Court File and Parties

COURT FILE NO.: CR-22-91106387-00MO DATE: 2023-05-26

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HIS MAJESTY THE KING Respondent – and – CHRISTOPHER PUNZO Applicant

Counsel: Mr. D. Morlog, for the Respondent Mr. L. Hochberg, for the Applicant

HEARD: March 27, 2023

Reasons for Decision

M.K. FUERST J. :

Introduction

[1] Twenty-six year old Christopher Punzo is charged with one count of possession of cocaine for the purpose of trafficking. He was arrested on August 3, 2022, after information from a confidential informant led police to observe him meeting with two individuals in a manner consistent with drug trafficking.

[2] The police obtained a search warrant for the condominium where he was living. There they located 695 grams of cocaine, a digital scale, and a Rolex watch. In a safe under a bed in the master bedroom they found $80,620 cash, which they seized.

[3] Mr. Punzo was released on a recognizance with his father as his surety. He currently lives with his parents.

[4] Mr. Punzo’s case is before the Ontario Court of Justice. He anticipates electing to be tried in the Ontario Superior Court of Justice.

[5] Mr. Punzo applies under s. 462.34 of the Criminal Code for the return of the seized money, for the purpose of meeting his legal expenses.

Mr. Punzo’s Financial Circumstances

[6] In an affidavit dated February 13, 2022 [sic], Mr. Punzo said that he has been employed with Condrain Construction since 2016. He is a bulldozer operator, working on the building of roads for new subdivisions and developments. The nature of his work is such that he becomes, in his words, “temporarily jobless” during the winter months. His yearly income from 2018 to 2021 averaged just over $63,700.

[7] Mr. Punzo swore in the affidavit that the money seized from the safe is his and his alone, and that it is “[a]ll of the money I own”. He acknowledged, however, that he has one asset, a condominium in Vaughan that he “co-owns” with his father. The unit is currently rented out, to cover the mortgage and expenses. He said that the value of the unit is about $599,000. There is an outstanding mortgage of approximately $394,000. His share of the equity in the unit is about $95,000.

[8] Mr. Punzo swore that after “taxes, rent, food and other expenses” he does not have enough funds available to cover legal fees and disbursements. He said that other than the seized funds, he has no means by which to retain counsel of choice.

[9] On March 7, 2023, Detective Constable Rob Vingerhoets of York Regional Police swore an affidavit that the Crown submitted with its responding materials. The officer stated that he made inquiries of financial institutions, which reported back to him on February 21, 2023, that Mr. Punzo holds “accounts” with TD bank, and has a “profile” with CIBC. The officer also said that photographs taken during the search of the condominium unit show the following:

1. A TD Direct Investing document addressed to Mr. Punzo, reporting the value of Canadian and U.S. trading accounts held by him as just under $6,000 Canadian at the end of December 2021.
2. CIBC envelopes addressed to Mr. Punzo.
3. A book of CIBC cheques for an account in Mr. Punzo’s name.

[10] The officer said that based on tax records obtained from the CRA, in 2021 Mr. Punzo disposed of $48,000 U.S. worth of securities held with TD Waterhouse, although the officer could not tell if a capital gain or loss was claimed. It is not entirely clear, but I infer that this trading activity was conducted through the TD Direct Investing accounts. The tax records also show that Mr. Punzo holds a TFSA with CIBC that was worth just over $6,100 in 2021.

[11] In response to this information, Mr. Punzo filed a second affidavit, sworn on March 13, 2023. In that affidavit he said:

• He has two bank accounts with CIBC. One holds his “life savings” of approximately $27,000, accumulated from gifts, part-time jobs, and “other savings”. In addition, it holds approximately $28,900, which Mr. Punzo said is the balance of the money that the tenant of the condominium paid “up front” for a one year rental of the unit.
• He received a gift of $5,000 from his uncle at Christmas 2022.
• He last received a payment from his employer in December 2022, and has been receiving Employment Insurance payments since January of this year.

[12] Mr. Punzo did not specifically describe his second CIBC account, but from the bank statements attached to his second affidavit it appears that it is a chequing account into which his salary is deposited and from which expenses are paid. It had a balance of approximately $7,900 on September 30, 2022, $8,600 on October 31, 2022, $9,700 on November 30, 2022, $12,800 on December 31, 2022, $9,500 on January 31, 2023, and $8,400 on February 28, 2023.

[13] Mr. Punzo testified before me on the application. In response to questions from his counsel, he said that:

• He has a TFSA with CIBC in the amount identified by Detective Constable Vingerhoets. It was just a “minor mistake” that he did not mention it in either of his affidavits.
• He had a TD Direct Investing account as identified by the officer, which he used for stock trading. He liquidated it in 2022 after his arrest, at which time it held only $900.
• His parents do not want to pay his legal fees.

[14] In cross-examination, he testified that:

• He did not dispose of $48,000 worth of stock in 2021.
• He has a VISA credit card account that he did not mention in his affidavits.
• He does not pay rent to his parents while he lives with them, but he contributes to the household. His statement in his first affidavit that he has a rent expense is not accurate.
• Both his parents are employed, and he assumes their house is currently worth in excess of $600,000.
• He does not perform work for Condrain from approximately December to April or May each year. He is not prohibited from working elsewhere in that period, but “that’s what unemployment insurance is for.” He is happy to have four or so months off work annually, and has never worked at a second job during those months.

[15] Mr. Punzo agreed with Crown counsel that he had not produced documentation showing that his trading account with TD was closed, or a copy of the rental agreement for his condominium to substantiate that the tenant made a one year rental pre-payment.

The Legal Expenses Return Provision

[16] Section 462.34 is contained within the proceeds of crime regime set out in Part XII.2 of the Criminal Code. Section 462.34(1) provides that a person who has an interest in property seized under a s. 462.32 warrant may apply for an order under subsection (4)(c)(ii) that the property or part of it be returned to them for the purpose of meeting their reasonable legal expenses. The application judge must be satisfied that the applicant has no other assets or means available for that purpose, and that no other person appears to be the lawful owner of or lawfully entitled to possession of the property.

[17] Section 462.341 expands the availability of the application to money or bank-notes seized under other provisions of the Code or under the Controlled Drugs and Substances Act that may be subject to forfeiture as proceeds of crime.

[18] The Supreme Court of Canada explained in R. v. Rafilovich, 2019 SCC 51, at paragraph 9 that while the proceeds of crime regime seeks to ensure that crime does not pay, the legal expenses return provision of s. 462.34(4)(c)(ii) is designed to ensure fairness to an accused. It has two important objectives: to provide access to counsel, and to give meaningful weight to the presumption of innocence. As expressed by the Ontario Court of Appeal in Wilson v. Canada (1993), 86 C.C.C. (3d) 464 (ONCA), at p. 478, the provision recognizes that, “[T]he 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.” The provision respects the principle of fairness in criminal prosecutions in that it permits the return of presumptively private property to avoid an individual being “left unable to hire legal representation because the state seized the funds with which they could have paid counsel”: Rafilovich, at paras. 38, 47 and 82.

[19] That said, the application judge must be satisfied that the applicant has “no other assets or means available” to pay reasonable legal expenses. The applicant’s access to the seized funds must be “truly necessary”: R. v. Rafilovich, at para. 37.

The Necessary Pre-Conditions to Return

[20] In order to succeed on the application, the applicant must satisfy the hearing judge on a balance of probabilities that:

1. The property in question is eligible property.
2. The applicant has an interest in the property.
3. No other person appears to be the lawful owner of or lawfully entitled to possession of the property, and
4. The applicant has no other assets or means available for the purpose of meeting their legal expenses.

[21] In this case, Crown counsel concedes that the first three pre-conditions are met. The fourth, however, is in issue.

[22] On behalf of the applicant, Mr. Hochberg argued that Mr. Punzo established on a balance of probabilities that he has no other assets or means available to meet his legal expenses. In his factum, Mr. Hochberg described Mr. Punzo’s assets aside from the seized funds as “minimal”. Mr. Punzo is entitled to access the seized funds to pay his reasonable legal fees and disbursements, which Mr. Hochberg estimated at about $180,000. In oral submissions, Mr. Hochberg suggested that $50,000 of the seized money should be ordered returned to Mr. Punzo.

[23] On behalf of the federal Crown, Mr. Morlog asserted that Mr. Punzo failed to meet his onus. Mr. Punzo did not provide complete and honest information about his financial circumstances. The information that is available shows that he has assets and means to cover his legal expenses, apart from the seized money.

Has Mr. Punzo Established That He Has No Assets or Means Available to Meet His Legal Expenses?

[24] I do not accept Mr. Punzo’s assertions that he has no assets or means available to cover legal fees and disbursements, other than the seized money.

[25] Mr. Punzo failed to disclose in his affidavits the totality of his funds and assets. His assertion in his first affidavit that the seized money is “all the money” he owns is demonstrably false, in light of the bank accounts he was found, through police investigation, to hold.

[26] Even in his second affidavit, which clearly was submitted to address the untruthfulness of his first affidavit, Mr. Punzo failed to acknowledge that he has money in a TFSA. The explanation he gave for this omission when he testified, that it was just “a minor mistake”, is not credible.

[27] Additionally, Mr. Punzo was evasive in his testimony about the information from CRA records that he disposed of securities in 2021. He produced no records to confirm his claim that his TD trading accounts had a zero balance and were closed in 2022. This claim appears to be at odds with the information received by Detective Constable Vingerhoets. The TD bank advised that as of February 21, 2023, there were two active accounts in Mr. Punzo’s name.

[28] I am satisfied that Mr. Punzo sought to mislead the Court as to his financial situation.

[29] It is clear that he has, at least, the following funds and assets:

1. Approximately $60,000 in a CIBC account I will refer to as the savings account.
2. A monthly balance in a CIBC chequing account that is consistently over $7,000 even after payment of ongoing expenses.
3. A TFSA in an amount of approximately $6,000, and
4. A condominium unit in which the equity upon which he could draw is, at a minimum, approximately $95,000.

[30] The banking records show that of the $60,000 held in a CIBC savings account, over $28,000 was deposited in early September 2022. Mr. Punzo asserts that this represents pre-payment of a year’s rent by the tenant of the condominium. In other words, that money is effectively the tenant’s, and should not be attributed to Mr. Punzo. However, no documents were submitted by Mr. Punzo to confirm this assertion, and it is contradicted by his banking activity. The records for his two CIBC accounts show that from September through to the end of February 2022, the last month for which Mr. Punzo provided banking statements, he paid the monthly mortgage and maintenance fee for the condominium from his chequing account. There was no corresponding withdrawal from or transfer out of the savings account in which the $28,000 is held. I am unable to accept that about half the money in the savings account should not be attributed to Mr. Punzo.

[31] With respect to the condominium unit, Mr. Punzo produced no documents. The Teranet documents obtained by Detective Constable Vingerhoets show its ownership in the names of Mr. Punzo and his father as joint tenants. However, Mr. Punzo testified that the down payment for the condominium came from him. The bank records he provided for September 2021 through February 2022 show that he was the one who paid the mortgage and condominium fee. Based on this evidence, it appears that Mr. Punzo’s father is simply on title as a joint tenant. The true owner of the unit, and the beneficiary of the equity in it, appears to be Mr. Punzo. Accordingly, the equity upon which he could draw is approximately $190,000.

[32] I find that Mr. Punzo has funds and assets available to him, at a minimum, of approximately $150,000, rising to well over $200,000 if the total equity in the condominium unit is taken into account. This is so without including his chequing account, into which his salary is deposited and from which he meets his ongoing expenses. In other words, he has access to a minimum of $150,000 without being “beggared”.

[33] The wording of s. 462.34(4)(c)(ii) requires me to consider both the assets and means of Mr. Punzo. It is a relevant consideration that he chooses to be underemployed, in the sense that annually from December to April or May when he is not working for Condrain, he elects to collect Employment Insurance, rather than to work at another job and put himself in a better financial position. He continued to make this choice even after he was arrested and knew that he would have legal fees to pay.

[34] Further, Crown counsel argues that financial assistance from family members must be considered on this application. In Rafilovich, the Supreme Court of Canada acknowledged that financial help from family members is a relevant consideration in determining whether an applicant has no means other than the seized funds: see para. 65. The evidence before me is that Mr. Punzo’s parents own a home in the Greater Toronto Area worth hundreds of thousands of dollars, and that both parents are employed.

[35] Mr. Punzo testified that his parents do not want to assist with his ongoing legal fees. However, his parents did not provide an affidavit or testify on the application. I note that his father paid the legal fees for the bail hearing, and signed as a surety, evidencing his willingness to assist his son. In light of Mr. Punzo’s attempt to minimize the funds and assets available to him, I am unable to accept his bald assertion that his parents are unwilling to assist with the payment of further legal fees.

Conclusion

[36] I recognize the importance of representation by counsel. However, Mr. Punzo has failed to satisfy me on a balance of probabilities that he has no other assets or means available to meet his reasonable legal expenses.

[37] The application is dismissed, without need to hold an in camera hearing to assess the reasonableness of the legal fees and disbursements proposed by Mr. Hochberg.

Justice M.K. Fuerst Released: May 26, 2023

ONTARIO SUPERIOR COURT OF JUSTICE HIS MAJESTY THE KING Respondent – and – CHRISTOPHER PUNZO Applicant REASONS FOR DECISION Justice M.K. Fuerst

Released: May 26, 2023