ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 10-G30391
DATE: 20131129

BETWEEN:

HER MAJESTY THE QUEEN

Crown/Applicant

– and –

TROY SAIKALEY

Defendant/Respondent

Roderick Sonley/ Margaret Jarmoc, for the Crown/Applicant

Gregory Lafontaine/Vincenzo Rondinelli, for the Defendant/Respondent

Patrick McCann for Sharon Leakey, Elias Leakey and Maha Saikaley

HEARD: May 6, June 25, 26, 27, November 6, 7, and 8, 2013

Amended Decision on Forfeiture Application

This is an amended Decision to the Decision originally released November 21, 2013. The amendments occur at paras. 117 and 134 with respect to the amount remaining from the proceeds of the sale of 144 Kerry Hill which was seized by the Crown.

lalonde j.

Background

[1] On April 5, 2013, Mr. Troy Saikaley was found guilty of conspiracy to traffic and trafficking in controlled drugs and substances, namely, cocaine, cannabis marijuana, and cannabis resin; possession of controlled drugs and substances; possession of proceeds of crime; entering into agreements to receive interest at a criminal rate of interest; and extortion. Mr. Saikaley was also convicted of criminal organization offences under sections 467.11, 467.12 and 467.13 of the Criminal Code. He was also convicted of possession of unregistered prohibited firearms. As outlined below, these convictions are of special significance in the forfeiture context.

[2] As part of the sentencing hearing, the Crown has applied for the forfeiture of certain assets and monies acquired by Mr. Troy Saikaley, as being proceeds of crime, pursuant to section 462.37 of the Criminal Code.

[3] On June 27, 2013, the offender, Troy Saikaley, consented to grant the Crown immediate forfeiture of the items listed on schedule “A,” attached.

[4] Additionally, the Crown seeks forfeiture, or a fine in lieu of forfeiture, with respect to the following:

(i) The $133,000 in cash seized from 144 Kerry Hill Crescent;

(ii) The current value of a 2006 Mercedes Benz CLS55 AMG; and

(iii) The properties associated with:

a. 144 Kerry Hill Crescent, Ottawa (144 Kerry Hill)

b. 1-164 Paseo Private, Ottawa (Paseo condominium)

c. 168 Ingersoll Crescent, Kanata (168 Ingersoll)

The Crown seeks a further fine in lieu of forfeiture in the sum of $1,125,769.83.

The Issues and The Law

[5] I have reproduced the submissions of Crown counsel on the issues and the law. I am satisfied that the Crown counsel’s submissions on the pertinent law are accurate and spell out what considerations should apply to arrive at a forfeiture order in this case. Where counsel for Troy Saikaley, Maha Saikaley, Elias Saikaley and Sharon Leakey refer to additional jurisprudence, I will refer to them also.

[6] The following issues are raised in this Application:

a) Should the assets and properties described above in paragraph 4, and such further assets as the court determines, be forfeited to Her Majesty the Queen in the Right of Canada, to be disposed of by the Minister of Public Works and Government Services in accordance with the law, pursuant to s.462.37 of the Criminal Code?

b) Was Troy Saikaley once in the possession of proceeds of crime that are no longer available for forfeiture?

c) If the answer to (b) is “yes,” should a fine in lieu of forfeiture be ordered with respect to those proceeds of crime?

Applicable Law

[7] The definition of “proceeds of crime” applicable to the forfeiture provisions is contained in section 462.3 (1) of the Criminal Code, as follows:

462.3 (1) In this Part,

“proceeds of crime” means any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of

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

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

[8] The definition of a “designated offence” is also contained in section 463.3(1) of the Criminal Code, as follows:

462.3 (1) In this Part,

“designated offence” means

o (a) any offence that may be prosecuted as an indictable offence under this or any other Act of Parliament, other than an indictable offence prescribed by regulation, or

o (b) a conspiracy or an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to, an offence referred to in paragraph (a).

Any monies arising directly or indirectly from the commission of a designated offence would meet the definition of proceeds of crime. Therefore, any property acquired, in whole or in part, either directly or indirectly, as a result of the receipt of monies from Mr Saikaley’s and/or his criminal organization’s drug trafficking activities and/or his loan sharking activities would be proceeds of crime.

[9] For the purposes of the forfeiture application, the relevant provisions are contained in section 462.37 of the Criminal Code. The following parts of section 462.37 pertain to this application.

462.37 (1) Subject to this section and sections 462.39 to 462.41, where an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime and that the designated offence was committed in relation to that property, the court shall order that the property be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.

(2) Where the evidence does not establish to the satisfaction of the court that the designated offence of which the offender is convicted, or discharged under section 730, was committed in relation to property in respect of which an order of forfeiture would otherwise be made under subsection (1) but the court is satisfied, beyond a reasonable doubt, that that property is proceeds of crime, the court may make an order of forfeiture under subsection (1) in relation to that property.

(2.01) A court imposing sentence on an offender convicted of an offence described in subsection (2.02) shall, on application of the Attorney General and subject to this section and sections 462.4 and 462.41, order that any property of the offender that is identified by the Attorney General in the application be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law if the court is satisfied, on a balance of probabilities, that

o (a) within 10 years before the proceedings were commenced in respect of the offence for which the offender is being sentenced, the offender engaged in a pattern of criminal activity for the purpose of directly or indirectly receiving a material benefit, including a financial benefit; or

o (b) the income of the offender from sources unrelated to designated offences cannot reasonably account for the value of all the property of the offender.

(2.02) The offences are the following:

o (a) a criminal organization offence punishable by five or more years of imprisonment; and

o (b) an offence under section 5, 6 or 7 of the Controlled Drugs and Substances Act — or a conspiracy or an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to an offence under those sections — prosecuted by indictment.

(2.03) A court shall not make an order of forfeiture under subsection (2.01) in respect of any property that the offender establishes, on a balance of probabilities, is not proceeds of crime.

(3) If a court is satisfied that an order of forfeiture under subsection (1) or (2.01) should be made in respect of any property of an offender but that the property or any part of or interest in the property cannot be made subject to an order, the court may, instead of ordering the property or any part of or interest in the property to be forfeited, order the offender to pay a fine in an amount equal to the value of the property or the part of or interest in the property. In particular, a court may order the offender to pay a fine if the property or any part of or interest in the property

o (a) cannot, on the exercise of due diligence, be located;

o (b) has been transferred to a third party;

o (c) is located outside Canada;

o (d) has been substantially diminished in value or rendered worthless; or

o (e) has been commingled with other property that cannot be divided without difficulty.

(4) Where a court orders an offender to pay a fine pursuant to subsection (3), the court shall

o (a) impose, in default of payment of that fine, a term of imprisonment

▪ (i) not exceeding six months, where the amount of the fine does not exceed ten thousand dollars,

▪ (ii) of not less than six months and not exceeding twelve months, where the amount of the fine exceeds ten thousand dollars but does not exceed twenty thousand dollars,

▪ (iii) of not less than twelve months and not exceeding eighteen months, where the amount of the fine exceeds twenty thousand dollars but does not exceed fifty thousand dollars,

▪ (iv) of not less than eighteen months and not exceeding two years, where the amount of the fine exceeds fifty thousand dollars but does not exceed one hundred thousand dollars,

▪ (v) of not less than two years and not exceeding three years, where the amount of the fine exceeds one hundred thousand dollars but does not exceed two hundred and fifty thousand dollars,

▪ (vi) of not less than three years and not exceeding five years, where the amount of the fine exceeds two hundred and fifty thousand dollars but does not exceed one million dollars, or

▪ (vii) of not less than five years and not exceeding ten years, where the amount of the fine exceeds one million dollars; and

o (b) direct that the term of imprisonment imposed pursuant to paragraph (a) be served consecutively to any other term of imprisonment imposed on the offender or that the offender is then serving.

(5) Section 736 does not apply to an offender against whom a fine is imposed pursuant to subsection (3).

[10] The definition of “criminal organization offence” is contained in section 2 of the Criminal Code and is as follows:

2. In this Act,

“criminal organization offence” means

(a) an offence under section 467.11, 467.12 or 467.13, or a serious offence committed for the benefit of, at the direction of, or in association with, a criminal organization, or

(b) a conspiracy or an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to, an offence referred to in paragraph (a).

[11] “Serious offence” is defined in section 467.1, as follows:

467.1 (1) The following definitions apply in this Act.

“serious offence” means an indictable offence under this or any other Act of Parliament for which the maximum punishment is imprisonment for five years or more, or another offence that is prescribed by regulation.

Objectives of the Forfeiture Legislation

[12] The objectives of the forfeiture provisions in the Criminal Code have been discussed in a number of Court of Appeal and Supreme Court decisions. In Wilson v. R. (1993), 1993 8665 (ON CA), 15 O.R. (3d) 645 at para. 10 (C.A.), on behalf of the Ontario Court of Appeal, Mr. Justice Doherty states the following:

10 The purpose of Part XII.2 is clear. It is intended to give effect to the age old adage that crime does not pay. It is now recognized that some crime is big business, and that massive profits, both direct and indirect, can be made from criminal activity. Part XII.2 is a response to that realization and provides a comprehensive scheme whereby those direct and indirect profits may be located, seized and eventually forfeited to the Crown: R. v. Clymore (1992), 1992 1112 (BC SC), 74 C.C.C. (3d) 217 (B.C.S.C.) at p. 231; R.G. Mosley, "Seizing the Proceeds of Crime: The Origins and Main Features of Canada's Criminal Forfeiture Legislation" (Address to the Canada/United States Proceeds of Crime Conference, Ottawa, March 1989).

[13] Lebel J., on behalf of the majority of the Supreme Court of Canada in Quebec (Attorney General) v. Laroche, 2002 SCC 72, [2002] S.C.J. 74 at para. 25, says the following:

25 The legislative objective of Part XII.2 plainly goes beyond mere punishment of crime: an analysis of the provisions of that Part shows that Parliament intended to neutralize criminal organizations by taking the proceeds of their illegal activities away from them. Part XII.2 intends to give effect to the old adage that crime does not pay (see Wilson v. Canada (1993), 1993 8665 (ON CA), 86 C.C.C. (3d) 464 (Ont. C.A.), at p. 469; Oerlikon Aérospatiale Inc. v. Ouellette, 1989 1128 (QC CA), [1989] R.J.Q. 2680 (C.A.), at p. 2687). As German, supra, has observed, Part XII.2 organizes the fight against organized crime around a strategy that focuses on the proceeds of crime, as opposed to the offender. As well, the effectiveness of that struggle depends largely on the speed with which proceeds of crime can be identified, located, seized and ultimately forfeited. For that reason, Part XII.2 provides for new enforcement techniques that enable the police to freeze or immobilize the property of criminal organizations regardless of whose possession it may be in, even before charges are laid.

[14] In R. v. Lavigne, 2006 SCC 10, [2006] 1 S.C.R. 392 at para. 9, Madame Justice Deschamps writes:

9 Great importance is thus attached to the proceeds of crime, and one of the stated goals is to neutralize criminal organizations by depriving them of the profits of their activities. The Honourable Ray Hnatyshyn, who was the Minister of Justice when the bill was introduced, said that traffickers had been insufficiently deterred by traditional sentencing methods. Canada therefore had to adopt methods by which it could deprive offenders of the profits of their crimes and take away any motivation to pursue their criminal activities. Of all the methods chosen, the primary one is forfeiture (House of Commons, Minutes of Proceedings and Evidence of the Legislative Committee on Bill C-61, Issue No. 1, November 5, 1987, at p. 1:8). The effectiveness of the adopted methods depends largely on the severity of the new provisions and on their deterrent effect (Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72, at para. 25).

[15] The use of the word “shall” in ss. 462.37(1) and (2.01) has been interpreted by the Ontario Court of Appeal and by the Supreme Court to mean that forfeiture is mandatory: Lavigne, supra at para. 14; Wilson, supra at para. 14.

[16] It is also clear that the provisions have a very broad scope due to the combined definitions of proceeds of crime and the mandatory nature of the provisions. In Lavigne, supra at para. 15-17, Deschamps J. states:

15 The broad meaning of the expressions "proceeds of crime" and "in relation to", combined with the fact that no discretion whatsoever is provided for in s. 462.37(1), is significant. Parliament has made this provision mandatory by requiring forfeiture and making the provision apply to the widest possible range of property.

16 Parliament's intention in enacting the forfeiture provisions was to give teeth to the general sentencing provisions. While the purpose of the latter provisions is to punish an offender for committing a particular offence, the objective of forfeiture is rather to deprive the offender and the criminal organization of the proceeds of their crime and to deter them from committing crimes in the future. The severity and broad scope of the provisions suggest that Parliament is seeking to avert crime by showing that the proceeds of crime themselves, or the equivalent thereof, may be forfeited.

17 The severity shown by Parliament is further illustrated by s. 462.37(2), which provides that where the evidence does not establish a connection between property and the offence of which an offender has been convicted, the property may nevertheless be forfeited if it is proven to be proceeds of crime.

(continued verbatim through paragraphs 18‑134 as in the original decision)

Mr. Justice Paul F. Lalonde

Released: November 29, 2013

COURT FILE NO.: 10-G30391
DATE: 20131129

ONTARIO
SUPERIOR COURT OF JUSTICE

B E T W E E N:

HER MAJESTY THE QUEEN

Crown/Applicant

– and –

TROY SAIKALEY

Defendant/Respondent

Amended Decision on

Forfeiture Application

Mr. Justice Paul F. Lalonde

Released: November 29, 2013