(in rem), 2017 ONSC 5855

COURT FILE NO.: 321/17

DATE: 20171002

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Attorney General of Ontario, Applicant/Moving Party

AND:

$7,950.05 in Canadian Currency (in rem), Respondent/Responding Party

BEFORE: C. Petersen

COUNSEL: Sara MacDonald, counsel and Paul Kim, student-at-law, for the Applicant/Moving Party

HEARD: September 19, 2017

ENDORSEMENT

[1] The Attorney General filed two concurrent motions, one for a preservation order under the Civil Remedies Act, 2001, S.O. 2001, c. 28 and the other for an order dispensing with service on an interested party.

[2] These motions are brought in the context of the Attorney General’s underlying Application, pursuant to ss.3(1) and 8(1) of the Civil Remedies Act, 2001, for forfeiture of $7,950.05 in Canadian currency (“the Currency”) seized by members of the Wellington County Ontario Provincial Police (“OPP”) from the person and residence of Randall Cormier. The Attorney General alleges that the Currency constitutes the proceeds and/or instruments of unlawful activity.

Background Facts

[3] The Currency was seized from Mr. Cormier on two separate occasions. First, during a traffic stop on September 22, 2016, the OPP seized $6,055.05 CAD found during a search of his person that was conducted incident to his arrest for unauthorized possession of a prohibited weapon (a folding knife). On that occasion, the police observed a marijuana pipe on the front passenger floor of the vehicle. They searched the vehicle, which Mr. Cormier had been operating, as well as his person, and seized two pocket knives, three cell phones and the Currency, which was in four elasticized bundles.

[4] Subsequent investigative checks revealed that Mr. Cormier’s driver’s licence was suspended for unpaid Highway Traffic Act, R.S.O. 1990, c.H.8 (“HTA”) fines and that he was under two Criminal Code prohibition orders to not possess any weapons. He was additionally charged with driving while under suspension (s.53(1) of the HTA) and with two counts of possessing a weapon contrary to a prohibition order (s.117.01(1) of the Criminal Code, R.S.C. 1985, c. C-46).

[5] On the second occasion, on October 12, 2016, the OPP seized $1,925.00 CAD from Mr. Cormier’s residence, while executing an authorized search pursuant to a warrant obtained under the Controlled Drugs and Substances Act, S.C. 1996, c. 19 (“CDSA”). The police found Mr. Cormier and a female companion hiding in a bedroom closet. They observed a white powdery substance on Mr. Cormier’s nose, which he later admitted was cocaine. A subsequent search of the apartment resulted in seizure of the Currency (found in two elasticized bundles), as well as several other items, including a substantial amount of cocaine in pre-weighed baggies, a large quantity of phenacetin (a known cocaine cutting agent), a small amount of marijuana, various drug paraphernalia, a replica handgun, a debt list, a canister of bear spray and two cell phones. Mr. Cormier was charged with possession of marijuana (s.4(1) of the CDSA), possession of cocaine for the purpose of trafficking (s.5(2) of the CDSA), and possession of a weapon for a dangerous purpose (s.88 of the Criminal Code).

[6] After each seizure, the OPP made Reports to Justice and obtained Detention Orders under ss. 489.1 and 490(1) of the Criminal Code, permitting the OPP to hold the Currency as evidence while the criminal charges against Mr. Cormier proceeded to trial.

[7] Mr. Cormier was convicted of the unauthorized weapon charge on May 10, 2017 and of the marijuana possession charge on May 17, 2017. All other charges against him, arising from the September 2016 traffic stop and October 2016 search warrant, were withdrawn.

[8] The Detention Orders relating to the Currency expired in May 2017, when each of the criminal proceedings for which the Currency was being detained concluded. The Currency remains in the possession of the OPP, notwithstanding that the Detention Orders have expired.

[9] The Attorney General commenced its forfeiture Application on July 30, 2017. In the Motions before me today, the Attorney General seeks to have the Currency preserved until such time as the forfeiture Application is decided.

[10] No one, including Mr. Cormier, has made an application under s.490(7) or s.490(10) of the Criminal Code for an order to have the Currency returned to them.

Motions before the Court

[11] Although the Attorney General’s forfeiture Application and its motions are properly brought in rem (i.e., as against the seized property, not against Mr. Cormier), Mr. Cormier is entitled to be served as though he were a party to the proceeding, pursuant to s.15.5 of the Civil Remedies Act, 2001.

[12] In the motions before me, the Attorney General seeks:

a) an order dispensing with service on Mr. Cormier pursuant to Rule 16.04 of the Rules of Civil Procedure, or in the alternative, an order for substituted service;

b) an order pursuant to ss.4(3) and 9(3) of the Civil Remedies Act, 2001,to preserve the Currency until disposition of the forfeiture Application; and

c) an order that the OPP deposit the Currency with the Accountant of the Superior Court of Justice in an interest bearing account to the credit of the Attorney General’s Application or be kept in police custody at the discretion of the Director of Asset Management – Civil.

Motion to Dispense with Service

[13] Mr. Cormier has not been served with the Notice of Application or motion materials, but that is through no fault of the Attorney General. The Attorney General has made diligent efforts to effect service without success.

[14] Pursuant to Rule 16.04(1), where it appears to the Court that it is impractical for any reason to effect prompt service of an originating process or any other document required to be served personally, the Court may make an order for substituted service, or where necessary in the interest of justice, may dispense with service.

[15] A finding that service is “impractical” (within the meaning of Rule 16.04) may be made where, for any reason, service is not capable of being done or is only capable of being done at too great a cost. See Laframboise v. Woodward, 2002 CanLII 49471 (ON SC), [2002] O.J. No. 1590, at para. 8.

[16] Motions of this nature are not treated casually by the Court. The moving party must show that all reasonable steps have been taken to locate the other party and serve him or her personally. What is reasonable will depend on the nature of the case, the relief claimed, the amount involved and all of the surrounding circumstances. See Laframboise, supra, at paras. 10 and 24.

[17] The Attorney General has made multiple attempts to serve Mr. Cormier personally, by sending a process server to several different addresses at which he might be residing. On August 24, 2017, service was attempted at the address where the search warrant had been executed on October 12, 2016, which Mr. Cormier had identified to the police (after his arrest) as his temporary residence at the time. The process server was advised by an adult male living at that address that he had been residing there for a year and had never heard of Mr. Cormier. The Attorney General also attempted service on August 24, 2017 at an address provided to the police by Mr. Cormier following an earlier arrest in 2014. Two adult women living at that address advised the process server that they did not know Mr. Cormier.

[18] On August 28, 2017, the Attorney General attempted service at the address listed for Mr. Cormier in the Ministry of Transportation’s driving records. That address is out of date, since Mr. Cormier’s driver’s licence was suspended in March 2008 for unpaid fines. However, his mother is the registered owner of the property. The Attorney General confirmed her title to the property by obtaining a parcel register for the address. When service was attempted at that address, an adult male advised the process server that Mr. Cormier had moved out two years prior. There is no evidence to suggest that Mr. Cormier has been residing at or visiting that address more recently.

[19] A final attempt at service was made on September 1, 2017 at a men’s shelter at which Mr. Cormier is supposed to be residing pursuant to his current release conditions pending criminal charges. However, the staff of the shelter advised the process server that Mr. Cormier has never been a resident at the facility.

[20] The Attorney General made several additional attempts to locate Mr. Cormier. A google search was conducted (without success) to try to obtain a current address, his last known phone number was called (without success), and a credit report was obtained, but it listed his address as the same outdated address in the Ministry of Transportation’s records. The Attorney General made inquiries with Maplehurst Correctional Complex to ascertain whether Mr. Cormier was incarcerated there; he was not. The Attorney General also contacted the OPP to inquire about Mr. Cormier’s possible whereabouts. The OPP advised that Mr. Cormier is currently wanted on a bench warrant for failing to appear in court on pending criminal charges in relation to an incident that occurred on July 11, 2017. The OPP also advised the Attorney General of its belief that Mr. Cormier does not have a surety and has no fixed address.

[21] The Attorney General’s above efforts must be assessed in the context of the specific facts and nature of this case. This is a forfeiture proceeding in respect of a modest sum of money. Forfeiture proceedings under the Civil Remedies Act, 2001 do not require a finding that a specific individual engaged in a particular offence, so there is no risk of a finding of wrongdoing against Mr. Cormier. In light of the in rem nature of the proceedings and relatively small amount of money at issue, I find that the Attorney General has taken all reasonable steps to locate Mr. Cormier and serve him personally.

[22] Based on all of the above, I conclude that it is impractical in the circumstances of this case for the Attorney General to serve Mr. Cormier.

[23] I further conclude that an order for substituted service on his mother is not appropriate, since there is no evidence that he maintains contact with her. The evidence in the record suggests that he has not been living at her address for two years. There is no reason, apart from familial relationship, to conclude that service upon his mother would likely bring the Application to his attention. Where the respondent is not reasonably likely to learn of an Application through substituted service, an order dispensing with service is more appropriate. See Laframboise, supra, at para. 14 and Chambers v. Muslim (2007), 2007 CanLII 82791 (ON SC), 87 O.R. (3d) 784 at para.13 (S.C.J.).

[24] I conclude that it is necessary in the interest of justice to order dispensation with service in the circumstances of this case. In reaching this conclusion, I have considered both the interests of the Attorney General and those of Mr. Cormier, per Palmer v. St. Joseph’s Hospital, [2003] OJ No 1277 at para.4 (SCJ) and Niemi v. Western Assurance Co., 2011 ONSC 958, at para.14.

[25] On the side of the Attorney General, I have considered the public interest purposes of the Civil Remedies Act, 2001, including compensation of victims and deterrence of crime (by taking the profit incentive out of crime). If an order dispensing with service is not granted in this case, the seized Currency may be returned to Mr. Cormier, notwithstanding reasonable grounds (set out below) to believe that the Currency constitutes proceeds and/or an instrument of criminal activity. This is clearly contrary to the public interest purposes of the statute.

[26] On the side of Mr. Cormier’s interests, I have considered that, should a preservation (and/or forfeiture) order be made without notice to him, he will not be subject to any sanctions, fines or penalties. As noted above, forfeiture proceedings under the Civil Remedies Act, 2001 are brought in rem, not as against Mr. Cormier personally, and will not involve any findings of fault, liability or guilt against him. The forfeiture order requested by the Attorney General requires proof that the Currency constitutes proceeds or an instrument of unlawful activity, but the Currency need not be linked to any particular offence or specific offender. See Ontario (Attorney General) v. Chow, [2003] O.J. No. 5387 (S.C.J.) at para. 24 and Ontario (Attorney General) v. Chatterjee, 2009 SCC 19, [2009] 1 S.C.R. 624 at paras. 46-47. The potential adverse impact on Mr. Cormier of not receiving notice of the proceeding is therefore limited to possible pecuniary loss if the Currency is ultimately forfeited.

[27] I have also considered that Mr. Cormier is aware that the Currency was seized by the OPP. He could make an inquiry of the OPP regarding the whereabouts of the Currency. Such an inquiry would bring the underlying Application to his attention and he would be entitled to respond. The fact that he is unlikely to exercise this option because of an outstanding bench warrant for his arrest is not a factor that I believe is relevant to the issue before me.

[28] On balance, I find that the interests of justice favour dispensing with service on Mr. Cormier.

Motion for Preservation Order

[29] Sections 4 and 9 of the Civil Remedies Act, 2001 state that the Court may make interlocutory orders for the preservation of any property that is the subject of a forfeiture proceeding if the Court “is satisfied that there are reasonable grounds to believe that the property is proceeds of unlawful activity” or “an instrument of unlawful activity”, except “where it would clearly not be in the interests of justice” to do so.

[30] The standard of “reasonable grounds to believe” that property is proceeds or an instrument of unlawful activity is a lower standard than “on a balance of probabilities”, which is the applicable standard at the forfeiture stage of a proceeding: See s.8 of the Civil Remedies Act, 2001.

[31] Section 2 of the Civil Remedies Act, 2001 defines “proceeds of unlawful activity” as property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity. An “instrument of unlawful activity” is defined in s.7(1) 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.

[32] The Attorney General submits that the Currency was likely acquired as a result of unlawful activity, namely violations of ss.4 and 5 of the CDSA (possession and trafficking in a Scheduled substance, specifically cocaine or marijuana) and/or of ss.354(1) and 355(a) of the Criminal Code (possession of property obtained by crime having a value in excess of $5,000).

[33] In support of this submission, the Attorney General relies on the sworn affidavit of Detective Constable Tyler Cowie, who works in the OPP Wellington County Street Crime Unit and has been employed by the OPP since April 2009. Detective Cowie gave uncontested evidence based on his training and experience in the area of profit-motivated criminal activity. He deposed to his belief that the seized Currency is proceeds or an instrument of unlawful activity, namely drug trafficking. He articulated his grounds for this belief as follows:

a. in total, Mr. Cormier was found in possession of five cell phones; the use of multiple cell phones is common by those involved in unlawful activity in order to avoid police detection and interception of communications;

b. on both September 22 and October 12, 2016, Mr. Cormier was found with various weapons, including pocket knives and a canister of bear spray; drug traffickers are often found in possession of weapons for their protection;

c. the proximity of the seized currency to the pre-weighed baggies of cocaine, cutting agent, drug paraphernalia, and weapons is suggestive of its provenance in unlawful activity, namely drug trafficking;

d. the seized currency was bundled and secured in a manner consistent with drug trafficking; further, a high proportion (approximately 64%) of the seized bills were $20 bills, which is also consistent with drug trafficking;

e. the large amount of cash was not being stored in a financial institution, unlike how legitimate earnings are generally managed;

f. during questioning following the execution of the search warrant on October 12, 2016, Mr. Cormier admitted that the cocaine found in his bedroom closet was his and that he had shared some of it with the female who was found in the closet with him; further, although he disavowed any knowledge of the safe found in the hallway closet, he acknowledged the possibility that his fingerprints might be found on some of the baggies of cocaine found inside of the safe; and

g. to date, Mr. Cormier has not provided any documentation substantiating his claim that the seized currency was earned through lawful employment.

[34] The Attorney General also relies on Mr. Cormier’s numerous prior convictions under the CDSA and Criminal Code as evidence of his propensity for drug-related criminal activity, asking the Court to infer that the Currency in his possession is therefore more likely to have its providence in unlawful drug trafficking. I do not find this to be a compelling argument, but I note that evidence of prior criminal convictions is a factor that the Ontario Court of Appeal has considered in some forfeiture proceedings. See Ontario (Attorney General) v. 1140 Aubin Road, Windsor (in Rem), 2011 ONCA 363, [2011] O.J. No. 2122 (C.A.) at para. 46.

[35] In this case, even absent consideration of the record of prior criminal convictions, I conclude, based on the totality of the evidence, that there are reasonable grounds to believe that the Currency is the proceeds and/or an instrument of drug trafficking.

Interests of Justice

[36] Having reached this conclusion, the Attorney General is entitled to a preservation order pursuant to ss.4(2) and 9(2) of the Civil Remedies Act, 2001, unless it is “clearly not in the interests of justice” to grant the order. This “interests of justice” exception operates where, “on any reasonable view,” preservation or forfeiture of property “would be a draconian and unjust result.” See Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem), 2011 ONCA 363, 2011 OJ No.2122 (CA), at para.84.

[37] The question of whether or not to order preservation or forfeiture of property under the Civil Remedies Act, 2001 is not determined based on a balancing of the pros and cons of making the order. The word “clearly” in the statute modifies the phrase “not in the interests of justice” and must be given some meaning. In the context of a forfeiture proceeding, the Court of Appeal has ruled that the word “clearly” speaks to the “cogency of the claim advanced for relief from forfeiture”. The Court of Appeal has also ruled that the “party seeking relief must demonstrate that, in the circumstances, the forfeiture order would be a manifestly harsh and inequitable result.” Ontario v. Aubin Road, supra, at para.85.

[38] Since preservation orders are interlocutory in nature, the “clearly not in the interests of justice” exception should be applied even more stringently at this motions stage than at the final forfeiture stage of the proceeding. See Ontario (Attorney General) v. $51,000 CAD (in Rem), 2012 ONSC 4958 at para. 38.

[39] Mr. Cormier is not before the court. He has not submitted any evidence or arguments to show that a preservation order would be draconian, manifestly harsh, unjust or inequitable. However, in the unique circumstances of this case, where dispensation with service on Mr. Cormier has been granted, the Court must be cautious not to ignore relevant “interests of justice” considerations simply because there is no party seeking relief from the preservation order.

[40] I am cognizant that there is, in this case, a possible infringement of Mr. Cormier’s rights under s.8 of the Charter of Rights and Freedoms, arising from the continued detention of the Currency beyond the expiry of the Detention Orders. The Attorney General argues that Charter breaches ought not to be considered under the “clearly not in the interests of justice exception”, at any stage in a forfeiture proceeding. I do not accept this submission. In enacting the Civil Remedies Act, 2001, the legislature did not identify with specificity the factors that will justify granting relief from preservation or forfeiture. Instead, it used the broad phrase “interests of justice” and left it to the court to determine on a case-by-case basis what circumstances will justify granting relief. The Ontario Court of Appeal has stated that it is “not possible to catalogue all the factors that could properly be taken into account in evaluating the interests of justice in any given case” and that a court “must consider all factors that are relevant to the ‘interests of justice’.” Ontario v. Aubin Road, supra, at para.97. In my view, any infringement of constitutionally guaranteed rights or freedoms is a factor that is relevant to the interests of justice.

[41] However, the mere possibility that there may be a Charter violation is not a basis on which to conclude that a preservation (or forfeiture) order would clearly not be in the interests of justice. See Ontario (Attorney General) v. $9,616.98 in Canadian Currency (In Rem), 2011 ONSC 3820 (Div.Ct.) at para.14.

[42] On the question of whether there is an actual (as opposed to possible) Charter breach in this case, the Attorney General submits that the continued detention of the Currency beyond the expiry of the Detention Orders does not constitute a s.8 Charter breach.

[43] The Detention Orders in this case were obtained pursuant to ss.489.1 and 490 of the Criminal Code, which provide judicial oversight regarding the detention of property seized by law enforcement officers. In certain circumstances, a failure to comply with the requirements of these sections has resulted in a finding of a s.8 Charter breach. See R. v. Garcia-Machado, 2015 ONCA 569, [2015] O.J. No. 4146 (CA) and R. v. Correia 2005 ONCJ 435, [2005] O.J. No. 4722 (O.C.J.).

[44] Section 490 provides mechanisms for the return of detained property in a variety of circumstances, including an application by the person from whom the property was seized for the return of the property after the expiration of the detention period. The Attorney General argues that neither the police nor the Crown are statutorily obligated to return detained property after proceedings have been concluded, absent an application by an interested party. Since Mr. Cormier has not made such an application in this case, the Attorney General argues that there has been full compliance with s.490 of the Criminal Code and there is no basis to find a s.8 Charter breach.

[45] In my view, it is unnecessary and would be inappropriate, in the context of this interlocutory motion, for me to make a finding with respect to whether or not s.8 Charter rights have been infringed in this case. I agree with the Attorney General’s submission that potential Charter breaches are properly adjudicated at the forfeiture stage of proceedings, when a full evidentiary record is available, and when the Court has made a finding, based on a balance of probabilities, as to whether the Currency is, in fact, proceeds and/or an instrument of unlawful activity. That finding would be a relevant consideration in assessing the impact of any Charter violation. See Ontario (Attorney General) v. $69,360 in Canadian Currency (In Rem), [2015] O.J. No.3534 at para.13.

[46] I therefore make no finding with respect to a potential Charter breach in this case. Any Charter issues can be decided when the forfeiture Application is heard. There is no basis to conclude that the requested interlocutory preservation order is clearly not in the interests of justice.

Conclusion

[47] For all of the above reasons, the Orders requested (in paragraph 12 above) by the Attorney General will be granted pursuant to ss.4(3) and 9(3) of the Civil Remedies Act, 2001.

Petersen J.

Date: October 2, 2017

CITATION: Attorney General of Ontario v. $7,950.05 in Canadian Currency (in rem), 2017 ONSC 5855

COURT FILE NO.: 321/17

DATE: 20171002

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Attorney General of Ontario, Applicant/Moving Party

AND:

$7,950.05 in Canadian Currency (in rem), Respondent/Responding Party

ENDORSEMENT

Petersen J.

Released: October 2, 2017