Civil remedies forfeiture may be refused if Crown delays excessively

Attorney General of Ontario v. 20 Strike Avenue, Bowmanville, Ontario, 2013 ONSC 2130 holds that an application by the Attorney General of Ontario for an order for forfeiture of property under s. 8 (1) of the Civil Remedies Act, 2001, S.O. 2001 may be refused for delay in prosecution by the Crown (Thanks to YAMRI TADDESE for drawing the case to my attention) :

[12]           The question of forfeiture is not to be decided on a mere balancing of the pros and cons of making a forfeiture order.  An order will not be made where it is clearly not in the interests of justice: s. 8(1). Courts have interpreted this provision of the Act as meaning that an order for forfeiture will not be made where it would be “manifestly harsh and inequitable.” As stated by Doherty J.A. in Ontario (Attorney General) v. 1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (in rem), [2011] O.J. No. 2122 (C.A.), at para. 85,

…the word ‘‘clearly’’ modifies the phrase ‘interests of justice’ and must be given some meaning.  I think the word “clearly” speaks to the cogency of the claim advanced for relief from forfeiture. The party seeking relief must demonstrate that, in the circumstances, the forfeiture order would be a manifestly harsh and inequitable result.

[13]           The court in this case was reviewing the wording in s. 3(1), which deals with forfeiture of proceeds of crime. However, the phrase “clearly not in the interests of justice” is similarly employed in the subsection dealing with instruments of unlawful activity. Indeed, as noted by Thomas J. in Ontario (Attorney General) v. 51 Taylor Avenue, 2012 ONSC 6355 (CanLII), 2012 ONSC 6355, [2012] O.J. No. 5804, at para. 86, most of the considerations addressed by Doherty J.A. in respect of the “interests of justice” analysis under s. 3(1), continue to apply to “instrument” forfeiture under s. 8(1). 

[14]           One of the factors to consider in the “interests of justice” analysis is the property owner’s conduct as it relates to the unlawful activity.  In 1140 Aubin Road, the Court of Appeal stated the following at para. 100:

Surely, a property owner who had no involvement in the criminal activity, was unaware of the activity, had acted reasonably throughout and did not profit from the activity, should as a matter of elementary justice, be treated differently on a forfeiture application from the property owner who was involved in and directly profited from the unlawful activity.

[15]           In the case at bar, there was no suggestion that Roger Parker was complicit in, or profited from, the unlawful activities of his son, Fred Parker.  I am not prepared to find that Roger Parker purchased the property for anything other than for his own purpose, using his own funds for a down payment and assuming the mortgage obligations.   Although the AG made some suggestion to the contrary,   I have no hesitation in concluding that Roger Parker was the sole and exclusive beneficiary of the property and that he purchased it because he operated a large factory and storage facility in the Bowmanville area.   I also accept that Roger Parker legitimately rented the property to his son Fred, the perpetrator of the unlawful activity.  I find that Fred Parker, prior to the events of 2010,  was a legitimate employee of his father’s enterprise, Parker Brothers Textile Mills, and that this employment required him to attend at the Bowmanville site from time to time.  For the reasons set out in the analysis under the “responsible owner” exception above, however, I am unable to conclude that Roger Parker acted as a responsible property owner throughout the history of the unlawful activities.  Roger Parker’s conduct alone, therefore, is not sufficient to warrant him the protection of the “interests of justice” exception.  

[16]           The interests of justice exercise should also embody a review of all the relevant circumstances of a case.   While the Act makes clear that there is no limitation period for the launching of an application, it is clear that the AG had grounds, as early as March 2006, to bring an application under the Act.  Indeed, part of the grounds for the Application, as set out in paragraphs “y” through “dd,” were the unlawful activities that took place at the property in March 2006.     These activities led to charges, which led to convictions in January 2008.  The property became an instrument for unlawful activities again in 2010.   Yet, the present Application was not launched until February 24, 2012, nearly six years after the unlawful activities were first discovered and more than four years after the conviction which followed.   In my view, it is clearly not in the interests of justice to allow the Attorney General to bide its time in launching an application, while an unsuspecting owner of property continues to maintain his property and to use his own funds to pay down a mortgage obligation.  In this case, Roger Parker’s own efforts served to enhance the equity in the property; yet, at the same time, he was unwittingly increasing the notional impact of the forfeiture on himself.   He legitimately acquired the property back in 2001, partially financing its purchase by giving a $147,000 mortgage to the Canadian Imperial Bank of Commerce (CIBC).   The court received evidence that the principal balance owing on the mortgage stood at $91,919.43 as at March 6, 2013.  The property was listed for sale by the owner in February 2012 for $229,000.   While no evidence was led of the increase in equity experienced by the property owner between 2006 and 2012, I take judicial notice of the fact that regular payments on a mortgage apply increasingly to principal as opposed to interest during any amortization period, thereby reducing the mortgage debt at an increased rate with every payment.   Assuming average market value increases, the equity in the property would have grown considerably in the six years between 2006, when the AG first had grounds upon which it could apply for forfeiture under the Act, and 2012 when the present Application was issued.

[17]           The Applicant could offer no explanation of the reason for the delay other than that prospective Applications were back-logged.   I recognize that, in order to succeed on a forfeiture Application where the responsible owner of property exception in s. 8(3) might be invoked by a Respondent, a certain passage of time between the commission of the unlawful activity and the Application might be necessary in order to gauge the reasonableness of the property owner’s actions in the aftermath of identified unlawful activities.   Yet, the Applicant did not present any evidence of this being a reason for the delay, nor was it even suggested as a reason in submissions.  Moreover, the Applicant’s contention was that Roger Parker was already failing to act as a responsible owner as early as 2006.  This was a time when Roger Parker was well aware of Fred Parker’s unlawful activities both at the property and at 405 Lake Road as a result of the police investigation, the arrest and charges, and Roger Parker’s own role as a surety for his son.   The Applicant further contended that Roger Parker purchased the property for the benefit of his son, that he was at all times a nominal owner only and that he was aware of, and indeed facilitated, drug trafficking and criminal activity by allowing Fred Parker to use the property for those purposes.  To the extent that any of that is true, it is obvious that the AG believed it to be true by March 2006, or a short time thereafter.  In my view, in the absence of some adequate explanation, and notwithstanding the absence of a limitation period in the Act, it is clearly not in the interests of justice to permit the AG to delay the launching of an application beyond a reasonable period from the date when prima facie grounds for forfeiture existed especially where, as here, that period of delay coincides with a significant growth in the equity in the property, to the ultimate detriment of the legitimate property owner.    

[18]           In arriving at my conclusion in this case, I have borne in mind the words of Doherty J.A. in 1140 Aubin Road, at para. 96:

I do not, however, agree that the ‘interests of justice’ in s. 3(1) are limited to the purpose of the CRA identified in s. 1.  Those purposes are part of, but cannot be equated with, the ‘interests of justice’. That phrase is a broad one and includes maintaining public confidence in the civil justice process. That confidence is promoted by orders that are, broadly speaking, in accord with the community’s sense of fairness.  A forfeiture order made in circumstances where any reasonable person would regard the order as excessive, while perhaps serving the purposes of the CRA in the narrow sense, would do a real disservice to the administration of justice and thereby undermine rather than promote the ‘interests of justice’.

[19]           I cannot imagine that reasonable members of the community would not find it troubling, perhaps even shocking, for a court to order forfeiture in these circumstances.   Fairness requires a balancing of the competing interests of the Applicant and the property owner.  An unexplained six year delay in bringing a forfeiture application under s. 8(1) of the Act, while an unsuspecting owner of property builds up his equity in a property for the benefit of the Attorney General, is unfair to the point of offensive.   To grant forfeiture in these circumstances would, in my view, be a manifestly harsh and inequitable result