Ruling on Forfeiture Application

Ontario Court of Justice

Date: April 7, 2020

Between:

Her Majesty the Queen

— and —

Zoran Vujisic

Before: Justice L. Chapin

Heard on: June 18, 2019, June 28, 2019, August 26, 2019, August 28, 2019, October 9, 2019, October 25, 2019, November 8, 2019 and November 21, 2019

Reasons for Judgment released on: April 7, 2020

Counsel:

• Ms. K. Gill — counsel for the Applicant
• Mr. R. Napal — counsel for the Respondent Mr. S. Majidi
• Mr. D. Allen — agent for the Respondent Mr. S. Majidi

Introduction

[1] This is a ruling on an application brought by the Public Prosecution Service of Canada for forfeiture of offence-related property pursuant to section 16 of the Controlled Drug and Substances Act (CDSA) or alternatively under s. 462.37(1) of the Criminal Code (Code). The Crown called two witnesses. Mr. Majidi called one witness and testified.

[2] By way of background, on November 7, 2017 a CDSA search warrant was executed at an illegal marihuana dispensary operating under the name Green1 Medz located at 1111-A Finch Avenue West in the City of Toronto. Mr. Zoran Vujisic was the owner of the business and had rented the space from the partial owner and manager of the building, Mr. Sina Majidi.

[3] During the execution of the search warrant the police seized more than 95 pounds of marihuana, cell phones, money counters, vacuum sealers, various electronics, air purifiers and cash. With regard to the cash, $2,810 and $5000 in coin was found in the dispensary and $91,770 was located in a unit below the dispensary in and around two safes along with $497 in coins. The unit below could be accessed by Mr. Vujisic and his employees through a hole in the wall upstairs which had a pulley system connecting the two. The hole in the wall upstairs was concealed by a removable panel that was designed to look like a hot water shut-off box.

[4] Mr. Vujisic was charged with a number of offences as a result of the search and pleaded guilty to a designated substance offence on July 5, 2018. He was convicted of one count of trafficking in a Schedule II substance (marihuana over) contrary to s. 5(2) of the CDSA; one count of possession of property obtained by crime pursuant to section 354(1) of the Code and one count of failure to comply with an undertaking pursuant to s. 145(3) of the Code. An agreed statement of facts was read into the record and Mr. Vujisic relinquished any interest in property and funds seized during the execution of the search warrant.

[5] The Public Prosecution Service of Canada (PPSC) applied for forfeiture of all of the cash and property and served notice of its intention pursuant to s.19 of the CDSA. Until the day of sentencing the issue of forfeiture had been uncontested and forfeiture of all items and cash seized was expected to be part and parcel of the sentencing position. On the day of the guilty plea and sentencing a third party, Mr. Majidi, sent his counsel, Mr. Napal, to court in response to Crown's notice of application. Mr. Majidi claimed to be the lawful owner of the money that was seized on November 7, 2017 from the two safes in the first-floor storage unit.

[6] The Federal Crown Applicant had not been contacted by Mr. Majidi or counsel on his behalf at any time prior to July 5, 2018 despite the fact that the proceedings were ongoing over many months prior to that date. The Federal Crown was taken by surprise by this sudden appearance by counsel on behalf of Mr. Majidi. Forfeiture of all of the money seized during the execution of the search warrant was an integral part of the agreement between the Crown and Mr. Vujisic.

[7] Counsel for Mr. Majidi was not prepared to proceed on that day and requested an adjournment for the purpose of obtaining disclosure of the police file and for the preparation of an expert report.

[8] Counsel for Mr. Majidi brought a Charter application near the end of the proceedings claiming that Mr. Majidi's s. 8 Charter rights were breached and seeking the return of funds seized as well as property found near the two safes pursuant to s. 24(1) of the Charter.

The Crown Applicant Evidence

Agreed Statement of Facts

[9] The Agreed Statement of Facts that was read in when Mr. Vujisic pleaded guilty included an admission that he was selling illegal marihuana and that the first-floor space where cash and marihuana were seized by the police on November 7, 2017 was connected to the second-floor dispensary. There was also an admission that Mr. Vujisic continued to operate the dispensary after the first police raid. He was arrested a second time on November 14, 2017 at the dispensary.

Execution of the Search Warrant

[10] The Crown called Officer James McArthur who participated in the execution of the search warrant. In November of 2017 Officer McArthur was a police officer with the Toronto Police Service and was working in the Street Violence Task Force. The focus of the Street Violence Task Force at the time was investigations into illegal drug dispensaries. The task force was called upon to execute a number of search warrants.

[11] On November 7, 2017 Officer McArthur attended a briefing in the morning at 10 a.m. and was informed that he would be detailed as a search officer. Officer McArthur was in plainclothes and was driving an unmarked police vehicle. He arrived at the building where the search warrant was to be executed at 12:30 p.m. and parked in the south parking lot and conducted surveillance of the building. He described 1111-A Finch Avenue. W. as a small square two-story commercial building with a double glass door entrance at the south side.

[12] He observed several people coming and going into the premises in the 50-minute time period he waited until the Emergency Task Force (ETF) arrived at 1:20 p.m. to clear and secure the dispensary. Officer McArthur also noted that there were security cameras on the outside of the building.

[13] Officer McArthur and his team proceeded into the premises after the ETF had cleared it to conduct the search. The door at the entrance of the building was locked and was controlled by a buzzer security system. The control for the buzzer was located upstairs in the dispensary. Once inside the building Officer McArthur observed that the windows on the first-floor had thick steel bars over them.

[14] In order to reach the dispensary, the officers had to climb a set of stairs. There were a number of security cameras in the stairwell. Once officers reached the top of the stairs Officer McArthur observed two more security doors that were controlled by the same buzzer security system. Just beyond the second security door he saw two chairs and an ATM machine up against a wall. There was a row of windows on this wall through which he could see a marihuana display/store area.

[15] As Officer McArthur entered, he turned left and walked down a hallway and then turned right and proceeded along another hallway. The display/store area was located on the right side and could be accessed through a sliding door.

[16] The display/store had a large TV screen hanging on the wall that listed various strains of marihuana along with prices. The strains listed were as follows:

• Red Congolese
• Pink Bubba
• Rockstar Kush
• Gas Og
• Cotton Candy
• Astro Boy – Watermelon cut
• God's Nuken
• Orange Diesel
• PinkStar
• Blue Cheese
• Lemon Pineapple
• Chocolate Chunk

[17] There were also 2 large glass display cases in the room that contained various marihuana related products and a cash till that contained Canadian currency. On the walls there were also several signs indicating that cell phones were not allowed in that area. Security cameras were also observed inside the display/store.

[18] As he continued down the hallway Officer McArthur recalled that there was an office to the right. The office contained a desk, marihuana containers, a vacuum sealer, scales and a control box for the doors to the dispensary. There was also a large air filter. Officer McArthur explained that it was common to see air filters in dispensaries as they help filter the odour of the marihuana.

[19] Across from the office there was a living room with three sofas. This room was the focus of Officer McArthur's search. While searching, he saw what appeared to be a small metal panel that was labelled "water shut-off" with hinges of the type one would commonly find in basements. He thought that this was odd as shut-offs are usually placed in kitchens or bathrooms. There was no water source in the room.

[20] Officer McArthur opened the panel, as he suspected that it was a hiding place or stash area. Upon opening the panel, he observed what appeared to be a box framed with wood. Inside the box there was a copper pipe running between the studs with a spindle shut-off valve on top. The valve was also unusual as it was the type normally used for outside garden hoses.

[21] He reached down to grab a pipe and noticed that the framed-in box slid up and down and that the copper pipes weren't attached to anything. He removed the box and there was a 10 by 10-inch hole behind it. He looked down the hole and could see directly into the unit below. There was a blue rope that acted as a pulley system from the room he was in to the room below. He could see that there were a number of vacuum sealed bags filled with marihuana and cash in the unit below.

[22] Officer McArthur was concerned that there may be someone below who would dispose of the evidence because the ETF had not gone into that area. He enlarged the hole by breaking the drywall and had a second officer observe while he lowered himself down into the room below. The room appeared to be a storage area. His belief was that dispensary workers had thrown the bags of marihuana down into the unit below.

[23] Officer McArthur landed downstairs where the marihuana bags were and observed that he was in a room with a wall and a door and no ceiling. Photographs of the blue rope coming down from the second floor were entered as exhibits. The blue rope appeared to be attached to the wall with a metal hook of some sort.

[24] Officer McArthur believed that the storage space he climbed down into was part of the dispensary because there was no ceiling separating the two areas and the pulley system connected the two spaces. Officer McArthur had seen hidden storage areas like this during the execution of other search warrants.

[25] Officer McArthur cleared the rest of the area and returned to the first storage area where he had observed the bags of marihuana and cash. Officer McArthur noted that there were two safes in the room, a large safe and a small safe. The bags of marihuana did not appear to be organized. 1 or 2 of the zip lock bags of marihuana had landed on the small safe and the rest were on the floor. The large safe was open and the small one was locked.

[26] The large safe contained a number of documents and notebooks as well as some stacks of cash. A locksmith was called by the officers to open the small safe. Officer McArthur had a discussion with a jeweller who was a tenant on the first floor of the building. He had come across the jeweller while he was clearing the first floor. The jeweller advised Officer McArthur that he could contact the property manager. The jeweller called a number and handed the phone to Officer McArthur. The person on the other end of the line identified himself as the property manager.

[27] Officer McArthur explained to the man on the phone that the police had executed a search warrant. There is no dispute that the person Officer McArthur was speaking to was Mr. Majidi. Mr. Majidi advised Officer McArthur that the main floor office was used by him and that he had no knowledge of the marihuana dispensary.

[28] Officer McArthur told Mr. Majidi that he had located an access panel in the dispensary and that bags of marihuana and cash had been found in the area below. Mr. Majidi told Officer McArthur that the large safe was related to a strip club he had an interest in and that the small safe was his. He said the small locked safe had no connection to the marihuana dispensary.

[29] Officer McArthur advised him that a locksmith had been called and that they would be searching the safe because of the marihuana and cash they found in the storage area. Upon hearing this, Mr. Majidi told the officer that he didn't want the safe damaged and spoke to the jeweller and gave him the combination. The jeweller opened the safe for Officer McArthur.

[30] Officer McArthur noted that inside the small safe there were a number of small white boxes. One of the boxes was labelled "10-WEEK ROCKSTAR" and another was labelled "10 W PINK". Officer McArthur confirmed that one of the strains listed on the screen in the dispensary was Rockstar. He seized the contents of the two safes and all of the marihuana and cash that was on the floor.

[31] The breakdown of the cash seized by the police in the storage area is as follows:

• $13,400 found in the large safe,
• $67,080 found in two boxes in the small safe in the second box, and
• 2 bags of Canadian currency containing $8,480 were found scattered around the floor.

[32] There was also cash seized from the second-floor dispensary in the amounts of $395, $1,770 and $645 for a total of $2,810, along with $500 in coin.

[33] In cross-examination Officer McArthur disagreed that it would have been easy to secure the area downstairs and get a search warrant for the first-floor storage area. This was because he couldn't say if there were other people in the area and couldn't guarantee that evidence would not be destroyed. There were several exits on the first floor, and he didn't know if there was someone from the dispensary downstairs. Also, there were only 6 officers conducting the search and there were a number of people found in the dispensary that had to be dealt with. Further, Officer McArthur testified that he had good reason to believe that the storage space on the first floor was part of the dispensary given the false hot water shut off, hole in the wall, pulley system and cash and drugs found in the space.

Expert Evidence

[34] After a voir dire Officer Adam Edgar was qualified as an expert in the identification of strains of marihuana, the pricing of marihuana, the manner of distribution of marihuana, the modus operandi of cannabis dispensaries as well as the identification of proceeds of crime.

[35] Officer Edgar first became a member of the Toronto Drug Squad in May of 2010. In 2015 he became a member of the Clandestine Lab Team. This team investigates marihuana grow operations as well as chemical lab operations, such as the production of methamphetamine, ketamine and GHB. He was involved in the investigation of 81 storefront dispensaries. In 38 of those investigations he was an undercover officer and entered the dispensaries and purchased various amounts of marihuana or marihuana related products. He has performed various roles with respect to the investigations such as surveillance, exhibit collection, central note-taking and the preparation of search warrants.

[36] The marihuana dispensary investigations started in 2016. Initially the illegal store front dispensaries were selling marihuana in bud form. Within months the dispensaries had expanded to selling cannabis oils such as hash, cannabis resin and edibles that came in many forms such as candies and peanut butter. The edibles were infused with either tetrahydrocannabinol (THC) or cannabidiol (CBD). Generally, customers could walk in from the street and would be served at the counter. In 2016 most dispensaries could be entered through unlocked doors and the customer would have the opportunity to handle and smell the marihuana.

[37] The way in which dispensaries operated evolved over time because of police seizing large quantities of the product during the execution of search warrants. Many dispensaries were also being robbed. The dispensaries started installing cameras with closed circuit television capacity. The dispensaries also started locking their front doors and placed security guards at the front with a desk and a chair. The security guards would ask customers for identification before granting them access to the dispensary. Once satisfied with the pre-screening, the security guard would unlock a second door to let the customer into the display area. Over time the security measures taken increased and in 2017 many dispensaries had full security systems.

[38] It was common for dispensary managers to take the revenue from the day and place it into a plastic bag or an envelope and write the date and the amount of money taken in for the day. This enabled the police to determine the daily sales when executing search warrants. Larger amounts of money were generally bundled in $1,000, $5,000 or $10,000 stacks bound with elastic bands that would allow a person to identify the amount just by looking at it. The police saw sales as low as $200 dollars a day and as high as $50,000 a day. The dispensaries that were making the highest profits were operating like chain stores. An example of one of these operations was a chain called Cannabis Culture.

[39] The amount of marihuana and cash being seized by the police decreased for a period of time as the dispensaries started keeping less product and cash on hand. In 2016 when the police first started executing search warrants at the storefronts it would be common for them to be seizing 100 pounds or more of marihuana and anywhere from $10,000 up to $200,000 in cash. Those amounts decreased significantly in 2017.

[40] By 2017 a trend was developing where dispensaries were storing marihuana and cash within the store but behind false walls, or in safes, or basements and attics or the owners and managers would take the drugs offsite. The Toronto Drug Squad came across a number of dispensaries where the marihuana and cash were being stored in a basement or attic of a building or house with no connecting staircase. The method of concealment of the entry point for the hidden storage areas varied and was generally dictated by the structure of the building. In single floor buildings the police were seeing false walls within the back rooms or furniture with cavities that could only be opened with magnets. A trend was developing where only daily sales would be kept at the store and the bulk of the cash would be secured in these hidden storage areas. The daily sales would be bundled and labelled for the day indicated on the envelope or bag. At times post-it notes were used. The cash in the hidden storage spaces were generally bundled in larger amounts.

[41] Officer Edgar discussed the importance to dispensaries of having large amounts of cash available. Cash deposits of more than $10,000 cash within a 24 period have to be reported to the Federal Government. Owners of illegal dispensaries didn't want to be in a position where they had to explain large cash deposits. The owners were also paying their employees in cash and were purchasing product with cash. Access to large amounts of cash was a necessity.

[42] Officer Edgar saw a number of different strains of marihuana during the investigations he was involved with. Some of the more popular strains were OG Kush, Sour Diesel, Pink Kush and Rockstar. The pricing of various strains was related to the amount of THC or CBD in the marihuana. Strains with a higher concentration of THC or CBD would sell for more. Generally, stores with fewer strains would generate less income. At the gram level he had seen prices as low as $8 a gram for marihuana in bud form and up to $90 a gram for shatter.

[43] Officer Edgar described the operation at Green 1 Medz as a mid-level operation based on the amount of cash and marihuana found as well as the number of marihuana strains (12) listed on the screen found in the display area of the store. Officer Edgar advised that a smaller dispensary would have approximately 3-5 strains for sale and a large dispensary may have 20 -30 strains on offer. Given the average price of marihuana, the 43 kilograms found at this dispensary would be worth anywhere from $344,000 to $645,000 in Canadian currency.

[44] Officer Edgar was shown photographs of the opening in the lounge area of the dispensary where Officer McArthur found the pulley rope and observed marihuana, cash and safes in the area below. Office Edgar testified that this was very similar to other pass-throughs or alcoves that he had seen in dispensaries to keep cash and larger amounts of marihuana separate from the actual dispensary. Officer Edgar had seen similar pulley systems before in other dispensaries.

[45] Officer Edgar viewed photographs of the two safes located in the first-floor storage area where Officer McArthur searched. When viewing the contents of the large safe Officer Edgar testified that the stacks of twenty-dollar bills were bundled in a manner consistent with bundles he had seen in other dispensaries. The largest stack had 10 stacks of 50 $20 bills which had their own elastics around them. Officer Edgar also noted that the stacks of twenties in the photograph with post-it notes on them were consistent with other daily sales stacks he had seen in other dispensaries where the managers write the date and amount of sales on bundles of money.

[46] Officer Edgar was also shown a photograph of the contents of the small safe. His attention was drawn to the boxes that were in the safe labelled "10-WEEK ROCKSTAR" and "10 W PINK" as those are strains of marihuana that he was aware of. He further noted that he saw those strains listed on the screen that was located upstairs in the dispensary. He also observed that there was significant bundling of cash, which was consistent with the bundling of cash he had seen at other dispensaries.

[47] In this case the largest sum of cash was located in the storage area below the dispensary. Officer Edgar testified that this was consistent with what he had seen throughout his investigations at other dispensaries. Larger amounts of money and product would be kept either off-site or in a location that would not be readily found by police or someone who intended to rob the dispensary. He further noted that the money found on the floor in the zip lock bags was consistent with what he had seen in other investigations as employees would pass product and cash through the passageway and only a manager or owner would have access to the storage space.

Evidence of the Respondent

Evidence of Mr. Majidi

Mr. Majidi's Background

[48] Mr. Majidi claims that he is the lawful owner of the money seized by the police from the two safes.

[49] He testified that he has a number of degrees after spending 12 years in University. He has a degree in biology, ecology and evolution from Western University, a degree in engineering water resource from the University of Guelph, a professional engineering certificate from the Commonwealth of Virginia and an MBA from Schulich.

[50] Mr. Majidi has worked in a number of different businesses including engineering, entertainment, food importing and real estate. He has a number of different business enterprises, including a partial ownership of 1111-A Finch Avenue West.

Purchase of 1111-A Finch Avenue West

[51] In 2014 Mr. Majidi purchased 1111-A Finch Avenue West and took possession of it in 2015. Mr. Majidi shares ownership of 1111-A Finch Avenue West with a silent partner. He owns 30% and the partner owns 70%.

[52] Mr. Majidi was responsible for managing the building. He took care of the leases and dealt with any tenant issues including repairs and upgrades. As building manager, his plan was to inspect the units on a monthly basis. His intention was to have the building re-zoned in order to move in a strip club that he had a 50% interest in.

[53] The building at 1111-A Finch Avenue West had 4 units. Three were on the first floor and one was on the second floor. When Mr. Majidi took possession of the building there was a jeweller in the second-floor unit – Unit 4. There was another jeweller in Units 2 and 3 on the first floor and a third jeweller in Unit 1. Units 1 and 2 shared an alcove on the east side of the building and Units 3 and 4 shared a separate entrance on the south side of the building. There are stairs at this entrance that lead up to Unit 4. There was a door between Units 2 and 3, but no doors between Units 1 and 2 and Units 1 and 3. Mr. Majidi's safes were moved into Unit 2 and remained there because they were very heavy and difficult to move. Jeff Morrison was the jeweller in Unit 3.

[54] Mr. Majidi was unable to carry out his plan to move the strip club into 1111-A Finch Avenue West as the City of Toronto would not permit the property to be re-zoned. Because of this, he kept the existing tenants.

Mr. Vujisic Rents Unit 4 of 1111-A Finch Avenue West

[55] The tenant who was in Unit 4 left in the spring or summer of 2016. In examination-in-chief Mr. Majidi testified that Mr. Vujisic moved into the second floor in the summer of 2016. In cross-examination he testified that Mr. Vujisic moved in the summer of 2017. Mr. Majidi was pressed on this because he had said earlier in his testimony that he had left the unit vacant for quite some time – approximately 6 months, as he was hoping to move the strip club in. He ultimately agreed that it was likely only vacant for a month.

[56] Initially Mr. Vujisic rented the space on a monthly basis and then he signed a one-year lease. Mr. Vujisic was paying $3,000 per month originally then Mr. Majidi raised the rent to $4,500. Mr. Vujisic objected. They compromised and settled on $4,000 per month. Mr. Vujisic paid his rent in cash.

[57] Prior to leasing Unit 4 to Mr. Vujisic, Mr. Majidi inspected the floor as he had concerns regarding the electrical system. He did not see the hatch that Officer McArthur located in the back office of the premises. He first saw it after the police raid.

[58] Mr. Majidi's understanding was that Mr. Vujisic would be running a medical marihuana dispensary. He testified as follows in his examination-in-chief:

Q. Now, I'm going to spend a little bit of time on this, if you don't mind. As far as you're concerned, when you – when you leased the premises to Mr. Vujisic, did you know what the purpose – you know, basically what – what Zoran Vujisic was using the – was going to use the premises for?

A. This was around the summer of 2016. It was some kind of court decision regarding medical cannabis. Dispensaries are opening up everywhere and he wanted to open up one. I did a little bit of research, I didn't see anything wrong with it and so I let him open it up in November or late November of 2016.

Q. Right.

A. So, I knew it was a medical dispensary (emphasis added), and he was dealing with people only with medical issues with a medical script. And in December of – or November of 2016, thereabouts, the City came and visited him, raised issues. So, that's when I told...

Q. What kind of issues?

A. I – I don't know the specifics, they said he's in zoning violation.

Q. Okay.

A. So, I said you have to take care of this. He said he took care of it. So, I made him sign the lease then, for one year, just to protect myself. And I didn't hear anything back. That's when I visited the place, it looked – it was fine. It looked clean.

And then again in July, the City raised issues again about zoning. So, I went to visit again, and he said to me – he was communicating with the City. I called the City up, no one answered, so I couldn't get a hold of him directly. So, as in July, I didn't know there was any issues.

Q. But as I understand your evidence, you're saying that as far as – from your research of your own, you know, whatever you did, you – you came to the conclusion that there was nothing illegal about that medicinal marijuana...

A. No. I think at that time, in 2016, there was a court decision affirming people's right to access medical cannabis.

Q. Right.

A. And there was a host of these dispensaries, and no one was closing them down.

Q. Right.

A. And the fact that the City zoning guy came to visit, I mean, kind of reaffirms – if it was a crack dispensary, I'm sure the cops would have been there in five seconds.

Q. Right. And you know, I'm just going to ask you one more – I'm just going to ask you this – sorry, just remind me again, when did you – when did you say you – you leased the premises to Mr. Vujisic?

A. July, August, of 2016. But his lease started in December or January 2017.

Q. When did he actually enter into occupation?

A. When did he start to occupy?

Q. Yeah.

A. The summer of 2016.

[59] In cross-examination Mr. Majidi retreated from his earlier position in examination-in-chief and in sworn affidavits that he knew that Mr. Vujisic was selling "medical marihuana" during the following exchange:

Q. The fact is, and I think this is something that's quite acknowledged, it's not in dispute, you knew he was selling marijuana?

A. I did not know he was selling marijuana. I knew he was dealing with marijuana issues and he was dealing with people with medical prescriptions, so it was medical prescriptions – he had a medical prescription, everybody there had a medical prescription. He was collecting prescriptions. The specifics of it I did not know. I – I knew the City had been in there, they'd seen what he did and they okayed it. That's all I knew.

Q. All right. So, you thought he was selling marijuana to people with medical prescriptions?

A. I did not say that. I knew he was dealing with prescriptions. He was getting a doctor and a chiropractor.

Q. Okay, one second. When you say he's dealing with prescriptions, what is your understanding of what that means, dealing with prescriptions?

A. It can mean multiple things. He's collecting and he's referring them to doctors. He's doing – there's – there's a huge practice of doctors being referred and people getting commissions on it. There is nothing – I did not see anything that he was doing anything wrong. The City was in there. The City said it's okay, he can get a lease so I assumed it was okay.

Q. Okay.

A. If the City came back and said he's doing something illegal, he would have been gone. He was on a month to month.

[60] After this exchange the Crown asked Mr. Majidi to review his signed and sworn affidavit. He reviewed it and changed his evidence again in the following exchange:

Q. And so you're telling us today, you understood it to be a marijuana dispensary but when you went in, you didn't see any product?

A. No, I saw the medical forms, they showed me all their medical stuff. All the – and they actually asked me to introduce – it was a chiropractor. I introduced a chiropractor to them because they wanted someone to do medical examinations and that was my extent of my understanding. And the City never said anything to me to the contrary.

Q. Okay. My question was, so when you went in, you're telling us that you didn't see any marijuana product?

A. Yeah, there were marijuana products but I didn't anything for sale. They had a medical licence. He showed me his prescription.

Q. No, that's fine. I'm not talking about your understanding of the medical nature of it. You're saying, I did see marijuana products but he has a licence and I didn't see anything for sale, so you saw some products there?

A. I did see some products, yes.

Q. Okay. All right. And so your assumption was that these things were just to view but they weren't for sale?

A. No, for personal use.

Q. Pardon?

A. It could have been for personal use.

Q. So, you assumed that the marijuana there was for his personal use?

A. His or somebody else's personal use.

Q. And I guess you would have seen this item in the – in the – in the display cases?

A. Display case and in the kitchen.

[61] In cross-examination Mr. Majidi was asked whether or not he made any inquires of the City to make sure that Mr. Vujisic was complying with all City requirements. He testified that he had left a voicemail for a man named Stanley Fumez and that he did not get a call back. Mr. Majidi did nothing further.

The Sources of the Cash Found in the Large and Small Safes Located on the First Floor of 1111-A Finch Avenue West

[62] Mr. Majidi's evidence was that there were essentially two sources for the cash that was found during the execution of the search warrant.

[63] In June of 2017 the strip club was closed, and he moved a safe with a float of $5,000 to $15,000 over to 1111-A Finch Avenue West. He was hoping to revive the strip club. There were ongoing liabilities relating to the strip club and he would make regular deposits at the bank but would keep cash in the large safe. He would also put any extra cash from other businesses in the safe. Mr. Majidi testified that there was paperwork in this safe related to the strip club business as well as documents for a wholesale food business that were seized by the police.

[64] The main source of the cash in the small safe came from selling food and water products wholesale. He started this business in 2016. Mr. Majidi had a numbered company, 9755683 Canada Inc. (9755683) for buying and selling food in skids and containers. This was not his main source of income and was meant to supplement his earnings. Prior to starting this business Mr. Majidi estimated that he had between $70,000 and $80,000 in the safe.

[65] The food products Mr. Majidi was selling were rice, banana peppers and roasted red peppers. He would purchase containers from a company named IGG International Inc. (IGG) using cash and then would use space in their warehouse to store the goods before selling the products to IGG customers/distributors at an increased price for cash. He would have buyers in mind when he purchased containers.

[66] In cross-examination Mr. Majidi testified that he was a 50% shareholder of IGG and that Giovanni Daniel is a partial owner who operates the business. He also indicated in cross-examination that when he started this venture with IGG, IGG owed him money and that is why he went to a cash system to safeguard himself. He testified that previously he would give Mr. Daniel a cheque and tell Mr. Daniel to pay him after he sold the food products. Mr. Majidi said it was like pulling teeth to get the money back. If Mr. Majidi was a purchasing container from IGG, he would go to the warehouse with cash for the entire container.

[67] He would also buy products from other companies and sell them to IGG if IGG didn't have the money at the time. The main company Mr. Majidi would sell to was Sun Distributing Limited. They would pay Mr. Majidi in cash. The denominations of the bills would vary. In cross-examination Mr. Majidi said that IGG would make the arrangements for receiving the goods he purchased, and they would also handle the logistics of selling his goods. He did not pay a fee to IGG for these services.

[68] The buyers would pick up the goods from IGG and would pay Mr. Daniel or Sun Distributions. Mr. Majidi would rely on Mr. Daniel to set the price for the skids he was selling as Mr. Majidi did not know what the market rate was.

[69] Mr. Majidi would purchase a container of peppers for $40,000 and then would sell it and make $5,000 or $6,000. He didn't have an overhead cost because IGG wasn't charging him for the storage space. He would put the profits in the bank and put the cash back in the safe. The cash in the safe would stay the same and he guessed that he would be making 80,000 to 100,000 per year in profit from the business.

[70] Mr. Majidi said he didn't have records for these transactions as they were seized by the police. Mr. Majidi testified that he didn't need a fancy record-keeping system because he was dealing in small quantities and at times, he would use post-it notes or just determine what had been picked up by looking at what was in the warehouse at the time. In cross-examination the Crown pointed out that it seemed that the police had not seized Mr. Majidi's records. Mr. Majidi himself had included a summary of sales as well as specific receipts for the business in documents that his lawyer had filed with the court. The invoices and the receipts filed covered the relevant time period. Mr. Majidi said he forgot that he had issued sales invoices. When asked where the invoices had been found, he said they were in a drawer at IGG.

[71] When asked who was doing the bookkeeping for Mr. Majidi's numbered company, he couldn't recall. He agreed that Mr. Glen Ciarabellini was not doing the bookkeeping for the numbered company so there was no reason for him to keep the business records at 1111-A Finch Avenue West.

[72] The invoices from IGG to 9755683 Canada Inc indicated that the products were to be delivered to his house. When cross-examined about this his explanation, was that it was understood that the products would be delivered to IGG.

[73] Mr. Majidi was cross-examined regarding the invoices as most of them reflected that he would purchase the goods and sell them for a profit on the same day. His response was that he would do the paperwork on the same day to get it out of the way and said, "So, I must have done it on the same day. I completely just have no idea why it slipped my mind." Then, he said that he would bill it that way and they would pay him in installments. Mr. Majidi was pressed on the fact that his earlier evidence was that he sold skids separately and not the entire container at once. He said the following:

A. Like I said, people come and buy skids at a time, he arranges it. Either he takes it there, they come and pick it up. Like, Giovanni does not ship anything anywhere, I do not ship anything. So, he might buy it on paper, but it's still sitting in the warehouse. Like, I'm not – I'm not letting....

Q. So, it's up to him to determine when he wants to come pick up his products?

A. Yeah, he makes money selling.

Q. Well, obviously. But...

A. Yeah.

Q. ...I'm trying to understand....

A. Yeah.

Q. He paid you, it says, for the entire container?

A. On paper it says that, but I get paid in installments. And the record of those payments are the bank statements.

[74] Mr. Majidi said that the money was collected informally. He was asked further about the method of payment his buyers would use. His response was somewhat confusing. Initially he indicated that usually someone would go and collect the payment after the goods were picked up. Then, when asked if he picked up the payments, his response was:

A. No, no, it's gone – someone goes to collect it or they give it to Giovanni and he takes it. Or everyone has – there's multiple layers – sorry – there's multiple layers of relationships. Not just he sees them for this, he sells them other things. It just – you know, everyone knows everybody else. There is no – there's a level of trust there, because if you screw him on deal, you lose everything else. You lose all the opportunities.

[75] Later in his cross-examination he said that he just gets the cash from Mr. Daniel and would deposit the profits to the bank and put the rest in the small safe in Unit 2. He also said that he might not get all of the cash that was collected because someone might take a fee in the following exchange:

Q. And so, now in all of this, you pay no transportation costs, you pay no taxes or fees to import the items. Is – that's all included in the 20 to $40,000 you pay for the container?

A. Yes. Yes.

Q. Okay. So, that covers all of those.

A. Yes.

Q. Shipping, transit...

A. Yes.

Q. ...taxes, everything?

A. Yes. Now, I don't want to speak for someone else, but remember the cash I receive is not necessarily the cash that was collected. So, you know, somebody might take a little fee for themselves, you see what I'm saying?

Q. Informally?

A. Informally, I – I don't know, I can't say for somebody else. I just know this is the cash I got, this is the cash I wanted...

Q. Mm-hmm.

A. ...and I deposited some and I put the rest in the safe.

Q. All right.

A. That's it.

Q. It's a little bit loose?

A. Yes.

[76] The cash from 9755683 would be stored in the small safe. Mr. Majidi described it as working capital for that business. Mr. Majidi would use the cash for various things. At times he would pay contractors in cash. He also would loan cash to friends but said he would not make money on the loans. His evidence was that people had lent him money in the past on a handshake and he would do the same for others. He would not have a written agreement with these individuals that he lent money do. His explanation was that he was building relationships with people.

[77] Mr. Majidi testified that he no longer was selling goods with this numbered company because the police seized all of his cash. He added during his cross-examination that the police also seized some light fixtures that were worth $4,800 to $5,000. This allegation was not put to Officer McArthur. Then Mr. Majidi changed his evidence and said that the light fixtures and computers were taken on the second day of the raid. However, he agreed in cross-examination that he wasn't present during the second raid and couldn't say who was or was not able to gain access to his unit.

Explanation of the Boxes Labelled "10-WEEK ROCKSTAR" and "10 W PINK" Found in the Small Safe

[78] Mr. Majidi testified that he was aware that "Rockstar" was a common strain of marihuana. His evidence was that Mr. Vujisic must have left the boxes labelled with strains of marihuana in Unit 2 on the first floor that he occupied for a brief two-week period in early 2017. Mr. Majidi found the boxes later on the floor and thought they were the perfect size for his cash.

[79] Mr. Majidi testified that at the end of June in 2017 he took over Unit 2 where the safes were found and used it as an office. He used the office for storage and would keep bookkeeping materials there as well as cash. He had a bookkeeper, Mr. Glen Ciarabellini, who would come into the unit on Tuesdays to work on the books for the strip club. The only people that had access to Unit 2 were Mr. Majidi, the jeweller and the bookkeeper. Anyone else had to go through Mr. Majidi.

[80] Mr. Majidi would use this office space roughly once a week as he also worked at IGG and at home. He had a desk, computer and a printer there. He would work in that office anywhere from 5 minutes to hours at a time. His workspace was close to the two safes.

Execution of the Search Warrant at 1111-A Finch Avenue West – November 7, 2017

[81] Mr. Majidi testified that on November 7, 2017 he received a call from a tenant of his who rented space at 1111-A Finch Avenue West. The tenant, Mr. Jeff Morrison, put a police officer on the phone. The officer advised Mr. Majidi that they had executed a search warrant at the upstairs unit and that as part of the search they came downstairs as there was money and marihuana on the floor. The officer told him that he was bringing in a locksmith to open the locked safe and that he wasn't interested in the contents of the safe as long as there were no drugs found in it.

[82] Mr. Majidi did not want the police to break the safe, so he gave the combination to Mr. Morrison. He was under the impression that the police would not take the cash. His recollection was that the officer told him that he was only interested in drugs. Mr. Majidi gave the combination to the jeweller. Mr. Majidi was still on the phone with the police officer when the small safe was opened and testified that the officer asked him why he had so much cash. Mr. Majidi replied that it was his cash. Some of it was from rent and was in a bag and the rest was organized and stacked. Then the officer said that all of the money was proceeds of crime and they were going to take it.

[83] Mr. Majidi said that he was shocked when he found out that the cash was taken and said he would have called a lawyer if he thought the police would be taking the money in the safes.

Legal Action After the Execution of the Search Warrants at 1111-A Finch Avenue West

[84] Mr. Majidi was questioned in cross-examination as to the steps he had taken after the police raided his office. Mr. Majidi said that he did speak with his lawyer immediately after the first search warrant was executed but agreed in cross-examination that he took no action until July 5, 2017. His explanation was that he was not familiar with the system. Mr. Majidi was asking Mr. Vujisic what was going on. According to Mr. Majidi, Mr. Vujisic told him he couldn't do anything unless Mr. Vujisic spoke to his own lawyer.

[85] Mr. Majidi testified that he received disclosure from Zoran Vujisic because Mr. Vujisic was asking him if the money was his. Mr. Majidi said that he received 200-300 pages of disclosure of the police file.

[86] There was no other explanation as to why he had done nothing to assert his claim prior to that date.

Evidence of Ron Smith

[87] Mr. Ron Smith is an accountant and was hired by Mr. Majidi to give expert evidence on this proceeding. I did not qualify him as an expert as his evidence was being introduced for the purpose of showing that Mr. Majidi had a large income such that it was feasible that he would have the amount of cash on hand that was located in the safes. I did not need his evidence to make that determination given that a I had income tax records for Mr. Majidi that achieved that objective.

[88] Mr. Majidi called Mr. Smith as a witness to testify about the IGG food business. Mr. Smith attended the IGG warehouse in Vaughan Ontario on January 29, 2019. Prior to attending the warehouse, he went through the company's website. The purpose of this visit was to establish that this was a legitimate company that housed products that Mr. Majidi had sold through his numbered company for cash. The company operates under the name of Daniel's and purchases food products. Mr. Smith attended at this location once.

[89] Mr. Smith met with Mr. Majidi, Mr. Allen and his assistant, a private investigator, Mr. Daniel and Mr. Bellini in a room provided by Mr. Daniel. Mr. Smith wanted to understand how the company operated to see if he could back up the cash sales from IGG to Mr. Majidi's company with paperwork. They met for approximately 2 hours and then did a quick five-minute walk around the warehouse. Mr. Smith took pictures of products in the warehouse. Copies of the photographs of food products were filed as exhibits in the proceeding.

[90] In cross-examination he conceded that he didn't ask Mr. Daniel, the owner, if the payments were in cash or what the company's policies were with respect to payments. He also did not ask if the products they sold in 2019 were any different than the products sold in 2017. Mr. Smith did not visit Mr. Majidi's warehouse or any of his businesses. Mr. Smith had been told by Mr. Majidi that Mr. Majidi had warehouse space at IGG but he did not ask Mr. Majidi to show him the space he rented in the warehouse. Mr. Smith thought that it was irrelevant as it was two years after the time in question. Mr. Smith's understanding was that Mr. Majidi no longer had space at the warehouse. Mr. Smith never saw any agreements between Mr. Majidi and IGG.

[91] Mr. Majidi provided Mr. Smith with copies of his income tax returns which showed that he earned approximately $220,000 in the years 2014 to 2017 before taxes.

Position of the Parties

Position of the Crown Applicant

[92] The Crown Applicant submits that the evidence clearly established on a balance of probabilities that the property and cash located by Officer McArthur is offence-related property under the CDSA and proceeds of crime under the Code.

[93] The Crown submits that the circumstantial evidence shows; that the required nexus between the marihuana dispensary on the second floor of the building and the cash and drugs located in the storage area below has been established.

[94] The Crown notes that the Agreed Statement of Fact is evidence on the Application. It demonstrated that there was an illegal dispensary operating on the second floor of the building connected to the unit below by a pulley system that was accessed through the false hot water shut off box in the dispensary located by Officer McArthur.

[95] The Crown submits that the drugs and cash in clear plastic bags scattered on the floor along with the boxes of cash in the small safe labelled with two of the strains of marihuana listed on the price list in the dispensary lead to a strong inference that the cash was offence-related. In addition to this, the Crown points to the expert evidence of Officer Edgar who provided evidence as to the growing trend of owners of dispensaries to create hidden spaces to store their product and cash to prevent seizure by the police or theft from criminals. Further, the Crown submits that the bundling of cash located in the small safe was consistent with the bundling the police had been seeing when seizing cash from dispensaries.

[96] With respect to the credibility of the officers, the Crown submitted that they gave consistent clear evidence that was corroborated by the physical evidence and that their evidence was not shaken in cross-examination.

[97] The Crown submits that the evidence of the Respondent Mr. Majidi was not credible, and it was constantly changing while he was testifying. The Crown further submits that his viva voce evidence contradicted the sworn affidavits that he had filed in this proceeding. In the Crown submission, Mr. Majidi has not established lawful ownership of the money found in the two safes and has not shown that he was not complicit in the operation of the dispensary.

[98] The evidence of Ron Smith was irrelevant in the Crown's submission as he had no information as to how the payments were made for the goods purchased and sold.

[99] With respect to the Charter application, the Crown takes the position that the Ontario Court of Justice does not have the statutory or implied jurisdiction to determine a third-party claim under the CDSA or Code. Even if the court did have the jurisdiction to determine the Charter claim, the Crown takes the position that the remedy sought is not available, if I find that the money was offence-related property or proceeds of crime it would be contrary to public policy and would bring the administration of justice into disrepute if it was given to Mr. Majidi.

Position of the Respondent

[100] The Respondent submits that the Crown Applicant has not established any connection between the dispensary and the cash located in the two safes. The Respondent's position is that the drugs and cash in the plastic bags were hastily dropped down into the first-floor unit by employees and Mr. Vujisic in response to the police raid. The Respondent submits that I should accept the explanation provided by Mr. Majidi that the boxes found in the small safe (that had the names of marihuana strains written on them) were found by Mr. Majidi after Mr. Vujisic had occupied the first-floor space for a brief period of time.

[101] The Respondent submits that it would be purely speculative to find that the cash in the safes are offence-related property or proceeds of crime.

[102] The Respondent submits that the inconsistencies in Mr. Majidi's evidence were all minor in nature and should not detract from his credibility. The Respondent further submits that Mr. Majidi steadfastly claimed that the money was his and that position never changed.

[103] The Respondent submits that the evidence of Mr. Majidi's income corroborates his evidence that he had substantial amounts of cash available to him. Further, the Respondent submits that the evidence of Mr. Smith corroborates the evidence of Mr. Majidi, that there was a legitimate cash food business that he was engaged in during the relevant time period.

[104] The Respondent also submits that the Crown must show that there was some positive act in order for a finding of collusion and that no such act has been established in evidence.

[105] With respect to the Charter argument, the Respondent takes the position that his s. 8 right to be free from unreasonable search and search was breached, as the search warrant was for the dispensary and did not cover the first floor. The Respondent seeks to have the cash seized by the police from the two safes returned to him as relief pursuant to s. 24(1) of the Charter.

Analysis

The Legal Framework

[106] The Crown Applicant has applied under both the CDSA and the Code provisions for forfeiture of the property and money seized by the police in this case. Both regimes set out the procedure to be followed.

The CDSA Forfeiture Framework

[107] Section 16(1) of the CDSA sets out that where a designated substance offence was committed in relation to the offence-related property, the court shall order forfeiture if satisfied on a balance of probabilities that the property is related to the offence.

[108] Section 2 of the CDSA provides that a designated offence is an offence under Part 1 of the Act, except for s. 4(1). Mr. Vujisic pleaded guilty to trafficking of marihuana which is a designated offence.

[109] Section 16(2) of the CDSA provides that the court may still order forfeiture of the property even if the court has not been satisfied that the property is related to the commission of the designated offence if the court is convinced beyond a reasonable doubt that the property is non-chemical related offence-related property.

[110] Section 19 of the CDSA allows a third party to make a claim for property that otherwise would be forfeited if the court is satisfied that the party is a lawful owner and appears to be innocent of any complicity or collusion in the designated offence.

The Code Forfeiture Framework – Part XII.2

[111] The forfeiture provisions in the Code mirror the forfeiture provisions in the CDSA. S. 462.37 provides that where an offender is convicted of a designated offence the Crown can apply for forfeiture of the proceeds of crime and that the court shall order forfeiture of the proceeds if satisfied on a balance of probabilities that the proceeds were obtained through the commission of the designated offence.

[112] S. 462.3 of the Code provides that a designated offence is one which is any offence that may be prosecuted as an indictable offence. In this case, all of the offences Mr. Vujisic pleaded guilty to are designated offences.

[113] Proceeds are defined broadly as:

"any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence, or

(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence."

[114] S. 462.37(2) allows the court to order forfeiture of the proceeds even if the court is not satisfied that the proceeds were connected to the designated offence if the court is satisfied beyond a reasonable doubt that the proceeds are proceeds of crime.

[115] And, similar to the CDSA, the Code provides a mechanism for a third party to claim relief from forfeiture in s. 462.42. The section requires that the person not be charged or convicted of a designated offence and that party must appear to be innocent of any complicity or collusion in the designated offence.

[116] Given this, I agree with the submission of the Crown that the authorities interpreting these provisions apply to both forfeiture schemes.

The Caselaw on Forfeiture – General Principles

Crime Shall Not Pay

[117] In R. v. Craig, 2009 SCC 23, [2009] 1 S.C.R. 762, the Supreme Court of Canada considered whether there was an interdependent relationship between a forfeiture order for offence-related real property and the CDSA and other sentencing consequences for the first time. The Court endorsed the description of Wittmann J.A. of the purpose of the forfeiture scheme within the CDSA in R. v. Grimsby, 2000 ABCA 261, and set out the passage at para. 16 of the judgment:

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.

At para. 17 of the judgment the court referred to his discussion as to how the legislation could prevent, to a certain extent, future offences by removing offence-related property that could be used to commit further offences.

[118] The Court went on to describe the broad definition of offence-related property in para. 23 and noted at para. 41 that the legislation is aimed at taking offence-related property out of the hands of criminals and those who would allow 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." Later in the same paragraph the court found that this approach 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."

[119] The court went on to discuss the very broad nature of offence-related property that will be caught in the dragnet of forfeiture law given that property that is not connected to the designated offence can be forfeited if the Crown proves beyond a reasonable doubt that it is offence-related property.

[120] In R. v. Wilson (1993), 15 O.R. (3d) 645 Justice Doherty, writing for the Ontario Court of Appeal, set out the purpose of the proceeds of crime legislation at page 4 of the decision stating:

The purpose of Part XII.2 is clear. It is intended to give effect to the age old adage that crime does not pay. It is now recognized that some crime is big business, and that massive profits, both direct and indirect, can be made from criminal activity. Part XII.2 is a response to that realization and provides a comprehensive scheme whereby those direct and indirect profits may be located, seized and eventually forfeited to the Crown: R. v. Clymore (1992), 74 C.C.C (3d) 217 at p. 231, 16 W.C.B. (2d) 538 (B.C.S.C.) ; R.G. Mosley, "Seizing the Proceeds of Crime: The Origins and Main Features of Canada's Criminal Forfeiture Legislation"

[121] In R. v. Nikitczuk, [2009] O.J. No. 2438 SCJ the Supreme Court of Canada referred to the far-reaching nature of the legislation. Mr. Nikitczuk was charged with conspiracy to traffic cocaine along with others. He was seeking to have a truck returned to him that had been seized by police prior to the trial. There was no cocaine found in the truck but there was a ledger that the Crown alleged was a record of drug transactions. At para. 16 of the decision the court endorsed the text "Money Laundering & Proceeds of Crime" which discussed the very broad nature of offence-related property at page 181:

The reach of offence-related property in both the Criminal Code and the Controlled Drugs and Substances Act is extremely broad, in terms of both the definition's linguistic and geographic scope. ...

Apart from its geographic scope, the definition of offence-related property is extremely broad. It is difficult to imagine anything in any way related to the commission (or intended commission) of a criminal offence that would not be caught within the definition's dragnet. The most obvious examples include vehicles, whether they be used to make a drug delivery, to case a bank, or as part of a front in support of a fraud scheme. However, vehicles are only the surface of offence-related property – everything in any way used for the commission of an offence is vulnerable.

[122] The court went on to point out that even though there were no drugs found in the truck, if the trial judge were to find that it was a record of drug transactions, it would be offence-related property.

Forfeiture Proceedings are Distinct from Trial and Sentencing Proceedings

[123] In Craig the Supreme Court of Canada found that a forfeiture inquiry was distinct from the trial and sentencing for policy reasons at para. 34 given that it would not be appropriate for some offenders to avoid jail if they had property to offer as an alternative.

[124] At para. 40 the court found that Parliament's intention was for forfeiture orders to be treated independently, "pursuant to a separate rationale and as a distinct response to distinct circumstances."

Factors in Considering Whether or not Property is Offence Related

[125] In R. v. Old Navy Property Corp., [2012] the Crown sought forfeiture under s. 16(1) of the CDSA of a clubhouse used by the Hells Angels Motorcycle Club at the conclusion of lengthy trial where all five of the accused were found guilty of designated offences under the CDSA. The property was owned by the Respondent corporation.

[126] The respondent corporation argued that the clubhouse was not offence-related property or if it was, that the corporation was innocent of complicity and collusion or, in the further alternative, forfeiture was disproportionate in light of the circumstances of the offences and the offenders.

[127] Justice Forestell referred to the decisions in R. v. Cook, 2010 ONSC 5155, [2010] O.J. No. 4413, R. v. Kopp, 2011 MBPC 74, R. v. Paziuk, 2007 SKCA 63, at para. 48 of the decision and noted that these authorities have interpreted the words "in relation to the property" to mean that the property need only be connected to the offence. It need not be "'integral' to the offence."

[128] Justice Forestell found that the clubhouse was offence-related property on a balance of probabilities. There was no evidence of money and drugs being exchanged at the clubhouse, with the exception of one sale of 50 Oxycodone pills to an undercover officer, but the clubhouse was used for several meetings where criminal activities were discussed. This was enough for a finding that it was used in connection with a designated offence.

Circumstantial Evidence

[129] In R. v. Blizzard, 2008 NBQB 307, the court found at para. 68 that many authorities have held that in determining the nexus between the funds sought to be forfeited and the offence charged circumstantial evidence is sufficient to establish that the funds were tainted.

[130] The court referred to the decision of the New Brunswick Court of Appeal in R. v. Lanteigne, [1999] N.B.J. No. 316 at para. 21 which said the following:

These cases show that it is open to a trial judge in determining that an asset is truly a proceed of crime or, like in this case, proceeds of narcotic trafficking, to take into account and to assess the evidence as a whole, including circumstantial evidence, and to deduct therefrom, if need be, that certain property is in fact derived from crime in the absence of direct evidence linking the specific property or profits to specified criminal activity.

Third-Party Claims for Relief from Forfeiture

[131] In R. v. Sankar, [2012] ONSC 1498, Justice Durno was considering a third-party claim for relief from forfeiture under the Code provisions. The Crown was seeking forfeiture of funds that had been obtained by the offender by defrauding his employer. The Crown was seeking the funds to return them to the employer, SNC-Lavalin Profac Inc. (Profac). Another corporate entity, Picard Foods Ltd. responded to the notice sent out to those who appeared to have a valid interest in the property. This corporation claimed that they were a secured creditor and that $248,699 should be returned to them with interest. Therefore, there were two innocent third parties.

[132] The court noted that the decision to grant relief from forfeiture is a matter of discretion of the trial judge even when a party has satisfied all of the requirements in s. 462.37 because of the permissive language of "may" in the legislation.

[133] At para. 17 of the decision the court referred to the reasons why the onus should be on a third party to establish their legitimate interest in property as follows:

Notwithstanding the differences in the sections, I am persuaded that there is an onus on the party responding to a s. 462.41 notice who seeks to have property returned to them for the following reasons. First, the criteria upon which the judge must be satisfied under s. 462.41(3) are within the knowledge of the person claiming an interest. Second, it would be illogical to put the onus on the Crown in relation to the s. 462.41(3) criteria when the Crown seeks forfeiture of all the property. It would put the onus on the party who seeks to defeat the claim of the person claiming an interest. The result of the Crown satisfying the court of the criteria would be to diminish or eliminate completely the property the Crown sought forfeited.

[134] Justice Durno went on to set out the steps in a Crown forfeiture application at para. 22:

In summary,

The first step in a Crown's forfeiture application is the Crown establishing the criteria for forfeiture under s. 462.37 on a balance of probabilities.

2. If the Crown meets its onus, notice is given to person(s) who appear to have an interest in the property. If anyone responds to the notice seeking the return of property, the judge may hear them and determine whether the disputed property should be returned to the person with an interest. At this stage there is an onus on the person claiming an interest to establish the criteria noted in s. 462.41 on a balance of probabilities.

3. If the person claiming an interest satisfies the judge with regard to the criteria, the judge has a discretion whether to return the property. In exercising his or her discretion, the sentencing judge must consider all the circumstances and determine whether all, part or none of the property should be returned considering the equities of the situation.

4. Where the judge orders property returned, the remainder of the property, if any, is forfeited to the Crown pursuant to s. 462.37(1).

Has the Crown Established that the Money Located in the Two Safes is Offence-Related Property and/or Proceeds of Crime?

[135] In my view, the Crown has established that the funds located in the two safes are offence-related property and also proceeds of crime on a balance of probabilities. I have considered the whole of the evidence in coming to this conclusion.

[136] The Agreed Statement of Facts, which is evidence on this proceeding, established that Mr. Vujisic was operating an illegal marihuana dispensary on the second floor of the building. Mr. Vujisic agreed that there was a hole in the wall of the living room area located within the dispensary and that there was a rope that was threaded from the hole into the storage area below, where his cash and marihuana were stored. Mr. Vujisic relinquished his interest in the cash found in the room below.

[137] Officer McArthur's evidence was that when he removed the cleverly designed panel in the wall of the living room, he was able to poke his head through the hole and see marihuana and cash in bags that were scattered on the floor below. And, once he lowered himself into the space below, he observed one or two bags of marihuana on top of the small safe as well as bags of marihuana and cash strewn about the floor. The large safe was open. His view was that the space below was part of the dispensary in those circumstances. It is important to note that Unit 2 was the only area of the first floor Officer McArthur searched as he believed it was part of the dispensary. I also note that it would have taken time and effort to build this faux hot water shut-off compartment. I agree with his conclusion that Unit 2 was part of the dispensary.

[138] Once the small safe was open, Officer McArthur observed that there was a white box labelled "10-week Rockstar" with a substantial amount of cash in it. He was able to confirm with other officers on the second floor, that it was a strain of marihuana listed in the display area of the dispensary. In my view, this discovery established a direct link between with the money in the small safe and the dispensary.

[139] The expert evidence of Officer Edgar established that in 2017, illegal marihuana operators were hiding product and cash, after losing significant amounts of both to police raids and robberies. The hidden hole in the wall with the pulley system connecting the dispensary and storage space below at 1111-A Finch Avenue West, was similar to other alcoves or pass-throughs that he had seen during the execution of search warrants where large amounts of cash and product would be stored. Officer Edgar also testified that the illegal marihuana dispensaries operated as cash businesses.

[140] In addition to this, the bundling of cash with elastic bands in a manner to easily identify certain quantities of cash and the grouping of cash in accordance with a particular time span for marihuana sales at this location was similar to what he had seen on many previous occasions.

[141] I found that both of the officers were credible witnesses. Their evidence was straightforward and responsive. They were not shaken in cross-examination in any way.

[142] The evidence of Mr. Majidi was that he had provided access to Unit 2 to Mr. Vujisic for storage. It is trite law that I can accept all, some or none of a witness's evidence See: D.R. et al. v. The Queen (1996), 107 C.C.C. (3d) 289 at para. 318 ; Regina v. Hunter, [2000] O.J. No. 4089 (C.A.) at para. 5 ; Regina v. Abdallah, [1997] O.J. No. 2055 (C.A.) at para. 4 . I accept his evidence that he provided storage to Mr. Vujisic, but I reject his evidence that he stopped providing storage to Mr. Vujisic. I find as a fact that Unit 2 was a storage area provided by Mr. Majidi to Mr. Vujisic for storage of cash and drugs.

[143] Therefore, looking at all of the evidence, there is no question in my mind that the significant amount of cash found in the same room with drugs and with a pulley system connecting it to the upstairs portion of the dispensary, is both offence-related property and proceeds of crime.

Has the Respondent Established that he is the Lawful Owner of the Money Located in the Two Safes?

[144] The onus is on the third-party Respondent, Mr. Majidi, to prove on a balance of probabilities that he is the lawful owner, that he is not the person charged with a designated offence and that he does not appear to be complicit or guilty of collusion.

[145] In my view, the Respondent has failed to establish either that he is the lawful owner or that he did not appear to be complicit. I found that Mr. Majidi was not a credible witness, neither was he reliable. His evidence was riddled with inconsistencies and changed over time.

[146] One of the most material inconsistencies was Mr. Majidi's knowledge of what was happening on the second floor of his building. In paragraph 2, of an affidavit sworn on July 26, 2018, Mr. Majidi said the following:

I am the lawful and legitimate owner of property seized by the police on November 7, 2017 from the safety deposit boxes at my premises situated on the 1 st floor of 1001 Finch Avenue West. My corporation owns the building that houses my unit and my corporation is the landlord of several businesses that run their business from units in the building, namely a dispensary situated on the second floor with a separate entrance at the rear of the building and meter that I believe operates a medical marihuana facility. This business is run by my tenant, Zoran Vujisic. I have no involvement in this business, and I do not attend these premises and only ensure that I receive the monthly rent from Mr. Vujisic.

[147] In his examination-in-chief Mr. Majidi testified that he thought Mr. Vujisic was operating a medical marihuana dispensary but then changed his evidence significantly in cross-examination, to say that he didn't know Mr. Vujisic was selling marihuana. Then, he changed his evidence once more when the Crown pointed out that he had contradicted himself. He testified that he did see marihuana in the dispensary but thought it could have been for personal use.

[148] Mr. Majidi's explanation for keeping large amounts of cash in the small safe made little sense. He said at one point that he liked to have a lot of cash around to loan it to friends. He said he wouldn't make any money from the loans and there would be no paperwork. His evidence on this point was vague and lacking in detail. He testified that the people he lent money to were very wealthy and that they wouldn't lose any sleep over losing $100,000, but he would lose sleep if he lost that much money. It doesn't seem plausible that a businessman would loan money on a handshake and risk losing thousands of dollars that he couldn't afford to lose.

[149] Mr. Majidi's also testified that he would use the money in the safe to purchase containers from IGG and deposit the profit he made from selling the products in the bank then put the original amount back in the safe. If that was in fact what he was doing, the math doesn't add up. There was close to $70,000 in the small safe when the cash was seized. Mr. Majidi's records indicate that the most he would spend on a container was $43,200.

[150] Mr. Majidi's evidence about how the cash food business he operated was inconsistent. Initially in his sworn affidavit, he claimed that all of the documentation he required to show that he ran this business was seized by the police. He maintained this position when he testified in his examination-in-chief. Later in cross-examination he said he kept all his business records in the "cloud" because he had three offices he attended on a regular basis. It would make sense for him to keep his documents in a cloud storage system given that he had three places where he conducted business. In my view, Mr. Majidi's statement that the police took his records was a fabrication designed to provide an explanation for documents that did not exist.

[151] In examination-in-chief, Mr. Majidi described an operation where he would buy a container and sell the contents one skid at a time. Then in cross-examination he was confronted with the sales documents which showed that the majority of documents appeared to have him buying and selling the entire contents on the same day. I found Mr. Majidi's explanation that he billed it that way to just get it out of the way administratively non-persuasive.

[152] In examination-in-chief, Mr. Majidi said that he would make $10,000 to $20,000 every month and said that the profits would be put in the bank. No documents were produced to corroborate this evidence. He also testified that he would pay in cash for the products that he purchased from IGG, which would have meant that he would be walking around with anywhere from $8,000 to $44,000 in cash on a regular basis. This does not make sense to me.

[153] Mr. Majidi's explanation for dealing with IGG in cash was that he had provided IGG with cheques to purchase products before and was having a tough time getting the money after IGG had sold the products. It makes no sense to think that providing cash to IGG rather than a cheque would protect Mr. Majidi. It also did not make sense that he would continue to do business with them when IGG owed him money. It was evidence, in my view, that was offered in an attempt to provide legitimacy for the cash in the small safe.

[154] Further, I found his attempts to explain how money was collected to be vague and evasive. I provided an example of that in my summary of his evidence. He wasn't able to give a straight answer as to how the money was collected. He also said that when he sold products at the skid level, he didn't issue receipts because "they" don't want receipts. Again, this is unlikely in the business world given, that a purchaser would have to account for what was bought.

[155] Mr. Majidi was also confronted with the fact that the purchase invoices showed his home address as the place for delivery. His evidence was that it was just understood that the goods would be delivered to IGG. Again, this doesn't make sense.

[156] The inconsistencies and improbabilities in these two areas go to the heart of the matter, as they involve his attempts to establish that there was a legitimate business that accounted for the money in the safes, and that he was not complicit in the illegal dispensary operation.

[157] Where Mr. Majidi's evidence concerning the telephone call with Officer McArthur differs with respect to the search of the safe I accept Officer MacArthur's evidence and reject Mr. Majidi's. As I noted earlier Officer McArthur's evidence was credible and clear. He said he would not have told anyone that cash would not be seized in those circumstances.

[158] The lack of any action on Mr. Majidi's part to make a claim prior to the day Mr. Vujisic pleaded guilty speaks volumes. Surely an intelligent man with several university degrees would pursue money that he felt was lawfully his at the first possible opportunity. His evidence was that he had a lawyer that he spoke to immediately after the first police raid, yet he would have me believe that he was relying on Mr. Vujisic for advice as to how to proceed. The more likely scenario is that Mr. Majidi saw an opportunity to gain a windfall when he received disclosure of the police file a few days prior to Mr. Vujicic's guilty plea.

[159] In my view, Mr. Majidi was well aware that Mr. Vujisic was running an illegal dispensary and he assisted Mr. Vujisic by providing him with a storage area that could be quickly accessed from the false hot water shut off box, in case of police or criminals sought to seize or steal product and cash. Further evidence of Mr. Majidi's collusion is found in the fact that Mr. Majidi did nothing to stop Mr. Vujisic from operating the dispensary after the first police raid.

[160] On a final note I agree with the Crown that Mr. Smith's evidence is irrelevant as it does nothing to establish that Mr. Majidi was running a legitimate cash business at the relevant time. Mr. Smith did not see any documents establishing a business relationship between IGG and Mr. Majidi and asked no questions of Mr. Daniel of IGG as to the business practices of IGG at the relevant time. He was not an accountant for Mr. Majidi for any of his businesses.

Conclusion

[161] Given my findings that Mr. Majidi has not established that he is the lawful owner of the cash found in the two safes and that he was complicit in the criminal activity, there is no need to consider the Charter application.

[162] The Applicant has met its onus of proving on a balance of probabilities that cash and items seized from the first floor of 1111-A Finch Avenue West is offence-related property as defined in the CDSA as well as proceeds of crime as defined in the Code. The Respondent resisted the application but has not shown entitlement as an innocent third party.

[163] I therefore order that the property and cash be forfeited.

Released: April 7, 2020

Signed: Justice L.A.P. Chapin J.