No insulation from civil forfeiture

A plea bargain with the federal Crown in a criminal proceeding in which it agrees not to seek forfeiture of certain assets will not necessarily prevent the province from successfully bringing its own application under the Civil Remedies Act.

No insulation from civil forfeiture
Justin Safayeni says a recent ruling is a reminder that any agreement with criminal prosecutors over the seizure of a client’s assets is unlikely to bind the province from using its civil forfeiture powers.

A plea bargain with the federal Crown in a criminal proceeding in which it agrees not to seek forfeiture of certain assets will not necessarily prevent the province from successfully bringing its own application under the Civil Remedies Act.

Ontario Superior Court Justice Jasmine Akbarali ruled in favour of the provincial Crown last month in Attorney General (Ontario) v. 855 Darby Road and found that a Hells Angels clubhouse in Welland and paraphernalia related to the biker organization were instruments of unlawful activity and should be forfeited. The three owners of the building were also ordered to pay the province more than $32,000 in costs for the legal action.

“It is not clearly not in the interests of justice to order forfeiture,” stated Akbarali in explaining the legal test set out in the provincial statute, which was found to be constitutional by the Supreme Court of Canada in 2009 in its ruling in Chatterjee v. Ontario.

The decision is another reminder to defence lawyers that any agreement with criminal prosecutors over the seizure of a client’s assets is unlikely to bind the province from using its civil forfeiture powers, says Justin Safayeni, a lawyer at Stockwoods LLP in Toronto.

“The bottom line is you cannot give a client in a criminal proceeding any assurance that they are going to be insulated from civil forfeiture. That will be the exception, not the rule,” says Safayeni, who has acted in forfeiture cases and written about the law in this area.

Craig Bottomley, a Toronto defence lawyer, agrees that given the sweeping powers within the Civil Remedies Act, there are financial risks for some defendants even after a criminal plea bargain.

“It is a question of letting your client know,” says Bottomley, who heads Bottomley Barristers and has acted in forfeiture proceedings.

The plea agreement in the Welland case followed a major drug trafficking investigation and prosecution by the federal Crown. One of the owners of the clubhouse, Gerald Ward, was sentenced to 16 years in prison in 2009 after pleading guilty to trafficking related offences.

The federal government seized one of his vehicles and $300,000 in cash, as part of the plea arrangement. It also lifted the restraint order on the Darby Rd. property.

The province later brought a forfeiture application for the property. In the hearing before Akbarali, the court heard evidence that the federal Crown never gave an assurance at the time of the plea bargain that no other party would seek to seize the building.

However, the former criminal defence lawyer for Ward testified the plea deal might not have been reached if he thought his property would still be seized.

Akbarali, in her ruling, rejected the argument that Ward was “lulled into a false sense of security” about the status of the Darby Rd. clubhouse.

While the province may be legally entitled to seek forfeiture of assets after a prosecution has been resolved, it could affect what a criminal defendant is going to do, suggests Bottomley.

“This has the real impact of discouraging guilty pleas,” he says, adding that it may lead to increased court resources being used in major drug cases for example, instead of the Crown and defence working toward a resolution. One of the rare examples of a provincial forfeiture application being dismissed because of the nature of the plea bargain in a criminal case was a ruling by the Ontario Court of Appeal nearly four years ago.

The federal Crown in a marijuana grow operation case stated on the record at the time of the guilty plea that it was not seeking forfeiture of the house.

The Court of Appeal in its ruling in Ontario (Attorney General) v. 714 Railton Avenue found that the defendant reasonably entered into a plea agreement in which he was led to believe he would not have to forfeit his home.

Ryan Naimark, who acted for Ward and the other two respondents in the Darby Road forfeiture hearing, argued that the facts were similar to those in Railton where the Court of Appeal made reference to the need for an “umbrella of fairness” in its decision. Akbarali, in her ruling, rejected the argument.

Railton was an unusual case,” the judge stated.

“The Court of Appeal was not setting out a second exception to forfeiture beyond the ‘clearly not in the interests of justice’ exception in the CRA,” she wrote.

Naimark, who heads Naimark Law in Toronto, declined comment when contacted by Law Times.

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