Court File and Parties

COURT FILE NO.: CR-23-50000081 DATE: 20240416 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: HER MAJESTY THE KING – and – AMERULLAH HABIB

Counsel: Sara Samet, for the Crown, Respondent Yonatan Eshetu, for Amerullah Habib, Applicant

HEARD: January 26, 2024

Reasons for Judgment on Forfeiture Application

R.F. GOLDSTEIN J.

[1] On September 3, 2020, Rehan Habib pulled up to Ajwa Pizza on Overlea Boulevard in Toronto. He was driving a dark blue 2017 Toyota Corolla with an Ontario licence plate of CLNV 490. The Applicant went inside, presumably to get a slice of pizza. Instead, he had a confrontation of some kind with an employee. He walked out of Ajwa Pizza, took a gun from the Corolla, and came back into the premises. He then hopped the counter and proceed to chase the employee through the pizza parlour and out back. He racked, or cocked the gun as he did so. Fortunately, Rehan did not shoot anyone (I will refer to Rehan Habib as Rehan, not out of any disrespect but to distinguish him from his father, Amerullah Habib, who I will refer to as the Applicant). Virtually the entire incident was caught on video.

[2] Shortly after the incident, Rehan called Daryosh Bhari. Mr. Bhari was a target of a Toronto Police wiretap investigation. As a result, the police listened while Rehan and Mr. Bhari discussed what happened in the restaurant:

REHAN: …. I fucking walked in, I loaded up. I was about to blam his ass right in front of the fucking… BAHRI: Oh, you wheeled it out? REHAN: I wheeled it down when I cocked it back. I fucking… I was about to blow his brains out fam. He ran for his life out of the fucking thing. I went inside the wha… the store… with the stick in my hand.

[3] Rehan said that he lost his head. Mr. Bhari warned him that he should hide the firearm in case his “crib” was raided. The police did indeed take a strong interest. They obtained search warrants for his home and for the Toyota Corolla. The police also obtained the video from Ajwa Pizza. I stated in my reasons for sentence:

The police arrested him [The Applicant], and then executed the warrants. The found a loaded Smith and Wesson semi-automatic pistol in a satchel in the trunk. It was the same weapon that The Applicant had obtained from the trunk of his automobile on September 3, 2020. The magazine contained 8 rounds of ammunition. The firearm was a prohibited weapon. The Applicant did not have a firearms licence or authorization. He also did not have a registration certificate for the weapon.

[4] On June 20, 2023 Rehan pleaded guilty to the following offences on the indictment:

• Count 2: Occupying a motor vehicle knowing that there was a prohibited firearm, contrary to s. 94(1) of the Criminal Code;
• Count 3: Possession of a prohibited firearm together with readily accessible ammunition contrary to s. 95(1) of the Criminal Code; and,
• Count 5: Possession of a weapon for a purpose dangerous to the public peace, contrary s. 88(1) of the Criminal Code.

[5] I sentenced Rehan to a global sentence of four years in custody. The facts are set out in more detail in my sentencing judgment: R. v. Habib, 2023 ONSC 6897. I was satisfied beyond a reasonable doubt that Rehan was a low-level drug dealer, and that he carried the firearm as a tool of the drug trade.

[6] On January 15, 2024 the Applicant, filed a Notice Of Application asserting a legal interest in the Toyota Corolla. He applies under s. 490.4(3) of the Criminal Code for an order restoring the Corolla on the grounds that he is lawfully entitled to all or part of that property. The Applicant is Rehan Habib’s father.

[7] The question before the court now is what to do about the Applicant’s Corolla.

[8] The Corolla was a used, or as they call it in car parlance, previously loved 2017 blue SE model. It was purchased on January 28, 2020 and delivered on January 31, 2020. The Vehicle Purchase Agreement notes that it was a cash purchase. The car was purchased in the name of “Rehan Habib” with an email address and an address in Niagara Falls, Ontario. The dealership was Don Valley North Hyundai in Markham, Ontario. The initials “RH” appear in various places on the document. It appears to bear Rehan’s signature.

[9] The Applicant filed an affidavit in which he swore to the following facts:

• The Applicant paid for the entire vehicle;
• The purchase price of $19,000 came from a $10,000 draft from his account at the TD Bank, and $9000 in cash.
• The understanding was that the vehicle would be used primarily by Rehan and his father, the Applicant;
• Rehan was responsible for paying for insurance;
• One of the reasons why the car was purchased in Rehan’s name was that it would assist Rehan in increasing his credit score;
• The Applicant and Rehan each had a key to the vehicle;
• The Applicant used the vehicle on a regular basis for family activities and errands;
• The Applicant had no knowledge of a firearm in the vehicle, did not know that Rehan had a firearm in his possession, and had never seen a firearm in the house or car. He did not know Rehan had committed an offence until he was arrested.

[10] The Applicant attached a copy of both the bank draft and a copy of the transaction history.

[11] Mr. Eshetu’s position, on behalf of the Applicant, is that the vehicle was really jointly owned between him and Rehan. It was, in essence, a family vehicle. Section 490.4(3) of the Criminal Code only requires that an applicant establish that she or he is lawfully entitled to possession of all or part of the property.

[12] The Crown’s position is simple: Rehan owned the vehicle; the police observed only Rehan operating the vehicle; and it was used in the commission of an offence. The Applicant and his wife were able to sign for a $50,000 bail for Rehan. It is not uncommon for people to purchase cars for their children. The evidence suggests that is what happened.

[13] Where a person is convicted or discharged of a Criminal Code offence or the Corruption of Foreign Public Officials Act, and where the Crown makes an application, the court shall order forfeiture to the Crown. The court must be satisfied on a balance of probabilities that the property is offence-related property and is related to the commission of an offence. The burden is on the Crown to prove both things: R. v. Trac, 2013 ONCA 246 at para. 74. Offence-related property encompasses property used in any manner in connection with a criminal offence. It is broadly aimed. It aims at the “means, devices, or instrumentalities used to commit offences”: R. v. Trac, supra, at para. 80.

[14] The offence-related property provisions have three purposes:

• To punish offenders by taking away property used in the commission of offences;
• To deter offenders by imposing costs on the owners of property who have used the property to commit offences or permitted their property to commit offences; and,
• To ensure that the property cannot be used to commit offences in the future.

[15] See: R. v. Fercan Developments Inc., 2016 ONCA 269 at para. 15; R. v. Craig, 2009 SCC 23 at paras. 16-17.

[16] Section 490.4(3) of the Criminal Code states:

490.4 (3) A court may order that all or part of the property that would otherwise be forfeited under subsection 490.1(1) or 490.2(2) be returned to a person — other than a person who was charged with an indictable offence under this Act or the Corruption of Foreign Public Officials Act or a person who acquired title to or a right of possession of the property from such a person under circumstances that give rise to a reasonable inference that the title or right was transferred for the purpose of avoiding the forfeiture of the property — if the court is satisfied that the person is the lawful owner or is lawfully entitled to possession of all or part of that property, and that the person appears innocent of any complicity in, or collusion in relation to, the offence.

[17] The subsection sets out four requirements before a court may provide relief from forfeiture of property:

• first; that the claimant has not been charged with an indictable offence under the Criminal Code or under the Foreign Corrupt Practices Act;
• second, that the claimant did not acquire an interest in the property under circumstances that give rise to an inference that the transfer was made to avoid forfeiture;
• third, that the claimant is lawfully entitled to possession of all or part of that property;
• fourth, that the person claiming the property is innocent of any collusion or complicity in the offence.

[18] In my view, only the third requirement is in issue here. There is no evidence that he Applicant had anything to do with possession of the firearm. He was also never charged with an offence. There is also no evidence that that the Applicant transferred the funds to avoid forfeiture – the Corolla was purchased years before the offence.

[19] It is clear from the wording of the subsection that the decision is a discretionary one.

[20] There is no doubt that the Corolla is offence-related property. Offence-related property is defined in S. 2 of the Criminal Code as follows:

offence-related property means any property, within or outside Canada,

(a) by means or in respect of which an indictable offence under this Act or the Corruption of Foreign Public Officials Act is committed,

(b) that is used in any manner in connection with the commission of such an offence, or

(c) that is intended to be used for committing such an offence.

[21] In R. v. Hells Angels Motorcycle Corp. (2009), 246 C.C.C. (3d) 559, [2009] O.J. No. 3503, 2009 CarswellOnt 4986 (Ont.Sup.Ct.), the Hells Angels Corporation (a corporation registered in California) opposed forfeiture of and sought the return various items of property. The property had been seized from the homes of members and from various Hells Angels clubhouses during investigations of Hells Angels members. The property consisted of jewelry, clothing, and other items bearing trademark symbols used by the Hells Angels in Canada. Pardu J. (as she then was) determined that the property was offence related property. The Hells Angels was found to be a criminal organization. The property, while not strictly used in the commission of an offence in the narrow sense, were symbols that could be used in a broad sense, to establish the bona fides of individuals belonging to the group in the course of criminal transactions. She then considered s. 490.4(3) of the Criminal Code, the provision at issue in this case. The corporation ultimately relied on a practice that members signed a property agreement. Pardu J. stated at paras. 28 and 29:

I infer from the provision in the property agreement customarily signed by members, declaring the corporate Respondent owner of all items bearing the trademark, agreeing to "grant Power of Attorney to a duly appointed representative of HAMC to sign, correspond or engage in any necessary action to retrieve any and all of the aforementioned items, seized by any law enforcement agency and/or their representatives”, that the agreement transferring the property was executed for the purpose of avoiding forfeiture of the property. In such a case, the corporate Respondent is not entitled to the return of the property.

There are no such agreements bearing the signatures of Gerald Ward, Kenneth Wagner and Brian Jeffery. While it may have been customary for some time for such documents to be signed by members, I am not convinced that they have been invariably executed. While the individuals may feel some compulsion to adhere to the practice, I am not satisfied that a legal transfer of ownership of goods has in fact occurred. Under these circumstances, the corporate Respondent has not established that it is the lawful owner or the person lawfully entitled to possession of the property seized from these individuals.

[22] Accordingly, Pardu J. did not grant forfeiture.

[23] In R. v. D’Onofrio, 2023 QCCQ 10034, 2023 CarswellQue 20121, a Nissan Rogue was used in a horrific kidnapping. The Rogue was used by Frank D’Onofrio, a professional criminal, to transport the victims from New York State into a safe house owned by his ex-wife in Quebec. The Rogue was owned by D’Onofrio’s sister, Lisa D’Onofrio. Defence applied for relief from forfeiture of the car on behalf of Lisa. Lisa herself filed no evidence. Lisa was actually a figurehead: although she was the registered owner of the car, the evidence established that the Rogue was used by Frank in Quebec on a full-time basis (Lisa lived in Ontario). The Court of Quebec did not relieve Lisa from forfeiture.

[24] Turning to the facts in this case, both parties agree that an application of this nature is very fact-specific. On the uncontradicted evidence of the Applicant, he paid for the vehicle, had a set of keys to the vehicle, and used it as a family vehicle. With respect, while it is possible that the Applicant simply bought the vehicle for his son, as the Crown suggests, I have no basis to reject the Applicant’s factual assertions.

[25] Importantly, s. 490.4(3) requires that The Applicant establish either that he is the “lawful owner” or that he is “lawfully entitled to possession of all or part of that property”. As I read the statute the Applicant does not need to be the registered owner of the vehicle to establish lawful entitlement to all or part of it.

[26] Obviously The Applicant is not the registered owner of the Corolla. Nor is there any evidence of a registered security interest under the Personal Property Security Act or registration by The Applicant under the Highway Traffic Act. He must, therefore, establish his interest by some other means.

[27] Based on the evidence before me that he paid for the car, that he had a set of keys, and that he had the right to use it, I find he was lawfully entitled to possession of all or part of the vehicle. If Rehan did not permit the Applicant to use the car, noting the evidence of the agreement between them that the car was a shared asset, and that the Applicant’s consideration for the agreement was that he paid for the car, I do not doubt that the Applicant would be successful in an action or application of some kind to assert an interest. In my view, therefore, there is uncontradicted evidence that there was a contractual basis for the Applicant’s interest in the Corolla.

[28] There are two other ways in which the transfer of the funds to purchase the Corolla can be treated: either by resulting trust or by advancement. A resulting trust arises when “title to property is in one party’s name, but that party, because he or she is a fiduciary, or gave no value for the property, is under an obligation to return it to the original title owner”: Pecore v. Pecore, 2007 SCC 17 at para. 20. The presumption of resulting trust is rebuttable. The Crown has filed no evidence to rebut that presumption.

[29] Advancement is a gift from parent to child where the child is financially dependent on the parent: Pecore v. Pecore, supra, at para. 21. Where the presumption of advancement arises the party challenging the transfer bears the burden of rebutting the presumption of a gift. Here, the Crown has filed no evidence. Perhaps more importantly, the Applicant has filed evidence suggesting that the Corolla was not a gift and that it was always his intention to use it.

[30] The forfeiture regime can be applied to third-party owners of property who have not been charged or convicted. That said, “property owners who acted reasonably, were unaware of and not involved in any criminal activity, and did not profit from any illegal acts should not be subject to punishment or loss”: R. v. Fercan Developments Inc., supra, at para. 16. Or, as at Galiatsatos J.C.Q put it in R. v. D’Onofrio, supra, para. 41:

The forfeiture regime is rooted in common sense. Its consequences can be draconian. Where an uncharged property owner acted reasonably, was unaware of and not involved in any criminal activity, and where he did not profit from any illegal acts, logic dictates that he should be spared from losing his property. After all, there is no point to punishing morally innocent persons. This would not advance any legitimate social or legal interest.

[31] In my view, I see no social interest that would be advanced by refusing to order forfeiture in this case. There is no evidence that Rehan’s low-level drug dealing was used to pay for the car. Although I was satisfied beyond a reasonable doubt that Rehan was a low-level drug dealer for the purposes of sentencing, he was not convicted of a drug offence. There is no evidence that the Applicant had any knowledge that his son was a low-level drug dealer, in addition to his sworn evidence that he had no knowledge of the firearm. When I consider the three objectives of the forfeiture scheme, I make the following comments:

• Although it would certainly punish Rehan to forfeit the vehicle, he is serving a penitentiary sentence and is unlikely to every have use of it, given the Applicant’s intention to sell it. Forfeiture would punish the Applicant and his family far more.
• While forfeiture may deter offenders, I do not see how property owners who have no inkling that their children are using their vehicles for criminal purposes will be deterred. Figureheads like Lisa D’Onofrio, who let her professional criminal brother monopolize her car, are one thing. People in the situation of the Habibs are quite another.
• Taking the Applicant at his word, the car will be sold while Rehan is in prison. I appreciate that Rehan will have to sign any documents transferring ownership. I will assume, based on his representations to me in court during his sentencing hearing, that he will be morally swayed by the position is parents have taken. If not, The Applicant may bring an appropriate application before me.

[32] The application is granted.

R.F. Goldstein J. Released: April 16, 2024