Court File and Parties

Citation: Attorney General of Ontario v. $9,616.98 in Canadian Currency, 2011 ONSC 3820 Divisional Court File No.: 242/10 Date: 20110617

Ontario Superior Court of Justice Divisional Court

Before: Jennings, Swinton and Durno JJ.

Between:

Attorney General of Ontario Applicant (Appellant)

– and –

$9,616.98 in Canadian Currency (In Rem) Respondents (Respondents in Appeal)

Counsel: Leslie Zamojc and Robin K. Basu, for the Applicant (Appellant) No One Appearing

Heard at Toronto: June 17, 2011

Oral Reasons for Judgment

Durno J. (orally)

[1] The Attorney General of Ontario appeals from a decision of Kiteley J. of the Superior Court of Justice dated April 28, 2010, in which she dismissed the Attorney General’s application under the Civil Remedies Act, 2001, for civil forfeiture of $9,616.98 alleged to be a proceed or instrument of unlawful activity.

[2] The funds were seized from Mr. Bing Rong Feng in October, 2007 when Mr. Feng was arrested for possession of marijuana and possession of proceeds of crime. The criminal charges against Mr. Feng were withdrawn in January, 2008 prior to the hearing of the application under the Civil Remedies Act. Mr. Feng did not participate in the civil proceedings but he did sign a consent agreement with the Attorney General to an order whereby $2,500.00 would be paid to Feng and the balance forfeited.

[3] In dismissing the forfeiture application, the application judge found:

(i) The Attorney General had not established on a balance of probabilities the currency was the proceeds of unlawful activity or an instrument of unlawful activity;

(ii) The consent would not support an inference that Feng conceded the currency was proceeds or an instrument of unlawful activity; and

(iii) If the Attorney General established the currency was proceeds or an instrument of unlawful activity, it would clearly not be in the interests of justice to order forfeiture because the criminal charges were withdrawn and there may have been a violation of Feng’s ss. 8, 9, 10 and 11(d) Charter rights.

[4] In relation to the first issue, the application judge examined six pieces of evidence relied upon by the Attorney General and concluded Feng’s record for drug offences was irrelevant, that he had not provided an explanation for the source of the funds or information regarding his employment suggested a reversal of the onus and the three remaining items alone or in combination with the others did not meet the test. First, we are persuaded the application judge erred in determining that Feng’s prervious convictions for drug offences were irrelevant. The applications judge did not have the benefit of the judgment of the Court of Appeal in Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363 at para. 46, in which the Court relied upon the previous record of the respondent or this Court’s judgment in Ontario (Attorney General) v. $5,545 in Canadian Currency (In Rem) (2011) (Ont. S.C.) 2827 where the past record of a respondent was held to be relevant evidence on the application.

[5] Second, we are persuaded the applications judge erred in finding Feng’s failure to provide information about the source of the currency or his employment “suggested a reversal of the onus.” The applications judge found that in criminal proceedings involving proceeds of crime, the Crown typically leads expert evidence to the effect that currency sorted in bundles such as was seized here, along with other paraphernalia, is indicative of the money being proceeds of the sale of drugs such as marijuana. In the absence of such evidence, the applications judge was not prepared to draw the inference in this case because she had received evidence in other cases.

[6] The forfeiture scheme of the Civil Remedies Act, 2001, S.O. 2001, c. 28 is not part of the criminal process where the burden of proof is on the prosecution to establish the elements of the offence beyond a reasonable doubt. This was a civil proceeding in which the Attorney General bore the onus on a balance of probabilities. The fundamental principle that an accused person is not required to assist the state in making out the case against him or her does not apply in the civil context. D.P. v. Wagg, [2004] O.J. No. 2035 (C.A.) at para. 68. In Ontario (Attorney General) v. Lok 2008 ONCA 682, the Court of Appeal also relied upon the failure of a respondent to adduce any evidence seeking to explain why he was carrying a large amount of money. The judge is entitled to have regard to the absence of any evidence documenting any legitimate source for the currency. Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363 at para. 45. While not determinative in itself, that there was no “innocent” source for the money was a relevant factor from which an inference can be drawn. It did not place the onus on Mr. Feng.

[7] Accordingly, the totality of the evidence and the available inferences in support of the application were the following:

(i) There was a strong smell of fresh marijuana coming from the car;

(ii) The car contained two garbage bags with traces of marijuana;

(iii) The car contained gardening tools suitable for use in a marijuana grow operation;

(iv) Feng had $9,616.98 wrapped in two bundles including nine-five $100 bills;

(v) There was no innocent source for the funds offered by Feng at the time of his arrest or later and he did not respond to the application;

(vi) Searches of Casino and Lottery records for Feng having won the money were negative;

(vii) Drug trafficking is a cash business (Attorney General of Ontario v. Chetterjee (2007), 86 O.R. (3d) 169 (C.A.) at para. 46; and

(viii) Feng had a previous criminal record for possession for the purpose of trafficking and production.

[8] That evidentiary basis alone provided a strong case the currency was probably the proceeds or an instrument of unlawful activity without expert evidence. While expert evidence might have been introduced, it was not essential to establish the currency was proceeds of unlawful activity. The Crown’s evidence was unanswered and the inferences unchallenged.

[9] In addition, we are persuaded the applications judge erred in failing to rely on Feng’s consent to the forfeiture, This was a civil proceeding in which there was nothing to suggest anyone other than the Attorney General and Feng had an interest. The parties, through counsel, reached an agreement that should have been relied upon by the applications judge. That the consent did not contain an express acknowledgement the currency was proceeds of crime or an instrument of unlawful activity was of no moment. The consent stated that the parties consented to the order in the attached form including Feng’s consent to the forfeiture of $7,116.98 “to the Crown of Ontario pursuant to the Civil Remedies Act.” After obtaining legal advice, Feng consented to an order that could only be made if the money was proceeds or an instrument of unlawful activity. His agreement was implicit in the consent.

[10] When this factor is added to those noted earlier, there was an overwhelming case for forfeiture subject to the final issue addressed by the applications judge, whether the forfeiture would clearly not be in the interest of justice.

[11] The applications judge determined that if the Attorney General had met the onus she would not grant forfeiture because to do so would clearly not be in the interests of justice. In making this determination the applications judge relied on the court’s empowerment to consider overarching issues of fairness and proportionality even when the standard was met. She determined that if the onus was met it would be unjust to make the order sought because of the possibility that Mr. Feng’s Charter rights were violated and the withdrawal of the charges.

[12] Subsequent to the release of the decision under appeal, the Court of Appeal examined the meaning of “clearly not in the interests of justice” in Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363. Doherty J.A. held that even where the applicant met the onus there would be cases where “forfeiture would be draconian and [an] unjust result.” The test was not merely balancing the pros and cons of forfeiture. Rather, “clearly” spoke of the cogency of the claim advanced for relief from forfeiture. The party seeking relief must demonstrate that in the particular circumstances, forfeiture would be “manifestly harsh and inequitable.” Relief from forfeiture should be very much the exception and should be granted only where the party seeking relief from forfeiture clearly makes the case that forfeiture would be an inequitable and unjust order in all the circumstances.

[13] Finally, the Court of Appeal in that case held the applications judge erred in finding the withdrawal of the charges was an issue to be considered on the “best interests of justice” issue. That fact had no relevance in the exercise of the discretion. There was no unfairness where the federal prosecutor chose not to prosecute and the provincial Attorney General chose to pursue forfeiture. The applications judge here relied on the judgment of the application judge in Darlington Crescent.

[14] Applying the criteria for the exercise of discretion from the Court of Appeal, we are persuaded the applications judge erred. That charges were stayed or withdrawn is not a bar to forfeiture, neither is it a factor to consider here in assessing whether it would be in the interests of justice to make the order. The possibility that there was a Charter violation cannot be a basis to conclude it would clearly not be in the interests of justice to order forfeiture. There was no application for relief from forfeiture by Feng or a claim his rights were violated and it cannot be said the finding of a possible breach provided a cogent reason to grant relief from forfeiture.

[15] In the result, the order of the applications judge is set aside and an order to issue in terms of the consent filed.

Costs

Jennings J.

[16] I have endorsed the back of the Record, “This appeal is allowed for oral reasons delivered today. Order to issue in terms of the consent filed before the applications judge. No costs being sought. None are ordered. Approval of form and content of the order by Feng dispensed with.”

Durno J.

Jennings J.

Swinton J.

Date of Reasons for Judgment: June 17, 2011

Date of Release: June 21, 2011

CITATION: Attorney General of Ontario v. $9,616.98 in Canadian Currency, 2011 ONSC 3820

DIVISIONAL COURT FILE NO.: 242/10

DATE: 20110617

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

JENNINGS, SWINTON AND DURNO JJ.

BETWEEN:

ATTORNEY GENERAL OF ONTARIO Applicant (Appellant)

– and –

$9,616.98 IN CANADIAN CURRENCY (IN REM) Respondents (Respondents in Appeal)

ORAL REASONS FOR JUDGMENT

DURNO J.

Date of Reasons for Judgment: June 17, 2011

Date of Release: June 21, 2011