Court File and Parties
COURT FILE NO.: CV- 22-80259 DATE: 2024-05-21
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ATTORNEY GENERAL OF ONTARIO, Applicant A N D: $48,575 IN CANADIAN CURRENCY (IN REM), Respondent
BEFORE: The Honourable Justice A.J. Goodman
COUNSEL: K. Yeretsian for the Applicant M. Bastawrous, for Mathew Ross-Young, Interested Party
HEARD: January 11 and April 18, 2024
E N D O R S E M E N T
[1] This is an application by the Attorney General of Ontario (“Attorney General”) for a Forfeiture Order under ss. 3(1) and 8 of the Civil Remedies Act, 2001, SO 2001, c. 28 (“Civil Remedies Act”), with respect to the $48,575 in Canadian currency seized by members of the Halton Regional Police Service (“HRPS”) on July 21, 2019. The seizure was made at Club 54, situated at 3345 Harvester Road in Burlington.
[2] The Attorney General submits that, on a balance of probabilities, the seized currency (the “Subject Currency”) is proceeds of unlawful activity and/or an instrument of unlawful activity within the meaning of the Civil Remedies Act and should therefore be forfeited.
[3] Mathew Ross-Young (“Ross-Young”) responded to the application as an Interested Party and seeks an order dismissing the proceeding and remitting the seized property to him.
Background
[4] On July 21, 2019, HRPS received a call from a complainant, who advised that an unknown male had threatened to shoot him. Members of HRPS were dispatched to the complainant’s location at Club 54, situated in Burlington.
[5] The complainant described the suspect as a male with long braids, wearing a long black and white sleeve shirt and observed entering a black Jeep, possibly with three or four other males. HRPS officers arrived on the scene and they observed a male matching the suspect’s description, who was later identified as Ross-Young. He was located by the tailgate of a black Jeep, seen reaching inside the vehicle and removing a cloth bag. Apparently, Ross-Young saw police and immediately tossed the cloth bag over the fence behind the vehicle.
[6] Officers approached Ross-Young, advised him that he was under arrest and ordered him to stop and show his hands. Ross-Young ignored the officers and began walking away from the Jeep. He was again advised that he was under arrest and to lay on the ground, but he ignored police commands. Ross-Young was arrested, was searched, and found to have $3,730 on his person.
[7] A search of the Jeep revealed another large quantity of Canadian currency, three cell phones, a digital scale, ten green sandwich bags, 29 clear Ziplock bags, cannabis and a small quantity of a white substance believed to be cocaine.
[8] The Canadian currency found in the Jeep included loose currency located in the centre console of the Jeep, a vacuum sealed bag of Canadian currency located in the back seat of the Jeep in a black bag, and a large bundle of currency secured with elastic bands located in the back seat of the Jeep in a black bag. Officers could see a sock concealed in the area above the driver’s seat of the Jeep, which was beside a digital scale. Officers were able to fish out the sock and saw that it contained a blue Ziplock bag with a small amount of white powder, which was suspected to be cocaine. The bag Ross-Young had previously tossed over the fence contained a large quantity of cannabis. No firearm was located during the search.
[9] Samples of the seized substances were analysed by Health Canada. The first substance believed by officers to be cocaine was found to contain phenacetin. The second substance was found to contain cannabis. The total quantities of the substances seized were confirmed to be Cannabis – 958.9 grams, Phenacetin – 4.3 grams.
[10] Police determined that the currency seized on July 21, 2019, totalled $48,575 CAD, broken down as follows: $4,155 in loose currency, including $3,730 located on Ross-Young’s person, and $425 located in the centre console of the Jeep, and $44,420 in bundled currency, located in the Jeep, which was counted and photographed by officers. The bundled currency was divided between two bags. The first bag contained one clear plastic vacuum sealed package with four bundles and a quantity of loose Canadian bank notes in various denominations. The total count was $24,440. The second bag contained Canadian bank notes in various denominations bundled with elastic bands in the amount of $19,980.
Positions of the Parties
[11] The Attorney General submits that it has met its onus to establish the forfeiture of the Subject Currency pursuant to the legislation and prevailing jurisprudence.
[12] Counsel for Ross-Young responds that his client was arrested and charged with a series of offences resulting from a criminal investigation. Upon his arrest, a search warrant, which contained significant deficiencies, was exercised on Ross-Young’s electronic devices and his vehicle.
[13] The Attorney General’s position is that the seized funds are proceeds of crime because they were found in Ross-Young’s possession and that he has been involved in unlawful activity. The disclosure throughout the investigation did not reveal that the money seized from Ross-Young was proceeds of crime. Ross-Young argues that the mere possession of funds and a general allegation of unlawful activity is not sufficient to establish a direct connection between the seized funds and the alleged unlawful activity. The Attorney General has not provided any evidence to directly link the seized funds to any specific unlawful activity and its position is based solely on speculation and assumptions. The Attorney General has not met the requisite evidentiary threshold to establish its case.
[14] Ross-Young says that he has provided ample disclosure, including bank records, business records, that clearly show him to be of good character, an active and prominent member of the community, and that his life savings were unlawfully seized after the warrantless search of the vehicle containing his belongings. All of the Subject Currency is from legitimate sources and devoid of any moral blameworthiness or wrongdoing.
[15] Ross Young’s criminal or regulatory charges were subsequently withdrawn or stayed, underpinning the lack of substantial evidence against him. Nevertheless, his life savings were seized and labeled as proceeds of crime, a categorization that lacks any substantiated basis. Ross-Young contends that the Attorney General's application for forfeiture is based on speculation and assumptions rather than empirical evidence, thereby failing to meet the requisite evidentiary threshold to establish that the seized funds are indeed proceeds of crime.
[16] Ross-Young submits that this case serves as a stark reminder of the potential for overreach, misapplication and misuse of the provisions of the Civil Remedies Act. This case presents an opportunity for this Court to reaffirm the principles of justice and fairness by setting aside the forfeiture application, thereby sending a clear message that the Civil Remedies Act cannot and should not be used to target innocent citizens without substantial evidence. It underscores the need for a careful and judicious application to prevent its misuse against innocent citizens like Ross Young.
Issues
[17] Is the Subject Currency, on a balance of probabilities, the proceeds and/or an instrument of unlawful activity? Is it “clearly not in the interests of justice” to order forfeiture of the currency?
Legal Principles
[18] For a forfeiture order, the onus is on the Attorney General to show on the balance of probabilities that either: (a) the property is “proceeds of unlawful activity”; or (b) the property is “instrument of unlawful activity”: Chatterjee v. Ontario (Attorney General), 2009 SCC 19, [2009] 1 S.C.R. 624, at para. 23; Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem), (“Aubin Road”) 2011 ONCA 363 at para. 54; Ontario (Attorney General) v. $13,900 in Canadian Currency (In Rem), 2015 ONSC 2267, at para. 36.
[19] Under ss. 3 and 8 of the Civil Remedies Act, the Court shall make an order forfeiting property if it is satisfied, on a balance of probabilities, that the property is proceeds and/or an instrument of unlawful activity, unless it would clearly not be in the interests of justice.
[20] It is trite law that forfeiture under the Civil Remedies Act, 2001, is a matter of civil and not criminal law.
[21] In Aubin Road, the Court of Appeal for Ontario outlined the procedure to apply the CNIJ exception: (1) The Attorney General must establish that the property is forfeitable; (2) claimants must fail to establish an uninvolved interest holder claim, responsible owner claim or a responsible vehicle owner claim; and (3) the claimant can raise CNIJ. Additionally, relief under CNIJ is “very much an exception” and will only be granted where the party seeking relief “clearly makes the case that forfeiture would be an inequitable and unjust order in all the circumstances”: at paras. 97-100.
[22] In R v. MacKenzie, 2013 SCC 50, [2013] 3 S.C.R. 250, at para. 99, the Supreme Court held that the evidence of police officers based on their experience and training is receivable in these proceedings. Such opinion evidence is admissible without requiring it to be tendered or admitted as expert evidence. In Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem), 2011 ONSC 3820, [2011] O.J. No. 2977 (Div. Ct.) at para. 8, the court held that it was not necessary for the applicant to tender expert evidence: See also (Ontario) Attorney General v. $9,475.00 in Canadian Currency (In Rem), 2014 ONSC 3711, at para. 27.
[23] It is appropriate for the court to admit and consider the evidence of deponent officers based on their experience and training as police officers. The weight to be attributed to the evidence will depend on the nature of the evidence and the officers’ experience.
[24] The jurisprudence also provides that a respondent's failure to provide a credible explanation or to establish a legitimate source for the property will favour a forfeiture order; suspicious circumstances call for a "credible and reasonable answer". The court may take note and draw an adverse inference from a respondent’s failure to adduce such credible evidence.
[25] “Proceeds of unlawful activity” is defined under the Civil Remedies Act, as property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity. An “instrument of unlawful activity” is any property that is likely to be used to engage in unlawful activity that, in turn, would be likely to or is intended to result in the acquisition of other property. The term “unlawful activity” is given a broad definition by the Civil Remedies Act, encompassing any act or omission that is an offence under an Act of Canada, Ontario or another province or territory.
[26] Various trial and appellate courts have recognized in these similar types of applications that drug dealing is a cash business, and persons involved in illegal drug activity frequently carry large sums of money.
Discussion
[27] The purpose of the Civil Remedies Act is to make crime or unlawful activity unprofitable, to capture tainted resources to make them unavailable to fund future unlawful activity and to help compensate victims and the province for the costs of crime or unlawful activity.
[28] Proceedings commenced under the Civil Remedies Act are in rem proceedings, as against the thing, rather than as against the person. As the Ontario Court of Appeal explained in Chatterjee, at paras. 21: “The CRA does not define or create any offence. It has nothing to do with the identification, charging, prosecution, conviction or punishment of the offender. It does not seek to impose a penalty, fine or other punishment and does not provide for imprisonment.”
[29] As such, an offence may be found to have been committed in relation to the subject property, even if no person has been charged with that offence or if a person charged received an acquittal or had the charge stayed or withdrawn. Further, the Attorney General need not identify a particular offence or offender to prove that the property is associated with unlawful activity.
[30] The Attorney General provided evidence from several police officers, including Detective Constable Wilson (“Wilson”), who addressed the bundling of currency, information on drug trafficking and the drug cycle. Premised on his training and experience, Wilson is aware that unlawful activities such as drug trafficking are almost invariably cash based; persons involved in lawful cash-based activities do not usually store significant quantities of currency on their persons, or in their vehicles. This practice is inherently unsafe and is more commonly associated with those involved in unlawful activity; conducting transactions in cash avoids creating a traceable paper record that results from using legitimate financial instruments, such as cheques, credit cards, wire or email money transfers; drug traffickers avoid using financial institutions to store their illicit funds due to the requirement to report to FINTRAC, imposed on financial institutions, pursuant to the Proceeds of various money laundering legislation. Funds placed in financial institutions are also traceable and can be frozen by authorities and individuals involved in profit-motivated unlawful activity may be in the possession of a large amount of cash as a result of a recent sale of illicit product or as a means of purchasing more illicit product for resale.
[31] Courts in Ontario have held that suspicious circumstances, such as the possession of large amounts of currency, call for a credible and reasonable explanation: Ontario (Attorney General) v. $1,650 in Canadian Currency (in Rem), [2008] O.J. No. 2076 (Ont. S.C.). A court is entitled to consider the lack of credible explanation as to the source or purpose of the money and to draw adverse inferences: Ontario (Attorney General) v. $10,000 in Canadian Currency (In Rem), 2014 ONSC 944, at para. 15.
[32] The storage of large sums of money in a vehicle raises such a suspicion, and a court may consider this in determining that the currency is proceeds or an instrument of unlawful activity. In Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem), the Divisional Court concluded that currency seized pursuant to a traffic stop was the proceeds or an instrument of unlawful activity. In doing so, the court relied on the fact that “drug trafficking is a cash business”, among other factors.
[33] A level of suspicion calling for a credible explanation also arises where significant amounts of currency are found in proximity to other indicia of drug trafficking, such as quantities of controlled substances, weight scales and drug packaging material. In addition, the presence of a large quantity of currency in proximity to these indicia leads to a strong inference of drug trafficking.
[34] In cases involving suspicious circumstances, an applications judge may take note of the absence of any evidence documenting a legitimate source for the currency at issue. Moreover, a court can draw an adverse inference from a party’s failure to provide a credible and reasonable explanation for the lawful source of the currency, where suspicious circumstances are present. In other words, application of the exception is not to be determined on a “mere balancing” of interests.
[35] With respect, in his factum, Ross-Young makes assertions that are unsupported by the case law and misconstrues the legislative scheme related to the Civil Remedies Act. As mentioned, forfeiture under the CRA is a matter of civil law, not criminal law. Criminal charges and/or convictions are not a prerequisite to a forfeiture application. Courts have routinely granted forfeiture based on circumstantial evidence; and a forfeiture order is not a collateral attack on s. 490 of the Criminal Code, R.S.C., 1985, c. C-46.
[36] Ross-Young’s assertions that the Attorney General has failed to “connect” the Subject Currency to any specific unlawful activity, or demonstrate the Respondent's “direct” connection to unlawful activity also misrepresents the test that the applicant has to meet. The Attorney General does not have to prove that the Subject Currency is related to any particular offence. It only has to demonstrate that, on a balance of probabilities, the Subject Currency is proceeds and/or an instrument of unlawful activity in general.
[37] The jurisprudence is clear that the applicant can obtain a forfeiture order if it can establish on a balance of probabilities by direct or circumstantial evidence that the money is proceeds or an instrument of unlawful activity in general.
[38] I am not persuaded by Ross-Young’s assertions that he has provided credible information and evidence, thus substantiating his position as the lawful owner of his seized savings through his responding record which includes: Three years of banking history and records with CIBC between 2018 to 2020, Evidence of ACMPR license along with confirmation from Health Canada dated October 26, 2023, confirming his registration certificate number and date of expiry being March 15, 2021.
[39] Overall, I do not accept Ross-Young’s explanations for legitimate or credible ownership of the funds. As examples, Ross-Young’s evidence is that his ACMPR license expired around 2019 and was not renewed. He did not recall how much cannabis with which he was arrested. He indicated that the cannabis was for his personal use, and he thought the amount was in line with the entitlement in his ACMPR license, which is illogical. He confirmed that he would have been unable to consume 958.9 grams of cannabis over the course of one evening, and stated that he had forgotten the cannabis in his vehicle prior to his arrest. He also denied throwing his bag containing cannabis over the fence when he saw police officers approaching, and says the officers are lying about this. He did not recall having a digital scale in his vehicle but said it would have been for his personal use.
[40] Although Ross-Young alleges that he has provided “three years of banking history and records with CIBC between 2018 to 2020”, he, in fact, provided six months of banking documents for 2019, and 12 months of banking documents for 2020. None of these show a withdrawal of, or withdrawals totalling even close to $48,575, nor do they provide any evidence of his finances prior to his July 21, 2019, arrest. Indeed, Ross-Young only provided one bank document for the time preceding his arrest. Instead, his documents show a significant amount of e-transfers and ATM cash deposits in whole numbers, for approximately 18 months after his arrest, when he had transitioned into a different profession.
[41] In this case, not only has Ross-Young failed to provide a credible explanation for the Subject Currency, but he has also failed to adduce tax or other records that could support a finding that he reported enough legitimately earned income that it is plausible that he could reasonably have sourced all the currency from his legitimate earnings.
[42] Ross Young has also provided inconsistent evidence. Examples include, but are not limited to the maximum quantity of cannabis Ross-Young’s ACMPR license. He was entitled to possess is 150 grams of dried cannabis. Upon arrest, Ross-Young was in possession of 958.9 grams of cannabis, more than six times the amount he was permitted by licence to possess.
[43] Ross-Young vacuum sealed the funds, which itself is unusual. He explained that the funds were vacuum sealed so he would not spend them. However, he explained that he was going to conduct some legitimate business at the club at the time. The currency seized from Ross-Young was divided between two bags, one of which contained $24,440 in a vacuum sealed package, and the second of which contained $19,980 bundled with elastic bands. If Ross-Young did not want to spend the funds, it does not make sense that a portion of the funds were vacuum sealed while another portion was bundled.
[44] As mentioned, Ross-Young did not file personal taxes in 2019 and has failed to adduce complete corporate taxes for 2018 – 2020. Instead, he has provided one page of his corporate tax return for 2018 and one page of his corporate tax return for 2019. These documents show that in 2018, Ross-Young had a credit of $6,878.83, and in 2019, Ross-Young owed a total of $9,575.14. These documents do not show Ross-Young’s gross income. I agree with the applicant that the lack of complete records is not due to an inability to obtain records but was due to a deliberate choice to withhold them.
[45] I do not accept the rationale for the significant amount of funds being in the vehicle, and in the manner whey were packaged and located, or his assertions that Ross-Young was at the club on the evening in question to conduct some legitimate business transaction. In my view, all of the interested party’s evidence or assertions were somewhat self-serving, or deficient. In this regard, I accept all of the Attorney General’s submissions on point.
[46] Based on the totality of the circumstances and the evidence in the present case, I agree with the Attorney General that, on a balance of probabilities, the Subject Currency is proceeds and/or an instrument of unlawful activity. The Subject Currency was stored in a manner consistent with money used in or derived from unlawful activity, namely, bundled and kept outside of the banking system. It is reasonable to believe that cash derived from legitimate means would be placed in a bank or other safe storage. Those involved in drug trafficking typically have little or no documentation justifying the large amount of cash in their possession, as found here. This contrasts with cash obtained from legitimate sources, where receipts, withdrawal documents and/or other financial documents, including invoices for services that were paid in cash, can assist in explaining the origin of the cash. The large amount of the Subject Currency as found in this case, is of itself unusual and suspicious.
[47] The storage of the currency is consistent with money derived from unlawful activity, particularly drug trafficking. 958.9 grams of cannabis was seized with the Subject Currency. Other indicia of drug trafficking were also seized, including three cell phones, ten sandwich bags, 29 clear Ziplock bags and an Infyniti digital scale. A large quantity of cash in proximity to weight scales and controlled substances leads to a strong inference of drug dealing. The possession of a large quantity of cannabis alongside Ziplock bags and digital scales suggests an unlawful selling or distribution of the cannabis.
[48] While not dispositive of the issue, I am advised that in 2020, Ross-Young was charged with drug trafficking, possession of cocaine for the purpose of trafficking, and possession of cannabis for the purpose of distribution. The circumstances of the seizure of the Subject Currency are similar. It is reasonable to infer from the multiple incidents that Ross-Young is involved in unlawful activity, namely drug trafficking, and that the seized currency is more likely than not proceeds and/or an instrument of unlawful activity: See Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem). Nonetheless, Ross-Young’s withdrawn charges do not give rise to an arbitrary or unfairness of the forfeiture proceedings: Attorney General v. 43,120 in Canadian Currency, 2011 ONSC 3076, at para. 19.
[49] Finally, I find that there are no known “interests of justice” considerations that would weigh against forfeiture of the Subject Currency in this case. On the contrary, all three factors identified in the prevailing jurisprudence support a forfeiture order.
Conclusion
[50] The available evidence indicates that the Interested Party was involved in the unlawful activity that generated and/or involved the use of the Subject Currency. I agree with the Attorney General that all the Subject Currency is proceeds and an instrument of unlawful activity. Forfeiture of the Subject Currency in this case would advance the purposes of the Civil Remedies Act.
[51] For all of the aforementioned reasons, the Application is granted. An order will go forfeiting $48,575 in Canadian currency to the Crown in the Right of Ontario.