ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-5531
DATE: 20140210

B E T W E E N:

ATTORNEY GENERAL OF ONTARIO

Jean Marie Dixon, Counsel for the Applicant

Applicant

• and -

$10,000.00 IN CANADIAN CURRENCY (IN REM)

Respondent

Frank M. Falconi, Counsel for the Respondent, Jason Paquette

HEARD: January 16, 2014

ellies j.

[1] At about 11:35 p.m. on September 10, 2012 a North Bay Police Service Officer stopped his cruiser behind a bank in downtown North Bay after observing the respondent, Jason Paquette, and his girlfriend involved in a heated argument. When the officer inquired as to whether everything was alright, Paquette swore at the officer, took the leash off his dog, and began to swing the leash over his head. As he did so, he approached the officer, saying “Come get some”. Paquette eventually desisted when the officer threatened to stun him with a taser. He was then arrested for assaulting a police officer.

[2] When Paquette was searched following the arrest, the police discovered five bundles of Canadian currency in the pockets of his jeans. Four of the bundles were held together with an elastic band and one was held together with an elastic hairband. Each of the five bundles consisted of two smaller bundles, containing $1,000 in bills of various denominations, the largest being $100. The money was seized and Paquette was released from custody after being charged with the provincial offence of public intoxication.

[3] The Attorney General seeks a forfeiture order with respect to the money under sections 3 and 8 of the Civil Remedies Act, 2001 (the “Act”). He argues that the money is either the proceeds of unlawful activity, an instrument of unlawful activity, or both.

EVIDENCE

[4] In support of his application, the Attorney General filed the affidavit of Scott McFarlane, a police officer, who deposed that he has experience and specialized training in a number of areas, including drug investigations. There were a number of exhibits attached to his affidavit, including photographs of the seized money and a copy of Paquette’s criminal record. In response, Paquette swore an affidavit to which he appended copies of his pay records, his income tax information from 2007 to 2012, and print outs of his bank account information.

[5] The Attorney General also filed transcripts of the cross-examinations of McFarlane and Paquette on their affidavits, as well as copies of documents produced in satisfaction of undertakings given by Paquette during his cross-examination.

[6] There is no direct evidence that the money found on Paquette came from or was going to be used for unlawful activities. The Attorney General’s case is based entirely on circumstantial evidence. That evidence can be grouped as follows:

• the circumstances in which the money was found;

• Paquette’s criminal record;

• Paquette’s refusal to cooperate with the police regarding their investigation of the source of the money; and

• Paquette’s failure to adequately explain the source and purpose of the funds.

ANALYSIS

[7] “Unlawful activity” is defined in the Act as an act or omission that is an offence under an act of Canada, Ontario or another province or territory of Canada or even outside of Canada, if a similar act or omission would be an offence in Ontario if committed here. The Attorney General does not have to prove that the property in question is related to any particular offence: Chatterjee v. Ontario (Attorney General), 2009 SCC 19, [2009] 1 S.C.R. 624, at para. 21. However, in this case, the Attorney General relies mainly on evidence of drug trafficking.

[8] Section 3 of the Act requires the court to make an order forfeiting property if it finds that the property is proceeds of unlawful activity, with certain exceptions. The parties agree that none of the exceptions apply in this case, at least with respect to Paquette.

[9] The term “proceeds of unlawful activity” is defined in s. 2 as meaning “property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity”.

[10] Section 8 of the Act requires the court to make a forfeiture order if it finds that the property is an instrument of unlawful activity, again with certain exceptions that the parties agree do not apply here.

[11] The term “instrument of unlawful activity” is defined in s.7 as meaning “property that is likely to be used to engage in unlawful activity that, in turn, would be likely to or is intended to result in the acquisition of other property or in serious bodily harm to any person, and includes any property that is realized from the sale or other disposition of such property”.

[12] A proceeding under the Act is a civil proceeding. Therefore, the Attorney General must prove the requisite grounds on a balance of probabilities: Civil Remedies Act, 2001, S.O. 2001, c. 28, s. 16; Chatterjee, at para. 23. I am persuaded that he has done so in this case, for the following reasons.

The Circumstances in Which the Money was Found

[13] It is unusual, if not highly unusual, for someone to be carrying $10,000 in cash in his pant pockets in downtown North Bay late at night. It is even more unusual to bundle money in the way it was found bundled in Paquette’s pockets.

[14] Drug trafficking is a cash business: Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem), 2011 ONSC 3820 (Div. Ct.), at para. 7. McFarlane deposed that the manner in which the cash was bundled “is consistent with money obtained from drug trafficking”. He deposed that drug traffickers often bundle their cash with elastic bands in order to avoid counting out the cash and thereby speeding up the drug transactions to reduce the opportunity for police detection.

[15] In light of the nature of the drug trade and McFarlane’s evidence, the presence of such a significant amount of money, found late at night on Paquette’s person after he had been in a bar in downtown North Bay, bundled the way it was, is strong circumstantial evidence from which an inference can be made that the money in question is proceeds of drug trafficking, an instrument of drug trafficking, or both.

The Respondent’s Criminal Record

[16] Although McFarlane deposed that Paquette was a “well-known drug dealer”, the Attorney General is not relying on this evidence; wisely, in my opinion. It is nothing more than reputation-based evidence of bad character, which is not usually admissible in civil proceedings: Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 3rd ed. (Markham, Ont.: LexisNexis Canada, 2009) at paras. 10.8 to 10.11.

[17] A respondent’s criminal record, however, is admissible and may be probative as similar fact evidence in proceedings under the Act. In Ontario (Attorney General) v. $5,545 in Canadian Currency (In Rem), 2011 ONSC 2827, the Divisional Court held that criminal records were admissible as similar fact evidence of a respondent’s past “unlawful activity (: see paras. 29 and 30). See also Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem), 2011 ONCA 363, at para. 46.

[18] Paquette’s criminal record spans a period from February of 2004 to June of 2008. It includes convictions for theft (four counts), possession of property obtained by crime (one count), and fraud in relation to collecting fares (one count). In also includes offences of violence and two convictions for possession of a scheduled substance under the Controlled Drugs and Substances Act, both of which were entered in December of 2007.

[19] Counsel for Paquette submitted that the record was dated and, therefore, indicative more of rehabilitation than unlawful activity. While I agree that the value of a criminal record as similar fact evidence of unlawful activity may be reduced where it is dated, I do not view these convictions as being so old as to significantly decrease their probative value.

[20] In my opinion, Paquette’s convictions for possession of drugs are probative of the source and purpose of the funds with which he was found that night.

Paquette’s Refusal to Cooperate with Police

[21] Civil proceedings under the Act differ significantly from criminal proceedings with respect to a respondent’s obligation to offer an explanation in circumstances that might otherwise justify an inference that property is proceeds of unlawful activity or an instrument thereof. As the court held in Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem), at para.6:

The fundamental principle that an accused person is not required to assist the state in making out the case against him or her does not apply in the civil context: D.P. v. Wagg, [2004] O.J. No. 2035 (C.A.) at para. 68. In Ontario (Attorney General) v. Lok, 2008 ONCA 632, the Court of Appeal also relied upon the failure of a respondent to adduce any evidence seeking to explain why he was carrying a large amount of money. The judge is entitled to have regard to the absence of any evidence documenting any legitimate source for the currency.

[22] At the time of his arrest, Paquette told the police that the question of where he got the money was none of their business. Following Paquette’s release, a lawyer who said he was retained by Paquette called the police to inquire about the money. Later, Paquette also called the police. He was told that if he could prove that the cash was obtained through legitimate means, he could have it back, to which he replied, “Well, I guess I won’t be coming in then.” He further stated that he had saved the money, that he was not going to speak to the police, that he would not provide proof as to the origin of the cash, and that his lawyer would get the money from the court.

[23] Paquette was obviously less than cooperative with the police regarding the source and purpose of the funds. In this case, however, I would not put much weight on Paquette’s initial response to police inquiries. The way he reacted to the officer who eventually arrested him that night and McFarlane’s evidence about Paquette’s history with the police demonstrate that Paquette had a very bad relationship with the police. The history of his involvement with the criminal law and the substance of his telephone discussions with the police the morning after his arrest confirm Paquette’s sworn evidence that he did not believe he had any duty to cooperate with the police. It is clear he did not understand that an adverse inference could be drawn from his failure to do so in a civil, as opposed to a criminal, context.

The Respondent’s Evidence Regarding the Money

[24] Nonetheless, the circumstances in this case call for some explanation on Paquette’s part, in my opinion.

[25] Differing, and conflicting, explanations have been given as to the purpose of the money found on Paquette. At the time of his arrest, the female with whom Paquette had been arguing told the police that the money Paquette had on him was their rent money. The following morning, Paquette told the police that the money was to buy a car. No affidavit was filed by the female in this application and neither rent allegation nor the car allegation was ever repeated by Paquette in his affidavit. Indeed, Paquette’s affidavit contains no information with respect to the purpose of the cash.

[26] With respect to the source of the cash, Paquette deposed that he had saved all of the money from his employment and that none of it came from any kind of criminal activity whatsoever. While it would not be impossible for Paquette to save $10,000 from the money he earned from 2008 to 2012, I find this very unlikely.

[27] Paquette’s tax returns indicate that, in the period between 2008 and 2012, inclusive, he earned between $10,000 and $26,000, approximately, per year. Paquette deposed that he had managed to save money by not paying rent or other expenses after 2008, except for food. His tax returns demonstrate, however, that Paquette claimed rent and medical expenses in those years, which totalled nearly $10,000 in 2012, for example.

[28] During cross-examination on his affidavit, Paquette testified that he saved $50 per pay cheque from 2008 forward. However, according to Paquette’s own evidence, this would only amount to $1,500 to $2,000 per year. At most, this would total $8,000 to the point at which the $10,000 was seized.

[29] In addition, Paquette admitted during cross-examination that he did spend money on things other than food, such as snowmobiles ($1,300 to $1,400). For these reasons, I am unable to accept Paquette’s evidence as to how he accumulated the money.

[30] As to why he was carrying around so much money, Paquette deposed that he kept the cash out of the bank because he did not want any of it seized in satisfaction of a child support order dated November 3, 2011 in which he was ordered to pay child support of $197 per month. The Attorney General argues that this explanation is an admission by Paquette that the money is proceeds, because it is fraudulent to attempt to thwart a child support order. Although I do not need to decide this issue given my conclusion that the money is proceeds from or an instrument of other unlawful activity, I would not agree with the Attorney General’s argument. The case relied upon by the Attorney General in support of this argument, namely Ontario (Attorney General) v. $138,650 in Canadian Currency (In Rem), 2012 ONSC 7230, is distinguishable on several grounds. The main one is that the respondents in that case were in receipt of public funds and were required to disclose the cash in question, which they did not do. There was no positive obligation on the respondent in this case to keep the funds in the bank and, apart from any moral issues associated with not wanting to support one’s own child, there was nothing fraudulent about failing to do so.

[31] Nonetheless, I am not persuaded by Paquette’s explanation as to why he kept the money on his person. There are many safer places to keep $10,000 in cash other than in your pants. Paquette’s evidence that he did not want to keep it in his apartment because his girlfriend had stolen from him previously does not explain why he would not keep it in another safe place, such as a safety deposit box, for example.

[32] In Ontario (Attorney General) v. $1,650 in Canadian Currency (In Rem), [2008] O.J. No. 2076 (S.C.), the respondent was found with “a very large sum of folded money” in circumstances from which it could be inferred that he was trafficking in drugs. Power J. found that “the suspicion” that arose from the circumstances required a “credible and reasonable answer” and held that such an answer had not been given. I am compelled to the same conclusion here. Paquette has failed, in my opinion, to provide a satisfactory explanation as to the manner in which he came to possess the $10,000 and the reason why he had the cash in his pockets. Further, he has not introduced any evidence to explain why it was bundled in the way it was.

CONCLUSION

[33] I am satisfied that the $10,000 is proceeds of unlawful activity, an instrument of unlawful activity, or both. The application is granted. The money is forfeited to the Crown in right of Ontario.

[34] The parties may make written submissions with respect to the issue of costs, as follows:

(a) The Attorney General shall have 30 days in which to serve and file written submissions of no more than 10 double-spaced pages, excluding attachments;

(b) Paquette shall have 20 days from the receipt of those submissions in which to serve and file written submissions, similarly limited in length;

(c) The Attorney General shall have 10 days from the receipt of those submissions in which to serve and file reply submissions, limited to 5 double-spaced pages, excluding attachments.

Ellies J.

Released: 20140210

2014 ONSC 944

COURT FILE NO.: CV-12-5531
DATE: 20140210

ONTARIO
SUPERIOR COURT OF JUSTICE

ATTORNEY GENERAL OF ONTARIO
– and –
$10,000.00 IN CANADIAN CURRENCY (IN REM)

REASONS FOR DECISION

Ellies J.

Released: 20140210