2022 ONSC 1116

Court File No.: CV-21-00674055-0000 Date: 2022-02-23 Superior Court of Justice – Ontario

Re: Attorney General of Ontario, Applicant And: $91,702 in Canadian Currency and $510 in US Currency (in rem), Respondents

Before: Carole J. Brown J.

Counsel: Michael Saad, Counsel for the Applicant Ali Brate, Youssef Ellougani, Jean Guerrier, Steven Hobson, Ali Khan, Matteo Lucic, Zhichao Luo, Lawrence Mascoe, Jason Pithawalla, self-represented Respondents Lisa Buckley, Counsel for the Respondent, Patrick Cha Boris Bytensky, Counsel for the Respondent, Raymond Latinsky Sandra Kimberg, Counsel for the Respondent, Emirjan Rranxburgaj

Heard: February 16, 2022

Endorsement

[1] The Attorney General of Ontario (AGO) brings this application on notice pursuant to sections 4(1) and 9(1) of the Civil Remedies Act, 2001 S.O. 2001 c. 28 for an order preserving the property, namely $91,072 in Canadian currency and $510 in US currency, which is the subject of these proceedings until completion of all proceedings, or until further order of the Court. These amounts were seized on January 15, 2021 by members of the Toronto Police Service (TPS) from 1956 Yonge St., Toronto, Ontario.

[2] The AGO submits that there are reasonable grounds to believe that the subject property constitutes proceeds and/or an instrument of unlawful activity within the meaning of the Civil Remedies Act and should therefore be preserved by the court.

[3] The facts indicate that in October 2020, TPS officers assigned to the Major Crimes Unit at 53 Division received an anonymous tip that there was an illegal gaming house located above the Wallace Gastropub at 1956 Yonge St. which was connected to a shooting that occurred on October 24, 2020. Another anonymous tip was subsequently received indicating that an illegal gaming house was being operated from 1956 Yonge St.

[4] Upon investigation, the TPS became aware that the Wellington Gastropub at 1956 Yonge St. is part of a two-story row of buildings, typically with commercial retail buildings on the first floor and residential apartments on the second floor. In this case, the restaurant spans two storefronts, and has two entrances, a front entrance off Yonge Street and a back entrance from a laneway accessible from Imperial Street. In the front of the building are two doors, one leading to the restaurant, and the second leading to the second floor.

[5] Surveillance on the building commenced October 30, 2020 at approximately 8:45 PM. It was noted that there were numerous vehicles parked in the rear parking lot with movement to and from the unit. Surveillance continued on November 1, 6, 20 and 21, and December 18 and 21, 2020. It was noted that there was a surveillance camera directly above the front and rear doors to the second floor; that both entrance doors to the second floor appeared to be reinforced with metal plates; that there were numerous entries by individuals to the second floor between 9 PM and midnight, after the restaurant and other businesses in the area, had closed; that a doorman was present at the door to the second floor; and that numerous people entered and left the upstairs unit after the Gastropub had closed.

[6] A search warrant was executed on January 15, 2021. It was noted that both front and back doors were reinforced steel, with a keypad affixed near the front door. Entering the unit from the front entry, there is, at the top of the staircase, an open living room, kitchen and bathroom with two smaller rooms and a solarium at the back. In the living room were two operational gaming tables capable of seating 10 to 12 people, with black office chairs around the tables and a large quantity of poker chips and playing cards on the tables. A clipboard was found containing preprinted sheets to track results of the games. On the wall was a whiteboard listing player names and game rules. Three large television screens were affixed to the walls, one displaying surveillance images from the cameras monitoring the gaming house. The windows in the open room were covered with an opaque white material, preventing anyone from seeing in.

[7] The kitchen contained several large trays of food and a large quantity of liquor bottles on the counter. Two closets in the unit were stocked with dozens of bottles of alcohol, beer and non-alcoholic beverages. In one of the smaller rooms at the back was a high-definition surveillance system and large television. The surveillance system monitored the exterior and interior of the gaming house, including the front and rear entrances and the gaming tables. Also, at least 10 debt books/ledgers with records of players names, gambling winnings and results from sporting events were found.

[8] The bathroom was decorated with framed images of poker players playing cards, money, a casino sign and suggestive images of women. There was a sign on the wall saying “No Paper Towel in the Toilet – Please and Thanks”. Under the sink was found a loaded 9 mm handgun.

[9] Based on the foregoing descriptions, the interior was not typical for a residential apartment.

[10] Thirteen people were found in the gaming house, all with large amounts of money in bundles on their persons, together totaling $91,072 Canadian and $510 US. Those individuals found in the gaming house were charged and the monies were seized.

[11] In order to obtain a preservation order pursuant to the Civil Remedies Act, it must be established that there are reasonable grounds to believe that the subject property is proceeds and/or an instrument of unlawful activity, and if so, whether it clearly would not be in the interests of justice to order preservation of the subject property. The standard is a low one.

[12] 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: Civil Remedies Act, s.7 the term “unlawful activity” is given a broad definition by the Act, encompassing any act or omission that is an offence under an Act of Canada, Ontario or another province or territory: Civil Remedies Act. ss. 2 and 7.

[13] The AGO submits that the seized currency was likely acquired as a result of and used in the commission of unlawful activity that includes, but is not limited to, keeping or being found in a common gaming house, unauthorized possession of a firearm and careless storage of a firearm, with readily accessible ammunition, and failure to file a tax return as required by law.

[14] Based on all the evidence adduced, I am satisfied that there is sufficient evidence to conclude that there are reasonable grounds to believe that the subject property which was seized is proceeds and/or an instrument of unlawful activity. The circumstances in the evidence gathered set forth indicia of a gaming house. I note that the standard of proof for “reasonable grounds to believe” is a lower standard than “balance of probabilities”. In this case the indices were sufficient to conclude that there were reasonable grounds to believe that the activity was unlawful, namely operating or being found in a gaming house, sufficient for satisfying the first step of the test for granting the preservation order.

[15] It is of note that the proceedings pursuant to the CRA are in rem proceedings, as against the property and not against a person. Indeed, no charges need be laid against a person in order to obtain a preservation order against such property. As the Court of Appeal explained in Chatterjee: “the CRA does not define or create any offence. It has nothing to do with the identification, charging, prosecution, conviction or punishment of the offender. It does not seek to impose a penalty, fine or other punishment and does not provide for imprisonment”.: Ontario (Attorney General) v. Chatterjee, 2007 ONCA 23 at para. 23, aff’d 2009 SCC 19 at paras. 21 and 46. An offence may be found to have been committed in relation to the subject property, even if no person has been charged with that offence or if a person charged with that offence received an acquittal or had the charge stayed or withdrawn. Further, the Attorney General need not identify a particular event or particular offender to prove that the property is associated with unlawful activity: Chatterjee (SCC) at paras. 21, 46 and 47. And see Ontario (Attorney General) v. 1140 Aubin Rd., Windsor and 3142 Halpern Rd., Windsor (in Rem), 2011 ONCA 363 at paras. 100, 110, 111; Ontario (Attorney General) v. $138,650 in Canadian Currency (in Rem) 2012 ONSC 7230; Civil Remedies Act ss. 15.6 (1) and 17 (2). Thus, the proceedings under the CRA are taken against the property itself and can be initiated without joining the owners or possessors as defendants. Any person with a known interest in such property is entitled to notice and is deemed to be a party to the proceeding as if they were named defendant or respondent.

[16] I further find that granting the preservation order, at this juncture, is not clearly “not in the interest of justice”. I find, rather, that it is in the interest of justice to grant the order. Pursuant to the CRA, a preservation order shall be granted where the court is satisfied that the first part of the test has been met, unless it is clearly not in the interest of justice to make the order sought by the AGO. Given all of the evidence before me, I see no reason why it would not be in the interest of justice to make the order sought.

[17] I note that three people found in the gaming house have all attended today, either in person or by counsel.

[18] The first respondent, Zhichao Luo, has submitted an unsworn, unsigned affidavit indicating that the $7000 found on his person was not proceeds of crime, but came from his bank account. He attended in person today and made his submissions consistent with his affidavit. He explained that he was a player found in the gaming house, but that the money on his person, $7000 in a bundle, was not used to buy poker chips or play and should not be considered proceeds of criminal activity. He will, of course, have the opportunity to make submissions, at the main proceeding on a full evidentiary record.

[19] A second respondent, Raymond Letinsky, was represented by Mr. Bytensky, who stated that he appeared as a courtesy for Mr. Letinsky today to indicate that Mr. Letinsky did not oppose the application but wanted to ensure that there were no costs imposed against him today. No materials were filed by Mr. Letinsky.

[20] A third respondent, Patrick Cha, was represented by Ms. Buckley, who stated that her client did not consent to the proceedings today. She stated that her client opposed the proceedings on the ground that the AGO has not demonstrated reasonable grounds for the $6500 found on Mr. Cha to be seized. She stated that he did not agree that being found in a gaming house meets the test necessary to establish unlawful activity.

[21] As stated with respect to Mr. Luo, these respondents, and indeed all respondents will be entitled to make submissions at the main proceeding.

[22] As stated above, I am satisfied that the two tests required to establish that the proceeds seized should be preserved until the matter is determined on a full evidentiary record have been established.

[23] Accordingly, I order that the proceeds in the amount of $91,072 in Canadian currency and $510 in US currency seized by members of the TPS on January 15, 2021 from a suspected gaming house located at 1956 Yonge St., second floor, Toronto be preserved until the final disposition of this application. The seized currency shall be deposited in an interest-bearing account with the accountant of the Superior Court of Justice.

[24] Further, on the basis of the submissions made by the AGO as regards service on two of the respondents, I further order that service on the respondent, Jakheen Polydore, is dispensed with pursuant to Rule 16.04 and that service on the respondent, Matteo Lucic, of the notice of application and the motion record by email of January 17, 2022 and February 7, 2022 and by Canada Post mail on February 7, 2022 is validated pursuant to Rule 16.08.

C.J. Brown J. Date: February 23, 2022