Attorney General of Ontario v. $17,700.00 in Canadian Currency (In Rem)

[Indexed as: Ontario (Attorney General) v. $17,700.00 in Canadian Currency (In Rem)]

Ontario Reports

Ontario Superior Court of Justice,

Kershman J.

July 3, 2015

126 O.R. (3d) 393 | 2015 ONSC 4301

Case Summary

Civil procedure — Affidavits — Cross-examination — Attorney General applying for forfeiture of seized currency pursuant to Civil Remedies Act and bringing motion for preservation order — Counsel for person claiming to have possessory interest in currency filing affidavit sworn by her former counsel — Three affidavits which were sworn for purpose of previous application under s. 490 of Criminal Code being appended as exhibits to that affidavit — Exhibit affidavits deemed to have been filed in civil application — Attorney General having right to cross-examine deponents of exhibit affidavits — Civil Remedies Act, 2001, S.O. 2001, c. 28 — Criminal Code, R.S.C. 1985, c. C-46, s. 490

H claimed to have a possessory interest in currency seized from K's residence. Her lawyer brought an application under s. 490 of the Criminal Code for the release of the funds to H and a return order for the release of the money to H was granted. The Attorney General commenced an application for the forfeiture of the currency pursuant to the Civil Remedies Act, 2001 and brought a motion for a preservation order. H's new counsel served and filed an affidavit sworn by her former counsel. Appended as an exhibit to that affidavit was a copy of the s. 490 application record, which included affidavits sworn by H, her husband and K (the "exhibit affidavits"). The Attorney General brought a motion to compel the cross-examination of the deponents of the exhibit affidavits.

Held, the motion should be granted.

When an exhibit affidavit of a party to an action is appended to his or her solicitor's affidavit, the exhibit affidavit is also deemed to be filed. The exhibit affidavits were served and filed by H's counsel in the civil proceedings. Notwithstanding that H was not named as a respondent, H had an interest in the currency and an interest in the preservation motion. As she was a party with an adverse interest in the currency, her affidavit was an essential part of the civil application. The Attorney General was entitled to cross-examine H. Since H's counsel took a positive step by filing the exhibit affidavits of H's husband and K, the Attorney General had a right to cross-examine those deponents. The motion for cross-examination did not amount to a collateral attack against the order made in the s. 490 proceedings.

Thomson v. Atlas Transport Equipment Ltd., [1981] O.J. No. 991, 24 C.P.C. 278, 11 A.C.W.S. (2d) 215 (H.C.J.), apld

Wise v. Benda, 1982 CarswellOnt 3447, distd

Other cases referred to

Canada (Attorney General) v. Mennes (2014), 122 O.R. (3d) 434, [2014] O.J. No. 4789, 2014 ONCA 690, 325 O.A.C. 336, 245 A.C.W.S. (3d) 804; R. v. Wilson, 1983 35 (SCC), [1983] 2 S.C.R. 594, [1983] S.C.J. No. 88, 4 D.L.R. (4th) 577, 51 N.R. 321, [1984] 1 W.W.R. 481, J.E. 84-70, 26 Man. R. (2d) 194, 9 C.C.C. (3d) 97, 37 C.R. (3d) 97, 11 W.C.B. 200

Statutes referred to

Civil Remedies Act, 2001, S.O. 2001, c. 28, ss. 3(1), 8(1)

Criminal Code, R.S.C. 1985, c. C-46, s. 490 [as am.], (10), (12)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 4.01, 21, 39.02

MOTION for an order for cross-examination of the deponents of the affidavits.

Jean Marie Dixon, for applicant.

Isaac Liu, for Cynthia Hill.

KERSHMAN J.: —

Introduction

[1] This motion is brought by the applicant to compel the cross-examination of deponents on affidavits that were attached as exhibits to the affidavit of a deponent in this proceeding (hereafter referred to as the "Exhibit Affidavits"). The Exhibit Affidavits were originally sworn for the purpose of a related criminal proceeding.

Factual Background

[2] On August 1, 2013, the Ontario Provincial Police ("OPP") executed a search warrant at the residence of Paul King at 21 King Street, Picton, Ontario and seized a number of items, including CAD$17,700, in cash, from a Nissan car parked in his garage. The vehicle was registered to Cynthia Hill.

[3] On August 7, 2013, the OPP filed a report to Justice and obtained a Detention Order on the same date allowing the OPP to detain the $17,700 until the completion of the court proceedings.

[4] During the criminal proceedings, Mr. King's counsel, Brian Eberdt, advised the court that, while the car that the $17,700 was found in belonged to Ms. Hill, the $17,700 actually belonged to Mr. King.

[5] On May 7, 2014, Crown counsel withdrew the drug trafficking charge against Mr. King on the basis that it was not convinced that it could prove the charge pleaded in the information beyond a reasonable doubt.

[6] On June 17, 2014, Mr. Eberdt advised the Civil Remedies for Illicit Activities Office ("CRIA") that he had met with both Mr. King and Ms. Hill and that he also now represented Ms. Hill. Mr. Eberdt also advised that he would send the CRIA a letter indicating that the $17,700 did not in fact belong to Mr. King, but belonged to Ms. Hill.

[7] On June 25, 2014, Mr. Eberdt sent a letter to the CRIA claiming that Ms. Hill had "sole possessory interest" in the $17,700 and that she came into the possession of the currency during the dissolution of a business, K&C Haulage, which she ran with her husband Paul Van Hecke.

[8] The Attorney General was of the opinion that Mr. Eberdt's letter did not substantiate the lawful source or purpose of the moneys seized from the King residence and advised Mr. Eberdt of the same.

[9] On December 22, 2014, Mr. Eberdt served a s. 490 Criminal Code application returnable on January 28, 2015, requesting that the $17,700 seized from Mr. King's residence be released to Ms. Hill.

[10] On January 27, 2015, by telephone and letter, the Attorney General reminded Mr. Eberdt of the 30-day appeal provision that applies to any return orders pursuant to s. 490(12) of the Criminal Code and that a return order in no way prejudiced a proceeding of the Civil Remedies Act, 2001, S.O. 2001, c. 28.

[11] On January 28, 2015, Mr. Eberdt, representing Ms. Hill on her s. 490 application, obtained a Criminal Code return order. The return order provided for the release of the money to Ms. Hill.

[12] The Attorney General commenced an application for the forfeiture of the $17,700 seized from the King residence pursuant to s. 3(1) and s. 8(1) of the Civil Remedies Act and served its materials for a preservation motion on February 12, 2015, for an order preserving the $17,700.

[13] At the hearing on February 17, 2015, new counsel, for Ms. Hill, Issac Liu, served the CRIA with Ms. Hill's materials in response to the Attorney General's preservation motion. Ms. Hill's materials included an affidavit sworn by Mr. Eberdt on February 16, 2015. Appended as an exhibit to Mr. Eberdt's affidavit was a copy of the s. 490 Criminal Code application record, which included the following three affidavits:

(a) Affidavit of Cynthia Hill, sworn September 17, 2014;

(b) Affidavit of Paul King, sworn September 17, 2014; and

(c) Affidavit of Paul Van Hecke, sworn November 12, 2014.

[14] The applicant sought to cross-examine the deponents of the Exhibit Affidavits. Mr. Liu has refused to allow the deponents to be cross-examined.

[15] The applicant brings the motion for an order to cross-examine the deponents of the Exhibit Affidavits.

Position of the Attorney General

[16] The Attorney General submits that it is entitled to cross-examine on all affidavits included in the responding materials on this application. The Attorney General relies on rule 39.02 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] to argue that, "a party to a motion or application who has served every affidavit on which the party intends to rely and has completed all examinations under rule 39.03 may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion or application". The Attorney General submits that Ms. Hill, who is claiming the money, is a party adverse in interest.

[17] The Attorney General also submits that pursuant to rule 39.02, the Exhibit Affidavits of Ms. Hill, Mr. King and Mr. Van Hecke are "any affidavit" and that the Exhibit Affidavits relate directly and specifically to the issue to be decided.

Position of Ms. Hill

[18] Mr. Liu submits that there is no right to cross-examine on an affidavit that is "spent" and that an affidavit is spent when the proceedings for which it has been filed have been disposed of.

[19] Mr. Liu also argues that the applicant's motion is a collateral attack against a judicial order and that to allow the cross-examination to proceed would effectively allow the Attorney General to proceed in a matter that has already been decided, contravening the principles of res judicata.

Issue I: Can a party cross-examine a deponent of an exhibit affidavit?

[20] The central issue in this motion is whether the applicant should be allowed to cross-examine a deponent of an affidavit filed and/or attached as an exhibit to an affidavit filed in the current proceeding?

The law

[21] There is little Ontario jurisprudence on the issue of how an affidavit attached as an exhibit to the affidavit of a deponent in a proceeding can be used.

[22] In the case of Canada (Attorney General) v. Mennes (2014), 122 O.R. (3d) 434, [2014] O.J. No. 4789, 2014 ONCA 690 ("Mennes"), at para. 27, the court wrote that, the right to cross-examine on an affidavit is always subject to the court's discretion to control its own process.

[23] In Thompson v. Atlas Transport Equipment Ltd., [1981] O.J. No. 991, 24 C.P.C. 278 (H.C.J.) ("Thompson"), a defendant moved to set aside a default judgment. In support of that application, the defendant filed an affidavit by its solicitor stating that an "affidavit of merits" had been sworn by his client, an officer of the defendant company. The client's affidavit of merits was attached as an exhibit to the solicitor's affidavit. The motions judge at first instance permitted the plaintiff to cross-examine the client on his affidavit. On appeal, the defendant argued that the affidavit of merits had not been filed, but was merely attached as an exhibit to the solicitor's affidavit, and in the alternative, that if the client's affidavit was deemed to have been filed as part of the solicitor's affidavit, only the solicitor and not the client could be cross-examined.

[24] The Ontario High Court of Justice upheld the decision of the motions judge and found that, as the solicitor's affidavit, which was filed, deposed that an affidavit of merits was sworn and was attached, the affidavit of merits was therefore also filed.

[25] Regarding who could be cross-examined, at para. 5, the Ontario High Court held that:

While exhibits that are attached to an affidavit become part of that affidavit and the deponent of the main affidavit could be examined on them, that does not preclude the deponent of such affidavit attached as an exhibit from being examined where he is a party, particularly where such affidavit as in this case is almost an essential part of the application itself. An affidavit of merits cannot normally be made on information and belief, and therefore it would be improper to direct the solicitor who attaches such an affidavit to his own, to be examined on it. To hold otherwise would be to make a farce of the process of examining the party who has knowledge of the facts.

(Emphasis added)

Analysis

[26] The court finds the reasoning in Thompson to be persuasive.

[27] As per Thompson, an affidavit of merits is deemed to be filed if the affidavit of merits is appended as an exhibit to a solicitor's affidavit, which deposes of the affidavit of merits. In other words, where an exhibit affidavit of a party to an action is appended to his or her solicitor's affidavit, the Exhibit Affidavit is also deemed to be filed.

[28] In accordance with the Rule of Civil Procedure, particularly rule 39.02, the court finds that the Exhibit Affidavits were served and filed by Mr. Liu, on behalf of Ms. Hill, in relation to this application as distinguished from being filed in the s. 490(10) application only.

[29] As noted in Thompson, the inclusion of an affidavit as an exhibit appended to another affidavit does not preclude the deponent of such affidavit, attached as an exhibit, from being examined where the deponent is a party, and particularly where such an affidavit, as in this case, is an essential part of the application itself.

[30] With regards to Ms. Hill being a party and the style of cause of the within application, the court acknowledges that the documents do not reflect the name of Ms. Hill, Mr. King or Mr. Van Hecke as respondents.

[31] Notwithstanding that Ms. Hill is not named as a respondent, the court finds that Ms. Hill is, in fact, someone who has an interest in the moneys and has an interest in the Attorney General's preservation motion. As noted above, Ms. Hill has made a claim for the $17,700, as her own money.

[32] In this case, Ms. Hill is a party with an adverse interest in the moneys and her affidavit is an essential part of the civil application.

[33] Therefore, this court finds that Ms. Hill can be cross-examined on her affidavit, which was appended as an Exhibit Affidavit to Mr. Eberdt's affidavit.

[34] As to the Exhibit Affidavits of Mr. King and Mr. Van Hecke, these were also filed in this application. The court finds that since Mr. Liu took a positive step by filing these Exhibit Affidavits in the within application, the Attorney General has a right to cross-examine on them.

[35] Following the Mennes case, the court exercises its discretion, to control the process by allowing for the cross-examination of Ms. Hill, Mr. King and Mr. Van Hecke on their Exhibit Affidavits.

Issue II: Are the Affidavits In Question "Spent"?

[36] As noted above, Mr. Liu argues that the Exhibit Affidavits are spent and therefore no cross-examination can be held in relation to them. Mr. Liu submits that the Exhibit Affidavits were used in the s. 490 application and as that application has been dealt with and has not been appealed, the Exhibit Affidavits are spent.

[37] Mr. Liu relies on the case of Wise v. Benda, 1982 CarswellOnt 3447, at para. 4 ("Wise"), in support of his position.

[38] The court finds that the Wise case is distinguishable from the case at bar. In the case at bar, the Exhibit Affidavits were actually filed not only in relation to the s. 490 application, but also in these proceedings. As such, the applicant must be able to meet its case, and can only do so by having the ability to cross-examine on the affidavits filed in the proceeding.

Issue III: Does the Collateral Attack Doctrine Preclude the Use of the Current Proceeding as the Form to Challenge Evidence Used to Obtain the s. 490(10) Order?

[39] Mr. Liu argues that the cross-examination is a collateral attack and relies on the case of R. v. Wilson, 1983 35 (SCC), [1983] 2 S.C.R. 594, [1983] S.C.J. No. 88, at p. 599 S.C.R.

[40] The court does not find that this is a collateral attack against the order made in the s. 490 proceedings. The intention of the applicant's motion for cross-examination is to allow the applicant to meet its case in this matter. The applicant must be allowed to deal with the case on its merits, and by virtue of the Exhibit Affidavits being filed in the within proceeding, this must include the ability to cross-examine on the Exhibit Affidavits. Therefore, the collateral attack argument fails.

Issue IV: Does Res Judicata Require the s. 490(10) Application Record be Excluded From Cross-Examination?

[41] The court notes that the Attorney General specifically advised Mr. Eberdt by telephone and by letter that it took the position that any return order under s. 490 of the Criminal Code would not prejudice a proceeding under the Civil Remedies Act.

[42] Mr. Liu argues that the application and policy principles of res judicata require the s. 490(10) Exhibits Affidavits be excluded from cross-examination. He relies on various case law set out in his factum.

[43] The court notes that Mr. Liu's arguments related to the doctrine of res judicata could be raised, but not at this juncture. This motion brought by the Attorney General is to compel cross-examination on the Exhibit Affidavits. Mr. Liu is arguing res judicata in defence to the entire application. In the court's view, Mr. Liu could bring a Rule 21 motion at some point in time.

Disposition

[44] The Exhibit Affidavits appended to the affidavit of Mr. Eberdt are affidavits in the within proceedings.

[45] For the reasons above, the court finds that the Attorney General of Ontario shall be able to cross-examine the deponents on any affidavit filed in this proceeding, including the Exhibit Affidavits.

Costs

[46] The parties are encouraged to settle the issue of costs. If they are unable to do so within 15 days of the release of this decision, counsel for the Attorney General shall deliver written cost submissions including a costs outline within 14 days. Thereafter, counsel for Ms. Hill shall deliver written costs submissions, including a costs outline within 14 days. Thereafter, counsel for the Attorney General will have the right of reply within ten days period. Each costs submissions shall be no longer than three pages, excluding the costs outline. The parties shall comply with rule 4.01 of the Rules of Civil Procedure.

[47] Order accordingly.

Motion granted.

End of Document