Court File and Parties
CITATION: AGO v. $29,900 in Canadian Currency (in rem), 2016 ONSC 6887
COURT FILE NO.: CV-16-548172
DATE: 20161109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ATTORNEY GENERAL OF ONTARIO Applicant
– and –
$29,900 IN CANADIAN CURRENCY (in rem) Respondent
Lisa Will and Kateryna Toderishna, for the Applicant
Daniel Freudman, for Naomi Rawana
HEARD: September 12, 2016
REASONS FOR DECISION
FAIETA, J.
INTRODUCTION
[1] On November 29, 2015, the Toronto Police Service (“TPS”) seized $29,900 in Canadian currency found in an apparently abandoned suitcase. The seized cash was packed into a shoebox in 30 bundles of largely $20 bills that, with one exception, totaled $1,000. Naomi Rawana (“Rawana”) claims she owns the seized cash.
[2] In its Application commenced on March 7, 2016, the Attorney General of Ontario submits that all of the seized cash is, on the balance of probabilities, the proceeds, and/or an instrument, of unlawful activity. The Attorney General, with the consent of Naomi Rawana, seeks a forfeiture Order under the Civil Remedies Act, 2001, SO 2001, c 28 (the “Act”) in respect of the seized cash. The requested order would forfeit $25,900 to Her Majesty the Queen in right of Ontario (“Ontario”) and return $4,000 to Rawana.
[3] Following the hearing of this Application, I sought and received further submissions from the parties to explain the legal basis upon which $4,000 would be returned to Rawana.
[4] For the reasons given below, I have ordered that all of the seized cash be forfeited to Ontario.
BACKGROUND
[5] On November 29, 2015, the landlord of a house located at 69 McClure Crescent, Toronto called the TPS to report that her tenant, Rawana, was being assaulted. Rawana lived in a basement apartment with independent access at the side of the house. The landlord told the TPS about the events preceding the discovery of the suitcase:
• Rawana was arguing outside the house with a man later identified as Jerome Johnson;
• Johnson grabbed Rawana by her hair and threw her to the ground; and
• Johnson yelled at Rawana: “Give me my money or I’m going to kill you.”
[6] An affidavit sworn by Rawana, on January 21, 2016, states:
By the time police arrived, [Johnson] had left the scene. I made it clear that there was no problem and that police intervention was absolutely unnecessary.
Police then turned their attention to a closed suitcase on my lawn, and examined it. This suitcase belongs to my (present) boyfriend, Harris Baffoe. It was on my lawn at the time because Harris was moving in with me, and [Johnson] took exception to this, throwing Harris’ suitcase outside out of anger.
Inside the suitcase were some of [Baffoe-Badou’s] personal belongings, including his identification, clothing and video games.
Also inside the suitcase was a shoebox containing thirty thousand dollars ($30,000.00) cash. This money belonged to me and I had been putting aside savings over the last four years or so to accumulate that amount. I’ve had issues with banks in the past, which is why I secured the money in a shoe box inside a suitcase for safekeeping instead of depositing it. …
[7] The report of Police Officer Jonathan Burns provides additional context surrounding the discovery of the suitcase:
Officers exited the side door from the basement and were met by the neighbor at 67 McClure Cres. [She] called out to officers and advised them there was a large black suitcase in her driveway by her back door. [She] advised the suitcase did not belong to them and wanted officers to remove it from her property. Officers secured the suitcase and looked inside for identification. Officers located a S.I.N. card inside a Louis Vuitton grey man purse with the name of BAFFOE-BOADU Harris. Officers completed checks and found same name date of birth … on file for robbery and B and E’s as well as drugs and other charges. …
[8] The affidavit of Detective Constable Jacqueline Hood states that Baffoe-Boadu has no adult criminal convictions; however, in 2012 he was charged with possession of a Schedule II substance for the purpose of trafficking. That charge was eventually withdrawn. Rawana has no criminal record.
[9] At the scene, Police Constable Sidhu of the TPS noted the contents of the suitcase:
• $29,900 in a shoebox;
• Digital scale with a leafy substance residue;
• Binoculars;
• Balaclava;
• Facemask;
• Bandana;
• High-end men’s clothing (pants, shirt, jacket, gloves);
• Men’s Louis Vuitton hand bag;
• Men’s toiletries;
• PlayStation; and
• Identification in the name of Harris Baffoe-Boadu.
[10] The contents of the suitcase were brought to a police station. Rawana attended at the police station later that evening, after being released from hospital. She claimed to own the PlayStation and the seized cash. The TPS refused to give her these items, advised her that nothing inside the suitcase supported her claim of ownership, and asked her to return the next day.
[11] On November 30, 2015, Rawana returned to the police station, as instructed. She said she owned the cash inside the suitcase and wanted it returned. She provided her bank statements to the TPS to support her ownership claim.
[12] An affidavit from Baffoe-Baadu, sworn January 21, 2016, states:
The suitcase in question belongs to me. I was keeping it at Naomi’s as I was moving in with her. Inside the suitcase were some of my personal belongings, including my identification, clothing and a few video games.
I am the rightful owner of the aforementioned personal belongings. However, Naomi Rawana is the rightful owner of the $30,000 cash inside the shoebox contained in the suitcase. As the entirety of the money belongs to Naomi, I confirm that I have absolutely no legal claim, right or other such entitlement to it.
My belongings in the suitcase are in no way connected to any crime or illicit conduct by myself, [Johnson] or anyone else known to me. To the best of my knowledge, the saem can be said for Naomi’s money.
I was advised by Naomi and do verily believe that, despite her cooperation with police and providing them with financial records, they are still refusing to return the money to her. Police did, however, return all of my belongings (i.e. clothing, ID, video games, etc.) to me in early, December 2015. …
Given the surrounding circumstances, the manner in which the suitcase was found, and its contents, it is clear that the money within the suitcase could only possibly belong to me and/or Naomi. I know and agree that the full $30,000 found within the suitcase properly belongs to Naomi. As such, there is no discrepancy or inconsistency in terms of rightful ownership, so I do not see any lawful grounds for police to maintain their seizure of the cash. …
I cannot emphasize enough that, although the suitcase belonged to me and contained some of my possessions, the cash within the shoebox is solely and lawfully owned by Naomi Rawana, and is not the product of, or in any way connected to, any illicit or criminal activity.
[13] A dog at the Toronto Police Dog Services performed a sniff test on February 2, 2016 to determine whether the seized cash had been exposed to any controlled substances: The test was negative.
[14] The affidavit of Lori Blaskavitch, a law clerk for the Attorney General, sworn August 11, 2016, states that this Application was commenced on March 7, 2016, and that the parties have reached a settlement and executed a Consent that would result in the seized cash being forfeited to Ontario, with the exception of the $4,000.00 paid to Rawana.
ANALYSIS
[15] The Act “… creates a property-based authority to seize money and other things shown on a balance of probabilities to be tainted by crime and thereafter to allocate the proceeds to compensating victims of and remedying the societal effects of criminality. The practical (and intended) effect is also to take the profit out of crime and to deter its present and would-be perpetrators:” Chatterjee v. Ontario (Attorney General), 2009 SCC 19 at para 23.
[16] While the parties have agreed on the proposed outcome of this forfeiture application, a forfeiture order can only be issued under ss. 3 or 8 of the Act if the seized property is in fact “proceeds of unlawful activity” or “an instrument of unlawful activity:” Attorney General of Ontario v. $8,740 In Canadian Currency, 2016 ONSC 3773 at para 24. Similarly, relief from forfeiture can only be granted under ss. 3 or 8 of the Act if a party to the proceeding in fact proves that he or she is a “legitimate owner” or “responsible owner” of the property, or that it would “clearly not be in the interest of justice” for the property to be forfeited to Ontario.
ISSUE 1: HAS THE ATTORNEY GENERAL ESTABLISHED ON A BALANCE OF PROBABILITIES THAT THE SEIZED MONEY REPREENTES THE “PROCEEDS OF UNLAWFUL ACTIVITY” OR THAT IT IS AN “INSTRUMENT OF UNLAWFUL ACTIVITY”?
[17] The Act provides the following definitions:
“Unlawful activity” means an act or omission that,
(a) is an offence under an Act of Canada, Ontario or another province or territory of Canada, or
(b) is an offence under an Act of a jurisdiction outside Canada, if a similar act or omission would be an offence under an Act of Canada or Ontario if it were committed in Ontario …”
“Proceeds of unlawful activity” means …property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity, whether the property was acquired before or after this Act came into force…”
“Instrument of unlawful activity” means … 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.
[18] The Attorney General submits that the following circumstances demonstrate, on a balance of probabilities, that the seized money is both the proceeds of unlawful activity and an instrument of unlawful activity. The affidavit of Detective Constable Hood, sworn March 11, 2016, states:
I believe that the $29,900.00 CDN seized from a suitcase found at 67 McClure Crescent, was collected through profit motivated unlawful activity, such as trafficking of a controlled substance or theft, and therefore is proceeds of unlawful activity within the meaning of the Civil Remedies Act, for the following reasons:
a. The large sum of currency was bundled in a manner that is consistent with money used in unlawful activity, namely, bound with elastic bands, in equivalent $1,000 bundles and organized by denomination.
b. Persons involved in lawful activity do not usually store currency of significant quantity in a shoebox inside a suitcase, rather than in a financial institution. These practices are more commonly associated with those involved with unlawful activity.
c. It is reasonable to believe that if the money had been legitimately obtained, it would have been placed in a bank or other safe storage. Individuals involved in unlawful activity usually avoid banks for illegally obtained funds as bank accounts produce records that investigators are able to trace. Moreover, bank accounts may be frozen.
d. Most of the currency seized from the suitcase (79% of the bills) consisted of $20 bills, this is the most common denomination for street level drug trafficking.
e. Ms. Rawana’s argument that she saved $29, 900 CDN during the last four years, while having to pay for living expenses such as rent, utilities and groceries, is not credible since she only earned about $20,500 during that time while making frequent restaurant and retail purchases.
f. The money was found in Mr. Baffoe Baadu’s suitcase with his identification and other items that belong to a male. The money likely belongs to him. He is likely using Ms. Rawana to claim the money as legitimate on his behalf.
g. The money was found in a suitcase containing binoculars, balaclava and a facemask which are break and enter/robbery tools. The suitcase also contained a digital scale used for weighing drugs. The residue on the scale looks like a leafy substance, likely marihuana.
h. Ms. Rawana claimed that she worked for Green Northern Greenhouse. A representative of the company told me over the phone that Ms. Rawana has never worked there.
i. The combination of the amount of currency found with what could be described as a “robbery kit” and a digital scale for weighing drugs suggests that the currency originated from profit-motivated unlawful activity; and
j. TPS is unaware of any complete, credible and legitimate explanation that could account for all of the currency, or at least a significant portion of it.
[19] I am satisfied that the seized cash represents the proceeds of unlawful activity for the reasons given by Detective Constable Hood, despite the assertions of Rawana and Baffaoe-Badou. No other credible explanation for the origin of these funds has been presented.
ISSUE #2: HAS RAWANA ESTABLISHED THAT SHE IS A “LEGITIMATE OWNER” OR A “RESPONSIBLE OWNER” OF THE SEIZED MONEY?
[20] If a person proves that he or she is a legitimate owner of the property or a responsible owner of the property, the court shall make such order as it considers necessary to protect the legitimate owner’s interest in the property, unless it would clearly not be in the interests of justice.
[21] The Act provides the following definitions:
“Legitimate owner” is a person who did not, directly or indirectly, acquire the property as a result of unlawful activity committed by the person, and who:
(a) was the rightful owner of the property before the unlawful activity occurred and was deprived of possession or control of the property by means of the unlawful activity,
(b) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity; or
(c) acquired the property from a person mentioned in clause (a) or (b).
“Responsible owner” means, with respect to property that is an instrument of unlawful activity, a person with an interest in the property who has done all that can reasonably be done to prevent the property from being used to engage in unlawful activity, including,
(a) promptly notifying appropriate law enforcement agencies whenever the person knows or ought to know that the property has been or is likely to be used to engage in unlawful activity, and
(b) refusing or withdrawing any permission that the person has authority to give and that the person knows or ought to know has facilitated or is likely to facilitate the property being used to engage in unlawful activity.
[22] The Attorney General’s written submissions do not specifically address either of the two exceptions noted above. Rawana’s evidence clearly does not support the “responsible owner” exception; however, Rawana relies upon the “legitimate owner” exception. In her affidavit, sworn July 20, 2016, Rawana states:
I am the lawful owner of the Cash. I have been saving it since I started working odd jobs approximately four years ago. I have had issues with banks in the past which is why I secured my money in a shoe box inside a suitcase for safekeeping instead of depositing it.
When the police demanded that I send them financial records to corroborate the source of the money, I produced numerous pages of my bank statements. These bank statements corroborated a substantial majority of the Cash.
No charges were laid against me, [Baffoe-Badou] or [Johnson] after the police found the Cash. I do not have a criminal record.
From October 7, 2014 to December 12, 2015, I worked for minimum wage at a McDonalds Restaurant in Scarborough. I then became pregnant, gave birth to my child and have been on maternity leave since December 13, 2015. …
I planned to use the Cash which has been seized to support myself and my child until I returned to work.
Since the Cash has been seized, my only source of income is $340.00 that I receive every two weeks from Service Canada as maternity benefits. This amount is barely enough for my child and I to survive. …
I live with my mother who is currently receiving social assistance. The amount she receives is barely enough to cover our rent. I use the money I receive from my maternity benefits to buy groceries for my child, my mother and I, and to contribute to utilities. …
[23] On cross-examination, Rawana stated that in 2012, 2013, and 2014 she earned a total of $18,526.00. She deposited this money into her bank account and later withdrew it because she did not trust banks. She stated:
I didn’t have anything independent to say the full 30,000 was mine, but half of it that I was claiming for, the 18,000 and whatever dollars, I told them [the TPS] that that – you could see that in my bank statement that it’s there, that I could have that money. …
[24] Rawana testified that she kept $18,526 plus a further $6,000.00 with her. She had no explanation for the origin of the balance of the funds in the shoe box.
[25] Rawana’s income tax returns show a total income of $3,866.25 for 2014 and $15,005.96 for 2015.
[26] When asked why she would borrow $100 or some similar amount from Money Mart or Cash Money on several occasions between 2014 and 2015 Rawana stated:
Because I had – I don’t know –. I was doing this thing where I was like I would borrow the money. I would have it for a certain period of time. I would keep it, let it build up, and then I would try to like – I was working out a way of like holding it and then giving back certain stuff, like – and it was like helping me out in a way, too, to save more, because I was accumulating more, and then putting back and paying them off. [Question 507]
[27] I am not satisfied that Rawana is the legitimate owner of any of the seized monies. Her explanation for repeatedly borrowing small amounts of money at a high cost ($21 per transaction) makes no sense if she in fact owned the thousands of dollars in cash that she held in her apartment.
ISSUE #3: HAS RAWANA ESTABLISHED THAT FORFEITURE OF THE SEIZED MONEY IS “CLEARLY NOT IN THE INTERESTS OF JUSTICE”?
[28] The Act provides that the court shall not order forfeiture where it would “clearly not be in the interests of justice.”
[29] In Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem), 2011 ONCA 363 at paras 84-85, the Court of Appeal for Ontario stated:
The “interests of justice” exception to forfeiture recognizes that, given the very broad definition of “proceeds of unlawful activity” and the narrow exception to forfeiture carved out by the definition of “legitimate owner”, there will be cases that fall within the scope of the forfeiture power where, on any reasonable view, forfeiture would be a draconian and unjust result. The Legislature, rather than attempting to identify with specificity factors that would justify granting relief from forfeiture, used the broad phrase “interests of justice” and left it to the court on a case-by-case basis to determine when forfeiture was “clearly not in the interests of justice”.
I do accept counsel for the AG’s contention that s. 3(1) does not contemplate that the question of forfeiture will be decided based on a mere balancing of the pros and cons of making a forfeiture order. The word “clearly” modifies the phrase “interests of justice” and must be given some meaning. I think the word “clearly” speaks to the cogency of the claim advanced for relief from forfeiture. The party seeking relief must demonstrate that, in the circumstances, the forfeiture order would be a manifestly harsh and inequitable result. [Emphasis added]
[30] Three key factors should be considered in deciding whether the “interests of justice” exception applies: (1) the conduct of the party whose property is the subject of the forfeiture application; (2) the value of that party's interest in the property compared to the value of the property that is tainted by the unlawful activity; and (3) the interplay between the purposes of the Act and the exercise of the “interests of justice” discretion: Ontario (Attorney General) v. 1140 Aubin Road, Windso and 3142 Halpin Road, Windsor (In Rem), supra at para 98.
[31] In considering these elements, the Attorney General submits:
a) Rawana is likely complicit in the unlawful activity – possession of the proceeds of crime, breach of recognizance, and drug trafficking – and, therefore, her conduct would not mitigate against forfeiture.
b) There is no disparity between the amount of the proceeds and the amount sought to be forfeited. The amount sought to be forfeited is in line with the amount suspected to be proceeds or an instrument of unlawful activity.
c) The forfeiture of the seized cash will promote the purposes of the Act, which include taking the profit out of crime, deterring current and would be perpetrators of crime, and compensating the victims of crime.
[32] I accept the above submissions. Given my findings, Rawana has failed to establish that the forfeiture order is either manifestly harsh or inequitable. Accordingly, the “interest of justice” exception has not been established.
ISSUE #4: SHOULD THIS COURT GIVE EFFECT TO THE SETTLEMENT BETWEEN THE ATTORNEY GENERAL AND RAWANA?
[33] As noted, the Attorney General submits that the parties have agreed that $4,000 of the seized money be returned to Rawana and the balance be forfeited to Ontario. The supplemental submissions of the Attorney General clarified that the parties do not rely upon the “legitimate owner” exception or the “interests of justice” exception as justification for having this Court give effect to the settlement.
[34] Instead, the parties rely on s. 15.6(3) of the Act:
Actions in rem
15.6 (1) All proceedings, including proceedings for an interlocutory order, under Parts II, III and III.1, whether by action or application, are in rem and not in personam.
Parties
(2) Subsection (1) applies even though the proceedings have parties.
Same
(3) The rules of court apply with necessary modifications to the court’s jurisdiction to make an order in respect of any party or other person in any proceeding as if the proceeding were in personam and such person were a named defendant or respondent in the proceeding.
Application
(4) This section applies to all proceedings under Parts II, III and III.1, including proceedings for an interlocutory order, even if the proceedings were commenced before the coming into force of this section.
[35] The Attorney General submits that s. 15.6(3) of the Act grants jurisdiction to this Court to make an order giving effect to a settlement under Rule 49 of the Rules of Civil Procedure. The Attorney General relies upon Ontario (Attorney General) v. Two Financial Institutions, 2010 ONSC 47, where this Court granted a Norwich order requiring disclosure of information by financial institutions for the purpose of ascertaining the amount and location of property for which the Attorney General sought forfeiture. In that case, the Court stated at paragraph 24, that:
While I have some concerns about the availability of the Norwich order as a device to assist the AGO in determining whether to commence a forfeiture proceeding under the CRA, I conclude that section 15.6(3) of the CRA makes available to the AGO the procedural devices found in the general law of civil procedure in Ontario, including Norwich orders, and that any concerns about the scope of Norwich orders issued to the AGO for that purpose should be dealt with through the careful examination and application of the standard requirements for obtaining a Norwich order. [Emphasis added]
[36] The Attorney General submits that effect should be given to the settlement made with Rawana, as it is a settlement made pursuant to Rule 49 of the Rules of Civil Procedure. Rule 49 seeks to promote the resolution of proceedings by providing for: (1) a process for the making, acceptance and withdrawal of settlement offers; and (2) cost consequences when an offer has not been accepted.
[37] In my view, a settlement made pursuant to Rule 49 is not an independent basis for a making, or refusing to make, a forfeiture order under the Act. The Legislature has provided that a forfeiture order can only be made on two specific grounds, which are subject to three specific exceptions. There is no basis under the Act for this Court to make an order under the Act merely because the parties have agreed on terms. To interpret and apply s. 15.6(3) of the Act in this manner would give substantive effect to what is otherwise a procedural provision. Further, such interpretation would allow orders to be made under the Act that have no connection to the enumerated grounds and exceptions.
[38] In this case, the Attorney General asks this Court to approve a settlement returning $4,000 to Rawana, notwithstanding the Attorney General’s submissions on the merits of its Application. The parties have not explained why $4,000, as opposed to any other amount, should be returned to Rawana. Such evidence might have informed the application of one of the grounds or exceptions under the Act. Without such evidence, returning $4,000 appears to be arbitrary and not rationally connected to the requirements of the Act.
CONCLUSIONS
[39] I order that the seized cash be forfeited to Ontario. In the circumstances, it is not appropriate to award costs to the Attorney General.
Mr. Justice M. Faieta
Released: November 9, 2016
CITATION: AGO v. $29,900 in Canadian Currency (in rem), 2016 ONSC 6887
COURT FILE NO.: CV-16-548172
DATE: 20161109
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ATTORNEY GENERAL OF ONTARIO Applicant
– and –
$29,900 IN CANADIAN CURRENCY (in rem) Respondent
REASONS FOR DECISION
Mr. Justice M. D. Faieta
Released: November 9, 2016