SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-516748

DATE: 20150716

RE: Attorney General of Ontario, Applicant

– AND –

$11,900 in Canadian Currency (in rem), Respondents

BEFORE: Justice E.M. Morgan

COUNSEL: Miriam Young, for the Applicant

No one appearing for any interested parties

HEARD: July 15, 2015

ENDORSEMENT

[1] On July 18, 2014, the Toronto police conducted a search of the residence of Mr. Cosmo Commisso at 86 St. Lucie Drive, Toronto. The police seized, inter alia, a quantity of controlled substances, drug paraphernalia, a firearm, and $11,900 in Canadian currency. The Applicant now moves for forfeiture of the $11,900 as proceeds and/or an instrument of unlawful activity under ss. 3 and 8 of the Civil Remedies Act, 2001, SO 2001, c 28.

[2] The police officers observed that the house smelled of drugs, garbage, and food, and that drug paraphernalia, including pipes, powder residue, and foil wrappings were visible in the living room. The occupants of the house – Mr. Commisso and four other family members and friends – all appeared to the police to be under the influence of drugs.

[3] In one of the bedrooms, the police searched a blue bin located under the window and found a bottle of pills containing the controlled substance diazepam and a number of empty packages of the opioid and controlled substance fentanyl. Along with these items in the blue bin was $960 in Canadian currency. In the attic, the police officers found a black bag containing fentanyl packages along with $10,940 in Canadian currency. Assorted quantities of other illegal drugs, including cocaine powder, crack cocaine, and oxycodone, were also seized at the Commisso residence during the course of the search.

[4] Mr. Commisso was arrested and charged with four counts of possession of a controlled substance for the purpose of trafficking, four counts of possession of a controlled substance, two counts of failure to comply with a condition of a recognizance, and possession of proceeds of crime exceeding $5,000. According to the affidavit of Detective Constable Nicolas Talesnik of the Toronto Police Service, Mr. Commisso has an extensive criminal record with over 50 convictions, including numerous convictions for profit-making activity. Among other things, Mr. Commisso has prior convictions for narcotics trafficking and possession of property obtained by crime. He has been charged on at least four previous occasions with trafficking in controlled substances.

[5] Upon his arrest, Mr. Commisso claimed ownership of the seized currency and explained to the police that the money was for payment of his mortgage. That, however, seems unlikely under the circumstances. According to the mortgage documents in respect of the residence at 86 St. Lucie Drive, the monthly mortgage payment comes to $731.15. That does not explain the presence of $11,900 in cash hidden with illegal drugs in a bedroom and attic of the house.

[6] At the time of the arrest, Mr. Commisso advised the police that he was unemployed and was receiving social assistance.

[7] No other person has made a claim or indicated an interest in the seized currency.

[8] The charges flowing from the July 18, 2014 search have been withdrawn by the federal Crown, apparently due to late disclosure. On November 4, 2014, an Order of Disposition of Items Seized was issued by the Ontario Court of Justice on application of D.C. Talesnik, ordering the returning the $11,900 to Mr. Commisso (the “Return Order”).

[9] On December 3, 2014, the Applicant moved on short notice for a Preservation Order in respect of the $11,900. That rder was granted by Matlow J. for 30 days. On December 19, 2014, the Applicant moved on notice, and with Mr. Commisso appearing in person, to continue the Preservation Order pending disposition of the present application for forfeiture. The continuance of the Preservation Order was granted by C.J. Brown J. on consent of Mr. Commisso.

[10] The Return Order of November 4, 2014 was properly disclosed to the two judges hearing the preservation motions, and was included in the Applicant’s record in support of the present forfeiture application.

[11] Proceedings under the Civil Remedies Act do not seek to establish fault. They are in rem proceedings, and seek to establish only that the property is proceeds or an instrument of unlawful activity. Forfeiture of the property may be ordered even if no person has been charged with a criminal offence or a criminal charge was withdrawn or stayed, or if the person charged was acquitted of the charge: Ontario v Chatterjee, 2007 ONCA 406, at para 46, aff’d 2009 SCC 19; Ontario v 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (in rem), 2011 ONCA 363, [2011] OJ No 2122, at paras 110-111 (Ont CA). , at para 46.

[12] “Proceeds of unlawful activity” is defined in section 2 of the Civil Remedies Act as property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity. “Instrument of unlawful activity is defined in sections 7(1)-7(2) as property that is likely to or is intended to result in the acquisition of other property or in serious bodily harm to any person. The Applicant does not need to establish that the cash seized relates to any specific criminal offence committed by a specific person; rather it needs to establish only that it is more likely than not that the cash was derived from an unlawful activity or would likely be used to fund future unlawful activity: Chatterjee, supra, at para 46.

[13] Under the circumstances, given that the $11,900 in issue was found hidden with illegal drugs and other drug paraphernalia, it is certainly more likely than not that this cash was derived from or would be used to fund unlawful activity. Where this kind of strong evidentiary basis exists, the court may draw inferences from the totality of the evidence that the currency that was seized by the police is either proceeds and/or an instrument of unlawful activity: Ontario v $9,616.98 in Canadian currency (in rem), 2011 ONSC 3820, [2011] OJ No 2977, at para 8 (Div Ct).

[14] Section 2 of the Civil Remedies Act provides protection from forfeiture for a “legitimate owner” of property that is found to be proceeds of unlawful activity where the owner did not acquire the property through the unlawful activity, or where the current owner acquired the property for fair value after the unlawful activity occurred and did not know that it was derived from unlawful activity. Likewise, sections 7and 8(3) provide protection from forfeiture for a “responsible owner” of property that is found to be an instrument of unlawful activity where a person with an interest in the property has done all that can reasonably be done to prevent the property from being used in unlawful activity.

[15] The suspicious circumstances in which the cash was seized in the present case call for a “credible and reasonable answer” by a person claiming to be a legitimate or responsible owner of the property: Ontario v $10,000 in Canadian Currency (in rem), 2014 ONSC 944, at paras 21, 32; Ontario v $61,686.12 in Canadian currency (in rem), [2009] OJ No 3874, at para 24; Ontario v $1650 in Canadian currency (in rem), [2008] OJ No 2076, at para 3. No such credible and reasonable explanation for the presence of the cash with the illegal drugs and other items found in the Commisso residence has been put forward here.

[16] Counsel for the Applicant made reference in her submissions to my judgment in Ontario v $787,940 in Canadian currency (in rem), 2014 ONSC 3069, where I held that the motion for a preservation application in that case was a “collateral attack” on a Criminal Code Return Order. In that case, as here, the Return Order had been issued by the criminal court upon the Crown’s withdrawal of the charges; unlike here, however, the Return Order under s. 490 of the Criminal Code was sought by the person from whom the currency was seized.

[17] In referencing the $787,940 judgment, counsel for the Applicant pointed out, with admirable diplomacy, that a number of other judges of this court have come to different conclusions, and have found that a Return Order under s. 490 of the Criminal Code does not preclude civil forfeiture under the Civil Remedies Act: see, e.g. Lin v Ontario, [2008] OJ No 5364, at paras 49-50; Ontario v 615 Stanley Street, Windsor, Ontario, [2010] OJ No 739, at para 8. Perhaps wisely, other judges of this court have declined to resolve the apparent conflict between the two views of how a Return Order and the Civil Remedies Act interrelate, and have perceived this as a question for the Court of Appeal to address: e.g. Ontario v $10,895 in Canadian currency (in rem), July 17, 2014 (Stinson J., unreported).

[18] Counsel for the Applicant submits that a Return Order issued under the Criminal Code cannot foreclose a Preservation Order or Forfeiture Order under the Civil Remedies Act since the Criminal Code ruling does not constitute a substantive determination of property title. She points out that while the police may, as here, want to be free of the responsibility of storing the seized items once the prosecution is at an end, the Return Order does not prevent another claimant from seeking to establish herself as the rightful owner in a subsequent civil proceeding. Counsel states that the same logic applies to the Applicant in subsequent proceedings under the Civil Remedies Act.

[19] I agree that a judge issuing a Return Order has at the most made a determination of possessory entitlement as between the police and the person from whom the property was seized. Typically no deeper question of property rights is in issue and the position of no other property claimant would be considered by the criminal court. That, however, may not always be the case. The court to which the s. 490 application is made may occasionally have to weigh competing demands on the seized items; the return of property may be sought precisely because it belongs to someone other than the person from whom it was seized, or money may be sought to be returned because it was legitimately earned or needed for legitimate expenses. At the very least, a court to which a subsequent civil claim is brought must be apprised of the existence and import of a Return Order.

[20] Of primary concern in $787,940 was the fact that there had been an apparent failure to disclose the existence of the Return Order to the judge hearing the Civil Remedies Act application at first instance. As stated at para 47 of the $787,940 judgment:

If that Order had been disclosed, it would have been apparent that a large amount of the cash seized from the Respondents was ordered to be paid to their law firm for legal fees, and that another sum of cash was released as having been found in a condominium unit other than that belonging to the Respondents. That Order was certainly material to these proceedings.

[21] Under those circumstances, the Preservation Order application was found to be an improper circumvention of the Return Order. Similar circumstances do not exist here.

[22] As I have already indicated, the Return Order in the instant case has been appropriately disclosed all along. Further, there is no evidence or even any suggestion that the property in question belongs to someone other than Mr. Commisso, who has not appeared in this forfeiture application despite having been given proper notice. As indicated, the evidence of D.C. Talesnik demonstrates that it was the police, and not Mr. Commisso or his criminal defense counsel, who applied for the Return Order.

[23] Unlike in $787,940, where the Return Order under s. 490 of the Criminal Code was sought by the interested party for the stated purpose of paying legal fees and returning property to its rightful owner, here the Return Order was sought as a standard matter of housekeeping by the police upon closing their file. Since the Applicant has properly disclosed the Return Order in its application materials, and the genesis of the s. 490 proceeding has been properly explained in D.C. Talesnik’s supporting affidavit, I can see that the Return Order did not entail any more substantive determination of property entitlement.

[24] Counsel for the Applicant has acted with appropriate speed in bringing the application for a Preservation Order less than a month after the Return Order was issued. There is no suggestion that the Applicant has attempted to move under the radar, or to bring an undisclosed collateral attack on the Return Order such that the matter could not be considered in full by the judges considering the Preservation Order or by me in considering the Forfeiture Order. Unlike in $787,940, Mr. Commisso as the person from whom the property was seized has not made any such argument before me. Accordingly, the Return Order does not foreclose the Applicant’s remedy under the Civil Remedies Act.

[25] In all of the circumstances here, the Applicant shall have an Order under the Civil Remedies Act for forfeiture of the subject property, namely $11,900 in Canadian currency seized by the Toronto police on July 18, 2014 from Mr. Commisso, plus any and all accumulated interest.

[26] The Applicant may address me in writing with respect to costs. I would ask that counsel provide me with brief submissions within two weeks of the date of this endorsement.

Morgan J.

Date: July 16, 2014