Attorney General of Ontario v. $32,125.00 in Canadian Currency, 2020 ONSC 455
COURT FILE NO.: CV-17-0306-000 DATE: 2020-01-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Attorney General of Ontario Applicant
S. MacDonald, for the Applicant
- and -
$32,125.00 In Canadian Currency (In Rem) Respondent
A. McGillivray, for the Respondent
HEARD: September 18, 2019 at Thunder Bay, Ontario Madam Justice T. J. Nieckarz
Judgment on Application
Overview:
[1] The Attorney General of Ontario (the “Applicant”) seeks a forfeiture order under the Civil Remedies Act, 2001, S.O. 2001, c. 28 (the “Act”) with respect to $32,125 CAD (the “Currency”) seized on January 13, 2017 from James Wright (“Wright”).
[2] The Applicant submits that the Currency represents proceeds and/or an instrument of unlawful activity pursuant to ss. 3 and 8 of the Act and that no factors exist which would make forfeiture “clearly not in the interests of justice.”
[3] Wright opposes the Application and seeks return of the Currency to him. He argues that the money is not proceeds of and/or an instrument of unlawful activity as defined by the Act, but rather savings accumulated by him.
[4] For reasons that follow, I concur with the position of the Applicant and order that the Currency be forfeited to the Crown in Right of Ontario.
Facts:
[5] On January 13, 2017, Wright and Laura Forneri (“Forneri”) were stopped near Machin, Ontario by the Ontario Provincial Police (“OPP”) while travelling westbound on Highway 17. Wright was driving a legally rented vehicle. He had a valid licence and insurance.
[6] Wright was initially stopped for speeding. He was sober. The Applicant alleges that Wright advised the officer that he and Forneri were travelling to Calgary for a week to visit a friend.
[7] Forneri told the officer they were going for two days. Both Wright and Forneri ultimately revised their statements to say they were going to Calgary for four days.
[8] The officer detected an odour of fresh marijuana in the vehicle. He arrested Wright and Forneri for possession of a controlled substance.
[9] Upon conducting a search of the vehicle, the OPP found a small amount of marijuana and paraphernalia, along with a cooler in the trunk of the vehicle which emanated an odour of raw cannabis. The drugs were found in a backpack and were contained in two separate vacuum-sealed packages. Forneri indicated that the drugs and paraphernalia belonged to her.
[10] The OPP also found the Currency inside the lining of a suitcase, which was accessible via a zipper. The Currency was divided into three vacuum-sealed packages. Each bag was marked on the outside, in black ink, with the value of the money inside. In addition, $607 in cash funds was found on Wright’s person.
[11] Wright acknowledged that the money was his. He advised the OPP that he had the money because he was travelling to Calgary and hoped to purchase a truck there. He had not picked one out and had no appointments to view any specific vehicles.
[12] At the time of their arrest, Wright and Forneri were unemployed. Wright was attending a General Carpenter Apprenticeship program at Confederation College. He was in receipt of employment insurance benefits.
[13] Wright advised the police that the Currency represented accumulated by him, and then withdrawn starting in 2014. Wright claims to have withdrawn the funds from his bank account between approximately January of 2014 and October of 2016.
[14] On June 5, 2017 Forneri plead guilty to possession of a controlled substance. All other charges against her, and all criminal charges against Wright were withdrawn. The withdrawn charges include a charge pursuant to s. 354(1)(a) of the Criminal Code, namely possession of property of a value exceeding five thousand dollars knowing that all or part of the property was obtained by the commission in Canada of an offence punishable by indictment.
[15] Forneri had no prior criminal record. Wright had two criminal convictions from 2010; one for driving with more than 80 milligrams of alcohol in 100 millilitres of blood and the other for mischief over $5,000. Wright was also an identified party in several dated occurrence reports wherein marijuana use and/or trafficking was suspected.
THE LAW:
[16] The Applicant must establish, on a balance of probabilities, that there are reasonable grounds to believe that the seized currency is the proceeds and/or an instrument of unlawful activity. Once that threshold question has been satisfactorily answered, then the court shall make an order forfeiting the property to the Crown, unless there are factors that render forfeiture of the seized currently “clearly not in the interests of justice.” See: Civil Remedies Act, 2001, S.O. 2001, c. 28, ss. 3(1), 3(3), 8(1) and 8(3); and Chatterjee v. Ontario (Attorney General), 2009 SCC 19 at para. 23.
[17] “Proceeds of unlawful activity” are defined as property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity. See: Civil Remedies Act, ss. 2 and 7.
[18] An “instrument of unlawful activity” is any 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. See: Civil Remedies Act, ss. 2 and 7.
Issue #1: Are there reasonable grounds to believe that the Currency is the proceeds and/or instrument of unlawful activity?
The Applicant’s Position:
[19] The Applicant argues that the totality of the evidence supports the conclusion that there are reasonable and probable grounds to believe that the Currency is proceeds and/or an instrument of unlawful activity, namely drug trafficking.
[20] The Applicant relies on the following in support of this conclusion:
a) The Currency represents a large amount of cash, that is uncommon for a person to be carrying without a satisfactory explanation. Wright’s explanation that he was hoping to purchase a truck in Calgary is simply not believable in the circumstances.
b) The currency was hidden in the lining of a suitcase, presumably to avoid detection by law enforcement.
c) The currency was vacuum-sealed in three separate plastic bundles with the quantity marked on the outside. The bills were primarily $20 bills, but there were also $100 bills. The bills were organized and splayed for easy counting. Money used in illicit transactions is often found in these denominations and is often handled in this manner.
d) Currency that has been legitimately obtained and intended for a lawful purpose is general placed in a bank.
e) On the other hand, drug trafficking is a cash business. Persons involved in illegal drug activity are frequently found to be carrying large sums of cash either for the purpose of purchasing drugs or as proceeds from the sale of drugs. See: Chatterjee at para. 46; Ontario (Attorney General) v. $9,616.98, 2011 ONSC 3820 (Div. Ct.) at para. 7; Ontario (Attorney General) v. $10,000 in Canadian Currency (In Rem), 2014 ONSC 944, [2014] O.J. No. 653 (SCJ) at para. 14; and Ontario (Attorney General) v. $1,650 in Canadian Currency (In Rem), [2008] O.J. No. 2076 (SCJ) at para. 3.
f) Two packages of marijuana were found in the vehicle, packed in the same vacuum sealed plastic as the Currency. This is consistent with drug trafficking.
g) A cooler bag was also found in the vehicle which smelled strongly of marijuana and is suspected to have been used to transport marijuana.
h) The Respondent was driving a rental vehicle. In the experience of the officers involved, rental vehicles are often used by drug couriers to provide anonymity and to avoid seizure. There are a number of inconsistencies in the evidence of Wright, and also that of Forneri with respect to the rental and the reason for it.
The Respondent’s Position:
[21] As the Respondent correctly asserts, there is no onus on him to prove the legitimacy of the origin of the money or of its use. The onus rests with the Attorney General. While I am mindful of where the onus lies, the suspicion that arises from the evidence led by the Crown necessitates a “credible and reasonable answer” from the Respondent. See: Ontario (Attorney General) v. $10,000 at para. 32.
[22] The Respondent maintains that the money was earned legally. His explanation is that:
a) The Currency represents money he had been saving for some time, and then withdrew from approximately January 2014 to October 2016. During this time, he had been employed, earning the following amounts:
2014 $33,360; 2015 $41,210; and 2016 $24,002.
He also received a gift from his grandparents of approximately $7,000; $5,000 of which he had deposited into his bank account.
b) The total saved, that he withdrew from his account from 2014-2016 was $34,387. He primarily withdrew from ATM’s, accounting for the $20 denominations.
c) He lived a modest lifestyle, with minimal housing and other expenses. He shared all expenses with Forneri.
d) The Respondent regularly withdrew from his bank account a couple of hundred dollars from each paycheque. He preferred to have the cash physically, to be able to watch his savings grow as he felt this enabled him to save money more effectively. He also felt that having the cash in hand enabled him to access his savings more quickly and without having to arrange with a bank ahead of time for large purchases such as a truck.
e) The Respondent’s savings strategy was to store his cash in either a shoebox or Tupperware container. Once he had a large enough amount, he would place it in a Ziploc or vacuum-sealed food saver bag in random amounts.
f) When stopped by police he was innocently travelling to Calgary with Forneri to do some shopping, visit a friend and to potentially purchase a truck. He felt that he may secure a better price if he could offer cash on the spot for any vehicle, he found suitable. He did not make any prior arrangements for viewing vehicles as there were a large number of suitable trucks available in the Calgary area and he did not feel it necessary to do so.
g) The truck purchase was also the reason he rented a vehicle; if he found a truck, he would simply leave the rental with the rental company at a Calgary branch and drive back in the new truck. He was also concerned about whether his existing vehicle would fare well given some mechanical issues he was experiencing.
[23] The Respondent further notes that the police processed the Currency through a Currency Reading and Tracing System (“CRTS”), used to track money used in undercover policy drug buys and there were no “hits” with respect to any of the seized bills.
Analysis:
[24] I find that the Applicant has established reasonable and probable grounds to believe that the Currency is proceeds or an instrument of unlawful activity, or both. I do not find the Respondent’s explanation as to how he came to possess the funds or the reason why he was carrying it in vacuum-sealed bags in the zipper lining of a suitcase to be credible.
[25] First, the fact that Wright and Forneri were in a rented vehicle that contained marijuana, drug paraphernalia and an empty cooler bag with the odour of marijuana, combined with the amount of cash seized, makes the circumstances suspicious that one or both of them were engaging in unlawful activity.
[26] In light of all the other evidence, the fact that the bills were not identified through CRTS is not persuasive in convincing me that the funds are not proceeds or an instrument of unlawful activity.
[27] Similarly, the fact that Forneri plead guilty to only possession while all charges were withdrawn against the Respondent is not persuasive. Funds may be found to be the proceeds and/or instrument of unlawful activity even if no person has been charged, or if a person has been charged but received an acquittal or had the charges stayed or dismissed. The standard of proof in criminal matters is much higher than in civil matters. No particular offence need be proved by the Attorney General in order to obtain a forfeiture order. See: Civil Remedies Act, s. 17(2); Chatterjee at para. 46; Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem), 2011 ONCA 363, [2011] O.J. No. 2122 (ONCA) at paras. 110-111; and Ontario (Attorney General) v. $43,120 in Canadian currency (In Rem), 2011 ONSC 3076, [2011] O.J. No. 2546 (SCJ) at paras. 7 and 20.
[28] Overall, I accept the submissions of the Applicant, and I find that Wright’s explanation as to why he had $32,125 cash in his possession improbable. While each individual element of Wright’s explanation may have some plausibility, and while each individual element of the Applicant’s claims is not necessarily determinative when viewed in isolation, when the totality of the evidence is scrutinized and taken into consideration, the Applicant has satisfied its burden of proving that it is more probable that the Currency is proceeds or an instrument of unlawful activity. I do not accept that the Currency represents savings withdrawn since 2014 that were being used for a truck purchase in Calgary.
[29] In finding that Wright’s explanation is improbable, I note that:
a) Wright’s evidence that he preferred to withdraw his savings from the bank and keep it in shoe boxes and other containers so he could physically see it grow is unusual, but I acknowledge is not, in of itself, determinative. It is also unusual that someone would want to travel cross-country with a large amount of cash, thinking that it was both safe and helpful to be able to flash the cash at prospective vendors. While I accept Wright’s assertion that vendors may be more willing to negotiate if they know that the purchaser can conclude the transaction quickly, a “cash” deal may also be affected with bank drafts or certified cheques. This may also attract less suspicion from vendors than large sums of cash and are certainly safer options.
b) Wright’s evidence was that his paycheques were deposited into his bank account, but he paid his bills with cash. Between 2014 and 2016 he withdrew $34,387.10 in cash. He still had $32,125 remaining at the time the Currency was seized. This leaves only $2,262.10 for payment of his cash paid bills for 2014 through much of 2016. Even with the balance of his grandparents’ gift that was not deposited into his bank account, some reliance on Forneri’s income and credit, and his modest lifestyle, it is simply not reasonable to conclude that Wright could have paid the expenses he claims were paid for with cash on the small amount of money consumed.
c) I do not accept that the Currency was concealed under clothing and inside the lining of a suitcase because Wright wanted to surprise Forneri with the truck purchase. The evidence is that Forneri’s clothes were also in the suitcase, making the money easily discoverable by her. Furthermore, when questioned by a police officer Forneri mentioned the possible vehicle purchase in Calgary, suggesting that it was not a surprise as alleged by Wright, but rather a rehearsed explanation for the funds.
d) On the face of it, the packaging, marking and arranging of the funds is not consistent with the savings of an individual or Wright’s explanation that he kept the savings in shoe boxes or containers until he accumulated a significant amount, following which he would transfer it to Ziploc or vacuum-sealed bags. I note that the seized marijuana was also in a vacuum-sealed bag. Wright’s explanation may have been more credible if the amounts transferred into the bags were consistent. For example, if he transferred the cash into bags each time he had accumulated a set amount.
e) There are also other internal and external inconsistencies in Wright’s evidence that detract from the credibility of his explanation. These include, but not limited to his explanation with respect to the purchase of a truck approximately a year and a half earlier, and with respect to his purchase of marijuana. I agree with the Applicant that Wright and Forneri’s evidence with respect to the Currency and related events was at times inconsistent, subject to revision, and generally unbelievable when the facts and circumstances as a whole are considered.
CONCLUSION:
[30] I am satisfied that the totality of the evidence supports the conclusion that the $32,125 CAD is proceeds of unlawful activity and/or an instrument of unlawful activity. I am also satisfied there are also no factors alleged by Wright that render forfeiture “clearly not in the interests of justice.” The Application is granted, and the Currency is forfeited to the Crown in Right of Ontario.
[31] The parties may make written submissions as to costs, as follows:
a) The Applicant shall have 30 days in which to serve and file written submissions of no more than five double-spaced pages, excluding attachments and caselaw, failing receipt of which the issue of costs shall be deemed to have been settled;
b) The Respondent shall have 20 days from the receipt of those submissions in which to serve and file written submissions, similarly limited in length; and
c) The Applicant shall have 10 days from the receipt of the Respondent’s submissions in which to serve and file any Reply submissions, which shall be limited to 3 pages, double-spaced, excluding attachments.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz