ONTARIO
SUPERIOR COURT OF JUSTICE
In the matter of an application for a forfeiture order under the Civil Remedies Act, 2001
B E T W E E N:
ATTORNEY GENERAL OF ONTARIO
D. Phelan for the applicant
Applicant
- and -
$53,140 IN CANADIAN CURRENCY (IN REM)
J. Dean for the respondent
Respondent
HEARD: March 30, 2015
MITCHELL J.:
[1] The Attorney General of Ontario (“Attorney General”) applies for forfeiture of $53,140 CDN. (the “money”) pursuant to ss. 3 and 8 of the Civil Remedies Act, 2001 (the “CRA”).
[2] The money was seized by police during a traffic stop conducted on August 27, 2010 in the city of London.
[3] The Attorney General commenced this proceeding by notice of application issued June 23, 2011 seeking a forfeiture order in respect of the money.
[4] The Attorney General asks the court to find that the money constitutes proceeds or instruments of unlawful activity, namely drug dealing, and should therefore be forfeited to the Crown in Right of Ontario.
The Evidence
Constable Morrow
[5] On August 27, 2010 at approximately 3:35 p.m., Ontario Provincial Police officer James Morrow performed a traffic stop of a white cargo van travelling eastbound on Littlewood Road, in the city of London. The vehicle was travelling at the rate of 102 km/h in a posted 80 km/h zone.
[6] Police Constable Morrow approached the passenger side of the vehicle and the driver leaned over and opened the door. Police Constable Morrow smelled a strong odour of marijuana coming from the vehicle. He also observed an air freshener on the floor and on the rear-view mirror, as well as garbage strewn throughout the vehicle.
[7] The driver identified himself as Isaac Doxtater. Mr. Doxtater was unable to produce a valid driver’s license as his license had expired in February, 2010.
[8] Mr. Doxtater advised Constable Morrow that he was not sure whether there was any marijuana in the vehicle but confirmed he did not have any marijuana on his person.
[9] At approximately 3:37 p.m., Constable Morrow asked Mr. Doxtater to step out of the vehicle and arrested him for the offence of driving while suspended and possession of a controlled substance.
[10] Constable Morrow searched Mr. Doxtater’s person incident to arrest and placed Mr. Doxtater in the rear of the police cruiser. At approximately 3:39 p.m., Constable Morrow read Mr. Doxtater his Charter rights and Mr. Doxtater confirmed that he understood his rights.
[11] At approximately 3:44 p.m., Constable Morrow opened the driver’s side door of the cargo van and looked into the vehicle. He observed a bag of garbage on the floor between the seats, with a large bundle of money stuffed into the top of it. Next to the bag of garbage was a green and purple plastic bag with several bundles of currency in it. A third bag, a “GAP” clothing store bag, also containing bundles of currency, was also located. Constable Morrow further located a dark navy blue balaclava in the vehicle.
[12] In response to questioning from Constable Morrow, Mr. Doxtater appeared nervous and was evasive. He confirmed that the money belonged to his boss, Alvira Elijah, who owns and operates “Stand A Lone Smokes”, a tobacco retail store located on the Oneida reserve (“Stand A Lone”).
[13] Mr. Doxtater confirmed that he was not going to or from a bank when his vehicle was stopped by Constable Morrow.
[14] Despite questioning by Constable Morrow, Mr. Doxtater provided no explanation as to why there was a large bundle of money stuffed into a bag of garbage in the vehicle he was operating.
[15] Constable Morrow detected the odour of fresh marijuana and tobacco upon opening the rear cargo doors of the vehicle.
[16] Constable Morrow seized the money believing it to be proceeds of crime.
[17] Mr. Doxtater was transported to the London detachment where he provided the phone number of Ms. Elijah. Attempts to contact Ms. Elijah were unsuccessful.
[18] Ultimately Mr. Doxtater was released and served a summons for the offense of driving while suspended contrary to section 53 of the Highway Traffic Act. All other charges were withdrawn.
Peace Officer Spencer Salters
[19] OPP peace officer, Spencer Salters, assisted in the investigation. He and Constable Morrow counted the money. When the money was unbound, two small baggies with marijuana leaves printed on them were found. One was located in the “GAP” bag, while the other was found in the bag of garbage.
[20] The money that was found in the bag of garbage was organized in one bundle and totalled $3,120 in Canadian currency. The “brick” was comprised of the following denominations: 131 x $20 bills, six x $50 bills and two x $100 bills.
[21] The money found in the green and purple plastic bag was organized into bundles and totaled together $15,020 in Canadian currency. The first “brick” of money totaled $5000 and was made up of 100 x $50 bills. The second “brick” of money was comprised of five $2000 sub-bundles, each comprised of 100 x $20 bills.
[22] One of the bills seized was positively identified by the database used to identify money used by police in undercover drug purchases.
[23] The money found in the “GAP” shopping bag was organized into four bundles totaling $35,000. One of the bricks totaled $5000 and was made up of 100 x $50 bills. The remaining three bricks contain $10,000 per brick. Each of those three bricks was further organized into five $2000 sub-bundles, each comprised of 100 x $20 bills.
[24] On September 1, 2010, Michael Barry, defence lawyer for Ms. Elijah, contacted peace Officer Salters to inquire about the whereabouts and return of the money to his client.
[25] Mr. Barry advised Officer Salters that Ms. Elijah would contact Constable Morrow and provide a statement in regards to the money. Ms. Elijah did not provide a statement as promised.
Ms. Elijah
[26] In her affidavits filed in support of her position on this application and in response to the Attorney General’s position and on cross-examination, Ms. Elijah gave the following evidence:
• that the money was intended to be used to purchase tobacco products from Arrow Express. Arrow Express is a distributor for “Grand River Enterprises”. Grand River Enterprises is licensed by the Federal government to produce and distribute cigarettes. A copy of the August 9, 2010 invoice (together with copies of other invoices in similar amounts) was attached as an exhibit to her affidavit;
• Stand A Lone is a cash business;
• she has no criminal record;
• she is a member of the Oneida Nations on the Thames Band;
• she owns and operates the Stand A Lone smokes shop together with her common-law spouse of 13 years, Kirk Nicholas. The smoke shop was previously owned by her father and has at all times been engaged in the lawful sale of tobacco products;
• Stand A Lone is located on the Oneida reserve;
• she is the common-law spouse of Kirk Nicholas;
• she owns the vehicle which was driven by Mr. Doxtater at the time the money was seized by the police;
• in 2009, other monies were seized from the residence of Ms. Elijah and Mr. Nicholas in the aggregate amount of approximately $318,554. This money was similarly used for the purchase and sale of tobacco and was later returned to Mr. Nicholas;
• at the time the money was seized, Stand A Lone did not hold a license to sell non-Ontario tax cigarettes
Ms. Mach
[27] Attached as an exhibit to the affidavit of Helen Mach, Law Clerk at Civil Remedies for Illicit Activities Office, Ministry of the Attorney General is a letter dated September 24, 2013 from Cathy D. Rae, Senior Manager, Registration and Client Services, Ministry of Finance, indicating that Ms. Elijah was not authorized to sell cigarettes under the Ministry of Finance First Nations Cigarette Allocation System at any time since April 1, 2008 and at no time did Ms. Elijah possess an Unmarked Dealers Permit.
Ms. Jamieson
[28] The President of Arrow Express, Trisha Jamieson, was examined as a witness under rule 39.03 of the Rules of Civil Procedure. Ms. Jamieson gave the following evidence:
• cash payments for the supply of tobacco products to Stand A Lone were always made within a day or two of an invoice being issued;
• the payments were made by Kirk Nicholas, co-owner of Stand A Lone, to the Arrow Express delivery person;
• Kirk Nicholas made the payments on account at the Stand A Lone location;
• the delivery person would return to Arrow Express head office with the cash payment; and
• the August 9, 2010 invoice was paid by Stand A Lone on August 10, 2010 in cash totaling $44,180.
Detective Martin
[29] Detective Martin of the Durham Regional Police Services was seconded to the Provincial Asset Forfeiture Unit (the “AFU”) since January 2008. The mandate of the AFU is to identify, seize, restrain and forfeit the assets and proceeds of crime obtained from the commission of designated offences under the Criminal Code and the Controlled Drugs and Substances Act. As a result of his specialized training and his experience in over 100 investigations with regards to currency seizures, Detective Martin has become familiar with the bundling practices and concealment methods commonly used by persons involved in profit-motivated crimes such as drug trafficking. Detective Martin deposed an affidavit in support of the Attorney General’s position on the application.
[30] Detective Martin provided his opinion that the money was packaged and bundled in a manner that is consistent with the methods used by persons involved in profit-motivated unlawful activity such as drug trafficking. In forming his opinion, Detective Martin relied on the following evidence:
• the use of elastic bands and sub-bundles;
• the denominations of the currency contained in the bundles indicating sales at street level;
• the use of air fresheners and the use of “dime” baggies;
• the passage of time following seizure of the money before an explanation was provided to the police; and
• the presence of $50 bills to improve ease of transport and concealment of large bulk currency amounts.
[31] The evidence of Detective Martin is unchallenged.
Position of the Attorney General
[32] The Attorney General submits that the totality of the evidence supports a finding that, on a balance of probabilities, the money is proceeds and/or an instrument of unlawful activity.
[33] To meet its onus, the Attorney General argues that it is not required to prove that the either Mr. Doxtator or Ms. Elijah were charged with or have been convicted of drug trafficking.
Position of Ms. Elijah
[34] Ms. Elijah submits that the money found by police during the arrest of Mr. Doxtater was obtained through the legal sale of tobacco products. There is no evidence that any drugs were found at any point during the investigation.
[35] Ms. Elijah claims that Stand A Lone smoke shop is still in business and continues to legally operate as a company.
[36] She submits that the Attorney General has not met the evidentiary burden of proving, on a balance of probabilities, that the money is proceeds or an instrument of unlawful activity.
Analysis
[37] The issue for determination on this application is whether the Attorney General has established, on a balance of probabilities, that the money is proceeds and/or an instrument of unlawful activity.
[38] “Unlawful activity” is defined as an act or omission that is an offence under an act of Canada, Ontario or another province or territory of Canada.[^1]
[39] “Proceeds of unlawful activity’ is defined as property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity.^2
[40] Once the money is found to be proceeds and/or an instrument of unlawful activity, the court is required to make a forfeiture order “except where it would clearly not be in the interests of justice”.
[41] The Attorney General argues the money qualifies as an instrument of unlawful activity because drug money can also be used to purchase more drugs for eventual sale and profit. Alternatively, the Attorney General says the money was proceeds of the unlawful (unlicensed) sale of tobacco by Stand A Lone.
[42] At a minimum, the Attorney General is not required to prove any particular offence against any particular offender in order to succeed on this forfeiture application.[^3]
[43] It is immaterial to my analysis that the charges against Mr. Doxtater were withdrawn. Failure to prosecute the charges against Mr. Doxtater is not a bar to forfeiture nor is it a factor to consider in assessing the “clearly not in the interests of justice” exception.[^4]
[44] The standard of proof in proceedings under the Civil Remedies Act is the civil standard of proof on the balance of probabilities.[^5]
[45] Under the Tobacco Tax Act there is a general prohibition against any person possessing or dealing in unmarked (untaxed) cigarettes in Ontario, unless permitted to do so under the Act or its regulations. Any person possessing unmarked cigarettes for sale either without a permit or when not an authorized First Nations retailer under the allocation system contravenes the Tobacco Tax Act.[^6]
[46] I find that the Attorney General has satisfied the burden of proof. The totality of the evidence filed by the Attorney General in support of this application tips the balance in favour of forfeiture. I rely on the uncontroverted expert opinion evidence of Detective Martin. Moreover, I do not find the explanation of Ms. Elijah credible in the face of the conflicting evidence of Ms. Jamieson with respect to payment practices of Stand A Lone. I find that the money is proceeds of an unlawful activity or an instrument of unlawful activity and rely on the following evidence:
• The bundled money is indicative of drug trafficking.
• The unchallenged expert opinion of Detective Martin that the storage, bundling and denominations of the money are consistent with the money being the proceeds of drug trafficking.
• Delivery of payment of invoices to Arrow Express is inconsistent with the practice of Stand A Lone to make cash payments to Arrow Express’s delivery person at its premises.
• No invoice(s) was produced to support a payment due to Arrow Express in the amount of the money seized.
• Although no drugs were found in the vehicle, Constable Morrow deposed to detecting the odour of marijuana.
• Two “dime” baggies bearing a marijuana leaf emblem were found in the vehicle . Dime baggies are utilized in the trafficking of marijuana.
• Stand A Lone smoke shop is not licensed to sell tobacco.
• The bundles of money were located in a bag containing garbage, a “GAP” shopping bag and another plastic bag which is not consistent with the transportation of money for purposes of paying legitimate business invoices.
• Mr. Doxtater was unresponsive, evasive and nervous when answering questions of Constable Morrow. Mr. Doxtater’s evidence, in support of Ms. Elijah’s position, is conspicuously absent from the record and I have drawn an adverse inference from its absence.
• It was not until five days following seizure of the money by the police that Ms. Elijah came forward to lay claim to the money and then only through her defence attorney. If the money was proceeds of a legitimate business operation, a more immediate response would be expected.
• Drug dealing is a cash business.
[47] It is unnecessary for me to consider the alternative argument of the Attorney General that the money constitutes proceeds from the unauthorized sale of tobacco; however, I note, in obiter, that I would not have been persuaded by this argument. I do not believe that sections 3 and 8 of the CRA are intended to apply to proceeds from what otherwise would have been a legitimate business enterprise but for the expiry of Stand A Lone’s license.
[48] Judgment to issue in accordance with paragraph 1(a) of the Notice of Application.
[49] If the parties are unable to agree, I will entertain submissions on costs. The Attorney General shall serve and file its written costs submissions not to exceed five pages in length, single-sided and double-spaced, excluding any Costs Outline and Bill of Costs within 15 days. Within 15 days thereafter, Ms. Elijah shall serve and file her written costs submissions not to exceed five pages in length, single-sided and double-spaced, excluding any Costs Outline and Bill of Costs. The Attorney General’s reply submissions, if any, not exceeding three pages in length, single-sided and double-spaced, to be filed seven days thereafter.
“Justice A. K. Mitchell”
Justice A. K. Mitchell
Released: May 27, 2015
COURT FILE NO.: 4487/11
DATE: 2015/05/27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ATTORNEY GENERAL OF ONTARIO
Applicant
- and -
$53,140 IN CANADIAN CURRENCY (IN REM)
Respondent
REASONS FOR JUDGMENT
Mitchell J.
Released: May 27, 2015
[^1]: Subsection 7(1) of the Civil Remedies Act, 2001.
[^3]: Ontario (Attorney General) v. Chatterjee, [2009] O.J. No. 19 (S.C.C.) at paras. 21 and 47.
[^4]: Ontario (Attorney General) v. $9,616.98, 2011 ONSC 3820, [2011] O.J. No. 2977 (Div. Ct.) at para.14.
[^5]: Chatterjee, supra, at para. 23.
[^6]: R.S.O. 1990, c. T. 10, s. 29.