



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v. 20 Strike Avenue,
    2014 ONCA 395

DATE: 20140516

DOCKET: C57014

MacPherson, Cronk and Gillese JJ.A.

BETWEEN

Attorney General of Ontario

Applicant

(Appellant)

and

20 Strike Avenue, Bowmanville, Ontario
    (PIN #26932-0115 (L.T.)
and a

2005 Dodge Magnum (VIN # 2D4GV58255H680471) (
in rem
)

Respondent

(Respondent in Appeal)

William J. Manuel and Dan Phelan, for the appellant

Sharon E. Lavine and Peter R. Hamm, for the respondent

Heard: February 25, 2014

On appeal from the order of Justice John R. McCarthy, of
    the Superior Court of Justice, dated April 10, 2013, with reasons reported at 2013
    ONSC 2130.

Cronk J.A.:

A.

introduction

[1]

This Crown appeal arises from the dismissal of an application by the
    Attorney General of Ontario (AGO) for forfeiture of a residential property in
    Bowmanville, Ontario under the
Civil Remedies Act, 2001
, S.O. 2001, c.
    28 (
CRA
).  The
CRA
establishes a civil forfeiture of
    property scheme, distinct from the forfeiture provisions of the
Criminal
    Code
, aimed at deterring crime, compensating victims of crime, and
    remedying the societal effects of criminality.  The statute provides for the forfeiture
    of certain kinds of property in Ontario to the provincial Crown in specific
    circumstances, including property that constitutes proceeds of unlawful
    activity (s. 3(1)) and property that is used to engage in unlawful activity (s.
    8(1)).

[2]

Forfeiture under the
CRA
, however, is subject to statutory
    exceptions, two of which are relevant to requests under s. 8(1) for forfeiture
    of property that is used to engage in unlawful activity.

[3]

The first exception, found in s. 8(3) of the
CRA
, applies where
    the party seeking to avoid forfeiture establishes that he or she is a
    responsible owner of the property sought to be forfeited (the Responsible
    Owner Exception).  In this event, the court is required to make an order that
    protects the owners interest in the property, unless the AGO demonstrates that
    such an order would clearly not be in the interests of justice.

[4]

The second exception, provided for under s. 8(1) itself, affords the
    courts discretion to relieve against forfeiture where a forfeiture order would
    clearly not be in the interests of justice (the Interests of Justice
    Exception).

[5]

This appeal was heard at the same time as
Ontario (Attorney General)

v. 51 Taylor Avenue
, 2014 ONCA 396 and
Ontario (Attorney General)

v. 714 Railton Avenue
, 2014 ONCA 397, released concurrently with these
    reasons.  Each case involves a s. 8(1) application by the AGO for forfeiture of
    property used to engage in unlawful activity, defined under the
CRA
as
    property that is an instrument of unlawful activity.

[6]

In this case, the application judge concluded that the property owner
    could not rely on the Responsible Owner Exception to avoid forfeiture of the
    targeted residence.  However, he also held that the Interests of Justice
    Exception to forfeiture applied in all the circumstances.  In particular, he
    found that the AGO had delayed for six years in commencing a forfeiture
    proceeding, without adequate explanation and to the prejudice of the property
    owner.  In the application judges view, this rendered forfeiture unfair and a
    manifestly harsh and inequitable result.  He therefore dismissed the AGOs forfeiture
    application.

[7]

The Crown appeals, arguing that the application judges analysis of the
    Interests of Justice Exception to forfeiture is infected by palpable and
    overriding factual errors, as well as errors of law.

[8]

The respondent defends the application judges reliance on the Interests
    of Justice Exception to deny forfeiture.  However, it submits that the
    application judge erred by holding that the Responsible Owner Exception to
    forfeiture did not apply on the facts here.  The respondent says that both
    exceptions to forfeiture under s. 8(1) are engaged in this case.

B.

relevant statutory provisions

[9]

Section 1 of the
CRA
contains the following description of the purpose
    of the
CRA
:

1.
The purpose of this Act is to provide
    civil remedies that will assist in,

(a) compensating persons who suffer pecuniary or non-pecuniary
    losses as a result of unlawful activities;

(b) preventing persons who engage in unlawful activities and
    others from keeping property that was acquired as a result of unlawful
    activities;

(c) preventing property, including vehicles as defined in Part
    III.1, from being used to engage in certain unlawful activities; and

(d) preventing injury to the public that may result from
    conspiracies to engage in unlawful activities.

[10]

Section
    8(1) of the
CRA
authorizes the forfeiture of property that is an instrument
    of unlawful activity.  It reads:

8. (1)
In a proceeding commenced by the
    Attorney General,
the Superior Court of Justice shall, subject to
    subsection (3) and except where it would clearly not be in the interests of
    justice, make an order forfeiting property
that is in Ontario to the Crown
    in right of Ontario
if the court finds that the property is an instrument
    of unlawful activity
.  [Emphasis added.]

[11]

Section
    7(1) of the
CRA
defines the phrases instrument of unlawful activity
    and unlawful activity in this fashion:


instrument of unlawful activity
 means
    property that is likely to be used to engage in unlawful activity that, in
    turn, would be likely to or is intended to result in the acquisition of other
    property or in serious bodily harm to any person, and includes any property
    that is realized from the sale or other disposition of such property;




unlawful activity
 means an act or omission
    that,

(a) is an offence under an Act of
    Canada, Ontario or another province or territory of Canada, or

(b) is an offence under an Act of a
    jurisdiction outside Canada, if a similar act or omission would be an offence
    under an Act of Canada or Ontario if it were committed in Ontario,

whether the act or omission occurred before or after this Part
    came into force.

[12]

Forfeiture
    under s. 8(1) is expressly subject to the Responsible Owner Exception
    established by s. 8(3) of the
CRA
.  Section 8(3) states:

8. (3)  If the court finds that property is an instrument of
    unlawful activity and a party to the proceeding proves that he, she or it is a
    responsible owner of the property, the court, except where it would clearly not
    be in the interests of justice, shall make such order as it considers necessary
    to protect the responsible owners interest in the property.

[13]

The
    term responsible owner is defined in s. 7(1) of the
CRA
in these
    terms:

responsible owner means, with respect to property that is an
    instrument of unlawful activity, a person with an interest in the property who
    has done all that can reasonably be done to prevent the property from being
    used to engage in unlawful activity, including,

(a)

promptly notifying appropriate
    law enforcement agencies whenever the person knows or ought to know that the
    property has been or is likely to be used to engage in unlawful activity, and

(b)

refusing or withdrawing any
    permission that the person has authority to give and that the person knows or
    ought to know has facilitated or is likely to facilitate the property being
    used to engage in unlawful activity.

[14]

As
    I have said, forfeiture of an instrument of unlawful activity is also subject
    to the Interests of Justice Exception created by s. 8(1).  The
CRA
contains no definition of the broad phrase interests of justice.  Instead, it
    is left to the court to determine, on a case-by-case basis, whether the
    applicable circumstances justify granting relief from forfeiture.

[15]

Finally,
    by operation of s. 8(5) of the
CRA
, no statutory limitation period
    applies to a s. 8 forfeiture proceeding.

C.

Facts

(1)

Ownership and Occupancy of the Property

[16]

On
    February 24, 2012, the AGO applied to the Superior Court of Justice for
    forfeiture of a single-family, private residence located at 20 Strike Avenue,
    in Bowmanville (the Property).  At all material times, Roger Parker (Roger),
    the president and principal shareholder of Parker Brothers Textile Mills (Parker
    Brothers), was the registered owner of the Property.

[17]

Roger
    purchased the Property in 2003 for $159,900, assuming a mortgage in the
    approximate amount of $147,000 in partial satisfaction of the purchase price.  Roger
    honoured his mortgage obligations in the normal course, from his own funds,
    until the date of the AGOs forfeiture application.

[18]

It
    was Rogers evidence that he acquired the Property for reasons related to his
    textile business.  He expected that it would serve as his residence if he were
    required to attend the Parker Brothers facility in Bowmanville for significant
    periods of time.  As it happened, Roger never resided at the Property. 
    Instead, he rented the Property to his son, Fred Parker (Fred), at various
    intervals between 2004 and late January 2011.  Fred worked at the Parker
    Brothers textile plant in Bowmanville.  Roger charged Fred rent for his
    occupancy of the Property, in the amounts of $800 and, later, $1,310 per
    month.  He arranged for the rental payments to be automatically deducted from
    his sons salary at Parker Brothers.

[19]

At
    the time of the forfeiture hearing, Fred was 43 years old.  It is common ground
    that he has battled a long-standing and serious addiction to drugs since he was
    about 18 years of age.  For decades, with Rogers assistance and that of other
    family members, Fred repeatedly attempted to overcome his drug habit. 
    Unfortunately, his efforts were unsuccessful.

[20]

Fred
    also has a lengthy criminal record, consisting of approximately 36 criminal
    convictions dating from 1989, including at least nine convictions for the
    possession of drugs or possession of drugs for the purposes of trafficking.  He
    also has 14 convictions for failing to comply with court orders.  In several
    instances, Roger acted as Freds bail surety in respect of his criminal
    charges, and paid his legal bills.

(2)

Criminal Activity at the Property

(a)

March 2006 Police Investigation

[21]

On
    March 10, 2006, the police executed a search warrant at the Property.  They
    found an indoor marijuana grow operation in three rooms in the basement of the
    home, with 86 marijuana plants having an estimated street value of up to $86,000.
    They also discovered various drug-related paraphernalia, 117.8 grams of packaged
    marijuana, 147 grams of cocaine, small amounts of cannabis resin, oxycodone and
    ecstasy, and $2,549.15 in cash located in various rooms of the house.  Fred,
    who was then residing at the Property, was arrested.

[22]

Later
    the same month, the police executed a search warrant at the Parker Brothers
    plant in Bowmanville, where Fred worked.  At the plant, the police discovered a
    sophisticated, industrial-scale marijuana grow operation in a hidden room, with
    895 marijuana plants having an estimated street value of $895,000.

[23]

From
    March 10, 2006 until May 2, 2006, Fred was detained in custody.  On the latter
    date, he was released on bail with Roger acting as surety.  While on bail, he
    resided with his father.

[24]

On
    January 7, 2008, Fred pleaded guilty to production of marijuana and possession
    of cocaine for the purposes of trafficking.  He was sentenced to two years and
    six months imprisonment.

(b)

July 2010 Police Investigation

[25]

In
    September 2009, Fred was released on parole.  He resumed living at the
    Property, together with his girlfriend and son.

[26]

In
    late June or early July 2010, having received information that Fred was selling
    drugs from the Property while on parole, the police placed Fred under
    surveillance.  During the surveillance, the police saw Fred attending a known
    crack house located near the Property.  They also observed significant traffic
    at the crack house and at the Property, when Fred was present, consistent with
    drug trafficking activity.

[27]

On
    the afternoon of July 2, 2010, Fred was arrested outside the crack house.  He
    was found in possession of $1,610 in cash, eight grams of cocaine, 33 oxycodone
    pills of varying strength, and a vial containing five grams of hash
    oil/cannabis resin.

[28]

Later
    the same day, the police executed a search warrant at the Property.  They
    seized a variety of pills, including a bottle of 15 oxycocet pills (in part containing
    oxycodone) and two tablets containing the controlled substance nabilone,
    together with a digital scale and marijuana grinder, from the kitchen of the
    house.

[29]

On
    July 20, 2010, Fred pleaded guilty to possession for the purposes of
    trafficking (cocaine) and possession of a controlled substance (oxycodone).  He
    was sentenced to five months in jail, plus two years probation.

[30]

As
    a result of these convictions, Fred was in custody from early July 2010 to
    October 2010.  On his release from jail, he returned to live at the Property.

(c)

January 2011 Police Investigation

[31]

In
    December 2010 and January 2011, the police received information that Fred and
    his girlfriend were trafficking in prescription drugs.  On January 19 and 20,
    2011, the police observed the couple leaving the Property and meeting with
    various individuals for short periods of time in their vehicle, engaging in what
    the police believed was a series of drug transactions.  These encounters included
    a brief meeting with an individual who, on subsequent arrest, was found in
    possession of three oxycodone pills and 2.4 grams of crack cocaine.

[32]

On
    January 22, 2011, the police monitored Fred throughout the day.  Later that
    evening, when the police conducted a traffic stop of the car that Fred was
    driving, Fred and his girlfriend were arrested for trafficking.  During a
    search of the vehicle incident to arrest, the police discovered small
    quantities of drugs and drug-related items on Freds person or in the car,
    including 0.02 grams of crack cocaine, 178 marijuana seeds, seven vials of
    cannabis resin, a spoon with cocaine residue, two crack pipes, two needles containing
    an unknown substance, a butane torch, and $1,335 in cash.

[33]

The
    next day, January 23, 2011, the police again executed a search warrant at the
    Property.  On this occasion, they found five 30 milligram Benzodiazapine
    tablets, 30 milligrams of marijuana and 73 unknown pink tablets, plus a spoon
    containing 0.4 grams of cocaine residue, a digital scale and a stun taser.  Virtually
    none of these items was in plain view.

[34]

On
    May 18, 2011, Fred pleaded guilty to possession of a controlled substance,
    possession of a prohibited weapon, and three counts of breach of recognizance. 
    He was sentenced to approximately 11 months in jail and two years probation.

[35]

After
    his arrest on January 22, 2011, Fred never again resided at the Property.  On
    his release from custody in December 2011, he resumed living with his father.

(3)

Forfeiture

Proceeding and Sale of the Property

[36]

On
    February 24, 2012, the AGO applied for an order forfeiting the Property as an
    instrument of unlawful activity under s. 8(1), or as the proceeds of unlawful
    activity under s. 3(1), of the CRA.
[1]
On the same day, the AGO obtained a 30-day preservation order concerning the
    Property.  The preservation order was subsequently continued until the hearing
    of the forfeiture application or further court order.

[37]

At
    the time of the forfeiture application, the Property was listed for sale.  It
    was Rogers evidence that he had attempted to sell the Property as early as
    2007, without success.  By court order dated June 20, 2012, Roger was
    authorized to sell the Property, subject to various conditions, including the
    requirement that the net proceeds of sale be paid into court pending the
    determination of the AGOs forfeiture application.  The Property was
    subsequently sold on consent of the parties and the net proceeds of sale, in
    the amount of $123,269.54, were paid into court.

(a)
Parties Positions at the Forfeiture
    Hearing

[38]

In
    his application for forfeiture, the AGO identified Roger as the registered
    owner of the Property.  The AGO asserted that Roger purchased the Property for
    Freds benefit or, alternatively, that Fred was a nominee owner of the
    Property.  The AGO also alleged that, based on the numerous times that Roger
    had acted as Freds bail surety, he appeared to be fully aware of Freds drug
    trafficking and criminal activity.  Indeed, the AGO maintained that Roger
    facilitated and condoned his sons criminal activities at the Property and
    the Parker Brothers Bowmanville plant.

[39]

At
    the forfeiture hearing, the AGO argued that Roger had failed to prevent Fred from
    repeatedly using the Property to engage in unlawful activity.  As a result, Roger
    could not demonstrate that he was a responsible owner of the Property within
    the meaning of the Responsible Owner Exception to forfeiture under s. 8(3) of
    the
CRA
.  Similarly, according to the AGO, Roger could not bring
    himself within the Interests of Justice Exception to forfeiture under s. 8(1)
    of the
CRA
.  Neither exception to forfeiture having been triggered, a
    forfeiture order was therefore mandatory.

[40]

The
    respondent conceded that the Property could be considered an instrument of
    unlawful activity, as defined under s. 7 of the
CRA
.  The respondent argued,
    however, that Roger was a responsible owner of the Property within the meaning
    of ss. 7 and 8(3) of the
CRA
, with the result that the Responsible
    Owner Exception to forfeiture applied.  The respondent also maintained, based
    on the circumstances as a whole, that the Interests of Justice Exception to
    forfeiture applied.  In support of this submission, the respondent emphasized the
    limited connection between the Property and Freds unlawful activities, and Rogers
    own limited connection to his sons unlawful activities.  These considerations,
    the respondent urged, compelled the conclusion that forfeiture should be denied
    based on the Interests of Justice Exception.

(b)
Application Judges Decision

[41]

The
    application judge reviewed the relevant provisions of the
CRA
, the
    purposes of the
CRA
, and the parties positions.  He concluded that
    the Property was an instrument of unlawful activity within the meaning of s. 7 of
    the
CRA
.

[42]

The
    application judge then considered whether the statutory exceptions to
    forfeiture applied in the circumstances.  He first addressed the Responsible
    Owner Exception, holding as follows:

(1)

Roger failed
    to establish that he had taken reasonable steps to ensure that the Property was
    not used as an instrument of unlawful activity;

(2)

Rogers
    evidence that he made regular visits to the Property to determine if his son
    was engaged in drug activity and that, during these visits, the house was clean
    and free of drug paraphernalia, must be rejected;

(3)

Roger was
    aware, prior to 2011, of his sons problems with substance abuse and law
    enforcement authorities.  He was also aware, on at least two occasions (as a
    result of Freds 2006 and 2010 convictions), of Freds unlawful activity at the
    Property; and

(4)

nonetheless,
    Roger failed to take any steps to terminate his sons use of the Property. 
    Moreover, he also failed to take the type of extraordinary measures (such as
    unscheduled or surprise visits) that a reasonably diligent property owner, in
    the circumstances, would undertake.

[43]

Based
    on these findings, the application judge held that the respondent could not
    avail itself of the Responsible Owner Exception.

[44]

The
    application judge then turned to the Interests of Justice Exception to
    forfeiture.  He considered certain of the principles relating to forfeiture described
    by this court in
Ontario (Attorney General) v. 8477 Darlington Crescent
,
    2011 ONCA 363, 279 O.A.C. 268 (
Darlington
)
[2]
,
    in particular, whether Rogers conduct, as owner of the Property, assisted the
    respondent.  He found that:

(1)

there was
    no suggestion that Roger was complicit in, or profited from, his sons unlawful
    activities at the Property;

(2)

contrary
    to the AGOs contention, Roger was the sole and exclusive beneficiary of the
    Property, having purchased it for legitimate reasons; and

(3)

Roger rented
    the Property to his son for legitimate reasons connected with his sons employment
    by Parker Brothers.

[45]

However,
    the application judge also held that:

(4)

since
    Roger had failed to act as a responsible owner in relation to the Property, his
    conduct alone was insufficient to trigger the Interests of Justice Exception to
    forfeiture.

[46]

Having
    considered Rogers conduct, as owner of the Property, the application judge
    then reviewed what he termed the entire circumstances of the case, in
    particular, the AGOs conduct, to determine whether the Interests of Justice
    Exception should be invoked.  He made the following key findings:

(1)

although the
    AGO had grounds to bring a forfeiture application as early as March 2006, the
    AGO delayed six years  until late February 2012  before commencing the
    application;

(2)

it was clearly
    not in the interests of justice to allow the AGO to bide his time in
    commencing proceedings under the
CRA
, while Roger, as an unsuspecting
    property owner continued to maintain the Property and to use his own funds to pay
    down his mortgage, thereby increasing his equity in the Property over time;

(3)

the only
    reason offered by the AGO for the six-year delay was a backlog in prospective
    forfeiture applications; and

(4)

in the
    absence of an adequate explanation for the delay and in light of the prejudice
    to the property owner, the Interests of Justice Exception to forfeiture applied
    to prevent the AGO from delaying beyond a reasonable period from the date when
prima facie
grounds for forfeiture existed.

[47]

The
    application judges conclusion on the Interests of Justice Exception is set out
    in this succinct passage, at para. 19 of his reasons:

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 [appellant] and the property owner.  An unexplained six year
    delay in bringing a forfeiture application under s. 8(1) of the [
CRA
],
    while an unsuspecting owner of the property builds up his equity in a property
    for the benefit of the [AGO], is unfair to the point of offensive. To grant
    forfeiture in these circumstances would, in my view, be a manifestly harsh and
    inequitable result.

[48]

Accordingly,
    relying on the s. 8(1) Interests of Justice Exception to forfeiture, the
    application judge dismissed the AGOs forfeiture application.

D.

issues

[49]

The
    Crown argues that the application judges analysis of the Interests of Justice
    Exception to forfeiture is fatally flawed in several respects.  It submits that
    the application judge erred:

(1)

by finding
    that the AGO delayed for six years, without adequate explanation and to the
    prejudice of the Property owner, in commencing the forfeiture application;

(2)

by
    imposing a judicially-created limitation period for forfeiture applications
    under s. 8(1) of the
CRA
;

(3)

by

improperly

substituting

his

discretion

for

that

of

the
    police and the AGO regarding whether, and when,

a

forfeiture

application should be commenced; and

(4)

by
    adopting a broad and liberal construction of the Interests of Justice Exception
    under s. 8(1) of the
CRA
.

[50]

The
    respondent raises an additional issue, arguing that the application judge
    erred:

(5)

by
    concluding that the
CRA
s. 8(3) Responsible Owner Exception to
    forfeiture does not apply in this case.

E.

analysis

(1)

Interests of Justice Exception to Forfeiture

[51]

The
    interpretation of the Interests of Justice and Responsible Owner Exceptions to
    forfeiture under ss. 8(1) and (3) of the
CRA
are matters of first
    impression for this court.

[52]

However,
    this court has considered similar issues under the
CRA
, in the context
    of forfeiture applications relating to property that constitutes the proceeds
    of crime.  Section 3(1) of the
CRA
provides for relief from forfeiture
    of such property where a forfeiture order would clearly not be in the
    interests of justice.  In
Darlington
, this court considered this
    exception to forfeiture and commented, at para. 84:

The interests of justice exception to forfeiture recognizes
    that, given the very broad definition of proceeds of unlawful activity and
    the narrow exception to forfeiture carved out by the definition of legitimate
    owner, there will be cases that fall within the scope of the forfeiture power
    where, on any reasonable view, forfeiture would be a draconian and unjust
    result.

[53]

These
    comments are equally applicable to the Interests of Justice Exception under s.
    8(1) of the
CRA
and should guide this courts approach to relief from
    forfeiture under that provision.  I will return to the holdings in
Darlington
later in these reasons.

(a)


Findings of Unexplained,
    Prejudicial and Unfair Delay

[54]

The
    Crowns primary submission on appeal is that the application judges analysis
    of the Interests of Justice Exception under s. 8(1) rests on several factual
    findings that are tainted by palpable and overriding errors.  It contends that the
    application judges core finding that the AGO delayed for six years in seeking forfeiture
    of the Property, together with his associated findings regarding the reason for
    the delay and the ensuing prejudice to the Property owner, are fatally flawed. 
    These errors, the Crown says, led the application judge to further err by
    invoking the Interests of Justice Exception to deny forfeiture of the Property. 
    Since these submissions are inter-related, I will address them together.

[55]

First,
    the finding of a six-year delay.  The application judge held, in effect, that
    the AGO knowingly delayed  bide[d] his time  for six years in commencing
    the forfeiture application.  This finding comes very close to a holding of
    abuse of process or bad faith by the AGO.  I agree with the Crown that, on this
    record, this serious finding is unsustainable.

[56]

Simply
    put, the evidentiary record does not support the finding of a six-year delay
    attributable to the AGO.  The record details the staged process followed in
    Ontario under O. Reg. 91/02 for the determination whether a civil forfeiture
    proceeding should be commenced under the
CRA
.  In brief, this process
    involves an investigation by the police into suspected unlawful activity at a
    property, a referral by the police to an asset forfeiture unit officer for
    assessment, a referral by that officer to the Crown Law Office  Criminal to
    perform a gatekeeping function concerning potential civil forfeiture
    proceedings and, if a forfeiture submission is to proceed, a referral by that
    office to the Civil Remedies for Illicit Activities Office (CRIA)  the office
    within the Ontario Ministry of the Attorney General (MAG) responsible for
    proceedings under the
CRA
.  The CRIA then provides an opinion to the
    AGO about whether a forfeiture proceeding should be commenced.

[57]

As
    a result of this multi-step process, the AGO is generally not in a position to
    decide whether to approve the initiation of
CRA
forfeiture proceedings
    until a forfeiture submission has been received and evaluated by the CRIA and
    provided, with advice, to the AGO.  The decision whether to advance a
    forfeiture submission is made initially by the police and then by officials in
    the Crown Law Office  Criminal of the MAG.  Only then is a forfeiture
    submission potentially forwarded to the CRIA and, from it, to the AGO.

[58]

The
    record here reveals that the police first referred this case for evaluation of
    a possible
CRA
forfeiture proceeding in September 2011.  Prior to that
    date, the police acted independently in the enforcement of the criminal law
    during their investigations of potential unlawful activities at the Property.  It
    appears that it was not until approximately November 2011 that the forfeiture
    submission was forwarded by the CRIA to the AGO for consideration.

[59]

In
    these circumstances, I do not think it can fairly be said that the AGO delayed
    six years in initiating the forfeiture application.  The forfeiture submission
    did not even reach the MAG from the police until September 2011.  Measured from
    that date, the forfeiture proceeding was commenced within five months of the
    initial police referral and within approximately three months of the CRIA
    submission to the AGO.

[60]

Contrary
    to the application judges finding, therefore, there is no evidence that the
    AGO bide[d] his time in commencing the forfeiture application, let alone for
    six years.  Lacking any evidentiary footing, this finding is tainted by
    palpable and overriding error.

[61]

I
    note that the respondent made no complaint of undue and unfair delay in its
    materials on the forfeiture application.  Nor does it advance such a claim
    before this court.  The issue of excessive delay appears to have been raised by
    the application judge, of his own motion, during submissions at the forfeiture
    hearing.

[62]

I
    would not foreclose the possibility that, in a proper case, the timeliness of a
    forfeiture application may be relevant to the analysis whether the Interests of
    Justice Exception to forfeiture is implicated.  Indeed, the AGO acknowledged as
    much during oral argument at the appeal hearing.  However, an undue delay claim
    must be assessed in the context of the full record.  This did not occur in this
    case.  The application judges reasons make no mention of the
CRA
referral process or of the critical dates on which the forfeiture submission
    was first received by the MAG and subsequently forwarded to the AGO.

[63]

There
    is a second material defect in the application judges findings regarding delay. 
    In one part of his reasons, the application judge stated that a six-year delay
    in commencing the forfeiture application arose because of a backlog in prospective
    forfeiture applications.  Later in his reasons, the application judge suggested
    that the cause of the delay was unexplained and that this unexplained delay
    and ensuing prejudice to the Property owner resulted in unfairness to the
    point of [being] offensive.  I take these seemingly conflicting statements to
    mean that, in the application judges view, the AGO failed to offer an
    acceptable explanation for what the application judge regarded as an unwarranted
    and prejudicial delay in commencing the forfeiture proceeding.

[64]

This
    finding is also infected by palpable and overriding error.  Before this court,
    both parties acknowledge that there was no evidence, and no party even
    suggested before the application judge, that the timing of the commencement of
    the forfeiture application was driven by a backlog in forfeiture applications.

[65]

Finally,
    the application judges dismissal of the forfeiture application was based in
    part on his finding of prejudice to Roger, as the unsuspecting Property owner,
    due to the appreciation of Rogers equity in the Property prior to the
    commencement of the forfeiture application.  I have already concluded that the
    application judges findings of unexplained and unfair delay attributable to
    the AGO are unsustainable.  It follows that any increase  or decrease  in Rogers
    equity in the Property prior to the date of the forfeiture application was
    largely irrelevant.  At its highest, this was but one factor to be considered
    in the analysis whether the court should exercise its discretion under the
    Interests of Justice Exception to shelter the Property from forfeiture.

(b)
Application Judges Approach to Section 8(5) of the
CRA

[66]

The
    Crown also argues that the application judge erred in his approach to s. 8(5)
    of the
CRA
.  Some forfeiture applications under the
CRA
are
    subject to a statutory limitation period, as for example, where forfeiture of
    property that constitutes proceeds of unlawful activity is sought under s. 3(1):
    see s. 3(5) of the
CRA
.  This stands in stark contrast to forfeiture
    requests under s. 8(1).  Section 8(5) of the
CRA
provides that there
    is no limitation period for a s. 8(1) forfeiture proceeding concerning property
    that is an instrument of unlawful activity.

[67]

The
    application judge was clearly cognizant of this important statutory provision, referring
    to it at least three times in his reasons.  The Crown submits that the
    application judge nonetheless erred by, in effect, applying a judicially 
    imposed limitation period in respect of s. 8(1) forfeiture applications.  In
    so doing, the Crown contends, the application judge improperly substituted his
    own discretion for that of the police and the AGO as to whether, and when, a
CRA
s. 8(1) forfeiture proceeding should be commenced.

[68]

I
    agree that the application judge erred by failing to give effect to s. 8(5) of
    the
CRA
.  The legislative direction afforded by s. 8(5) exists for a
    reason.  It is designed to prevent the use of property for unlawful activity,
    whenever such use is discovered.  Section 8(5) confirms the legislatures clear
    intention that delay alone will not defeat a s. 8(1) forfeiture application
    concerning property that is used to engage in unlawful activity.  It follows
    that by relying principally, if not exclusively, on his perception of the AGOs
    delay in this case to deny forfeiture of the Property, notwithstanding the
    plain language of s. 8(5), the application judge further erred.

[69]

Moreover,
    s. 8(5) of the
CRA
signals the legislatures intention to provide the
    AGO with wide discretion in determining whether, and when, to commence a s. 8(1)
    forfeiture application under the
CRA
.  The application judge held that
    the AGO had grounds, as early as March 2006, to bring a forfeiture application
    and that the AGOs decision to proceed with forfeiture only in February 2012 was
    unfair and manifestly harsh and inequitable.  I agree with the Crowns
    submission that, in so holding, the application judge essentially substituted
    his discretion under s. 8(1) of the
CRA
to consider whether forfeiture
    of the Property was clearly not in the interests of justice for the discretion
    of the police and the AGO regarding the timing for commencement of a s. 8(1) forfeiture
    application.  With respect, this was not the application judges role.

(c)

Fresh Consideration of the Interests of Justice Exception

[70]

In
    light of the application judges errors, described above, it is unnecessary to
    consider the AGOs other complaints regarding the application judges exercise
    of his discretion to relieve against forfeiture of the Property.  As the
    application judges reliance on the Interests of Justice Exception rests on a
    flawed foundation, it cannot stand.  It therefore falls to this court to
    determine whether the courts discretion to relieve against forfeiture under the
    Interests of Justice Exception should be exercised.

[71]

The
    test for relief from forfeiture under the Interests of Justice Exception in s.
    8(1) of the
CRA
is a high one.  As the
Darlington
court noted,
    relief from forfeiture on this ground may only be granted where forfeiture is
    clearly not in the interests of justice.  Justice Doherty explained in
Darlington
,
    at para. 85:

Section 3(1) does not contemplate that the question of
    forfeiture will be decided based on a mere balancing of the pros and cons of
    making a forfeiture order.  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.

[72]

After
    careful consideration of the record and in light of the undisputed findings of
    the application judge, I conclude that forfeiture of the Property would be manifestly
    harsh and inequitable in the circumstances of this case and, hence, that it is
    clearly not in the interests of justice.  Accordingly, the courts discretion
    to relieve against forfeiture should be exercised.  I reach this conclusion for
    the following reasons.

[73]

In
Darlington
, this court analogized the discretion to refuse forfeiture
    under s. 3(1) of the
CRA
to the private law remedy of relief from
    forfeiture.  Citing the Supreme Courts decision in
Saskatchewan River
    Bungalows Ltd. v. Maritime Life Assurance Co
., [1994] 2 S.C.R. 490, at p.
    504, the
Darlington
court noted, at para. 87, that the power to
    relieve from civil forfeiture is both discretionary and fact-specific. 
    Further, a court asked to grant relief from forfeiture under the
CRA
must consider all factors that are relevant to the interests of justice:
Darlington
at para. 97.

[74]

In
Darlington
, at para. 97, this court recognized that it is not possible
    to list all the factors that could properly be considered by the court in
    evaluating the interests of justice in a particular case.  However, Doherty
    J.A. identified the following factors as relevant:

(1) the closeness of the connection between the property and
    the illegal activity (para. 97);

(2) the reasonableness of the conduct of the party whose
    property is the subject of the forfeiture application as it relates to the
    unlawful activity (paras. 98 and 99);

(3) the interplay between the purposes of the
CRA
and
    the exercise of the discretion to relieve against forfeiture (paras. 98 and
    107); and

(4) the value of the property owners interest in the property
    compared to the value of the property that is tainted by the unlawful activity
    (paras. 98 and 104).

[75]

The
    first three factors listed above are pertinent in this case.  In my opinion,
    the evaluation of these factors on the facts here yields several compelling
    reasons that militate in favour of relief from forfeiture of the Property.

[76]

First,
    the connection between the Property and Freds illegal activities is neither
    consistent nor overwhelming.  There is no doubt that there was a connection
    between the Property and Freds drug activities in 2006, when a marijuana grow
    operation was found at the premises.  However, after that discovery, Fred did
    not reside at the Property for three and one-half years.  Indeed, when the
    six-year period between Freds arrest in March 2006 and the date of the
    forfeiture application is viewed as a whole, Fred did not live at the Property
    for almost four years and ten months.  And, when Fred was released from jail in
    2011, Roger did not permit him to resume living at the Property. Instead, he
    was required to reside with his father.

[77]

Further,
    there is no suggestion of drug activity at the Property after Fred returned to
    live there in September 2009, until the summer of 2010.  Even then, Fred was
    arrested at the nearby crack house, not at the Property.  Further, the
    drug-related items discovered at the Property were consistent with personal
    drug use.

[78]

Fred
    did suffer a relapse, and return to drug activity in late 2010 and January 2011. 
    However, Fred and his girlfriend were arrested in late January 2011 in their
    vehicle, from which they were conducting drug transactions.  No arrests took
    place as a result of activities at the Property, notwithstanding police
    surveillance of Fred at the home, and no trafficking charges concerning drug
    transactions at the Property proceeded.  On the evidence before the application
    judge, it appears that Fred was living at the Property while engaging in drug
    activities, rather than using the Property to carry on those activities.

[79]

It
    is also relevant that, following Freds 2006 arrest, Roger attempted to sell
    the Property, albeit without success.  On the application judges findings,
    Rogers reasons for owning the Property were entirely and legitimately related
    to his business.  There was evidence that, in 2007, Roger listed the Property
    for sale, and he testified that he put it up for sale three or four times. 
    Although his efforts to sell the Property were unsuccessful, they do reflect conduct
    consistent with placing the Property beyond Freds use for unlawful purposes. 
    At a minimum, they undermine any suggestion that Roger intended to permit or
    was indifferent to his sons activities at the Property.

[80]

Moreover,
    by the time of the forfeiture application, the Property had been vacant for
    about one year and was again listed for sale.  As I have indicated, it was
    eventually sold, with court approval, in 2012.  There is no claim that it was
    available after January 2011 for any unlawful activity.

[81]

Finally,
    throughout his occupancy of the Property, Fred paid rent, deducted at source by
    his employer, Parker Brothers, from his salary.  This is not a case where
    rental payments were generated from the profits of drug-related activities.  Nor
    is this a case where the property owner acquired or maintained the Property
    utilizing funds from unlawful activities.  On the application judges findings,
    supported by the evidence, Roger was the exclusive beneficiary of the Property,
    having acquired it with his own funds for a
bona fide
business-related
    purpose.  He also maintained the Property and honoured his mortgage obligations
    utilizing his own funds.  Notwithstanding the AGOs more sweeping allegations
    in his materials on the forfeiture application, there was no evidence at the
    forfeiture hearing that Roger was complicit in, or profited from, his sons
    unlawful activities.

[82]

In
    all these circumstances, while the evidence established a connection between
    the Property and unlawful activity sufficient to ground the uncontested finding
    that the Property was an instrument of unlawful activity, that connection was
    limited and intermittent.

[83]

The
    second important factor to be considered is the interplay between the purposes
    of the
CRA
and the application of the Interests of Justice Exception
    in s. 8(1).  In
Darlington
, this court confirmed, at para. 95, that
    forfeiture orders under the
CRA
are intended to further the purposes
    of the statute, as set out in s. 1.  As a result, in deciding whether to grant
    relief from forfeiture under the
CRA
, the court must have regard to
    the effect of granting such relief on the achievement of the purposes of the
CRA
.

[84]

However,
    the
Darlington
court also held, at para. 96, that the broad concept of
    interests of justice contemplated under the
CRA
is not synonymous
    with the purposes of the
CRA
identified in s. 1.  Rather, those
    purposes form but part of the concept of interests of justice:
Darlington
at paras. 96 and 107.  Justice Doherty explained, at para. 96:

[The phrase interests of justice] 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 communitys
    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.

[85]

The
    purposes of the
CRA
include compensating the victims of crime, crime
    prevention and deterrence.  Section 1(c) of the
CRA
provides that
    forfeiture is intended to assist in preventing property from being used to
    engage in certain unlawful activities.  Under s. 7(1) of the
CRA
, the
    term instrument of unlawful activity is defined as property that is likely
    to be used to engage in unlawful activity.  Thus, with respect to property
    that is used to engage in unlawful activity, both the purposes of the
CRA
and the definition of instrument of unlawful activity have a prospective,
    crime prevention and deterrence focus.

[86]

I
    again emphasize that by the time of the forfeiture application, the Property
    had been vacant for some time, Fred was residing with his father, Roger was
    attempting to sell the Property, and the Property, in fact, was sold shortly
    thereafter.  Further, Roger was not himself implicated in any unlawful activity
    relating to the use of the Property.

[87]

In
    these circumstances, an order requiring forfeiture of the Property would not
    promote the deterrence and crime prevention goals of the
CRA
.  There
    is also a strong argument that, by February 2012 (when the forfeiture
    application was commenced), the Property no longer constituted an instrument
    of unlawful activity.  I note that the application judge does not appear to
    have factored these considerations into his analysis.

[88]

I
    turn now to the third factor relevant to the analysis of the Interests of
    Justice exception in this case  the reasonableness of the property owners
    conduct in relation to unlawful activity at the property.

[89]

The
    application judge considered the reasonableness of Rogers conduct primarily under
    the rubric of his analysis of the Responsible Owner Exception to forfeiture.  With
    respect to this exception, he held that Roger knew of Freds problems with
    substance abuse and the law.  He also found that Roger failed to take: (1)
    reasonable steps to ensure that the Property was not used as an instrument of
    unlawful activity; (2) any steps to terminate Freds use of the Property; and
    (3) the type of extraordinary measures (such as unscheduled or surprise
    visits) that a reasonably diligent property owner, in the circumstances, would
    undertake.  In so holding, the application judge rejected Rogers evidence of
    regular visits to the Property to ensure that his son was not engaging in drug
    activity.

[90]

The
    application judge failed to undertake any analysis regarding the reasonableness
    of Rogers conduct in relation to his sons unlawful activities for the purpose
    of determining whether the Interests of Justice Exception to forfeiture should
    be invoked.  Instead, based on his findings with respect to the Responsible
    Owner Exception, he found that Rogers conduct alone was insufficient to
    warrant the protection of the Interests of Justice Exception.  As I have
    explained, he then concluded that the AGOs delay in commencing the forfeiture
    application justified the denial of forfeiture.

[91]

In
    my view, there are several difficulties with this approach to the analysis of
    the Interests of Justice Exception.  I accept that it was the application
    judges task to assess the evidence.  Absent palpable and overriding error, the
    application judges factual findings attract deference from this court.

[92]

But,
    for the purpose of determining whether to invoke the Interests of Justice
    Exception to forfeiture, the reasonableness of Rogers conduct must be
    evaluated in the context of the full evidentiary record.  It bears repetition
    that when relief from forfeiture is sought, all factors relevant to the
    interests of justice must be considered:
Darlington
at para. 97.

[93]

Moreover,
    as this court emphasized in
Darlington
, at para. 100, elementary
    justice requires that care be taken on a
CRA
forfeiture application to
    distinguish between a property owner who had no involvement in the criminal
    activity, was unaware of that activity, had acted reasonably throughout and did
    not profit from the activity and a property owner who was involved in and
    directly profited from the unlawful activity.

[94]

While
    involvement in criminal activity is not a prerequisite to a forfeiture order
    under s. 8(1) (
Darlington
at paras. 99 and 100), forfeiture under the
CRA
is not intended to penalize the undeserving or the innocent.  Justice Doherty put
    it this way in
Darlington,
at para. 101:

[T]aking a persons property away from that person has a
    punitive component.  The interests of justice require that punitive orders made
    by the courts be reasonably perceived by the community as being deserved by
    those against whom they are made.

I agree.

[95]

In
    this case, while the application judge identified aspects of the evidence that
    supported the conclusion that Roger could not rely on the Responsible Owner
    Exception to forfeiture, he failed to consider the evidence as a whole
    regarding the reasonableness of Rogers conduct in relation to the Property and
    his sons activities when addressing relief from forfeiture under the Interests
    of Justice Exception.

[96]

I
    agree that Rogers conduct, by itself, does not meet the threshold articulated
    in
Darlington
for discretionary

relief from forfeiture under
    the Interests of Justice Exception.  But that is not the end of the matter.  Assuming,
    as the application judge held, that the Responsible Owner Exception did not
    apply, the reasonableness of Rogers conduct in relation to the Property and
    his sons unlawful activities remained a critical, separate consideration in
    the determination whether discretionary relief from forfeiture should be
    granted under the Interests of Justice Exception to forfeiture.

[97]

It
    is not axiomatic that because a property owners conduct does not meet the
    statutory requirements of the Responsible Owner Exception to forfeiture, his or
    her conduct is also unreasonable for the purposes of the Interests of Justice
    exception.  This may, but need not, be so.  The requisite inquiries under these
    exceptions are different and discrete.

[98]

Consider
    that, in this case, on the application judges unchallenged findings, Roger was
    entirely innocent of any involvement in and derived no benefit from his sons
    unlawful activities.  As the application judge found, there was no suggestion
    that Roger was complicit in, or profited from, Freds unlawful activities.

[99]

Furthermore,
    contrary to the AGOs contention at the forfeiture hearing, the application
    judge accepted that the Property was acquired for a legitimate purpose, that
    Roger was the sole and exclusive beneficiary of it, and that Roger rented the
    Property to his son  deducting the rental payments from his sons salary  for
    legitimate reasons connected with his sons lawful employment by Parker
    Brothers.  There was simply no evidence that Roger sought to facilitate,
    encourage or sanction Freds unlawful activities.  To the contrary, the
    evidence established that Roger furnished the Property to Fred to provide him,
    as well as his grandchild and his sons girlfriend, with a place to live.

[100]

Importantly,
    there was also no evidence that Roger turned a blind eye to his sons drug
    problems.  Indeed, there was uncontradicted evidence to the contrary.  The
    record reveals that Roger attempted, for almost 25 years, to assist his son in
    overcoming his serious and long-standing addiction to drugs.  The evidence
    indicates that Roger was steadfast in his efforts to support Freds repeated
    attempts at rehabilitation, by his own account devoting hundreds of hours and
    expending thousands of dollars on these efforts.  Roger was not a compliant or
    uninvolved father and property owner.  Further, there is no evidence that he
    knowingly countenanced the criminal activities that flowed from Freds drug
    addiction.  The application judges reasons make no mention of these critical
    contextual factors.

[101]

Finally, it was
    open to the application judge to reject Rogers evidence of his efforts to
    detect any drug-related activities by his son at the Property.  However, both
    Fred and his sister gave evidence confirming diligent monitoring activities by
    their father at the Property.  The application judge made no mention of their
    evidence on this important issue in his reasons.

(d)

Conclusion on Interests of Justice Exception

[102]

In all the
    circumstances, I conclude that the three factors discussed above, in
    combination, engage the Interests of Justice Exception and justify this courts
    exercise of its discretion under s. 8(1) of the
CRA
to refuse
    forfeiture.

(2)

Responsible Owner Exception to Forfeiture

[103]

Since I am
    persuaded that it would clearly not be in the interests of justice to order forfeiture
    of the Property in this case, I would deny forfeiture on the basis of the s.
    8(1) Interests of Justice Exception to forfeiture.  Accordingly, I need not
    address the respondents argument that forfeiture should also be denied on the
    basis of the Responsible Owner Exception to forfeiture.

F.

Disposition

[104]

For the reasons
    given, I would dismiss the appeal.  I would award the respondent its costs of
    the appeal, fixed in the amount of $10,000, inclusive of disbursements and
    H.S.T.

[105]

The costs of the
    forfeiture hearing have yet to be fixed.  In the circumstances, I would direct
    that the respondent file brief written submissions concerning the costs of that
    hearing with the Registrar of this court within 14 days from the release of
    these reasons.  The AGO may file its brief responding costs submissions within
    14 days thereafter.

Released:

JCM                                                E.A.
    Cronk J.A.

MAY 16 2014                          I agree J.C.
    MacPherson J.A.

I agree
    E.E. Gillese J.A.





[1]
The AGO also sought forfeiture of the vehicle in which Fred and his girlfriend
    were observed, on January 22, 2011, to be engaged in what the police concluded
    were drug transactions.  The vehicle was registered to Freds sister. 
    Forfeiture of the vehicle was denied by the application judge.  That ruling is
    not at issue on this appeal.



[2]
Also reported as
Ontario (Attorney General) v. 1140 Aubin Road, Windsor and
    3142 Halpin Road, Windsor (In Rem)
.


