COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v. 714 Railton Avenue, 2014 ONCA 397

DATE: 20140516

DOCKET: C57097

MacPherson, Cronk and Gillese JJ.A.

BETWEEN

Attorney General of Ontario

Applicant (Appellant)

and

714 Railton Avenue, London, PIN# 0813-0834 (LT) (in rem) and Russell Kenneth Dowdle

Respondent (Respondent in Appeal)

William J. Manuel and Dan Phelan, for the appellant

Malcolm B. Scott, for the respondent

Heard: February 25, 2014

On appeal from the order of Justice Helen A. Rady of the Superior Court of Justice, dated April 16, 2013, with reasons reported at 2013 ONSC 1291.

MacPherson J.A.:

A. Introduction

[1] The appellant appeals from the order of Rady J. of the Superior Court of Justice dated April 16, 2013 dismissing its application for a forfeiture order pursuant to the Civil Remedies Act, 2001, S.O. 2001, c. 28 (“CRA”).

[2] The principal issue on the appeal is whether this case meets the “clearly not in the interests of justice” exception from forfeiture in s. 8(1) of the CRA.

B. Facts

(1) The parties and events

[3] On February 24, 2006, members of the London Police Service Drug Unit executed a search warrant at 714 Railton Avenue (the “Property”), a single family home in London owned by Russell Dowdle. The police found a marijuana grow operation with 342 plants, five and one-half pounds of marijuana bud, marijuana seeds, Ziploc bags containing various amounts of marijuana, grow equipment, digital scales, and what police regarded as a debt list. The police discovered that there had been extensive modifications to the home’s electrical wiring and water supply, as well as alterations to the duct work and venting system to permit the venting of marijuana odours.

[4] The respondent Russell Kenneth Dowdle was charged with the production of marijuana and possession of marijuana for the purpose of trafficking under the Controlled Drug and Substances Act, S.C. 1996, c. 19. On December 20, 2006, he pled guilty to the production offence and received a $10,000 fine.

[5] On September 23, 2009, the Attorney General of Ontario (“AGO”) applied for a forfeiture order with respect to the Property pursuant to the CRA. Prior to that, preservation orders relating to the Property were made on April 3 and 10, 2007.

(2) The application judge’s decision

[6] The application judge found that the Property was “an instrument of unlawful activity” and that “Mr. Dowdle does not meet the definition of a responsible owner.”

[7] Turning to the “clearly not in the interests of justice” exception in s. 8(1) of the CRA, the application judge considered the factors set out by this court in Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem) et al., 2011 ONCA 363, 279 O.A.C. 268 (“Darlington”). She found that Mr. Dowdle’s conduct counted against him; he “was involved in a marijuana grow scheme designed to generate profit, the very conduct that the CRA seeks to curtail.” She also found that, “[o]n balance, it seems likely that the profits would have exceeded the value of the home”, thus also favouring forfeiture.

[8] However, the application judge was troubled by a different factor. In his affidavit filed in response to the AGO’s forfeiture application and in the cross-examination on the affidavit, Mr. Dowdle asserted that he pleaded guilty to the production offence only after receiving an assurance from the federal Crown that there would be no attempt to seek forfeiture of his home.

[9] At the conclusion of the hearing, the application judge ordered a transcript of the proceedings before the provincial court judge on December 20, 2006. In her reasons that are the subject of this appeal, she recorded what she discovered, namely, “the following submissions made by the federal prosecutor to the court in support of the joint submission on sentence”:

MR. O’MALLEY: I – this is a case where the residence was restrained. It was restrained based on the different valuation and restrained based on some income information that was available at the time. My friend has provided me today with a number of documents that explain on the – previously unexplained sources of wealth which if not explained would have led us to proceed with the forfeiture application for the home.

THE COURT: Is there a formal application in front of the court?

MR. O’MALLEY: There’s no formal application.

THE COURT: No.

MR. O’MALLEY: There won’t be but I’m going to have to get an order from you to unrestrain the house.

THE COURT: All right.

MR. O’MALLEY: Which I’ll have to draft and give to the clerk.

THE COURT: Well, an order will go unrestraining that to – cease any restraining of the house.

[10] In his reasons for sentence, in which he accepted the joint submission, the provincial court judge said:

I will accept the joint submission and I will fine you $10,000. I will give you 90 days to pay it. And your grow equipment is to be forfeited to the Crown and we have the Crown’s undertaking with respect to registering a cessation of the request for – what is it?

MR. O’MALLEY: It’s basically to unrestrain…

THE COURT: The residence.

MR. O’MALLEY: To vacate the restraint order.

[11] Based on this information, the application judge concluded that “there is evidence that Mr. Dowdle was misled or at the least, lulled into a false state of security that his home would not be the subject of forfeiture.” Accordingly, she held that the interests of justice exception applied and the Property should not be forfeited to the provincial Crown.

[12] The Crown appeals the application judge’s decision.

C. Issue

[13] The sole issue on the appeal is whether the application judge erred in her interpretation and application of the “clearly not in the interests of justice” exception in s. 8(1) of the CRA.

D. Analysis

[14] The appellant submits that the application judge made two errors in her CRA s. 8(1) analysis.

[15] First, the appellant contends that the application judge erred in finding that the “contemplation” of forfeiture by the federal prosecutor engages the “clearly not in the interests of justice” exception in s. 8(1) of the CRA.

[16] In support of this submission, the appellant relies on Chatterjee v. Ontario (Attorney General), 2009 SCC 19, [2009] 1 S.C.R. 624. In that case, the court rejected the argument that the forfeiture provisions of the CRA might in some cases interfere with the sentencing process in a criminal proceeding. Justice Binnie said, at para. 49:

The concern has been that the federal forfeiture provisions will be displaced by the CRA with its lower threshold of proof…. This may be true, but where no forfeiture is sought in the sentencing process, I see no reason why the Attorney General cannot make an application under the CRA. Where forfeiture is sought and refused in the criminal process, a different issue arises. [Emphasis added.]

[17] The appellant points to the emphasized portion of this passage and submits that the application judge’s reliance on the fact that “there was both a prosecution and contemplation of a forfeiture” as sufficient to refuse forfeiture was erroneous.

[18] I do not accept this submission. The application judge was aware of Chatterjee and this court’s decision in Darlington, both of which discuss the interplay between the forfeiture provisions in the Criminal Code and the CRA. She recognized that the federal and provincial Crowns are not indivisible in this context and that a decision by the federal Crown not to pursue, or to abandon, forfeiture in a criminal proceeding does not prevent a provincial Crown from seeking a civil forfeiture order under the CRA.

[19] In this case, however, what the application judge saw in the record of the criminal guilty plea and sentence hearing was language from the federal Crown – “[m]y friend has provided me today with a number of documents that explain… previously unexplained sources of wealth… I’m going to have to get an order from you to unrestrain the house” – and from the trial judge – “an order will go unrestraining…the house… and we have the Crown’s undertaking with respect to registering a cessation of the request for …[t]he residence” – that led her to conclude, and find as a fact, that “Mr. Dowdle was misled or at the least, lulled into a false state of security that his home would not be the subject of forfeiture.”

[20] In my view, this factual analysis, under the umbrella of fairness, is entirely supportable and not in conflict with Chatterjee and Darlington. Importantly, in Darlington, the federal Crown chose not to prosecute the property owner and, apparently, did not consider seeking a forfeiture order. In this case, the federal Crown obtained restraint and management orders, prosecuted and obtained a conviction, and formally agreed to an order lifting the restraint order, and did so in language that a reasonable person could assume meant that although he would have to pay a $10,000 fine and forfeit chattel property worth about $8,000, at least his house was safe.

[21] Second, the appellant submits that the application judge erred in considering the effect that possible civil proceedings might have on the criminal plea bargain process generally. In particular, the appellant challenges this passage in the application judge’s reasons:

I am also concerned that the plea deal process so vital to the orderly and expeditious administration of justice might be impaired if an accused will not entertain a plea arrangement because of concern for future jeopardy.

[22] I agree with the appellant that the application judge’s concern on this point is misplaced. In this court’s decision in Ontario (Attorney General) v. Chatterjee, 2007 ONCA 406, 86 O.R. (3d) 168, the court said, at para. 35:

The Criminal Lawyers’ Association submits that the CRA creates new civil consequences for unlawful acts. This, they argue, will complicate plea bargaining by accused persons as it will often be impossible for the accused to know what civil consequences may flow from such a plea. While this may be true, uncertainty as to the civil consequences of a guilty plea has always existed. Although the CRA has created a new mechanism which, in some cases, will expose an accused to additional civil consequences, this is within the province's sphere of authority and does not frustrate any federal criminal law purpose.

[23] However, my agreement with the appellant’s criticism of the application judge on this point does not mean that her ultimate conclusion is wrong. On the contrary, in my view the resolution of the first issue disposes of the appeal. The reality here is that the federal Crown did and said things in this case (which I do not criticize; he was entitled to make these choices) that led an accused to enter into a plea agreement that he thought, reasonably, involved a final decision that he would not have to forfeit his home. The application judge found this as a fact and, on the record before her, I see no error in this finding and the disposition flowing from it.

E. Disposition

[24] I would dismiss the appeal. The respondents are entitled to their costs of the appeal, which I would fix at $10,000, inclusive of disbursements and HST.

Released: May 16, 2014 (“J.C.M.”)

“J.C. MacPherson J.A.”

“I agree. E.A. Cronk J.A.”

“I agree. E.E. Gillese J.A.”