R. v. Davidson, 2016 ONSC 7440

CITATION: R. v. Davidson , 2016 ONSC 7440

COURT FILE NO.: 7679/16, 7488/14

DATE: 2016-11-29

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HER MAJESTY THE QUEEN

– and –

RODNEY DAVIDSON

Joseph Chapman, for the Federal Crown

Michael Lacy and Jennifer Tremblay-Hall, for Rodney Davidson

HEARD: November 23, 2016

varpio, J.

REASONS FOR JUDGMENT ON APPLICATION FOR LEGAL EXPENSES

[1] This is an application for the release of funds to be used to fund Mr. Rodney Davidson’s defence of two criminal charges.

[2] Mr. Davidson is charged with a variety of drug offences that flow from two separate incidents. First, Mr. Davidson was arrested for drug offences that involve a smaller quantum of drugs and monies seized (the “First Case”). While released on bail for these charges, Mr. Davidson was arrested on a second set of charges. A search subsequent to arrest occurred whereby the police allegedly seized over $750,000 as well as other property (the “Second Case”).

[3] Counsel seek to have funds seized in the Second Case used to fund both defences. The defence submits that Ms. Tremblay-Hall represent Mr. Davidson on the First Case and that both counsel represent Mr. Davidson on the Second Case.

[4] The defence makes the submission that two lawyers are necessary given the complexity of the Second Case. Specifically, they note that the arrest occurred as a result of considerable confidential informant information from multiple sources. This is an inherently intricate area of the law that requires:

1. Pointed disclosure applications;

2. Considered vetting by the Crown;

3. Presumable judicial scrutiny of same; and

4. Possible Charter arguments.

[5] The Crown made a variety of concessions in this matter, namely:

1. The applicant has been denied legal aid;

2. The applicant appears, prima facie, to have no money to pay for private retainer[^1]; and

3. The seized funds belong to the applicant.

[6] The Crown submits that neither case is particularly complicated and that one lawyer at a legal aid rate ought to be sufficient in the circumstances. The Crown submits that there is nothing out of the ordinary as regards either case.

[7] A bifurcated hearing was held in this matter whereby several representations were made by the defence in open court as well as in camera.

[8] On the record, the defence proposes that:

1. Mr. Lacy’s hourly rate be set at $400/hr;

2. Ms. Tremblay-Hall’s hourly rate be set at $200/hr;

3. Mr. Tremblay-Hall be retained for the First Case and that both counsel be retained for the Second Case;

4. That a total of $180,000 be released into Ms. Tremblay-Hall’s trust to pay for legal fees in the Second Case; and $70,000 be release to pay for legal fees in the First Case.

ANALYSIS

[9] I have been provided with case law that I have considered as well as the relevant Criminal Code provisions.

[10] First, I am informed by section 462.34 of the Criminal Code of Canada which states:

Application for review of special warrants and restraint orders

462.34 (1) Any person who has an interest in property that was seized under a warrant issued pursuant to section 462.32 or in respect of which a restraint order was made under subsection 462.33(3) may, at any time, apply to a judge

(a) for an order under subsection (4); or

(b) for permission to examine the property.

Order of restoration of property or revocation or variation of order

(4) On an application made to a judge under paragraph (1)(a) in respect of any property and after hearing the applicant and the Attorney General and any other person to whom notice was given pursuant to paragraph (2)(b), the judge may order that the property or a part thereof be returned to the applicant or, in the case of a restraint order made under subsection 462.33(3), revoke the order, vary the order to exclude the property or any interest in the property or part thereof from the application of the order or make the order subject to such reasonable conditions as the judge thinks fit,

(c) for the purpose of

(ii) meeting the reasonable business and legal expenses of a person referred to in subparagraph (i), or

if the judge is satisfied that the applicant has no other assets or means available for the purposes set out in this paragraph and that no other person appears to be the lawful owner of or lawfully entitled to possession of the property.

Hearing

(5) For the purpose of determining the reasonableness of legal expenses referred to in subparagraph (4)(c)(ii), a judge shall hold an in camera hearing, without the presence of the Attorney General, and shall take into account the legal aid tariff of the province.

Expenses

(5.1) For the purpose of determining the reasonableness of expenses referred to in paragraph (4)(c), the Attorney General may

(a) at the hearing of the application, make representations as to what would constitute the reasonableness of the expenses, other than legal expenses; and

(b) before or after the hearing of the application held in camera pursuant to subsection (5), make representations as to what would constitute reasonable legal expenses referred to in subparagraph (4)(c)(ii).

Taxing legal fees

(5.2) The judge who made an order under paragraph (4)(c) may, and on the application of the Attorney General shall, tax the legal fees forming part of the legal expenses referred to in subparagraph (4)(c)(ii) and, in so doing, shall take into account

(a) the value of property in respect of which an order of forfeiture may be made;

(b) the complexity of the proceedings giving rise to those legal expenses;

(c) the importance of the issues involved in those proceedings;

(d) the duration of any hearings held in respect of those proceedings;

(e) whether any stage of those proceedings was improper or vexatious;

(f) any representations made by the Attorney General; and

(g) any other relevant matter.

[11] I am also guided by the Ontario Court of Appeal’s decision in R. v. Wilson 1993 8665 (ON CA), [1993] O.J. No. 2523 wherein the Court stated at paragraphs 10 and 42:

The purpose of Part XII.2 is clear. It is intended to give effect to the age old adage that crime does not pay. It is now recognized that some crime is big business, and that massive profits, both direct and indirect, can be made from criminal activity. Part XII.2 is a response to that realization and provides a comprehensive scheme whereby those direct and indirect profits may be located, seized and eventually forfeited to the Crown: R. v. Clymore (1992), 1992 1112 (BC SC), 74 C.C.C. (3d) 217 (B.C.S.C.) at p. 231; R.G. Mosley, "Seizing the Proceeds of Crime: The Origins and Main Features of Canada's Criminal Forfeiture Legislation" (Address to the Canada/United States Proceeds of Crime Conference, Ottawa, March 1989).

One further argument advanced by the appellants must be addressed. Where funds are seized pursuant to s. 462.32 the person from whom the funds were seized may apply under s. 462.34(4)(c)(ii) for the release of sufficient funds to pay reasonable legal expenses. The clause is intended to allow a person, whose property has been seized or restrained, access to that property in order to pay reasonable legal expenses. Typically, the legal expenses will relate to proceedings connected with or flowing from the seizure or restraint of the person's property. The provision recognizes that the state should not be allowed to beggar a person who will often need to retain the assistance of counsel in order to defend himself or herself against state action directed at depriving that person of their property and liberty. This provision would appear to be a direct response to a perceived weakness in the comparable American legislation: Caplin & Drysdale Chartered v. U.S., 109 S. Ct. 2646 (1989); U.S. v. Monsanto, 109 S. Ct. 2657 (1989).

[12] Although the Ontario Court of Appeal suggests that money is “typically” released to pay for legal expenses flowing from the seizure thereof, I do not read the above passage as making such a linkage mandatory. Indeed, in R. v. Wilson [2002] N.S.J. No. 221, the Court released funds to pay for three separate trials that did not all appear to be directly related to the seized funds. The Crown made no argument in this regard and I see no legal reason to prevent the seized funds on the Second Case to be used to pay for both defences.

[13] When determining whether to use seized funds to pay for legal counsel of choice, the Court must undertake a nuanced analysis. One cannot always expect to have one’s preferred counsel for a variety of reasons that were adequately discussed in several cases including R. v. Alves [2015] O.J. No. 3626 (Ont. S.C.), R. v. Black [2016] O.J. No. 3048 (Ont. S.C.) and R. v. Su [2007] O.J. No. 5884 (Ont. S.C.). These cases all deal with the interplay between s. 462.34 of the Criminal Code and the issue of counsel of choice. In Su, Karakatsanis J. (as she then was) stated at paragraph 12 of her reasons:

The Code provides for the return of money to a person with a valid interest in the money for the payment of that person's reasonable legal expenses - not for the minimum quantum that can provide for a competent defence. The issue, in my view, is whether the legal expenses of counsel of choice are reasonable and whether the applicant has the means to pay them. A person using their own money does not necessarily retain the cheapest lawyer available - he makes the choice of counsel based upon the balancing of a variety of considerations, including the experience of counsel, confidence in a particular counsel, the degree of jeopardy involved and the quantum of fees. In these circumstances, I find that the focus of the inquiry should not be if a legal aid certificate would meet reasonable legal expenses in general but rather if the legal aid certificate is means for meeting the reasonable legal expenses of this particular accused, taking into account the rates of counsel of choice, the nature of the case and the degree of jeopardy involved. [emphasis added]

[14] This passage makes imminent sense to me. Legal fees in criminal cases are not “one size fits all”. The reasonableness depends upon a variety of factors including, but not limited to, the complexity and the jeopardy involved.

[15] As regards the matter before me, while I accept that a case involving a number of confidential informants will have a heightened level of complexity, the Second Case is not a case like R. v. Murtaza and Murtaza 2011 ONSC 7577, [2011] O.J. No 6034 (Ont. S.C.) where Hill J. had to examine a heroine importation smuggling ring (which is, by definition, a highly complex scenario). Equally, however, this is not a simple drug case involving narrow, discrete issues. This is a case that has multiple informants which will require reasonably intricate legal work.

[16] I also accept that the accused is facing the prospect of a serious period of incarceration if convicted on all charges before the court.

[17] Given this complexity and potential jeopardy, I accept that two lawyers are necessary to hear the Second Case.

[18] The next question involves the legal rates charged.

[19] I take no issue with Ms. Tremblay-Hall charging $200/hr for her services or with Mr. Lacy‘s rate of $400/hr. While I recognize that this is more than the legal aid tariff, these two cases are more complex than the criminal case simpliciter and justify the higher legal rate.

[20] The complexity of the Second Case would suggest that a senior and a junior lawyer would be the most reasonable legal representation for Mr. Davidson. I do not believe that either case is of sufficient complexity to justify the hiring of two senior lawyers as per s. 462.34. Nonetheless, the budget proposed and the rates charged are sufficiently reasonable that I have no problem with both Mr. Lacy and Ms. Tremblay-Hall representing Mr. Davidson on the Second Case.

[21] With respect to the quantum of funds to be dispersed, I take no initial issue with the budget as proposed by counsel in camera. Equally, I have no notional issue with the amount of money charged by counsel for work already undertaken, although I note that I was not provided with a bill of costs or particulars of how the money was expended.

[22] In light of the in camera nature of the proceeding that was before me, I will not describe the fees or budget any further save and except to state that I will be releasing sufficient funds to enable Mr. Davidson to proceed with the matter in an expeditious fashion. I will also release the funds on terms that will ensure the confidentiality of those in camera communications while ensuring sufficient transparency.

[23] Accordingly, I hereby Order that:

1. From the money seized by the police in this case out of Unit #5, 1 Kilborn Way, Elliot Lake, Ontario, $250,000 shall be transferred to the trust account of Jennifer Tremblay-Hall, Barrister & Solicitor, solely for the purpose of defending Mr. Rodney Davidson in the pre-trial preparation, motions and trial on the indictment in Court Files 7679/16 (to a maximum of $180,000) and 7488/14 (to a maximum of $70,000). The sum shall be inclusive of counsel fees, disbursements and HST, as may be necessary for Mr. Davidson's defence.

2. Fees chargeable by Mr. Lacy shall be $400/hr. and $4000 per court day and for Ms. Tremblay-Hall $200/hr. and $2000 per court day.

3. Before any portion of the monies are transferred from Ms. Tremblay-Hall's trust account to satisfy legal fees, Ms. Tremblay-Hall and/or Mr. Lacy shall

a) present an itemized account to Mr. Davidson for the client's acknowledgement of his agreement as to the necessity and reasonableness of the fees and his consent to payment; and

b) provide a copy of the account (redacted if necessary to protect any applicable privilege) to the Director of Public Prosecutions (or his/her designate – presumably Mr. Joseph Chapman) at least 10 days prior to disbursing funds. The Crown shall determine within 7 days of receiving notice of the account whether it wishes to provide notice to Mr. Davidson through Ms. Tremblay-Hall that the Crown requires a taxing of the legal fees account pursuant to s. 462.34(5.2) of the Code.

4. Should Ms. Tremblay-Hall at any time cease to be the counsel of record for Mr. Davidson in this trial, the remainder of the funds in Ms. Tremblay-Hall’s trust account shall be forthwith transferred to the custody of the seized property management director of the Public Prosecution Service of Canada or equivalent department as may be identified by the Director or his/her designate.

5. In the event that Mr. Davidson or the Director (or her/his designate), wishes to contest an account submitted by counsel, defence counsel shall apply to this Court for a ruling pursuant to s. 462.34(5.2) and shall, in respect of any redacted account submitted to the Crown, file a sealed unredacted version of said account as part of the application for the Court's review.

6. Should counsel require more than $180,000 or $70,000 to fund the defences, they are free to come back before the Court.

[24] I had contemplated a partial release of funds however, upon further consideration, this would involve delaying the litigation unnecessarily in the circumstances of this case.

[25] I suggest that the parties move the litigation to the next steps forthwith.

Varpio, J.

Released: November 29 2016

CITATION : R. v. Davidson, 2016 ONSC 7440

ONTARIO

SUPERIOR COURT OF JUSTICE

HER MAJESTY THE QUEEN

– and –

RODNEY DAVIDSON

REASONS FOR JUDGMENT ON APPLICATION FOR LEGAL EXPENSES

Varpio, J.

Released: November 29 2016

[^1]: The Crown did not cross-examine the applicant on his affidavit. Based upon that affidavit, I find that he has no money from any source to pay for a lawyer.