ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 7495/14
DATE: 2015-07-10

BETWEEN:

HER MAJESTY THE QUEEN

– and –

NELSON ALVES

Applicant

J.M. Chapman, for the Crown

J.M. Poitras, for the Applicant

HEARD: June 30, 2015

reasons on application
to release seized funds to pay reasonable legal expenses

A.D. KURKE, J.

[1] The Applicant stands charged on a five-count Indictment with four counts of Possession of various drugs for the Purpose of Trafficking, and one count of Possession of the Proceeds of Crime Over $5,000 (count 4). He applies, pursuant to s. 462.34(1) for the return of $26,765.00 that was seized from his vehicle at the time of his arrest on March 10, 2014. The Applicant seeks this money, which itself is the subject matter of count 4 on the Indictment, in order to meet his reasonable legal expenses.

Facts

[2] A Synopsis, agreed upon as background for the purposes of this Application only, has been given to the Court. It provides the following facts.

[3] On March 10, 2014, the Sault Ste. Marie Drug Enforcement Unit and Crime Suppression Unit officers conducted a drug investigation after receiving information about the Applicant in possession of a quantity of marijuana and cocaine for distribution.

[4] At 7:00 p.m., officers observed the Applicant and another person exit the Wellington Square Mall and enter a vehicle registered to the Applicant. The Applicant was arrested and during a subsequent search of the vehicle was found to be in possession of 99 grams of marijuana valued at $1,485 packaged in ziploc baggies, 85 grams of cocaine valued at $8,500 packaged in ziploc baggies, 18 percocet pills valued at $90 packaged in a ziploc baggie, and 28 grams of crack cocaine valued at $2,800 packaged in a ziploc baggie.

[5] The Applicant was also in possession of the money in question, a cell phone, three scales, and packaging materials. He was arrested and charged, as was the person he was with; interestingly, although the Applicant seeks access to $26,765.00, the Indictment charges only $26,260 as Proceeds of Crime.

[6] The Applicant produced Affidavits for this Application, and offered testimony, concerning the following.

[7] The Applicant has three children, of whom he has custody. It appears that he is recently estranged from their mother. He lives with his parents who assist him in taking care of his children.

[8] The Applicant is not currently employed, and has not been able to find employment. Strict bail conditions hamper his opportunities. He is on Ontario Works, receiving $799 per month. He is in a College Program, studying to become qualified as a heavy equipment operator. His course of studies, which occupies his days during the week, is to continue until December of this year.

[9] The Applicant was originally denied bail on these charges on March 11, 2014. Shortly thereafter he retained Mr. Poitras. The Applicant was released from custody August 7, 2014.

[10] At some point the Applicant’s erstwhile co-accused had his charges withdrawn, and the Applicant then retained that person’s counsel, Donald Orazietti, who conducted a half-day preliminary inquiry.

[11] Mr. Poitras conducted a bail review and a detention review on the Applicant’s behalf, reviewed disclosure, conducted legal research, conducted counsel and judicial pre-trials in the Ontario Court of Justice, and has attended various court dates, including the preliminary inquiry which was conducted by Mr. Orazietti. Mr. Poitras indicated that he had expended 38.25 hours on the case to this point.

[12] The Applicant’s parents provided to Mr. Poitras $3,000 as retainer, but refuse to pay anything further in this proceeding. The Applicant spends all that he receives on maintaining his children. He has no savings and no assets, and no other sources of funding for legal assistance.

[13] Concerning the seized money, the Applicant states “I am the sole owner of the money seized in the vehicle, which was inside a bag with my clothing. No other person has any interest in the money seized but myself.” The Applicant was in the course of leaving the home he had shared with his estranged common-law wife, when the police arrested him.

[14] The Applicant has not applied for Legal Aid. He is aware that Mr. Poitras and Mr. Orazietti do not accept Legal Aid. Mr. Orazietti is very senior and experienced counsel; his hourly rate is $450. Mr. Poitras bills at the rate of $200 per hour, though he indicates that he is prepared to proceed for as little as $150 per hour. Legal Aid pays at a rate less than those amounts – about $100 per hour for someone of Mr. Poitras’ vintage, and about $130 per hour for someone of Mr. Orazietti’s seniority. The Applicant wants to continue with his counsel of choice.

[15] The Applicant received independent legal advice making him aware that “he faces the likelihood of mandatory consecutive jail time in default for any proceeds used for legal fees as a result of an application under s. 462.34 of the Criminal Code of Canada.”

[16] There still must be a Superior Court pre-trial of this matter. Mr. Poitras estimated that a trial would take four to five days, following a one day Charter application. Transcripts of the preliminary inquiry still need to be ordered.

The legislation

[17] Concerning this Application, s. 462.34 of the Criminal Code provides, in its relevant parts:

462.34 (1) Any person who has an interest in property that was seized under a warrant issued pursuant to section 462.32 or in respect of which a restraint order was made under subsection 462.33(3) may, at any time, apply to a judge

(a) for an order under subsection (4);

(4) On an application made to a judge under paragraph (1)(a) in respect of any property and after hearing the applicant and the Attorney General and any other person to whom notice was given pursuant to paragraph (2)(b), the judge may order that the property or a part thereof be returned to the applicant or, in the case of a restraint order made under subsection 462.33(3), revoke the order, vary the order to exclude the property or any interest in the property or part thereof from the application of the order or make the order subject to such reasonable conditions as the judge thinks fit,

(c) for the purpose of

(i) meeting the reasonable living expenses of the person who was in possession of the property at the time the warrant was executed or the order was made or any person who, in the opinion of the judge, has a valid interest in the property and of the dependants of that person,

(ii) meeting the reasonable business and legal expenses of a person referred to in subparagraph (i)

if the judge is satisfied that the applicant has no other assets or means available for the purposes set out in this paragraph and that no other person appears to be the lawful owner of or lawfully entitled to possession of the property.

(5) For the purpose of determining the reasonableness of legal expenses referred to in subparagraph (4)(c)(ii), a judge shall hold an in camera hearing, without the presence of the Attorney General, and shall take into account the legal aid tariff of the province.

(5.2) The judge who made an order under paragraph (4)(c) may, and on the application of the Attorney General shall, tax the legal fees forming part of the legal expenses referred to in subparagraph (4)(c)(ii) and, in so doing, shall take into account

(a) the value of property in respect of which an order of forfeiture may be made;
(b) the complexity of the proceedings giving rise to those legal expenses;
(c) the importance of the issues involved in those proceedings;
(d) the duration of any hearings held in respect of those proceedings;
(e) whether any stage of those proceedings was improper or vexatious;
(f) any representations made by the Attorney General; and
(g) any other relevant matter.

The focus of this Application

[18] The evidence in the Application and concessions by the Crown allow me to find, on the balance of probabilities, that the Applicant has no assets to pay his legal costs or means by which to pay his legal costs (s. 462.34(4)), and that the Applicant alone has a possessory interest in the money in question (s. 462.34(4); s. 462.34(5)).

[19] This hearing focused on a central issue. Does Mr. Alves need to avail himself of funding from the Ontario Legal Aid plan, or at least make an application for Legal Aid before he can have resort to this seized money?

[20] The overarching concern in an application of this kind relates to the observation of Doherty J.A., in Wilson v. R., 1993 8665 (ON CA), [1993] O.J. No. 2523 (C.A.), at para. 47:

In the case of an application under s. 462.34, the judge must balance the applicant’s need for legal assistance against the possibility that property which will turn out to be the proceeds of crime will be used to benefit a person who may be shown to have acquired the property through the commission of a criminal offence.

[21] The potential source of the money cannot be ignored, as, depending on the ultimate findings of the trial court, if the seized money is determined to have been proceeds of crime, then it may also turn out to have been, in essence, judicially laundered for use as legal fees.

[22] Not surprisingly, Court decisions are split on the duty of an Applicant to attempt to resort to Legal Aid funding as a pre-condition to an Application under s. 462.34. Legal Aid pays at a lower rate than counsel require, but the source of the funding is unimpeachable.

[23] One line of cases is strongly in favour of Legal Aid as an option. Dambrot J., in R. v. Kaleniuk, [2004] O.J. No. 2112 (Sup. Ct.), at para. 31, decided that the “balance contemplated by Doherty J.A. is achieved in cases such as this one by denying release of the seized funds to a person who may be able to obtain legal aid to pay her legal expenses.” This ruling was followed by Ewaschuk J. in R. v. Allen, [2004] O.J. No. 3423 (Sup. Ct.), and by Then J. in R. v. Cheng, 2011 ONSC 4479, [2011] O.J. No. 3415 (Sup. Ct.), at paras. 14-25.

[24] Somewhat more pragmatic is the conclusion of Nordheimer J., in R. v. Bedi, [2003] O.J. No. 5825 (Sup. Ct.), at paras. 8-13, who was of the view that Legal Aid would likely reject an application from someone who could bring such an application as this, and that it would be better policy to assist an applicant by allowing resort to private funding than to use limited public resources to pay for the defence. Hill J., in R. v. Murtaza, 2011 ONSC 7577, [2011] O.J. No. 6034 (Sup. Ct.), at para. 36, also notes Legal Aid’s policy to turn down potential s. 462.34(4)(c)(ii) applicants. McIntyre J., in R. v. Gader, 2001 SKQB 95, [2001] S.J. No. 105 (Q.B.), at paras. 23-25, and Reilly J., in R. v. Ro, [2006] O.J. No. 3347 (Sup. Ct.) were of the view that no Legal Aid application was required by the legislation.

[25] It is agreed that the Legal Aid tariff in Ontario falls below the billing rates of the Applicant’s chosen counsel. That Legal Aid must be a relevant consideration is made clear by s. 462.34(5), which mandates the judge presiding over an application such as this one to take into account the legal aid tariff.

[26] The federal Crown has reasonably submitted that a Legal Aid application at least should be a prerequisite to this kind of request. Public perception of the justice system and an understanding that the issue is fairness of trial and not unfettered choice of counsel at trial, should make an attempt at Legal Aid funding essential. Just because these two lawyers do not accept Legal Aid does not mean that no competent lawyers can be found who would be prepared to act at Legal Aid rates. All things being equal, the issue of the public’s perception of the administration of justice should be given some weight.

[27] But all things are rarely equal. For reasons as varied as a longstanding relationship with particular counsel, or trust for a particular counsel built up in the case prior to the bringing of an application such as this, an accused person may have a rational basis for choosing a specific lawyer which deserves respect from the Court.

[28] That is the case here. The Applicant has seen counsel labouring on his behalf through proceedings in the Ontario Court of Justice and up to this hearing. He is not saying to the Court that he requires these particular counsel just because he wants them. He has experience of their assistance, and he trusts them.

[29] On an application of this sort, while an accused person may not have unfettered choice with respect to counsel, that choice should be respected if it can reasonably be accommodated and is reasonably justified. In my view, that is what Karakatsanis J. meant when she observed at para. 15 of R. v. Su (unreported, July 9, 2007, Ont. S.C.J.):

While the constitutional right to counsel does not create a positive obligation on the state to provide public funding for counsel of choice if the particular counsel chosen is unaffordable or unwilling to act on legal aid rates, the court should, within reason, not interfere with an accused’s right to choose his or her counsel…

[30] The Applicant may use the seized funds to pay counsel.

Reasonable legal expenses

[31] Section 462.34(4)(c)(ii) speaks in terms of “reasonable legal expenses”. Beyond consideration at least of the legal aid tariff, what does reasonableness require in the circumstances of this case? Jurisprudence suggests that the nature of the case, its legal complexity, the length of the proceedings, and the importance of the issues at play also should be weighed in the balance: R. v. Abu-Taha, [2001] O.J. No. 4278, at paras. 39-43, R. v. Murtaza, 2011 ONSC 7577, [2011] O.J. No. 6034, at paras. 39-47.

[32] This does not appear to be a particularly complicated case or one that will require significant court time. The facts are straightforward and readily summarized. The preliminary inquiry was concluded in half a day. There will be a one-day Charter application, presumably involving s. 8, and then four or five days of trial. In fact, the federal Crown’s view is that the Charter application will likely be determinative of the trial, and Mr. Poitras indicated that that might well be the case.

[33] Mr. Poitras, in disclosing the 38.25 hours that he had spent on the case, explained that he had already done significant research on the Charter issue for the judicial pre-trial in the Ontario Court of Justice. Further legal research would seem to be minimal.

[34] How many lawyers does it take to conduct such a trial? The cases generally show two counsel on cases that are complicated, that are replete with Charter issues, or that will consume weeks or months of court time. Thus, for example:

a. The Application judge in R. v. Ro ([2006] O.J. No. 3347, at para. 74) described that case as “complex”, involving the accused and nine others, with each accused having a separate team of lawyers.

b. In R. v. Murtaza, 2011 ONSC 7577, [2011] O.J. No. 6034, Hill J. dealt with a case involving perhaps the largest heroin importation in Canadian history, with voluminous disclosure and Urdu translators, numerous Charter applications, a Preliminary inquiry of nine days, an anticipated three month trial, and a potential life sentence after trial.

c. In R. v. Le, [2014] O.J. No. 5001, Justice Then made an order providing funding for only one experienced counsel at the Legal Aid rate on charges involving an anticipated 3-4 week trial, two major grow operations, and evidence that included wiretaps.

[35] Mr. Poitras indicates that he has already done the bulk of his research. In effect, Crown and defence agree that this is likely a one-issue case: s. 8 of the Charter, and that the trial could be far shorter than a week. Reasonableness dictates that this money may fund a single lawyer, either Mr. Poitras or Mr. Orazietti.

[36] And at what rate of pay? Once again, the complexity of the case must be taken into account. I am told that Legal Aid Ontario pays at a rate little more than $100 per hour even for experienced counsel. Senior Toronto counsel, in extremely complex prosecutions in the caselaw before me, usually do not seek the rate that Mr. Orazietti deservedly commands. The money at issue in this case, subject as it potentially is to forfeiture and currently under a cloud of tainting, must be released with restraint.

[37] Cases offer various ranges of pay for counsel in applications like this one.

a. In R. v. Murtaza, 2011 ONSC 7577, [2011] O.J. No. 6034 (Sup. Ct.), at paras. 39-53, Hill J. considered a range of rates between $125/hour and $325/hour, with senior counsel in the case before him, a “very serious criminal trial”, suggesting a rate of pay of $250/hour, which was half his normal rate.

b. In R. v. Le, [2014] O.J. No. 5001 (Sup. Ct.), Then J. ordered seized money to be paid out at the Legal Aid rate of $117.84 per hour.

[38] While everyone can agree that the untrammelled right to counsel of choice is a fine ideal, our choices are constrained in every aspect of our lives by our means. That reality is part of what “reasonableness” must imply in this context. In a perfect world, the Applicant could retain Mr. Orazietti and Mr. Poitras at their normal hourly rates. But the nature of the money at issue, and the issues concerning its source and its ultimate fate, call for a more restrained approach.

[39] I am prepared to order $120/hr. from these funds for the 38.5 hours expended to this point by Mr. Poitras, less whatever has already been paid from the initial $3,000 retainer.

[40] The federal Crown will have the right to have Mr. Poitras’s account taxed.

[41] No request has been made for Mr. Orazietti’s past expenses, and no indication of his hours to this point has been given, except that he conducted a half day preliminary inquiry. Accordingly, I have no data by which to determine his time on the file, or what quantum of reimbursement it should attract.

[42] On a go-forward basis, the hourly rate of $150 is approved for either of these two counsel, who may not both be retained on this file by these funds. Crown counsel will have the right to have the accounts presented by counsel taxed.

[43] I have allocated a lower rate for work previously done in order to ensure that my decision on this application is not used to create more situations of funding than are merited. I have permitted the Applicant in a straightforward case to bypass the need for a Legal Aid application. I allowed this because I have found that the Applicant’s desire to continue with current counsel is reasonable, even though neither accepts Legal Aid certificates. The Applicant has experience of them, given how far along we are in the proceedings.

[44] But, in my view, such applications as this one should be brought in a timely fashion, so that Applicants cannot bootstrap their request for such funding, to the exclusion of a Legal Aid application, by claiming long experience of counsel as a result of their own delay. Section 462.34(1) indicates that this kind of application can be brought “at any time”, and in my view, that implies as early as reasonably possible.

[45] Should Mr. Orazietti and Mr. Poitras be unwilling to continue at this rate, then the money that has been approved to pay for the services of Mr. Orazietti and Mr. Poitras may not be used for other counsel. Instead, the Applicant will in that circumstance have to resort to Legal Aid Application, self-representation, or somehow find some other funding for different counsel.

A budget

[46] Counsel did not prepare a budget for my consideration, so I offer the following.

[47] To this point, Mr. Poitras has expended 38.25 hours on this case. At $120/hour, that totals out to $4,590.

[48] I allocate 5 hours for preparation for and attendance at a Superior Court pre-trial, and 5 hours for general court preparation at the going forward rate of $150/hour, for a total of $1,500.

[49] One week of Court time will be funded for Charter application and trial: at the Legal Aid rate of 5.5 hours of court time and 4 hours of preparation for each day, that totals 47.5 hours, or $7,125.

[50] Up to $1,000 will be permitted for past and future incidental expenses, such as printing and copying of factums, books of authorities, application records, and transcripts.

[51] In total: $14,215, inclusive of counsel fees, disbursements, and HST. From that amount must be deducted whatever of the retainer of $3,000 went to pay Mr. Poitras for work and expenses.

Order

[52] The Application is allowed. Order to go:

a. From the money seized by the police in this case from Nelson Alves’s vehicle on March 10, 2014, $14,215 shall be transferred to the trust account of Jonathan M. Poitras, at the Law Office of Hugh MacDonald, or to the trust account of Donald Orazietti, whichever one accepts Nelson Alves’s retainer as counsel under this Order, solely for the purpose of defending Nelson Alves in the proceeding that now stands in the Superior Court as Action 7495/14. The sum shall be inclusive of counsel fees, disbursements and HST, as may be necessary for Mr. Alves's defence.

b. The monies may not be moved from that trust account except pursuant to this Order or another Order of the Ontario Superior Court of Justice.

c. Fees chargeable by Mr. Poitras shall be $120/hr. for hours expended on this file up to June 30, 2015, and, should he be chosen as counsel and accept the retainer, $150/hr. thereafter.

d. Fees chargeable by Mr. Orazietti, should he be chosen as counsel and accept the retainer, shall be $150/hr. from July 1, 2015.

e. Before any portion of the monies are transferred from counsel’s trust account to satisfy legal fees, counsel shall (a) present an itemized account to Nelson Alves for the client's acknowledgement of his agreement as to the necessity and reasonableness of the fees and his consent to payment, and (b) provide a copy of the account, redacted if necessary to protect any applicable privilege, to Joseph M. Chapman, Counsel for the Public Prosecution Service of Canada or his designate at least 10 days prior to disbursing funds to satisfy the account, in order for the Crown to determine within seven days of receiving notice of the account whether it wishes to provide notice to Mr. Alves through counsel that the Crown requires a taxing of the legal fees account or disbursements pursuant to s. 462.34(5.2) of the Criminal Code.

f. Mr. Poitras shall prepare an account relating to Mr. Alves's arrears of payment of legal fees and expenses on account of his representation of the applicant up to June 30, 2015, prior to payment of Mr. Poitras’s arrears from counsel’s trust account. A copy shall be forwarded to Mr. Chapman at least 10 days prior to disbursing funds to satisfy the account, to determine within 7 days of receiving notice of the account whether he wishes to provide notice to Mr. Alves through counsel that the Crown requires a taxing of the past legal fees account pursuant to s. 462.34(5.2) of the Criminal Code.

g. Should Mr. Poitras or Mr. Orazietti commence and then cease at any time to be the counsel of record for Mr. Alves in this trial, the remainder of the funds in counsel’s trust account shall be forthwith transferred to the custody of the seized property management director of the Public Prosecution Service of Canada or equivalent department as may be identified by Mr. Chapman or his designate.

h. In the event that Mr. Alves or Mr. Chapman (or his designate) wishes to contest an account submitted by counsel for Mr. Alves, counsel for Mr. Alves shall apply to this Court for a ruling pursuant to s. 462.34(5.2) and shall, in respect of any redacted account submitted to the Crown, file a sealed unredacted version of said account as part of the application for the Court's review.

i. The existing Restraint Order on the money seized by the police in this case from the Applicant’s vehicle on March 10, 2014, shall be varied as necessary to implement this Court's Order.

j. If neither Mr. Poitras nor Mr. Orazietti accepts retainer in this matter under this Order, no other counsel or agent or any other person is entitled under this Order to reimbursement from the money seized by the police in this case from the Applicant’s vehicle on March 10, 2014.

[53] Applicant’s counsel shall prepare an Order in accordance with these Reasons and forward it to Crown counsel for approval before submission to the Court.

A.D. KURKE, J.

Date Released: July 10, 2015

COURT FILE NO.: 7495/14
DATE: 2015-07-10

ONTARIO
SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

NELSON ALVES

Applicant

REASONS ON APPLICATION

Justice A.D. Kurke

Released: July 10, 2015