ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 13-728
DATE: 2015/11/26
BETWEEN:
Attorney General of Ontario
Applicant
– and –
$44,425 in Canadian currency (in rem)
Respondent
Lyndon Healy
Respondent
Jennifer Malabar, counsel for the Applicant
Jeffrey Langevin, counsel for the Respondent Lyndon Healy
HEARD: November 19, 2015
JUDGMENT
LALIBERTE, J.
INTRODUCTION
[1] The Court is dealing with an Application brought by the Attorney General of Ontario seeking a forfeiture order for $44,425 seized by the police on September 13, 2012 while executing a search warrant. The claim is made pursuant to the Civil Remedies Act, 2001.
[2] The money was found in a camping trailer located on a rural lot in the Township of North Stormont.
[3] This trailer is registered to a business owned by Lyndon Healy who opposes the Application. He is claiming ownership of the money and maintains that it was generated by lawful means.
[4] Properly articulated, the issue to be decided by the Court is whether the money subject of this Application is proceeds and/or an instrument of unlawful activity. If so found, the parties have agreed that a forfeiture order in favour of the Attorney General should follow.
THE EVIDENCE
[5] This Application is argued on the basis of affidavit evidence. On February 12, 2014, Mr. Healy was cross-examined on his January 21, 2014 affidavit. He has since filed a second affidavit which was sworn on July 18, 2014.
[6] The Applicant relies on the following affidavits:
− O.P.P. Constable Patrick MacCulloch, sworn January 14, 2014;
− Cornwall Police Service Constable Ryan Campeau, sworn January 13, 2014;
− Cornwall Police Service Constable Shane Kelly, sworn January 7, 2014;
− O.P.P. Constable Chris F. Shaw, sworn December 16, 2013;
− O.P.P. Constable Keith Chadwick, sworn December 30, 2013;
− O.P.P. Constable Raphael Rosen, sworn November 4, 2013;
− O.P.P. Constable Normand Lamontagne, sworn January 23, 2014;
− O.P.P. Constable Rick Weekes, sworn November 4, 2013;
− Cornwall Police Service Constable Pat Collins, sworn February 7, 2014;
− Durham Regional Police Service Acting Sergeant Robert Hawkes, sworn February 11, 2014.
[7] The Court notes that save and except for the source and origin of the money seized by the police, the bulk of the Applicant’s evidence is not contested and/or contradicted by Mr. Healy’s evidence.
[8] The evidence reveals that on August 27, 2012, O.P.P. Detective Rosen began an investigation into a cannabis marihuana outdoor grow operation at a rural lot located at 16467 Cedarvale Road in the Township of North Stormont. The suspect was David Pyke.
[9] A search warrant was obtained and executed by the police on September 13, 2012. They attended the scene at approximately 8:57 a.m. and observed the suspect David Pyke fleeing barefoot from a camping trailer, running north into the bush while checking over his shoulder as he ran.
[10] He was apprehended after a short foot pursuit using the canine unit.
[11] Mr. Pyke was arrested, cautioned, explained the search warrant and provided with his rights to counsel. He wished to speak to counsel. He stated “no weed of mine here”.
[12] The police continued to search the property including the camping trailer. They found a small clear plastic zip lock bag containing a white powdery substance believed to be cocaine, a small amount of marihuana and a large stack of currency hidden under the dining area seating bench. Police observed personal belongings and concluded that Mr. Pyke was living in the trailer.
[13] A second search warrant was obtained by the police allowing for the search of the trailer. It was executed at noon on the same date and the following items were found:
− $42,408 Canadian currency and $2,017 American currency located under a cushion in a hidden compartment under the bench of the dining table;
− Three plastic 500g bottles of Dextrose powder believed by the police to be used as a “cutting agent” for cocaine trafficking; this was located in a plastic bag in the bedroom;
− Two digital scales; one from the kitchen cupboards above the sink; the other from a cupboard above the couch;
− Two packages of small clear and tinted zip lock “dime” bags;
− A clear zip lock sandwich bag containing a white powdery substance (later confirmed to be a mix of cocaine and a cutting agent; this was located in the cupboard above the couch; there were 8 grams;
− Boxes of zip lock bags, a package of elastic bands, and a box of baby bottle liners in the cupboard over the couch;
− One gram of cocaine in a small clear “dime” bag from the dining table surface;
− One gram of marihuana from the cupboard above the couch.
[14] The $44,425 was found to be bundled almost exclusively in $5,000 bundles with $1,000 sub-bundles.
[15] The police did not find an outdoor cannabis marihuana grow operation.
[16] The camping trailer was seized and towed to storage. The vehicle identification number revealed that it was registered to Lyndon Healy’s business, Healy’s Auto World from Cornwall. Several attempts were made to contact Mr. Healy throughout the afternoon of September 13, 2012.
[17] On the same date, at approximately 3:40 p.m., Mr. Pyke, after speaking to counsel, provided a statement to the police wherein he stated the following:
− He had no idea about the camping trailer;
− That it was owned by Lyndon Healy who had loaned it to him;
− That he had no idea about a grow operation;
− That he was clearing out the property to build a cottage;
− When advised that the police had the trailer and $40,000, he stated “Oh, nothing to do with me” refusing to provide an explanation for the money stating: “Alright, that’s good, we’re done here”… “I was just hiding it”… “I don’t know, I’m remaining silent from now on”…he also indicated that he didn’t know of the existence of the money…while talking to himself, he stated “It’s Lyndon’s trailer, like I fucking know what’s in the trailer”.
[18] On September 14, 2012, Mr. Pyke attended the O.P.P. detachment at Long Sault to recover his personal possession from the trailer and advised the police that he does odd jobs for Mr. Healy and drives him around because he has ALS.
[19] On the same date, Lyndon Healy contacted the police and stated that he owned the trailer, put it on the property and allowed Mr. Pyke to use it. He indicated that he was selling off his business. He was advised that the trailer was being held as offence related property.
[20] The investigation revealed that the trailer had been purchased by Mr. Healy on August 2, 2012 with a “Will Pyke” using $15,510 cash and a trade-in trailer worth $15,882.
[21] On September 14, 2012, the police conducted ION testing of the counter and cupboard surfaces in the trailer. The tests were positive for traces of cocaine on all of the surfaces, including the head liner and on top of the cabinets, except for the kitchen sink.
[22] Mr. Healy attended the O.P.P. Detachment on October 2, 2012 and provided a cautioned video statement wherein he stated the following:
− The camping trailer and money seized belonged to him;
− That he had learned on September 27, 2012 that he was suffering from ALS.
[23] In regards to the source of the money, he explained;
− He had just sold his business for between $38,000 and $40,000;
− The cash was from selling approximately twenty cars since May 1, 2012;
− Between June and August he earned $50,000 from car sales; the HST was paid;
− He has receipts for the cars sold;
− He can’t count money so he asked Mr. Pyke to count the money and store it for him;
− He thinks the money was under the table or seat in the trailer;
− He had seen the money there a couple of days before the police seized it;
− He wanted to bring in the receipts in an hour which would show that he had sold $50,000 worth of cars; the police report that this was never provided to them;
− That the money was being kept in the trailer because he just “got out of his house”.
[24] The laboratory tests have confirmed that the substances seized were marihuana and cocaine.
[25] The Applicant relies on the evidence of Sergeant Robert Hawkes of the Provincial Asset Forfeiture Unit. He is offered as an expert witness on the question of the connection of the money seized and unlawful activity.
[26] Counsel for Mr. Healy argues that this evidence should not be admitted as expert evidence. His view is that while relevant, this affidavit evidence amounts to baseless “boiler plate” statements for which there is no foundation. He questions Sergeant Hawkes’ expertise on issues of drug trafficking and the operation of a business. The suggestion is that this evidence is not necessary.
[27] For the reasons articulated on the record when the objection was raised by counsel for the Applicant, the Court finds that this evidence is admissible as expert opinion evidence. This finding is based on the four criteria set out by the Supreme Court of Canada in R. v. Mohan 1994 80 (SCC), [1994] 2 S.C.R. 9. The Court notes the following:
i. The evidence is found to be relevant to the core issue to be decided as to whether the currency is connected either as proceeds and/or an instrument of criminal activity;
ii. This evidence is seen as necessary to assist on matters which are outside the experience and knowledge of the Court; for example:
− The significance of a large amount of $20.00 bills;
− The inference which may be drawn from the $50.00 and $100.00 bills;
− The bundling of money and the use of elastics;
− Why the evidence gathered by the authorities is indicative of “street to mid-level drug trafficking”;
iii. The proposed opinion does not contravene any exclusionary rule;
iv. Sergeant Hawkes is found, on the basis of his curriculum vitae, to be qualified to give the opinion; the following are noted:
− As of February 11, 2014, he has provided written expert opinions on twenty three occasions in relation to large currency seizures for the Civil Court process and fifteen opinions for the Criminal Court process;
− He has extensive experience as a criminal investigator;
− He has received significant training in a number of fields including money laundering, money packaging, large cash seizures, drug and money couriers;
− He has lectured on asset forfeiture and drug investigations.
[28] His opinion is that the seized cash is proceeds of crime and likely from cocaine trafficking. At paragraphs 47 to 52 of his affidavit he concludes:
“47. It is my belief based upon my review of the facts in this matter including the seized property, Canadian currency, the “bundling” structure of the money and the use of non-traditional banking methods, that the $42,408.00 (bundled cash found in the safe in the master bedroom), $2,017.00 USD (bundled cash hidden under the seating area of the dining room), of the camping trailer seized in this investigation is a payment for illicit drugs (cocaine) that have already been sold for the following reasons:
a) This is a large cash transaction done outside of the traditional and safe financial circles.
b) In the regards to cash derived from financial institutions, it is not usually distributed in the manner in which the seized currency was packaged. I have however been involved with and seen cases where illegal transactions are made with money packaged together in elastics.
c) It is not an economically sound decision or a safe decision in terms of security for one to store large amounts of currency in a camping trailer. However person(s) in possession of currency derived from profit motivated criminal activities such as drug trafficking will seldom employ conventional banking and/or business practices. Doing so would risk the alerting of authorities.
d) The manner in which this currency is packaged is consistent with that of currency derived from profit motivated criminal activity as well as the profit from illicit activity.
The amount of $50.00 and $100.00 bills in this seizure is consistent with persons involved in profit-motivated criminal activity in this case street to mid- level drug trafficking.
The amount of $100.00 bills and the presence of $50.00 bills indicate a level of refinement. This practice is usually utilized to assist the drug trafficker in the concealment of the currency, quick counts and for the purchase of bulk drugs, usually the pound or kilo level.
The large amount of $20.00 (1215) bills in Block Number 1 and in Block number 2 (180) is significant. The $20.00 bills is the denomination most utilized in the purchase of illicit drugs by drug users, particularly at the gram/multi gram level for cocaine all the way up to ounce purchases.
I am aware that there was only a small amount of illicit drugs located in the camping trailer. The materials and packaging that was located in the trailer in combination with the high ION scan readings is consistent with a premise that was being utilized in the production and distribution of drugs.
The seized cash is derived from illicit activity and is the proceeds of illicit activities.
[29] The Applicant raises the point that during Mr. Pyke’s guilty plea to simple possession of cocaine on July 10, 2013, counsel for Mr. Pyke (who is also counsel for Mr. Healy in this application) did not make any comments or seek clarification when Crown counsel stated the following:
“…they found point one grams of cocaine on a table and another bag which was approximately seven to eight ounces of a mixture of cocaine and dextrose. The certificates both came back for cocaine, so it’s all being put before the court, but I am mindful that the second quantity was a mixture of cocaine and a cutting agent.”
[30] A transcript of these Court proceedings was filed in this application.
[31] As already stated, the Respondent filed two separate affidavits in support of his position. He was also questioned by counsel for the Attorney General on January 21, 2014. A transcript of this cross-examination was also filed in this Application.
[32] Mr. Healy was born on November 10, 1958. He formerly owned and operated L. Healy’s World Auto in the City of Cornwall. He states having closed down his business due to an illness, namely amyotrophic lateral sclerosis.
[33] In 2012, he parked his trailer on the 36 acre property of Mr. David Pyke and allowed him to live in this trailer.
[34] In his January 21, 2014 affidavit which he had filed in the context of an Application he was intending on bringing to compel the police to release the money to him, he explained the following at paragraph 4:
“4. I was keeping some of my cash assets, totalling $44,425 in both U.S. and Canadian currency, in a compartment under the kitchen table within the house trailer… A creditor had gained a judgment against me in 2011. As a result, I declined to deposit any more money in my general operating account. The account was closed. After this judgment, I dealt entirely in cash sales. In fact, even before this event a large percentage of my sales from World Auto was in cash.”
[35] As soon as the criminal proceedings against Mr. Pyke were completed, he prepared an irrevocable direction to the police directing that the money be delivered to his counsel.
[36] Mr. Healy indicates that he needs the money to sustain himself by reason of the said illness. He is unable to work.
[37] When cross-examined by counsel for the Applicant on February 12, 2014, he explains that he is not the one who had put the money in the compartment under the kitchen table. He did not know where the police had found it. Mr. Pyke is the one who had placed the money.
[38] He explained that Mr. Pyke would count the money generated from car sales for him since he can’t hold paper very well because of his illness. He states “…I can’t hold paper very well. And I can’t, I can’t count money. I can’t hold it.”
[39] Mr. Healy contradicts the police evidence in regards to his failure to provide receipts for the car sales. The police would have told him that the receipts did not matter.
[40] Mr. Healy undertook to provide his TD Bank account statements for 2011 and 2012.
[41] In regards to the receipts from the car sales, the Court notes the following exchange:
“Q. Do you have the receipts from the car sales?
A. Yes, I do. I could have brought all that stuff and saved a lot of time because I’m dying and I’m destitute.
Q. I just would like you to answer…
A. I need my money.
Q. …the questions that I ask you.
A. I might have receipts. I’ll have to look for them.
Q. Will you provide the…
A. I might have them…to answer the question, I might have them.
Q. Right. So my question is, will you provide, undertake…locate the receipts and disclose them, all of the receipts that relate to…
A. I also had an HST on it six months ago which will certainly show all the deposits in that account.
Q. I’m not asking about that. I’m just asking you to disclose the receipts.
Mr. Langevin: He’ll make best efforts to find the receipts.
A. I don’t know they threw out a lot of stuff. I should have them but I don’t know. I’ll look.”
POSITION OF THE PARTIES
APPLICANT
[42] Briefly stated, the Applicant’s position is that it has met its burden and has established that the impugned money is, on a balance of probabilities, proceeds and/or an instrument of unlawful activity.
[43] It argues that the unlawful activity relates to illicit drugs namely marihuana and cocaine. As such, a forfeiture order should follow.
[44] Specifically, the following points are raised:
− The money, which totaled over $40,000 was hidden in a compartment inside a camping trailer;
− Mr. Pyke fleeing from the police;
− Marihuana and cocaine were found by the police, including an 8 gram mixture of cocaine and cutting agent;
− Three bottles of known cutting agent was found;
− Other items consistent with drug trafficking were found including two digital scales and drug packaging items;
− The unchallenged expert evidence of Acting Sergeant Robert Hawkes;
− The result of the ION tests;
− Mr. Pyke failing to provide any explanation as to the legal source of the money.
[45] It is further argued that in light of the circumstances, it was incumbent on Mr. Healy to provide a coherent explanation for the origins of the money. The submission is that he has failed to do so. He has not dislodged the Applicant’s case that the money found in the trailer is the proceeds and/or instrument of unlawful activity.
[46] The suggestion is that his explanation that the money came from car sales is not credible when looked at in the totality of the circumstances.
[47] Therefore, the $45,450 is to be forfeited to the Crown.
LYNDON HEALY
[48] The Respondent’s position is that the Applicant has not met its burden of proof as he is lawfully entitled to this money.
[49] His view is that the Applicant’s theory is based on a collection of “normative points” or subjective beliefs of how individuals are expected to act. The end result is that the claim for forfeiture is premised on mere speculation.
[50] The point is made that he has historically operated his business through cash deals. This is evidenced by the sale contracts filed as evidence. It is therefore not surprising that he would be in possession of a significant amount of cash.
[51] Nor is it unreasonable to suggest that Mr. Pyke was asked to count and preserve his cash. Reference is made to his illness and the fact that he was a judgment debtor and took steps to shield his money from seizure by judgment creditor. This is why he closed his bank account.
[52] The Court is reminded to avoid “normative reasoning”. Mr. Healy lives in a world where cash is how things operate.
[53] Counsel for the Respondent concedes that Mr. Pyke was involved in drugs as evidenced by the presence of cocaine. Mr. Healy was aware that Mr. Pyke was a user of cocaine. However, he argues that the evidence does not establish a connection between the money and the cocaine found in the trailer.
[54] In the end, the Respondent’s argument is that it has not been shown that the currency is proceeds and/or an instrument of drug trafficking. A reasonable and believable explanation was provided by him for the presence of the money.
THE LAW
[55] This Application is governed by the provisions of the Civil Remedies Act, 2001.
[56] Paragraph 3(1) of the said Act applies to “proceeds of unlawful activity. It provides:
− 3(1) In a proceeding commenced by the Attorney General, the Superior Court of Justice, shall, subject to subsection (3) and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in right of Ontario if the Court finds that the property is proceeds of unlawful activity.
[57] The concept of “unlawful activity” is defined as follows:
“…an Act or omission that, (a) is an offence under an Act of Canada, Ontario or another province or territory of Canada…”
[58] “Proceeds of unlawful activity” means
“…property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity…”
[59] Similarly, paragraph 8(1) provides for the forfeiture of “instruments of unlawful activity. It reads:
“8(1) In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3) and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the Crown in right of Ontario if the Court finds that the property is an instrument of unlawful activity.”
[60] The definition of “unlawful activity” already noted applies to an “instrument of unlawful activity”.
[61] “Instruments of unlawful activity” is defined as:
“…property that is likely to be used to engage in unlawful activity that, in turn, would be likely to or is intended to result in the acquisition of other property or in serious bodily harm to any person, and includes any property that is realized from the sale or other disposition of such property.”
[62] The parties have agreed that the notions of “legitimate owner”, “responsible owner” and the exception of “clearly not be in the interests of justice” are not relevant in this Application.
[63] Justice Perell in Ontario (Attorney General) v. $13,900 in Canadian Currency (In Rem) [2015] O.J. No. 1702, provides a useful summary of the relevant evidentiary principles. The Court notes the following:
“36. For a forfeiture order, the onus is on the Attorney General to show on the balance of probabilities that either: (a) the property is “proceeds of unlawful activity” or (b) the property is “instrument of unlawful activity…”
“39. There are situations where property can be both proceeds of unlawful activity and an instrument of unlawful activity. For example, in Ontario (Attorney General) v. Chow [2003] O.J. No. 5387 (S.C.J.) the Court accepted that money that was proceeds of unlawful activity (because it was obtained from the sale of drugs) was also an instrument of unlawful activity when it could be used to purchase more drugs.”
“45. Currency may be proceeds of unlawful activity and the Attorney General can obtain a forfeiture order if the Attorney can establish by direct or circumstantial evidence that the money was acquired from crime in general…”
“46. Currency may be an instrument of unlawful activity because drug money can be used to purchase more drugs for resale…”
“47. A respondent’s failure to provide a credible explanation for a legitimate source of the property…may be considered by the Court as part of the forfeiture analysis; suspicious circumstances call for a “credible and reasonable answer…”
“48. Because it is a known fact that persons involved in illegal drug activity are found carrying large sums of money from drug sales or purchases, the inference that arises when a person is found with large sums of money that the money is the proceeds of unlawful activity or the instrument of unlawful activity calls for a credible and reasonable answer…”
DISCUSSION
[64] Having considered all of the circumstances and the relevant principles, the Court is of the view that the Applicant has met its burden of proof. It is more probable than not that the money seized by the police is proceeds and/or an instrument of unlawful activity, namely trafficking in narcotics.
[65] This finding is based on the cumulative effect of the evidence. It is not seen by the Court as speculation to find that the money is connected to the drug trade either as proceeds and/or an instrument.
[66] The Court also rejects Mr. Healy’s evidence that the money was lawfully generated by the business. The Court’s finding is that his explanation is not credible and reasonable when looked at in the totality of the circumstances.
[67] The factors considered by the Court in finding that the money seized was connected to drug trafficking include the following:
The uncontradicted expert evidence of Sergeant Hawkes;
The presence of a number of items associated with drug trafficking inside the trailer;
The finding of cocaine and traces of cocaine on all of the surfaces through ION testing;
The money was found in an environment which, on balance, was used in trafficking;
The evidence relating to the money in terms of the significant amount, its bundling and denominations;
The fact that the occupier of the trailer, Mr. Pyke, fled the scene, barefoot, when the police attended; the Court is mindful that in a criminal context, flight may be consistent with the commission of one or more offences (see R. v. Arcangioli 1994 107 (SCC), [1994] 1 S.C.R. 129); however, it is seen as allowing an inference of consciousness of guilt linked to trafficking; it is not the only inference but one that is supported by the other evidence;
Mr. Pyke in his statements to the police contradicts Mr. Healy’s evidence on a number of fronts; for example, Mr. Pyke is reported as stating following his arrest “…It’s Lyndon’s trailer, like I fucking know what’s in the trailer…”; it should be clear that any statements made by Mr. Pyke to the police are not considered by the Court for the truth of their content; they are assessed in terms of their consistency with the evidence adduced by Mr. Healy;
Lyndon Healy’s explanation is found to be not credible and unreasonable; suspicious circumstances call for a “credible and reasonable answer”; there is no credible explanation for a legitimate source for the money.
[68] In dismissing Mr. Healy’s explanation, the Court’s considerations include the following:
The uncontradicted expert evidence of Sergeant Hawkes;
Mr. Healy is contradicted by statements provided to the police by Mr. Pyke;
The lack of consistency in the explanations provided by Mr. Healy as to the origin of the money;
The fact that he waited close to two weeks before meeting with the police;
His failure to provide receipts for car sales after stating that he could provide same;
While not impossible, it is unlikely that such a significant amount of money would be entrusted to someone for safekeeping in a camping trailer in a rural area;
The packaging of the money in the context of an environment suggestive of drug trafficking is not supportive of his explanation.
[69] The issue of Mr. Healy not having produced evidence from Mr. Pyke was raised during arguments from counsel. The Court was provided with cases by both parties. The Court will not draw a negative inference against Mr. Healy by reason of not having provided evidence from Mr. Pyke.
CONCLUSION
[70] The Court grants the Applicant’s claim for a forfeiture order in its favour in regards to the $44,425 seized by the police on September 13, 2012.
[71] The parties are asked to resolve the issue of costs. If unable to do so, brief written submissions are to be exchanged and filed with the Court on or before December 18, 2015.
Justice Ronald M. Laliberte Jr.
Released: November 26, 2015