COURT FILE NO.: CV-06-078786-00

DATE: 2012-02-07

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Attorney General of Ontario

Konstantina Chantzis, for the Applicant

Applicant

• and -

139 William Honey Crescent, Newmarket ( in rem ) and Vui Lian Yong, Zhu Nu Feng

Edward Hung, for the Zhu Nu Feng

Respondents

HEARD: July 29, 2011

REASONS FOR JUDGMENT

EDWARDS J.

Overview

[ 1 ] Marijuana grow operations have attracted wide spread media attention over the last number of years. For a relatively small investment, large illegal profits can be made. Unfortunately, much grief accompanies this criminal activity. The unsuspecting owner of a home that houses a “grow op” may be the victim of a home that ultimately requires extensive remediation. The owner may also become the subject of an application by the Crown for a forfeiture order under the Civil Remedies Act, 2001 , (“the Act”).

[ 2 ] This matter involves an application for a forfeiture order with respect to the net proceeds of sale of 139 William Honey Crescent, Markham, Ontario (“the property”).

[ 3 ] The respondents in this matter Vui Lian Yong (“Yong”) and Zhu Nu Feng (“Feng”) were married in 1994 and had three children. They separated in 2002 and got back together for the sake of the children in an attempt to reconcile between October 2003 and February 2004.

[ 4 ] The property was owned by Feng and after their latest break-up she allowed Yong to remain in the property ostensibly to undertake renovations. If her evidence is accepted, she was unaware that subsequent to her departure from the property, Yong commenced a grow operation that ultimately resulted in his arrest on November 16, 2004.

[ 5 ] The Crown now seeks an order for forfeiture of the net proceeds of sale of the property.

The Facts

[ 6 ] The property was purchased by Feng in 2003. Her uncontradicted evidence is that she purchased the property with her own money which had come from the proceeds of sale of other properties. The property was purchased for $315,000 and was subject to a first mortgage in favour of the Royal Bank (“RBC”) in the amount of $185,000. Approximately two months after the date of purchase, a second mortgage was registered against title in the amount of $50,000. The carrying costs of the first mortgage with RBC was $1,082.82 per month. Feng’s evidence with respect to the second mortgage is that she lent the $50,000 to her sister, which was ultimately repaid.

[ 7 ] Feng’s income tax returns were filed in evidence before me. Her tax returns show that in 2003 she had a total declared income of $6,214.43 of which $4,785 was actual employment income. In 2004 she showed declared income of $14,374 of which $988 was employment income and $7,878 was income derived from a numbered company. The Crown, not surprisingly, argues that given Feng’s declared income to CRA she could not possibly have carried her obligations with RBC, as well as her other ongoing day to day expenses. The Crown argues Feng must have supplemented her income from monies that her husband derived from the marijuana grow operation. The fact remains however, that Feng had been able to purchase the property in 2003 at a point in time when there is no evidence that she had access to any illegal monies from a grow operation and that she was able to carry the costs of the property for nearly a year prior to her departure from the property and her husband’s commencement of the grow operation. One can only speculate that Feng’s actual declared income as evidenced in her income tax returns was not an honest reflection of her true income.

[ 8 ] As previously noted Feng and Yong had married in 1994 and separated in 2002. At the time of separation, Feng had full custody of the children.

[ 9 ] After purchasing the property in 2003 Feng and Yong, in an attempt to reconcile, began living at the property in October 2003. This attempted reconciliation lasted until February 2004 when Feng discovered Yong was involved in another relationship. Feng, therefore, decided to leave the property and moved in with her mother, sister and sister’s family at a property known as 10 Page Crescent, Markham, Ontario.

[ 10 ] After leaving the property, Feng allowed Yong to remain in the house ostensibly so that he could undertake renovations that Feng had intended to do herself. In return Yong would pay rent in an amount that Feng stated would be $1,500 per month, while Yong’s evidence was that he would pay rent of $1,000 per month. No formal lease was put into evidence substantiating this relationship, nor was any of the rental income declared by Feng in her tax return.

[ 11 ] Subsequent to his arrest, Yong provided information with respect to the grow operation. He indicated that he had been selling marijuana for approximately six months and that he was selling it at a cost of $1,400 per pound. When cross-examined on his affidavit, he indicated that it had cost him approximately $10,000 to set up the grow operation and that he had to dismantle the basement of the property in order to set up the grow operation.

[ 12 ] It is noteworthy, that at no time during the course of Yong’s police statement, nor in his cross-examination on his affidavit filed in these proceedings, did Yong ever indicate that his ex-wife was in any way involved in the grow operation, nor does he indicate that his ex-wife had any knowledge that the grow operation was ongoing subsequent to her departure from the property in February 2004.

[ 13 ] There can be no dispute that when the police executed the search warrant at the property on November 16, 2004, that what was discovered was a fully operational, sophisticated, commercial marijuana grow operation located in two rooms in the basement. There were a total of 953 plants in various stages of growth with an estimated street value of just under $1,000,000.

[ 14 ] During the course of the police investigation at the property, various personal effects suggested that the property was being lived in, including children’s’ clothing on the main and second floor. The police also discovered a bag of marijuana on a bedside table located in what is described as the children’s bedroom.

[ 15 ] On the same day as the search warrant was executed, Feng was located at 10 Page Crescent, and was arrested for production of a controlled substance marijuana and possession of a controlled substance for the purposes of trafficking in relation to the marijuana grow operation at the property.

[ 16 ] Presumably, as a result of the discovery of children’s clothing at the property, the Children’s Aid Society became involved and a Children’s Aid Society worker, together with a Cantonese speaking York Regional Police Officer, conducted a follow-up investigation during the course of which Feng purportedly advised that she lived at the property with her husband and three children together with other unnamed individuals.

[ 17 ] Information relied upon by the Crown to the effect that Feng confirmed to the CAS worker and the Cantonese York Regional Police Officer that she lived at the property, is contradicted in Feng’s evidence before me. Feng does not read English, nor does she speak English. Her native language is Cantonese. On her cross-examination on her affidavit, Feng testified that when she was asked by the York Regional Police Officer and the CAS worker as to whether she lived at the property, she was shown her driver’s licence and she believed that the question that she was being asked was whether the house was hers. It is important to note that when she was questioned by the police and the CAS worker, she was not provided with the assistance of a professional interpreter, but rather a Cantonese speaking police officer. What is particularly noteworthy as well is that on the evidence before me, the Crown elected not to put in evidence any affidavit evidence of the Cantonese speaking police officer or any evidence from the CAS worker. Instead, the Crown filed the affidavit of one of the investigating police officers, Detective Cardwell, who states, “I have reviewed the case notes of Teresa Zonneveld, and have spoken to her. As a result, I have learned the following:

(a) On November 16, 2004, Teresa Zonneveld attended at 10 Page Crescent in the town of Markham to conduct a follow-up investigation in relation to the children living at the marijuana grow op located at 139 William Honey Crescent;

(b) Ms. Feng advised Teresa Zonneveld that she lived at 139 William Honey Crescent with her husband, Vui Lian Yong and their three children; and

(c) Ms. Feng advised Teresa Zonneveld that other people lived at the house, but that she did not know their names.

[ 18 ] There is no explanation as to why the first hand information of Teresa Zonneveld herself together with her field notes, were not put in evidence before me. There is also no explanation as to why I did not have the first hand evidence of the Cantonese speaking police officer, particularly, in the face of Ms. Feng’s evidence with respect to her misunderstanding regarding the question put to her as to whether she lived at the property as opposed to owned the property.

[ 19 ] As a result of the investigation by the CAS, the three children were put into foster care. Approximately one year later the children were returned to Feng. There is no information provided as to why the CAS presumably backed off their initial concern that Feng had allowed the children to live at the property while a marijuana grow operation was ongoing, which would have had obvious health concerns for the children, and for that matter, anyone else living at the property. I can only surmise that the reason why the children were ultimately returned to Feng was as a result of further investigation that Feng in fact was not living at the property with the children, thereby exposing the children to obvious health concerns. It is also worth noting that the charges that were originally laid against Feng were ultimately withdrawn, again, presumably because the Crown felt it did not have evidence that would lead to a reasonable prospect of conviction.

[ 20 ] The evidence that was relied upon to suggest that the children were living at the property was based on observations made by the police executing the search warrant in November 2004, to the effect that there were items of children’s clothing located at the property. What is significant is that none of the photographs taken by the investigating police officers were tendered in evidence before me that would substantiate the extent of that critical piece of evidence of children’s clothing that would have linked Feng to potential knowledge of what was going on at the property. Photographs were taken but not put into evidence. There is no evidence as to the quantity of the items of children’s clothing. There is also no evidence that one might have expected to substantiate a family living at the property such as evidence with respect to the contents of the refrigerator.

[ 21 ] What is also absent from the evidence before me is the actual statement made by Yong to the York Regional Police at the time of his arrest. His statement was videotaped. That videotape could easily have been put into evidence. There is no indication that Yong’s statement was taken with the assistance of an interpreter. While Yong apparently advised the York Regional Police that Feng had sometimes resided at the house, there is no indication in that statement as to when she resided at the house and specifically, that she resided at the property while the grow op was on going.

[ 22 ] Yong was cross-examined and his transcript was filed in evidence before me. He testified that when he advised the police that the children were still there in 2004 he was confused, and that it would in fact not have been possible for the children to have been living at the property while the grow operation was ongoing. He indicated that during the course of the grow operation he seldom saw his children as grow operations for obvious reasons had to be kept secret.

[ 23 ] At the time of Yong’s cross-examination he had been married to another woman for approximately three years. The divorce with Feng had apparently become effective as of February 8, 2004. The relationship between Yong and Feng clearly is at an end and as such, there is nothing in the evidentiary record to suggest that Yong is in collusion with Feng in an attempt to cover up any potential involvement that Feng may have had in the grow operation. To the contrary, Yong’s evidence would seem to confirm the termination of a relationship between these two individuals.

[ 24 ] Feng’s evidence to the effect that she moved in with her mother and sister at 10 Page Crescent is supported by affidavits from two individuals, Zuh Ling Feng and Lian Di Luo.

[ 25 ] Feng’s mother Zuh Feng confirms that between February and November 2004 Feng lived with her at 10 Page Crescent in the basement with her three children.

[ 26 ] During the time period when Feng was living at 10 Page Crescent, the Crown submits that it is impossible to believe that Feng would not have attended at the property to see how the renovations were going, that were being undertaken by Yong. The fact that Feng did not ask for any status updates about the renovations, nor did she express any preferences about the materials being chosen, and that she was not interested in seeing the progress of the renovations on her house, do not support, argues the Crown, the position being asserted by Feng that she had no involvement in the property after she left in February 2004.

[ 27 ] It is Feng’s fundamental position that she did not profit from the marijuana grow operation that was located at the property. She asserts that she was able to pay for her living expenses despite her modest declared income to the Canada Revenue Agency. Feng does acknowledge that the $1,500 per month that she received from Yong in the form of rental payments did go towards paying her monthly mortgage payments and property taxes.

[ 28 ] While the Crown points to a number of sizable deposits made into both her RBC account and her TD account, it is worth noting that a number of these large deposits were made prior to the grow operation. There is no evidence to suggest that Feng was involved in any illegal activities between April 2003 and February 2004 when some of these deposits are noted in her various accounts. While passing reference is made to these so called unexplained large deposits, the position of the Crown with respect to the “proceeds of unlawful activity” as defined under the Act is largely restricted to the payments that Feng made on her mortgage from the so called rental monies paid by Yong on a monthly basis. The position of the Crown in this regard is set forth at paragraph 71 of the Crown’s factum as follows:

It is respectfully submitted that the Court can infer that Ms. Feng acquired equity in 139 William Honey Crescent by using payments from the marihuana grow operation to pay down her mortgage as Ms. Feng’s employment income in 2003 and 2004 and money saved in her savings account were insufficient to cover even the mortgage payments on the house, let alone other expenses related to the house (property taxes, insurance, and utilities) and day-to-day living expenses for her and her three children. Further, any money that she may have received from Mr. Yong, by their own evidence $1,000 or $1,500 per month, was proceeds from the marihuana grow operation.

[ 29 ] In essence then, the Crown asserts that Feng should forfeit the entirety of the proceeds of sale of the property on the basis of the aforesaid mortgage payments that it is said, were derived from the rental income obtained from the proceeds of the marijuana grow operation. It is uncontradicted that Feng’s equity in the property up to that point in time when the grow operation commenced, would have been in the order of approximately $70,000, i.e. the original purchase price of $315,000, less the first and second mortgage. This would assume of course that there would have been no increase in the value in the property between April 2003 and February 2004. It is also worth observing that the mortgage payments that Feng would have paid between February 2004 and November 2004 would have been in the amount of approximately $13,500 of which a significant proportion would likely have gone towards interest as opposed to increasing any equity in the home. The Crown essentially asserts that Feng should be deprived of the entirety of the proceeds of sale as a result of an increase in equity from those aforesaid mortgage payments that likely would have been less than $3,000 or $4,000 at best.

The Civils Remedies Act (“The Act”)

[ 30 ] The Act allows the Attorney General of Ontario to initiate in rem proceedings in the Superior Court of Justice, so as to preserve and forfeit the proceeds and instruments of unlawful activity. The purpose of the Act is to provide civil remedies that will assist in:

(a) Compensating persons who suffer pecuniary or non pecuniary losses as a result of unlawful activities;

(b) Preventing persons who engage in unlawful activities and others from keeping property that was acquired as a result of unlawful activities;

(c) Preventing property from being used to engage in certain unlawful activities; and

(d) Preventing injury to the public that may result in conspiracies to engage in unlawful activities;

See Chatterjee v. Ontario (Attorney General) (2009), S.C.C. 19 at paragraph 17.

[ 31 ] As noted in Chatterjee , supra , proceedings that are commenced under the Act do not seek to establish fault; but rather that the property is the proceeds or an instrument of unlawful activity.

[ 32 ] In order to succeed in an application under the Act, the onus is on the Crown to prove on a balance of probabilities that the proceeds at issue constituted proceeds of unlawful activity, see Chatterjee, supra , at paragraph 23 and Ontario (Attorney General) v. Lok , [2008] OJ No. 3550 (Ont. C.A.) .

[ 33 ] The Act defines unlawful activity as an act or omission that,

(a) Is an offence under an Act of Canada, Ontario or another province or territory of Canada…

[ 34 ] There is no dispute that the marijuana grow operation at the property would have fallen within the foresaid definition.

[ 35 ] The forfeiture sections of the Act that deal with proceeds and instruments of unlawful activity are set forth in sections 3(1) and 8(1) as follows:

3(1 ) In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3) and except where it would clearly not be in the interest of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property has proceeds of unlawful activity.

8(1) In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3) and except where it would clearly not be in the interest of justice, make an order forfeiting property that is in Ontario to the Crown in Right of Ontario if the court finds that the property is an instrument of unlawful activity.

[ 36 ] “Proceeds of unlawful activity” is defined in section 2 of the Act as property that is acquired directly or indirectly, in whole or in part, as a result of unlawful activity. It is not disputed by counsel for Feng that payments on a mortgage constitute acquisition of an interest in property- see Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor, 2011 ONCA 363 , [2011] O.J. No. 2122 at paragraph 39 and 40 . As previously noted, the Crown asserts that Feng acquired and increased her equity in the property by using payments from the marijuana grow operation to pay down her mortgage.

[ 37 ] The Act provides protection from forfeiture for legitimate owners of property that is found by the court to be “proceeds of unlawful activity”. “Legitimate owner” is a defined term as it relates to property that is proceeds of unlawful activity, as a person who did not, directly or indirectly, acquire the property as a result of unlawful activity committed by the person, and who,

(a) was the rightful owner of the property before the unlawful activity occurred and was deprived of possession or control over the property by means of the unlawful activity;

(b) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity, or

(c) acquired the property from a person mentioned in clause (a) or (b) above.

[ 38 ] The Crown asserts that as in 1140 Aubin Road , Feng cannot fit within the definition of “legitimate owner” under the Act as she was not deprived of possession or control of the property, nor did she acquire the property for fair value after the unlawful activity occurred. Counsel for Feng does not dispute that Feng does not fit within the definition of “legitimate owner” as she was not deprived of possession or control of the property. Rather, the evidence is to the contrary, that she simply left the property after discovering that Yong had been unfaithful to her and moved in with her mother and sister.

[ 39 ] The Act also provides an exception from forfeiture for a responsible owner. A responsible owner is defined with respect to property that is an instrument of unlawful activity as being a person with an interest in the property who has done all that can be reasonably be done to prevent the property from being used to engage in unlawful activity, including the prompt notification of law enforcement agencies whenever the person knows or ought to know that the property has been or is likely to be used to engage in unlawful activity, and refusing or withdrawing any permission that the person has authority to give and that the person knows or ought to know has facilitated or is likely to facilitate the property being used to engage an unlawful activity.

[ 40 ] The Crown asserts that the position advanced by Feng to suggest that she was renting the property to her husband lacks credibility and in that regard points to the following factors:

(a) That he had gone through two crops before police dismantled the marijuana grow operation;

(b) That he was selling marijuana for approximately six months;

(c) That he was selling the marijuana in half pound packages;

(d) That marijuana was selling for $1,700 to $1,900 per pound;

(e) That he had to dismantle the basement to set up the marijuana grow operation;

(f) That while he was growing the marijuana, he was not otherwise employed due to a hip injury. He had advised Ms. Feng about this hip injury;

(g) That it cost him $10,000 to set up the marijuana grow operation.

[ 41 ] The Crown therefore asserts that either Feng was aware of the marijuana grow operation and therefore she cannot establish that she is a “responsible owner” as defined by the Act or in the alternative, the Crown asserts that Feng was wilfully blind to what was actually happening at the property.

[ 42 ] The final exception to a forfeiture order is where it is “clearly not in the interest of justice” to make such an order as provided for in both section 3 and section 8 of the Act. The “interest of justice” exception to forfeiture only operates in a situation where the Crown has otherwise shown that the property is subject to forfeiture and the respondent has not brought herself within the “legitimate owner” exception. As noted by the Court of Appeal in 1140 Aubin Road :

“…In the interest of justice” exception to forfeiture recognizes that, given the very broad definition of “proceeds of unlawful activity” and the narrow exception to forfeiture carved out by the definition of “legitimate owner”, there will be cases that fall within the scope of the forfeiture power where, on any reasonable view, forfeiture would be a draconian and unjust result…”.

[ 43 ] As further noted by the Court of Appeal on 1140 Aubin Road , the onus is upon the party seeking relief under this exception to demonstrate that in the circumstances, the forfeiture order will be a manifestly “harsh and inequitable result”.

The Issue

[ 44 ] While counsel for Feng in argument took the position that the property was not acquired by unlawful activity, the focus of the argument was largely upon the exception set forth in section 3(1) of the Act, to forfeit the proceeds of sale of the property on the basis that it would not be in the interest of justice to do so. It was conceded by counsel for Feng that if the property was found to be “proceeds of unlawful activity”, Feng could not be considered a “legitimate owner” as she could not prove on a balance of probabilities that she was “deprived of possession and control of the property by means of the unlawful activity” as defined in section 2 of the Act.

[ 45 ] As it has been determined by the Court of Appeal in 1140 Aubin Road , that drug money used to pay down a mortgage is “proceeds of unlawful activity”, and as there is no evidence to the contrary before me that the rental monies used by Feng were used for anything other than to pay down the mortgage, the real issue before me is whether I should exercise the discretion provided to the court by section 3(1) so as to provide Feng with relief from forfeiture.

Position of the Crown with respect to the exception set forth in section 3(1) of the Act.

[ 46 ] The Crown points to three factors referenced by the Court of Appeal in 1140 Aubin Road that should guide this court in whether to exercise its discretion to provide relief from forfeiture. The first consideration relates to the conduct of Feng as it relates to her knowledge, actual or constructive, of the grow operation, and her failure to take any reasonable steps to prevent the unlawful activity, and any profit that she derived knowingly or unknowingly from the unlawful activity. The second factor referenced by the Court of Appeal relates to the disparity between the value of the property, i.e. the proceeds of unlawful activity and the value of the property sought to be forfeited. On the facts before the Court of Appeal in 1140 Aubin Road , the Crown had established that approximately $2,500 in rental income was proceeds of unlawful activity while the value of the residence sought to be forfeited was $41,500. The aforesaid disparity was one basis upon which the Court of Appeal found that forfeiture would be “clearly not in the interest of justice”.

[ 47 ] The third factor referenced by the Court of Appeal related to the interplay between the purposes of the Act and the exercise of the discretion to relieve from forfeiture. While noting that in most circumstances the purposes of the Act would be furthered by a forfeiture order, forfeiture of property belonging to an individual who did not know, and could not have known about the unlawful activity that gave rise to the proceeds was not “clearly in the interest of justice”.

[ 48 ] With the aforesaid three factors in mind, the Crown suggests that on the facts before this court there is ample evidence to suggest that anyone living in the property would have been well aware of the marijuana grow operation; that this was not a real rental income situation; and that the purpose of the Act, specifically the disgorgement of unlawful gains and of the use of property for unlawful activity would be served by a forfeiture order.

[ 49 ] The Crown suggest that the value of the marijuana grow operation far exceeded the value of the property and further suggests that there is no evidence of any legitimate money having been paid towards the property. This final submission in my view is not borne out by the evidence. While the value of the marijuana grow operation (approximately $1,000,000) would clearly have far exceeded the value of the property, there is no evidence to suggest that Feng, in any way, derived anything remotely close to the value of the marijuana grow operation. At most, it can be said that she may have received approximately $13,500 in rental income that likely was derived from the proceeds of sale of the marijuana grow operation. The evidence does not bear out that Feng knew that the rental monies that she was receiving from her ex-husband were in fact monies derived from a marijuana grow operation. More importantly, the submission that “there is no evidence of any legitimate money having been paid towards the property”, as asserted by the Crown, is not borne out by the evidence whatsoever. To the contrary, the evidence confirms that Feng purchased the property in 2003 for $315,000 at a point in time when there is no evidence that Feng derived the monies used for the down payment of that property from anything other than her own legitimate sources.

[ 50 ] The Crown relies heavily on a subsequent Court of Appeal decision, Ontario (Attorney General) v. 170 Glenville Road, King (in rem) , [2011] O.J. No. 2616 . This case is however factually quite different from the facts before this court. As O’Connell J. found:

This marijuana operation is no “mom and pop” operation. It was an entrenched, thriving production line for the elicit production and sale of marijuana. To give any weight to the interest of justice, forfeiture must follow. Rather than it not being in the interest of justice to forfeit, I find that it is clearly in the interest of justice to do so.

[ 51 ] O’Connell J. came to the conclusion set forth above, based on a fact situation where the respondent’s defence to the forfeiture application was one essentially based on an argument that he had leased the property in question to a man whom he only knew as “Steven” and had nothing to do with, or knowledge of, the marijuana grow operation. The respondent in 170 Glenville Road did not know “Steven’s” last name, nor did he know where to contact this individual. The respondent had made no inquiries about the background business or employment status of Steven to whom he was leasing a property that was worth $457,000; a property that was being invested in apparently for his daughter’s benefit. It is also significant to note that in 170 Glenville Road the respondent had phone bills, propane bills and hydro bills in his name, delivered to the house he says was being rented to the tenant by the name of Steven. As the Court of Appeal noted, it was not surprising that O’Connell J. rejected the respondent’s story “outright”.

[ 52 ] The facts before me are quite different. I find as a fact that Feng had separated from Yong prior to the commencement of the grow operation at the property. I accept that she moved out of the house as a result of Yong’s infidelity to her and that she moved into her mother’s residence. While it may seem strange that Feng did not attend at the property after she had departed, it is not overly surprising given that she had in fact by that point in time, been divorced from Yong and now on all accounts Yong has entered into a new relationship of at least three years standing by the time this matter came before me.

[ 53 ] I do not accept that Feng purchased the property with anything other than legitimate sources of her own and that the most that can be said is that she retired a small portion of the principle of her mortgage, utilizing unwittingly cash monies paid to her by Yong, that were derived from the proceeds of the illegal marijuana grow operation. I do not accept that Feng was wilfully blind as to what was occurring at the property as it has to be looked at in the context of her separation from Yong and all of the attendant stresses that would have created for her and the three children for whom she was responsible; this at a point in time when on Yong’s own evidence he was having minimal contact with his children.

[ 54 ] While I accept that it is not necessary for the Crown to establish that criminal charges were laid against Feng and proceeded with in support of its forfeiture application, I do take into account that for unknown reasons the Crown did not proceed with the charges that were laid against Feng. I also parenthetically have taken into account the fact that despite initial concerns by the CAS, the children were returned to Feng.

[ 55 ] It is particularly noteworthy that 170 Glenville Road does not stand for the proposition that a consideration of the property owner’s involvement in the criminal activity is irrelevant to the “interests of justice” exception. This is made quite clear by Doherty J.A. where at paragraph 100 he disagrees with the aforesaid proposition which is set forth at paragraph 78 of O’Connell J.’s decision. Doherty J.A. takes a commonsense approach to this argument and notes:

In holding that the property owner’s conduct as it relates to the unlawful activity is an important consideration in determining whether to grant relief from forfeiture, I do not suggest that actual involvement in the criminal activity is in any way a prerequisite to a forfeiture order under the CRA. It is not. However, nothing in the CRA precludes that commonsense recognition that the conduct of the property owner will be important when deciding whether it is clearly not in the interests of justice to order forfeiture. Surely, a property owner who had no involvement in the criminal activity, was unaware of that activity, had acted reasonably throughout and did not profit from the activity, should as a matter of elementary justice, be treated differently on a forfeiture application on the property owner who was involved in and directly profited from the unlawful activity.

[ 56 ] What may be described as a community standards approach to whether the interests of justice exception should apply, can be found at paragraph 101 of 1140 Aubin Road, supra , where Doherty J.A. states: “…The interests of justice require that punitive orders made by the courts be reasonably perceived by the community as being deserved by those against whom they are made.”

[ 57 ] Asking the rhetorical question as to whether or not the community would perceive the forfeiture of the proceeds of sale of the property in this case as being reasonable, must be looked at from the perspective of the factual findings that apply. In that regard, the following facts that I have determined from the evidence are paramount:

(a) Feng did not know, nor was she wilfully blind to the existence of the grow operation at the property.

(b) She did not participate in, directly or indirectly in the grow operation.

(c) She was unaware that Yong was paying the rent with drug money.

(d) Put in the context that Feng had previously separated from Yong and had only attempted to reconcile in the best interests of her children for a relatively brief period of time, it was reasonable for Feng to have left the property with the children and sought refuge at her mother’s home.

[ 58 ] It is not suggested by the Crown that the separation between Feng and Yong was in any way contrived and was anything other than a lawful separation between a husband and wife in a situation where the wife had found her husband being unfaithful to her. To now visit upon a single mother responsible for three children, the loss of the equity that she had acquired in the property prior to her separation and prior to the commencement of the grow operation, would not be viewed by the community at large as being deserved and in the interest of justice.

[ 59 ] The Court of Appeal in 1140 Aubin Road, supra , also acknowledged that there was a significant disparity between the value of the respondent’s total interest in the property and the value of the interest acquired as a result of the unlawful activity. This significant disparity was a relevant consideration in determining whether a forfeiture order would be “clearly not in the interest of justice” and it is a factor on the facts before me that I also view as being relevant in denying the application for forfeiture. As previously noted, Feng would have acquired at least $70,000 in equity in the property prior to the commencement of the grow operation. I have no evidence with respect to the increase or decrease in market values between the time of purchase and the grow operation, but find it unlikely in the housing market that the Greater Toronto Area has experienced over the last 10 years that there would have been anything other than a likely increase in Feng’s equity.

[ 60 ] While the Crown quite rightly points to the rental payments received by Feng as a means by which proceeds of unlawful activity was used to pay down the mortgage obligation that Feng had with RBC, the fact still remains that such increase in equity would have been marginal and would have represented a significant disparity between the value of Feng’s total interest in the property and the value of the interest acquired as a result of the unlawful activity.

[ 61 ] The Act clearly has appropriate purposes which include the prevention of persons who engage in unlawful activities from keeping property that was acquired as a result of unlawful activities and preventing property from being used to engage in unlawful activities. No one can argue that those purposes are anything other than appropriate in the society that we find ourselves today. However, I adopt the words of Doherty J.A. as being apropos to the case before me:

“…Directing forfeiture of the property of a person who had no involvement, knowledge of, or responsibility for the relevant, criminal activity would hardly seem to further the deterrence objective of the CRA. There is no need to deter the innocent and responsible owner by seizing his or her property. Indeed, it could be argued that disregarding the property owner’s lack of involvement in or knowledge of the criminal activity when deciding the question of forfeiture could well undermine the deterrence goals of the CRA. If forfeiture falls indiscriminately on the innocent and the complicit, there may seem to be little value in avoiding involvement in criminal activity….”

[ 62 ] In the circumstances where Feng left the property having found her husband unfaithful, and put in the context of the stresses that such a matrimonial situation may have created, I do not accept that Feng was wilfully blind as to what was going on at the property after she had left. It would be against the interests of justice to now visit upon Feng the implications of a forfeiture order put within the context of the situation that she found herself in. For the reasons that I have set forth above, the application is therefore dismissed.

[ 63 ] If the parties are unable to agree upon the appropriate costs disposition, costs submission may be filed with the court and limited to five pages in length to be received within 30 days from the date of receipt of these reasons.

Justice M. Edwards

Released: February 7, 2012