck shipping/dock area, Area 7A on Exhibit 6. They would sleep in their truck Monday to Thursday and go home to Owen Sound on the weekends. There were other trucking companies leasing space as well. She remembered First Transport and Karlea as two of the trucking companies and two gentlemen called Dan and Roger. She also met Lex, a maintenance man, who fixed a dock plate when they began leasing space.

[31] Ms. Carere-Smith never observed anything untoward while they leased space in the plant. She had no idea that a marihuana grow operation was in the plant close to the area she and her husband parked and slept in their truck. She was in the Molson Plant with her husband on January 9, 2004 when the police executed their search warrant.

(ii) Kumi Canada

[32] Justin Moreau is employed with Kumi Canada as Assistant Vice President and Plant Manager. Kumi is a tier one automotive supplier, with Honda Canada being their main customer. In 2002, Mr. Moreau managed the department that was leasing space at the Molson Plant. They leased warehouse space to receive and re-package parts shipped from their sister company in Alabama. In 2002, Kumi originally leased 55,000 square feet of space in the front portion of the warehouse area. This amount of space was reduced over the course of that year. He dealt mainly with James Hayes. Initially he was in the Molson Plant every morning, sometimes the whole day; however, after the space was organized he had a supervisor, Jean Stewart, who handled the day-to-day operation.

[33] Mr. Moreau recalled a letter written by James Hayes (Exhibit 49) advising that the lease for the space occupied by Kumi was to be terminated effective December 6, 2003 because it was required for warehousing needs associated with the water bottling operation. Kumi paid $6.00 per square foot. In January 2003, for 25,000 square feet, the rent was $13,375.

[34] Jean Moores (Stewart) worked as a supervisor for Kumi at the Molson Plant. James Hayes showed her the area of the warehouse that Kumi would be using. They were using the area in front of the docks on Exhibit 6. She was introduced to Bob, who James told her was the brother of the owner of the property. She also met a couple of other gentlemen who were in the process of converting the beer equipment to a water bottling company. One of the maintenance guys was called Lex. She met Vincent DeRosa on a couple of occasions during the daytime, when he was with James, but it was only a brief, "Hi, how are you doing" type thing.

[35] Ms. Moores was aware that there was a coffee business operating in the plant. Once or twice a month there would be a very strong coffee burn smell. This business was run by someone she knew as Import George. She also met another man called George who worked in the offices doing accounting or something.

[36] When Kumi was assembling and packaging plastic parts for Honda at the Molson Plant there were 35 to 40 workers involved. This number decreased as the leased space was reduced. Ms. Moores and Mr. Moreau did not provide any evidence concerning the marihuana grow operations, particularly the grow operation in the space leased by Ontario Pallet, which was close to the space they leased.

(iii) First Transport

[37] Mr. Kenneth Judd is the owner of First Transport. He was looking to rent a cross dock facility and a real estate agent, Victor Slobodian, assisted him in leasing 5,000 square feet at the Molson Plant. He spent time at the Molson Plant as did some of his employees as they were needed. Exhibit 43 is the lease agreement between First Transport and Vicar Properties. Mr. Slobodian filled it out and brought it back signed by the owner or an authorized representative of the property. The signing took about 5 days. The lease commenced on February 1, 2003 and terminated on January 31, 2004. Mr. Judd had the first three dock doors.

[38] Mr. Judd also leased some space to store product that he was transporting for a bed and bath company. He erected a chain link fence around this property. It was Mr. Judd's evidence that he was not restricted in any way and he and his employees would wander around the facility. He observed machinery being taken apart in various locations. There was a coffee grinding facility. There was also an area that looked like a water bottling operation was being set up. He smelled coffee but never saw it in operation. He also did not see the water bottling operation up and running. The primary contact person was James, who he believed was a property manager or something.

[39] Mr. Judd also was aware of two other trucking companies; Smitty's, a husband and wife who operated straight trucks and a transport company, using flatbed trailers for moving machinery, operated by Roger Kelly. There was also a company called Kumi that utilized part of the warehouse as a staging area for parts for Honda. Exhibit 50 is a photograph of one of Mr. Judd's trucks in the Molson Plant in the space he leased.

[40] Mr. Judd was in the premises during business hours and after business hours in the evening and on weekends. He did not provide any evidence concerning his being aware of the marihuana grow operations in the Molson Plant.

(iv) Simcoe Steam Brewing Company

[41] Peter Chiodo owns Simcoe Steam Brewing Company and leased space at the Molson Plant starting in March 2003. His company was building a brewery in downtown Barrie and they stored their equipment at the Molson Plant while the construction was going on. He rented space in the area marked "warehouse" on Exhibit 6.

[42] He was never told that he could not go into any areas within the Molson Plant. When he was given a tour of the plant by James he observed a water bottling operation and a coffee company. The only person he had contact with was Bobby DeRosa. Mr. Chiodo testified that he looked into bringing spring water from the Molson Plant to his brewery and spoke to Bobby DeRosa about arranging it. They obtained a milk truck of water from the Molson Plant for over a year at a cost of $300-$325 a load.

[43] Bobby DeRosa also purchased all of Mr. Chiodo's brewery's spent grains, which he would use to feed his buffalo. Ms. Underhill testified that initially Mr. Chiodo's brewery's spent grains were used to feed her cattle. Mr. Chiodo also met a man named George, who he believed was the controller of the water bottling company. He observed people working at the plant setting up the water bottling operation. He was aware of Moonstone Mechanical trying to set up the lines for the bottling company by adapting the Molson equipment. He was also aware that they were removing and selling equipment and his company purchased some pieces of equipment.

[44] He was renting space in the Molson plant the day the police raided the marihuana grow operations. His space was right next to the area being used by the grow operators. He testified that he was shocked by the discovery and could not believe it had being going on.

(v) RK Trucking

[45] Roger Kelly has been in the trucking industry for 35 years. He had operated RK Trucking since 1988. He leased space at the Molson Plant through J.J. Barnicke. He rented space to park his tractor trailer trucks as well as office space. He rented the space through James Hayes. He also came to know Lex McGee, Vincent DeRosa and Ken and Andy Fraser as a result of working at the plant. He spoke to Vincent DeRosa on one occasion when he was introduced by James Hayes and Mr. DeRosa told him that the rental price was the price. The office space was at the main entrance to the Molson Plant in Area 13. About a year after first renting space RK Trucking went bankrupt and Mr. Kelly had another company called Karlea Trucking.

[46] Mr. Kelly became friends with Bob DeRosa. He knew Lex, who did maintenance at the plant. He would see Bob in the guardhouse and then later at the Canadiana offices. He was aware that a water bottling operation was being started up. He moved some of the equipment through Moonstone and he arranged for equipment to be shipped from Sioux City, Iowa to the Molson Plant. He also moved the coffee company equipment from Concord to Barrie. His work hours in the plant would be from 8:00 a.m. to 7:00 p.m. and sometimes on weekends. Mr. Kelly was aware that water bottling companies from Mississauga and Alberta were purchased and he helped with moving the equipment. He shipped coffee for the coffee company to Florida.

[47] While he was working out of the Molson Plant he observed that a doorway would be bricked or a new wall had been built. He did not see this work being done but observed the completed work the next day. Mr. Kelly testified there were no restrictions placed on him as to where he was to go in the Molson Plant. He had keys to the docks and to the main doors to get to his office space. It was his belief that as areas were rented out that locks were changed.

[48] Persons renting space at the Molson Plant were given passes to be able to come and go. You had to check in at the guardhouse. After a while it was not really necessary to check in once they got to know you. It was James Hayes on the gate during the day and Mike Dicicco at night.

[49] He knew Cathy Underhill, who was a cleaner, and later drove Bob DeRosa around. He always saw Cathy with Bob. He saw Vincent DeRosa at the guardhouse or in the Canadiana room.

[50] After the police raid he could not believe what had been going on in the two marihuana grow operations. He was given a tour by Bob and James after the police finished and they were allowed back into the building. He was in shock and had no idea this was going on at the same time he was renting space. He no longer leased space in the Molson Plant after the police raid. He then rented office space at the Oro Centre.

[51] Mr. Kelly later found a house at 17 Guest, which he mentioned to Victor Slobodian, a real estate broker who did work for Bob DeRosa. It was close to the Oro Centre. Mr. Kelly thought Bob might be interested in purchasing it and then renting it to him. Mr. Kelly was shown an agreement of purchase and sale between assignor Roger Kelly in trust and the signee Robert DeRosa in trust, Exhibit 54. He did not remember signing anything but it could have been something that Victor did up. He did recognize the Residential Lease Agreement, Exhibit 55, signed by himself and Catherine Underhill on October 28, 2005. Bob had mentioned to Mr. Kelly that Cathy would be the one who was buying 17 Guest Road and he would be dealing with her. He made his rent cheques payable to Cathy Underhill. Bob gave him permission to park his trucks on land adjacent to 17 Guest Road that he believed Fercan owned. He ran his business out of this property and he and his family lived there about three years.

[52] Mr. Kelly was aware that the police raided 17 Guest Road about a year after he left and discovered a marihuana grow operation. It was not his grow operation.

[53] Mr. Kelly believed that Bob DeRosa was the superintendent of the Molson Plant. He always saw him there. He never had any discussions with Bob about the production of marihuana.

[54] Mr. Kelly knew George Arnold and believed he was involved in Aurora Beverages at the Molson Plant. He saw Mr. Arnold there regularly and knew he had an office in the Canadiana Room. Mr. Kelly's company transported some of the new equipment, including a plastic injection moulding machine, for the water bottling operation that was being set up in the Molson Plant. His company also shipped former Molson equipment that Moonstone Mechanical sold.

[55] On one occasion the police came to the Molson Plant to check out one of Mr. Kelly's trucks. Mr. Kelly had a problem with one of his drivers who had been to the United States. The police brought in a police dog to sniff around the truck, however, no drugs were found. Mr. Kelly was present when fire trucks came to the Molson Plant because of some alarms that kept screwing up.

(vi) Barrie Good Fish

[56] In November 2001, Robert DeRosa advised Vincent DeRosa that he had a group of individuals who were interested in leasing the space containing the stainless steel fermentation tanks at the Molson Plant to grow fish. The company was called Barrie Good Fish Company. Robert DeRosa provided Vincent DeRosa with an offer to lease that included a diagram of the space Barrie Good Fish intended to lease. The diagram did not include the second floor, where the living quarters of the growers was discovered. Vincent DeRosa testified he had no idea that the second floor space was part of the Barrie Good Fish lease. An offer to lease was purportedly signed by Mike Dicicco on November 22, 2001. The monthly rent was $17,000. There is conflicting evidence as to when the offer to lease was signed, which will be discussed later.

(1) Mike Dicicco

[57] Mike Dicicco was one of the individuals convicted of possession for the purpose of trafficking in marihuana and production of marihuana in December 2004. He received a conditional sentence of two years less a day.

[58] Mr. Dicicco, the only witness who had been directly involved with the two grow operations, testified he was first approached by Dan (Dolic), an individual he knew for approximately a year, and was asked if he wanted to work at the Molson's Plant. Although the Crown asked Mr. Dicicco if Dan introduced him to somebody about the job, Mr. Dicicco did not give an answer and the Crown did not pursue the question further. Vincent DeRosa testified that his brother, Robert, hired Mr. Dicicco. It is clear from Mr. Dicicco's evidence that most of his dealings were with Robert DeRosa, who was also actively involved in the grow operations; although, the Crown never asked Mr. Dicicco about Robert DeRosa's role and involvement in the two marihuana grow operations.

[59] Mr. Dicicco started working for Vicar Properties as a night security guard in the guardhouse and later his responsibilities included overseeing and maintaining the portable boilers that were brought into the Molson Plant to provide heat. Within a week of starting to work at the Molson Plant, Mr. Dicicco testified he was told by Dan about the planned marihuana grow operations and was asked if he wanted to be involved. He knew that Dan was involved in running several marihuana grow operations in different locations.

[60] Mr. Dicicco had contact with all of the persons involved with the marihuana grow operations. He knew Jeff Lawson, who was a friend of Dan's and was involved in the grow operations. Jeff Lawson, according to Mr. Dicicco, had a girl working for him in the Canadiana Room where Bob DeRosa had an office. He knew Lex McGee, who worked for Vicar as a maintenance man and electrician. He observed the grow operations being set up in stages by two or three persons. He saw the lights and transformers being installed in both grow operations. They would set up one or two tanks initially and then set up another one. He also observed the grow operation in the Pallet Company space being set up. Mr. Dicicco also observed a block wall being built between the transportation/warehouse area and the Pallet space. He saw four or five guys building it and it only took a couple of days. The materials were brought in during the night.

[61] He knew Bob DeRosa, who he described as a "barracuda" and not a very pleasant person. Mr. Dicicco did not like Bob very much as Bob was "all for himself." Despite his expressed dislike for Robert DeRosa, Mr. Dicicco signed a rental application for Bob DeRosa and his family at 12 Raydonhurst Crescent, Barrie, Ontario. He did this at Bob's request because of Bob's lack of a credit rating. He testified that Bob DeRosa would visit him in the old Molson beer store where he stayed. Cathy Underhill would also come and clean the old beer store for him.

[62] Mr. Dicicco was aware of the coffee company that roasted coffee beans, put them in cans and then sold the finished product. When the coffee was being roasted you could smell the coffee all over the plant and even outside the plant. There was a water bottling company that was being set up and "it was very close to happening" although it never got to be fully operational while he was at the Molson Plant.

[63] Mr. Dicicco was paid approximately $15,000 a month to act as the person who provided food, cigarettes, beverages and supplies to the marihuana grow workers. He also ensured that those involved in the grow operations had access into the Molson Plant when he worked in the guardhouse during the evening hours. He had five parking passes, which he provided to Dan, Jeff Lawson and the "Preacher" or anyone else connected to the grow operations that needed one. He would see the workers coming into the plant at night in vans. He was paid whenever a harvest of marihuana was sold and the Preacher or Dan or Jeff would bring him his pay ($15,000), the float for supplies ($15,000-$20,000) and the money for the rent to be paid by Barrie Good Fish Company ($17,000).

[64] Mr. Dicicco was paid $500 a week by Vicar for his work as an engineer and as security in the guardhouse at night. He received his Vicar cheques from Bob, however, Jeff Lawson and Bob made a deal; Jeff told Mr. Dicicco to cash these cheques and give the cash to Bob for Bob's use. Mr. Dicicco lived in the old Molson beer store, which was just to the northeast of the Molson Plant. The Barrie Good Fish cheque registers, with cheque stubs attached, were found by police in this location.

[65] Mike Dicicco testified that he became involved with Dave Nottrodt in Barrie Good Fish Company. According to Mr. Dicicco, this company was set up to try and grow fish in the stainless steel tanks in the fermentation area of the Molson Plant. The Crown did not ask Mr. Dicicco how it was that he met Dave Nottrodt, who introduced him or how they entered into a partnership to raise fish in the stainless steel fermentation tanks at the Molson Plant. According to Mr. Dicicco, the partnership between himself and Dave Nottrodt came about not long after Mr. Dicicco began working for Vicar.

[66] Mr. Dicicco set up a bank account at a TD Bank for Barrie Good Fish and deposited the rent money each month and then wrote a cheque to Vicar. He was told to pay the rent by Dan and Bob.

[67] When Mr. Dicicco was shown the business cards for Barrie Good Fish Company listing him as President and Dave Nottrodt as Vice-President, it was his evidence that he did not really recall those cards but they were likely made up by Dave. He testified that Dave brought some fish to the Molson Plant and they cut one of the fermentation tanks and put them in. Dave was building a platform and different things inside the tank.

[68] According to Mr. Dicicco, there were problems encountered in growing the fish, which he thought were called collapia, but he did not know what those problems were. Dave was only involved for a few months and then he left as everything "fell apart." When Dave was attempting to get the fish to grow in the fermentation tanks he stayed with Mr. Dicicco in the old Beer Store.

[69] It was Mr. Dicicco's position that the marihuana grow operation in the Barrie Good Fish Company's leased space was being set up at the same time that Dave Nottrodt was attempting to grow fish. There was a contamination problem with the grow operation involving spiders but they sprayed the plants and it killed them all.

(2) Dave Nottrodt

[70] Dave Nottrodt was called as a witness by the Crown on December 5, 2012. It became very obvious early in his testimony that because of significant medical problems he did not have any memory of his involvement at the Molson Plant with the Barrie Good Fish Company. In fact, he later testified that everything he had testified to in questioning by Ms. Healey was based on information provided to him by his wife. He then advised that he had no memory of any of the evidence he had just given in court. After considerable discussion with counsel it was agreed that I would not give any weight to the testimony of Mr. Nottrodt and I would disregard it. It was ultimately agreed that Mr. Nottrodt's audio statement given on May 19, 2004 to D/Sgt. Milner and D/Sgt. Dziepak, of the O.P.P., would be filed as Exhibit 58, together with D/Sgt. Milner's synopsis, Exhibit 29, which had been introduced earlier. It was agreed by all parties that I could consider Mr. Nottrodt's statement for the truth of its contents in relation to the totality of the evidence on this issue.

[71] The audio recording of Mr. Nottrodt's statement was played in court. It is 55 minutes in duration. I found D/Sgt. Milner's synopsis of the statement, Exhibit 29, to be very accurate, with very little missed in terms of the questions asked or the answers provided. I find that Mr. Nottrodt, at the time of his giving this statement to the police, was quite capable of understanding the questions that D/Sgt. Milner asked him and that his answers were responsive. He was able to provide a great amount of detail in the answers he gave. His memory was quite good despite suffering from medical conditions that included a growth in his brain, which caused him to have seizures, and pancreatitis. He showed the police a letter from the Ministry of Transportation advising that he could get his driver's licence back. Further, his answers were consistent throughout, even where D/Sgt. Milner would ask the same question, framed a little differently, later in the interview. It is my view that he was being forthright in the answers he gave to D/Sgt. Milner. There were no inconsistencies or discrepancies in the information he provided.

[72] At one point he became upset because he thought the police were looking at him as being involved in the marihuana grow operations and he was concerned that his wife and kids could get shot by those involved in the grow operations. It is my view that his responses were appropriate to the manner in which the questions were being asked. He continued to provide information to the officers after it was explained that they just wanted to understand his involvement with Mike Dicicco.

[73] Mr. Nottrodt told the police he had been involved in raising fish for 7 years, since 1997. He raised tilapia fish and he had a tank of tilapia in his garage at his residence, which he sold to restaurants. He had been operating a greenhouse in Fonthill with an employee named Danny Sonyarchuk but his lease had run out. He told the police he had attended the Molson Plant as he was looking for a place to expand his greenhouse business. He saw a big sign advertising there was space for lease so he went to check it out. He was introduced to Mike Dicicco who showed him the fermentation stainless steel tanks in the facility and suggested that he could use them to see if he could raise fish. The tanks were arranged 8 over 8 in an area 40 yards by 50 yards.

[74] Mr. Nottrodt agreed to bring some of his fish to the Molson Plant and he ultimately put them in one of the tanks. He told the police that he picked the Barrie location because the Formosa water was ideal for growing fish, as it had high nutrient value. D/Sgt. Milner asked whether Dave was also thinking of using the Barrie plant for his greenhouse operation and Dave said that he planned on using aquaponics to grow plants such as tomatoes, carrots, herbs, lettuces, cucumbers and zucchini. He was there at the plant for three or four months trying to get it to work, using pumps and stuff, but over a period of a week or two the fish started dying off. He spoke to his colleague in the United States and they both agreed that it was not going to work in the type of tanks that were available at the Molson Plant. He remembered that he left the plant in the summer.

[75] Dave told the officers that when he first arrived at the gate there was a big guy and a woman in her 40s or 50s with short hair. He told them he was looking to rent space to grow fish and he was directed to Mike Dicicco, who took him on a tour of the plant and showed him the tanks. Mike told Dave that he was willing to let Dave try it out to see if fish could grow in the tanks. Dave did not know Mike before going to the Molson Plant. When he was first at the plant, he also met Bob, who was the property manager, but he did not have many dealings with him after he started to grow fish. Bob told Dave it was okay for him to use the tanks to grow fish. Mike never talked to Dave about paying rent or paying for the water because there was never a determination of how much space Dave would be using. Dave was trying to renovate the tanks to assist in the raising of the fish but he never finished.

[76] Mike Dicicco said he would run the telephones and look after the fish company and he made out business cards for Dave and himself. It was Mike's idea to start the fish business. Mike told Dave that he was already importing and selling frozen fish and, if Dave was able to raise fish, Mike would sell Dave's too. Dave told D/Sgt Milner that he never saw any frozen fish and as far as he knew no one was planning to raise fish before he arrived there. D/Sgt. Milner told him about business cards found at the Molson Plant for Barrie Good Fish Company and Dave told him this was the company name that Mike came up with.

[77] Mr. Nottrodt described how the area that Mike showed him was a "sealed spot" and Mike told him no one could get into the fermentation area and see what Dave was doing. Mr. Nottrodt had expressed concerns to Mike that someone might try to steal his ideas and prototypes. The entry to the fermentation area was locked at both ends and Dave was provided keys to get in by Mike. Mike told him that nobody was leasing the space where the tanks were and that he could use it for his experiments. Mr. Nottrodt thought he was up at the plant less than 10 times. When he was working at the plant he stayed with Mike in a little building where they used to sell beer. When the fish died Dave told Mike he was leaving as he could not get them to grow. As far as Dave knew Mike was not going to continue trying to raise fish.

[78] Mr. Nottrodt had never heard of Vincent DeRosa or Fercan and had never met Vincent DeRosa.

[79] On one occasion, he and his wife and daughter went roller blading in the plant; they roller-bladed in the area of the tanks and about half of the building, which was huge. He did not observe anything that would have indicated there was a marihuana grow operation in the area he was working in. He had been around "pot", he knew what it smelled like and if it was there he believed he would have seen or smelled it. There were areas in the Molson pant that were locked and he could not get into them. He never witnessed the delivery of agricultural supplies or electrical equipment when he was working at the Molson Plant. It was Mr. Nottrodt's position that if there were marihuana plants in the area he was working in then they were pretty good at fooling him.

[80] He was aware of a company called Kumi that operated out of the plant. They were putting together parts for Honda or some Japanese company. He heard about a water bottling plant but never saw anything. He was not aware of a coffee company. He did not think he ever heard of a company called National (sic) Pallet Company. He met Lex McGee, who was a maintenance guy at the plant. He saw transport trucks at the loading dock area of the plant.

(3) Grenville Graham

[81] Grenville Graham worked in various capacities at the Molson Brewery, from 1972 to 2000; his last position was working as the supervisor of maintenance. After retiring from Molson's he went to work for a former Molson's employee, Ken Fraser, who had formed his own company, Moonstone Mechanical, which was doing work for Vicar, moving and selling the Molson's equipment that had been left in the plant. He worked primarily in the Molson Plant from October 2001 to July 2002. In February 2003, after a falling out with Ken Fraser, Mr. Graham worked for Fercan on a contract basis. He was introduced to Vincent and Bob DeRosa. He saw Bob just about every day he worked at the Molson Plant and saw Vincent DeRosa no more than once a week.

[82] Mr. Graham was requested by Ken Fraser, in December 2001, to investigate the feasibility of converting the fermentation tanks in area IB of Exhibit 6 to grow fish. He was introduced to a young woman, Tracey, who operated a fish farm in Elmvale. He was also introduced to another young man called Jerry, who was working with her. He mainly spoke to Tracey and obtained information as to what she hoped to do so he could develop what needed to be done to the tanks. Ken Fraser introduced him to these two people. He drew up a sketch, which provided for removing part of the top of the fermenters and putting in ladders and a catwalk to give access to the inside of the tank to clean and feed the fish. He gave the sketch to Ken. It was going to be an expensive undertaking and Mr. Graham described what had to be done and that it would take a couple of weeks to convert each tank. He thought it would cost about $10,000 to convert one tank. He was asked by Ken to prepare this on December 3, 2001.

[83] He was originally told by Ken and later, when he worked for Fercan, he was told by Lex that the fermentation area was off limits because they were growing fish and the human body would contaminate the fish. He did not know anything about growing fish so he assumed they were telling him the truth. He never saw whether the work he prepared was done to the fermentation tanks to grow fish as he was not allowed in that area. It was only after the police raid that he saw that none of the work he suggested for fish farming had been done to the tanks.

[84] On one occasion he was outside and saw a person outside by a door leading into the fermentation area. When this person saw Mr. Graham, he immediately went inside the building.

[85] Mr. Graham never heard the name Barrie Good Fish Company. He did not believe he heard the name Dave Nottrodt, nor was he introduced to anyone by that name. He met someone named Mike, who lived in the old Beer Store, but he was never told what his role was at the Molson Plant or saw what he did. When he was working for Fercan in February 2003, he observed that the entrances to the fermenting cellars were blocked off so there was no access to the upper and lower areas.

[86] Mr. Graham was in the Molson Plant from 2001 to July 2002 and then from February 2003 when he started working for Fercan until the raid by the police in January 2004. He never observed anything that caused him to suspect there was a marihuana grow operation in the fermentation tank area.

(4) Andy Fraser

[87] Andy Fraser started working in 1998 for Moonstone Mechanical, a company started in 1995 by his father, Ken Fraser. At the time of testifying he held the position of General Manager in Moonstone and in 2013 he was assuming a part ownership in the company. Prior to working for Moonstone, he worked for Molson Brewery, as did his father. His father worked for Molson's for more than 25 years. Moonstone employed 15 full-time employees when Moonstone worked for Vicar and had employed as many as 50 or 60 employees depending on the contract.

[88] Grenville Graham worked for Moonstone Mechanical starting in late 2001 for approximately a year and a half. He was involved in the removal of equipment from the Molson Plant. Moonstone Mechanical was initially involved in determining the value of the equipment that Molson's Brewery intended to include in the sale of the property to Vicar. After the sale, Moonstone was involved in the sale and removal of equipment from the Molson's Plant.

[89] While he worked at the Molson Plant selling and installing equipment he heard about a company called Barrie Good Fish Company. Once Barrie Good Fish leased space he was not permitted to enter the area of the fermentation tanks. The person who he believed was the manager of Barrie Good Fish was Mike; they called him the "chief". It was his understanding that this company was growing fish in the fermentation tanks. Mr. Fraser testified that he observed a truck connected to Barrie Good Fish come to the Molson Plant every day.

[90] There was a point when Mike, the "chief", told everyone that they could not go into the Barrie Good Fish space because of a contamination problem. He was not given any instructions concerning Barrie Good Fish by Vincent DeRosa. He was told by a gentleman who said he worked for Coldwater Fish Farm that they were called to the Molson's Plant. He also spoke to Tracey Belanger (married name is Pickering), who he attended high school with, and she told him that she worked for Barrie Good Fish Company. Both Tracey and Mike talked to him about the contamination problem. Tracey worked out of the Canadiana Room where she had a desk.

[91] He observed doors between the aging cellars and the fermentation area being blocked in. This did not raise any suspicions in his mind about something illegal going on in the fermentation area as he believed this was to prevent the contamination problem. He was not aware of the date that Barrie Good Fish started their lease. When Fercan first took possession of the Molson Plant Mr. Fraser testified he was able to walk around the fermentation area but after the doors were locked he no longer had access. He never had any discussion with Vincent DeRosa about Barrie Good Fish.

[92] He was aware that Grenville Graham drew up a plan to see how the fermentation tanks could be used to farm fish. He saw the drawings when they were completed. Mr. Fraser understood that Mr. Graham drew up plans for an aeration system to grow fish. He believed it involved the installation of pipes and cutting holes in the tanks. Mr. Graham would estimate hours and materials and then it would be given to Moonstone, through either Mr. Fraser or his father, to prepare a cost quotation. To his knowledge Moonstone never formally submitted any plans to convert the tanks to grow fish. Mr. Fraser did not know who the plan drawn up by Mr. Graham was done for. It was his belief that Mr. Graham showed his father the plans. He did not know what became of these drawings.

(5) Dirk Lange and Daniel Pitcher

[93] Dirk Lange and Dan Pitcher were involved in a company called D & D Enterprises. In October 2001, they were hired by Vincent DeRosa and Vicar to decommission the large steam boilers at the Molson Plant and replace them with a smaller portable steam plant, which would be more efficient and less costly. They were introduced to Mike Dicicco, who was a fourth class stationary engineer, and they trained him to operate the portable heat system.

[94] According to Dirk Lange, Vincent DeRosa took them on a tour of the plant. When they were in the fermentation area, they were shown the stainless steel tanks and there was a discussion of how those tanks could be cleaned to be able to raise fish. He and Dan suggested that the tanks be cleaned by pressure washing them. During the tour they came to an area by the bottling area that had double doors that were locked with a chain. Mr. DeRosa told them the area behind the doors was rented. They were told to concentrate their efforts in the boiler room and fermentation and filtration areas of the plant. Mr. Lange indicated that it was difficult to recall details of meetings and conversations because they occurred so long ago. He did not recall the name Barrie Good Fish being mentioned. Mr. Lange did not believe they had any contact with Bob DeRosa, who basically stayed in the guardhouse. He believed they were at the Molson's Plant until March 2002.

[95] Mr. Lange agreed their company was hired as part of the start-up of this new operation. Mr. Lange was not introduced to Dave Nottrodt or to a person from the University of Guelph who were involved in assessing the tanks for the purpose of growing fish.

[96] Dan Pitcher worked for many years as a first class engineer. He agreed that he and Dirk Lange were hired by Vicar to initially look into the starting up of a water bottling plant. They first met with Vincent DeRosa and his brother, Bob. They were shown around the Molson Plant. As things progressed their company was also asked to look into replacing the old steam boilers. A portable unit was rented on a tractor trailer. They oversaw the installation and operation of the new portable boiler system. He met a native Canadian who said he was an engineer, but Mr. Pitcher did not believe he was an engineer because he asked questions an engineer would know the answers to.

[97] Mr. Pitcher also indicated that because of the passage of time his memory of conversations and events was limited. His memory was much clearer when he provided his statement to the police in February 2004. There was discussion about growing fish in the stainless steel fermentation tanks. Bob DeRosa told Dan and Dirk that they were looking into starting a fish hatchery. There was discussion about the cleaning of the tanks to make sure they were appropriate to breed fish in. He thought those discussions were likely with Vincent. He never heard the name Barrie Good Fish.

(vii) Ontario Pallet

[98] Robert DeRosa advised Vincent DeRosa shortly after the purchase of the Molson Plant that he had a pallet company, Ontario Pallet, that wanted to lease space in the southeast corner of the building. Vincent DeRosa testified that the area Ontario Pallet wanted to lease did not interfere with his plans for Aurora Beverages, as it was a self-contained area. The lease, Exhibit 40, was signed on October 23, 2001, by Brian McIntyre, as President of 1477990 Ontario Inc. (Ontario Pallet). The lease commenced on November 1, 2001. Vincent DeRosa testified he did not meet Brian McIntyre and would have signed the lease in his office. The leased area was approximately 30,000 square feet. The monthly rent was $12,500. Ontario Pallet provided a security deposit and paid the monthly rent in a timely fashion.

[99] No witnesses connected to the Ontario Pallet company were called to give evidence. No information was provided by any witness as to Mr. McIntyre's connection to Dan Dolic or the marihuana grow operation that was set up in the space leased by Ontario Pallet. No evidence was led as to Mr. McIntyre's relationship with Robert DeRosa.

[100] Mr. Graham became aware that a pallet company had leased space in the southeast corner of the Molson Plant, in Area 7B on Exhibit 6. He used to eat his lunch with some of the truckers at the southeast corner of the bottle shop. He used to joke during lunch that they did not see many pallets coming out of Ontario Pallet. He observed a couple of guys with big pick-up trucks that came and went into the Ontario Pallet space but he never spoke to them.

[101] He did not observe any changes to doors or openings when he was working for Moonstone up until July 2002. Later, when he was working for Fercan after February 2003, he did notice changes to both the fermenting areas and the transportation area where the pallet company leased space. Lex McGee told him those areas were off limits. Lex would tell him if he needed anything from those restricted areas, for example, when he was doing piping in the bottle shop area he knew there was extra pipe in the fermentation area, he would just ask Lex and Lex would get it. If Mr. Graham needed any other materials for his work he went to James Hayes to have it ordered and brought to the plant.

(viii) National Roasters

[102] Vincent DeRosa purchased a company called Multi Brands Food Corporation in 1993 or 1994, which at the time of the purchase of the Molson Plant was operated at a property in Concord, Ontario. This was a coffee roasting facility and a distributor of a number of different food products. A decision was made by Mr. DeRosa to sell the Concord building and move Multi Brands Food to the Molson Plant. After the company was moved to the Molson Plant it was not involved in anything but the roasting, packaging and selling of coffee under the brand name of Prime Coffee. The company name was changed to National Roasters by George Arnold after it was moved to the Molson Plant.

[103] Prior to the purchase of the Molson Plant, Vincent DeRosa testified that he sold Multi Brands Food Corporation to his brother, Nicola DeRosa, for a very nominal amount. National Roasters occupied 20,000 – 25,000 square feet of space in the Molson Plant. National Roasters paid rent of approximately $7,000 per month.

[104] Roger Kelly testified that his company, RK Trucking, moved the National Roaster's coffee equipment from Concord to Barrie. Andy Fraser testified that Moonstone Mechanical was involved in the re-installation of the coffee equipment that had been moved from the Concord facility to the Molson Plant. He had attended the Concord building to view the equipment. It took approximately a couple of months to set up the equipment, including the coffee roaster as well as a packaging system. It required four employees from Moonstone to complete the work. National Roasters was set up in Area 14 of Exhibit 6. Mr. Arnold testified that when he first arrived at the Molson Plant there were multiple truck loads of coffee that had been produced in Concord that were vacuum packed and sitting on pallets.

[105] One of George Arnold's responsibilities was to try and sell the coffee that was already packaged for sale. He testified he met with representatives from Giant Tiger and they agreed to sell the Prime Coffee line in their stores. Roger Kelly testified his company was involved in shipping coffee to Florida.

[106] Numerous witnesses testified they saw and smelled coffee being roasted by National Roasters after the roasters and packaging line were installed and up and running. There was a large amount of green coffee beans, which Mr. Arnold estimated at tens of thousands of pounds that had to be roasted as it was just sitting there in bags. Initially a small roaster was set up, according to George Arnold, to roast small amounts of coffee to meet demand. Later a large roaster was installed. George Arnold testified that coffee was roasted and packaged once every week or two weeks and that National Roasters employed one or two employees to do the roasting and packaging of the coffee. Cathy Underhill testified that George (not Arnold) and Peta both worked for the coffee company. This was also supported by the evidence of Andy Fraser who looked to these two individuals for assistance when Moonstone was installing the National Roaster coffee equipment. Grenville Graham testified that after he was hired by Fercan, in February 2003, he worked on the coffee line. Cathy Underhill testified that she also worked on the coffee line. George Arnold described a situation where a fire broke out in the chimney of National Roasters and the Barrie Fire Department attended to ensure there were no further problems.

[107] It was the evidence of Grenville Graham and George Arnold that there was no strong odour of coffee being roasted inside the plant because of the chimney that exited the roof.

[108] It was Mr. Arnold's evidence that when it was decided to roast the green coffee beans; Nicola DeRosa was at the plant assisting with formulating a blend between the various coffee beans. Mr. Arnold was not really aware of what Nicola DeRosa's position with National Roasters was. It was Ms. Underhill's evidence that it was her understanding Nicola DeRosa was in charge of the coffee company in Concord. When it was moved to the Molson Plant, Nicola initially was involved in the set up and afterwards he did not come very often. Mr. Arnold's focus was to market and sell the overstock of coffee that he ultimately sold to Giant Tiger. Once that was done his focus shifted to his main responsibility, which was the setting up of Aurora Beverages.

[109] Mr. Arnold was close to signing an agreement with Vitality Food Corporation to do some custom roasting for a liquid coffee concentrate that would be sold to coffee machines, casinos and other food services. However, after the police raid, Vitality Food was no longer interested in pursuing any agreement with National Roasters.

[110] Mr. Arnold testified that National Roasters, after the police raid, was not operational very often as there was a price war occurring in the coffee business and Prime Coffee was not a national brand.

[111] The Crown pointed to a number of empty Prime Coffee tins that were found in the areas leased by those involved in the two marihuana grow operations. It is the Crown's position that the discovery of these coffee cans in the growers leased space demonstrated their unrestricted access throughout the building. In my view, the discovery of these coffee tins more likely demonstrated that because the growers were living in the Molson Plant, as well as individuals like Lex McGee and Mike Dicicco, who also lived in the plant or the old Beer Store and were involved in assisting with the grow-ops, they had easy access to the Prime Coffee inventory at night when no one else was around and they helped themselves to it. Further, one of Mike Dicicco's responsibilities was to provide food supplies for the growers who were living in the plant, although he testified he did not see any Prime Coffee cans in the Barrie Good Fish or Ontario Pallet leased spaces.

(ix) Aurora Beverages

[112] One of the reasons Vincent DeRosa gave for purchasing the Molson Plant was to start a water bottling operation due to the existence of the Formosa spring, which he determined was an excellent source of water, prior to purchasing the property. Mr. DeRosa testified that Gartner Lee, an engineering company that provided environmental consultation services, was retained to do an assessment of the water quality of the Formosa Spring and to make an application for the necessary permits from the Ministry of the Environment to draw water from the spring. This permit was obtained in 2002 or 2003. Mr. DeRosa also retained Moonstone Mechanical to investigate whether any of the existing Molson equipment could be adapted or converted to bottle water.

[113] Andy Fraser testified he knew Steve Usher, of Gartner Lee, was investigating the water at the Molson Plant and making an application for a permit for drawing water from the well. It was Mr. Fraser's belief that the permit was ultimately granted after a lengthy period of time. Moonstone Mechanical was also involved in the purchase of new equipment, which they installed in the Molson Plant for the Aurora Beverages water bottling operation. A number of the existing pieces of Molson equipment were adapted and converted for use on the water bottling line.

[114] Mr. Fraser's company was also involved in handling the maintenance of the Echo Springs water bottling facility in Mississauga that Mr. DeRosa was looking to purchase. They also extracted equipment from the Echo Springs facility in High River, Alberta, which was brought back to the Molson Plant and installed. Moonstone Mechanical had as many as 15 employees working on the Aurora Beverages water bottling operation. Andy Fraser testified Moonstone Mechanical was paid close to $1 million over a two year period for the work done for Aurora Beverages. Grenville Graham testified he supervised a lot of the electrical work that was done on the bottling line. He also was involved in converting all of the high voltage (600 volt) lighting in the bottle shop area and in the hallways. When Molson's operated the plant, the lights were on 24 hours a day, so Mr. Graham installed switches to turn the lights on and off.

[115] The area in the Molson Plant where Aurora Beverages was being set up was in the Warehouse and Bottle Shop Areas of Exhibit 6. Aurora Beverages leased 270,000 square feet of the Molson Plant and paid $90,000 a month. The Crown did not allege that this money was not paid to Fercan by Aurora Beverages. The original rent was based on $4.00 per square foot but this amount was to be increased in 2009 to $5.00 per square foot.

[116] George Arnold was actively involved in overseeing the installation of equipment for Aurora Beverages and getting the water bottling line up and running. He was being paid $100,000 a year to get Aurora Beverages operational and then arrange for the marketing and sale of the water that was bottled. Mr. DeRosa testified he paid between $3.5 to $4.5 million in the conversion and installation of existing Molson equipment, the purchase and installation of Echo Springs' equipment and the purchase and installation of new equipment for Aurora Beverages.

[117] Roger Kelly testified he knew George Arnold as the person who was in charge of setting up the water bottling operation in the Molson Plant. Mr. Kelly saw Mr. Arnold at the Molson Plant on a daily basis. Mr. Arnold had an office in the Canadiana Room. Mr. Kelly brought new equipment from Sioux Falls, Iowa, and from Mississauga, which included a plastic injection moulding machine, to the Molson Plant for the water bottling operation.

[118] George Arnold testified that Vincent DeRosa attended the Molson Plant on most Saturdays and they would meet, either in the Canadiana Room or in the plant where the water bottling operation was being set up, to discuss its progress. Andy Fraser, who was in the Molson Plant almost daily prior to the police raid and after, testified that he saw Vincent DeRosa on the floor of the plant when the bottling operation was being installed and set up. This was also confirmed by Cathy Underhill who testified she saw Vincent DeRosa at the Molson Plant when they were setting up the water bottling operation.

[119] I do not accept the Crown's submission that very little if any work was done setting up Aurora Beverages prior to the police raid in January 2004. I find that there was a significant amount of evidence supporting Vincent DeRosa's assertion that one of the reasons he purchased the Molson Plant was to set up a water bottling operation utilizing the existing Formosa Springs Well, which was an excellent water source.

(e) The Sale of the Molson Chattels

[120] Vincent DeRosa testified that prior to the purchase of the Molson Plant he retained Moonstone Mechanical to determine the resale value of the equipment Molson's Brewery was leaving in the plant. Further, he testified that Moonstone was involved in determining if any of the Molson chattels could be converted or altered and be used in the water bottling operation he planned to set up and operate. He was advised that the resale value of the Molson equipment was in the range of $5 to $10 million.

[121] The evidence of Andy Fraser corroborates the evidence of Vincent DeRosa. Exhibit 52, Schedule "B" to the Purchase and Sale, is a comprehensive listing of the major components left by Molson's Brewery at the Molson's Plant. It was Moonstone's initial task to verify their existence and provide a valuation. Moonstone had the sole rights to the extraction of the equipment and they received 10% for every piece of equipment sold. Exhibit 53 is an example of the descriptions that were prepared for the equipment at the Molson's Plant that was to be sold. Mr. Fraser wrote these descriptions.

[122] When Moonstone sold a piece of equipment they would send an offer to purchase to GAB Capital Corp. (hereafter GAB), which was Vincent DeRosa's company that owned the chattels and received payment. GAB would send an invoice and Moonstone would submit a cheque less 10%. Exhibit 82 is a sampling of the types of cheques and documents relating to the sale of the Molson's equipment. Exhibit 82 represents about $1.2 million in sales of equipment, which is only a portion of the money made through the sale of the Molson's chattels. From these documents it appears that the first piece of equipment was sold on October 30, 2001, although there might have been earlier sales.

[123] It was Mr. Fraser's evidence that a low estimate of the equipment sold would be $4 million, although he believed the actual value would be higher. Moonstone would have received $400,000 commission on those sales. Vincent DeRosa testified that approximately $6 million, net of expenses, was made by GAB through the sale of the Molson chattels. This took approximately five or six years from the closing date in October 2001. Hundreds of potential customers came to the Molson Plant to view the equipment that was for sale. There were no restrictions placed on Mr. Fraser as to where he could take their potential customers, although they did not take them into leased areas where there were tenants. Equipment was sold before and after the police raid in January 2004.

[124] Mr. Fraser was at the Molson Plant daily after the closing in October 2001. At a minimum he was at the plant five days a week and at times he was there seven days a week. He would work eight to fifteen or eighteen hours a day. He had complete access to the areas of the plant. Moonstone had originally been asked to sell the stainless steel fermentation tanks; however, they were not able to sell them because they were horizontal tanks which were no longer being used in the brewing industry. At some point doors and windows were blocked in between the aging cellars and the fermentation area because, from what Mr. Fraser was told, there was a sanitation issue concerning the fish that were being raised in the fermentation tanks. Once the fermentation area was leased to Barrie Good Fish, Mr. Fraser no longer went into that area.

[125] Exhibit 83 represents some of the invoices provided to Aurora Beverages and Vicar for work done by Moonstone for the installation or extraction of equipment.

(f) Evidence of Catherine Underhill

[126] In October 2001, Cathy Underhill was raising cattle on a farm in Oro-Medonte living with a friend. She was a registered nurse by profession. James Hayes, who she knew from raising cattle, contacted her and he asked her if she wanted a job cleaning offices at the Molson Plant. Initially she cleaned the guardhouse during the day, which is where James Hayes sat as she understood he managed the guardhouse. James was also responsible for ordering supplies as he was very knowledgeable of the Barrie area. A short time after she started, she first met Mike Dicicco as he was manning the guardhouse at night. She also met Robert DeRosa, who was the property manager of the Molson Plant and other properties owned by Vicar/Fercan in the Barrie area. She knew that Bob DeRosa was responsible for assisting in setting up the water bottling operation.

[127] For about a month she was paid in cash, and thereafter was put on the payroll of Vicar and paid by cheque. Initially she was paid $2,000 a month and later her salary was $32,000 a year. She cleaned and painted the old Beer Store where Mike Dicicco worked and cleaned up the offices in the Canadiana Room.

[128] After a short while she began to work in a capacity as Bob DeRosa's assistant and driver. Bob DeRosa gave her a gift of $50,000, which allowed her to purchase the farm property that she lived on in Waubaushene. Initially Bob used the guardhouse as his office but he later moved to the Canadiana Room. Cathy Underhill testified that when Bob had an office in the guardhouse he met there with Jeff (Lawson).

[129] Ms. Underhill was familiar with a number of the workers at the Pallet Company and she observed one of them working in the guardhouse at night instead of Mr. Dicicco. She observed Rob (Bleich), Rayne (Sauve) and Jeff (Lawson or DaSilva) from the pallet company coming in and out of the plant. Ms. Underhill testified she recognized Robert Bleich, Rayne Sauve, Scott Walker, Craig Walker and Michael Dicicco, the five persons in a Toronto Sun article and photo, Exhibit 60, as working for the Pallet Company.

[130] Vincent DeRosa visited the Molson Plant on Saturdays and she first met him during the first month of her employment.

[131] She testified that despite being at the Molson Plant daily, she had no idea there were two marihuana grow operations there. Further, she had no knowledge that any of the individuals she knew from the Ontario Pallet Company were, in fact, working in a marihuana grow operation. Ms. Underhill described that in December 2003 there was a Christmas party held in the Canadiana Room attended by employees of Fercan, tenants, inspectors from the City of Barrie, people from the Fire Department and from hydro. A few weeks later, the police executed a search warrant and discovered two very large and sophisticated marihuana grow-ops just across the hall from where the Christmas party was held.

(g) The Grow Operations

(i) The Molson Plant, 1 Big Bay Point Road

[132] On January 9, 2004, two large sophisticated marihuana grow operations were discovered at 1 Big Bay Point Road, in the former Molson Plant. Detective Constable Bednarczyk, who was the continuity exhibits officer during the execution of the search warrant and the dismantling of the grow operations, provided evidence of the physical aspects of the two marihuana grow operations and the extensive modifications to the Molson Plant that were discovered after the execution of the search warrant. Exhibit 6 is a diagram of the layout of the plant showing the areas used by the two grow operations. Exhibit 7 is a bound volume of photographs, used by D.C. Bednarczyk when he testified at the sentencing hearing in 2004 (See also the photographs in Exhibit 30). He also described what was depicted in a number of videos (Exhibit 8 and 9) taken after the discovery of the grow-ops. D.C. Bednarczyk's involvement was limited to Project Plants in 2004. He was not involved in any of the subsequent police investigations (Project 3D or Project Birmingham).

[133] Access to the two marihuana grow operations was controlled by two locked exterior doors on the south side of the Molson Plant. Any entrances or doorways within the plant, which led into the areas where the two grow-ops were located, were locked or bricked in with cement blocks or dry walled to prevent anyone working inside the plant from gaining access. Only those individuals involved in the grow-ops with keys were able to access these areas through the exterior doors.

[134] One of the grow operations was located in the space rented by Barrie Good Fish, identified on Exhibit 6 as Area 1A, Area 1B and Area 3. The second grow operation was located in space rented by Ontario Pallet Company (1477990 Ontario Inc.), identified on Exhibit 6 as Area 4A, Area 4B, Area 5, Area 6, and Area 7B. Those involved with the grow operations had constructed two living quarters for the growers in each space so the operation could be monitored around the clock.

[135] Larry Farr is the owner of Farr Masonry Ltd. In 2001 he was paid to do some work at the Molson Plant. Someone met him at the guard house, took him into the plant and showed him the openings to be filled in. He filled in some windows and a man door. Exhibit 64 is his invoice dated October 29, 2001. The work would have been done a day or two before or on the date of the invoice. The invoice indicates the work was done for 1477990 Ontario Inc. in the amount of $705.13. He was paid in cash by the person who showed him where to do the work. He was unable to give a description of this person. Mr. Farr did the work somewhere between Area 7B and the warehouse on Exhibit 6, but was unable to say exactly where he did the work. During oral submissions the Crown conceded this point. He assumed the blocks he used came from Simcoe Block but he was not positive. The person who brought him into the plant also talked to Mr. Farr about building a wall from Area 7A through the middle of the warehouse and bottling area on Exhibit 6. Mr. Farr was not hired to build the wall that was discussed.

[136] A cement block wall was constructed between the warehouse area and the area used by Ontario Pallet, although no evidence was lead as to who did this work or who paid for its completion. Michael Dicicco, one of the individuals charged with being involved in the grow operations, testified the wall was built during the night by four or five guys and that equipment and materials were brought into the plant to do this work at night. He later changed his evidence to say the wall was built during the day. It is interesting to note that Mr. Dicicco worked as the night security in the guardhouse and he testified that during the day he slept.

[137] D.C. Bednarczyk testified that 342 invoices from Simcoe Building Centre/Simcoe Block were located in the guard house and seized. There was evidence that Robert DeRosa originally maintained an office in the guard house. Of the Simcoe Block invoices, only three referred to the name "Vince" and all of those related to the Oro Centre for stucco materials. There was evidence led that extensive renovations were done to the outside of the Oro Centre after it was purchased by Vincent DeRosa.

[138] Sophisticated sulfur/charcoal venting was installed in the roof to prevent the smell of vegetative marihuana leaking into the common areas of the plant. Water pipes and electrical wiring were installed and routed along the ceiling in the plant to provide water and electricity to the two grow areas. The growers obtained water for the Barrie Good Fish grow operation by running a waterline from the National Roasters area into an empty vat that was used as a reservoir. The waterline then went from this vat up to the ceiling and was secreted in the rafters where it directed water to the Ontario Pallet space. Electrical cables were run from transformers, taken through the ceiling and hidden under flashing on the roof and then brought through the ceiling into the area of the Ontario Pallet grow operation. It is my view, based on the video footage, that these modifications would have been difficult to observe by individuals who were unaware of the grow operations and would not have raised any suspicions.

[139] It would have been obvious to anyone who gained entry into the areas of the two grow operations as to what type of activity was going on. It is my opinion those in charge of the grow operations did everything in their power to prevent anyone not involved from gaining access. Based on the evidence of D.C. Bednarczyk, it is clear the scope of the two marihuana grow operations at 1 Big Bay Point was massive and highly sophisticated. The Crown has set out, in accordance with the evidence of D.C. Bednarczyk, the layout of the two grow operations and I do not intend to reproduce the detail here.

[140] Grow schedules, discovered in the two grow operations, established that for Ontario Pallet marihuana plants were growing as early as March 19, 2012 and for Barrie Good Fish as early as March 24, 2002. Michael Dicicco testified the process of getting the grow operations up and running was done in stages; they would get one or two tanks operational at a time. Mr. Dicicco was not asked the names of the two or three individuals he testified set up the grow operations. In fact, very few questions were asked of Mr. Dicicco concerning his involvement or the involvement of others in the marihuana grow operations.

[141] I find the modifications to windows, doorways and the brick wall separating the warehouse area from Area 7B, which prevented access from the common areas of the Molson Plant to the grow operations, were completed in the months leading up to March 2012. The evidence of Mr. Dicicco, Roger Kelly, and Grenville Graham supports the inference that much of this work was completed at night. Mike Dicicco was in the guardhouse at night acting as security and was recruited early on by Dan Dolic to be involved in the grow operations.

[142] Mike Dicicco testified that on one occasion he observed a strong odour of vegetative marihuana coming from a hole in a wall separating Ontario Pallet from the warehouse. He immediately brought this to Dan's attention and this problem was quickly corrected and the hole was filled in.

[143] Robert DeRosa's role in the Molson Plant grow operation, according to the Agreed Statement of Facts filed on his guilty plea, April 15, 2011, was to ensure that no unauthorized persons gained access into the two grow operations. In my view, it is a reasonable inference that as the property manager of the Molson Plant, Robert DeRosa had to have been approached by Dan Dolic or some other person involved in setting up the grow operations to allow this type of activity to take place. It was his job to prevent discovery by anyone, including fire, safety or city inspectors.

[144] Robert DeRosa hired Mike Dicicco to work in the guardhouse during the evening hours to allow those involved in setting up and operating the marihuana grow operations free access to the areas that had been leased by Ontario Pallet and Barrie Good Fish. He was aware that the two companies operated as fronts for the grow operations. Robert DeRosa also hired Lex McGee to work at the Molson Plant as a maintenance worker who did electrical work and odd jobs. Mr. McGee was charged in 2010 and pleaded guilty, although I was not advised in the materials or the evidence to what charge or charges. He was a very low end participant in the 2004 grow operation; he had knowledge of the grow operation and apparently assisted in setting up the electricity.

(ii) The Oro Centre

[145] The OPP executed a search warrant, authored by Constable Neil Browne, during the morning of January 10, 2004, in the space leased by Jeff Dylan for the mattress store. Upon entering the building it was observed there were three to four inches of water on the floor as a pipe had burst in the furnace room. The police, due to safety concerns, contacted Hydro One to come and ensure the power was turned off.

[146] Upon entering the unit leased by the mattress company, police discovered a functioning marihuana grow operation with over 1963 plants and 60 pounds of dried marihuana. In addition, there were numerous 1000 watt high-intensity lights, ballasts, and transformers in the grow room. There were also living quarters that had been built with a living room with couches, two bedrooms containing beds and dressers, a washroom and a kitchen area.

[147] Constable Browne confirmed that he observed the stucco on the outside of the Oro Centre was being renovated. He also indicated that to his knowledge no one was charged in 2004 in relation to this marihuana grow operation.

[148] Mr. Shogi-Baloo testified he was completely unaware that there was a marihuana grow operation in the Oro Centre until after the police executed the search warrant.

(iii) Ssonix

[149] In March 2003, during a scheduled inspection, Aarne Salojarvi, an environmental enforcement officer with the Region of Niagara, observed oily residue in one of the waste water discharges adjacent to the Ssonix building. Mr. Payne permitted him to inspect units 7, 8, 9 and 10, where Ssonix had been operated. He did not observe anything unusual.

[150] Mr. Payne advised Mr. Salojarvi that a new owner, Jeff (Lawson) was in the process of purchasing the Ssonix business, as well as the building, and had been given access to Unit 6. Mr. Payne told Mr. Salojarvi that he did not have keys for that unit. On June 27, 2003, Mr. Salojarvi returned and wanted to meet with the new owner, Jeff. Mr. Payne testified that he had a cell number for Jeff and he called Jeff and told him that Mr. Salojarvi wanted to meet with him. Later that same day, Mr. Salojarvi received a call from Jeff Lawson. Mr. Lawson advised that he worked with the new owner, Steve McGean, and that a broken water heater and toilet had caused water flow into the sanitary sewer. Mr. Salojarvi advised he needed access to the units involved. On July 3, 2003, Mr. Payne contacted Mr. Salojarvi to advise he had obtained the keys to the units to allow access.

[151] The Crown alleged in their written submissions that Vincent DeRosa notified Jeff Lawson to warn him of the impending inspection of the premises. It is my view, based on the evidence of Mr. Payne and Mr. Salojarvi, that Mr. Payne was the individual who contacted Mr. Lawson and advised him of Mr. Salojarvi's intention to conduct an inspection and Mr. Lawson then contacted Mr. Salojarvi and arranged a date for the inspection, about a week later. It makes logical sense that Mr. Lawson, in the interim, dismantled the marihuana grow operation. There was no evidence that Vincent DeRosa contacted Jeff Lawson to advise him of Mr. Salojarvi's interest.

[152] Mr. Payne testified that Mr. Lawson also installed a new fence with a gate because the old fence and gate was broken.

[153] Upon entering unit 6, Mr. Salojarvi discovered what he believed was a marihuana grow operation that was in the process of being set up or being dismantled and police were contacted. There were no marihuana plants in the unit when the grow operation was discovered but there was an extensive electrical set up with lights and ballasts, a sophisticated ventilation system, as well as a living quarters in unit 4. Sgt. Sandy Staniforth testified she attended at the Ssonix building at 20 Keefer Street, St. Catharines at the request of Mr. Salojarvi. She testified the unit was very clean and she was not able to detect any vegetative marihuana smell.

[154] Bob DeRosa and Jeffrey DaSilva, who were involved in the set-up of the Molson Plant grow operations, were convicted of the commercial production of marihuana in relation to the Ssonix grow operation. In his Agreed Statement of Facts, Jeffrey DaSilva described hiding marihuana clones at the rear of the building prior to the police attending as a result of Mr. Salojarvi contacting Mr. Lawson to arrange an inspection.

[155] As a result of this discovery, Mr. Payne testified that the sale to Jeff Lawson and Steve McGean fell through. Ultimately the property and business were sold to Steve Baker of Ayr, Ontario.

(iv) 17 Guest Road

[156] Roger Kelly became aware of a property at 17 Guest Road in Oro-Medonte that was for sale and he mentioned it to Victor Slobodian, a real estate agent he knew did work for Robert DeRosa. He knew that Fercan owned properties in the same area and it was his hope that Fercan would purchase the house so he could lease it. Exhibit 54 is an agreement of purchase and sale for 17 Guest Road between Roger Kelly and Bridgett Ward, dated August 25, 2005. This agreement was never completed and Roger Kelly never owned 17 Guest Road. Roger Kelly testified he could not afford the property so he spoke to Victor and Bob DeRosa.

[157] Cathy Underhill testified that in the summer of 2005, Bob DeRosa arranged for her to get a mortgage from Citizen's Bank for the purchase of 17 Guest Road. She was provided a number of documents, which were all false; a letter purportedly signed by Richard Brezzi, Fercan's comptroller, indicating she was employed with Aurora Beverages for five years and received an annual salary of $89,700 per annum, a T4 in her name reflecting the same salary working for Aurora Beverage Corp. and a pay stub for the two weeks ending October 14, 2005. These documents were marked collectively as Exhibit 62. She guessed Bob DeRosa spoke to Richard Brezzi to prepare these documents. Ms. Underhill believed she received the documents from either Bob DeRosa or Richard Brezzi; she was unsure. She agreed in cross-examination that because things occurred so many years before it was difficult to remember everything precisely as it happened.

[158] The cost of the house was $347,500 and Bob sent her to Fercan's office on King Street to pick up a certified cheque for the down payment. She could not recall the amount of the cheque or who it was made payable to. Bob DeRosa arranged everything.

[159] It was the evidence of Ms. Underhill that the purchase of this house was between Bob and Roger Kelly. Bob DeRosa told her that Roger Kelly was going to provide her rent cheques. Roger Kelly was calling her repeatedly and asking if she had signed the documents as he and his family needed to move in. After she signed everything at the lawyer's office she called Roger Kelly and told him that he could move in. Exhibit 55 is the lease between Cathy Underhill as landlord and Roger Kelly as tenant. Exhibits 54 and 55, according to Ms. Underhill, were prepared by Bob DeRosa. Roger Kelly and Cathy Underhill testified that Bob and Roger were good friends at the time of the purchase of this home.

[160] After Ms. Underhill's employment with Fercan ceased in 2006, she continued to work with Robert DeRosa in his business ventures. Bob DeRosa purchased a building in Morrisburg that he put in Ms. Underhill's name. He also put a numbered company in her name. She was put on Bob DeRosa's construction company, R.J.C. Construction, as an officer. All of these things were purportedly done because Bob DeRosa did not have a good credit rating because he had declared bankruptcy.

[161] Roger Kelly rented 17 Guest Road and provided her with post-dated cheques (see Exhibit 55) until February 2008 when Roger's wife called and said they could not afford the rent anymore. They moved out shortly after this phone call. Ms. Underhill spoke to Bob DeRosa and told him that Roger Kelly moved out and she could not afford to pay the mortgage without the rent cheques. Bob DeRosa told her a new tenant had been found but she knew that the mortgage was not being paid as the bank sent her notices. She called Bob DeRosa on numerous occasions but he did not always respond to her calls. Ultimately Ms. Underhill had to declare bankruptcy and she ended up losing her farm property in Waubaushene.

[162] On April 25, 2009, Ms. Underhill was visited by police and asked if she owned 17 Guest Road. She told them whatever they needed to know they should speak to Bob DeRosa as it was his property. She called Bob and let him speak to the police. The police told her and Bob DeRosa that they were conducting a drug investigation respecting the property at 17 Guest Road. On April 27, 2009, O.P.P. executed a search warrant at 17 Guest Road and discovered a marihuana grow operation with 4,000 clones as well as lights and ballasts. No one was in the residence when the warrant was executed. Ms. Underhill testified she had no knowledge there was a grow operation at 17 Guest Road.

[163] Vincent DeRosa testified he had no involvement in or awareness of the transactions involving 17 Guest Road. Ms. Underhill testified she never discussed or went to Vincent DeRosa for assistance concerning the properties that Bob put in her name.

(v) 1408 Rainbow Valley Road

[164] On October 13, 2010, a search warrant was executed at 1408 Rainbow Valley Road in Phelpson, which was the personal residence of Robert DeRosa and his family. P.C. Lyall described that police found 10 pounds of marihuana in half pound bags inside the residence. Further, a full sized commercial van was found at the back of the property containing numerous pieces of equipment used in marihuana grow operations, high-intensity lamps, tables and so on. There was also a building that appeared to have previously housed an operational marihuana grow op, with vapour barrier on the walls, ducting for a ventilation system and a shelving rack system consistent with holding clone plants. Inside the residence were numerous magazines related to marihuana growing.

(h) Evidence called by First Ontario Credit Union

[165] As indicated previously, the Crown originally took the position that First Ontario Credit Union was complicit and/or in collusion with Fercan and the designated substance offence of production of marihuana. This was a position the Crown maintained before Justice Mulligan of the Ontario Superior Court when Fercan Developments Inc. brought an application to vary the Order of Restraint to allow for the sale of 1 Big Bay Point Road to enable First Ontario's mortgage to be paid together with interest. In refusing to vary the Restraint Order, Justice Mulligan held:

It [referring to the Attorney General] does not concede at this stage of the proceedings, that the mortgagee is an innocent third party, given the timing of the mortgage registration and the submissions that the grow-op activities started approximately a year prior to the mortgage. In my view, the Attorney General has raised a prima facie case.

...Given that the Attorney General does not, at this point, concede that First Ontario is an innocent party, it would be premature to enable First Ontario to be paid out, prior to a full hearing, under section 20 of the CDSA with First Ontario being a party.

[166] First Ontario then brought an application to vary the Order of Restraint to allow for the sale of 1 Big Bay Point Road to enable First Ontario's mortgage to be paid. Once again, the Crown submitted to Justice Mulligan there was evidence to suggest that First Ontario was complicit or in collusion and Justice Mulligan held:

The Attorney General has made out a prima facie case that First Ontario may not be an innocent third party. First Ontario has remedies available to it, it could seek to participate in the forfeiture hearings scheduled to commence August 21, 2012. Alternatively, it has the right to bring a post-forfeiture application under the terms of the Act.

[167] As discussed above, after 28 days of evidence and after First Ontario called four witnesses, including Anthony (Ron) Choma, retired Vice-President of Commercial Services and Retail Credit, the Crown advised they were no longer proceeding with the forfeiture application as it related to First Ontario. No explanation was provided by the Crown as to the change in their position; although, later in discussions with Ms. Healey, during her cross-examination of Vincent DeRosa, she conceded that one of the reasons the Crown decided not to proceed further against First Ontario was because of a misunderstanding, by the Crown, of what a collateral security mortgage was.

[168] First Ontario was approached by Fercan to provide a first mortgage on the 1 Big Bay Point Road, Barrie property to allow Fercan to pay out Molson Breweries' vendor take back mortgage of $5.4 million. First Ontario provided considerable evidence through Ron Choma, Dr. Andrew Panko and Robert Nunnenmacher as to the due diligence that was exercised prior to approving the $3 million mortgage on September 5, 2003. Fercan was providing its own money to pay out the remainder of the vendor take back mortgage. It was Mr. Choma's evidence that the loan to value ratio, at approximately 30%, was very low. The usual loan to value ratio was 60% to 65%.

[169] It was Mr. Choma's evidence he was aware that there were a number of tenants leasing space at the Molson Plant; however, he did not rely on any of the income generated by these leases as the Molson Plant had significant equity. First Ontario valued its worth at $9.5 million (Mr. Nunnenmacher's report, Exhibit 85A, Tab 8) and First Ontario was taking collateral security on other Fercan properties, which had good tenant income flow, as well as guarantees from MVD Properties Inc., a company owned by Vincent DeRosa and Vincent DeRosa personally. First Ontario did require Fercan to provide the leases of the tenants in those properties that collateral security mortgages had been placed to confirm the income flow. Mr. Choma testified they were provided. In August 2003, First Ontario had received information that Vincent DeRosa's personal net worth was $50,800,000.

[170] The Crown argued that Vincent DeRosa never provided the Barrie Good Fish Offer to Lease because it did not exist until a few months prior to the police raid in January 2004, based on the evidence of Mike Dicicco. I have already indicated my view as to the reliability and credibility of Mr. Dicicco. Further, Vincent DeRosa provided Mr. Choma with a listing of a number of the leases, which were in place at the time Fercan was applying for a mortgage with First Ontario (See Exhibit 85A, Tab 5). The memorandum is dated June 9, 2003 and includes the Barrie Good Fish lease. Mr. DeRosa testified the only reason he could think of for why the Barrie Good Fish Offer to Lease was not provided to First Ontario was because it was only an offer to lease. It was Mr. Choma's evidence that he did not request the Barrie Good Fish lease be provided as First Ontario was not relying on the rental income from the tenants at the Molson Plant to make their decision as to whether or not to approve Fercan's mortgage application. In my view, the Crown's submission does not hold up based on the totality of the evidence and my previous findings of fact.

[171] I found Mr. Choma to be a very credible and reliable witness and I accept his evidence. The Crown suggested that Vincent DeRosa provided inaccurate information to Mr. Choma after the police raid and the discovery of the two marihuana grow operations. Mr. Choma explained that the information he included in his memorandums was obtained from Vincent DeRosa and the news media reports, as well as Mr. Choma's personal views and understanding of the circumstances. I find that much of the inaccurate information pointed to by the Crown came from the news media articles. Mr. Choma had faith in Vincent DeRosa and accepted his denial of any knowledge of the existence of the grow operations. First Ontario's Board decided to continue with the financing of 1 Big Bay Point Road (Molson Plant) and, in the following years, provided at least a further 10 to 12 mortgages for commercial/industrial/office building properties owned by Vincent DeRosa's companies. At one point, First Ontario held approximately $21.5 million in mortgages with Vincent DeRosa's companies. In addition, First Ontario investigated and conducted due diligence on another $28 million of mortgages that they subsequently sold to Concentra Financial because of lending limits; however, those mortgages were administered by First Ontario.

[172] During the cross-examination of Vincent DeRosa, the Crown suggested that Mr. DeRosa defaulted on First Ontario's mortgage in late 2011 to allow First Ontario to join the forfeiture hearing before the Ontario Court of Justice. It was Mr. DeRosa's position, with which I agree based on the evidence, that Fercan defaulted on First Ontario's mortgage to enable First Ontario to apply to the Ontario Superior Court to vary the Restraint Order to allow the 1 Big Bay Point Road property to be sold so First Ontario's mortgage could be paid out. The only reason First Ontario became a party to these proceedings was because the Crown submitted to Justice Mulligan that the Crown had evidence that First Ontario was complicit or in collusion with Fercan respecting the marihuana grow-ops. It was Justice Mulligan's suggestion that First Ontario could become a party to the Crown's forfeiture hearing as they were a party lawfully entitled to possession under section 19(3) of the CDSA or they could wait and apply under section 20(4) of the CDSA if the Ontario Court of Justice ordered forfeiture to the Crown.

(i) Evidence of Vincent DeRosa

[173] Vincent DeRosa is 51 years of age and has four brothers and sisters. Robert is the eldest, age 53; Maria is 52 years of age, Anna is 45 years of age and Nicola is 41 years of age. All of his siblings are married with children. His sisters both attended university; Maria is President of Communications MDR, a consulting firm and Anna, Vice President of Commercial Lending with Royal Bank. Nicola attended Mohawk College and has a mechanical shop in St. Catharines and is also operating their mother's fruit farm in Niagara-on-the-Lake. Robert completed high school and was involved in several businesses, all of which were unsuccessful. Vincent DeRosa's father died in 2007 and his mother continues to reside on the family fruit farm. Vincent DeRosa is married with two children, both boys.

[174] Vincent DeRosa received a Bachelor of Arts degree at McGill University in Montreal. After school he became involved as a Motorola cell phone distributor. In 1992 or 1993 he then purchased a company called Multi Brands, in Woodbridge, which was a food distribution company and it also had a coffee roasting facility. Around the same time period he purchased Ssonix, a company that his brother Robert operated with a partner that had run into financial difficulties.

[175] Starting in 1994 and 1995, Vincent DeRosa began to purchase commercial, office and industrial properties, which had multiple tenants. Exhibit 104 is a list of 52 properties that Vincent DeRosa or one of his companies purchased between 1995 and December 31, 2003. Most of those properties, with the exception of 1 Big Bay Point Road, Barrie (Molson Plant), were sold because Mr. DeRosa's wife became ill and Mr. DeRosa wanted to spend less time involved with his business.

[176] The majority of the properties purchased by Vincent DeRosa's companies were ultimately sold for a profit, in some cases a considerable profit. During the years 2002 to 2004, Mr. DeRosa's 45-50 properties would have had between 500 and 600 individual tenants. Some examples of properties he owned during that time period: 1 St. Paul Street, St. Catharines, which was an office building with 40-50 tenants; Citation Business Park, Oshawa, which was an industrial park housing up to 100 tenants in 18 separate buildings for a total of 308,000 square feet; 60 James Street, St. Catharines, which was an office building with 10-20 tenants in downtown St. Catharines; Cotes des Neiges, Montreal, which is an office building across from one of Montreal's hospitals; 77 James Street North, Hamilton, which is the Hamilton Eaton's Centre in the downtown core with 480,000 square feet of space with 60-80 tenants; 2 Simcoe Street, Oshawa, which was an office building with 20-30 tenants; 300 Tecumseh Road, Windsor, which was a 90,000 square foot commercial plaza with 15-20 tenants and an office building on Ouellette, Windsor with 30-40 tenants.

[177] Between 1995 and 2003, Vincent DeRosa purchased 51 properties for a gross cost of $81,272,000, not including the Molson Plant. Eventually he sold all of those properties for a gross sales total of approximately $167,575,000. It is the defence position and supported by the evidence that the majority of these acquisitions and sales were between arms-length entities. DeRosa companies recorded gross sales and rental income in 2001/2002 of approximately $14 million and approximately $20 million in 2003/2004.

[178] In each geographic area that Mr. DeRosa acquired properties he would hire a property manager, who handled leasing, maintenance of the buildings, security of the buildings and whatever other needs the tenants had. Each of his property managers were paid between $100,000 and $125,000 a year in salary. Leases would be negotiated by the various property managers within the pricing parameters set by Vincent DeRosa. The lease would be signed by the tenant and then couriered to the head office of Fercan on King Street in Toronto for Vincent DeRosa's signature.

[179] Mr. DeRosa used a variety of financial institutions to provide mortgages for his property acquisitions, including C-I-B-C, Merrill Lynch, Credit Suisse, Equitable Trust, Bank of Nova Scotia, one of the pension funds from Quebec, First Ontario Credit Union and Duca Credit Union. He testified that he started using First Ontario more frequently because they had a quick turnaround in terms of making a commitment to lend the necessary funds. They were more conservative in terms of requiring much more security through guarantees and collateral mortgages than other lenders.

[180] Mr. DeRosa testified he spent most of his time at his King Street offices and in the acquisition and sale of properties. He generally left the day-to-day operations of his properties to the property managers. He would visit the various areas in the Province of Ontario that he owned properties as little as two or three times a year or as often as once every two or three months depending on the issues that arose. The Molson Plant was somewhat different because of the three aspects of the purchase: real estate, the chattels and the development of a water bottling operation using the Formosa spring. Vincent DeRosa testified he would drive to the Molson Plant on Saturdays to see how the sale of the chattels was proceeding as he expected to sell them for between $3 and $10 million. Further, he was interested in determining the progress of setting up, modifying or converting existing equipment, and the purchase of new equipment for Aurora Beverages.

[181] Approximately a year prior to the closing date of October 1, 2001, he was advised by A.E. LePage or J.J. Barnicke, two real estate companies that he utilized to purchase properties, that the former Molson Brewery was available for sale. Molson's wanted to sell the plant together with the majority of the equipment in the plant and the acreage around the plant. Mr. DeRosa retained Moonstone Mechanical to estimate the value of the chattels that were part of the sale. In addition, he retained Andrew Panko to do an environmental assessment, including an asbestos survey of the plant. He also investigated the suitability of the water source, the Formosa spring well, at the Molson Plant, by retaining Gartner Lee as discussed previously.

[182] The purchase price was $8 million, broken down as $7.5 million for the building and land and $500,000 for the chattels. Mr. DeRosa testified he wanted the chattels number to be greater but Molson's would not agree because of their tax considerations. Schedule B to the Agreement of Purchase and Sale set out a list of the chattels, prepared by Moonstone.

[183] Shortly after the purchase of the Molson Plant, Robert DeRosa advised Vincent DeRosa about the various companies that were interested in leasing space at the Molson Plant, including Ontario Pallet and Barrie Good Fish.

[184] It was Mr. DeRosa's evidence that he was not involved in the fish operation and did not ask to see it. He became aware of a contamination problem from either Ken Fraser or his brother, Robert. Vincent DeRosa first met Mike Dicicco when Robert introduced him as the individual who was able to operate and maintain the portable boilers that were rented to heat the Molson Plant. Robert told him that Mike Dicicco was already on site because of Barrie Good Fish and was prepared to look after the boilers for a small monthly amount, which Vincent DeRosa believed was $2,000.

[185] Vincent DeRosa never entered the leased space of Barrie Good Fish or Ontario Pallet prior to the discovery of the marihuana grow operations. It was his evidence that he was completely unaware of any alterations made to either of these leased areas. Prior to the police raid, no one had ever brought to his attention that alterations had been done where doors and windows had been blocked in with cement blocks or drywall or that a wall had been constructed between the warehouse area and the Ontario Pallet space. The first he became aware of the modifications and alterations was after the police returned the Molson Plant to Fercan and he toured these areas.

[186] Mr. DeRosa testified that it was not common practice for him, as a landlord, to go into his tenants' leased space. Legally he was not entitled to just walk into a tenant's space without their permission. He testified there was no reason for him to enter any of his tenants' space at the Molson Plant.

[187] Vincent DeRosa agreed that he had discussions with Ken Fraser about the fish operation because he was concerned that no damage be done to the stainless steel vats that were intended to be used. He advised his brother, Robert, in no uncertain terms, to insure that these tanks were not damaged in any way when he agreed to lease the space and the tanks to Barrie Good Fish.

[188] Moonstone began advertising the equipment for sale after the purchase of the Molson Plant. Exhibit 53 contains examples of the type of advertisements they were putting out in the industry. Vincent DeRosa also involved his brother Robert in providing day-to-day oversight of the sale, extraction and transport of the equipment. Prior to the sale of any piece of equipment, Vincent DeRosa testified he had final approval of the price a piece of equipment was to be sold for. It was his evidence that the Molson chattels were sold for approximately $6 million, net of expenses, over a five or six year period. In 2006 or 2007, the 150 stainless steel vats were able to be sold because the price of stainless steel had gone up dramatically. They were sold to breweries, water companies and some went for storage. These tanks sold for approximately $3 million, which was part of the total $6 million earned from the sale of the Molson chattels.

[189] Most Saturdays Vincent DeRosa testified that he attended the Molson Plant to be kept apprised of the progress of the water bottling operation and the sale of the chattels. He would meet with Ken or Andy Fraser of Moonstone, his brother Robert and George Arnold after he started in 2002 to manage Aurora Beverages. In 2001 and the years following, it was Mr. DeRosa's belief that a small company engaged in bottling water could be competitive in the market. Mr. DeRosa testified he invested approximately $3.5 to $4.5 million into Aurora Beverages. He believed he spent approximately $1 to $1.5 million setting up the water bottling line. He bought a controlling interest in Echo Springs and came close to working out a deal with the creditors of Echo Springs but in the end another company purchased Echo Springs and his interest was bought out. Ultimately Aurora Beverages was not successful because Pepsi and Nestle became actively involved in selling bottled water at greatly reduced prices, which small companies could not compete with. Mr. DeRosa testified that the assets of Aurora Beverages were sold in 2006 or 2007.

[190] Mr. DeRosa initially became involved with First Ontario Credit Union as a result of an introduction by a mortgage broker, Strategic Mortgage Financing, that he was working with. He first used First Ontario to finance his purchase of an office tower at 21 King Street, Hamilton for $12.25 million. He later sold that building for $15 million. Ron Choma was his main contact with First Ontario. First Ontario was used to provide financing for many of Mr. DeRosa's acquisitions because of the quick turnaround in their application process. According to Mr. DeRosa and Ron Choma, First Ontario typically was a more conservative lender, which required more security and personal guarantees.

[191] Mr. DeRosa testified that he was completely unaware of the existence of two marihuana grow operations operating at the Molson Plant. He had no suspicions that anything illegal was occurring within the space leased by Ontario Pallet and Barrie Good Fish. No concerns or suspicions were raised with him by any of Fercan's employees, including his brother, as to the existence of a marihuana grow-op. Further, he had no knowledge or suspicions concerning the existence of a marihuana grow-op being operated by a tenant at the Oro Centre. His brother never raised any concerns about anything illegal being done at the Oro Centre.

[192] After the discovery by the police of the three marihuana grow-ops he questioned his brother, James Hayes and George Arnold if they had any suspicions or knew anything and he was assured that they were as surprised and shocked by the police discovery as he was. As a result of what the police found Vincent DeRosa instructed his property managers to inspect every tenant's space in all of his properties.

[193] Vincent DeRosa was cross-examined for three days. In my view, he provided his evidence in a clear, concise manner, consistent with his evidence in-chief. I found his evidence to be credible and reliable and, as I have indicated throughout my discussion of the facts, his evidence is supported and corroborated by witnesses called by the Crown and defence. In my view, he was not shaken from his evidence provided in-chief.

[194] Many of the Crown's submissions respecting Vincent DeRosa's businesses are not supported by the evidence. The Crown made allegations concerning Mr. DeRosa's connection to Mr. Italo Ferrari, the General Manager of Fercan, yet did not provide any evidence to support their submissions concerning their allegations of illegality by Mr. Ferrari. The Crown suggested that the nature of Vincent DeRosa's involvement in selling food products to his brother's food import business when Robert and his family lived in Cuba in the mid-1990s was in "doubt" given Robert DeRosa's involvement with the drug trade in 2009, yet once again no evidence was provided. This type of submission is what the defence has termed an "innuendo of suspicion", which they submit leads to speculation and conjecture. In my view, it also demonstrates the importance and necessity of drawing reasonable inferences from objective facts established by the evidence. Otherwise, any inferences purportedly drawn will amount to impermissible speculation, which I find the Crown has repeatedly engaged in.

[195] Another example of what the defence has termed an "innuendo of suspicion" occurred during the cross-examination of Ron Choma, when the Crown asked Mr. Choma if he was aware that Fercan was the amalgamation of three companies: Fercan, Vicar and Fermanaugh Realty. Mr. Choma indicated he did not recall the name Fermanaugh Realty. The Crown then asked Mr. Choma whether he was aware that the principal of Fermanaugh was a person by the name of Simon Rosenfeld, who was convicted of money laundering. When Mr. Choma indicated he did not know that name, the Crown asked if he was aware that Mr. Rosenfeld continued to be an officer of some of Mr. DeRosa's companies. The problem with the questions was that Simon Rosenfeld was the incorporating lawyer of Fermanaugh on September 11, 1995 and after two days his name was deleted from the corporate register and Vincent DeRosa was added as the director, officer and sole shareholder of Fermanaugh. In fact, when Fercan was created by the amalgamation of the three aforementioned corporations, Vincent DeRosa was the only officer, director and shareholder of all three corporations and he signed on behalf of each company. After objection was raised by Mr. Greenspan, the Crown conceded she had not examined all of the corporate documents closely enough and her questions on this issue were improper because there was no factual foundation to ask them. In my view, many of the areas of cross-examination pursued by the Crown during Vincent DeRosa's questioning raised this same concern.

(j) Vincent DeRosa's Relationship with his Brother, Robert DeRosa

[196] It was Vincent DeRosa's evidence that he has supported his brother Robert and his family, since 1990. He assisted in the purchase of residential properties where Robert and his family lived. Robert and his family lived in Cuba for three or four years and returned to Canada in 1998 or 1999. When he returned to Canada he lived at 4A Firelane in Niagara-on-the-Lake. This was a house Vincent DeRosa purchased when his brother Robert defaulted on his mortgage in the mid-nineties.

[197] Vincent DeRosa employed and involved Robert DeRosa when he was investigating whether he wanted to purchase the Molson Plant. Robert assisted Moonstone in doing the due diligence respecting assessing the value of the chattels prior to closing. After the purchase of the Molson Plant in October 2001, Vincent DeRosa made Robert his property manager for the Molson Plant and any future acquisitions in the Barrie area, like the Oro Centre, which was purchased in 2002. Robert DeRosa was not a part owner of any of these properties and he worked solely as an employee of Vicar and later Fercan. Fercan paid Robert in cash at his request because he had credit problems. He was responsible for assisting Moonstone Mechanical as necessary, in the sale and removal of the Molson chattels.

[198] The Crown alleges that Vincent DeRosa's testimony concerning his brother's role at the Molson Plant was "markedly different" from what he told the police in his interview on June 24, 2004. I have reviewed Mr. DeRosa's statement to the police and I find there is no "markedly different" position taken. Vincent DeRosa in his statement advised Staff Sgt. Milner that "the three main people" at the Molson Plant were "James Hayes, my brother, Robert and George Arnold." When asked who would have given permission to block in doors and windows in the plant he suggested the police talk to the same three individuals. In my view those statements are consistent with his evidence during this hearing in terms of the three individuals who had been delegated authority respecting the three purposes Vicar/Fercan purchased 1 Big Bay Point Road; namely, the sale of Molson's chattels, as a real estate investment with tenants and the setup of Aurora Beverages. Further, all of the other witnesses who testified that worked either for Fercan or at the Molson Plant referred to Robert DeRosa as the property manager, including, Mike Dicicco, Cathy Underhill, Roger Kelly, Grenville Graham, Andy Fraser, and George Arnold. Their evidence was consistent with that of Vincent DeRosa.

[199] After appointing Robert to be the property manager of the Molson Plant, Vincent DeRosa purchased 1408 Rainbow Valley Road as a residential property for Robert and his family to live in. Prior to that purchase Robert and his family rented a house in Barrie that Mike Dicicco testified Robert DeRosa requested Mr. Dicicco sign as the individual renting the apartment. In 2002 or 2003, Robert DeRosa was made a vice-president of Aurora Beverage, although his main responsibility respecting Aurora Beverage was assisting George Arnold in getting the production line for the water bottling operation up and running. He was not paid any further salary for his work with Aurora Beverages.

[200] The Crown disputes Vincent DeRosa's assertion that his brother, Robert, was a failure in his businesses and that he more or less supported Robert from 1990 onwards. Based on the evidence led during this hearing I find that Vincent DeRosa did assist his brother Robert. Examples of the type of assistance he provided Robert included providing him employment at the Molson Plant, purchasing Robert DeRosa's failing business, Ssonix, and personally purchasing 1408 Rainbow Valley Road for Robert's family to live in as well as other residences.

[201] Shortly after the discovery of the marihuana grow operations in 2004, Robert DeRosa began operating his own company, R.J.C. Construction, and ceased being the property manager of the Molson Plant and the Oro Centre. Vincent DeRosa would provide work for Robert's company if his pricing was competitive. For example, one of Vincent DeRosa's companies purchased the old Whitby Mental Hospital site and 18 small buildings had to be demolished and a series of underground tunnels had to be removed. This work was contracted to R.J.C. Construction.

[202] In 2008, there was a significant falling out between Vincent DeRosa and Robert as the result of a Toronto Star newspaper article, Exhibit 103, which was critical of Robert DeRosa's treatment of some immigrant workers he had hired. The article was an exposé of Robert DeRosa's business practices that also referenced the discovery of the two marihuana grow operations and linked Vincent DeRosa with his brother, Robert as co-owners of the Molson Plant, which was incorrect. Vincent DeRosa testified this was the final straw and as a result he cut off most, if not all, contact with his brother Robert. He only saw Robert at family functions and no longer assisted him financially.

Position of the Parties

[203] It is the position of the Crown that the properties located at 1 Big Bay Point Road, Barrie, Ontario, the Molson Plant, and 1408 Rainbow Valley Road, Phelpson, Ontario are offence related property within the meaning of section 2(1) of the CDSA and, consequently, are subject to forfeiture pursuant to section 16 of the CDSA.

[204] The Crown argues the purpose for the acquisition of the property was in part to house the commercial production of marihuana. Further, the Crown argues the plans to produce marihuana at the Molson Plant had been in place well before the closing of the real estate transaction between Vicar and Molson's Brewery. They submit the degree of planning, investment and risk involved make it implausible that the choice of location for these grow operations was an afterthought that occurred when an opportunity presented itself to Bob DeRosa.

[205] The Crown submits that while Vincent DeRosa may not have actively participated in the organization, management or administration of the drug production, he knowingly permitted his properties to be used to produce marihuana and/or acquiesced in that use. He also helped to keep them secret. He ensured the grow operations were not discovered by inspectors or appraisers, and he misled Ron Choma, First Ontario Credit Union and others about its presence at 1 Big Bay Point Road.

[206] According to the Crown, the evidence establishes that Fercan Developments Inc. was complicit in the marihuana grow operations and colluded in the commission of the offence of production of cannabis marihuana for the purpose of trafficking. The Crown points to the following evidence in support of this argument:

(a) Bob DeRosa, a senior employee of Fercan, and Vincent DeRosa, an officer of Fercan, were involved in several business ventures together from the mid-1990s to 2007;

(b) Vincent DeRosa, Bob DeRosa, James Hayes, Lex McGee and Michael DiCicco, each either an officer, agent or employee of Fercan, worked together and separately to conceal the presence of the two grow operations from inspectors, the appraiser and others;

(c) The use of the property at 1 Big Bay Point Road for the commercial production of marihuana was not limited to the areas purportedly leased to the fictitious Ontario Pallet Company or Barrie Good Fish Company. The electrical, ventilation, and plumbing systems, Canadiana room, guardhouse, old Beer Store and other areas throughout the property at 1 Big Bay Point Road were used to facilitate the commercial production of marihuana;

(d) The use of utilities by the growers was neither stolen nor hidden;

(e) Fercan controlled access to and from the property twenty-four hours a day, seven days a week, three hundred and sixty five days a year, yet materials, equipment, product, supplies and growers for two extremely large commercial marihuana grow operations came and went without suspicion;

(f) The growers invested millions of dollars in the grow-operation and controlled the premises, despite the presence of and visits by Vincent DeRosa and a number of people who knew him well, such as his brother Nick DeRosa, brother-in-law Joaquin Moreira, and Fercan's comptroller Richard Brezzi;

(g) Vincent DeRosa lied about the signing of the offer to lease for Barrie Good Fish. As described by Michael Dicicco, the offer to lease for Barrie Good Fish was created and backdated in the fall of 2003. It was not provided to First Ontario (Ron Choma or David Edwards) or to Mr. Nunnemacher because it did not exist;

(h) Vincent DeRosa was much more involved with Barrie Good Fish enterprise than he has been willing to admit;

(i) First Ontario Credit Union was misled by Vincent DeRosa, who exploited Ron Choma's willingness to accept the story told him in order to keep a valuable account;

(j) Six marihuana grow operations and/or the equipment and materials related thereto were found in five different properties connected to Vincent DeRosa and his corporations;

(k) Vincent DeRosa routinely uses nominees as presidents of his corporations and to purchase properties. He is still in complete control of GRVN Group Inc., despite his attempt to assert the contrary; and

(l) Vincent DeRosa has been deceptive in his business dealings and has misled this Honourable Court. He was not credible and his evidence should be rejected.

[207] In the alternative, the Crown argues that if Vincent DeRosa was unaware of the two marihuana grow operations, it was because he had in fact, if not by express delegation, delegated to Robert DeRosa the full responsibility for the Molson Plant, The Crown argues there was no evidence as to the existence of policies or guidelines that Robert DeRosa was required to follow in his management of the property. Further, the Crown submits Robert DeRosa was an operating mind of Fercan Developments Inc. with respect to the Molson Plant and the complicity and collusion of Fercan can be established through his actions.

[208] Finally the Crown points to the fact that Robert DeRosa was convicted in relation to designated substance offences which occurred at his home at 1408 Rainbow Valley Road. This property was purchased by Vincent DeRosa for his brother Robert to live in with his family and then sold to GRVN Ltd., a company purportedly owned by Nicola DeRosa. It is the position of the Crown that GRVN is actually controlled by Vincent DeRosa. The Crown argues that GRVN is complicit and/or colluded in the commercial production of marihuana.

[209] The defence argues that many of the factual assertions of the Crown in their written and oral submissions do not stand up to close scrutiny nor legal analysis. The defence further argues that the exaggeration, speculation and distortion of the facts by the Crown are manifestly unfair.

[210] The defence submits the circumstantial evidence led by the Crown cannot support any inference of knowledge or wilful blindness by Fercan, GRVN, Nicola DeRosa, or Vincent DeRosa. This was not a case of "see no evil, hear no evil." This was a case where there was no evil to be seen, nor was there any evil to be heard because the sophistication of the operation camouflaged and disguised the illegal activities in such a manner that fire inspectors, environmental inspectors, and contract workers who were given free access to the property by management had no idea that any "evil" was occurring. Vincent DeRosa could not have seen what was not visible. He, like the many other witnesses who testified (Grenville Graham, Dirk Lange, Daniel Pitcher, George Arnold, and Andy Fraser, to name a few), saw nothing to even arouse suspicions. In the case of GRVN, there is absolutely no evidence that GRVN or Nicola DeRosa heard, knew, or saw anything, or for that matter visited the property, during the time the criminal acts committed by Robert DeRosa were taking place.

[211] It is the position of the defence that there was no direct evidence of any connection between Vincent DeRosa and Dan Dolic, the mastermind of the two marihuana grow operations at the Molson Plant. There was no direct or circumstantial evidence to support an inference that the grow operations were set up to benefit Vicar/Fercan or Vincent DeRosa. The rents charged by Vicar/Fercan to Ontario Pallet and Barrie Good Fish were consistent with rents charged to other tenants and represented an expense to Dolic – not a benefit to Fercan. It is the submission of the defence that the rental payments represent the costs of concealing the grow operations from prying eyes.

[212] Mr. Greenspan argued that Vincent DeRosa testified he had absolutely no knowledge of the two marihuana grow operations at the Molson Plant. He further testified that he neither saw nor heard anything that aroused his suspicions. It was the defence submission that, despite being cross-examined for over three days, Vincent DeRosa was not shaken in his evidence and it should be accepted by the court. Despite extensive follow-up police investigations, neither Fercan nor Vincent DeRosa were ever charged in connection with the marihuana grow operations. No application for restraint or forfeiture of the Molson Plant was brought after the police raid in January 2004 and the ensuing charges and guilty pleas of seven individuals to designated substance offences in relation to that property. The defence also points to Robert DeRosa's unchallenged statement to the sentencing court that Vincent DeRosa had nothing to do with the grow operations at the Molson Plant and knew nothing about them.

[213] It is the position of the defence that there is no evidence of complicity or collusion on the part of Fercan or Vincent DeRosa and, consequently, the court should not order forfeiture. Finally, it is the defence submission that Robert DeRosa was not an operating or directing mind of Fercan and, as such, his actions cannot be imputed to Fercan.

[214] The defence submits there is no evidence which establishes complicity or collusion on the part of GRVN or Nicola DeRosa respecting the designated substance offences committed by Robert DeRosa in relation to 1408 Rainbow Valley Road.

Statutory Framework

[215] The relevant sections of the Controlled Drugs and Substances Act (CDSA) are as follows:

2(1) In this Act,

"designated substance offence" means

(a) an offence under Part 1, except subsection 4(1), or

(b) a conspiracy or an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to, an offence referred to in paragraph (a);

"offence-related property" means, with the exception of a controlled substance, any property, within or outside Canada,

(a) by means of or in respect of which a designated substance offence is committed,

(b) that is used in any manner in connection with the commission of a designated substance offence, or

(c) that is intended for use for the purpose of committing a designated substance offence;

16. (1) Subject to sections 18 to 19.1, where a person is convicted of a designated substance offence and, on application of the Attorney General, the court is satisfied, on a balance of probabilities, that any property is offence-related property and that the offence was committed in relation to that property, the court shall

(a) in the case of a substance included in Schedule VI, order that the substance be forfeited to Her Majesty in right of Canada and disposed of by the Minister as the Minister thinks fit; and

(b) in the case of any other offence-related property,

(i) where the prosecution of the offence was commenced at the instance of the government of a province and conducted by or on behalf of that government, order that the property be forfeited to Her Majesty in right of that province and disposed of by the Attorney General or Solicitor General of that province in accordance with the law, and

(ii) in any other case, order that the property be forfeited to Her Majesty in right of Canada and disposed of by such member of the Queen's Privy Council for Canada as may be designated for the purposes of this subparagraph in accordance with the law.

(2) Subject to sections 18 to 19.1, where the evidence does not establish to the satisfaction of the court that the designated substance offence of which a person has been convicted was committed in relation to property in respect of which an order of forfeiture would otherwise be made under subsection (1) but the court is satisfied, beyond a reasonable doubt, that that property is offence-related property, the court may make an order of forfeiture under subsection (1) in relation to that property.

(2.1) An order may be issued under this section in respect of property situated outside Canada, with any modifications that the circumstances require.

(3) A person who has been convicted of a designated substance offence or the Attorney General may appeal to the court of appeal from an order or a failure to make an order under subsection (1) as if the appeal were an appeal against the sentence imposed on the person in respect of the offence.

19. (1) Before making an order under subsection 16(1) or 17(2) in relation to any property, a court shall require notice in accordance with subsection (2) to be given to, and may hear, any person who, in the opinion of the court, appears to have a valid interest in the property.

(2) A notice given under subsection (1) shall

(a) be given or served in such manner as the court directs or as may be specified in the rules of the court;

(b) be of such duration as the court considers reasonable or as may be specified in the rules of the court; and

(c) set out the designated substance offence charged and a description of the property.

(3) Where a court is satisfied that any person, other than

(a) a person who was charged with a designated substance offence, or

(b) a person who acquired title to or a right of possession of the property from a person referred to in paragraph (a) under circumstances that give rise to a reasonable inference that the title or right was transferred for the purpose of avoiding the forfeiture of the property,

is the lawful owner or is lawfully entitled to possession of any property or any part of any property that would otherwise be forfeited pursuant to an order made under subsection 16(1) or 17(2) and that the person appears innocent of any complicity in an offence referred to in paragraph (a) or of any collusion in relation to such an offence, the court may order that the property or part be returned to that person.

19.1...

(3) Subject to an order made under subsection 19(3), if a court is satisfied that the impact of an order of forfeiture made under subsection 16(1) or 17(2) in respect of real property would be disproportionate to the nature and gravity of the offence, the circumstances surrounding the commission of the offence and the criminal record, if any, of the person charged with or convicted of the offence, as the case may be, it may decide not to order the forfeiture of the property or part of the property and may revoke any restraint order made in respect of that property or part.

(4) Where all or part of the property that would otherwise be forfeited under subsection 16(1) or 17(2) is a dwelling-house, when making a decision under subsection (3), the court shall also consider

(a) the impact of an order of forfeiture on any member of the immediate family of the person charged with or convicted of the offence, if the dwelling-house was the member's principal residence at the time the charge was laid and continues to be the member's principal residence; and

(b) whether the member referred to in paragraph (a) appears innocent of any complicity in the offence or of any collusion in relation to the offence.

20. (1) Where any offence-related property is forfeited to Her Majesty pursuant to an order made under subsection 16(1) or 17(2), any person who claims an interest in the property, other than

(a) in the case of property forfeited pursuant to an order made under subsection 16(1), a person who was convicted of the designated substance offence in relation to which the property was forfeited,

(b) in the case of property forfeited pursuant to an order made under subsection 17(2), a person who was charged with the designated substance offence in relation to which the property was forfeited, or

(c) a person who acquired title to or a right of possession of the property from a person referred to in paragraph (a) or (b) under circumstances that give rise to a reasonable inference that the title or right was transferred from that person for the purpose of avoiding the forfeiture of the property,

may, within thirty days after the forfeiture, apply by notice in writing to a judge for an order under subsection (4).

(4) Where, on the hearing of an application made under subsection (1), the judge is satisfied that the applicant

(a) is not a person referred to in paragraph (1)(a), (b) or (c) and appears innocent of any complicity in any designated substance offence that resulted in the forfeiture of the property or of any collusion in relation to such an offence, and

(b) exercised all reasonable care to be satisfied that the property was not likely to have been used in connection with the commission of an unlawful act by the person who was permitted by the applicant to obtain possession of the property or from whom the applicant obtained possession or, where the applicant is a mortgagee or lienholder, by the mortgagor or lien-giver,

the judge may make an order declaring that the interest of the applicant is not affected by the forfeiture and declaring the nature and the extent or value of the interest.

[216] The CDSA sets out a comprehensive regime for the restraint and forfeiture of offence-related property and the protection of third party interest holders. It is a separate but very similar regime to the provisions for forfeiture of offence-related property in sections 490.1 to 490.5 of the Criminal Code and the forfeiture of proceeds of crime in sections 462.37 to 462.42 of the Criminal Code.

[217] I have already set out these provisions and their inter-relatedness in my earlier ruling, dated January 9, 2013, on the onus under section 19(3) of the CDSA and I have not reproduced the chart I created in these reasons.

Legal Tests to be Applied to the Evidence

(a) Section 19(3): The Meaning of "Appears Innocent of Complicity or Collusion"

[218] It is important to understand Parliament's purpose and intention in enacting the forfeiture provisions of the CDSA. Justice Abella, in R. v. Craig, cited with approval the comments made by Whittmann J. of the Alberta Court of Appeal, in R. v. Gisby, dealing with the previous CDSA forfeiture provisions.

19 The CDSA was enacted by Parliament to combat the illicit drug industry. A review of the CDSA and in particular, the provisions related to the forfeiture of property, indicate that the CDSA does so both through punishment and deterrence. The forfeiture provisions are punitive to the extent that they deprive one of offence-related property, broadcasting the message that Canadian society regards designated substance offences with abhorrence. But they also introduce an element of deterrence in relation to designated substance offences. In this respect, the forfeiture provisions attach a very real cost to the business of drug crime directly equivalent to the monetary value of the offence-related property that is subject to forfeiture, thus raising the stakes associated with the commission of those offences.

20 The forfeiture provisions serve another purpose. In addition to punishment and deterrence, they help prevent or at least reduce the likelihood of future offences by removing from the illicit drug industry property which, by virtue of the definition found at s. 2(1), is being used to facilitate the commission of a designated substance offence. Provided that all requisite conditions are met, property that has been used to facilitate such offences will be forfeited and thus cannot be used to aid the perpetration of future offences.

23 …The forfeiture provision is therefore designed to prevent, or at least impede, the commission of further offences by ensuring that offence-related property cannot be used to facilitate those offences.

Consequently, it is clear that the forfeiture provisions of the CDSA address three different but related purposes: first, forfeiture punishes the offender by taking away the property that was used in the commission of the designated substance offence; second, forfeiture is a deterrent in the sense that it "raises the stakes" by imposing a "very real cost" to those who either use, or permit their property to be used, in the commission of a designated substance offence; and third, forfeiture ensures that the property is no longer available for continued use in criminal activities. (See R. v. Old Navy Property Corporation, Scotia Mortgage Corp. v. Leung and Canada (Attorney General) v. Huynh.)

[219] In order for a property to be subject to forfeiture under section 16(1) of the CDSA, a person must be convicted of a designated substance offence. Further, upon application of the Crown, the court must be satisfied, on a balance of probabilities, that the property is offence-related property and that the designated substance offence was committed in relation to that property. It is conceded by Fercan that the property located at 1 Big Bay Point Road is offence-related property as defined in section 2 of the CDSA. Further, GRVN concedes that the property located at 1408 Rainbow Valley Road is also offence-related property.

[220] The persons involved in the two grow operations discovered at the Fercan property pleaded guilty to various offences which were designated substances offences; namely, production of marihuana and possession for the purpose of trafficking in marihuana. Further, the offence of trafficking in marihuana that Robert DeRosa pleaded guilty to involving 1408 Rainbow Valley Road is a designated substance offence.

[221] In my view, the Crown has met its burden of satisfying the court that the two properties in question are both offence-related properties in relation to which designated substance offences were committed. However, this does not end the matter. Section 16(1) begins with the phrase "Subject to sections 18 to 19.1." Consequently, in my view, the Crown's application for forfeiture, under section 16, includes a consideration of the provisions in section 19, prior to a court making an order of forfeiture.

[222] What is the legislative purpose of section 19 of the CDSA? It is clear that this section can only apply to those persons who have not been charged with a designated substance offence or who have not acquired title to or a right of possession of the property in circumstances that give rise to a reasonable inference title or possession was obtained to avoid forfeiture.

[223] If the third party is the lawful owner (Fercan) or person lawfully entitled to possession (First Ontario) of the property that has been determined by the court to be "offence-related" property under section 16(1), the next issue to be determined is whether the lawful owner or person entitled to lawful possession is complicit in the designated substance offence or has colluded in relation to such an offence. If they "appear innocent" of complicity or collusion the court may order that the property or a part be returned to that person.

[224] The purpose of section 19 was considered in R. v. ERJO Investments Ltd. at paras. 41-42:

…The seizure of offence related property from third parties is not part of sentencing of the offender, as is the seizure of the profits of crime, or the offense related property of the offender himself. The purpose appears to be mainly one of deterrence to others. For example, seizure of property of third parties is to deter those owners of property, who would knowingly allow drug traffickers to use the owner's property to carry out the trafficker's business.

If anyone is to appear to be guilty of complicity or condonation it would require evidence of knowledge on the part of the owner of the property of the drug trafficking, in order to accomplish the legislative purpose of deterrence. Even willful blindness requires sufficient knowledge to have a strong suspicion of the illegal use of the property but to refrain from making the final conclusive inquiry. The legislature does not wish to take away the property of an owner who appears innocent. [Emphasis added]

[225] In discussing the purpose of the forfeiture scheme, Madam Justice Abella stated at paragraph 41 of Craig, supra:

For a start, the fact that forfeiture may apply to property owned by a complicit individual who is neither sentenced nor even charged with an offence is, to me, an indication that forfeiture orders and terms of imprisonment or other aspects of a sentence were intended to be treated as separate and distinctive consequences. The forfeiture scheme is focused in part on taking offence-related property out of circulation and on confronting organized crime, whether or not the property is owned by the offender. Individuals who have allowed their property to be used for criminal purposes, even if their conduct does not rise to the level of criminal liability with respect to the particular offence, may, as a result, also be subject to forfeiture orders, as reflected in s. 19(3), which provides a recovery mechanism for third-party owners of offence-related property to be forfeited. Under that section, a court must be satisfied that individuals are innocent of any complicity or collusion in the offence before they can recover their property. This is consistent with the historic roots of forfeiture as punishment for negligently allowing one's property to be used for wrongful purposes, a consequence connected to, but not identical to, punishment for the offence. [Emphasis added]

[226] As I have already ruled, in order for the Crown's application for forfeiture to succeed, they must

…satisfy the court that the lawful owner or person lawfully entitled to possession is complicit in the designated substance offence or in collusion in relation to such an offence and therefore is not entitled to the return of the property. The Crown bears the onus of establishing that the property is forfeitable throughout its application under section 16.

[227] The terms "complicity" and "collusion" as used in section 19(3) were considered in ERJO Investments Ltd, supra. Both the Crown and Fercan agree with Justice Singer that complicity means "a partnership in wrong doing", and that collusion is "a fraudulent secret understanding or the act of secretly acting with another to achieve a fraudulent or illegal purpose." Further, "Complicity or collusion logically requires that the owner of the property have knowledge of the activity of the offender."

[228] Complicity has also been defined as "a partnership in an evil action"; "one who is united with others in an ill design, an associate, a confederate, an accomplice." An accomplice is defined as "a person who knowingly, voluntarily and with common design unites with another in the commission of a crime."

[229] In Villeneuve v. The Queen, in dealing with section 462.42 of the Criminal Code (similar provision to section 20(4) of the CDSA), Roberts J.(as he then was) examined a number of legal definitions for collusion, including:

A clandestine agreement between two or more persons with a view to causing prejudice to one or more persons or attaining an objective which is prohibited by law.

He concluded that collusion includes two components: "firstly an agreement and secondly an aim, which is that of misleading one or more persons." Justice Roberts further held:

The agreement may be established by direct proof or may be inferred by the behaviour of the parties. The behaviour of the appellant, which the judge qualified as wilful blindness, may be taken into account not to establish wilful blindness, but rather to establish that there was collusion.

[230] In R. v. La, Fraser J. cited the definitions for complicity and collusion referred to above in Villeneuve, supra, To and ERJO Investments Ltd, supra, with approval. Black's Law Dictionary defines complicity as "association or participation in a criminal act; the act or state of being an accomplice"; and collusion as "an agreement to defraud another or to do or obtain something forbidden by law."

[231] The Crown concedes there is no direct evidence that Mr. Vincent DeRosa had knowledge of the marihuana grow operations at 1 Big Bay Point. On several occasions in their written submissions the Crown argued that Vincent DeRosa, as a "reasonable" landlord, ought to have known what was going on. I agree with Justice Singer that "the concept that knowledge can be proven by what a person ought to know or what a reasonable man would suspect has no place in the criminal law. Knowledge in criminal law is always subjective."

[232] The Crown also argued that Vincent DeRosa either knew or was wilfully blind as to what was going on. Certainly wilful blindness is the equivalent of knowledge in criminal law. In R. v. Barbeau, the Quebec Court of Appeal explained that the test for wilful blindness was subjective, dependent upon what the individual actually knew, not what he should have known or what he might normally have known. In the context of section 19(3) of the CDSA, Justice Singer explained that "wilful blindness arises where a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth but would prefer to remain ignorant."

[233] In R. v. Briscoe, Charron J. for the Court held that it was important to keep the concepts of recklessness and wilful blindness separate and referred to Glanville Williams' explanation for the key restriction in the doctrine:

The rule that willful blindness is equivalent to knowledge is essential, and is found throughout the criminal law. It is, at the same time, an unstable rule, because judges are apt to forget its very limited scope. A court can properly find willful blindness only where it can almost be said that the defendant actually knew. He suspected the fact; he realized its probability; but he refrained from obtaining the final confirmation because he wanted in the event to be able to deny knowledge. This and this alone, is willful blindness. It requires in effect a finding that the defendant intended to cheat the administration of justice. Any wider definition would make the doctrine of willful blindness indistinguishable from the civil doctrine of negligence in not obtaining knowledge. [Emphasis added]

[234] Justice Singer in citing this passage by Glanville Williams cautioned that wilful blindness "is a very restrictive rule to be applied carefully and only in those cases where the legislative intent requires." I agree with this observation and therefore, a very careful application of the rule that limits the scope of wilful blindness will require evidence from which reasonable inferences can be drawn that the third party owner, Fercan or its owner, Vincent DeRosa, had "sufficient knowledge to have a strong suspicion of the illegal use of the property but refrained from making the final conclusive inquiry."

[235] The Crown takes the position that knowledge or wilful blindness with respect to the illegal acts of those involved in the marihuana grow operations is sufficient to establish complicity or collusion. Counsel on behalf of Fercan argues that this position is not consistent with the case law. "Knowledge is the prerequisite, not the equivalent, of collusion or complicity. Collusion or complicity requires an involvement in the activity or scheme beyond mere knowledge." Support for this proposition is found in Justice MacLeod's judgment in R. v. To where, after discussing the definitions of complicity and collusion, she held:

I must conclude therefore that both complicity and collusion require something more than mere knowledge - more akin to the performance of an act that aids or abets. [Emphasis added]

[236] Certainly the definitions set out above seem to suggest that some act on the part of the third party owner is necessary to prove complicity or collusion: what is required is evidence which establishes that there is a partnership in wrongdoing or an agreement with another to mislead or secretly acting with another to achieve a fraudulent purpose. It is my view that in order to establish complicity or collusion the Crown must present evidence, direct or circumstantial, which establishes something more than mere knowledge or wilful blindness by Vincent DeRosa concerning the two marihuana grow operations at 1 Big Bay Point Road.

[237] In Craig, supra, Madam Justice Abella refers to the third party owner who knowingly allows their property to be used for criminal purposes, even if their conduct did not rise to the level of criminal liability and made the obiter comment "a court must be satisfied that individuals are innocent of any complicity or collusion in the offence before they can recover their property." I agree with Fraser J. in La, supra, and Fratkin J. of the British Columbia Provincial Court in R. v. Vu that this comment was not germane to Justice Abella's judgment, which was dealing with proportionality under section 9.1(3). Parliament has seen fit to include the word "appears" to modify the word innocent. Justice Abella does not include the word "appears" in her obiter comment. In my view, it is difficult to see how the word "appears" can be "read out" of the section. The use of the word "appears" seems to support Justice MacLeod's conclusion that mere knowledge is not enough to establish complicity or collusion on the part of a third party; there is the need for the performance of an act by the third party owner that aids or abets those involved in the marihuana grow operation. Further, the comments of Madam Justice Abella respecting a third party owner who has knowingly allowed their property to be used for criminal purposes also presupposes that the third party owner has more than mere knowledge.

[238] Justice Singer in ERJO Investments Ltd., also supports this position in the following passage:

In this case, a very careful application of the rule that limits the scope of willful blindness requires evidence upon which an inference can be drawn that Mr. Migneault suspected that Ebach was using the house for drug trafficking purposes and that he failed to confirm that suspicion intending to cheat the administration of justice. Even that would prove only that he had knowledge and the property could be returned to the owner i[f] there was no proof or inference [which] negated the appearance that the owner was innocent of complicity in the offense or colluded in the offense of drug trafficking. [Emphasis added]

He then cites the passages from Villeneuve referred above in paragraph 229.

[239] Consequently, I find that in order for the Crown to establish complicity or collusion on the part of the third party owner there must be evidence, either direct or circumstantial, of something more than mere knowledge or wilful blindness of the criminal activities of those committing the designated substance offences or to put it another way, in the words of the section, if the third party owner "appears innocent of complicity or collusion in respect of the designated substance offence" the court may order the return of the property in question.

(b) Hearsay Evidence

[240] At the commencement of the Crown's forfeiture application the question of whether hearsay evidence was admissible was raised by Fercan. It was my view, which I expressed during counsel's argument, that Fercan's concern was premature and it was ultimately agreed by both parties that if a particular piece of evidence raised hearsay concerns, they would be addressed at that point in the proceedings, rather than attempting to anticipate evidence which had not yet been led.

[241] By way of example, here are some of the pieces of evidence that could fall within a broad definition of hearsay evidence. In these proceedings the Crown relies on the agreed statements of fact which were filed on the sentencing hearings of those individuals who pleaded guilty in 2004 and of those individuals who pleaded guilty in 2011, as well as the transcripts of those proceedings. Further, the Crown relies on the continuity affidavit, with appendices, of Detective Constable Bednarczyk, which were filed on some of those sentencing hearings, in respect of the police investigation into the two grow operations discovered at 1 Big Bay Point Road in January 2004. Much of the documentation seized during the execution of the search warrant was filed on the Crown's application. Photographs and videos taken of the two grow operations and the various renovations and modifications that were done at the former Molson plant to prevent their discovery by persons not involved in the grow operations were filed, in many instances on consent. The audio statements and transcripts/summaries of David Nottrodt and Vincent DeRosa were filed on consent. Books of documentation were filed by the Crown relating to First Ontario Credit Union in response to a production order. Both First Ontario and Fercan also filed numerous exhibits relating to documentation respecting their involvement with 1 Big Bay Point Road, as well as their operations generally. Finally, evidence relating to the Oro Centre, 17 Guest Road, the Ssonix property in St. Catharines and 1408 Rainbow Valley Road by way of documentation and viva voce evidence were also led. Numerous witnesses were called by the Crown and a lesser number of witnesses were called by First Ontario and by Fercan.

[242] Neither of the parties to this forfeiture application raised any specific concerns relating to the admissibility of any contentious hearsay evidence during the proceedings. It is my view, after a review of the case law, that hearsay evidence is admissible on a forfeiture hearing. Justice Pardu, in R. v. Hells Angels Motorcycle Corp., dealt with the issue of the admissibility of hearsay evidence.

The corporate Respondent was not a party to the proceedings instituted against the individual respondents, and has no standing to relitigate the factual findings of the trial judge, that Hells Angels chapters in Canada comprise a criminal organization, and that Hells Angels chapters in Canada use material containing the trademark to further the criminal purposes of the organization. As noted by Drapeau, C.J.N.B. in R. v. Faulkner, [2007] N.B.J. No. 212 (C.A.), evidence in forfeiture proceedings following conviction "will, in the overwhelming majority of cases, consist entirely of the evidence produced at trial. Needless to say, that body of evidence should not feature any inadmissible hearsay". While the corporate Respondent disavows any challenge to the conclusions of the trial judge, other than to dispute that the personal property in question is "offence-related property", it is not feasible to pick and choose amongst the various findings made. It would be an abuse of process to allow a third party to relitigate issues determined in relation to other individuals and other organizations. Such a collateral attack could result in inconsistent findings. There is no unfairness to a third party owner, as the statutory regimes provide a mechanism for relief from forfeiture for persons other than the convicted person.

While the majority in R. v. Craig, supra, determined that forfeiture proceedings were to be treated separately from sentencing proceedings, and were, in that sense, distinct proceedings, all of the members of the Court relied upon the factual findings of the trial judge regarding the circumstances surrounding the commission of the offence to assess the merits of the forfeiture application, without any suggestion that a rehearing of those issues was necessary. As a matter of policy, sentencing proceedings were to be treated separately from forfeiture proceedings so that well off individuals with substantial assets available for forfeiture would not have that factor applied in mitigation of sentence.

[243] In my view, what is more significant than whether hearsay evidence is admissible or not, is what use can be made of the hearsay evidence that is tendered? As I expressed to counsel when the issue was first raised, double hearsay-type evidence would be evidence of very poor quality in terms of its trustworthiness, credibility and reliability, particularly when proffered to show evidence of complicity or collusion. Support for my view can be found in Justice Nordheimer's ruling in R. v. Allan in dealing with the admissibility of hearsay evidence on an application to vary a restraint order:

I am more persuaded by the reasoning in Zeolkowski and Clymore that the proper approach to the reception of evidence in these types of applications should be a broader one which would permit hearsay evidence to be admitted provided that the court is satisfied that the evidence is reliable and trustworthy. I consequently conclude that hearsay evidence can be admitted. I agree with Justice Wilkinson that the issue is not as much the admissibility of the evidence as the weight to be given it….

In my view, the concern ought to be less about the admissibility of hearsay evidence per se and more about the quality of the hearsay evidence that is offered and received….

[244] In R. v. Sankar, Justice Durno dealt with the issue of whether hearsay evidence, namely the agreed statement of facts filed on the accused's guilty plea, was admissible on the forfeiture application respecting proceeds of crime. This is similar to the case at bar where the convictions were registered after guilty pleas were entered based on agreed statements of fact. Clearly the facts contained in those agreed statements of fact are "conclusive proof of the contents of the statement," as between the parties to the guilty plea. Justice Durno makes it clear that if the parties to the forfeiture application (third parties who were in possession of some of the proceeds in question) "wish to lead evidence of other facts that would impact on the forfeiture application, they may do so."

[245] I do agree however, with the submission of counsel on behalf of Fercan, that the hearsay evidence that was found to be admissible related to the criminal convictions and the determination of whether the property in question was "offence-related". I was not directed by the Crown to any decision where hearsay evidence was admitted for its truth in order to support a third party owner's complicity or collusion in respect of the designated substance offences.

[246] An example of the type of hearsay contained in an agreed statement of facts, which goes beyond proving the essential elements of the offences to which an accused is pleading guilty, can be found in the Agreed Statement of Facts filed on Robert DeRosa's guilty plea. One of the offences to which Robert DeRosa pleaded guilty was an offer to traffic firearms in association with a criminal organization. During one of his conversations with the undercover agent, Robert DeRosa advised the agent that Lex McGee had told to his brother (Vincent DeRosa) that he (Robert DeRosa) had stashed guns at the Molson plant. It was the Crown's submission in their factum at paragraph 53 that from Robert DeRosa's comment to the undercover agent, "it can be inferred that Vince DeRosa and Lex McGee had spoken about the criminal activity at the property and that Vince had some authority over Bob with respect thereto."

[247] In my view, it is a quantum leap to draw the inference urged by the Crown that Vincent DeRosa and Lex McGee had spoken about the "criminal activity at the property" because of what Robert DeRosa said to the undercover agent in 2009 about his stashing guns at the Molson plant. The "criminal activity" that the Crown refers to is not the fact that Robert DeRosa might have had some guns at the Molson plant but rather that Vincent DeRosa and Lex McGee had actually talked about the marihuana grow operations. Otherwise, it has no relevance to the issue of complicity or collusion on Vincent DeRosa's part. In my view, this is the type of impermissible speculation referred to in R. v. Munoz. (I will make further reference to this decision later in my reasons.)

[248] Further, this is the double-hearsay I referred to during the submissions by counsel dealing with the admissibility of hearsay and, in my opinion, the issue of reliability becomes significant. Neither Robert DeRosa nor Lex McGee were called as witnesses during the forfeiture application. The Agreed Statement of Facts filed on Larry "Lex" McGee's guilty plea, on July 12, 2011, makes no mention that Lex McGee had advised Vincent DeRosa that his brother Robert had stashed guns in the Molson Plant. What is mentioned is that he was aware that "Bob DeRosa, his employer, kept a gun in the grow-op area of the plant." Vincent DeRosa was asked by the Crown if Lex McGee had told him that his brother Robert had guns stashed at the Molson plant and he denied ever being told this by Mr. McGee.

[249] Finally, it is my view this fact was included in Robert DeRosa's Agreed Statement of Facts to demonstrate that he had been involved with guns beginning in 2004, which corroborated and supported Robert DeRosa's conversations with the undercover agent about being prepared to traffic in firearms in association with a criminal organization, which was one of the charges he pleaded guilty to.

[250] In my view, a further example of inadmissible hearsay can be found in the Crown's factum at paragraph 65 where the Agreed Statement of Facts for Lex McGee at paragraph 11 is referenced. Paragraph 11 sets out a partial conversation from an intercepted communication between the undercover agent and Mr. McGee, which is reproduced as part of the facts relied upon to prove the charge to which Mr. McGee pleaded guilty. Unfortunately only a portion of the conversation is included as is evidenced by the "…" in the middle of the conversation quoted and nothing of what the undercover agent said is reproduced. Consequently, I am unable to determine the context of the conversation. In my view, without the full conversation and the context it would be speculative to affix the meaning attributed by the Crown. The Crown's submission that this comment directly implicates Fercan as being complicit in the grow operations is, in my view, without merit or foundation. Mr. McGee was not called as a witness by the Crown during the forfeiture hearing. During Mr. McGee's sentencing the federal Crown conceded that Mr. McGee was at the low-end of the scale of those involved in the grow operations. On the evidence at this hearing, Mr. McGee had no dealings with Vincent DeRosa.

(c) Drawing Reasonable Inferences from Circumstantial Evidence

[251] There can be no doubt that reasonable inferences are often drawn by trial judges from circumstantial evidence. Justice Watt in his text, Watt's Manual of Criminal Evidence, provides the following definition of inference drawing:

An inference is a deduction of fact which may logically and reasonably be drawn from another fact or group of facts found or otherwise established in the proceedings. It is a conclusion that may, not must be drawn in the circumstances.

Equally important is Justice Watt's caution that "The boundary which separates permissible inference from impermissible speculation in relation to circumstantial evidence is often a very difficult one to locate."

[252] In R. v. Pham, the Ontario Court of Appeal applied Justice Watt's summary of how circumstantial evidence is utilized in drawing inferences as to knowledge for possession:

The element of knowledge is dealt with by Watt J. in the case of R. v. Sparling, [1988] O.J. No. 107 (Ont. H.C.) at p. 6:

There is no direct evidence of the applicant's knowledge of the presence of narcotics in the residence. It is not essential that there be such evidence for as with any other issue of fact in a criminal proceeding, it may be established by circumstantial evidence. In combination, the finding of narcotics in plain view in the common areas of the residence, the presence of a scale in a bedroom apparently occupied by the applicant, and; the applicant's apparent occupation of the premises may serve to found an inference of the requisite knowledge.

[253] Justice Doherty's observations in R. v. Morrisey are also of assistance:

A trier of fact may draw factual inferences from the evidence. The inferences must, however, be ones which can be reasonably and logically drawn from a fact or a group of facts established by the evidence … An inference which does not flow logically and reasonably from established facts cannot be made and is condemned as conjecture and speculation.

[254] The Ontario Court of Appeal has repeatedly cautioned against confusing a reasonable inference with mere speculation or conjecture. Where an inferential gap exists, it can only be properly overcome by evidence. This point was powerfully made by Doherty J. in U.S.A. v. Huynh. "The process of drawing inferences from evidence is not, however, the same as speculating even where the circumstances permit an educated guess." Ducharme J. in R. v. Munoz, supra, held:

Supposition or conjecture is no substitute for evidence and cannot be relied upon as the basis for a reasonably drawn inference. Therefore, it is not enough simply to create a hypothetical narrative that, however speculative, could possibly link the primary fact or facts to the inference or inferences sought to be drawn. As Fairgrieve J. noted in R. v. Ruiz, [2000] O.J. No. 2713 (C.J.) at para. 3, "Simply because a possibility cannot be excluded does not necessarily mean that a reasonable trier could be justified in reaching such a conclusion on the evidence." The inference must be one that can be reasonably and logically drawn and, even where difficult; it cannot depend on speculation or conjecture, rather than evidence, to bridge any inferential gaps.

[255] It is the position of Fercan and GRVN that the facts upon which the Crown relies to demonstrate complicity or collusion on the part of Fercan or Vincent DeRosa are not facts at all, as they are based on conjecture and speculation. They refer to R. v. Munoz, supra, where Justice Ducharme in dealing with this issue held:

The first step in inference drawing is that the primary facts, i.e. the facts that are said to provide the basis for the inference, must be established by the evidence. If the primary facts are not established, then any inferences purportedly drawn from them will be the product of impermissible speculation.

[256] Justice Ducharme continues:

The second way in which inference drawing can become impermissible speculation occurs where the proposed inference cannot be reasonably and logically drawn from the established primary facts. This possibility stems precisely from the fact that an inductive conclusion is not necessarily valid. As McLachlin C.J.C. put it in Arcuri at 31-2:

[W]ith circumstantial evidence, there is, by definition, an inferential gap between the evidence and the matter to be established -- that is, an inferential gap beyond the question of whether the evidence should be believed ... The judge must therefore weigh the evidence, in the sense of assessing whether it is reasonably capable of supporting the inferences that the Crown asks the jury to draw. [Emphasis added]

Consequently, one can overreach and draw an inference that should not properly be drawn from the primary facts.

[257] I adopt the comments made by Justice Ducharme referred to above and rely on his analysis contained in paragraphs 23 to 31 of Munoz in determining what reasonable inferences are available on the totality of the evidence called during this hearing.

(d) Corporate Liability

[258] Both the Crown and defence agree that sections 22.1 and 22.2 of the Criminal Code do not apply to this case. Further, both the Crown and defence agree that the identification doctrine can be utilized to inform the analysis of whether Fercan was complicit or colluded in the designated substance offences.

[259] It is the Crown's position that if Vincent DeRosa, as a directing mind of Fercan, knew of or was wilfully blind in respect of the two marihuana grow operations situated at the Molson Plant then the conclusion that Fercan was complicit or colluded necessarily follows. However, even if I am not satisfied as to Vincent DeRosa's knowledge respecting the designated substance offences, the inquiry into Fercan's complicity or collusion does not end.

[260] The Crown argues that Robert DeRosa was a directing mind of Fercan as a result of Vincent DeRosa delegating full and complete control of the Molson Plant to his brother. Robert DeRosa had authority to sign leases with prospective tenants, to approve modifications and renovations to the building and he permitted the installation of two massive grow operations. There were no policies or guidelines put into evidence as to what Robert DeRosa was required to follow in his management of the Molson Plant.

[261] Robert DeRosa was convicted of production of marihuana at the Molson Plant. The Crown argues that he was the "alter ego" of Fercan respecting the property at 1 Big Bay Point Road and, consequently, the complicity and collusion of Fercan can be established through his actions.

[262] In R. v. McNamara (No. 1) (sub nom Canadian Dredge & Dock Co. v. The Queen), the Supreme Court of Canada established how corporate criminal liability is to be determined:

The principle of attribution of criminal actions of agents to the employing corporate principal in order to find criminal liability in the corporation only operates where the directing mind is acting within the scope of his authority (Beamish, supra, at pp. 890 and 892, and St. Lawrence, supra, at p. 320), in the sense of acting in the course of the corporations' business…. The essence of the test is that the identity of the directing mind and the company coincide so long as the actions of the former are performed by the manager within the sector of corporation operation assigned to him by the corporation. The sector may be functional, or geographic, or may embrace the entire undertaking of the corporation. The requirement is better stated when it is said that the act in question must be done by the directing force of the company when carrying out his assigned function in the corporation. It is no defence to the application of this doctrine that a criminal act by a corporate employee cannot be within the scope of his authority unless expressly ordered to do the act in question. Such a condition would reduce the rule to virtually nothing. Acts of the ego of a corporation taken within the assigned managerial area may give rise to corporate criminal responsibility, whether or not there be formal delegation; whether or not there be awareness of the activity in the board of directors or the officers of the company; and, as discussed below, whether or not there be express prohibition.

[263] Further, "[t]he identity doctrine merges the board of directors, the managing director, the superintendent, the manager or anyone else delegated by the board of directors to whom is delegated the governing executive authority of the corporation, and the conduct of any of the merged entities is thereby attributed to the corporation." (Emphasis added) Estey J. also established an "outer limit" of the delegation or identification doctrine:

In my view, the outer limit of the delegation doctrine is reached and exceeded when the directing mind ceases completely to act, in fact or in substance, in the interests of the corporation. Where this entails fraudulent action, nothing is gained from speaking of fraud in whole or in part because fraud is fraud. What I take to be the distinction raised by the question is where all of the activities of the directing mind are directed against the interests of the corporation with a view to damaging that corporation, whether or not the result is beneficial economically to the directing mind, that may be said to be fraud on the corporation….

Where the criminal act is totally in fraud of the corporate employer and where the act is intended to and does result in benefit exclusively to the employee-manager, the employee-directing mind, from the outset of the design and execution of the criminal plan, ceases to be a directing mind of the corporation and consequently his acts could not be attributed to the corporation under the identification doctrine…. Whether this is so or not, in my view the identification doctrine only operates where the Crown demonstrates that the action taken by the directing mind (a) was within the field of operation assigned to him; (b) was not totally in fraud of the corporation; and (c) was by design or result partly for the benefit of the company.

[264] Consequently, a corporation will only be responsible or liable for its employees' actions where those employees are directing minds of the corporation, not mere employees, and the action taken by the directing mind was within the field of operation assigned to them, was not totally in fraud of the corporation and was by design or result for the benefit of the company.

[265] The Supreme Court of Canada further refined the definition of who is a "directing mind" of a corporation in Rhône (The) v. Peter A.B. Widener (The). The case of Rhône involved a civil action respecting a collision between two vessels in the Port of Montreal. The issue was whether the captain of the Great Lakes tug Ohio was a directing mind of Great Lakes by virtue of the fact that he exercised some discretion and performed some non-navigational functions as an incident of his employment.

[266] After discussing the identification doctrine adopted in Canadian Dredge, supra, Iacobucci J., for the majority, held:

As Estey J.'s reasons demonstrate, the focus of inquiry must be whether the impugned individual has been delegated the "governing executive authority" of the company within the scope of his or her authority. I interpret this to mean that one must determine whether the discretion conferred on an employee amounts to an express or implied delegation of executive authority to design and supervise the implementation of corporate policy rather than simply to carry out such policy. In other words, the courts must consider who has been left with the decision-making power in a relevant sphere of corporate activity. [Emphasis added]

With respect, I think that the courts below overemphasized the significance of sub-delegation in this case. The key factor which distinguishes directing minds from normal employees is the capacity to exercise decision-making authority on matters of corporate policy, rather than merely to give effect to such policy on an operational basis, whether at head office or across the sea. While Captain Kelch no doubt had certain decision-making authority on navigational matters as an incident of his role as master of the tug Ohio and was given important operational duties, governing authority over the management and operation of Great Lakes' tugs lay elsewhere. Therefore, I am of the view that the courts below erred in holding that Captain Kelch was part of the directing mind and will of Great Lakes. [Emphasis added]

[267] It is the position of the defence that Vincent DeRosa was the sole directing mind of Fercan and Vicar. As previously referred to, the defence argues that the evidence cannot support a finding that Vincent DeRosa had even an awareness or suspicion about the grow operations. The defence further submits that Robert DeRosa was merely a property manager employed by Fercan/Vicar and although he had been delegated certain managerial responsibilities, he did not have authority to design and supervise the implementation of corporate policy. His responsibility was to carry out the corporate policy of Fercan/Vicar as it was established by Vincent DeRosa.

Analysis

[268] No evidence was called, which showed any link between Vincent DeRosa and Dan Dolic (purportedly the mastermind and person in charge of the criminal organization responsible for establishing the two marihuana grow operations at the Molson Plant). Mr. DeRosa met Jeffrey Lawson in 2003 in relation to the sale of Ssonix and knew he was a friend of his brother, Robert. He never had any contact with Jeffrey Lawson after the aborted sale of Ssonix and he never saw him at the Molson Plant. The person known as the "Preacher", who provided the finances to fund the set up and ongoing expenses (salaries), was never identified by the three police projects. No evidence was called from which any inference could be drawn that Vincent DeRosa had any connection to the "Preacher".

[269] Vincent DeRosa testified he never communicated with Robert about when inspectors were planning on conducting inspections at the Molson Plant and he expected his brother to cooperate fully and provide unrestricted access. No other evidence, direct or circumstantial, was led by either party on this issue.

[270] There was no evidence led which demonstrated the kind of relationship that existed between Dan Dolic and Robert DeRosa. When did they first meet? What were the arrangements between them respecting the various grow operations? When did discussions commence about utilizing the Molson Plant for the production of marihuana in two separate areas? What is the connection between Robert DeRosa and Jeffrey Lawson?

[271] In the Crown's opening, Mr. Selvaratnam advised he intended to call as a witness, Jeff Olesky, who apparently was aware of the marihuana grow operation and was involved in various meetings about the grow operations, including one with Vincent DeRosa and Robert Bleich. Mr. Olesky was not called as a witness by the Crown and his name was never mentioned again. I have no idea who this individual is or the role, if any, he played in the two marihuana grow operations at the Molson Plant.

[272] The only viva voce witness called during this forfeiture hearing that had any involvement with the two marihuana grow operations was Mike Dicicco. According to Mr. Dicicco, his role in the grow operations was quite minor. He provided the growers with food and supplies. He manned the guardhouse at night or arranged for one of the workers in the Ontario Pallet space to do so, which ensured that those involved in the grow-ops had unrestricted access to the Molson Plant. He had no authority, on his evidence, to direct or instruct the grow-op workers. The Crown described him as a low level participant in the criminal organization and agreed to a conditional sentence of two years less one day. Mr. Dicicco also described himself as a gopher. Yet, Mr. Dicicco was paid $15,000 per month by Dan Dolic, a considerable amount considering his described role. He testified that his remuneration commenced once the Ontario Pallet grow-op was operational. It was my view that Mr. Dicicco was attempting to downplay his role in the two marihuana grow operations.

[273] Mr. Dicicco was one of the partners in the Barrie Good Fish Company. He was not asked how his involvement with Barrie Good Fish came about, only that very shortly after he started to work for Vicar he became involved with Barrie Good Fish Company. Based on Mr. Dicicco's evidence concerning Dan Dolic approaching him about becoming involved in the grow-ops, there is a reasonable inference that it was Dan Dolic who got Mr. Dicicco involved with Barrie Good Fish. Mr. Dicicco signed the Barrie Good Fish lease, which, in my view, was pivotal to the successful subterfuge created to conceal and prevent discovery of the grow operation. The creation of the cover story relating to contamination of the fish, which according to a number of the witnesses called by the Crown and defence was told by Mike Dicicco, allowed the Barrie Good Fish area to be sealed off, away from prying eyes. I do not accept Mr. Dicicco's evidence that he never heard about a contamination problem with the fish as I find that this story originated with him. Mr. Dicicco set up the bank account to be able to pay expenses on behalf of Barrie Good Fish, including rent and waste disposal. Mr. Dicicco was responsible for the removal of the waste product generated by the grow operation through his use of Capital Environmental Resource Inc. and the cheque stubs written by Mike Dicicco to Capital Garbage Bin. Mr. Dicicco was provided $15,000- $20,000 a month to cover the expenses of the two grow operations by the "Preacher", who was never identified.

[274] I do not accept the Crown's submission that Mr. Dicicco acted as a bridge between Fercan and Dan Dolic. I find that he had been hired by Robert DeRosa, initially to work in the guardhouse at night and then later to oversee and operate the new portable boiler system installed by D & D Enterprises. Both of these positions gave Mr. Dicicco free and unrestricted access to the Molson's Plant at night, which I find was necessary in order to maintain the secrecy required to prevent discovery of the marihuana grow operations by those performing legitimate activities at the Molson Plant during the day. Robert DeRosa's role, as described by the Crown, was to ensure that no one discovered the existence of the grow-ops. I find that Mr. Dicicco was hired by Robert DeRosa to assist him in fulfilling that role. It is also a reasonable inference, based on Mr. Dicicco's evidence concerning Dan Dolic first approaching him about working at the Molson Plant, that both Dan Dolic and Robert DeRosa were involved in Mr. Dicicco's hiring.

[275] Mr. Dicicco was only interviewed by the police just prior to his testifying in these proceedings. I found his memory to be selective and by his own admission, poor. When Mr. Dicicco was confronted in cross-examination with his initial statement to police in July 2012, where he stated that he signed the lease six months before the police raid, he was quick to agree that it could have been two months or six months prior to the police raid that he signed the lease. Further, Mr. Dicicco originally told the police in September 2012 in his video statement that he made up the business cards for Barrie Good Fish, yet in cross-examination he could not recall telling Det. Cst. Hayhurst this in his video statement less than a month before. In his evidence during these proceedings he testified he thought Dave Nottrodt made up the cards. Mr. Nottrodt told the police in his statement that Mike Dicicco made up the business cards. Finally, Mr. Dicicco agreed in cross-examination that he saw and worked with Bob DeRosa, who he viewed as a barracuda, for over two years at the Molson Plant, and yet for the first half of his September 2012 interview he could not recall Bob DeRosa's name.

[276] I did not find Mr. Dicicco's evidence to be very credible or reliable based on the above-referenced testimony. Initially Mr. Dicicco made it appear that he had contact with Vincent DeRosa on a weekly basis; however, it became evident that he, in fact, had no direct involvement with Vincent DeRosa. He saw Vincent DeRosa at the Molson Plant on Saturdays but he did not speak to him. He ultimately admitted that he really did not know what Vincent DeRosa was like, he seemed pleasant but Mr. Dicicco really did not have many conversations, if any, with him. He initially testified that Vincent DeRosa brought money up to the Molson Plant on Saturdays but then testified this was only an assumption on his part as he never saw money being given to anyone by Vincent DeRosa. I do not accept his evidence respecting the date he signed the Barrie Good Fish lease. I accept Vincent DeRosa's evidence that he signed the Barrie Good Fish lease at his office after the Offer to Lease had already been signed by Michael Dicicco in November 2001.

[277] In my view, based on the evidence described previously, Barrie Good Fish Company was set up as a subterfuge or deception to allow a marihuana grow operation to be set up by Dan Dolic and Jeff Lawson and to prevent anyone not involved in the grow operation from becoming aware of its existence. The payment of monthly rent was a further step in maintaining this subterfuge and preventing discovery of the true nature of the illegal activity that was taking place. The various rents charged to the tenants leasing space at the Molson Plant were consistent with the rents charged to Barrie Good Fish Company and Ontario Pallet.

[278] Similarly, Ontario Pallet was created as a subterfuge or deception by Dan Dolic and Jeff Lawson in setting up the marihuana grow operation in that space. No evidence was led by the Crown as to who set up the numbered Ontario corporation (1477990 Ontario Inc.), which leased space in the Molson Plant. Brian McIntrye, the President of this corporation and the individual who purportedly signed the lease with Vicar, was never called as a witness. It is my understanding that he was never charged in 2004 in relation to his involvement with the marihuana grow operation that was set up in the Ontario Pallet leased space. What was his connection to Dan Dolic, the mastermind of the two grow operations? No link was ever shown to exist between Brian McIntyre and Vincent DeRosa. In fact, the evidence discloses that Bob DeRosa advised his brother Vincent that he had found a pallet company that wanted to lease space at the Molson Plant.

[279] Further, it is important to note that there was no evidence that Fercan and Vincent DeRosa received anything other than rents from the two tenants, Ontario Pallet and Barrie Good Fish, despite an intensive police investigation, Project Plants and Project 3D. In my view, this strongly supports Vincent DeRosa's assertion that he was unaware of the two marihuana grow operations. It does not logically make sense for Mr. DeRosa to expose himself and his business to criminal charges and forfeiture of a property worth $8 million for monthly rent, particularly given the Crown's contention the two grow operations were making as much as $8 to $60 million a year (See Expert Evidence of Det. Sgt. Horne, December 10, 2012).

[280] The Crown argued that one of the purposes for the acquisition of the Molson Plant was to house the commercial production of marihuana. I agree with the submissions of Fercan and GRVN that this submission completely ignores the evidence of witnesses called by the Crown and defence, including the evidence of Vincent DeRosa. Further, it is my view that this submission defies logic, as discussed in the previous paragraph, and I do not accept it.

[281] I find the majority of the alterations or renovations to the Molson Plant that prevented access to the leased areas of the two marihuana grow operations were done at night. Andy Fraser testified he worked at the Molson Plant most days and sometimes 15 hours a day yet he never saw any modifications or construction occurring while he was there. All of the witnesses confirmed Vincent DeRosa's evidence that he attended the Molson Plant on Saturdays, in the morning, for about an hour. He would attend the guardhouse, the Canadiana Room and occasionally he would go into the plant with George Arnold, Andy Fraser or Bob DeRosa to discuss the progress of the sale of the Molson equipment or to discuss the progress of the water bottling operation. There was no evidence that anyone drew his attention to these renovations to the Molson Plant and it was his evidence, which I accept, that he only became aware of them after the police raid and the discovery of the marihuana grow-ops.

[282] The only direct evidence relating to blocking a doorway and a couple of windows was provided by Larry Farr, who attended the Molson Plant on one occasion, October 29, 2001, and completed the work in a day. There was an invoice, dated October 19, 2001, for 320 blocks from Simcoe Block ordered by Bob DeRosa and ultimately paid, in cash, by James Hayes. Mr. Farr explained that the first time he was interviewed by the police was in September 2012, after the forfeiture hearing had commenced. Consequently, he did not recall who directed him where to do this work nor was he able to show on Exhibit 6 where in the Molson Plant the work was actually done. During oral submissions the Crown conceded this point, yet maintained that this work was significant because it pre-dated the start date of November 1, 2001 for Ontario Pallet's lease. Mr. Farr's invoice, Exhibit 64, was directed to 1477990 Ontario Inc., which was Ontario Pallet. Bob DeRosa was actively involved in the grow operations and it was his responsibility to ensure that no one became aware of their existence. It does not surprise me that Bob DeRosa would be involved in ordering cement blocks to block up doorways and windows, which would otherwise provide access or a view into the areas that were to be utilized by the growers.

[283] The Crown points to the fact there were 342 invoices with Simcoe Block found in the guardhouse, which the Crown alleges were signed by Robert (Bob) DeRosa, James Hayes and Vincent DeRosa (See paragraph 94 Crown Factum). Yet only three of the 342 invoices referenced "Vince" and all three were for stucco materials related to the Oro Centre. There was evidence given during this hearing that the exterior of the Oro Centre was being renovated with stucco. As I indicated above, it is not surprising that Robert DeRosa would be involved in ordering materials to prevent access to the two marihuana grow operations. There was also evidence that Robert Bleich was ordering materials used for the construction of the grow-ops. No evidence was led as to where various invoices were found within the guardhouse. This evidence would have been significant because Robert DeRosa utilized the guardhouse as his office until he moved into the Canadiana Room in January 2002. When the Crown called evidence relating to the location of documents seized in the Canadiana Room it became evident that the majority were found at a desk believed to have been used by Robert DeRosa.

[284] Mr. Dicicco talked about the building of the cement block wall separating Ontario Pallet from the rest of the Molson Plant. He originally testified this work was done at night and then changed his evidence and said it was done over a couple of days during the day. Mr. Dicicco testified all of the supplies and materials used to set up the grow operations were brought into the Molson Plant at night when he or one of the workers in Ontario Pallet were manning the guardhouse. I find this was how the modifications and alterations to the Molson Plant were completed so as not to raise suspicions of other tenants or those working for Fercan and not involved in the grow-ops. Further, it was during the evening and early morning hours that the extensive work necessary to get the sophisticated marihuana grow operations up and running was completed. Grenville Graham testified that when he worked for Moonstone at the Molson Plant, up to July 2002, he did not notice that a block wall had been built separating the warehouse from Area 7A on Exhibit 6 or that a number of windows and doors had been covered by cement blocks or locked or drywalled over. However, when he returned in February 2003 to work for Fercan, he observed these modifications had been done. He did not bring these changes to anyone's attention.

[285] The evidence of the various tenants and individuals who were in the Molson Plant on a daily basis supports and corroborates Vincent DeRosa's evidence that he had no knowledge or even suspicions that the marihuana grow operations existed at the Molson Plant. Persons who were at the Molson Plant daily or quite frequently, such as George Arnold, Andy Fraser, Grenville Graham, Cathy Underhill, Roger Kelly (RK Trucking), Dave Nottrodt, Dirk Lange, Dan Pitcher, Marie Carere-Smith (Smitty's Transport), David Justin Moreau (Kumi), Jean Moores (nee Stewart) (Kumi), Kenneth Gordon Judd (First Transport) or Peter Chiodo (Simcoe Steam Brewing Co.) never saw anyone bringing electrical equipment, florescent lights, ballasts, wood, drywall or any other building materials into the areas leased by Barrie Good Fish and Ontario Pallet. They had no suspicions that two marihuana grow operations were up and running from March 2002 until the police raid on January 9, 2004. All expressed shock and surprise at the police discovery.

[286] The Crown argued during oral submissions that the guardhouse logs appended to Det. Cst. Bednarczyk's affidavit, filed as Exhibit 5C, demonstrate that Bob DeRosa, Lex McGee and Mike Dicicco had free access to the Molson Plant. Mike Dicicco had at least 5 or 7 gate passes issued under his name, which he testified he provided to Dan Dolic, Jeff Lawson or the Preacher or anyone else involved in the grow-ops, when they needed to gain access to the plant. Of particular significance was the fact that Vehicle 1 and 2, which were stopped by the police leaving the Molson Plant on January 9, 2004 at the time of the execution of the search warrant, had Passes 41 and 44 inside the vehicles, both of which were issued to Mike Dicicco. These two vehicles contained the individuals charged as growers working in the two marihuana grow-ops. The fact that Mike Dicicco was listed as the contact person for Ontario Pallet and Barrie Good Fish on a notepad found in the guardhouse further supports, in my view, the inference that he was actively involved, together with Bob DeRosa and Lex McGee, in ensuring the existence of the two grow operations remained a secret. There is no evidence that Mike Dicicco had any conversations with Vincent DeRosa concerning the true nature and purpose of the operations of these businesses.

[287] It is also significant, however, that during the day, when the guardhouse log was maintained by James Hayes, there is an absence of activity involving employees of Ontario Pallet or Barrie Good Fish (the two grow-ops) entering and exiting the plant or companies bringing supplies or materials for Barrie Good Fish or Ontario Pallet reflected in the handwritten guardhouse log. In fact, there are very few entries in the guardhouse logs of vehicles entering after 7:00 p.m.

[288] Cathy Underhill worked with Robert DeRosa on a daily basis as his personal driver and assistant. Bob DeRosa managed other properties, including the Oro Centre, and she would attend these other properties with Bob. She knew the first names of some of the individuals who worked for Ontario Pallet: Rayne (Sauve), Jeff (DaSilva or Lawson) and Rob (Bleich). She overheard Jeff talking to Bob DeRosa about a fish company. She overheard Mike Dicicco talking about the Pallet company. Despite working in the Molson Plant daily, Ms. Underhill never saw anything that caused her to be suspicious about the possibility of two marihuana grow operations existing on the premises. She never saw any modifications or construction being done in the plant other than in the areas of the water bottling operation and coffee roasting operation. She had been in the hallway adjacent to the living quarters in the Barrie Good Fish space but was completely unaware of its existence. She assumed the doors, which were closed, led to office space but she never had any reason to go into them. She never heard anything unusual nor did she ever smell anything that raised any suspicions on her part. She expressed shock and surprise in relation to the discovery of the two marihuana grow operations. Her evidence further corroborates and supports the evidence of Vincent DeRosa that he was unaware of the existence of the two grow-ops until after the police raid in January 2009.

[289] The Crown submits very little work was being done in the warehouse or bottle shop areas of the Molson Plant, which were to be utilized by Aurora Beverages, prior to the police raid. In my view, this submission is not in accordance with the evidence called at this hearing. Although Aurora Beverages was not operational prior to the police raid, Grenville Graham, Cathy Underhill, Roger Kelly, Andy Fraser and George Arnold all testified that significant work was done in these areas prior to the police raid in terms of the installation of equipment, conversion of existing equipment for use in the water bottling line, and various electrical work.

[290] The Crown concedes in their written submissions that the presence of persons undertaking the adaptation of electrical, plumbing and ventilation systems would be unlikely to attract much attention from a tenant, contractor or casual visitor to the plant as this type of activity would be normal in a large factory. However, the Crown argues that the owner, landlord, manager or senior employee would be in a much different position. I do not agree with this submission for a number of reasons. As I have already indicated, the evidence is clear that the work done to set up the marihuana grow operations was mostly completed during the evenings, as testified to by Mr. Dicicco. Further, Grenville Graham did extensive electrical work, which would have necessitated him accessing the main electrical panel that those involved in the grow operations had utilized to obtain electrical power. He did not testify that he was aware of these alterations or adaptations done to the electrical panel. In fact, the Crown did not ask him about this issue. Further, Andy Fraser and the employees of Moonstone Mechanical had to deal with the electrical panel as a result of the removal of Molson's equipment that had been sold, the conversion of Molson equipment for use by Aurora Beverages and the installation of new equipment purchased for Aurora Beverages. He did not testify that he observed anything out of the ordinary as it related to the main electrical panel.

[291] The Crown argues that Vincent DeRosa attended the plant on numerous occasions both before the purchase and on a weekly basis, on Saturdays, after the sale was completed, yet he never observed or questioned these changes to his property. I have observed the photographs and videos filed as Exhibits 7, 8, 9 and 30 in this hearing, which show the main electrical panel and how those involved in the grow operations tapped into the electrical supply. It is my view that unless one has a particular expertise in electrical systems, it would be impossible to be able to identify anything out of the ordinary. I draw the same conclusion in respect of the water lines that were run between the Barrie Good Fish space and the Ontario Pallet space. These pipes were installed during the evenings and attached to the ceiling of the building, out of sight to individuals walking on the floor of the plant. Further, as I have previously indicated, there is no evidence that anyone else brought these changes to Vincent DeRosa's attention, including those experienced in electrical systems, such as Grenville Graham and Andy Fraser.

[292] In my view, the three heavy gauge electrical wires attached to the electrical panel situated in the warehouse and bottle shop areas and then re-routed through the roof of the Molson Plant, hidden under flashing in the roof and then re-routed back into the Ontario Pallet space, were not sufficiently out of the ordinary or out of place to raise any suspicions. In fact, as I describe below, those individuals who had the expertise to be able to discern changes that could raise suspicions saw nothing out of the ordinary.

[293] Grenville Graham, a qualified and certified electrician who worked for many years as an electrician and supervisor of maintenance in the Molson's Brewery and then worked as an electrician with Moonstone Mechanical at the Molson Plant and later for Fercan, testified he did extensive work involving the electrical system at the Molson Plant and for the water bottling line. Yet, he was completely unaware of the existence of the three heavy gauge wires taking electricity to the marihuana grow operations and he did not observe anything out of the ordinary.

[294] Andy Fraser was not asked by the Crown whether he observed anything unusual or out of the ordinary involving the main electrical panel in the Molson Plant despite he and his company working extensively in the extraction and installation of large pieces of equipment, which would have been disconnected or connected to the plant's electrical system.

[295] Further, I do not accept the Crown's submission that alterations to the electrical and plumbing systems by the growers were easily discoverable or would likely be reported to the landlord/owner, thereby demonstrating that Vincent DeRosa was complicit in the grow operations as a result of wilful blindness. As I have discussed previously, none of the alterations done by the growers were in fact discovered or observed until after the police search warrant was executed in January 2004. The evidence clearly demonstrates the work done by the growers was completed at night when Andy Fraser and his employees, George Arnold and Grenville Graham were not present. There was no evidence of anyone discovering and bringing to the attention of Fercan or Vincent DeRosa the alterations to the electrical and plumbing systems.

[296] The Crown called Gordon Allison, Director of Building Service for the City of Barrie and John Wyers, an electrician employed by the police to disconnect the electrical wiring installed by the growers, to provide evidence as to the substantial alterations and modifications that were completed by those involved in the marihuana grow operations. Their combined evidence clearly established the dangerous and hazardous conditions created by those alterations and modifications for anyone working in the Molson Plant, including the growers themselves who were living in the plant. In my view, those individuals in charge of orchestrating the setting up of the marihuana grow operations were not concerned in the least about the hazardous conditions they were creating, either for those employed by the criminal organization or those who were operating legitimate businesses in the Molson Plant. Their primary objective was economic gain and safety was not a priority. The fact the alterations and electrical work would not meet the building code, in my view, would not have been a concern of those involved in the grow-ops. I find this evidence does not assist in determining complicity or collusion on the part of Fercan or Vincent DeRosa.

[297] The Crown submits it is clear the criminal organization had such assurance of their control of the property that they had no concerns about any of the large number of individuals employed by Fercan who were in attendance on a daily basis at the Molson Plant advising Vincent DeRosa of anything out of the ordinary. It is the Crown's submission the logical inference is that Vincent DeRosa was aware of the presence of the marihuana grow operations and would do nothing. This submission completely ignores all of the evidence from the witnesses who testified they did not observe anything out of the ordinary, nothing caused them to be suspicious and as a result they were shocked and surprised by the discovery of the grow-ops.

[298] I find there is no evidence that Robert DeRosa or Lex McGee or Mike Dicicco ever advised or brought to Vincent DeRosa's attention the alterations and adaptations to the electrical, plumbing and ventilation systems at the Molson Plant. In fact, it was their combined objective to keep the existence of these alterations and adaptations a secret. This is demonstrated by the evidence of Mike Crone, an inspector with the Barrie Fire Department, who was shown around the Molson Plant by Lex McGee. In my view, Mr. McGee darkened areas that might have caused Mr. Crone to investigate further to prevent the discovery of the grow-ops. I further agree with the Crown that one of Robert DeRosa's primary roles in the marihuana grow operations was to keep their existence a secret. There is no evidence that contradicts Robert DeRosa's assertion to Justice Armstrong at his sentencing hearing that his brother, Vincent DeRosa, had nothing to do with the grow operations and did not know about them. The Crown never asked Mr. Dicicco if he talked to Vincent DeRosa about the marihuana grow operations or if he overheard Vincent DeRosa talking about the grow-ops or if he ever saw Vincent DeRosa in the areas of the grow-ops.

[299] On July 3, 2003, an application for a fire alarm retrofit system was filed by Fercan. The application appears to have been submitted by James Hayes as agent for Fercan respecting a fire alarm retrofit to a portion of the Molson Plant, namely, 260,000 square feet. The Crown points to a diagram of the plant, which was attached to the application according to Gordon Allison, Director of Building Services, City of Barrie, showing the areas leased to Ontario Pallet and Barrie Good Fish as being unoccupied. This diagram was prepared by Viking Fire Protection Inc., the company performing the retrofit. No witness was called from Viking Fire Protection and therefore it is not known who provided the instructions or information that led to those areas being listed as "unoccupied". In my view, it makes sense logically for Robert DeRosa to have provided this information as property manager of the Molson Plant and as the individual responsible for maintaining the secrecy of the grow-ops. He would not want building or fire inspectors to be looking around the areas leased by Ontario Pallet or Barrie Good Fish and by showing those areas as being unoccupied he would prevent discovery of the marihuana grow operations. There was no evidence this diagram was ever brought to the attention of Vincent DeRosa.

[300] The submission by the Crown that the application submitted and prepared by James Hayes misled the City of Barrie inspectors and can therefore be attributed to Fercan demonstrates, in my view, the importance of drawing reasonable inferences from objective facts established by the evidence before drawing the inference sought. Otherwise, any inferences purportedly drawn will amount to impermissible speculation, which I find occurred here. There is no evidence which could support an inference that James Hayes was a directing mind of Fercan.

[301] The Crown led evidence concerning an allegation of theft of water by the Molson Plant because of increased water flow entering into a nearby water pollution control centre. John Surowiak, an environmental inspector with the City of Barrie, wrote a letter dated August 19, 2002 to James Hayes concerning this issue (Exhibit 35). Steve Cripps, Water Customer Service Supervisor with the City of Barrie, wrote a letter dated September 10, 2002 to James Hayes concerning the calibration of water meters. On September 18, 2002, Lewis Mintz, lawyer for Vicar Properties, wrote to Mr. Cripps advising he had made several unsuccessful attempts to speak to Mr. Surowiak concerning these issues. Mr. Surowiak conceded that he recalled being contacted by a solicitor but did not respond as it was outside the scope of his job description. I am satisfied on a totality of the evidence there was no theft of water, rather, it was a problem created by water run-off from the Molson property and adjoining properties (Molson Park) as explained in Exhibit 106, a letter dated September 28, 2003 relating an investigation done by Dave Dobinson Excavating Inc. who were retained by Fercan to investigate this issue. Despite the matter being referred by Mr. Surowiak to Barrie Police, no charges were ever laid. Nor were any follow-up actions taken by the City of Barrie. I accept the evidence of Vincent DeRosa on this issue.

[302] It was alleged by the Crown during their submissions that hydro consumption at the Molson Plant should have caused Vincent DeRosa to investigate hydro usage by Barrie Good Fish and Ontario Pallet. The Crown pointed to Ms. Pelikan's Agreed Statement of Fact on her guilty plea, which provided that the growers did not steal or hide hydro use at the Molson Plant. The Crown called into question Vincent DeRosa's assertion that there was no unusual hydro expense, yet this is what the evidence actually disclosed. The summary of hydro usage filed by the Crown, Exhibit 107, reveals that the hydro charges fell within the normal range for other industrial properties and office buildings that Fercan owned, which ranged being $1.00 to $1.50 per square foot. Consequently, it was Vincent DeRosa's evidence that because hydro consumption was in the normal range with no unusual spikes, no one would have brought it to his attention. The Crown did not confront Vincent DeRosa with any contrary evidence during his cross-examination. All utilities were included in the rent charged to tenants at the Molson Plant. Vincent DeRosa testified that nothing out of the ordinary concerning excessive water and hydro usage was ever brought to his attention and no evidence was led by the Crown to suggest there were any concerns about excessive water and hydro usage.

[303] I agree with the Crown that those involved in the grow operations were confident in their having complete access to and control of every part of the Molson Plant. However, I do not agree with the Crown submission that this means knowledge can be imputed to Vincent DeRosa or Fercan. The confidence and willingness to expend money to make modifications to the building was directly related to the fact that Robert DeRosa was directly involved with Dan Dolic and Jeffrey Lawson. Robert DeRosa hired Mike Dicicco, who was later recruited by Dan Dolic as described above, and Robert DeRosa hired Lex McGee, who was also aware of and assisted in setting up the grow operations. Both Dicicco and McGee lived in the Molson Plant. Dicicco worked in the guardhouse at night or arranged for one of the individuals working in the grow operation in the Ontario Pallet space to work in the guardhouse at night.

[304] The Crown points to the evidence of Cathy Underhill and her involvement in the purchase of 17 Guest Road to suggest some involvement by Fercan in a further property where a marihuana grow operation was ultimately discovered in 2009. It was Ms. Underhill's evidence that Bob DeRosa handled all aspects of the purchase of this house, which he arranged to be put into Ms. Underhill's name. This property was purchased so Roger Kelly and his family would have a place to live and operate his trucking business out of. I find there is a reasonable inference that it was Bob DeRosa who created all of the false documents that were utilized to obtain a mortgage in Cathy Underhill's name. Ms. Underhill could not recall if it was Bob DeRosa or Richard Brezzi, the Fercan comptroller, who provided her with the documents. The Crown alleges in their submissions that Richard Brezzi provided these documents. I find that it does not make any logical sense for Richard Brezzi to be involved in the creation of false documents to enable Ms. Underhill to purchase 17 Guest Road so that Bob DeRosa's good friend, Roger Kelly, would have a place to live and operate his business. I find it only makes sense for Bob DeRosa to create these false documents. Ms. Underhill testified the lease agreement, Exhibit 55, was filled out by Robert DeRosa as she recognized it as his handwriting.

[305] Further, there was no evidence who the certified cheque that Ms. Underhill picked up at the Fercan offices in Toronto was made payable to. Logically, it makes sense for this cheque to be payable to the lawyer or law firm that handled the real estate transaction. There was also no evidence as to the amount of the cheque or the amount of the mortgage. Ms. Underhill testified she could not recall the amount of the cheque or who it was payable to. I find it was Bob DeRosa who made all the arrangements testified to by Ms. Underhill. I accept Vincent DeRosa's evidence that neither he nor anyone at the Fercan offices had any involvement with 17 Guest Road. He was not even aware of its existence. Further, I accept Vincent DeRosa's evidence he had no knowledge of the marihuana grow operation that was ultimately discovered in 2009 at 17 Guest Road.

[306] The Crown in their submissions also allege Cathy Underhill was provided with $50,000 to assist with the purchase of her own home and $30,000 as a downpayment for the purchase of 17 Guest Road for Roger Kelly to live in, from Fercan. There is no evidence Fercan provided the $50,000 amount; rather, it was Ms. Underhill's evidence that Robert DeRosa gave her this amount of money as a gift, most likely after the police raid of the Molson Plant although she was unsure of the exact date. Further, Ms. Underhill could not recall the amount of the certified cheque she picked up at the Fercan offices. She did not know who gave her the cheque or who it was payable to. She was never asked which account the cheque was drawn on. Consequently, the jump to the conclusion that Vincent DeRosa must have signed for those cheques is not in accordance with the evidence and, in my view, is another example of impermissible conjecture and speculation.

[307] The Crown's alternative submission that Robert DeRosa must have signed those cheques on behalf of Fercan and therefore demonstrates he is a directing mind of Fercan is also not based on the evidence. As indicated above, Ms. Underhill testified Robert DeRosa gave her the $50,000 as a gift; there is no evidence that it was a Fercan cheque. There is no evidence as to the amount of the downpayment cheque for the purchase of 17 Guest Road, nor is there any evidence as to whose cheque it was. In my view, this is another example of the Crown relying on facts not proven to draw an inference and therefore amounts to conjecture and speculation. Vincent DeRosa testified he searched his companies' records but was not able to locate such a cheque. Further, Det. Cst. Thorne, who was part of the investigation where search warrants and productions orders were obtained to examine Fercan's bank accounts and the cheques drawn, was able to locate cheques respecting the monthly rent for Barrie Good Fish and Ontario Pallet.

[308] I find the common denominator in each of the marihuana grow operations discovered by police is Robert DeRosa. There is no evidence to link Vincent DeRosa with his brother's illegal activities. It was not until the police utilized an undercover police agent in 2009 and 2010 that evidence was uncovered establishing Robert DeRosa's involvement in the marihuana grow operations at the Molson Plant; at the Oro Centre; at Ssonix; at 17 Guest Road or at 1408 Rainbow Valley Road. Vincent DeRosa was never charged with any criminal offences as a result of the further police investigation. In my view, the Crown did not call any evidence from which reasonable inferences can be drawn as to Vincent DeRosa having knowledge of his brother's criminal activities or of him being wilfully blind in relation to his brother's criminal enterprises. I find the theories and submissions of the Crown relating to Vincent DeRosa's knowledge of the two marihuana grow operations never rise above conjecture and speculation.

[309] Numerous documents were discovered by the police in the area of the Canadiana Room where Robert DeRosa had his desk. Handwritten notes, identified as Robert DeRosa's writing, were found containing lists of items used in a grow-op. This is not surprising given the role played by Robert DeRosa in the marihuana grow operations.

[310] The Crown alleged in their written submissions that James Hayes facilitated access to the Molson Plant by those actively involved in the grow operations. They allege those involved in the grow operations could not have had such free access to the property without Mr. Hayes' knowledge and complicity. Mr. Hayes was never charged in relation to the marihuana grow operations, either after the police raid in January 2004 or after the completion of Project Birmingham in 2010. I was advised during the hearing, and in the written submissions of Fercan/GRVN, that Mr. Hayes passed away in 2011 and, consequently, is unavailable as a witness. The Crown did not ask Mr. Dicicco if James Hayes knew about the grow operations or if Mr. Hayes was involved in the grow-ops or if he ever discussed the grow operations with Mr. Hayes. The fact that James Hayes managed the guardhouse during the day does not, in my view, support the submission that Fercan was aware of the marihuana grow operations. He clearly was not a directing mind of Fercan as has been defined in Canadian Dredge, supra, and Rhône, supra. Mr. Dicicco had a number of passes, which he testified he provided to those involved in the grow-ops, and the two vans stopped by police on January 9, 2004 leaving the Molson Plant had passes assigned to Dicicco in their vans. Further, as I have expressed previously, those involved in the grow operations had free access in the Molson Plant because of the involvement of Robert DeRosa, Mike Dicicco and Lex McGee, who were each convicted of designated substance offences related to the two grow operations. I find, however, this does not amount to any evidence of complicity or collusion by Fercan or Vincent DeRosa.

[311] There is no doubt that if anyone entered the fermentation area of the Molson Plant, the area leased by Barrie Good Fish or the area leased by Ontario Pallet, that they would know they were in a marihuana grow operation. This would be evident from the lights, the ballasts, the extensive electrical wiring, the water barrels, the sophisticated ventilation system and the marihuana plants. There was no evidence in this hearing that Vincent DeRosa was ever in the space leased by Barrie Good Fish or by Ontario Pallet. Mr. Dicicco was never asked if Vincent DeRosa was in those areas of the plant. Vincent DeRosa testified he was advised there was a contamination problem with the fish and, consequently, only those involved in the fish farming enterprise were allowed to enter the fermentation area. A number of witnesses supported Vincent DeRosa's evidence concerning the contamination story, which was told by Mike Dicicco.

[312] It was Vincent DeRosa's evidence that he was never physically in those two leased spaces as he had no reason as the landlord to request entry. He testified he was unaware of the two marihuana grow operations until after the police raid on January 9, 2004. I accept his evidence on this issue. I have previously indicated my assessment of Vincent DeRosa's evidence. I find there is no evidence that Vincent DeRosa knew of the marihuana grow operations at the Molson Plant or that he was wilfully blind as to the existence of the marihuana grow operations. I find Vincent DeRosa was not aware of any information which would have required him to inquire further or taken steps to investigate.

[313] I have ruled previously that the onus under section 19(3) rests with the Crown to prove on a balance of probabilities that Fercan, or a directing mind of Fercan, Vincent DeRosa, was complicit in the designated substance offences or was in collusion in relation to those offences. In my view, the Crown has failed to call any evidence to satisfy its onus. In my view, there is no evidence capable of establishing complicity or collusion on the part of Fercan or Vincent DeRosa, who was a directing mind of Fercan at the relevant time periods.

[314] It was the Crown's alternative submission that if I found there was no evidence supporting knowledge or wilful blindness on the part of Vincent DeRosa, this was because "he had in fact, if not in express written delegation, allocated to Bob DeRosa the full responsibility for 1 Big Bay Point Road." No reference was provided by the Crown respecting the "express written delegation" purportedly given by Vincent DeRosa to Robert DeRosa allocating full responsibility for the Molson Plant. It is my view, upon a review of all of the evidence respecting Robert DeRosa's role in connection with the Molson Plant and other properties in the Barrie area, that there was no express written delegation or even verbal delegation by Vincent DeRosa to Robert DeRosa giving him full responsibility for 1 Big Bay Point Road. I agree with the defence submission that while Robert DeRosa was given certain managerial responsibilities, including the leasing of space, collection of rents, ensuring that tenants' needs were met; he did not have authority to make decisions respecting the design and supervision of implementing corporate policy. The evidence was clear that leases were sent to Fercan's head office for approval by Vincent DeRosa or were signed off by him when he attended the Molson Plant on Saturdays. Vincent DeRosa set the parameters of the lease agreements in terms of pricing.

[315] As the Vice President of Aurora Beverages, Robert DeRosa had discretion in terms of setting up the water bottling line with George Arnold; however, he did not have authority to approve or sign for the purchase of equipment such as the injection moulding machine, which cost approximately $1.3 million. Robert DeRosa, as any property manager working for Fercan, had authority to maintain the buildings he managed; however, if there were major capital expenditures that needed to be done he would need to obtain approval from Vincent DeRosa. Further, Andy Fraser did not seek the approval of Robert DeRosa for the sale of the Molson's chattels; rather, he looked to Vincent DeRosa for approval. I find that Robert DeRosa was not a directing mind of Fercan as that term has been defined in Canadian Dredge, supra and Rhône, supra. He did not have governing executive authority as that phrase was further refined in Rhône, supra. I find that Robert DeRosa did not have the capacity to exercise decision-making authority on matters of corporate policy; rather his role was merely to give effect to such policy on an operational basis.

[316] Further, the identification doctrine only operates where the Crown demonstrates the action taken by the directing mind (a) was within the field of operation assigned to him; (b) was not totally in fraud of the corporation; and (c) was by design or result partly for the benefit of the company. In my view, even if Robert DeRosa could be said to be a directing mind of Fercan, which I find he was not, his involvement and participation in the numerous marihuana grow operations was completely outside the scope of his delegated authority and responsibility as a property manager employed by Fercan. I find he was acting contrary to the interests of Fercan and to Fercan's detriment. His actions were solely for his own benefit and the benefit of the criminal organization he was a member of. Robert DeRosa's actions were not done to benefit Fercan and I agree with the submission of the defence that this is not the case of a manager acting within the scope of his authority to benefit himself and his company. As I have previously indicated, despite an extensive investigation by the police following the raid on January 9, 2004, no evidence was found to show that Fercan received any financial income from the grow-ops, with the exception of rental income, which was necessary for those engaged in the grow-ops to ensure the continued secrecy of the grow operations and to create an aura of legitimacy. I agree these amounts represent expenses for the criminal organization's illegal activity, not benefits to Fercan. In my view, Robert DeRosa was acting against Fercan, rather than for it and the comments of Estey J. are apropos:

The identification theory, however, loses its basis in rationality when it is applied to condemn a corporation under the criminal law for the conduct of its manager when that manager is acting not in any real sense as its directing mind but rather as its arch enemy.

[317] Consequently, I am satisfied that Fercan Developments Inc. appears to be innocent of any complicity in the designated substance offences related to 1 Big Bay Point Road, Barrie, Ontario or of any collusion in relation to such offences.

[318] Concerning the forfeiture hearing relating to 1408 Rainbow Road, Phelpston, Ontario, it would appear the Crown's application in respect of this property was really only an afterthought, as very little, if any, evidence was called by either party. As I have previously indicated, there is no doubt this property qualifies as offence-related property under sections 2 and 16 of the CDSA. Robert DeRosa was convicted of a designated substance offence in relation to that property. There were significant quantities of marihuana grow equipment found in trailers and in various buildings situated on that property, as well as quantities of controlled substances.

[319] At the time of the restraint order the property was owned by GRVN, a corporation that is solely owned by Nicola DeRosa, Vincent DeRosa's brother, since August 9, 1999. GRVN owns a number of different properties, including Nicola DeRosa's auto mechanic shop in St. Catharines and the property originally farmed by the DeRosa family in Niagara Region.

[320] Vincent DeRosa originally purchased 1408 Rainbow Valley Road on July 29, 2002 for $495,000. He purchased this residential property for his brother, Robert DeRosa and his family to live in. He sold 1408 Rainbow Valley Road to GRVN for $550,000 on January 30, 2009. Apparently the property was remortgaged on December 29, 2010, 11 days after Robert DeRosa's return to Canada from Cuba. I was advised by the Crown during oral submissions on June 17, 2013 that the restraint order respecting 1408 Rainbow Valley Road was varied to allow the property to be sold to allow that mortgagee to be paid out. Currently, the amount remaining as a result of the mortgagee being reimbursed is $20,136.39, which is being held in trust by Seized Property Management Directorate Branch of the federal Department of Public Works and Government Services.

[321] It was the position of the Crown that Vincent DeRosa was the directing mind of GRVN despite his selling that corporation to his brother, Nicola, in 1999. In my view, it does not make a great deal of difference whether the directing mind of GRVN is Nicola DeRosa or Vincent DeRosa or both. No evidence was called demonstrating any knowledge or wilful blindness of the illegal activities engaged in by Robert DeRosa on the part of Nicola DeRosa or Vincent DeRosa. Robert DeRosa was not arrested until December 13, 2010. The restraint on 1408 Rainbow Valley Road was not granted until April 11, 2011. As I have already indicated, I accept Vincent DeRosa's evidence that he was completely unaware of his brother's illegal activities until after Robert's arrest in December 2010. Consequently, I am completely satisfied that GRVN or its directing mind(s) appear innocent of any complicity in the designated substance offences related to 1408 Rainbow Valley Road, Phelpston, Ontario or of any collusion in relation to such offences.

[322] Further, given my findings of fact in relation to the evidence and my acceptance of Vincent DeRosa's evidence, as it relates to his knowledge or wilful blindness as to the existence of the two marihuana grow operations, even if I had ruled in favour of the Crown that the onus, under section 19(3) of the CDSA, was on the lawful owner to satisfy the court that they appear to be innocent of complicity or collusion, it is my view that the evidence overwhelmingly leads to the conclusion that Fercan and GRVN, or the directing minds of those two corporations, are innocent of any complicity or collusion in relation to the designated substance offences. Consequently, even if the onus was on the lawful owner, I am satisfied that Fercan/GRVN or Vincent DeRosa/Nicola DeRosa have met the onus that they appear innocent of complicity or of collusion in respect of the designated substance offences.

[323] I am also satisfied that the two properties or any monies remaining after the sale of the properties to enable the mortgagees to be paid out are being held in trust by the Seized Property Management Directorate Branch of the federal Department of Public Works and Government Services.

Released: September 11, 2013

Signed: "Justice P.C. West"