Fleming (Gombosh Estate) v. The Queen, 1986 CanLII 63 (SCC), [1986] 1 SCR 415
Eric Fleming, Administrator ad litem of the Estate of Ernest Roland Maria Gombosh, Deceased Appellant;
and
Her Majesty The Queen Respondent.
1985: November 20; 1986: April 24.
Present: Dickson C.J. and McIntyre, Chouinard, Lamer, Wilson, Le Dain and La Forest JJ.
on appeal from the court of appeal for ontario
Narcotics ‑‑ Narcotic Control Act ‑‑ Restoration procedure ‑‑ Seizure of monies allegedly connected to narcotics offence ‑‑ Restoration proceedings not concluded before applicant’s death ‑‑ Whether or not monies should be restored to innocent personal representative ‑‑ Narcotic Control Act, R.S.C. 1970, c. N‑1, s. 10.
The focus of this case was on the "restoration hearing", a procedure established under the Narcotic Control Act, whereby a person can regain possession of things allegedly related to the commission of a narcotics offence and seized under s. 10 of the Act. The original applicant for restoration, Ernest Gombosh, was searched on two occasions in October, 1979. Several quantities of drugs, drug paraphenalia and cash were seized in the course of those searches and Mr. Gombosh was subsequently charged with offences under the Narcotic Control Act. Mr. Gombosh applied, in December 1979, for restoration of the monies seized. The hearing was adjourned and Mr. Gombosh died before being prosecuted and before the restoration hearing process was completed. Letters of administration were granted to the current applicant‑‑a person innocent of any wrong‑doing‑‑who pursued the restoration of the seized monies in his capacity as administrator. A judge of the Provincial Court ordered restoration but this order was quashed in the Supreme Court of Ontario and the matter remitted to Provincial Court. The Ontario Court of Appeal upheld the decision to quash.
The two‑part test for restoration in s. 10(6)(a) required that the magistrate be satisfied that (1) the applicant is "entitled to possession of the thing seized", and (2) the thing seized is not required as evidence. The three crucial questions to this appeal, then, were: what was meant by s. 10(6)(a) entitlement, on whom was the burden of proof or disproof, and what was the standard of proof?
Held: The appeal should be allowed.
In order to satisfy a magistrate at a restoration hearing on the question of entitlement to possession, a claimant must show on the balance of probabilities that he was in possession of the property at the time of seizure. To place the onus on the claimant in this way does not offend established rules of procedure as the claim of entitlement at this stage is simply the assertion of a civil right. In addition, such evidence is readily obtainable by most claimants. The generous standing in s. 10(5) leaves it open to "any" other person to rebut the claim to possession.
While entitlement within the meaning of s. 10(6)(a) can reasonably be assumed to mean "lawful entitlement", the rule of public policy that a person should not be allowed to profit from his own wrong doing should only operate where there is turpitude. Where that turpitude is a criminal wrong, criminality must be demonstrated in accordance with normal procedures. Section 10(8), which directs forfeiture of things seized which were "used in any manner" in connection with a narcotics offence of which a person has been convicted, codifies the ex turpi causa non oritur actio rule in the context of narcotics convictions.
The tainted connection leading to forfeiture under s. 10(8) must be proved beyond a reasonable doubt. The presumption of innocence as well as the nature of the proceedings under s. 10 make it inappropriate to transform a restoration hearing into a trial in which the Crown need only meet the civil standard of proof in order to establish guilt or taint. The culpability of the owner of the seized property must have been proven at antecedent criminal proceedings under the Narcotic Control Act. In the absence of a specific finding at trial of the requisite "tainted connection", the Crown can prove taint on the reasonable doubt standard at the restoration hearing. Where there was no antecedent conviction and no basis for laying a narcotics related charge, proceedings should be initiated under s. 312(1) of the Criminal Code.
Although s. 10(8) might imply that the ex turpi rule is excluded by the expressio unius est exclusio alterius rule from operation under s. 10(6)(a), where the things are connected to a conviction for a non‑narcotics offence, such an interpretation would multiply proceedings and offend public perception of the justice system. The expressio unius rule, therefore, should not prevent a reading of s. 10(6)(a) entitlement to mean "lawful entitlement" in this very limited context.
Where the rule of public policy legitimately applies, the status of an applicant as the innocent representative of a convicted but deceased owner would not entitle the applicant to restoration. However, where no conviction has been entered and where the evidentiary use of the things has either expired or is non‑existent the magistrate may not deny restoration to the person entitled to possession.
Cases Cited
Largie v. R. (1982), 1981 CanLII 3132 (ON CA), 25 C.R. (3d) 289; Re Aimonetti and The Queen (1981), 1981 CanLII 3344 (MB CA), 58 C.C.C. (2d) 164; Smith (M.J.) v. The Queen, 1975 CanLII 2292 (FC), [1976] 1 F.C. 196; Re Hicks and The Queen (1977), 1977 CanLII 2101 (MB CA), 36 C.C.C. (2d) 91; Re Collins and The Queen (1983), 1983 CanLII 3566 (QC CA), 7 C.C.C. (3d) 377; R. v. Molina (1985), 7 O.A.C. 235; Sowrey v. Minister of National Health and Welfare, 1984 CanLII 3681 (MB PC), [1985] 1 W.W.R. 85; Re Regina and Buxton (1981), 1981 CanLII 1217 (AB KB), 62 C.C.C. (2d) 278; Minister of National Health and Welfare v. Medd, 1983 CanLII 3650 (MB CA), [1983] 6 W.W.R. 304; R. v. Tupper (1976), 1976 CanLII 1440 (MB PROVJCT), 32 C.C.C. (2d) 529; R. v. Aimonetti (1985), 1985 CanLII 5532 (FCA), 19 C.C.C. (3d) 481, considered; Burgess v. The Queen (1975), 18 Cr.L.Q. 254; R. v. Robinson, 1951 CanLII 22 (SCC), [1951] S.C.R. 522; Re Regina and Blaney (1979), 1979 CanLII 2946 (ON SC), 50 C.C.C. (2d) 395; Woolmington v. Director of Public Prosecutions, [1935] A.C. 462; R. v. Appleby, 1971 CanLII 4 (SCC), [1972] S.C.R. 303; Goodyear Tire and Rubber Co. v. The Queen, 1956 CanLII 4 (SCC), [1956] S.C.R. 303; McDonald v. Lane (1882), 1882 CanLII 30 (SCC), 7 S.C.R. 462; R. v. Meloche, 1970 CanLII 313 (ON CA), [1970] 3 O.R. 798; R. v. Bagshaw, 1971 CanLII 13 (SCC), [1972] S.C.R. 2; Hardy v. Motor Insurers’ Bureau, [1964] 2 All E.R. 742, referred to.
Statutes and Regulations Cited
Canada Evidence Act, R.S.C. 1970, c. E‑10.
Canadian Bill of Rights, R.S.C. 1970, App. III, s. 2.
Combines Investigation Act, R.S.C. 1927, c. 26, re‑enacted 1952 (Can.), c. 39, s. 3.
Criminal Code, R.S.C. 1970, c. C‑34, s. 312(1).
Narcotic Control Act, R.S.C. 1970, c. N‑1, ss. 10(1)(a), (b), (c), (5), (6)(a), (b), (c), (d), (7), (8), (9).
Authors Cited
Halsbury’s Laws of England, 4th ed., vol. 35, London, Butterworths, 1981.
Shilton, B. R. "Drug Moneys‑‑The Fruits of Crime?" 25 C.R. (2d) 294.
APPEAL from a judgment of the Ontario Court of Appeal (1983), 1983 CanLII 3614 (SCC), 3 C.C.C. (3d) 575, dismissing an appeal from a judgment of Smith J. (1982), 1982 CanLII 3707 (ON SC), 1 C.C.C. (3d) 323, quashing an order of restoration granted by Waisberg Prov. Ct. J. and remitting the matter to the Provincial Court. Appeal allowed.
Alan D. Gold and W. B. Horkins, for the appellant.
Bruce Shilton, for the respondent.
The judgment of the Court was delivered by
Wilson J.‑‑This case raises the issue of the proper interpretation of s. 10 of the Narcotic Control Act, R.S.C. 1970, c. N‑1. Section 10 allows an officer to seize things which he or she suspects are related to the commission of a narcotics offence. However, the seizure provisions are not directly at issue in this appeal. Rather, the focus of the case is on the procedure called a restoration hearing by means of which a person can regain possession of the things seized. Section 10(6) sets out a two‑part test governing restoration. The first part requires the magistrate to be satisfied that the applicant is "entitled to possession of the thing seized". The second part requires him to be satisfied that the thing seized is not required as evidence. It is the first part of the test and the nature of the burden it imposes which must be resolved in order to settle the present appeal. The meaning of the phrase "entitled to possession" must be ascertained in the context of the peculiar facts of this case, namely that the appellant is the innocent representative of the allegedly non‑innocent person from whom the things were seized. The original claimant died before being prosecuted and before the restoration hearing process was completed.
The Facts
1. The Facts
The original applicant for restoration, Ernest Gombosh, was searched on two occasions in October of 1979. Several quantities of drugs, drug paraphenalia and cash were seized in the course of those searches and Mr. Gombosh was subsequently charged with offences under the Narcotic Control Act. On December 17, 1979 Mr. Gombosh applied for restoration of the monies seized. The hearing was adjourned. However, on February 28, 1980 Mr. Gombosh died before being prosecuted and before the restoration hearing process was completed. Letters of administration were granted to the current appellant, Eric Fleming. He pursued restoration of the seized monies in his capacity as administrator of Mr. Gombosh's estate.
The Legislative Scheme
2. The Legislative Scheme
Mr. Gombosh and subsequently the appellant proceeded under ss. 10(5) and (6) of the Narcotic Control Act. However, s. 10 deals not only with restoration but also with seizure, possession by the Minister of things seized, and forfeiture. Thus the restoration hearing is only one aspect of the larger process. I have set out the relevant subsections below as they appeared at the time of these proceedings:
(1) A peace officer may, at any time,
(a) without a warrant enter and search any place other than a dwelling‑house, and under the authority of a writ of assistance or a warrant issued under this section, enter and search any dwelling‑house in which he reasonably believes there is a narcotic by means of or in respect of which an offence under this Act has been committed;
(b) search any person found in such place; and
(c) seize and take away any narcotic found in such place, any thing in such place in which he reasonably suspects a narcotic is contained or concealed, or any other thing by means of or in respect of which he reasonably believes an offence under this Act has been committed or that may be evidence of the commission of such an offence.
(5) Where a narcotic or other thing has been seized under subsection (1), any person may, within two months from the date of such seizure, upon prior notification having been given to the Crown in the manner prescribed by the regulations, apply to a magistrate within whose territorial jurisdiction the seizure was made for an order of restoration under subsection (6).
(6) Subject to subsections (8) and (9), where upon the hearing of an application made under subsection (5) the magistrate is satisfied
(a) that the applicant is entitled to possession of the narcotic or other thing seized, and
(b) that the thing so seized is not or will not be required as evidence in any proceedings in respect of an offence under this Act,
he shall order that the thing so seized be restored forthwith to the applicant, and where the magistrate is satisfied that the applicant is entitled to possession of the thing so seized but is not satisfied as to the matters mentioned in paragraph (b), he shall order that the thing so seized be restored to the applicant
(c) upon the expiration of four months from the date of the seizure, if no proceedings in respect of an offence under this Act have been commenced before that time, or
(d) upon the final conclusion of any such proceedings, in any other case.
(7) Where no application has been made for the return of any narcotic or other thing seized under subsection (1) within two months from the date of such seizure, or an application therefor has been made but upon the hearing thereof no order of restoration is made, the thing so seized shall be delivered to the Minister who may make such disposition thereof as he thinks fit.
(8) Where a person has been convicted of an offence under section 3, 4 or 5, any narcotic seized under subsection (1), by means of or in respect of which the offence was committed, any money so seized that was used for the purchase of that narcotic and any hypodermic needle, syringe, capping machine or other apparatus so seized that was used in any manner in connection with the offence is forfeited to Her Majesty and shall be disposed of as the Minister directs.
(9) Where a person has been convicted of an offence under section 4 or 5, the court may, upon application by counsel for the Crown, order that any conveyance seized under subsection (1) that has been proved to have been used in any manner in connection with the offence be forfeited, and upon such order being made the conveyance is forfeited to Her Majesty and, except as provided in section 11, shall upon the expiration of thirty days from the date of such forfeiture be disposed of as the Minister directs.
The broad delineation of the seizure power in s. 10(1) is of particular importance for the analysis of the legal issues in this appeal. That section allows an officer without a warrant to enter and search certain premises and seize things found therein which he reasonably believes are related to a narcotics offence or may be evidence of such an offence. Restoration under s. 10(6) is contingent on the presiding magistrate's being satisfied that the appellant is "entitled to possession" of the thing seized and that it is not required as evidence. Conversely, where as in the present case there is no evidentiary use for the property and no conviction has been entered, the Minister's custody under s. 10(7) of "things seized" is legitimate only where entitlement has not been demonstrated to the presiding magistrate's satisfaction. Thus, the crucial questions to be answered are what is meant by entitlement, who has the burden of its proof or disproof, and what is the standard of proof? Finally, it should be noted that "disentitlement" or forfeiture is mandated where the narrow conditions of s. 10(8) are met, i.e. where seized monies were used for the purchase of a narcotic in respect of which a person has been convicted of a narcotics offence.
The Courts Below
3. The Courts Below
The decisions in the courts below reflect different approaches to the nature of the burden on the applicant to establish entitlement under s. 10(6)(a). Waisberg J. of the Ontario Provincial Court presided at the restoration hearing. He felt that entitlement should be narrowly construed since the consequence of failing to meet the test was to deprive an applicant of "several rights". Because of the original applicant's death there was no possible evidentiary use for the seized monies in this case. Judge Waisberg observed that if the matter had gone to trial there might well have been a conviction. Nevertheless, he felt satisfied that the current appellant was entitled to possession as administrator of the original applicant's estate. In his view, the suspected connection of the monies to drug trafficking did not defeat restoration. He made the requested order.
Smith J. [(1982), 1982 CanLII 3707 (ON SC), 1 C.C.C. (3d) 323] quashed the Provincial Court Judge's order on the basis of Largie v. R. (1982), 1981 CanLII 3132 (ON CA), 25 C.R. (3d) 289, a decision of the Ontario Court of Appeal which had been handed down in the interim. In his view, Waisberg Prov. Ct. J. had failed to take account of the rule of public policy that the courts will not permit a litigant to benefit from his or her crime. He rejected the appellant's argument that "when a claimant accused has died, the purpose behind the rule loses its legitimacy assuming the absence of any evidence that the representative is tainted", and thus "restoration should be made virtually for the asking". Such a result, to Smith J.'s mind, ignored the scheme of the legislation as defined in Re Aimonetti and The Queen (1981), 1981 CanLII 3344 (MB CA), 58 C.C.C. (2d) 164, a decision of the Manitoba Court of Appeal which was heavily relied on in Largie, supra. The Ontario Supreme Court in Largie had quashed the trial judge's restoration order on the basis of the rule of public policy. The Ontario Court of Appeal upheld that decision without, however, giving express approval to the reasoning on which it was based. Instead, Houlden J.A. adopted the approach of the majority in Aimonetti which, by reading s. 10 in its totality, found that the Minister's right to custody under s. 10(7) is directly proportionate to the scope of the seizure power in s. 10(1)(c). Thus, in order to obtain restoration an applicant must disprove the suspected relationship between the things seized and narcotics offences. Smith J. in the case at hand combined the public policy rationale with the textual analysis of Aimonetti in the following passage at p. 327:
Perhaps the matter might be put differently. When applying the public policy rule in the context of the seizure provisions of the Narcotic Control Act, the courts have tended to apply the taint to the "thing" or the monies rather than to the applicant. And that view is supported by the wording of the section.
This hybrid version of the two approaches perhaps obscures the importance of the distinction between them for the purposes of this case. However, the core of Smith J.'s reasoning is that once one replaces the person‑specific approach of an analysis based on the rule of public policy with the thing‑specific approach of an analysis based on the statutory text, the innocence of the person applying for restoration becomes irrelevant.
The Ontario Court of Appeal [(1983), 1983 CanLII 3614 (SCC), 3 C.C.C. (3d) 575] upheld Smith J.'s decision to quash in very short reasons written by Lacourcière J.A. However, Lacourcière J.A.'s analysis appears to be a reversion to the public policy rationale so carefully avoided by the Court of Appeal in Largie. He founds his decision on the view [at pp. 575‑76] that "the appellant as administrator of the deceased's estate can be in no better position to claim the restoration of the funds, the apparent proceeds of the alleged crime, than the alleged deceased perpetrator". Implicit in that position is the belief that the person‑specific public policy rule applies and that the entire case therefore turns on the peculiar fact that the applicant is an innocent representative of the allegedly noninnocent original applicant.
This divergence in analytic approach in the decisions below reflects a divergence in jurisprudential treatment of s. 10(6)(a) generally. B. R. Shilton in his article "Drug Moneys‑‑The Fruits of Crime?" 25 C.R. (2d) 294, has identified three conceptually distinct judicial interpretations of s. 10(6)(a) entitlement. The parties to this appeal admit of two possible approaches in their written argument. An examination of the restoration hearing transcript reveals that a third restrictive interpretation was proposed by the appellant at first instance and, indeed, was accepted by Waisberg Prov. Ct. J. as being the most appropriate approach. For convenience I will label the three interpretive approaches as follows: (1) the simple proof of entitlement approach; (2) the public policy approach; and (3) the legislative text approach. The unusual fact of the original applicant's death throws into sharp relief the conceptual distinction between the latter two approaches. Generally, an applicant is the person from whom the things in question were originally seized. From that perspective, the effect of the public policy approach and the legislative text approach is the same, i.e., an applicant must disprove "taint" in order to show entitlement. However, standing under the Act is quite broad; it allows "any person" to apply for restoration. If that person has no connection to the reasonable suspicion which prompted the seizure in the first place, the difference between the two approaches, as Lacourcière J.A.'s decision demonstrates, becomes very important. If the taint attaches to the person, then the appellant's innocent representative status may be significant. But, if the taint attaches to the thing seized, as Smith J. concluded, then the innocent status of the applicant may be irrelevant. It must be remembered, however, that this dichotomy arises only if one rejects the first approach which simply requires an applicant to prove entitlement.
It was suggested by counsel for the respondent that the appellant made a concession in the course of the restoration hearing which concludes the case against him and obviates the need to discuss the distinctions between the various approaches. I would respectfully disagree. At the hearing the appellant's counsel argued that, since forfeiture could only occur under the conditions set out in s. 10(8), the first approach, namely simple proof of entitlement, was all that was required of an applicant in order to succeed on his application. He went on to concede that, if he was wrong in that and had to prove in addition the absence of taint, he would be unable to discharge that burden. Accordingly, if the Court were to find that the rule of public policy operated vis‑à‑vis innocent representatives of less worthy litigants, this concession would be fatal to the appellant's case under both the public policy and the legislative text approaches. The concession would be irrelevant, however, if the Court were to find, as did Waisberg Prov. Ct. J., that all s. 10(6)(a) requires is proof of the right to possession. Thus, at the very least the Court must discuss the merits of the first analytic approach. Then, if that analysis is rejected, it must go on to discuss the viability of the argument that a claim by an innocent representative should not be defeated by the taint associated with the original claimant. If the result is again negative, only then does the appellant's concession disqualify him from success. However, it would be difficult to discuss fully the merits of any of the possible approaches to s. 10(6)(a) entitlement without reviewing the divergent lines of jurisprudence. I propose therefore not to limit my analysis of the section in the way suggested by respondent's counsel.
The Jurisprudence
(a) The Simple Proof of Entitlement Approach
4. The Jurisprudence
The cases adopting the first approach, which is a strict approach to the concept of legal entitlement, largely depend on the argument that forfeiture should only occur under s. 10(8) and that penal statutes and statutes depriving a person of proprietary rights should be strictly construed. Implicit in the reasoning is the notion that the reasonable suspicion which gives rise to a s. 10 search and seizure should not operate as a finding of guilt unless there is compliance with the normal rules of proof.
In Burgess v. The Queen (1975), 18 Cr.L.Q. 254, one of the earliest reported cases, Rice Prov. Ct. J., after finding that the terms of s. 10(8) could not be met even after conviction, concluded that the main issue was the evidentiary use of the seized monies. He thereby assumed that the Minister could not retain the monies under s. 10(7) on any other basis. This diminished reading of the purpose of the Minister's custody is confirmed by Rice Prov. Ct. J.'s treatment of s. 10(6)(a) in the hearing at first instance in Largie, supra. There he held, according to Houlden J.A., that entitlement in s. l0(6)(a) "was used in the legal sense, not in the moral sense and that if the appellant could show that he was entitled to possession of the money as opposed to any other person, he was entitled to an order of restoration": see Largie, supra, at p. 291.
The same assumption is implicit in Smith (M.J.) v. The Queen, 1975 CanLII 2292 (FC), [1976] 1 F.C. 196, a case which arose out of a civil action against the Minister to reclaim monies seized in a s. 10 search but for which no s. 10 application had ever been made. The accused had pleaded guilty to an offence under the Narcotic Control Act. There was no indication in the evidence that the monies were related to that offence. Addy J., like Rice Prov. Ct. J., was of the view that, where there was no evidentiary use for the property and no forfeiture under s. 10(8), entitlement was simply a question of who was the most likely owner or had the right to possession. Property rights were not subject to the applicant's disproof of taint. Quite the contrary; the Minister's s. 10(7) possessory right was subject to the proprietary rights of interested persons. He stated at pp. 199‑200:
It is obvious that section 10(8), in addition to providing that the Minister may direct the disposition of money seized, specifically stipulates that any money seized which was used for the purchase of a narcotic is forfeited to Her Majesty. This is the only case where any provision is made as to forfeiture of monies and it is clear from the admitted facts, in the case at bar, that the monies in question were not so used. Altogether apart from the principle that if a statute purporting to forfeit a property right must specifically state so, in view of the specific provisions as to forfeiture in subsection (8), I must conclude that subsection (7) does not in any way provide for the forfeiture of any property right or any right to possession since no forfeiture is mentioned in that subsection. Thus, the discretion of the Minister in that particular subsection is subject to any property rights of persons interested in the "thing" seized.
And later at p. 201:
It seems quite clear to me that subsections (5) and (7) of section 10 are merely procedural and custodial. They provide a ready mechanism for a person to obtain by some re‑application the return of anything which has been seized and also provide for the custody of same in the event of any application not being made or in the event of the application being denied. They do not either explicitly or by necessary implication cause any property right to be forfeited.
I might add that if, in enacting these subsections, the Parliament of Canada did purport to provide that any money whatsoever, seized in a police raid under the Narcotic Control Act, including money which is not eventually connected with the commission of a criminal offence, would be forfeited to the Crown in the right of Canada in the event of an application not being made for the return of same within two months, then, these provisions would be ultra vires as infringing on the property and civil rights jurisdiction of the provinces.
By employing the language of ultra vires and of interference with property rights Addy J. articulates the underlying rationale of the first approach. From this standpoint the scope of entitlement in s. 10(6)(a) is bounded on the one hand by the presumption of innocence and on the other hand by the presumption of constitutionality. The presumption of innocence addresses the impropriety in terms of fundamental principles of criminal law of the imposition of a penalty of forfeiture where there has been no proof that an offence associated with the goods has been committed. The presumption of constitutionality addresses the impropriety in terms of legislative competence of federal legislative interference with property rights apart from any valid federal objective.
The decision of the Manitoba Court of Appeal in Re Hicks and The Queen (1977), 1977 CanLII 2101 (MB CA), 36 C.C.C. (2d) 91, takes this same narrow interpretive approach. The case deals with s. 10(9) which is exclusively concerned with forfeiture of seized conveyances. Subsection 10(6) is subject to ss. 10(8) and 10(9). At the restoration hearing the Crown argued that "subject to" meant that s. 10(9) should prevail until it was established that its terms could not be met. The applicant argued that this restricted s. 10(6) to a very limited operation as the class of things liable to seizure under s. 10(1)(c) but not liable to forfeiture under ss. 10(8) and 10(9) is almost non‑existent. The majority at the Court of Appeal quashed the order denying restoration at first instance. Although the applicant had not disproved taint, it was felt that the requirements of ss. 10(6)(a) and (b) had nevertheless been met. Hall J.A., with whom three others concurred, found that an order granting restoration is not necessarily inconsistent with a later order of forfeiture. In the course of his reasons he stated at p. 95:
It is here appropriate to observe that statutes of this nature should be strictly construed. Deprivation of property as provided in the Narcotic Control Act is, to say the least, an extraordinary measure; that is not to say it is bad but rather the remedy of restoration and the ultimate penalty of forfeiture need to be reviewed in the context of the Act providing for them. Clear terms are required before depriving a person of his property, either temporarily or permanently.
Both Addy J. and Hall J.A. describe the principle of strict construction in terms of deprivation of property. However, such deprivation is not unusual under criminal statutes although, as Addy J. has pointed out, an attempt by Parliament to expropriate property for a purpose which is outside federal competence would likely be ultra vires. Alternatively, the rule can be described in terms of a presumption favouring strict construction of penal statutes. Indeed, this seems to be the context in which Waisberg Prov. Ct. J. invoked a restrictive interpretive approach in the present case. Although he explained that he was doing so because forfeiture deprives the accused of "several rights", he also pointed out that the Narcotic Control Act is a statute "involving criminal prosecution", that all criminal matters with regard to the original applicant came to an end with his death, and that there has never been a final adjudication of guilt or innocence.
The principle of strict construction of penal statutes, however, is problematic. This Court in R. v. Robinson, 1951 CanLII 22 (SCC), [1951] S.C.R. 522, determined that no such general rule exists in Canadian criminal law. Admittedly subsequent cases have modified that position. However, the impropriety of requiring an applicant to disprove taint in a s. 10 restoration hearing does not stem simply from an assertion, dubious since Robinson, that it is improper to give a large and remedial reading to criminal provisions. Rather, the impropriety relates to the use of that broad interpretive approach to undermine the presumption of innocence which traditionally places the burden of proof on the Crown. Although it is clear from the case law under the Canadian Bill of Rights that it is open to Parliament to enact exceptions to the presumption of innocence, s. 2 of the Canadian Bill of Rights, if nothing else, expressly requires that any such exceptions be strictly construed. That section reads in part:
[Construction of law]
- Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to
(f) deprive a person charged with a criminal offence of the right to be presumed innocent until proved guilty according to law in a fair and public hearing by an independent and impartial tribunal, or of the right to reasonable bail without just cause; ...
Thus the unwillingness to apply the mischief rule to s. 10(6)(a) which is manifested in the decisions adopting the first analytic approach has a solid legal foundation in both the Canadian Bill of Rights and common law principles of criminal justice.
- The case of Re Collins and The Queen (1983), 1983 CanLII 3566 (QC CA), 7 C.C.C. (3d) 377, comes closest to articulating fully the inconsistency between an enlarged definition of entitlement and fundamental principles of criminal law. The case concerned a post‑acquittal restoration hearing at which the trial judge denied restoration. The Quebec Court of Appeal overturned his decision. Montgomery J.A.'s reasons at p. 378 are brief and to the point:
The practical effect of the judgment refusing the order of restoration is to subject respondent to a heavy fine for an offence of which he has been acquitted. This is contrary to the principle of autrefois acquit, and I cannot agree that it was Parliament's intention that s. 10 of the Narcotic Control Act, R.S.C. 1970, c. N‑1, should bear such a meaning.
This amounts to a statement that forfeiture can and should only take place under s. 10(8). McCarthy J.A., with whom Jacques J.A. concurred, acknowledges that s. 10 places the burden of disproof of taint on an applicant but finds that it is an error of law not to consider the applicant's acquittal when applying the test of entitlement. He states at pp. 380‑81:
In fact, it is only because the police believed that an offence under the Narcotic Control Act had been committed that they were able to carry out the seizure (s. 10(1)(c)). The innocence of the accused with respect to the offence for which he is charged is settled once and for all (except for appeal, which is not the present case) by his acquittal. I do not believe that Parliament wished that the accused be obliged to convince the judge of his innocence, whether the same judge or another judge, a second time, or to convince him of his innocence with respect to offences with which he has not even been charged, in order to regain possession of a thing which had been seized.
Again, there is an implicit assumption that forfeiture can only occur upon a finding of guilt. Unfortunately, McCarthy J.A. does not address the issue of why in a pre‑trial situation it is not likewise an error of law to require an applicant to disprove guilt on pain of forfeiture with respect to offences with which he or she may not be charged, or if charged, of which he or she may not be convicted. That issue is central to the resolution of the present appeal.
- Finally, in R. v. Molina (1985), 7 O.A.C. 235, the Ontario Court of Appeal refrained from clarifying and reinforcing its decision in Largie, supra, and from making a clear pronouncement with regard to onus of proof of "taint" in s. 10(6)(a). Vanek Prov.Ct.J. had restored seized monies to an applicant in spite of finding that the applicant was "reluctant, unwilling or unable to provide a satisfactory explanation of the source from which all this money was generated, and how it came to be accumulated". Neither Aimonetti, supra, nor Largie, supra, nor the provisions of the Narcotic Control Act in Vanek J.'s view justified the conclusion that there is an onus on an applicant to prove that seized monies were not derived from traffic in drugs. As the Crown had failed to adduce any evidence on which he could reasonably conclude that the monies were tainted, he restored them. The Court of Appeal quashed the trial judge's restoration order. Grange J.A., in oral reasons for the Court, based his decision on a finding that Vanek J.'s assessment of the evidence was in error and that the Crown had provided enough evidence on which one could reasonably conclude that the applicant acquired the seized monies from drug trafficking. In doing so Grange J.A. not only sidesteps the question of onus but also gives a very cautious reading to Largie and Aimonetti as follows at p. 238:
It appears clear to us that whatever the onus may be and wherever it may lie, the application may be refused if the magistrate concludes that the money resulted from an illegal trade in narcotics. This is precisely what was held in Aimonetti at p. 172 and approved in Largie at p. 511.
(b) The Public Policy Approach
(b) The Public Policy Approach
The requirement that an applicant disprove taint because of "the well known rule of public policy" is found by reading "entitled" in s. 10(6)(a) as meaning "lawfully entitled". This triggers the application of the maxim ex turpi causa non oritur actio. Failure to consider this rule of public policy constitutes the requisite "error of law" on the basis of which a superior court reviewing on certiorari can quash a magistrate's decision. In order to prove lawful entitlement an applicant is usually called upon to demonstrate that the monies came from a legitimate source and are therefore not the profits of crime. It is generally accepted that the rule is person‑specific, i.e., that what is abhorrent to public perception is the spectacle of the actual wrongdoer reaping the benefits of his or her wrongdoing with the compliance, if not the assistance, of the courts. From this standpoint the appellant's assertion that his status as an innocent representative undermines the purpose of the rule is crucial to his success in the current appeal. The cases can be divided into two categories: (1) those in which the turpitude which triggers the rule consists of a reasonable belief on the part of the authorities that the monies seized are related to a narcotics offence, and (2) those in which the suspected taint has been confirmed by the applicant's own admissions.
The cases of Re Regina and Blaney (1979), 1979 CanLII 2946 (ON SC), 50 C.C.C. (2d) 395, Hughes J.'s decision in Largie, and Sowrey v. Minister of National Health and Welfare, 1984 CanLII 3681 (MB PC), [1985] 1 W.W.R. 85 fall into the first category. In Blaney the parties foreclosed discussion of the operation of ex turpi causa in this context by admitting that the rule applied but arguing on an alternative basis. However Grange J. (as he then was) of the Ontario High Court comments at p. 398:
I might have had some doubt that the well recognized principle that the Courts will not by giving judgment in his favour permit a litigant to profit by his crime extends to cover situations such as this where the accused seeks to recover money removed from him under judicial process but certainly the proposition is arguable and, as I have said, is not disputed before me.
In Largie Hughes J. of the Ontario Supreme Court quashed Rice Prov. Ct. J.'s restoration order because of his failure to take account of the rule. The Ontario Court of Appeal upheld that result but only by applying the legislative text approach set out in Aimonetti.
Only in Sowrey does one find a full‑blown use of the public policy rationale in spite of the lack of turpitude in the strict sense. In that case an undercover agent had arranged to exchange sixty‑four pounds of marijuana for some cash and several thousand units of LSD. The applicant was arrested and a quantity of cash seized before the transaction occurred. Garfinkel Prov. Ct. J. of the Manitoba Court denied restoration in a post‑conviction hearing. There was no evidence to connect the cash to the offences with which the applicant had been convicted at trial. Hicks, supra, was distinguished on the basis that there the interest of an innocent finance company in the seized conveyance swung the balance in favour of restoration. Although Garfinkel Prov. Ct. J. quotes extensively from Aimonetti, he uses the language of public policy in his conclusion at p. 95:
In the case before me, it is equally contrary to public policy and against the public interest for a court to grant an order of restoration if to do so would place in the hands of the applicant money which, on the facts before me, was associated with an illegal drug transaction and was intended to be used in an illegal drug transaction. I want to say I am not deciding the issue of ownership, which could be the subject of civil proceedings.
- The second category of cases is comprised of those in which the turpitude which triggers the rule is an actual admission of guilt. They include Re Regina and Buxton (1981), 1981 CanLII 1217 (AB KB), 62 C.C.C. (2d) 278, and Minister of National Health and Welfare v. Medd, 1983 CanLII 3650 (MB CA), [1983] 6 W.W.R. 304 (Man. C.A.) In Buxton the applicant admitted that part of the cash seized came from the sale of cocaine although not from the sale of the cocaine seized. The trial judge clearly adhered to the first analytic approach as the following passage quoted at p. 280 illustrates:
I come back again to the point that on the admitted facts it is not possible to determine what amounts came from what source (i.e., legitimate or illegitimate). Putting the Crown's case in its strongest possible position‑‑that the amount derived from narcotic sale is to be considered as $1,099 and the amount derived from the sale of the car at $1 still results in the sum of $1 being forfeited to the Crown completely without any authority to do so. Further to require the applicant to prove the proportions of the source of the money when the admitted facts are that the "mixed fund" is in "indeterminate proportions" places an impossible burden upon him which again would result in an effective forfeiture without authority in that the money would be held in perpetuity by the Minister ... .
In conclusion then I would hold that although the Kolstad case and public policy are both some authority that Courts should not, and should not appear to, countenance returning money to a person who obtained that money from an illegal activity; nevertheless, whereas here the money is a "mixed fund" in "indeterminate proportions" I would hold that the right to property is paramount in these circumstances. I find that the applicant has proved on a preponderance of evidence that he is entitled to possession of the $1,100 concerned, and since subpara. (b) has been complied with in the admitted facts, and since s. 10(8) does not apply, that the applicant is entitled to an order restoring the $1,100 to him.
- McFadyen J. of the Alberta Queen's Bench quashed the restoration. In her view it was contrary both to public policy and to the scheme set out in s. 10 to allow restoration of the proceeds of crime. She stated at p. 282:
In my view, the words in s. 10(6); "is entitled to possession" must be read as lawfully entitled to possession. In this matter the Court had notice that Buxton obtained some of the money by unlawful means. Buxton is not entitled to possession of that sum of money. The onus is on Buxton to establish the amount of money which he was lawfully entitled to possess.
- In Medd there was likewise an admission of guilt, although the illegality was not narcotics related. The applicant in that case was arrested with a suitcase containing narcotics and cash. At the restoration hearing he testified that the money was unconnected with drug trafficking and that most of it stemmed from an illegal pyramid scheme in Alberta. He also admitted that he intended to use the money to purchase narcotics for re‑sale. The trial judge restored the monies. Even in the face of the applicant's admission he refused to abandon the simple proof of entitlement approach or to apply the ex turpi rule. Hall J.A. quotes from the trial judge's reasons at p. 306:
Applying this definition of the strict interpretation' principle, to the Crown's allegation that the words entitled to possession' in s. l0(6) means [sic] "lawful" possession, I cannot, on grounds of interpretation or public policy, extend the plain, and ordinary meaning, sought by the Crown. It is clear in law that, if the language of a criminal statute creates uncertainty, the person against whom it is being enforced is entitled to the benefit of any doubt, or to the less harsher of interpretations.
The trial judge was of the view that the proper way for the Crown to proceed would be to charge the applicant under the relevant section of the Criminal Code although he admitted that proof would be difficult as the applicant had invoked the protection of the Canada Evidence Act [R.S.C. 1970, c. E‑10] in making his admission.
- Wilson J. quashed the restoration. Unlike the trial judge he felt that entitlement meant lawful entitlement. The Court of Appeal upheld his decision. Quoting from the reasons of Hall J.A. at p. 308:
In my view, it is quite unnecessary to consider the scope of the words "entitled to possession". It is sufficient to dispose of the matter by saying that it would be contrary to public policy and against the public interest for the Court to lend its process to grant an order of restoration, if to do so would place in the hands of the applicant money which, by his own admission, was illegally obtained. Mr. Medd swore that the money was not the fruits of illegal trade in narcotics but of another illegal activity. He asks for the money back. The court should not entertain that approach. In rejecting it, the court is not deciding the issue of ownership, which could be the subject of separate civil proceedings if Mr. Medd be so advised.
(c) The Legislative Text Approach
(c) The Legislative Text Approach
The third approach also requires an applicant to disprove taint. However it replaces the narrow focus of the public policy rationale on the word "entitlement" in s. 10(6)(a) with a careful reading of the entire statutory scheme in s. 10. There are two consequences of this difference in approach which are significant for the purposes of the current appeal. First, as mentioned earlier, the taint attaches to the thing seized rather than to the person applying. Thus the innocence of the present appellant has no impact on result under this analysis. Secondly, the turpitude which is traditionally required to trigger the ex turpi rule has been legislatively replaced by the reasonable belief of the officer who seized the goods initially that those goods are associated with narcotics offences.
Kopstein Prov. Ct. J.'s decision in R. v. Tupper (1976), 1976 CanLII 1440 (MB PROVJCT), 32 C.C.C. (2d) 529 (Man.), is one of the earliest expressions of this approach. Although the application failed for non‑compliance with the technical requirements in s. 10(5), the trial judge nevertheless considered the merits of the claim and in particular the scope of s. 10(6)(a) entitlement. He placed great importance on the use of the word "satisfied" in that section in terms of the Magistrate's being satisfied that the applicant was entitled to possession of the goods. In his view the word meant different things in different contexts. Therefore he focused on the context of s. 10 in its totality. He wrote at p. 535:
While it appears that under s. 10(1)(c) a peace officer may seize anything, including any money by means of which or in respect of which he reasonably believes an offence to have been committed under the Narcotic Control Act, it is only where such seized moneys were used for the purchase of the narcotic in respect of which an accused was convicted that such moneys are forfeited to Her Majesty under s‑s. (8). Any other money seized may be restored pursuant to an application under s‑s. (5). If it had been Parliament's intention, however, that such money was to be restored merely upon the failure of the Crown to show that it was used for the purchase of the narcotic which is the subject of the proceedings, it might simply have enabled or required the Court to restore such money by reason of that failure to the person, if any, from whom it was seized. Parliament, however, has made it necessary that an application be made to a Magistrate and that the Magistrate be satisfied of the applicant's entitlement to possession.
Under s. 10(1)(c), a peace officer may seize anything by means of or in respect of which "he reasonably believes" an offence under the Narcotic Control Act has been committed. In the circumstances of such a seizure it appears likely that it was the legislative intent to require a person who seeks restoration to provide proof of his right to possession. Evidence relating to the legitimate source of the applicant's acquisition of the moneys, in a case such as the present case, might well be a relevant consideration.
The thrust of Kopstein Prov. Ct. J.'s analysis is to treat the scope of s. 10(6)(a) proof of entitlement as a function of the scope of the s. 10(1)(c) seizure power. In other words the fact of a s. 10 seizure is evidence of taint, and strictly speaking, the Crown need not lead any further evidence. If the applicant fails to demonstrate the legitimacy of the funds' source, the fact of seizure becomes conclusive evidence of taint. In Tupper the Crown actually did call a witness who gave additional circumstantial evidence of the monies' taint, namely that they were found in a vase along with two scraps of paper on which figures followed by the abbreviations "lbs." and "oz." were written.
- Aimonetti, supra, is the authority usually cited for the proposition that the scheme of s. 10 requires an applicant to disprove taint in order to obtain restoration. Again, the Crown in that case led additional evidence of taint, namely that traces of cannabis resin were found on some of the seized bills. Huband J.A.'s majority reasons are very similar to the reasons in Tupper. The following passage, which was approved by the Ontario Court of Appeal in Largie, sets out the critical elements of the third analytic approach at pp. 171‑72:
Looking at s. 10 in its totality, I think it is clear that the authorities are entitled to seize cash, beyond that which may be involved in a particular illicit transaction with respect to which a charge is laid. Money actually used in the purchase of a narcotic is to be forfeited to Her Majesty at the conclusion of a trial, under s‑s. (8). The money we are now concerned with falls in a different category. The scheme of the Act, as I see it, allows police authority to seize property related to the illicit trade in drugs, possession of which is then turned over to the Minister unless the applicant is able to make out a case for restoration. The procedures under s. 10 do not constitute the Minister or the Crown as owner of the property in question. The Minister becomes entitled to "possession", but it is then open to the accused, or indeed anyone else, to advance a civil claim for the recovery of the property from the Minister. In Smith v. The Queen (1975), 1975 CanLII 2292 (FC), 27 C.C.C. (2d) 252, 67 D.L.R. (3d) 177, [1976] 1 F.C. 196, Addy J. of the Federal Court made it clear that s. 10(5) and (7) are "merely procedural and custodial", and that "they do not either explicitly or by necessary implication" cause any property right to be forfeited. The right to advance a proprietary claim in separate civil proceedings is open to anyone.
Where the property in question is money, the claim for restoration of possession will not be allowed if the cash appears to be the fruits of illegal trade in narcotics. The scheme of the Act is to deny possession of such funds to one accused and subsequently convicted of participating in illegal trade, (subject to that person's right to claim ownership in separate civil proceedings). It would be contrary to the scheme of the Act to allow restoration on the limited ground that the money could not be identified in a transaction with the specific narcotic found on the premises. In my opinion, Kopstein Prov. J. had the jurisdiction to deny the application for restoration in spite of the fact that the money in question was not directly identified as flowing from a transaction involving the cannabis resin seized from the premises. So long as there was evidence upon which he could reasonably conclude that the money resulted from illegal trade in narcotics, he was entitled to treat such money as a thing "in respect of which ... an offence ... has been committed", to borrow from the language employed in s. 10(1)(c).
Largie reinforced this position by reference to s. 312 of the Code which makes it an offence to knowingly possess the proceeds of crime. Houlden J.A. in that case stated that restoration should not be granted if the seized money was obtained from the sale of narcotics thus encouraging the commission of a s. 312(1) offence. This glosses over the fact that the elements of a s. 312(1) offence had not been proven. Indeed, in Largie it appears that the "taint" stemmed from the simple fact that the money was seized in the course of a s. 10 search. In the case at hand the respondent makes a similar argument, although in a more tentative form, by submitting that "the Court, if it were to order restoration, could be in the position of placing property in the applicant's hand which could constitute an offence under s. 312(1) of the Criminal Code".
In discussing R. v. Molina, supra, I noted that the Court of Appeal of Ontario seemed to retreat from the position that the scheme of the Act requires an applicant to make out a case for restoration by demonstrating the legitimacy of the source of the funds. Rather, Grange J.A. reduced the cases of Largie and Aimonetti to the proposition that there must be evidence on which a Magistrate could reasonably conclude that the monies were tainted. He refrained from a discussion of onus thus avoiding what is perhaps the most troubling aspect of both the public policy approach and the analysis based on the total scheme in s. 10.
Statutory Construction and Section 10(6)(a)
5. Statutory Construction and Section 10(6)(a)
The question of what is entailed in s. 10(6)(a) entitlement is largely one of statutory construction. The jurisdiction of a magistrate under s. 10 must be found within the confines of the authority and powers described in its provisions. In that sense Huband J.A.'s method of analysis in Aimonetti which relies on a cohesive view of the legislative text is persuasive. However, the interpretation which he proposed, while it is supported by the text, is difficult to reconcile with the substantive and constitutional limits on statutory construction, and in particular with the presumption of innocence as it has evolved at common law and under the Canadian Bill of Rights.
The classic formulation of the principle that a person accused of a criminal offence is innocent until proven guilty is found in Viscount Sankey's decision in Woolmington v. Director of Public Prosecutions, [1935] A.C. 462 (H.L.), at pp. 481‑82:
Throughout the web of the English Criminal Law one golden thread is always to be seen, that it is the duty of the prosecution to prove the prisoner's guilt subject to what I have already said as to the defence of insanity and subject also to any statutory exception. If, at the end of and on the whole of the case, there is a reasonable doubt, created by the evidence given by either the prosecution or the prisoner, as to whether the prisoner killed the deceased with a malicious intention, the prosecution has not made out the case and the prisoner is entitled to an acquittal. No matter what the charge or where the trial, the principle that the prosecution must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be entertained.
The principle is the foundation for a host of evidentiary rules and determines the otherwise inexplicable boundary between legal and scientific truth. As Viscount Sankey's pronouncement makes clear, two fundamental tenets flow from the presumption of innocence: first, that the burden of proof is upon the Crown and second, that proof is on the high standard of beyond a reasonable doubt. Nevertheless, Viscount Sankey acknowledged the legitimacy of statutory incursion into the principle and the jurisprudence of this Court under the Canadian Bill of Rights acknowledges to some degree the validity of such legislative derogation. However, Ritchie J.'s majority decision in the leading case of R. v. Appleby, 1971 CanLII 4 (SCC), [1972] S.C.R. 303, maintained that an enactment which reverses the onus of proof must do so expressly. Indeed, the Canadian Bill of Rights itself, as discussed earlier, if nothing else requires express words in order "to abrogate, abridge or infringe" any of the rights and freedoms in s. 2. Accordingly, if legislation permanently dispossessing a person of his or her property is properly characterized as penal, and in this case I think it is, then the procedural protections enshrined in the Canadian Bill of Rights which attend the imposition of penalties by the state should apply.
The appellate decisions which favour imposing a burden of disproof of taint on an applicant offer two rationales to justify their position. Houlden J.A. in Largie proposes a form of preventive criminal regulation; Huband J.A. in Aimonetti explains the denial of restoration under s. 10(6)(a) by maintaining that legal title is not affected by the restoration proceedings.
As discussed earlier, Houlden J.A. in Largie was of the view that the approach in Aimonetti was strengthened by s. 312(1) of the Criminal Code. He wrote at p. 293:
By virtue of s. 312(1), it would be an offence for the appellant to be in possession of money derived from the sale of narcotics. The court should not, therefore, make an order of restoration if the money were obtained in this way.
While this would perhaps be reasonable if the elements of a s. 312(1) offence had been proven, it seems unorthodox to deny restoration on the possibility that this would lead to the commission of such an offence. Section 312(1) stipulates that not only must an accused be in possession of tainted property but he or she must also have knowledge of the taint. In Largie the applicant led evidence at his hearing to show that the seized monies were derived from painting and decorating. Rice Prov. Ct. J. took the position that entitlement could be established without evidence of the source of the cash. No other evidence of taint or of knowledge of taint is mentioned by Houlden J.A. apart from the initial seizure. While a law which is specifically aimed at the prevention of crime was upheld in Goodyear Tire and Rubber Co. v. The Queen, 1956 CanLII 4 (SCC), [1956] S.C.R. 303, its operation was contingent on the previous commission of an offence. The provision in question allowed the court under s. 31 of the Combines Investigation Act, R.S.C. 1927, c. 26 as re‑enacted by 1952 (Can.), c. 39, s. 3, to order, in addition to any other penalty, the prohibition of the continuation or repetition of the offence of which the person had been convicted. In the present case not only is there no conviction, but there is no express legislative grant of authority to the magistrate. Furthermore, the judicial exercise of such a preventive power in these circumstances undermines established rules of proof and procedure designed to protect the accused. It is unnecessary for the purposes of this case to decide whether in fact an explicit legislative attempt would fall within federal competence over crime prevention.
The same observations can be made about the decisions which employ the public policy approach in the absence of any proof of turpitude. Again this seems to be an unwarranted exercise of judicial power in the form of preventive regulation of criminal behaviour contrary to both the normal operation of the ex turpi rule as well as fundamental principles of our justice system. In the circumstances it would be more consistent with considerations of public policy to grant rather than to deny restoration.
The second rationale is much more persuasive. In the previously quoted passage from Aimonetti, at pp. 171‑72, Huband J.A. makes reference to Addy J.'s characterization in Smith of ss. 10(5) and 10(6) as "merely procedural and custodial" and as neither explicitly nor implicitly causing forfeiture. Rather, a denial of restoration was described by Huband J.A. as simply a denial of possession and he was at pains to point out that it remained open to an applicant "to advance a proprietary claim" in a separate civil action against the Minister. Indeed, this was the nature of the action in Smith.
However, Huband J.A.'s view of the restoration hearing process was rejected by Mahoney J. of the Federal Court of Appeal in R. v. Aimonetti (1985), 1985 CanLII 5532 (FCA), 19 C.C.C. (3d) 481. When the applicant in Aimonetti met with failure in the Manitoba Court of Appeal and his application for leave to appeal that decision to this Court was dismissed, he instituted a civil action in the trial division of the Federal Court for the return to him as legal owner of the seized money plus interest. A preliminary question concerning the Federal Court's jurisdiction and res judicata was put to the Court of Appeal. Mahoney J. held that the cause of action at the restoration hearing was the same as the cause of action before the Federal Court. The applicant's ownership of the property had never been in question as no s. 10(8) forfeiture had ever taken place. Thus, the issue of possession had been conclusively determined under ss. 10(5), 10(6) and 10(7) in favour of the Minister. There was no need to distinguish Smith as in that case no previous restoration hearing had taken place. If Mahoney J. is correct, then what might otherwise be described as administrative detention of property subject to an ultimate determination of legal title is in fact a final and judicial determination of possessory rights. A denial of restoration is tantamount to a penalty of permanent dispossession.
It seems to me that the first analytic approach, which requires proof only of the right to possession and which does not require disproof of taint on the part of an applicant, is not only supported by the text of s. 10 but is also consistent with the interpretive tenets that flow from the entrenchment of the presumption of innocence in the Canadian Bill of Rights. Furthermore, the notion that there should be an exact correlation between the scope of the seizure power in s. 10(1)(c) and ministerial custody in s. 10(7), while formally pleasing in its symmetry, does not make functional sense. The considerations which would favour a fairly broad grant of power to a police officer under a search warrant to the detriment of the right of an individual to preserve his or her privacy no longer operate at the point of a restoration hearing. A further detention of property which has no evidentiary use and which has not been shown to be associated with the commission of an offence serves no legitimate purpose and would seem to require much clearer language than that employed in s. 10.
Conclusions
6. Conclusions
At the beginning of these reasons I stated that three crucial questions must be answered in order to settle this appeal: what is meant by s. 10(6)(a) entitlement, on whom lies the burden of its proof or disproof, and what is the standard of proof? In light of the foregoing discussion I would conclude that, generally speaking, the restrictive interpretation which I have called the simple proof of entitlement approach is completely consistent with the general principles of criminal justice and with the actual scheme in s. 10. Many of the decisions which employ this approach, including that of Waisberg Prov. Ct. J. in the present case, rely either explicitly or implicitly on the presumption of legal title to the goods which arises from the fact of possession. The rule is summarized in Halsbury’s Laws of England, vol. 35, 4th ed., at paragraph 1122 as follows:
Possession prima facie title. The presumption of law is that the person who has de facto possession also has the property, and accordingly such possession is protected, whatever its origin, against all who cannot prove a superior title. This rule applies equally in criminal and civil matters. Thus, as against a stranger or a wrongdoer, a person in actual or apparent possession, but without the right to possession, has all the rights and remedies of a person entitled to and able to prove a present right to possession.
In Canada the presumption has been applied in the cases of McDonald v. Lane (1882), 1882 CanLII 30 (SCC), 7 S.C.R. 462, R. v. Meloche, 1970 CanLII 313 (ON CA), [1970] 3 O.R. 798 (C.A.), and R. v. Bagshaw, 1971 CanLII 13 (SCC), [1972] S.C.R. 2. Thus, in order to satisfy a magistrate at a restoration hearing on the question of entitlement, a claimant should be prepared to show on the balance of probabilities that he or she was in possession of the property at the time of seizure. To place the onus on the claimant in this way does not offend established rules of procedure as the claim of entitlement at this stage is simply the assertion of a civil right. In addition, such evidence is readily obtainable by most claimants. The generous standing in s. 10(5) leaves it open to "any" other person to rebut the claim to possession.
While it seems sensible to assume that entitlement means lawful entitlement, the rule of public policy should only operate where there is turpitude. Where that turpitude is a criminal wrong, criminality must be demonstrated in accordance with normal procedures. Section 10(8) which directs forfeiture of things seized which were "used in any manner" in connection with a narcotics offence of which a person has been convicted, codifies the ex turpi rule in the context of narcotics convictions. This leaves open two questions. How must the tainted connection be proven under s. 10(8), and does that section imply that the ex turpi rule is excluded from operation under s. 10(6)(a) where the things seized are connected to a conviction for a non‑narcotics offence?
The answer to the first question is subject to the same considerations that apply to the discussion of the burden imposed on an applicant by s. 10(6)(a) entitlement. Fundamental principles of criminal justice as well as the nature of the proceedings under s. 10 make it inappropriate to transform a restoration hearing into a trial in which the Crown need only meet the civil standard of proof in order to establish guilt or "taint". Thus the culpability of the owner of the seized property must have been proven at antecedent criminal proceedings under the Narcotic Control Act. In the absence of a specific finding at trial of the requisite "tainted connection", the Crown may fill the evidentiary gap by proving taint on the reasonable doubt standard at the restoration hearing. Where there is no antecedent conviction and no basis for laying a narcotics related charge, proceedings should be initiated under s. 312(1) of the Criminal Code.
The second question concerns the situation in which the Crown places in evidence a prior conviction for a non‑narcotics offence and the association of the seized property with the commission of that offence. The interpretive guideline expressio unius est exclusio alterius suggests that s. 10(8) precludes the operation of the ex turpi rule here. However, such an interpretation would multiply proceedings as well as offend public perception of the justice system. Accordingly, I do not think the expressio unius rule should prevent a reading of s. 10(6)(a) entitlement to mean "lawful entitlement" in this very limited context. The more fundamental question remains whether the ex turpi rule has been correctly applied, namely whether the facts of a connection between the property and the commission of an offence, be it a Code offence or a narcotics offence, have been properly established. In summary, the public policy approach is to be faulted only in those cases in which this factual basis for its operation is lacking. In addition, where the rule of public policy legitimately applies, the status of an applicant as the innocent representative of a convicted but deceased owner would not entitle the applicant to restoration. In general, I agree with the following characterization of the ex turpi rule by Lord Diplock in Hardy v. Motor Insurers' Bureau, [1964] 2 All E.R. 742, at pp. 750‑51, and with his assumption that a successor stands in the shoes of the original claimant:
All that the rule means is that the courts will not enforce a right which would otherwise be enforceable if the right arises out of an act committed by the person asserting the right (or by someone who is regarded in law as his successor) which is regarded by the court as sufficiently anti‑social to justify the court's refusing to enforce that right.
Whether countervailing considerations apply where, as in that case, the benefit in question is claimed under an insurance policy, need not be decided here.
- Disposition of the Present Appeal
7. Disposition of the Present Appeal
Much of the argument in this case centred on the appellant's status as an innocent representative of the estate in answer to the allegation of taint associated with the seized monies. There was no admission of guilt by the appellant, simply an admission that a burden of disproof of guilt could not be met. In the debate over the effect of the original applicant's death on the interpretive alternatives, little attention was paid to the preliminary question of whether in any circumstances a magistrate under s. 10 may deny restoration of things seized to their proper owner where no conviction has been entered and where the evidentiary use of the things has either expired or is non‑existent. It seems to me, for the reasons given in the preceding discussion, that a negative answer must be given to that question. While the Crown may defeat entitlement by fulfilling the terms of s. 10(8) or alternatively, by placing in evidence the necessary facts to show that entitlement under s. 10(6)(a) would be unlawful, in both those situations the fact of a previous conviction is a condition precedent. Thus the appellant's lack of association with the reasonably held belief which prompted the initial seizure is irrelevant. Indeed, even if it were clear on the evidence that the appellant was closely involved in Mr. Gombosh's affairs, this would not be determinative by itself. The Crown has not argued that the monies seized are related to any ongoing investigation of Mr. Gombosh, the appellant, or any other person. As Waisberg Prov. Ct. J. pointed out, all criminal proceedings against Mr. Gombosh were discontinued at his death. Thus, there is no evidentiary use for the monies and the s. 10(6)(b) branch of the test for restoration is satisfied. In addition, counsel for the Crown conceded at the restoration hearing that there was sufficient evidence to show that Mr. Gombosh was in physical possession of the seized monies. The presumption of entitlement which operates in that circumstance has not been rebutted. Nor has the appellant's status as the representative of Mr. Gombosh's estate been challenged. Accordingly, the s. 10(6)(a) branch of the test for restoration has also been satisfied.
I would allow the appeal, set aside the orders of Smith J. and of the Court of Appeal for Ontario, and reinstate Waisberg Prov. Ct. J.'s order for the restoration of the property to the appellant.
Appeal allowed.
Solicitor for the appellant: Alan D. Gold, Toronto.
Solicitor for the respondent: Department of Justice, Toronto.
