Civil Remedies Act upheld

Today's Supreme Court of Canada decision in Chatterjee v. Ontario (Attorney General)  2009 SCC 19 upholds provincial forfeiture of proceeds of crime. This is a major decision and will greatly assist in dismantling criminal organizations.

A summary follows:

  The police arrested C for breach of probation and, in a search of his car incidental to the arrest, discovered cash and items that not only were associated with the illicit drug trade but also smelled of marijuana but found no drugs.  C was never charged with any offence in relation to the money, items, or with any drug related activity.  The Attorney General of Ontario was granted an order under the Civil Remedies Act, 2001 ("CRA") preserving the seized money and equipment.  He then applied under ss. 3 and 8 of the CRA for forfeiture of the seized money as proceeds of unlawful activity.  In response, C challenged the CRA's constitutionality, arguing that the CRA's forfeiture provisions were ultra vires the province because they encroach on the federal criminal law power.  Both the applications judge and the Court of Appeal concluded that the CRA  is a valid provincial legislation.

Held:  The appeal should be dismissed.  The CRA's forfeiture provisions are constitutional.   The argument that the CRA is ultra vires is based on an exaggerated view of the immunity of federal jurisdiction in relation to matters of criminal law that may, in another aspect, be the subject of provincial legislation.  Resort to a federalist concept of proliferating jurisdictional enclaves (or "interjurisdictional immunities") was recently discouraged by this Court's decisions in Canadian Western Bank (2007) and Lafarge Canada Inc. (2007) and should not now be given a new lease on life.  A court should favour, where possible, the ordinary operation of statutes enacted by both levels of government. 

The evident purposes of the CRA are to make crime in general unprofitable, to capture resources tainted by crime so as to make them unavailable to fund future crime and to help compensate private individuals and public institutions for the costs of past crime.  The practical (and intended) effect is to take the profit out of crime and to deter its present and would‑be perpetrators.  These are valid provincial objects.  Crime creates costs to victims and to the public that would otherwise fall on the provincial treasury including health, policing resources, community stability and family welfare.  It would be out of step with modern realities to conclude that a province must shoulder the costs to the community of criminal behaviour but cannot take legislative steps to suppress it.   

Where there is a degree of overlap between measures enacted pursuant to the provincial power and measures taken pursuant to the federal power, it is necessary to identify the "dominant feature" of an impugned measure.  If the dominant feature of the provincial enactment is in relation to provincial objects, as it is here, the law will be valid, and if the enactments of both levels of government can generally function without operational conflict they will be permitted to do so.  In factual situations where operational conflict does occur, the conflict will be resolved by the doctrine of federal paramountcy. 

The CRA is an enactment in relation to "property and civil rights", and as such its provisions may incidentally "affect" criminal law and procedure without doing violence to the division of powers.  The fact the CRA aims to deter federal offences as well as provincial offences and indeed offences committed outside Canada, is not fatal to its validity.  On the contrary, the very generality of the CRA shows that the province is concerned about the effects of crime as a generic source of social ill and provincial expense, and not with supplementing federal criminal law as part of the sentencing process.  While it is true that forfeiture may have de facto punitive effects in some cases, the CRA does not require an allegation or proof that any particular person committed any particular crime.  Property may be forfeited under the CRA if, on a balance of probabilities, it is demonstrated that the property constituted the proceeds of crime in general without further specificity. 

C argues that the provisions of the CRA introduce an interference with the administration of the Criminal Code forfeiture provisions.  If such operational interference were demonstrated, or if it were shown that the CRA frustrated the federal purpose underlying the forfeiture provisions of the Criminal Code, the doctrine of federal paramountcy would render inoperative the CRA to the extent of the conflict or interference.  However, this is not the case.  Where forfeiture is sought and refused in the criminal process, the various doctrines of res judicata, the issue estoppel and abuse of process are available to prevent the Crown from re‑litigating the sentencing issue.  Given the flexibility of these remedies there is no necessary operational conflict between the Criminal Code and the CRA such as to render the latter inoperative in relation to federal offences generally.  If in particular circumstances there arises a conflict between the forfeiture provisions of the Criminal Code and the CRA then to the extent that dual compliance is impossible the doctrine of paramountcy would render the CRA inoperable to the extent of that conflict, but only to that extent. 

James Morton
1100-5255 Yonge Street
Toronto, Ontario
M2N 6P4

416 225 2777