R. v. Lam, 2013 ONSC 7410
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Her Majesty the Queen v. Trung Le Lam
BEFORE: K.L. Campbell J.
COUNSEL: Althea Francis, for the Crown, respondent
Luka Rados, for the accused, applicant
HEARD: November 12, 2013
ENDORSEMENT
[Application to Access Seized Funds]
A. Introduction
1The applicant, Trung Le Lam, is currently charged, together with others, with a number of serious criminal offences arising from an alleged large-scale interprovincial drug trafficking and money laundering conspiracy. The accused is, of course, presumed to be innocent of these charges.
2The applicant was arrested on November 6, 2012. At the time of his arrest, the Toronto condominium where he was living with his wife and young child was searched, pursuant to the terms of a search warrant, and the police discovered, amongst other things, a total of $271,100.00 in Canadian currency on the floor in one of the bed rooms.
3The applicant now seeks an order, pursuant to ss. 462.34(1) and (4)(c) of the Criminal Code, R.S.C. 1985, chap. C-46, returning a portion of those seized funds for purposes of: (i) the payment of reasonable living expenses for him and his family; and (ii) the payment of his reasonable legal expenses in connection with the pending preliminary inquiry in this matter. Such an application may be made with respect to seized “money or bank-notes” as indicated in s. 462.341 of the Criminal Code.
B. The Legal Preconditions of the Application
4The combination of ss. 462.34(1) and 4(c) of the Code make it clear that, in order to be successful on this application, the applicant is obliged to establish three things, namely: (1) that he has an “interest” in the funds that were seized by the police; (2) that he has “no other assets or means available” for purposes of meeting the reasonable living expenses of he and his family and/or meeting his reasonable legal expenses; and (3) that “no other person appears to be the lawful owner of or lawfully entitled to possession” of the seized monies. See: R. v. Granger, 2012 ONSC 6169, [2012] O.J. No. 2120, at para. 24.
5The applicant contends that the evidence shows that he has met all three of these legal preconditions, and is entitled to access to these seized funds for both his family’s reasonable living expenses, and his own reasonable legal expenses. The applicant claims an interest in the funds, argues that he needs the money for these reasonable expenses as he has no other assets or financial means available, and contends that no other person appears to be the lawful owner or lawfully entitled to possession of these funds.
6The respondent is opposed to the application. The Crown argues that, while the applicant may have an interest in the funds, given that they were found in his possession, the applicant has failed to establish the other necessary preconditions of the application.
C. The Applicant’s Interest in the Funds
7The applicant has claimed a generic “interest” in these funds, although he was careful in his testimony not to claim ownership of them. Further, the applicant’s wife has denied having any interest in the monies, claiming a complete lack of awareness of its presence in the condominium at the time it was seized. In my view, the evidence of the accused’s interest in the funds, especially in combination with the evidence that the money was, in fact, found in a bedroom of the condominium rented by the accused, satisfies this precondition to the success of the application. See: R. v. Kalenuik (2004), 2004 CanLII 19299 (ON SC), 186 C.C.C. (3d) 408 (Ont.S.C.J.), at paras. 17-19. The Crown did not argue otherwise.
D. Reasonable Living Expenses
8The applicant seeks an order returning a portion of the seized funds for the purpose of the payment of the reasonable living expenses of him and his family. The applicant contends that it is simply “impossible” for him and his family to survive on what he presently earns, and he needs at least $500 a week to cover their reasonable living expenses.
9The applicant is 55 years of age and has a college education. He has held long-term employment as a press operator for an Alberta newspaper company, and as an interpreter for an Alberta hospital. The applicant held each of these two positions for approximately a decade each. He has also held a variety of other shorter term jobs.
10Since his release from custody following his arrest, the applicant and his family have lived in the basement apartment of a Toronto home owned by one of his sureties. The applicant does not pay rent for this apartment, and his surety also helps the applicant’s family with food and other recurring expenses. The applicant professes to be uncomfortable relying upon the generosity of his surety, but this living arrangement has apparently been satisfactory for approximately a year. The applicant works periodically for his surety in the construction industry, but only earns approximately $600 a month on average. While the applicant expressed his discontent with this income, at the same time he testified that he is not actively looking for any other employment. Instead, he has assumed the child-care responsibilities during the week while his wife attends school to learn English as a second language.
11In all of the circumstances I am not satisfied that the applicant has demonstrated that he has no other assets or means available to him to meet his and his family’s reasonable living expenses.
12Prior to his arrest, the applicant was more than capable of financially providing for himself and his family. When he lived in British Columbia a few years ago, he purchased a condominium unit. While he borrowed some of the necessary funds from a bank and from other family members, he contributed a substantial amount of his own money to this purchase. More recently, just prior to his arrest, the applicant was renting a Toronto condominium for $2,000 a month. He was apparently, at the time, able to financially provide for himself and his family notwithstanding that significant recurring monthly expense – an expense he is no longer obliged to pay. The applicant has been granted judicial interim release. He has a good education and, in the past, he has held permanent full-time positions in which he seems to have been well paid. I am not convinced that, if the applicant were to apply himself, he would not be able to obtain similar well paid employment once again. So far, as he fairly acknowledged in his evidence, he has simply not tried.
13Accordingly, I am not satisfied that the applicant has established that he has no other means available to meet his reasonable living expenses, as required by s. 462.34(4) of the Criminal Code. Therefore, he is not entitled to access the seized funds for those expenses.
E. Reasonable Legal Expenses
14The applicant seeks an order returning a portion of the seized funds for the purpose of payment of his reasonable legal expenses in connection with the pending preliminary inquiry in this matter.
15The applicant now faces serious criminal charges. The Crown concedes that, if he is convicted of these alleged offences, the applicant will likely be facing a penitentiary term of imprisonment. The case against the accused appears to depend upon the admissibility of the interception of private communications authorized under Part VI of the Criminal Code, the police seizure of significant quantities of marihuana, large sums of Canadian currency and other drug and money laundering paraphernalia, and police surveillance evidence over a significant period of time. The case certainly involves a measure of factual complexity and legal sophistication that is well beyond the ken of the applicant to personally defend. Clearly, he needs the assistance of a skilled and experienced criminal defence lawyer. Moreover, the accused has the constitutional right to retain and instruct counsel, as guaranteed by s. 10(b) of the Canadian Charter of Rights and Freedoms.
16The legislative purpose of s. 462.34(4)(c)(ii) of the Criminal Code is to allow a person, whose property has been seized or restrained, access to that property for the purpose of paying for their reasonable legal expenses. This provision recognizes that the state cannot be allowed to “beggar” a person who will need to retain the assistance of defence counsel in a prosecution undertaken against that person by the state and directed at depriving the person of their property and/or their liberty. See: Wilson v. Canada (1993), 1993 CanLII 8665 (ON CA), 86 C.C.C. (3d) 464 (Ont.C.A.), at pp. 478-480; Canada (Attorney General) v. Markovic, [2000] O.J. No. 3528 (S.C.J.), at para. 3.
17At the same time, on this type of application under s. 462.34(4) the court is obliged to balance the applicant’s need for legal assistance in mounting his defence to the outstanding criminal charges against the possibility that the property in question may ultimately be found to be proceeds of crime and properly the subject of a forfeiture order. See: Wilson v. Canada, at pp. 479-480.
18In the circumstances of the present case, and trying to fairly and appropriately balance these competing considerations, I have concluded that the applicant should be given access to a portion of the seized funds for the purpose of payment of his reasonable legal expenses in connection with the preliminary inquiry in this case.
19During the course of the hearing of this application, an in camera proceeding was conducted, pursuant to s. 462.34(5) of the Criminal Code, for the purpose of determining the reasonableness of the legal expenses that might be incurred by the accused in connection with the preliminary inquiry into this matter. Crown counsel was excluded for this limited portion of the application, although she was permitted to make submissions as to the reasonableness of these legal expenses, both before and after the in camera portion of the hearing.
20The Crown argued that, in the event I was inclined to grant this aspect of the application, the applicant’s reasonable legal expenses should be limited to the rates that might otherwise be paid under the Ontario Legal Aid Plan. I am certainly required to consider the potentially applicable legal aid tariff in determining the reasonableness of the legal expenses that might be incurred in association with the preliminary inquiry. Such consideration is required by the mandatory language of s. 462.34(5) of the Criminal Code.
21As I understand the current tariff under the Ontario Legal Aid Plan, a lawyer with the experience level of Mr. Bayliss would be entitled to bill approximately $125 an hour, while a lawyer with the experience level of Mr. Rados would be entitled to bill approximately $100 an hour. See: http://www.legalaid.on.ca/en/info/tariff_billing.asp.
22I am not prepared to strictly limit the applicant’s reasonable legal expenses to the hourly rates provided in the current provincial legal aid tariff. It is important to recall in this regard, that this is not a case in which public funds are being spent on legal expenses. More particularly, this is not a case in which public money is being accessed directly through the Ontario Legal Aid Plan, or even indirectly by means of an order under the authority of R. v. Rowbotham (1988), 1988 CanLII 147 (ON CA), 41 C.C.C. (3d) 1 (Ont.C.A.). As Goudge J.A. stated in Ontario v. Figueroa (2003), 2003 CanLII 42300 (ON CA), 64 O.R. (3d) 321 (C.A.), at para. 23, the “source of payments to counsel” ordered under s. 462.34(4)(c)(ii) of the Criminal Code “is not the public purse, but property seized from the person served by counsel.” See also: R. v. Paryniuk, [2001] O.J. No. 4410 (S.C.J.), at paras. 7-12; R. v. Murtaza, 2011 ONSC 7577, [2011] O.J. No. 6034, at paras. 7-10.
23Accordingly, these types of cases are more akin to those in which the accused has privately retained counsel. This is apparent from the governing statutory framework in ss. 462.34(1) and (4) of the Code, which require the applicant to have an “interest” in the seized property, which can be ordered to be “returned” to the applicant for the purposes of meeting his or her “reasonable legal expenses.” Accordingly, while the applicable legal aid tariff must be considered, in my view the issue falls to be determined on a broader assessment of what is fair and reasonable in the circumstances, having regard also to the nature, stage and complexity of the criminal proceedings and the experience of counsel. See, for example: R. v. White, 2010 SCC 59, [2010] 3 S.C.R. 374, at para. 4; Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, 300 C.C.C. (3d) 137, at para. 68.
24It is also important to appreciate that, as ss. 462.37(3) and (4) of the Criminal Code provide, if at the end of the proceedings against the accused the court is ultimately satisfied that an order of forfeiture should be made with respect to the seized funds (spent by the accused on reasonable legal expenses), the court may impose a fine upon the accused equal to the amount of seized money spent on his reasonable legal expenses, and the accused will be liable to imprisonment in default of his payment of such a fine. This provides further protection in relation to these funds in the event that it is ultimately determined that they are funds properly ordered forfeited.
25In any event, in my view, taking into account all of the circumstances of this case, the applicant’s “reasonable legal expenses” for the preliminary inquiry should be capped at a total of no more than $60,000.00. More particularly, I am satisfied that: (1) Mr. Bayliss, the senior counsel retained by the applicant in relation to this matter, should be paid at a rate of $300 an hour, or $3,000 for a court day; and (2) Mr. Rados, the more junior counsel who will be assisting Mr. Bayliss on this matter, should be paid at a rate of $150 an hour, or $1,000 for a court day – up to the maximum total of $60,000.00.
26While these hourly and daily rates are significantly more than what would be allowed under the Ontario Legal Aid Plan, they are also significantly less than the rates that would normally be charged by defence counsel under a purely private retainer. These set hourly and daily rates (and the capped total amount) are, in my opinion, “reasonable legal expenses” for the applicant in connection with his preliminary inquiry proceedings, having regard to all of the circumstances, including the provincial legal aid tariff, the nature, stage and complexity of the criminal proceedings, and the experience levels of Mr. Bayliss and Mr. Rados. These amounts are also in general accordance with hourly and daily rates set in other Ontario cases. See, for example: R. v. Murtaza, at paras. 49-50; R. v. Bedi, [2003] O.J. No. 5825 (S.C.J.), at paras. 13-17.
27Having specifically quantified the applicant’s “reasonable legal expenses,” I am satisfied that the applicant has demonstrated that he has no other assets or means available to him to meet these reasonable legal expenses associated with the preliminary inquiry. While the applicant should be able to financially support himself and his family, as he has done in the past, and adequately provide for their ongoing living expenses, I am satisfied that the payment of reasonable legal expenses is a much more onerous and extraordinary financial obligation, and one that the applicant has no assets or means available to satisfy. The applicant’s bank accounts and retirement savings have been frozen and are effectively unavailable for these purposes.
F. Others Potentially Lawfully Entitled to Possession
28The final precondition to the order sought is that the applicant must establish that “no other person appears to be the lawful owner of or lawfully entitled to possession” of the monies. The Crown argued that the applicant could not satisfy this precondition as the Canada Revenue Agency (CRA) has claimed an entitlement to possession of a significant portion of the seized funds. I need not, however, determine this issue.
29The evidence on this application suggests that the CRA has a pending tax claim in the amount of $206,812.44 against the accused. As I have indicated, the Crown argued that, based upon this evidence, the CRA is lawfully entitled to those funds and that, accordingly, these funds could not be accessed by the accused for any aspect of his family or legal expenses. However, as I have ordered the applicant’s reasonable legal expenses for the preliminary inquiry capped at a total of no more than $60,000.00, even if this amount is paid out in its entirety, there will still remain $211,100.00 of the seized Canadian currency in potential satisfaction of this applicant’s alleged debt to the CRA.
30Accordingly, as this order regarding payment of the applicant’s reasonable legal expenses for the preliminary inquiry does not potentially prejudice the alleged interest of the CRA, there is no need to draw any finally conclusions as to whether the CRA appears to be “lawfully entitled” to possession of the funds it has claimed. See, for example: R. v. Kalenuik, at paras. 22-28; R. v. Murray, 2004 SKQB 66, 246 Sask.R. 223, at paras. 16-17; Breton v. Canada (Attorney General), 2012 ONSC 6610, [2012] O.J. No. 5715, at paras. 7-11.
G. Conclusion
31In the result, the application is granted, but only in part. An order shall issue pursuant to s. 462.34(4)(c)(ii) of the Criminal Code, allocating the payment of a maximum of $60,000.00 from the total of $271,100.00 that was seized by the police from the applicant’s former residence, for the purpose of the payment of the applicant’s reasonable legal expenses in connection with the pending preliminary inquiry in this case. If counsel cannot agree on the specific content of the order, I may be contacted to settle its precise terms.
Kenneth L. Campbell J.
Released: December 2, 2013