IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation: British Columbia (Director of Civil Forfeiture) v. Cronin, 2016 BCSC 284

Date: 2016022

Docket: S133182

Registry: Vancouver

Civil Forfeiture Action in Rem Against

The Lands and Structures situated at 21150 - 123rd Avenue, Maple Ridge, British Columbia having a Legal Description of Parcel Identifier: 017-746-230, Lot A, District Lot 242, Group 1, New Westminster District Plan No. LMP4153 (the “Property”) and its Fruits and Proceeds and $5,800 in Canadian Currency and the Fruits and Proceeds therefrom (the “Money”)

Between:

Director of Civil Forfeiture

Plaintiff

And

The Owners and all Others Interested in the Property, in Particular

Shawn Nelson Cronin

Defendants

Before: The Honourable Madam Justice Duncan

Reasons for Judgment

Counsel for the Plaintiff: J.M. Poole S. Foster, Articled Student Counsel for the Defendants: K.R. Beatch Counsel for the Intervenor, the Attorney General of British Columbia: P. Ameerali Place and Dates of Hearing: Vancouver, B.C. November 9-10, 2015 Place and Date of Judgment: Vancouver, B.C. February 22, 2016





Introduction

[1] The Director of Civil Forfeiture (the “Director”) seeks forfeiture in these in rem proceedings of the land and structures at 21150-123rd Avenue in Maple Ridge, as well as $5,800 in Canadian currency. The defendant, Shawn Nelson Cronin, is the owner of the property.

[2] In August 2010, the Royal Canadian Mounted Police obtained a search warrant under the Controlled Drugs and Substances Act, S.C. 1996, c. 19 [CDSA] to search the defendant’s house. The RCMP conducted surveillance of the property prior to execution of the warrant and saw a man, later identified as the defendant, enter the house and then leave the house through the garage. The defendant was carrying a box. He was stopped by police as he drove away. The police arrested and searched the defendant. Inside the vehicle he had been driving police located a box of marihuana clones, a backpack containing $5,800 and a garage door opener that operated the garage door at the house that was under surveillance.

[3] When the RCMP searched the house they located a marihuana grow operation consisting of 2, 752 plants in the basement.

[4] Criminal charges were laid against the defendant under sections 5(2) and 7(1) of the CDSA. The charges were judicially stayed on February 28, 2013 when a Provincial Court judge found the defendant’s right to be tried within a reasonable time under s. 11(b) of the Canadian Charter of Rights and Freedoms [Charter] had been violated.

[5] The defendant applies pursuant to R. 12-5(67) of the Supreme Court Civil Rules to bifurcate these proceedings to determine whether there were breaches of sections 8 and 9 of the Charter, and whether a remedy is available with respect to those breaches, before the trial on the remainder of the forfeiture issues. The defendant also seeks an order that examination for discovery be limited to issues relating to the alleged Charter breaches.

[6] Counsel for the defendant relies on Director of Civil Forfeiture v. Lloydsmith, 2014 BCCA 72 [Lloydsmith]; Director of Civil Forfeiture v. Huynh, 2012 BCSC 740 [Huynh]; and Civil Forfeiture (Director) v. Johnson, 2015 BCSC 1217 [Johnson] as binding authority concerning the issue of bifurcation in forfeiture cases.

[7] The Director is opposed to the defendant’s application, in part because the defendant has no standing to argue that his s. 8 Charter rights were breached because he did not live on the property and in part because of how the defendant has framed his pleadings. The Director maintains that the matter should proceed through examination for discovery and trial in the usual course.

[8] Counsel for the Intervenor, the Attorney General of British Columbia, supported the Director’s position that there should be no bifurcation of issues in this case.

The Legislative Framework

[9] Rule 12-5(67) states:

The court may order that one or more questions of fact or law arising in an action be tried and determined before the others.

[10] The sections of the Charter the defendant relies on in this application are:

24(1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

(2) Where, in proceedings under subsection (1), a court concludes that evidence was obtained in a manner that infringed or denied any rights or freedoms guaranteed by this Charter, the evidence shall be excluded if it is established that, having regard to all the circumstances, the admission of it in the proceedings would bring the administration of justice into disrepute.

[11] Several provisions of the Civil Forfeiture Act, S.B.C. 2005, c. 29 [CFA] have application:

6 (1) 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.

(2) In the case of property that is proceeds of unlawful activity, the court may grant relief from forfeiture under subsection (1) if a party to the proceedings commenced under section 3 (1) proves both of the following:

(a) she or he did not, directly or indirectly, acquire the property as a result of unlawful activity committed by the party;

(b) she or he

(i) was the rightful owner of the property before the unlawful activity occurred and was deprived of possession or control of the property by means of the unlawful activity,

(ii) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity, or

(iii) acquired the property from

(A) a person who was the rightful owner of the property before the unlawful activity occurred and who was deprived of possession or control of the property by means of the unlawful activity, or

(B) a person who acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity.

…

12 (1) In this Division and in section 22.1, "uninvolved interest holder" means a person who

(a) owns, at the time of application for an order under section 3, the whole or a portion of an interest in property that is an instrument of unlawful activity, and

(b) did not directly or indirectly engage in the unlawful activity that is the basis of the application referred to in paragraph (a).

(2) A person who indirectly engaged in the unlawful activity that is the basis of the application referred to in subsection (1) (a) includes, without limitation, a person who had knowledge of the unlawful activity and received a financial benefit from the unlawful activity.

The Relationship between Civil Forfeiture and Criminal Law Concepts

[12] Proceedings under the CFA are conducted by the Director of Civil Forfeiture. The Director obtains information from the police, gathered during the investigation of a criminal complaint, and uses that information as the basis of a forfeiture action. The Director has no authority to order the police to gather evidence; rather, his role is as a passive recipient of information.

[13] A forfeiture trial is a civil proceeding. An individual who defends a forfeiture claim against his or her property is subject to the usual rules in a civil proceeding, which includes the requirement to submit to an examination for discovery. Evidence from an examination for discovery can be used against a forfeiture defendant at trial. There are no rules shielding a defendant from the use of information obtained during discovery. In other words, the rights that exist for accused persons in criminal cases, such as the right against self-incrimination, are not replicated in the in rem proceedings.

[14] There is a significant overlap between criminal law and civil forfeiture when it comes to the application of the Charter. When state action results in the acquisition of evidence, as with the execution of a search warrant, it is subject to scrutiny under the Charter, even though it is proffered in the civil context. It is this overlap that leads to bifurcation applications.

[15] Lloydsmith was an appeal by the Director from a bifurcation order as well as an order concerning examination for discovery. Madam Justice Saunders for the Court said:

[13] This case is one of several, perhaps more than several, now making their way through the Supreme Court of British Columbia. And it is not alone in being a claim of forfeiture against a person who has been neither charged nor convicted of a criminal offence. Accordingly it is a case in which challenges to police compliance with the Charter must be presented without the assistance of a Legal Aid funded lawyer. Yet the sophistication of the Charter issues makes it desirable that the individual is represented by counsel, which of course is very costly. Having to maintain a costly defence is a risk every person in the community is vulnerable to. There is, however, an extra element in the civil forfeiture cases, and that is the jeopardy faced by a civilian, at risk of losing a great deal and at risk of being labelled for criminal behaviour. This jeopardy arises from evidence gained by police using their special authority but without the case ever having fed into the criminal proceedings stream, with the defendant now caught in a proceeding that requires presentation for cross-examination at an examination for discovery. All of this is allowed by the legislation. Given these very high stakes for the individual and the power difference between the parties, it is not surprising that there has been an assortment of applications seeking to challenge the legitimacy of the evidence gathering actions of the police, seeking to postpone discovery until that legitimacy has been determined, and seeking avenues for just redress where such activities have been found to be in violation of a person’s Charter rights.

[16] On the issue of bifurcation, Saunders J.A. said:

[22] The criteria on bifurcation, also referred to as severance, has been established for some time. They include trial fairness, convenience, efficiency, and the presence or absence of prejudice. I would suggest that the preeminent consideration is the interests of justice.

[23] A decision on bifurcation engages the discretion of the judge in the management of the trial process. In Logan v. Hong, 2013 BCCA 249, the deference owed to the trial court was explained this way:

[9] Whatever may be the source of authority for the making of the order, it is clear it was made in the management by the trial court of its own processes and involves the exercise of discretion. Accordingly, this court must approach the appeal with the requisite deference. It is well known that we may interfere with an order made in the exercise of discretion only if we consider the judge did not give weight to all relevant considerations: Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3, 88 D.L.R. (4th) 1; Harelkin v. University of Regina, [1979] 2 S.C.R. 561, 96 D.L.R. (3d) 14; and MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, [2010] 1 S.C.R. 6. An error of principle, by definition, fits within the test established for interference with such an order.

[17] Finally, Saunders J.A. acknowledged at para. 38 of the reasons that civil forfeiture is a comparatively new area of litigation which raises difficult procedural questions as a result of the need to resolve Charter issues in the context of civil litigation and “there is no monolithic best way to deal with the process”.

The Preliminary Issue of Standing

[18] Mr. Beatch acknowledges there is an issue in this case with respect to the defendant’s standing to argue a breach of s. 8 of the Charter because the defendant maintains he was not living in the house at the time the warrant was issued.

[19] By way of background to the s. 8 issue in this case, the defendant purchased the house from his father in February 2010. At that time it was occupied by a tenant. At the time of the search it was occupied by a tenant.

[20] The search of the house and property was based on an Information to Obtain (“ITO”). In the ITO the affiant deposed there was an odour of marihuana at the property, elevated electricity usage and a heightened heat signature detected by FLIR, a thermal imaging device.

[21] Counsel maintains the way the smell of marihuana was detected is problematic. He also questions the validity of the affiant’s reliance on heightened electricity usage because the affiant compared them to his own electricity bills in coming to the conclusion they were unusually high. Finally, counsel notes that FLIR detects heightened heat signatures consistent with different types of activities, not solely those of a marihuana grow operation.

[22] Mr. Beatch relies primarily on R. v. Vi, 2008 BCCA 481 to demonstrate that the defendant has an arguable issue on standing.

[23] In Vi, the appellant was the owner of the property in question but lived elsewhere. The trial judge found he had no standing to challenge the search of the property. The Court of Appeal reversed that finding. Chief Justice Finch said:

[7] Whether Mr. Vi had an expectation of privacy in his house on McLauchlin Drive is a function of the totality of the circumstances. R. v. Edwards, [1996] 1 S.C.R. 128, sets out some of the relevant factors:

(i) presence at the time of the search;

(ii) possession or control of the property or place searched;

(iii) ownership of the property or place;

(iv) historical use of the property or item;

(v) the ability to regulate access;

(vi) the existence of a subjective expectation of privacy; and

(vii) the objective reasonableness of the expectation.

[8] Although the accused was not present at the time of the search, he did have possession or control of the property, he owned the property, and he had the ability to regulate access to the property. The evidence did not disclose any historical use of the property. Whether there was a subjective expectation of privacy, in the absence of any testimony from the accused, was a matter open to inference from the other facts, as was the objective reasonableness of such expectation.

[9] The trial judge appears to have found the determining factor on whether there was a subjective expectation of privacy to be the fact that the accused lived elsewhere.

[10] The cases relied on by the Crown are those where the accused persons similarly were not resident in the premises searched, see: R. v. Vu, 1999 BCCA 182, 133 C.C.C. (3d) 481; R. v. Novak, 2000 BCCA 257, 76 C.R.R. (2d) 104; R. v. Khuc, 2000 BCCA 20; and R. v. Pugliese (1992), 71 C.C.C. (3d) 295 (ON.C.A.).

[11] However, of those cases only in Pugliese was the person asserting an expectation of privacy the owner of the property in question. Moreover, in those cases the premises searched were occupied by someone other than the accused, e.g. Vu, Khuc and Pugliese; or the premises were not residential accommodation, e.g. Novak.

[12] This case is perhaps most similar to R. v. Wu, 2008 BCCA 7, 165 C.R.R. 369, where the accused was the owner of the house, had keys to the property, was present at the time of the search, but lived elsewhere. On the question of standing, this Court held that the case was “near the line” because the accused was not ordinarily resident in the premises, but nevertheless considered the case on the basis that Wu had standing to challenge the validity of the search warrant.

[24] Mr. Beatch relies on the decision of Mr. Justice Schultes in Huynh at para. 29 for the proposition that he need not prove standing at this stage, he is only required to make out an arguable case that he has standing. Mr. Beatch submits the following factors meet that threshold:

1. the defendant owned the house;

2. he was present immediately before the search warrant was executed;

3. his vehicle was parked in the driveway and he entered the house through the front door;

4. a short time later the defendant came out of the residence through the garage door;

5. he was carrying a 3’ by 1’ sealed cardboard box;

6. he put the box in the back of his vehicle and drove away; and

7. when police searched the house pursuant to the warrant no one was found.

[25] Counsel for the defendant submits that collectively, those factors establish an arguable case that he has standing to challenge the search warrant issued in this case.

[26] Mr. Poole, counsel for the Director, maintains the defendant does not have standing concerning the search of the house but concedes he has standing in relation to the search of his vehicle. Mr. Poole notes that in the defendant’s pleadings, he maintains he acquired the property through legal means, paid the expenses by legal means, was not living in the house, had rented it to a third party and if there was a marihuana grow operation he did not know about it. Specifically, the defendant has pleaded sections 6 and 12 of the CFA, quoted above. Counsel submits the defendant cannot “have it both ways” by maintaining he is an uninvolved interest holder yet still has a privacy interest in the property.

[27] Mr. Poole submits that Wu, cited by the Court of Appeal in Vi, illustrates circumstances that are just over the line in favour of a finding of standing, whereas this case does not meet that threshold.

[28] In Wu, the person found on the property at the time of the search was the mother of the appellant’s child. The appellant’s wallet was in the house and he had placed a padlock on the inside door to the basement. The Court of Appeal found those factors created a sufficient connection between the appellant and the property to ground standing. Counsel submits the circumstances before me are much more tenuous in terms of the defendant’s expectation of privacy in the property searched.

[29] Counsel for the Director also relies on R. v. Pugliese, [1992] OJ. No. 450 (C.A.). In that case, an apartment in a building owned by the accused was searched. The Crown alleged he was involved with the tenant of the apartment in illegal activity. There was no evidence he had ever been in the apartment or had access to it but he sought standing to challenge the search. The Ontario Court of Appeal rejected his argument that he acquired standing because he was the target of the search.

[30] Pugliese was decided before R. v. Edwards, cited above by the British Columbia Court of Appeal in Vi. The Edwards factors, and their treatment by the British Columbia Court of Appeal, are binding on me in terms of assessing the issue of standing. Pugliese is a factual example that was not analyzed within the Edwards paradigm.

[31] I am not persuaded that the defendant has to “ride one horse” to defend the Director’s claim against his property and either choose to pursue standing to mount a Charter argument or confine himself to the defence of uninterested property holder. No authority was cited to me to ground that proposition.

[32] The circumstances before me demonstrate the defendant owned the house, was present in it shortly before the police executed the search warrant, entered through the front door and exited via the garage door and was in possession of the garage door opener upon his arrest shortly after leaving the house with the sealed box. I am satisfied that the defendant has an arguable case on standing to pursue a Charter argument.

Positions of the Parties on Bifurcation

[33] Mr. Beatch submits it is in the interests of justice to order bifurcation in this case. The question of whether there are Charter breaches ought to be resolved first, rather than commingling Charter issues with considerations about whether there should be forfeiture or relief against forfeiture under the statutory framework of the CFA.

[34] Madam Justice Maisonville addressed this point in Johnson:

[54] Firstly, I note that the consideration of potential Charter breaches involves an examination of state behaviour, whereas the consideration of the application of the Civil Forfeiture Act, would engage a different evidential inquiry aimed at the impact on the subject of the in rem proceedings. Therefore, different evidentiary concerns are raised by the issues sought to be bifurcated. This lack of evidentiary overlap gives rise to a prima case for severance as noted in Okanagan Indian Band at para. 25.

[55] In addition, I find that separating the ss. 8, 9 and 10 Charter breach issue from the issues raised by the interplay of s. 24 the Charter with ss. 6 and 7 of the Civil Forfeiture Act provides compelling reasons to bifurcate the trial. Resolving the interaction between these two sections, s. 6 of the Civil Forfeiture Act and s. 24 of the Charter, will likely require extensive legal argument and possibly factual considerations, and so increased time and costs, argument that will prove unnecessary if Charter breaches are not found. I recognize that in effect, a remedy bifurcating the breach issue may ultimately result in a trifurcation, wherein the court is called upon to consider the issues of breach, remedy, and forfeiture in turn. However, I consider that in this case, as was the case in Huynh, proceeding in stages will ultimately result in cost savings and enable this matter to get heard far more quickly and fairly than if all the issues were left to be decided together.

[56] Also, the Johnsons submit that should bifurcation not be ordered, they would request a voir dire on the admissibility of the impugned evidence in advance of trial. This practical matter is discussed in Huynh at para. 39, where Schultes J. noted that there is little meaningful difference between the two ways of proceeding. There is therefore little prejudice to the plaintiffs.

[57] Further, I consider that Saunders J.A.’s identification of the power imbalance in civil forfeiture cases also weighs in favour of bifurcation. Establishing the legitimacy of the evidence gathered in advance of a determination of the other issues is in the interest of justice, and I consider it to be a compelling reason on the facts of this case.

[35] The Director and the Attorney General maintain that bifurcating the proceedings to explore Charter issues is not in the interests of justice in this case. Even if the defendant established standing and was successful in challenging the search warrant for the house, a full evidentiary record is required to determine whether the evidence should be admitted or excluded under s. 24(2) of the Charter. Charter breaches, once proven, may lead to remedies but the remedy must be fashioned in the particular context at play in any given case. There would be no time saving to slice off consideration of a Charter breach, although it is acknowledged that the defendant could seek a voir dire at the beginning of the trial to challenge the admissibility of the fruits of the police investigation. In Huynh, Schultes J. noted at para. 39 that there is very little meaningful difference between proceeding by way of voir dire or by way of bifurcation and thus little prejudice occasioned to the plaintiffs by bifurcating Charter issues.

[36] The Director and the Attorney General propose that the trial proceed in the normal course, with discoveries at large and evidence led at trial with the object of determining the effect of the Charter breaches, if any, at the end of the trial in the context of the statutory considerations concerning forfeiture. In particular, the Director submits that s. 6 provides relief against forfeiture and it may well be the case that Charter breaches could be accounted for in that context rather than through the exclusion of evidence under s. 24(2) of the Charter.

[37] I am satisfied it is in the interests of justice to bifurcate the ss. 8 and 9 issues and hear them first. If the defendant fails to establish standing to challenge the search warrant or fails to establish that the warrant violates s. 8 of the Charter, or a s. 9 violation with respect to the police stop after he drove away from the house, that will resolve one of the major issues before the court and potentially save time. I adopt the remarks of Maisonville J. at para. 55 of her reasons, quoted above, that resolving the interaction of s. 6 of the CFA and s. 24(2) of the Charter would engage significant complications that will be obviated if no Charter breaches are established. While bifurcation of the section 8 and 9 issues may well lead to trifurcation - breach stage, remedy stage and forfeiture stage - the matter can be heard more quickly and efficiently than if everything were left to be decided together.

[38] Finally, I note that combining consideration of Charter breaches and remedies with s. 6 of the CFA at the end of the trial could compromise the trial judge’s gatekeeper function concerning properly admissible evidence.

[39] The remaining issue is whether or not examination for discovery should proceed in the usual course, notwithstanding the bifurcation of proceedings. In Huynh (albeit in dicta), Lloydsmith and Johnson, the issue of discovery limited to the issue of Charter breaches was examined. The sum total of those judgments is that pursuant to Rule 7-1(18) the court may order a limited scope of examination for discovery.

[40] I am satisfied I should exercise my discretion in favour of an order for a limited cross-examination focussed on the alleged Charter breaches and nothing more. As Maisonville J. observed in Johnson:

[63] Questions posed during examinations for discovery should relate to the matter in question: Forliti v. Woolley, 2002 BCSC 858 at para. 9. In the context of this civil forfeiture application, wherein Charter breaches are alleged, I agree with Schultes J.’s comments as excerpted above and find that it is more consistent with the principles of proportionality, efficiency and fairness to limit discovery to the Charter breach issues in this case.

[41] The parties may appear before me if there are issues concerning the scope of examination for discovery or anything else arising from these reasons.

“Duncan J.”

______________________________________

The Honourable Madam Justice Duncan