DATE: January 22, 2021 ONTARIO COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

— AND —

XUETING XU AND C2S2 CONSULTING INCORPORATED

Before: Justice of the Peace M. Brihmi

Heard on: January 14, 2021 Reasons for Judgment released on: January 22, 2021

Counsel: Jeffrey WYNGAARDEN, for the Applicant Justin MRCHAND, for the Respondent

APPLICATION FOR SECTION 490 (2) (A). XUETING XU AND C2S2 CONSULTING INCORPORATED

1. INTRODUCTION

[1] The matter before the court is an application by the Crown for an Order pursuant to s. 490(2)(a) of the Criminal Code of Canada for further detention beyond the initial three months authorized by Parliament of the things seized and reported to a justice on September 14, 2020, pursuant to s. 489.1(1)(b) of the Criminal Code.

[2] These things were ordered detained by Her Worship Opalinski on September 14, 2020.

[3] Furthermore, the applicant provided the Court with the application record that contains, among other things, a detailed affidavit by Officer Robertson with the appropriate attachments as exhibits. It provides an evidentiary basis for the court to consider whether the legal test has been met under Section 490(2)(a) of the Criminal Code.

2. THE CASE LAW

[4] In my analysis of the totality of the evidence, which was presented at this hearing, the Court carefully reviewed relevant case law, particularly the following two cases:

• R. v. Tennina (2007), 2007 ON SCDC 51706, 88 O.R. (3d) 27 (S.C.J.)
• R. v. McNamara, [2006] O.J. No. 1194 (S.C.J.)

3. THE LEGISLATION

[5] The legislation on section 490(2) of the Criminal Code reads as follows: Further Detention - Nothing shall be detained under the authority of paragraph 1(b) for a period of more than three months after the day of seizure, or any longer period that ends when an application made under paragraph (a) is decided unless

a) a justice, on the making of a summary application to him after three clear days notice thereof to the person from whom the thing detained was seized, is satisfied that, having regard to the nature of the investigation, its further detention for a specified period is warranted and the justice so orders.

4. BACKGROUND FACTS

[6] On September 3, 2020, Justice of the Peace Dudani issued a search warrant pursuant to s. 487 of the Criminal Code in relation to an ongoing fraud investigation by the Royal Canadian Mounted Police (RCMP).

[7] The search warrant was executed on September 9, 2020. A Report to Justice was filed on September 14, 2020.

[8] On September 14, 2020, the things seized were ordered detained until December 8, 2020 by Justice of the Peace Opalinski.

5. EVIDENCE OF THE PROSECUTION

[9] In support of the Crown’s Application and its progress, the Court heard from Constable James Robertson, badge number 54679 of the Royal Canadian Mounted Police. He is investigating this matter and his testimony could be encapsulated as follows:

[10] Constable Robertson testified in his affidavit and in his viva voce evidence before the Court that he has been a Police Officer for the past twenty-four (24) years. For the past thirteen (13) years, he testified that he has been a member of the Royal Canadian Mounted Police.

[11] In addition, he told the Court that for the past nine (9) years, he has been assigned to the Greater Toronto Area - Financial Crime unit where he performs his duties as an investigator in a plainclothes capacity. Also, he was the affiant for the underlying search warrant.

[12] With regards to the summary of the offences under investigation, he testified that it relates to a Service Canada investigation. It is alleged Ms. Xueting Xu, has a company, C2S2 Consulting Incorporated.

[13] Ms. Xu, through her company, is alleged to have assisted clients in submitting fraudulent claims for Employment Insurance Benefits. It is alleged that this investigation involves 379 fraudulent claims that have been identified by Service Canada and he anticipates laying charges of fraud over $5000.00 contrary to s. 380(1)(a) of the Criminal Code against Ms. Xu.

[14] Furthermore, he testified that as part of the investigation on September 9, 2020, he led a team of members of the RCMP unit in executing the search warrant granted on September 3, 2020 by Justice of the Peace Dudani on the business premises of C2S2 Consulting Incorporated.

[15] Following the search and seizure, he told the court that a Report to Justice was submitted regarding the things seized pursuant to the warrant. The Return to Justice was approved by Justice of the Peace J. Opalinski pursuant to section 490(1)(b) of the Criminal Code, granting an initial detention period of three months. This three-month detention period ended on December 8, 2020.

[16] Ergo, he told the court that the order of detention obtained involves, among others, four banker boxes full of physical documents and their scanning was completed last Thursday, January 7, 2021.

[17] Furthermore, he testified that the RCMP Digital Forensic unit had copied all the computers and the USBs and to the best of his knowledge, it involves over one million digital files to be reviewed.

[18] In addition, he told the Court that these digital devices have been cloned, they look accurate at this point and he is in the process of reviewing the copies.

[19] Regarding the translation needed for most of the documents, Officer Robertson told the Court that it is not going quickly at all as there is only one Officer who must balance his work with the translation of these documents.

[20] In addition, he hasn’t reviewed the two (2) terabytes (TB) of data and he thinks that 85 to 90 % of the documents need translation. At this point, he told the Court that no charges have been laid.

[21] Ergo, Officer Robertson testified that there is close to two (2) TB of data and he cannot give the Court an estimate of the time it will take to read them all. In addition, the COVID 19 pandemic has affected the progress of his work, especially that he is working now from home, he is not a technological person and a lot of factors may impact the progress of his investigation.

[22] Officer Robertson testified that despite the COVID 19 pandemic, he is progressing with the investigation and reviewing the documents obtained through the search warrant. Also, he explained that he is still trying to determine the scope of things that are specific to the programme of Employment Insurance Benefits and he needs to get in touch with Service Canada to determine their relevance.

[23] While under cross-examination by the Respondent’s counsel, Constable Robertson clarified that he took ten (10) electronic devices with three computers and the remaining USBs to the RCMP Digital Forensic in London.

[24] Furthermore, he clarified that USB 5, 6, 7 and 8 have 16 GB of memory size data, USB 9 has 8 GB of data, USB 10 has 16 GB of data and USB 11 has no indication of the size of its data.

[25] Regarding the investigation, Constable Robertson told the Court that he needs to compare the cloned devices with the originals to make sure they are accurate in order to be able to add them, later, as exhibit for the trial.

[26] In addition, he told the Court that he has the utmost confidence in the copies and his plan is to do a side by side comparison to make sure they are accurate.

[27] When asked about the original four banker boxes, he reiterated that their content has been copied and he would estimate 85 to 90 % of them are of Asian characters and that he is interested in their content and the actual piece of paper where the content is located.

[28] In addition, he told the Court that he needs to do a comparison - with the electronic devices in the event charges are laid. This would allow him to present the best evidence, which in this case is documentary.

[29] When asked by the Court how much time he needs to complete his investigation taking into consideration the volume of materials he has told us about, Constable Robertson testified that it is very difficult for him to provide the Court with an estimate. He explained that there are a lot of moving parts including the requirement of the translation from the Officer, the COVID 19 pandemic restrictions and the clarifications he needs from Service Canada.

6. APPLICANT’S SUBMISSION

[30] The Applicant submits that the police seized equipment and documents under the search warrant. Specifically, the Court heard that the police are investigating 379 suspected fraudulent claims for Employment Insurance Benefits.

[31] Furthermore, the Applicant told the Court that it is believed that Ms. Xu assisted clients with these fraudulent applications.

[32] The Applicant explained that the search warrant has authorized the seizure of the materials and the Report to a Justice has authorized the things seized until December 8, 2020 and they are seeking an extension of that period for additional time.

[33] For the Applicant, this is a summary application for s. 490(2) of the Criminal Code and the Court must be satisfied that further detention of the things seized is warranted due to the nature of the investigation.

[34] The Applicant referred the Court to the Superior Court of Justice decision of R. v. Tennina which was upheld by the Court of Appeal. The legal test to be applied is found therein at paragraphs 25 to 30.

[35] First, the Applicant submits that the Court must determine whether there is still an investigation;

[36] Second, whether the material seized is still necessary for the investigation; and

[37] Third, the justice should assess the progress of the investigation to determine what additional period the materials should be held and necessary for the completion of the investigation.

[38] According to the Applicant, Tennina has said that substantial deference should be shown to investigators who may not know the full scope of their investigation.

[39] And as further stated at paragraph 37 of Tennina: “if there is an active, ongoing investigation, it should only be in the rarest of cases that an extension is refused within the first year of detention. Thereafter, the bar is raised higher.”

[40] The Applicant submits that the evidence before the Court is that the materials are extremely voluminous. In addition, the COVID 19 pandemic has hampered the investigating officer’s ability to access and review all the materials and to assess if they will be relevant.

[41] The Applicant acknowledges that the Officer has copies of the documents and the digital devices. Furthermore, he submits three rational explanations to justify the continued detention of the things seized:

1. The Investigator wants to put forward the original documents as the best evidence
2. The Officer wants to ensure copies are accurate copies of the originals. As common sense dictates, he wants to personally go through them to assess and ensure their accuracy; and to go through them will take considerable time.
3. The concerns of the Officer is if the devices and the information were released to Ms. Xu, she could use them to continue the alleged offence.

[42] The Applicant submits that Tennina directs if there are concerns about the amount of time the investigation has taken, the appropriate remedy is not to deny the investigation but to impose a deadline to it.

[43] In addition, there are provisions available in the Criminal Code that Ms. Xu can rely upon if she wants to continue her business and access the materials. Also, the Officer has an obligation to apply for a return of any materials that are not necessary.

[44] According to the Applicant, this investigation meets the standard and should be granted.

7. RESPONDENT’S SUBMISSION

[45] The Respondent submits that what is pertinent to this application is the hardware and it is not about a million documents or about reviewing them. It is about two computer towers, a Laptop Aspire made in 2017 and USB devices.

[46] In addition, the Respondent submits that the content in these devices is in the hands of the police more than one way. They are in the original devices and the duplicates.

[47] For the Respondent, the issue is whether the police require all these materials and devices as part of their investigation and whether it is necessary and needed to retain the four boxes of materials.

[48] Defence referenced paragraph 14 of Tennina, in particular “… The seizure must be justified in the first instance. Then the detention must be warranted for investigative purposes.”

[49] For the Respondent, the narrow question to ask is whether the things detained are necessary for investigative purposes?

[50] Furthermore, the Respondent submits that in paragraph 9 of the affidavit of Officer Robertson, he indicates that he would like to retain the originals for two purposes:

a) at trial, he would seek to introduce them as best evidence; and b) if Ms. Xu was given the devices and information back, she could use the materials for the alleged offence.

[51] For the Respondent, this reason is not a detention warranted for investigative purposes and it fails the test for narrow purposes.

[52] The Respondent submits that the third reason that the Officer provided in court for retaining the materials is to compare what was in the originals to the copies. This is the only possible reason in relation to the investigative purposes.

[53] However, the Respondent submits that it is for the Court to determine if it is necessary for investigative purposes to review the originals and to compare them to the copies.

[54] As based on his own evidence, the Officer has testified that he is not technology savvy. Therefore, the Respondent submits that he considers suspects any technological explanation coming from the Officer because of his limited practical knowledge of technology. According to the Respondent, this third reason involves some impossibilities.

[55] From the Respondent’s perspective, the action plan of the Officer to take the original Chinese documents and to compare them to the copies of the Chinese documents and review them for similarities does not meet any common sense assessment and is not coherent.

[56] Defence submits that neither of the 3 reasons offered for retaining the machines and paper documents establishes a rational connection to the ongoing investigative need.

[57] In addition, the Respondent submits in consideration of the balance of the property right versus the investigative need that in 2020 and 2021, the officers have many techniques available to them, including the capability to duplicate the documents, and new abilities to copy and provide better balance in favour of returning these properties to Ms. Xu.

[58] The Respondent concludes by referencing paragraph 15 of Tennina and submits that he disagrees with the reasons provided by the Officer, which do not establish the investigative need to retain these documents.

8. ISSUES RAISED

[59] The Court identified the following issues that have arisen in this proceeding and which need to be addressed:

a. The first one is to determine the test for this application and whether the Applicant has met the test that there is something about this investigation that justifies extending the detention of the materials seized beyond the initial authorized detention? b. Or has the Respondent brought before the Court or established that there is nothing about this investigation to justify the detention of the material seized beyond the initial authorized detention of the three months authorized by parliament? c. Has the Applicant satisfied the Court that, having regard to the nature of the investigation, further detention of the things seized is warranted until September 8, 2021?

9. ANALYSIS

[60] In this summary application for an order under section 490(2) of the Criminal Code, both the Applicant and the Respondent agree that the applicable test for today’s hearing is very narrow.

[61] In addition, both parties agree that the two (2) cases provided by the Crown, R. v. Tennina and R. v. McNamara provide the legal base for this matter. The Court accepts that these two cases go back to 2006 and 2007, I am not aware of more recent and relevant court decisions regarding section 490(2) of the Criminal Code.

[62] The Court accepts that in dealing with this application and for its clarity, it is not proper for me to analyze it from the perspective of reasonableness and fairness - if the conduct of this investigation or its purpose has been reasonable or fair to justify further detention of the materials seized.

[63] In addition, the Court accepts that I should not engage in analyzing the progress of this investigation or how much time this matter has taken up to now.

[64] My analysis will be centered and based on the nature of the investigation and if the Court is satisfied that further detention of the materials seized is justified for the period requested.

I The first issue is to determine the test for this application and whether the Applicant met the test that there is something about this investigation that justifies extending the detention of the materials seized beyond the initial authorized detention?

[65] In determining the nature of the inquiry and the test for this application, the Court relies on R. v. Tennina that was upheld by the Ontario Appeal Court.

1. The Court must determine if there is still an investigation or something is being investigated. If there is no investigation or something being investigated, the Court should not grant an extension.

[66] For the matter at hand, it involves the investigation of the alleged 379 fraudulent claims of Employment Insurance Benefits from Service Canada. The Court accepts that the materials seized from Ms. Xu and her company, C2S2 Consulting Incorporated is extremely voluminous and the majority should be translated. I heard from Officer Robertson that 80 to 95 % has Asian characters that should be translated and that is not proceeding quickly.

[67] In addition, this investigation is still at an early stage and a lot of factors have been impacting it, including, among others, the COVID 19 pandemic and the availability of an interpreter.

2. The Court must determine whether the seized materials are still necessary for the investigation. If they are not necessary for the investigation, the Court must not consent to the extension.

[68] As I indicated earlier that this investigation is ongoing and still at an early stage. The Court accepts that Officer Robertson has just started reviewing the documents in the four banker boxes and it will take time to review the 2 TB of data.

[69] The Applicant put before the Court three rationales from the investigator to justify their request for the continued detention of the things seized. I am not going to repeat them as the Applicant and the Respondent had the opportunity to go through them in their submissions.

[70] As the bar is not set high for the test according to Tennina, it is not for the Court to second guess the discretion and judgment of investigators. Therefore, I am satisfied that the material seized is still necessary for the investigation.

3. The Court should assess the progress of the investigation to determine what additional period of time the materials should be held and necessary for the completion of the investigation.

[71] Officer Robertson apologized and told the Court that it is very difficult for him to provide me with an estimate of the time required to complete his investigation.

[72] In addition, the Officer testified that he could not provide a specific estimate of the time for the investigation because of the sheer volume of materials that includes one million files and four banker boxes of documents. Moreover, the Covid 19 pandemic, the complexity of the translation and the time he needs to seek clarifications from Service Canada also contributes to the difficulty in determining how much additional time is required.

[73] In addition, the Officer has an obligation to apply for the return of any material that is not necessary, and he couldn’t make that determination as he has not reviewed all the documents.

[74] Although, I am not inquiring about the efficiency of this investigation or on how it is proceeding up to now, the Court accepts that the Investigator has not reviewed all the documents and he needs time for this to occur.

[75] In addition, the COVID 19 pandemic has had general and specific impacts on more than one activity, sector and business. It has impacted directly and/or indirectly a lot of people, their communities, their work and the whole society. Therefore, I accept the submission of the Applicant that Covid 19 has stalled the progress of this investigation.

[76] As the Investigator has not been able to determine the amount of additional time required for investigating the materials, the Court gives the proper deference to the request of the Applicant.

II The second issue of whether the Respondent brought before the Court or established that there is nothing about this investigation to justify the detention of the materials seized beyond the initial authorized detention of the three months authorized by parliament?

[77] Even though the respondent submits that the hardware, the computers, the USBs, the four boxes and the originals as well as the copies are in the hands of the police and they don’t need to keep the materials, the Court finds it important, at this stage, not to get involved in directing the investigator on how they should perform their duties and conduct their investigation.

[78] The investigator provided the Court with three rationale for retaining the materials in order to compare what is in the originals and what is in the copies. In addition, Officer Robertson wants to keep the originals in order to introduce them as best evidence in case charges are laid.

[79] Furthermore, the Court accepts that the original documents are housed in the devices and the Officer will need to refer back to the originals in case there are errors in the copies.

[80] In addition, the Court accepts that Officer Robertson has an obligation to apply for the return of any material that is not necessary. However, I accept that at this early stage of the investigation, he can not make that determination as he has not reviewed all the documents.

III Has the applicant satisfied the Court that having regard to the nature of the investigation, if further detention of the things seized is warranted until September 8, 2021?

[81] The Court has carefully reviewed the relevant case law and considered the totality of the evidence, including the Notice of Application and the testimony from Officer James Robertson.

[82] In addition, the Court has carefully reviewed the submissions from the Applicant and the Respondent as well as I have taken into consideration the nature of the investigation, the stage of the investigation, the complexity and the volume of the materials seized, the three rationales l considered in support of retaining the items seized, I accept that the legal test under s. 490(2)(a) of the Criminal Code has been met and I am granting a further detention for a period not exceeding one (1) year from the date of the seizure, which period would expire on September 8, 2021.

10. CONCLUSION

[83] As a result, the Court orders that all items seized from C2S2 Consulting Incorporated, #337-4168 Finch Avenue East, Toronto, be detained in the custody of the Royal Canadian Mounted Police, Greater Toronto Area – Financial Crime unit, 2755 High Point Drive, Milton, Ontario, until September 8, 2021.

Released: January 22, 2021 Justice of the Peace M. Brihmi