ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CR-15-0236-00MO
DATE: 2015 Oct 19
BETWEEN:
HER MAJESTY THE QUEEN
– and –
PENNY LEA KIDD and JOSHUA GRANT KIDD
Respondent
Brian McNeely, for the Crown
S. Goldstein, for the Respondent
HEARD: October 14, 2015 at Kingston
Tranmer J.
DECISION ON VARIANCE OF RESTRAINT ORDER
[1] This is an Application by Ms. Kidd and her son Joshua Kidd for the variance of a restraint order pursuant to s. 462.34(4)(c)(i and ii).
[2] The applicants were charged in October of 2011 with the criminal offences of defrauding the public of $4.5 million and being in possession of proceeds of crime.
[3] The Crown alleges that the accused were involved with four telemarketing companies that elicited money from the public for the express purpose of offsetting their costs for publishing and distributing magazines with social awareness content. The Crown maintains that very few magazines were published and distributed, and that the persons who paid money on the basis that their advertisements would appear in the magazines or as sponsors were defrauded.
[4] The Crown obtained an ex-parte Restraint Order, dated December 13, 2012, on the basis of satisfying the court that there were reasonable grounds to believe that certain property in respect of which, in order of forfeiture may be made should lawfully be restrained. The specific property was money held at or controlled by named financial institutions and standing to the credit of the applicants. This money totals in excess of $125,000.
[5] In support of this application, the applicant Penny Lea Kidd has filed an affidavit alleging that she lives with her daughter in Red Deer, Alberta, and works as a waitress. She swears that the criminal charges greatly restrict her ability to find work. She swears that she earns $400 per week plus unspecified tips and pays rent of $750, per month it is assumed, but this is not specified. She swears that she has borrowed money from her mother in the approximate amount of $180,000, that she realized approximately $6000 cash from the sale of her home and has expended savings of $20,000. She swears that she has run out of money to pay for reasonable living expenses and for reasonable expenses for her legal counsel.
[6] The applicant Joshua Grant Kidd swears in his affidavit that assets, including his matrimonial home, 2 cars, and 2 real estate deposits have been expended on legal fees and living expenses for he and his family. He swears that his bail conditions restricted his opportunities for employment. He and his family had moved to Spain, where they lived with his wife’s family. He was unable to secure gainful employment in Spain. He swears that he has now moved to Peterborough, where he resides with family friends of his wife. They do not charge him rent as he assists in maintaining the house and helping out. He still does not have employment. He swears that he has no other assets and no income. He presently owes his current lawyer, legal fees exceeding $100,000.
[7] Counsel advise that the trial is proceeding in the Ontario Court of Justice and that defense counsel have brought a motion for a directed verdict to which the Crown has responded with written submissions. I am told that there is a further court attendance for December 8, 2015, but that the court’s decision on the application for a directed verdict is not expected until August of 2016.
THE LAW
[8] The relevant provisions of the Criminal Code, namely s. 462.34(4)(c)(i and ii) and s. 462.341 provide that I “may” order the release of all or part of the funds if the applicants satisfy me on a balance of probabilities that: 1. They have an interest in the funds; 2. They have no other assets or means available for the purpose of meeting their reasonable living expenses or reasonable legal expenses; AND 3. No other person appears to be the lawful owner of or lawfully entitled to possession of the funds.
[9] At this point, there has not been a finding that the applicants have committed any crime or that the restrained funds are in fact the proceeds of crime. There has been a finding only that there are reasonable grounds to believe that the funds are property in respect of which an order of forfeiture may be made.
POSITION OF THE APPLICANTS
[10] The applicants submit that they have met the three prongs of the test, as I have set out above. It is accepted that they have an interest in the money. The applicants submit that their affidavits satisfy the second requirement. The applicants submit that because they have served the named financial institutions with this application and that they have not appeared indicates no one else is claiming ownership of or lawful interest in the money.
[11] In addition, the applicants strongly argue that the equities of the circumstances of these applicants warrant the release of the funds to them. They submit that it is because of the Crown’s unfocussed prosecution of the offences that the trial proceedings have been unduly prolonged and that therefore, these applicants have been put to considerable, unexpected cost. Counsel for the applicants submits that the Crown has introduced inadmissible evidence in the course of the trial and that its failed attempts to qualify its expert witness initially bear consideration in respect of this application.
[12] Counsel for the applicants submits that in his view the case law that does not require an initial application for legal aid should be preferred to the line of cases requiring an application for legal aid and a refusal thereof in support of the application such as is before the court.
POSITION OF THE CROWN
[13] The Crown opposes the application on the basis that the applicants have not satisfied either the second or third prongs of the test.
DO THE APPLICANTS HAVE OTHER ASSETS OR MEANS AVAILABLE TO THEM?
[14] The Crown has identified evidence of cash withdrawals by the applicants or their spouses and by Chet Kidd in the total sum of $542,254. The Crown has also identified assets, including the loan of $180,000, and the savings of $20,000 to which I have already referred. Sworn financial information filed in family court proceedings indicates that the matrimonial home was not encumbered and that therefore, Ms. Kidd’s share was $144,500, not $6,000. Thus, Ms. Kidd’s affidavit evidence is at odds with the sworn financial statements with regard to the matrimonial home. The Crown also identifies an unpaid loan to a sister in the amount of $19,000. There is no specific accounting for how the $180,000 and the $20,000 were expended. The affidavit evidence provides no detailed accounting for the expenditure or whereabouts of this cash and other assets which total $895,254.
[15] As pointed out, Ms. Kidd does not indicate the quantum of tips received from her waitress job and neither applicant has filed tax returns or banking statements or provided statements indicating the expenditures and/or whereabouts of the money flowing from the sale of the matrimonial home.
[16] The onus is on the applicants to satisfy me of the statutory preconditions to release of the restrained funds. I am not persuaded on a balance of probabilities that they have no other assets or means available for the purposes of meeting their reasonable living expenses or reasonable legal expenses.
[17] In addition, I prefer the reasoning of Justice Dunnet in R. v. Hobeika 2014 ONSC 5453, who follows the decision of Justice Then in R. v. Cheng, 2011 ONSC 4479 to the effect that a legal aid application is a necessary precondition to an application for the release of seized funds. Such an application has not been made in this case.
[18] Furthermore ,the principles set out in R. v Rowbotham (1988), 1988 147 (ON CA), 41 C.C.C. (3d) 1 ( Ont. C.A.) require funded counsel to be provided if the accused wishes counsel but cannot pay a lawyer and representation of the accused by counsel is essential to a fair trial.
[19] For these reasons, the applicants have failed to establish that they have no other assets or means available for the stated purposes, and therefore, the application is dismissed.
[20] In view of the decision I have reached above, it is unnecessary for me to adjudicate upon the issue as to whether the applicants have met the requirement that no other person appears to be the lawful owner of or lawfully entitled to possession of the property.
Honourable Justice Gary W. Tranmer
Released: October 19, 2015
COURT FILE NO.: CR-15-0236-00MO
DATE: 2015 Oct 19
ONTARIO
SUPERIOR COURT OF JUSTICE
HER MAJESTY THE QUEEN
– and –
PENNY LEA KIDD and JOSHUA GRANT KIDD
Respondent
decision on variation
of restraint order
Tranmer J.
Released: October 19, 2015