Wednesday, 27 August 2014

Committing crimes in one’s home has serious  consequences       
On May 15, 2008, the Royal Canadian Mounted Police (RCMP) searched the property of Barry Patrick Crowley, age 77 (and others) in Osoyoos, British Columbia and seized $92,468 in Canadian currency, $908 in US currency, a loaded handgun, a loaded shotgun and other firearms. The RCMP alleged that Crowley was using his property for storing the illicit guns and illegal drug trafficking, and the money was the proceeds of those two unlawful activities.                              

On December 1, 2010, the director of the enforcement of the Civil Forfeiture Act (CFA) brought an action to the Supreme Court of British Columbia for forfeiture against the said property and the money seized under the Act. The Supreme Court in B.C. is equivalent to the Superior court elsewhere.

Crowley didn’t strenuously argue that the money seized should not be forfeited, but he strongly argued that the Court should grant him relief from forfeiting his property (lands and house) under section 6(1) of the CFA.
That section states;
“If a court determines that the forfeiture of property or the whole or a portion of an interest in property under this Act is clearly not in the interests of justice, the court may do any of the following: (a) refuse to issue a forfeiture order, (b) limit the application of the forfeiture order; (c) put conditions on the forfeiture order.”
Although Crowley filed a Response, he did not cooperate in the litigation by not producing documents the Director requested or attend his examination for discovery (questioning under oath).

On December 5, 2011, Justice (judge) Grauer ordered that Crowley’s Response be struck and the action proceed as if no Response had been filed.  On January 10, 2012, the Director applied for what was essentially a default judgment seeking forfeiture of the property and money that was seized earlier. The guns had already been seized by the police. 

On January 30, 2012, Justice Rogers heard that matter. Crowley attended the hearing and attempted to participate in the hearing, but because his response was previously struck, he had no standing in the hearing so the judge ordered forfeiture of the property and money to the Director of the CFA.

As you can see, ignoring your obligations to properly participate in every step of court proceedings has dire consequences that sometimes are difficult or impossible to escape from. 
On January 25, 2011, Judge Balance made a preservation order under section 8 of the CFA  and that order was registered against the property’s title at the Land Title Office. That meant that the government could then seize the property and sell it.

The defendant then appealed the orders of judges, Grauer and Rogers.  The Court of Appeal dismissed the defendant’s application to extend time to appeal Judge Grauer’s order, but it allowed the appeal of Judge Rogers’ order and remitted the matter to the Supreme Court for a rehearing on the Director’s application for default judgment.

The scope of the rehearing was narrow as it related strictly to a determination under section 6(1) of the Civil Forfeiture Act  as to whether forfeiture of the property and money was clearly or not clearly in the interests of justice.

In remitting the matter to the Supreme Court for a rehearing, the Court of Appeal said:
“The appellant could not controvert (dispute) the facts alleged in the notice of civil claim [as] they were deemed to be admitted but, in this case, those facts did not address the interests of justice. Even if they were to have done so, I do not think that would have foreclosed (barred) the appellant from making submissions on the interests of justice issue or from adducing evidence that did not controvert the allegations of fact in the notice of civil claim.” unquote
In other words, the concern that the court of appeal members had was that seizing someone’s home is a very severe measure and the owner of the property should be able to speak at the hearing in an attempt to ask the court to let him keep his home. Since Judge Rogers had stated that Crowley had no standing in the hearing, he denied him the opportunity to ask the court to let him keep his home. That was a denial of justice because it conflicted with section 61 of the Civil Forfeiture Act.

When taking the property of an individual, some consideration should be given to the property owner since it is necessary to ensure that despite the power of the state to seize property, it is also important to recognize the procedural rights of the owner of the property. However, a judge has discretion whether to permit a person to participate in forfeiture proceedings notwithstanding his or her response to a civil claim that has been struck or no material has been filed in response to the application for the forfeiture.

And finally, in remitting the matter back to Supreme Court, the Court of Appeal cautioned the Supreme Court about hearsay and admissibility issues. What follows is the decision of the judge in the court of appeal who wrote the court’s decision;
I wish to add a note of caution arising from the evidentiary record placed before the court by the Director in support of his application for judgment. Much of that evidence appears to be hearsay. There may be applicable rules of evidence that make all or some of it admissible, but the court must consider carefully the admissibility of evidence in all applications for judgment under this Act.” unquote
Hearsay evidence is oral evidence given by the person testifying in court in which he states that he heard the information from someone else. It is rarely accepted in courts. 

“Therefore, these are the relevant facts presented by the Director to the court;
a.          The defendant had used the property for the purposes of storing and trafficking various controlled substances and illegal drugs including prescription drugs and also to store the money which is both proceeds and the instrument of unlawful activity.

b.        The defendant had stored various firearms at the property to facilitate the trafficking of illegal drugs and substances from the property.

c.        The proceeds of the trafficking and controlled substances had contributed to maintaining the interest of the defendant in the property.

d.         The money was acquired from trafficking in controlled substances.
e.        If retained by the defendant the money would be used to further facilitate trafficking in controlled substances.
f.         The property is a residential property located near schools, parks and youth centres in Osoyoos, BC. The defendant is the sole registered owner of the property.
g.         The property had been used to store, possess and traffic in cocaine and other controlled substances. The defendant was aware that this activity was going on and participated in it or did nothing to prevent it from occurring. The defendant profited directly or indirectly from the possession and trafficking from controlled substances from the property.
h.         The property had been and is likely to be used to store a variety of weapons, some of which were restricted or prohibited firearms, in an unsafe manner that could have caused serious bodily harm to a person. Weapons were being stored in the property for the purposes of assisting in the commission of unlawful activities, such as drug trafficking, which was likely to result in the acquisition or maintenance or possession of property, or to cause serious bodily harm to a person. Weapons stored in the property had been used to cause serious bodily harm to a person on at least on occasion during the time the property was occupied by the defendant.” unquote
The person representing the director also testified that On May 15, 2008 RCMP officer’s arrested the defendant and executed a search warrant at the Property. During the course of this search, the members discovered indicia that the property had been used as a location to store and traffic control substances including a.  $92,468 in Canadian currency packaged in unequal bundles in various denominations and hidden throughout the property;  b.  $908 in US currency in various denominations and hidden throughout the property;  c.  Several weapons, including a loaded semi-automatic handgun, a loaded shotgun and several long guns;   d.  Digital scales;   e.  Empty plastic bags with cocaine residue in it;   f.   Score sheets recording drug sales;   g.   Prescription drugs available for sale; and   h.  15 individually packaged flaps of cocaine.
This certainly is evidence of criminal activity of a drug dealer. The money seized represented the proceeds from the sale of cocaine and other controlled substances that had been in the process of being dealt with in a manner meant to convert the drugs from their original state.
The sale of controlled substances had been a major or sole source of income for the defendant. The defendant did not have sufficient legitimate financial resources of income or financial benefit to account for his possession of the money that was seized.
As part of a subsequent plea agreement, the defendant entered into an agreement with the Federal Crown to forfeit all of the money seized from his home to the Canada Revenue Agency (CRA) for tax purposes. The CRA issued a tax demand for $36,378.75 leaving $56,089.25 still owing to the tax man and the $908 US unclaimed by federal authorities.
The government said that all or part of the money the defendant had was used to maintain the property or used to pay off debt obligations arising from property taxes and utility charges in relation to the property and that the said money was acquired directly or indirectly from the prior unauthorized production and/or trafficking of controlled substances and/or the laundering the proceeds of crime.

The Director (via his representative) argued that the defendant had the onus to present evidence to show that forfeiting his property would clearly not be in the interests of justice. He further argued that before relief from forfeiture could be granted, the defendant had to prove that forfeiture would be manifestly harsh and inequitable.

In response, the defendant conceded that the Director had proved that the money was the proceeds of unlawful activity and that the property was used as an instrument of unlawful activity.

Nonetheless, the defendant listed a series of factors that he believed militated against the forfeiture of his property; those factors being in the interest of justice.  They were;

1.   He has owned the home for 26 years. He purchased it 1988 for $32,400. There is no evidence that the Property was used as an instrument of unlawful activity prior 2006.
2.   He renovated the home with his father and self-effort and has continuously resided in the home for 26 years.
3.    The RCMP search and seizure occurred in May 2006, almost 6 years ago. The defendant is elderly, currently age 77,(2012)  and has one daughter who he wishes to bequeath the property to when he passes on. Forfeiture would result in a financial cost visited on his one and only daughter.
If he hadn’t committed any further criminal acts since 2006, then he might have a valid argument for being permitted to keep his home.

He also said that the Director filed the only admissible evidence since the Court of Appeal’s decision as the other evidence was hearsay and therefor inadmissible. Further, Mr. Larson (the Director’s representative) candidly acknowledged that he had no knowledge about whether any investment by the defendant in the property occurred before criminal activity on his part commenced and that there was no evidence before the court indicating when the property began to be used as an instrument of criminal activity.

Further, the defendant argued that the deemed admissions of fact contained in the notice of civil claim did not establish that the property was an active centre of trafficking.

The question of when a residence has actually performed an instrumental function in the commission of crime, as opposed to having been a mere passive receptacle of illegal items, must be addressed with care and precision in order to give proper effect to the intention of the legislature without empowering indiscriminate forfeitures. For example, if he had been selling the illicit drugs from his home, then he had been actually performing an instrumental function in the commission of crime. The government didn’t say he was selling drugs from his home.

The judge in the Supreme Court in British Columbia had to ask himself this question;

“Notwithstanding the mandatory order of forfeiture that must be made under s. 5(1)(2) of the CFA for the money and property, should this Court exercise its discretion under section 6(1) of the CFA to grant relief to the property owner from forfeiture?”  His decision was a s follows;
“It is my judgment, that the money must be forfeited to the Director under section 5(1) of the CFA. The deemed facts prove that the money is proceeds of unlawful activity. The defendant has led no evidence that would justify relief from forfeiture regarding the money; indeed he made no submissions on the point.

“Further, with respect to whether relief from forfeiture of the property should be granted, proportionality and fairness are the dominant considerations I must undertake. I have considered the interests of the province of British Columbia, the defendant, and the defendant’s daughter; the property’s equity; the defendant’s investment in the property; the lack of evidence as to when the criminal activity began; how much equity has built up because of market conditions since the interim preservation order was granted in this case; whether forfeiture would cause the defendant to have to drastically change his lifestyle; and the magnitude of the unlawful activity and/or its profits or potential profits.”

The judge also said in his decision;

Considering all of the forgoing, I am not satisfied that complete forfeiture of the property would clearly be in the interests of justice. The proportionality and fairness analysis persuades me that some relief is appropriate because:  a.  the property has been the respondent’s home for 26 years and no evidence demonstrates when the illegal activity began on the property;   b.    he purchased the property for $32,000 in 1988 when it was a second hand store. He borrowed one-half of the purchase price from his mother and re-paid her $250 per month until paid in full. Together with his father’s help, he converted the store into a residence;  c.   the respondent (Crowley) is age 77 and although he concedes he is not financially destitute, complete forfeiture would require him to be uprooted and find another home; and   d.   the RCMP investigation following the 2008 search and seizure resulted in a number of charges against him, and he pleaded guilty to possession of a controlled substance and possession of a prohibited weapon. He received a fine as a sentence.” unquote
The judge also said in his decision;
“I exercise my discretion under section 6(1)(b) and limit the application of the forfeiture order for the property as follows:
a)   one-half of the defendant’s right, title and interest in the property will be forfeited and transferred to the Director, subject to all legal and legitimate prior encumbrances, if any, and the Director and the defendant will hold their respective 50% interest as tenants-in-common. (I am not sure that this means that the Director can ask the police to enter the property without a warrant.)
b)   within 60 days of the date of this judgment, the defendant will be at liberty to purchase the Director’s 50% interest in the property by paying 50% of the agreed upon current fair market value of the property. If the parties cannot agree on the current fair market value, a qualified appraiser, to be agreed upon by the parties, will determine the value;

c)   if the parties cannot agree on the fair market value and the defendant therefore requires more than 60 days to purchase the Director’s interest in the property, liberty is granted (to both parties) to apply to the Court for the appropriate directions.

“There will be judgment in favour of the Director against the money currently in Court pursuant to the January 25, 2011 Order of Justice Ballance  and the money is hereby forfeited to the BC government.” unquote

Let me say that he was lucky to have a judge who was fair and understood the law of forfeiture.

No doubt the property was worth far more than when he originally bought it so coupled with the money that was seized, and his fine for his past criminal activity, and the increase in the value of his house in which he forfeited 50 % of its value—crime certainly didn’t pay for him.

I don’t know if he paid off the monies representing the one-half of the property to the government but an unemployed 77-year-old man who only has 50% equity in his property will have great difficulty in getting a loan from a bank. Maybe he will simply have to remain as a co-owner of his home with the government of British Columbia. When he passes on, if he hasn’t paid the government what he still would owe them, he will be leaving a terrible bequest to his daughter. Would she want to be a co-owner of her home with the government of British Columbia? 

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