ONTARIO
SUPERIOR COURT OF JUSTICE
(Southwest Region)
CITATION: R. v. Nguyen,2015 ONSC 2857
COURT FILE NO.: 10858
DATE: 2015/05/27
IN THE MATTER of an application by Tania Thao Nguyen pursuant to section 20(4) of the Controlled Drugs and Substances Act for restoration of property previously ordered forfeited on June 19, 2006
B E T W E E N:
Her Majesty the Queen
Respondent
Michael McEachren, for the Public Prosecution Service of Canada
- and -
Tania Thao Nguyen
Ira E. Book, for the Applicant Tania Thao Nguyen
Applicant
HEARD: July 14, 2014
Submissions in writing October 12, 2014 and December 19, 2014
Rady J.
Introduction
[1] The applicant, Tania Thao Nguyen applies to set aside the restraint and management order made by Justice Steven Rogin dated June 8, 2004 at Windsor, Ontario with respect to 3271 Valmarie Avenue in Mississauga, Ontario. She applies to set aside the forfeiture order made by Justice Gregory Pockele of the Ontario Court of Justice at London on June 19, 2006 pursuant to section 20 of the Controlled Drugs and Substances Act, S.C. 1996 c. 19 as amended with respect to the same premises.
[2] In support of her application, Ms. Nguyen has filed an application record comprised of two volumes, a supplementary affidavit sworn by Adrienne Cruickshanks, sworn February 27, 2008, a supplementary affidavit of Ms. Nguyen sworn May 14, 2012 and a third supplementary affidavit sworn June 12, 2014. In addition, Ms. Nguyen gave viva voce evidence at the hearing of this application. The respondent relied upon the affidavits of David Cowan and Bernard Martyn, both members of the RCMP involved in the investigation detailed below, as well as the record of the proceedings that occurred prior to the hearing of this application.
Background
[3] Between June 2003 and June 2004, the London RCMP Integrated Proceeds of Crime section was involved in an investigation relating to the export of marijuana into the United States and the subsequent import of U.S. currency to Canada resulting from its sale. This was referred to as “Project OFLOW”.
[4] The investigation revealed two cells that were supplying marijuana to the United States. The first cell was run by Truong Gia Nguyen and it operated out of the greater Toronto area. The second cell, which operated out of the Windsor area, was run by Banh Thi Nguyen.
[5] As a result of the investigation, which included undercover operations, intercepted communications and surveillance, approximately 900 pounds of marijuana were seized as well as cash in excess of $1 million. The investigation resulted in the arrest of 21 persons, including Truong Gia Nguyen, Banh Thi Nguyen and Van Hoang Nguyen.
[6] During the course of the investigation and pursuant to a general warrant issued on January 23, 2004, police officers covertly entered the Valmarie property. The home did not appear to be occupied. The main floor was sparsely furnished and contained numerous old newspapers and invoices; old furniture appeared to have been left behind by a previous tenant; one room containing a mattress with a blanket, with no clothing in the closet, appeared to have been used infrequently; the basement appeared to be set up as a separate apartment but apart from a washer and dryer, it contained no furniture; the cupboards contained a large number of boxes containing freezer bags, vacuum sealing units, packing tape, markers and what appeared to be a bag of dried marijuana buds.
[7] Police ascertained that the parties under investigation communicated by way of cell phones, which were supplied by businesses owned or operated by the applicant, her mother and father, including:
• 887791 Ontario Inc. operating as New Generation Wireless located at 54 Grange Avenue, Toronto operated by the applicant’s father;
• 1577356 Ontario Limited operating as Unicell Wireless Plus/NGW New Generation Wireless operated by the applicant’s mother and managed by the applicant;
• 544225 Ontario Limited operating as New Generation Designs operated by the applicant’s mother and the applicant.
[8] The police discovered that Truong Gia Nguyen had two sons – Khoa Hoang Nguyen and Khoi Hoang Nguyen. The police allege that both sons were employed by New Generation Wireless. It appears that Khoi Hoang Nguyen was paid by New Generation Wireless by way of cheques dated May 30, 2003, July 26, 2003 and August 15, 2003. All cheques were marked “payroll” and were signed by the applicant’s father.
[9] It also appears that the applicant’s father loaned Truong Gia Nguyen the sum of $10,000 by cheque dated August 7, 2003 drawn on the account of “Thy Restaurant”. A similar advance was made payable to Khoa Hoang Nguyen.
[10] The Crown took the position that the Valmarie property was used by Truong Gia Nguyen and Van Hoang Nguyen as a stash house or “mother house” where marijuana was packaged to be smuggled to the United States. As a result, the Crown submitted that the Valmarie property was “offence related” within the meaning of the Act.
[11] On June 8, 2004, Justice Rogin issued a restraint order pursuant to section 14 of the Act with respect to a number of properties including the Valmarie property. This property was registered in the name of the applicant.
[12] Truong Gia Nguyen, Van Hoang Nguyen and Banh Thi Nguyen pleaded guilty to some of the offences charged against them. It was in the context of the sentencing hearing for Banh Thi Nguyen that the Crown sought forfeiture of the Valmarie property. Ms. Nguyen was given notice and she applied for relief from forfeiture pursuant to section 19(3) of the Act.
[13] On June 19, 2006, Justice Pockele, who took the guilty plea from Banh Thi Nguyen, found that Ms. Nguyen had not met the onus he considered was imposed on her to obtain relief. As a result, he issued a forfeiture order.
[14] Justice Pockele ruled that Ms. Nguyen’s evidence “simply isn’t believable. I am left to make the ruling that she was either a nominee for her father and this property or, if she was the owner, she was the owner as a cut-out to segregate or isolate her father from the titular ownership of his property which in fact he acquired… I find that she left the entire management of this operation to her father and that this is because she was a nominee. She was willfully blind; she received the titular benefit of the ownership of this home without being actively involved in any way, shape, manner or form. She was wilfully blind because she let her father do the dirty work”.
The Procedural History
[15] This case has had a protracted, complicated history. The application for relief from forfeiture was initially made returnable in the Superior Court on August 24, 2005 pursuant to section 20(4) of the Act. On consent, the matter was reconstituted as a hearing pursuant to section 19(3) of the Act in the Ontario Court of Justice in the context of Banh Thi Nguyen’s sentencing hearing.
[16] As already noted, Pockele J. dismissed the application and ordered the property forfeited to the Crown at the conclusion of a two-day hearing held June 5 and 14, 2006.
[17] Ms. Nguyen appealed to the Court of Appeal from Justice Pockele’s order. On December 10, 2007, in light of the Crown’s position that there was no statutory right of appeal of a forfeiture order made pursuant to section 16 and 19(1) of the Act available to a person who was not charged with a designated substance offence, counsel for the Crown and Ms. Nguyen agreed that the appeal would be dismissed as abandoned. The matter would then be reconstituted before a judge of the Superior Court for a hearing pursuant to section 20(4) of the Act.
[18] The Crown specifically waived any procedural impediments that would deny the applicant a full hearing. In particular, in its factum dated May 7, 2007, the Crown noted as follows:
On the peculiar facts of this particular case, the Crown is not asserting any type of estoppel or res judicata argument. The Crown concedes that it has agreed in this case to allow the applicant to seek a remedy under section 20. However, the Crown reserves the right to argue estoppel and res judicata in other cases in the future if warranted.
[19] The reconstituted application was heard in the Superior Court by Justice T. David Little on May 16, 2008. He dismissed the application, concluding that the applicant’s right to bring the application had been extinguished by the initial forfeiture order made by Pockele J.
[20] Ms. Nguyen appealed to the Court of Appeal from Justice Little’s disposition. On November 24, 2010, the appeal was allowed and the matter remitted back to the Superior Court of Justice for hearing. The Crown’s agreement was identified by the Court of Appeal as the basis for its decision to return the matter to the Superior Court to be adjudicated on its merits.
[21] The use that the court might make of the findings of fact and conclusions of Justice Pockele respecting the applicant’s credibility was addressed by Justice Thomas Heeney in a decision released on July 15, 2013. Counsel for Ms. Nguyen had brought a preliminary application for directions with respect to how the application should proceed. He sought an order that the hearing was to be conducted as a hearing de novo; that the reasons of Pockele J. dated June 14, 2006 would not be considered, relied upon or alluded to by any party or witness or by the judge hearing the application; and that the record should be purged of any references to Justice Pockele’s reasons, conclusions or opinions.
[22] Justice Heeney reasoned that it would not be appropriate to declare this to be a de novo proceeding. He noted that these are two different proceedings under two different sections of the Act. The proceeding before Pockele J. was an application by the Crown for forfeiture where the Crown had the onus of proof (although it appears to me that Justice Pockele erroneously imposed the burden on Ms. Nguyen.) This application made under section 20 is brought by a person who claims an interest in the property seeking relief from forfeiture. The applicant bears the onus of proof.
[23] The second request for relief was also dismissed on the basis that Justice Pockele’s earlier ruling forms part of the court record. It does not bind the judge hearing the section 20 application but, there was no basis in law for it to be expunged from the record. Justice Heeney specifically noted that “the judge hearing the section 20 application may have regard to it, or not, as he or she may see fit, provided that it is clear that the earlier ruling is not in any way binding”.
[24] In due course, the matter came on for hearing before me. In addition to the documentary record, I heard viva voce evidence from Ms. Nguyen. Counsel asked for and were granted leave to file written closing submissions outlining their respective positions and the relevant law. The Crown requested and was granted an extension of time for the delivery of its submission.
Ms. Nguyen’s Evidence
[25] With that background, I turn to the viva voce evidence and the evidence contained in Ms. Nguyen’s application record. Tania Nguyen was born on May 2, 1980 and is now 35 years old. As of the date of the hearing last year, she had lived at 3271 Valmarie Ave. for two years. She testified that the Valmarie property is registered in her name, purchased in October 2000 for $255,000 as an investment with funds given to her from her parents and through her own savings.
[26] She received her Bachelor of Commerce from the University of Toronto in 2005. She started studying to obtain her CGA designation but she had not yet completed her studies. Ms. Nguyen lives in a common-law relationship with Thomas Mach. She has no children. Six or seven years ago, she took over New Generation Wireless from her father, Tuyen Vi Nguyen, known as Tom Nguyen, who retired. The business sells cell phones and wireless devices.
[27] Ms. Nguyen has also started a business called “New Generation Taxes”. She has been doing tax returns for the last two-and-a-half to three years. She has a business card which identifies her as a corporate and personal tax specialist.
[28] She testified that her parents were Vietnamese “boat people” who came to Canada prior to 1980. They were entrepreneurial and industrious. They built up several businesses and bought a number of properties as investments. They operated a few Vietnamese Restaurants, a wireless business that had two or three stores and another business called “ABO Business Machines” in partnership with another individual.
[29] In 1980, her parents had a restaurant in Chinatown which they sold at a profit. They moved to Mississauga and opened another restaurant, which was also sold later at a profit. They returned to Toronto and opened “Pho 54” on Dundas Street. It was not profitable and closed. They moved to Grange Avenue and opened “Thy Restaurant”, which operated until 2002 when Ms. Nguyen’s mother could no longer work. This business was sold at a profit.
[30] She considered that she started at ABO in approximately November 2001, finishing there at the end of September 2002, when her father opened New Generation Wireless. In 2001, she worked at Thy Restaurant on Grange Avenue as well. Her part-time hours varied depending on what was necessary to cover for the full-time positions. She also attended school throughout this time as a full-time student.
[31] Her savings came from birthday gifts, her employment, gifts for Chinese New Year and her parents helped her financially from time-to-time. She said she invested $34,000 of her own savings in the Valmarie property.
[32] It was necessary to obtain financing in order to complete the purchase. With the assistance of a mortgage specialist by the name of Lam, she obtained a total of $222,750 secured by a first mortgage with the Hong Kong Bank and a second through private financing.
[33] In her mortgage application, Ms. Nguyen declared that she was earning $4,500 per month at ABO ($54,000 yearly). She acknowledged that this was not true but said it was a fabrication by Mr. Lam. In cross-examination, she confirmed that she was working part-time but was still at school full-time at the time of the application.
[34] She also listed her assets in the mortgage application. She said she had an automobile worth $15,000, a Honda Civic, which had been a gift from her father. She also listed $55,000 cash in a bank account. She agreed that this was a joint account with her mother. She did not recall the detail of a $40,000 accounts receivable. She listed $20,000 in belongings, which she testified was comprised of jewellery, diamonds and the like. She could not remember what the deposit purchase of $10,000 was.
[35] The two mortgages were refinanced in November 2002 with a new first mortgage in favour of Bank of Montreal for $219,000. The monthly mortgage payments of $1422.47 were withdrawn from Ms. Nguyen’s bank account.
[36] The BMO application was supported by a two-year lease with David Long Tran and Susana Thu Tran with a term of August 1, 2002 to July 2004 and yearly rent of $26,400. The lease agreement is dated July 10, 2002. Ms. Nguyen denied preparing it and said that she did not know that it was used in connection with the application to BMO. She did not know where the rental agreement came from or how it formed part of the application. She denied having a tenant by that name.
[37] There is also a document signed by her father saying that Ms. Nguyen earned $42,000 as an annual salary, which she acknowledged was not accurate.
[38] Initially, Ms. Nguyen took possession of the Valmarie property and lived there for a year with her parents. Because they disliked the long commute to Toronto, they moved back to Toronto to an apartment above the restaurant.
[39] Ms. Nguyen decided to sell the property but no deal was finalized. As a result, she decided to rent the house. She advertised in a Vietnamese newspaper “Thoi Bao” but received no inquiries. However, through word-of-mouth she obtained a tenant, Tien Nguyen (who is no relation to her). Tien Nguyen remained a tenant for one year from September 2001 to August 2002. Tom Nguyen screened and approved the tenant, who provided the first and last months’ rent and a series of post-dated cheques. It appears that after August 2002, the property was vacant for a time until Tien Nguyen’s brother resided there in February and March 2003.
[40] The next tenant was Van Hoang Nguyen, one of the offenders, who is also not related to Ms. Nguyen. Again, her father screened and interviewed the tenant. Van Hoang Nguyen advised that he was going to live in the premises with his family. A background and credit check were performed by Tom Nguyen. The tenant provided cheques for the first and last months’ rent and otherwise paid his rent in cash monthly. He resided there from March 2003 to February 2004 and Ms. Nguyen said she had no problems with him. He paid his rent on time, usually at the New Generation Wireless store. She did not inspect the premises because there were no complaints or cause for concern. Mr. Nguyen terminated the tenancy because he found another place to live.
[41] In April 2004, a new tenancy was secured: Truong Gia Nguyen and family, again no relation to Ms. Nguyen. Ms. Nguyen’s father screened his application as well. Truong Gia Nguyen remained on the premises until the time of his arrest. He also paid the rent in cash at the New Generation Wireless store.
[42] Ms. Nguyen testified that she learned of his arrest from her own lawyer. She was surprised and stunned because she had no idea that criminal activity was being carried out at the property. She said that she was never aware of any criminal activities being carried out on the premises other than what she now knows about Truong Gia Nguyen and Van Hoang Nguyen. She had received no warning from police nor complaints from neighbours. Her father drove by the premises and dropped in from time-to-time but she did not. She reported that her father found no problems as a result of his inspections.
[43] During the time that Truong Gia Nguyen was under arrest, Ms. Nguyen’s mother and father helped her pay the mortgage and the property taxes. The tenants had been responsible for utilities and she received no notice that they were delinquent.
[44] The property was leased from time-to-time until 2012. After the latest tenancy, the house was left in a damaged condition and as a result, Ms. Nguyen said she and her family undertook renovations following which she moved in with the mother, father and two sisters.
[45] Ms. Nguyen says that she has no criminal record and she has never been arrested. She is not aware that she has ever been investigated for money laundering or involvement in marijuana trafficking or grow operations.
[46] One of the names mentioned in the Cowan affidavit filed in connection with the Crown’s material is Thomas Mach, someone not related to this proceeding but allegedly involved in drug related matters. Ms. Nguyen testified that Mr. Mach is her common-law partner of ten years. She said that his father and stepmother were involved in ecstasy trafficking in Georgia but suggested that Mr. Mach was not involved.
[47] Ms. Nguyen continues to fight for the return of her home. She does not believe that she should be penalized for having bad tenants.
[48] In cross-examination, Ms. Nguyen testified that in June 2006, at the time of the original forfeiture hearing, she was 26 years old. By that time, she was the registered owner of three properties: a condominium on Bloor Street in Toronto, the Valmarie property and another property located on Kingston Road in Scarborough.
[49] She said that she viewed the Valmarie property as an investment. She was attending the Mississauga Campus of the University of Toronto and so she thought that she would be in the area and could manage the property. She wanted to get into the management field much as her parents had done. She thought that the price was good and the area in which the home was located was also attractive. She planned to “flip” the property in time.
[50] She testified that in April 2000 her father had purchased the Bloor Street condominium as a pre-construction project. He had put down five percent of the purchase price, intending it to be a gift to his daughter. The property was initially taken in his name and then transferred to her. She was responsible for the mortgage. She said that she was able to rent the property to good tenants and rental payments covered expenses.
[51] Ms. Nguyen never lived at the Bloor Street condominium property. She did not claim a capital gain when the property was sold, according to her because “they” renovated it at a cost of $40,000 before the property was transferred to her mother in March 2007. However, she agreed that renovation costs can be deducted from any capital gain realized.
[52] She was a full-time student at the University of Toronto from 1999 until 2005 when she graduated. She did not declare rental income for 1999, 2000 and 2001. She did not know if her father had claimed the rent as his income. She blamed the oversight on her accountant. A re-filing was completed in 2007 or 2008 after the June 2006 forfeiture hearing and rental income was declared and assessed.
[53] Ms. Nguyen agreed that in 2000, her declared income was zero and in 2001, it was $1,150. She did not file an income tax return for 1999 although she earned income at one of the restaurants. She explained that she received no T4 form. In 2002, her income was $28,786, which she said she earned from part-time work at the restaurant, New Generation Wireless and ABO seven days a week.
[54] Ms. Nguyen did not declare her income from ABO. She explained that again she was not given a T4 and was paid in cash. When she told her accountant that she had worked at ABO, he asked her for a T4. She approached ABO and was told that because she worked part-time, no T4 slip would be issued.
[55] She testified that in November 2002, she purchased the Kingston Road, Scarborough property for $107,000. It was a commercial property and required a 30% down-payment, which she drew from a line of credit with the Royal Bank, extended on the strength of her ownership of the Bloor Street condominium.
[56] Ms. Nguyen also had a line of credit jointly with her mother with the Toronto Dominion Bank. She thinks that she may have used $5,000 from that line of credit to complete the down payment.
[57] Because the bank would not lend less than $100,000, she said that “we” arranged for a private mortgage. She then corrected herself and said that she arranged the private mortgage. She said that the property had been burnt and was only a store front with no back. She said that “we” intended to buy the property, fix it and flip it. She acknowledged that her mother, father and her family made that decision.
[58] Eventually, Ms. Nguyen decided to transfer the Kingston property to her father. Her parents had moved into the property. As a result, she transferred it to her father because it would be easier for him to manage. Her father oversaw certain renovations and paid for them as well. The property was transferred for approximately $215,000 and she thought that the renovation cost was $100,000. She did not claim a capital gain because she said she broke even.
[59] Ms. Nguyen testified that her father owns a number of properties which he has purchased to rent or flip. She was familiar with a few of the properties owned by her father, but a property located on Glen Erin Drive in Mississauga did not ring a bell. She said she has never been to that property. She had not been aware that in August 2003, a marijuana grow-op, comprised of 290 plants, had been found there although she was made aware of that from the disclosure during the course of these proceedings.
[60] She identified Enersource Hydro as the entity to which she pays for electricity in Mississauga. She acknowledged that she went to a meeting with Enersource in January 2004 with her father because he needed an interpreter. Initially, she agreed that her father agreed to pay $25,000 as compensation for stolen hydro at the Glen Erin property. Ms. Nguyen then testified that she does not remember if he settled the bill and said that the discussion did not involve her. She subsequently acknowledged that Enersource had raised the issue of the Glen Erin grow-op and it wanted a lump sum payment as compensation. However, she explained that she was present only to serve as an interpreter for her father.
[61] She was also asked about her mother’s purchase of a property on Sixth Line in Oakville. She said that she has never been there and does not remember when it was purchased. In fact, it was purchased in October 2001 at a time when the family was living at the Valmarie property. The purchase price was $332,000. Her mother was a chef at a restaurant at the time.
[62] In May 2002, the hydro to the Sixth Line property was shut off. Ms. Nguyen said her mother never discussed this with her. She said that she did not know that her mother was assessed $12,000 for stolen hydro.
[63] She said that she was not aware that in May 2002, three males were found at the Sixth Line property in a ’77 Dodge Caravan belonging to her father and containing 135 marijuana plants. She said that there was no discussion by her parents of the vehicle being seized.
[64] In re-examination, Ms. Nguyen testified that the Glen Erin and Sixth Line properties were never the subject of a forfeiture order. Neither her mother nor father were charged with drug related offences.
The Statutory Framework
[65] The relevant portions of sections of the Act are reproduced below:
16.(1) Subject to sections 18 to 19.1, where a person is convicted of a designated substance offence and, on application of the Attorney General, the court is satisfied, on a balance of probabilities, that any property is offence-related property and that the offence was committed in relation to that property, the court shall
(a) In the case of a substance included in Schedule V!, order that the substance be forfeited to Her Majesty in right of Canada and disposed of by the Minister as the Minister thinks fits; and
(b) In the case of any other offence-related property,
(i) Where the prosecution of the offence was commenced at the instance of the government of a province and conducted by or on behalf of that government, order that the property be forfeited to Her Majesty in right of that province and disposed of by the Attorney General or Solicitor General of that province in accordance with the law, and
(ii) In any other case, order that the property be forfeited to Her Majesty in right of Canada and disposed of by such member of the Queen’s Privy Council for Canada as may be designated for the purposes of this subparagraph in accordance with the law.
(2) Subject to sections 18 to 19.1, where the evidence does not establish to the satisfaction of the court that the designated substance offence of which a person has been convicted 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 offence-related property, the court may make an order of forfeiture under subsection (1) in relation to that property.
(2.1) An order may be issued under this section in respect of property situated outside Canada, with any modifications that the circumstances require.
(3) A person who has been convicted of a designated substance offence or the Attorney General may appeal to the court of appeal from an order or a failure to make an order under subsection (1) as if the appeal were an appeal against the sentence imposed on the person in respect of the offence.
- (1) Before making an order under subsection 16(1) or 17(2) in relation to any property, a court shall require notice in accordance with subsection (2) to be given to, and may hear, any person who, in the opinion of the court, appears to have a valid interest in the property.
Order of restoration of property
(3) Where a court is satisfied that any person, other than
(a) a person who was charged with a designated substance offence, or
(b) a person who acquired title to or a right of possession of the property from a person referred to in paragraph (a) under circumstances that give rise to a reasonable inference that the title or right was transferred for the purpose of avoiding the forfeiture of the property,
is the lawful owner or is lawfully entitled to possession of any property or any part of any property that would otherwise be forfeited pursuant to an order made under subsection 16(1) or 17(2) and that the person appears innocent of any complicity in an offence referred to in paragraph (a) or of any collusion in relation to such an offence, the court may order that the property or part be returned to that person.
Notice
19.1 (1) Where all or part of offence-related property that would otherwise be forfeited under subsection 16(1) or 17(2) is a dwelling-house, before making an order of forfeiture, a court shall require notice in accordance with subsection (2) to be given to, and may hear, any person who resides in the dwelling-house and is a member of the immediate family of the person charged with or convicted of the indictable offence under this Act in relation to which the property would be forfeited.
Manner of giving notice
(2) A notice shall
(a) be given or served in the manner that the court directs or that may be specified in the rules of the court;
(b) be of any duration that the court considers reasonable or that may be specified in the rules of the court; and
(c) set out the offence charged and a description of the property.
Non-forfeiture of real property
(3) Subject to an order made under subsection 19(3), if a court is satisfied that the impact of an order of forfeiture made under subsection 16(1) or 17(2) in respect of real property would be disproportionate to the nature and gravity of the offence, the circumstances surrounding the commission of the offence and the criminal record, if any, of the person charged with or convicted of the offence, as the case may be, it may decide not to order the forfeiture of the property or part of the property and may revoke any restraint order made in respect of that property or part.
Factors in relation to dwelling-house
(4) Where all or part of the property that would otherwise be forfeited under subsection 16(1) or 17(2) is a dwelling-house, when making a decision under subsection (3), the court shall also consider
(a) the impact of an order of forfeiture on any member of the immediate family of the person charged with or convicted of the offence, if the dwelling-house was the member’s principal residence at the time the charge was laid and continues to be the member’s principal residence; and
(b) whether the member referred to in paragraph (a) appears innocent of any complicity in the offence or of any collusion in relation to the offence.
Application
- (1) Where any offence-related property is forfeited to Her Majesty pursuant to an order made under subsection 16(1) or 17(2), any person who claims an interest in the property, other than
(a) in the case of property forfeited pursuant to an order made under subsection 16(1), a person who was convicted of the designated substance offence in relation to which the property was forfeited,
(b) in the case of property forfeited pursuant to an order made under subsection 17(2), a person who was charged with the designated substance offence in relation to which the property was forfeited, or
(c) a person who acquired title to or a right of possession of the property from a person referred to in paragraph (a) or (b) under circumstances that give rise to a reasonable inference that the title or right was transferred from that person for the purpose of avoiding the forfeiture of the property,
may, within thirty days after the forfeiture, apply by notice in writing to a judge for an order under subsection (4).
Fixing day for hearing
(2) The judge to whom an application is made under subsection (1) shall fix a day not less than thirty days after the date of the filing of the application for the hearing of the application.
Notice
(3) An applicant shall serve a notice of the application made under subsection (1) and of the hearing of it on the Attorney General at least fifteen days before the day fixed for the hearing.
Order declaring interest not affected by forfeiture
(4) Where, on the hearing of an application made under subsection (1), the judge is satisfied that the applicant
(a) is not a person referred to in paragraph (1)(a), (b) or (c) and appears innocent of any complicity in any designated substance offence that resulted in the forfeiture of the property or of any collusion in relation to such an offence, and
(b) exercised all reasonable care to be satisfied that the property was not likely to have been used in connection with the commission of an unlawful act by the person who was permitted by the applicant to obtain possession of the property or from whom the applicant obtained possession or, where the applicant is a mortgagee or lienholder, by the mortgagor or lien-giver.
Section 20 Analysis
[66] One of the issues in this case is the significance of the ruling made by Justice Pockele in the section 19 application.
[67] In R. v. Sportun, [2010] O.J. No. 2201 (S.C.J.) Justice Hourigan (as he then was) noted Justice Little’s earlier decision in this case and made the following observation:
I am not persuaded that it necessarily follows that a party who participated unsuccessfully in a section 19 application cannot subsequently bring a section 20 application. The likelihood of success of such an application may not be great given that the onus on the section 20 application shifts away from the Crown and on to the party who is bringing the application. However, if Parliament intended to deny a party who participated in a section 19 hearing its rights under a section 20 hearing then it could have stated so explicitly. It did not do so and I am not prepared to read in such a limitation into the legislation…
I advised the parties that in my view I was not bound by the ruling of Justice Brophy. However, I advised that as the ruling and the evidence before Justice Brophy forms part of the record before me, I could properly have regard to both on this application.
[68] This is consistent with the ruling made by Justice Heeney earlier in this case. As a result, while I am not bound by Justice Pockele’s decision, I may have regard for it as well as the record of the evidence before him. However, because it appears that he shifted the burden to the applicant, I give it little weight.
[69] Another issue in this case is what onus the applicant bears – is it proof on the civil standard or something less? The parties are agreed that the standard is not proof beyond a reasonable doubt.
[70] The applicant submits that it is the latter. She relies on a decision of the Saskatchewan Court of Queen’s Bench in R. v. Brooks, [2000] S.J. No. 664 (213). In that case, the court made the following statement:
Section 20(4) does not require Brooks to prove either beyond a reasonable doubt or on a balance of probabilities her innocence of any complicity in the designated substance offence and that she exercised all reasonable care. It is sufficient for Brooks to merely satisfy the judge that she “appears innocent”.
[71] The applicant submits that is sufficient for her to merely satisfy the judge that she “appears innocent” of any complicity and that she appears to have exercised all reasonable care to be satisfied that the property was not likely to have been used in connection with the commission of an unlawful act by the person who she permitted to obtain possession of the property.
[72] In contrast, two Ontario decisions have held that the burden of proof is on a balance of probabilities: R. v. Sportun, supra; R. v. Basca, [2010] O.J. No. 157 (S.C.J.). It does not appear that the nature of the burden of proof was raised by the parties as an issue in those cases.
[73] In my view, the onus that the applicant bears is proof on a balance of probabilities. This is consistent with the jurisprudence that establishes that there is only one standard of proof in civil cases. See the decision in H.(F.) v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41. The McDougall decision is summarized in Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 3d ed. (Lexis Nexis Canada Inc. 2009) as follows:
Justice Rothstein held that the balance of probabilities standard was the sole standard of proof at common law in all civil proceedings. The party with the onus of proof has the obligation to prove that the existence or non-existence of a fact or issue is more likely than not. The lower standard of proof is justified in civil proceedings because it is not inextricably linked to the presumption of innocence and the government’s power to penalize or take away an individual’s liberty as exists in criminal proceedings.
Justice Rothstein stated that context played an important role in the application of the standard of proof. He held that a trial judge should not be unmindful of the seriousness of the allegations or the consequences of the event or the inherent probabilities or improbabilities of its occurrence, but that these considerations do not change the standard of proof in civil proceedings. He rejected the proposition that a trial judge should apply different levels of scrutiny depending on the type or seriousness of the case or that the evidence must be sufficiently clear, convincing and cogent to meet the more likely than not test in some factual scenarios. Finally, he held that there is no rule of law as to when and to what extent the inherent improbability of an occurrence must be taken into account by a trial judge, but that inherent improbability was a consideration as to whether or not the evidence established that it is more likely than not that the event occurred.
[74] Therefore, in order to succeed on a section 20 relief from forfeiture application, an applicant has the onus of establishing on a balance of probabilities that:
(i) she has not been convicted of a designated substance offence linked to the forfeited property;
(ii) she did not acquire title from the person convicted of the designated substance offence in circumstances that give rise to a reasonable inference that the title was transferred for the purpose of avoiding forfeiture;
(iii) she claims an interest in the property;
(iv) she appears innocent of any complicity in the designated substance offence or any collusion in relation to such an offence; and
(v) she has exercised all reasonable care to be satisfied that the property is not likely to have been used in connection with the commission of an unlawful act by the person who was permitted by the applicant to obtain possession of the property.
See R. v. Sportun, supra.
[75] With respect to criteria (iii), the applicant must also demonstrate on a balance of probabilities that she has a true and valid interest in the property. See, for example, 1431633 Ontario Inc. v. The Queen, 2010 ONSC 266 (S.C.J.); and R. v. Sankar, 2012 ONSC 1498 (S.C.J.).
[76] The Crown concedes that the applicant has established both criteria at (i) and (ii) above.
[77] Where the parties disagree is whether the applicant has established the final three criteria. Accordingly, I will focus on them.
(iii) Does the applicant have a true and valid interest in the property?
[78] In my view, Ms. Nguyen has not proven that she has a true and valid interest in the property. The evidence overwhelmingly supports the conclusion that Ms. Nguyen was her father’s nominee and that she held title for him. The evidence includes the following:
• Ms. Nguyen was only 20 years old at the time of the purchase;
• she was a full-time student;
• it is unlikely she could have accumulated in excess of $30,000 by that time;
• six months earlier, her father purchased a condominium property on her behalf by paying a 5% deposit. Ms. Nguyen did not use her alleged savings to complete that purchase;
• she declared no income in 2000 and a modest sum only in 2001;
• she did not declare rental income until 2007 or 2008;
• she lacked the financial wherewithal to maintain both properties; and
• she left virtually all responsibility for locating and screening tenants to her father as well as for inspecting the premises.
[79] There is also good reason to doubt Ms. Nguyen’s credibility. She made a number of admissions during the course of her testimony including:
• she made a false statement with respect to her income in connection with the first mortgage application;
• there were similar false statements respecting her annual income in the application for refinancing;
• the refinancing application included what can only be viewed as a sham lease;
• she failed to file an income tax return for 1999 although she had earnings;
• she did not declare income earned from ABO in her 2002 return;
• she did not claim a capital gain on the disposition of the Bloor Street or Kingston Road properties;
• she did not claim rental income in her tax returns until after the initial forfeiture hearing; and
• she was aware that her father had to settle an account with a hydro provider because of stolen hydro at a property owned by him, although she attempted to minimize her involvement in the negotiations.
[80] Ms. Nguyen blamed others for the misrepresentation of her income, in my view, to deflect from her responsibility. Her assertion that she asked for a T4 from ABO but was told that it was unnecessary due to her part-time status strikes me as blatantly false. She had no explanation for how the Tran lease came to be included in the application for refinancing. Ms. Nguyen’s credibility is seriously undermined as a result.
(iv) Does the applicant appear to be innocent of complicity?
[81] It is difficult to assess the applicant’s complicity in the offences which lead to the forfeiture of the property. While I am suspicious that Ms. Nguyen is not the innocent she wishes to portray, I am unable to conclude on the record before me that she was likely complicit.
(v) Did the applicant exercise all reasonable care?
[82] The answer to this question is overwhelmingly no. In fact, the applicant took absolutely no steps to ensure that the property would not be used for illicit purposes. She had little contact with the tenants. She conducted no inspections and allegedly relied upon her father to do so. On her evidence, she delegated responsibility to screen the tenants to her father. This evidence is entirely consistent with Ms. Nguyen holding title as her father’s nominee.
[83] It is important to recall that in May 2002, before any illegal activity was discovered at the Valmarie property, police discovered a hydroelectric bypass at the Sixth Line property owned by Ms. Nguyen’s mother. Police arrested three men at the property inside a vehicle owed by her father containing 135 marijuana plants.
[84] I do not accept Ms. Nguyen’s evidence that she was unaware of the foregoing. Her evidence on this issue is at odds with her evidence that her family was tightly knit and made decisions together. It is undermined by her admitted involvement subsequently in her father’s negotiations with Enersource to settle an outstanding assessment arising from a hydro bypass at the Glen Erin Drive property.
[85] In my view, Ms. Nguyen was, at a minimum, put on notice of the need to exercise diligence with respect to the Valmarie property (assuming it really belonged to her). She failed to do so.
Disposition
[86] Counsel for Ms. Nguyen submitted that it is open to the court to order something less than complete or partial forfeiture. He asks that a modest fine be imposed with time to pay in the event that the court concludes that Ms. Nguyen was manipulated by her father.
[87] I am not certain that the Act empowers the court to grant such relief. Section 20(4) provides that if the applicant satisfies her burden “the judge may make an order declaring that the interest of the applicant is not affected by the forfeiture and declaring the nature and extent or value of the interest”. There is nothing in that section that suggest that other relief is available. However, even if such a discretion existed, I would not make the order sought given the facts outlined above.
[88] For these reasons, the application is dismissed.
“Justice H. A. Rady”
Justice H. A. Rady
Released: May 27, 2015
CITATION: R. v. Nguyen,2015 ONSC 2857
COURT FILE NO.: 10858
DATE: 2015/05/27
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER of an application by Tania Thao Nguyen pursuant to section 20(4) of the Controlled Drugs and Substances Act for restoration of property previously ordered forfeited on June 19, 2006
BETWEEN:
Her Majesty the Queen
Respondent
-and-
Tania Thao Nguyen
Applicant
REASONS FOR JUDGMENT
Rady J.
Released: May 27, 2015