Court File and Parties

COURT FILE NO.: CV-15-5355000 DATE: 2016/06/03 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Attorney General of Ontario, applicant AND: $64,560 in Canadian Currency (In Rem), respondent

BEFORE: S.F. Dunphy J.

COUNSEL: L. Beheshti, for the Applicant no one appearing for respondent

HEARD: June 3, 2016

Reasons for Judgment

[1] This is an application pursuant to the Civil Remedies Act, 2001, S.O. 2001, c. 28. The respondent in this in rem application is $64,560 in Canadian currency seized by members of Toronto Police Services in the evening of November 21, 2015 in the course of an investigation of potential by-law, liquor and gambling infractions at a location at 3360 Midland Avenue in Toronto.

[2] In the course of this application, it has come to the applicant’s attention that an error in counting the funds seized was made. Although the application was for the amount of $64,560 in funds, the actual amount seized and deposited was $62,560. The difference - $2,000 – was identified in a forensic audit as having arisen due to the fact that the money was seized in a number of piles and one of the piles was inadvertently counted twice. I am satisfied that an error was made and that the amount originally seized was in fact $62,500.

[3] In the course of the investigation, a sophisticated gambling operation was observed to be underway complete with uniformed dealers and staff, a number of gaming tables, gambling chips, liquor and cigarettes (both without sales licenses), surveillance cameras and other paraphernalia. A cash room separated by a glass partition was also observed. In this room, the cash that is the subject-matter of this application was found. It was wrapped in bundles – rubber bands securing bundles of $10,000, metal clips securing smaller piles.

[4] None of the staff present during the raid – it should be called by its proper name – claimed any ownership of the cash. One suggested that the true owner was watching the raid over the internet using the security camera network that covered the premises. The apparent manager claimed that the funds belonged to a “Mr. Chan” in Hong Kong. Mr. Chan has not yet been located nor has he surfaced to claim what may have been his funds.

[5] The funds that are the subject-matter of this application were seized by the druing the course of the raid. A variety of charges were laid in relation to the raid. No gambling-related charges have yet been laid.

[6] Section 3(1) of the Civil Remedies Act provides that, on application of the Attorney General, the Superior court of Justice “shall….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”. There are two exceptions provided for where (i) it would “clearly not be in the interests of justice” or (ii) where the legitimate owner of the property that is proceeds of unlawful activity is identified and the court makes “such order as it considers necessary to protect the legitimate owner’s interest in the property”: s. 3(3) Civil Remedies Act.

[7] I am satisfied on the evidence that seized funds are the proceeds of unlawful activity. The evidence before me establishes that the funds were in what appeared to be a “cash room” containing records and bins of sorted cash as well as surveillance cameras. The cash room was adjacent to an active gaming operation that was underway when the raid was conducted. The premises were not a licensed gaming site. There was also evidence of tobacco and alcohol sales being conducted on site. The circumstances prevailing lead to the natural conclusion that the funds in question were the proceeds of the activity going on at the time it was seized and that the activity in question was unlawful (gaming, sales of alcohol or tobacco). There is nothing in the evidence to rebut or call into question that natural conclusion.

[8] The Civil Remedies Act is a civil statute and requires only proof to a civil standard. The failure of the Crown to obtain convictions in respect of all of the unlawful activities observed that likely gave rise to the proceeds may be a factor, but only a factor, in that assessment. In criminal proceedings the standard of proof is higher, prosecutions may be withdrawn due to factors unrelated to the actual unlawful activity, the investigation may be on-going and charges may yet be laid in the future. The presence or absence of criminal prosecutions related to the seized property is not determinative.

[9] None of the parties present at the time of the raid who had apparent possession or at least control over the funds has offered a credible explanation that might suggest an innocent source of the funds to rebut the strong inference the facts give rise to. No party has attempted to claim the funds as legitimate owner nor is there any suggestion in the evidence that there is any compelling interest of justice militating against making the requested order.

[10] I am fully satisfied that the Attorney General has discharged the burden of proof in this case and that the requested order of forfeiture ought to be made (corrected as to the amount of funds actually seized being $62,560. I so order.

Justice S.F. Dunphy Date: June 3, 2016