



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v.
    Norwood Estate, 2021 ONCA 493

DATE: 20210706

DOCKET: C68474

Huscroft, Paciocco and Jamal
    JJ.A.

BETWEEN

Attorney General of Ontario

Applicant/Moving Party

(Respondent)

and

Michael Norwood (Estate of) and
    947014 Ontario Inc.

Respondents/Respondents on Motion

(Appellants)

and

Rosa
    Norwood

Interested Party

Geoffrey
    Adair, Alan Brass and Erica Tanny, for the appellants

Antonin I.
    Pribetic and Paul Kim, for the respondent

Robert
    Meagher, for the interested party

Jessica L.
    Kuredjian and Robert Sniderman, for the intervener Canadian Constitution
    Foundation

Heard: May 12, 2021 by video conference

On appeal from the order of Justice Charles
    T. Hackland of the Superior Court of Justice, dated June 4, 2020, with reasons
    reported at 2020 ONSC 3510.

Paciocco J.A.:

OVERVIEW

[1]

Michael Norwood (Michael) faced narcotics-related
    criminal charges, but died before he could stand trial. As a result of those
    charges, and before Michaels death, the Attorney General of Canada (Canada) seized
    Michaels home at 11 Cassone Court (the Cassone Court property) and commenced
    proceedings to secure its forfeiture. Pending Canadas forfeiture proceedings,
    the Cassone Court property was sold on consent. The proceeds were paid into
    Canadas Seized Property Management Directorate.

[2]

After Michaels death, Canada terminated its
    forfeiture proceedings. Before the proceeds of sale of the Cassone Court property
    could be returned to Michaels estate, the Attorney General of Ontario
    (Ontario) commenced proceedings under the
Civil Remedies Act, 2001
,
S.O. 2001, c. 28 (the 
Civil Remedies Act
 or the Act), seeking its
    own forfeiture order. The proceeds of sale of the Cassone Court property were subsequently
    paid into court.

[3]

Michaels mother, Rosa Norwood (Rosa), notified
    Ontario of her claim to an interest in the Cassone Court property. Before
    Ontarios forfeiture claim could be resolved, Ontario agreed with Rosa that she
    should receive $120,000 from the sale proceeds. On May 6, 2020, pursuant to s.
    18.1 of the
Civil Remedies Act
, Ontario moved for approval of this proposed
    settlement. Michaels estate (the Estate) and 947014 Ontario Inc. (947),
    a company Michael controlled before his death, opposed Ontarios motion and the
    payment of funds to Rosa. On June 4, 2020, the motion judge granted an order
    approving the settlement between Ontario and Rosa, which required payment of $120,000
    to Rosas counsel in trust.

[4]

The Estate and 947 are the appellants in this
    appeal. Ontario is the respondent. Rosa is an interested party and relies on
    Ontarios submissions; she advanced no oral or written submissions of her own.

[5]

The appellants contend that the motion judge
    erred in approving the agreement between Ontario and Rosa prior to a judicial
    determination that Ontarios forfeiture claim was successful.

[6]

I agree. In my view, properly interpreted, to
    constitute a settlement in relation to a proceeding under this Act in the
    meaning of s. 18.1(1) of the
Civil Remedies Act
, the proposed agreement
    must relate to the
in rem
property interests being litigated in the underlying
    forfeiture proceedings. Although Ontario and Rosa could settle their relative
in
    personam
claims, they could not, between themselves, settle the
in rem

interests of others, such as the Estates interest in the Cassone Court
    property. Put another way, their so-called settlement was not a settlement in
    the meaning of the Act at all, and therefore not properly subject to judicial
    approval under s. 18.1.

[7]

Things would have been different, however, if before
    approving the agreement the motion judge had determined that the sale proceeds
    of the Cassone Court property were the proceeds and/or instruments of unlawful
    activity, and that forfeiture was not clearly contrary to the interests of
    justice. Such a determination would have given Ontario a higher right to the Cassone
    Court property to the exclusion of all others, subject to Rosas outstanding
    claim that she was a legitimate or responsible owner. Ontario and Rosa
    could then have entered into an agreement resolving the
in rem

property
    interests in the proceeds of the Cassone Court property being litigated in the forfeiture
    proceedings under the
Civil

Remedies

Act
, an
    agreement which would have constituted a settlement in the meaning of s. 18.1.

[8]

Put simply, absent a finding of unlawful
    activity, there was no settlement in relation to a proceeding under [the] Act
    between Ontario and Rosa for the motion judge to approve. Therefore, I conclude
    that the motion judge erred in approving the agreement between Ontario and Rosa.
    Accordingly, I would set aside the motion judges order of June 4, 2020.

MATERIAL FACTS & PROCEEDINGS BELOW

[9]

On October 7, 1993, Michael acquired the property
    at 11 Cassone Court, Ottawa (formerly Nepean). On September 22, 1995, a charge
    was registered against the Cassone Court property in favour of Michaels
    mother, Rosa. Rosas charge against the Cassone Court property was discharged twelve
    years later, on October 10, 2007.

Procedural history leading to the settlement
    approval motion

[10]

In February 2015, after a prolonged
    drug-trafficking investigation, Michaels Cassone Court residence was searched
    and the property itself was seized. So too was the Silver Dollar nightclub, which
    Michael owned and operated through 947.

[11]

As a result of its investigation, Canada laid drug-related
    charges against Michael, and instituted forfeiture proceedings against the
    Cassone Court property and the Silver Dollar, pursuant to s. 17 of the
Controlled
    Drugs and Substances Act
, S.C. 1996, c. 19, and ss. 462.38(2) and 490(9)
    of the
Criminal

Code
, R.S.C. 1985, c. C-46.

[12]

On October 19, 2015, Canada obtained a restraint
    order relating to the seized properties. The next day, October 20, 2015, Michael
    executed a promissory note in favour of Rosa in the amount of $138,000. On
    October 23, 2015, Michael directed his counsel to register a collateral charge
    against the Cassone Court property in Rosas name, also for $138,000.

[13]

Rosa claims that the promissory note and collateral
    charge retroactively evidenced an informal arrangement between herself and Michael,
    dating back to the mid-1990s, through which she provided her son with $138,000.
    Rosa asserts that, in return, Michael renovated the Cassone Court property to
    provide her with an apartment, promised her she could reside there until her
    death, and agreed to repay her from the proceeds of sale if the property were ever
    sold. However, when Rosa attempted to register the collateral charge, she was
    unsuccessful because Canadas restraint order against the Cassone Court property
    was in place.

[14]

Subsequently, Michael and Canada agreed that the
    Cassone Court property would be sold. The sale closed in July 2016 for
    $243,098.88. The net proceeds of sale were paid into Canadas Seized Property
    Management Directorate, along with the net proceeds of the Silver Dollar, which
    had also been sold.

[15]

On October 4, 2016, an order was made releasing
    some of the property Canada had seized from Michael to his criminal lawyer to
    assist in paying his legal fees, including $105,099 of the proceeds of sale of
    the Cassone Court property:
R. v. Norwood
, 2016 ONSC 6207. In making
    that order, Parfett J. (who was not the motion judge who made the order now
    under appeal), found that Michael had a possessory right in the seized
    property [including the Cassone Court property] to the exclusion of anyone else
    and no other means or assets with which to pay his legal expenses: at para.
    30.

[16]

Michael died around one year later, on October
    17, 2017. On February 8, 2019, Canada secured another order from Parfett J. terminating
    its forfeiture proceedings and ordering the return of the remaining proceeds of
    sale of the Cassone Court property, approximately $145,000 plus interest, to the
    Estate.

Ontarios forfeiture application and Rosas
    claim

[17]

On February 15, 2019, before the proceeds contemplated
    in Parfett J.s order could be paid to the Estate, Ontario began forfeiture
    proceedings pursuant to the
Civil Remedies Act
relating to the
    proceeds of sale of both the Cassone Court property and the Silver Dollar.

[18]

On February 21, 2019, Rosas counsel wrote to
    Ontario to advance Rosas $138,000 claim against the proceeds of sale from the Cassone
    Court property.

[19]

On March 7, 2019, Ontario obtained an interim
    preservation order relating to the proceeds of sale of the Cassone Court
    property and the Silver Dollar. That preservation order was renewed, on consent,
    in October 2019.

The proposed settlement and the settlement
    approval motion

[20]

On April 24, 2020, Ontario made an offer to
    settle Rosas claimed interest in the forfeiture proceedings by payment of
    $120,000 from the proceeds of sale of the Cassone Court property. The Estate
    rejected the offer. Rosa accepted it.

[21]

On May 6, 2020, Ontario brought an urgent
    motion pursuant to s. 18.1 of the
Civil Remedies Act

for
    approval of its proposed settlement with Rosa. The motion was heard before Ontario
    had served an application record setting out the evidentiary basis for its
    underlying forfeiture application.

[22]

The Estate opposed the approval motion,
    contending that Rosas claim was without merit. It maintained that, by hearing
    the motion before the Estate could challenge the forfeiture proceedings, the
    court would effectively deprive the Estate of a defence in those proceedings.

The order under appeal

[23]

On June 4, 2020 the motion judge ruled against
    the Estate, granting an order approving the settlement between Ontario and
    Rosa and directing payment of $120,000 in trust to Rosas counsel (the order
    under appeal).

[24]

The motion judges reasons for granting the
    order under appeal do not disclose a detailed exercise of statutory
    interpretation relating to s. 18.1. Notably, the motion judges reasons do not
    expressly contemplate whether he had the authority to approve the proposed settlement
    between Ontario and Rosa. The sole basis the motion judge offered for rejecting
    the Estates submission that the approval motion should not be heard in the
    face of an outstanding contested forfeiture application was that s. 18.1
    confers courts with a broad power to approve settlements. In support of his
    view, the motion judge stated that [n]otably, it is not required [under s.
    18.1] that any amount to be paid out of the preserved funds be first
    established to be proceeds of crime.

ISSUES ON APPEAL

[25]

The appellants advance three submissions with
    respect to the order under appeal.

[26]

First, their principal submission is that the
    motion judge erred in law in determining that the approval of a settlement
    under s. 18.1 of the
Civil Remedies Act
did not require a prior
    determination that the funds seized were the proceeds of unlawful activity.

[27]

Second, the appellants argue that Rosa is not a
    legitimate owner or responsible owner of the Cassone Court property, but a
    mere creditor incapable of entering into a settlement within the meaning of s.
    18.1 of the Act, and that the motion judge erred in finding otherwise.

[28]

Third, the appellants submit that the motion
    judge erred in deciding the approval motion based on hearsay evidence from a
    lawyer about the nature of the agreement between Rosa and Michael. On this
    ground, the appellants raise other related legal objections to the motion
    judges findings that I need not recount.

[29]

For reasons that follow, I would accept the
    first ground of appeal. As this disposes of the appeal, I will not comment on
    the second and third grounds. Suffice it to say that my silence should not be
    taken as either a favourable or unfavourable comment on the appellants
    remaining grounds of appeal or on the motion judges reasoning relating to
    those issues.

ANALYSIS

[30]

Section 18.1(1) of the
Civil Remedies Act
authorizes a court to approve a settlement in relation to a proceeding under
    this Act. In my view, the agreement between Ontario and Rosa was not a
    settlement in relation to a proceeding under the
Civil Remedies Act
and therefore not properly subject to judicial approval.

[31]

I will begin the analysis that leads me to this
    conclusion by setting out or describing the relevant provisions of the Act.

A.

The Material Provisions of the
Civil
    remedies Act

Purpose of the Act

[32]

The purpose of the
Civil

Remedies

Act
is specified in s. 1, as follows:

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
. [Emphasis
    added.]

Forfeiture

[33]

Although the
Civil Remedies Act

provides
    in some cases for damages or monetary payments, forfeiture is the primary
    mechanism to accomplish its purpose.

[34]

The Act does not define forfeiture. However, in
Chatterjee v. Ontario (Attorney General)
, 2009 SCC 19, [2009] 1 S.C.R.
    624, at para. 18, Binnie J. described forfeiture under the
Civil Remedies
    Act
as the transfer of property from the owner to the Crown. As such, until
    forfeiture occurs and the consequential transfer of property from the owner to
    the Crown has taken place, Ontarios rights in the subject property do not
    materialize, nor are the rights of others expunged.

[35]

The
Civil Remedies Act

provides for
    three categories of forfeiture of property linked to unlawful activity: proceeds
    of unlawful activity (Part II); instruments of unlawful activity (Part III); and
    vehicles linked to vehicular unlawful activity (Part III.1). The nature of the required
    link between the subject property and the unlawful activity varies with each
    category; hence my practice at times in this judgment of speaking generally
    about the requisite link between the property and the unlawful activity.

Unlawful activity

[36]

Unlawful activity is defined under Parts II and
    III, in ss. 2 and 7(1), as follows:

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.

Forfeiture of property that is proceeds or an
    instrument of unlawful activity

[37]

Ontario brought its forfeiture application
    relating to the proceeds of the Cassone Court property and the Silver Dollar
    pursuant to Parts II and III of the
Civil

Remedies

Act
.
    The application is based in part on the allegation that, in Michaels hands,
    the Cassone Court property was the proceeds and/or an instrument of unlawful
    activity. As ss. 3 and 8 provide, for forfeiture under either Part II or III to
    occur, a court must find that the property is tainted by unlawful activity.

[38]

Section 2 of the Act defines proceeds of
    unlawful activity as property acquired directly or indirectly, in whole or in
    part, as a result of unlawful activity.

[39]

Section 7(1) defines instrument of unlawful
    activity as 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, which includes any
    property that is realized from the sale or other disposition of such property.

[40]

Section 3(1), under Part II, states:

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 proceeds of unlawful
    activity
. [Emphasis added.]

[41]

Section 8(1), under Part III, is identical except
    that the requisite finding supporting forfeiture is that the property is an
    instrument of unlawful activity.

Legitimate owner, uninvolved interest holder
    and responsible owner

[42]

Section 3(3), the provision referred to in s.
    3(1), has been amended since the order under appeal was made.
[1]


[43]

Namely, the term legitimate owner in s. 3(3)
    has now been replaced by the term uninvolved interest holder, as follows:

If the court finds that property is
    proceeds of unlawful activity and a party to the proceedings proves that he,
    she or it is
a legitimate owner
[now,
an uninvolved interest holder
]
    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 legitimate owners interest in the property. [Emphasis added.]

[44]

Likewise, the definition of uninvolved interest
    holder now in force under s. 2 is identical to the former definition of
    legitimate owner, which was as follows at the time of the order under appeal:


legitimate owner
 [now, 
uninvolved
    interest holder
] means, with respect to property that is proceeds of
    unlawful activity, a person who did not, directly or indirectly, acquire the
    property as a result of unlawful activity committed by the person, and who

(a)

was the rightful owner of the property before
    the unlawful activity and was deprived of possession of the property by means
    of the unlawful activity,

(b)

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

(c)

acquired the property from a person mentioned in
    clause (a) or (b).

[45]

The term responsible owner is used under Part
    III in ss. 8(1) and 8(3), the comparable provisions to ss. 3(1) and 3(3) with
    respect to instruments of unlawful activity.

[46]

Section 7(1) defines responsible owner as
    follows:

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 knowns or ought to know has
    facilitated or is likely to facilitate the property being used to engage in
    unlawful activity.

Standard of proof in proceedings under the
Civil
    Remedies Act

[47]

Part V is the General part of the
Civil
    Remedies Act
. Under Part V, s. 16 specifies that, subject to exceptions
    not relevant to this appeal, findings of fact in proceedings under the Act shall
    be made on the balance of probabilities.

[48]

When the requisite standard of proof is applied
    to the material factual issues referred to in the preceding sections, the
    scheme of the Act as it relates to forfeiture applications under Parts II and
    III can be described in the following simple terms. If Ontario establishes on
    the balance of probabilities that the subject property is the proceeds and/or an
    instrument of unlawful activity, the court is authorized and required to make
    an order forfeiting the subject property, subject to the following two
    exceptions arising from elements of Parts II and III of the Act referenced
    above.

Exceptions to forfeiture

[49]

The first exception, pursuant to ss. 3(1) and
    8(1), provides that no forfeiture order may be made if the court finds that
    such an order would clearly not be in the interests of justice.

[50]

Pursuant to ss. 3(3) and 8(3), the second
    exception is engaged if a claimant satisfies the court on the balance of
    probabilities that they are a legitimate owner (now, an uninvolved interest
    holder) or a responsible owner of property that has been proven as the
    proceeds or an instrument of unlawful activity, respectively. If so satisfied,
    the court must make an order that is necessary to protect the legitimate or
    responsible owners interest in the property, unless it would clearly not be in
    the interests of justice to do so.

Special purpose account

[51]

Where Ontario succeeds in obtaining forfeiture by
    proving the subject property is the proceeds or an instrument of unlawful
    activity, and where the forfeited property has been converted into money, ss. 6
    and 11 provide for its payment into a special purpose account.

[52]

Money from a special purpose account may be used
    to compensate Ontario for its costs incurred in the proceedings, and/or to make
    payments for designated purposes, including compensating persons who suffered
    losses as the result of the impugned unlawful activity, assisting victims of
    unlawful activity generally, or compensating Ontario, a municipal corporation,
    or a public institution for pecuniary losses suffered as a result of unlawful
    activity.

[53]

Finally, three further provisions found in Part
    V are relevant to this appeal.

Actions
in rem

[54]

First, s. 15.6(1) provides:

All proceedings, including
    proceedings for an interlocutory order, under Parts II, III and III.1, whether
    by action or application, are
in rem
and not
in personam
.

Where possession unlawful

[55]

Second, s. 18 stipulates that a person cannot have
    a claim in property subject to proceedings under the Act if their possession of
    the subject property is unlawful:

For the purposes of a proceeding
    under this Act, a person cannot claim to have an interest in property  if,
    under the law of Canada or Ontario, it is unlawful for the person to possess
    the property.

Settlements

[56]

Third, s. 18.1  the provision authorizing court
    approval of settlements which is the primary focus of this appeal  provides as
    follows:

(1) Despite anything to the contrary
    in this Act, the court may approve a settlement in relation to a proceeding
    under this Act, on the motion of the Attorney General or of any other party to
    the proceeding with the Attorney Generals consent.

(2) For greater certainty, the power
    to approve a settlement under subsection (1) includes a power to approve a
    settlement that provides for the full or partial forfeiture of the property
    that is the subject of the proceeding.

(3) For greater certainty, the power
    to approve a settlement under subsection (1) includes a power to approve a settlement
    that provides for payment of a monetary amount instead of the full or partial
    forfeiture of property that is the subject of the proceeding.

[57]

Of note, ss. 18.1(1) and (2) were added to the
Civil
    Remedies Act
shortly after the Divisional Courts decision in
Ontario
    (Attorney General) v. $29,900 in Canadian Currency (in rem)
, 2017 ONSC
    2003, 137 O.R. (3d) 221 (Div. Ct.). In that case, Nordheimer J. (as he then
    was) upheld the application judges decision below refusing to approve Ontarios
    proposed agreement that would have resulted in the partial forfeiture of $4,000
    to a claimant who had not proved she was the legitimate owner of any of the subject
    property. Nordheimer J. explained his reasoning as follows, at para. 36:

In my view, the application judge was correct
    in concluding,
once he was satisfied that the monies were proceeds of
    unlawful activity
, that the entire amount had to be forfeited, absent any
    evidence that could satisfy the court that any other order was necessary,
    either in the interests of justice [under the terms of s. 3(1)], or in order to
    protect the interests of the legitimate owner of the monies [under the terms of
    s. 3(3)]. [Emphasis added.]

[58]

Sections 18.1(1) and (2), enacted in 2018, now
    authorize the approval of proposed agreements for partial forfeiture like the
    one refused in
$29,900 in Canadian Currency (in rem)
, a point I will revisit
    below.

B.

The Correct Interpretation of section 18.1

[59]

Ontario submits that any agreement between the
    Attorney General and any party to forfeiture proceedings constitutes a
    settlement within the meaning of s. 18.1, even if Ontario has not yet secured a
    finding that the property is the proceeds of unlawful activity.

[60]

I do not agree. In my view, correctly
    interpreted, s. 18.1 authorizes courts to approve settlements that relate to the
in rem
interests
in property subject to forfeiture
    proceedings (in my analysis that follows, I will refer to this as the 
in
    rem

settlement interpretation). As I will explain, before Ontario
    can achieve an agreement that settles the
in rem

interests in
    the subject property, it must first secure a finding that the required link
    between that property and unlawful activity exists.

[61]

In the case before us, the requisite finding was
    that the proceeds of the Cassone Court property were the proceeds and/or
    instruments of unlawful activity. Absent such a finding, I would find that the
    motion judge erred in granting the order under appeal.

Prior judicial interpretation of s. 18.1

[62]

The authority put before us on this appeal supports
    this view.

[63]

While Ontario relies in its submissions on
AGO
    v. $80 Cdn., et al.
, 2021 ONSC 988, that decision is not consistent with
    Ontarios position. In fact, it is consistent with the
in rem

settlement
    interpretation I have just described. In
$80 Cdn.
, one of five
    respondents to Ontarios s. 18.1 settlement approval motion, Ms. Flynn, was the
    registered owner of a vehicle from which the subject property was seized. Nicholson
    J. approved a settlement between Ontario and Ms. Flynn releasing some of the subject
    property to her, but not before satisfying himself on the balance of
    probabilities that all the property at issue was either the proceeds or an
    instrument of unlawful activity: at para. 24.

[64]

Similarly, in
Ontario (Attorney General) v. 269
    Weldrick Road West (in rem)
, 2020 ONSC 4605, Ontario sought the forfeiture
    of property as either the proceeds or instruments of unlawful activity. Ontario
    entered into an agreement to release a motor vehicle and around $280,000 out of
    approximately $550,000 liquidated from seized assets to a claimant whose common
    law spouse had been convicted of fraud and forgery offences. Ontario maintained
    that Sanfilippo J. could approve the agreement without inquiring into the
    substantive requirements of the
Civil

Remedies

Act
,
    including whether the subject property was the proceeds or instruments of
    unlawful activity. Sanfilippo J. disagreed. Like Nicholson J. in
$80 Cdn.
,
    before approving the settlement Sanfilippo J. made a finding on the balance of
    probabilities that the subject property was either the proceeds or instruments
    of unlawful activity: at para. 27.

[65]

In my view, the judges who rendered these decisions
    were correct to make the requisite unlawful activity findings before approving
    the proposed settlements before them. As I have indicated and will explain in
    more detail below, the need for a finding of unlawful activity arises from a
    correct statutory interpretation of the words a settlement in relation to a proceeding
    under this Act in s. 18.1 of the
Civil

Remedies

Act
.

The governing legal principles in
    interpreting s. 18.1

[66]

There is no dispute about the legal principles
    governing the interpretive exercise to be conducted on this appeal. Watt J.A.
    stated the core rule in
R. v. Stipo
, 2019 ONCA 3, 144 O.R. (3d) 145,
    at paras. 175-76:

It is well settled that statutory
    interpretation cannot be founded on the wording of the legislation alone.
    Instead, the approach is that advocated by Elmer Driedger in his
Construction
    of Statutes

(2nd ed., 1983):

Today there is only one principle
    or approach, namely, the words of an Act are to be read in their entire context
    and in their grammatical and ordinary sense harmoniously with the scheme of the
    Act, the object of the Act, and the intention of Parliament.

See,
Bell ExpressVu Limited Partnership v.
    Rex
,
2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26;
Rizzo &
    Rizzo Shoes Ltd. (Re)
, [1998] 1 S.C.R. 27, at para. 21;

Wilson v.
    British Columbia (Superintendent of Motor Vehicles)
, 2015 SCC 47,
    [2015] 3 S.C.R. 300, at para. 18.

This preferred approach recognizes the
    significant role that context must play when courts construe the written words
    of a statute. No statutory provision is an island in itself. Its words take
    their colour from their surroundings:
Bell ExpressVu
, at para. 27. All
    issues of statutory interpretation involve the fundamental question of what
    Parliament intended. To discover what Parliament intended, we look at the words
    of the provision, informed by its history, context and purpose:
R. v. Mabior
,
    2012 SCC 47, [2012] 2 S.C.R. 584, at para. 20.

Ontarios proposed interpretation of s. 18.1

[67]

Ontario urges that the modern approach to
    statutory interpretation, as articulated in
Stipo
,

favours its proposed
    interpretation of s. 18.1. It advances three supporting arguments in this
    regard: (1) the ordinary and grammatical meaning of s. 18.1(1) gives courts
    broad discretion to approve settlements without a prior finding of unlawful
    activity; (2) this broad interpretation aligns with the object and purpose of
    the Act and the intention of the legislature; and (3) the expansive authority flowing
    from this interpretation will be duly confined by the Attorney Generals obligation
    to act in the public interest and by the proper bounds of judicial discretion.

[68]

I would reject these submissions. I am persuaded
    that the broad interpretation of s. 18.1 that Ontario offers is incorrect and
    that the
in

rem

settlement interpretation I have
    articulated is correct.

[69]

In outlining the analysis that leads me to this
    conclusion, I will address each of Ontarios arguments in turn. It is convenient
    to begin with Ontarios last point.

(1)

The Role of the Attorney General and the
    Approving Judge

[70]

Ontario urges us to have confidence that the
    broad settlement authority it claims s. 18.1 provides will not be used unfairly
    because, (a) the Attorney General, in his or her dual role as Minister of
    Justice, is obliged to act fairly and in the public interest when agreeing to
    settlements, and (b) judges must exercise their discretion reasonably in
    approving settlements.

[71]

I would not accept this submission. The fact
    that the Attorney General is also the Minister of Justice and therefore bound to
    act reasonably and responsibly is irrelevant to the proper interpretation of s.
    18.1. The underlying challenge in interpreting a legislative provision is to
    identify the meaning intended by the legislation. The task is not to determine
    whether a public official with delegated legislative power would properly exercise
    that power.

[72]

For the same reason, the fact that judicial
    discretion must be exercised reasonably is equally irrelevant in identifying
    the proper interpretation of legislation. Our interpretive task with respect to
    s. 18.1 is to determine the reach of the legal authority that the legislation
    confers on the judge asked to approve a settlement. Confidence that appellate review
    is available if a judge acts unreasonably within the scope of the authority conferred
    by legislation plays no role in the interpretation of that legislation.

(2)

The Grammatical and Ordinary Meaning of the
    Words

[73]

Ontario also argues that the ordinary and
    grammatical meaning of s. 18.1 is clear and gives courts broad discretion to
    approve any settlement in a forfeiture proceeding. Ontario points out that s. 18.1(1)
    does not expressly require a finding that the subject property is the proceeds
    or an instrument of unlawful activity before a settlement may be approved. In
    making this submission, Ontario relies on the opening words of s. 18.1(1):
    Despite anything to the contrary in this Act, the court may approve a
    settlement. It calls this phrase unambiguously expansive, arguing that the
    phrase, and indeed s. 18.1 itself, would be rendered meaningless if settlements
    could be approved only after a finding of unlawful activity has been made.

[74]

I do not accept Ontarios position that the
    grammatical and ordinary meaning of the words used in s. 18.1 supports its proposed
    expansive interpretation. The words of the Act are to be read in their entire
    context. Section 18.1(1) does not simply say, Despite anything to the contrary
    in this Act, the court may approve a settlement. Crucially, it provides that,
    Despite anything to the contrary in this Act, the court may approve a
settlement
    in relation to a proceeding under this Act
 (emphasis added).

[75]

In this regard, it is important to recall that a
    proceeding under the applicable parts of the
Civil Remedies Ac
t
is an
in rem

proceeding engaged to settle title to property
    that is allegedly linked to unlawful activity. It is not an
in personam

proceeding conducted to resolve disputes
    between individuals about their relative rights. When the words a settlement in
    relation to a proceeding under this Act are read in this context, it is clear that
    they describe a settlement that relates to the
in rem
interests in the property
    being litigated in the proceedings. This is what I have already characterized
    as the 
in rem

settlement interpretation. In my view, to
    constitute a settlement relating to the
in rem

interests in
    the property, an agreement must resolve the
in rem

rights in
    the subject property. In other words, it must be capable of settling, to the
    exclusion of all others, the rights of the parties before the approving judge.

[76]

Quite clearly, the agreement between Ontario and
    Rosa could not resolve the
in rem

rights in the subject
    property. Even leaving aside the potential
in

rem

interests
    of non-parties to the litigation, the Estate claims an interest in the proceeds
    of sale of the Cassone Court property that has not been displaced by any
    forfeiture order. An agreement between Ontario and Rosa might well settle their
    personal dispute relating to ownership of the Cassone Court property, but that
    agreement is incapable of resolving the Estates
in

rem

rights
    in that property. Therefore, on a proper contextual, grammatical, and ordinary reading
    of the language of s. 18.1, in my view the agreement between Ontario and Rosa
    could not be a settlement in relation to a proceeding under this Act.

[77]

I see nothing in the language of s. 18.1 or
    elsewhere in the Act that could alter this conclusion. Section 18.1 does not,
    by its terms, authorize some of the parties in the
in

rem

proceeding
    to settle the
in

rem

claims of all others in the
    subject property. The only authority s. 18.1 provides is that of courts to
    approve settlements in relation to a proceeding under this Act. Since I would
    find that the personal agreement between Ontario and Rosa is not a settlement
    within the meaning of s. 18.1, the motion judge had no authority under s. 18.1(1)
    to approve that agreement.

[78]

Things would be different, however, if before
    approving the agreement the motion judge had made a finding that the proceeds
    of sale of the Cassone Court property were proceeds and/or instruments of
    unlawful activity and that forfeiture was clearly not contrary to the interests
    of justice. Had that determination been made, subject to Rosas outstanding
    claim that she was a legitimate or responsible owner, Ontario would have had
    a claim to the subject property to the exclusion of all others, including the Estate.
    Since, in this scenario, only Ontario and Rosa would have had outstanding
    claims to the Cassone Court property, they could have agreed to settle the
in

rem

interests in that property.

[79]

Ontario resists the
in

rem

settlement
    interpretation just described. It argues that to require an unlawful activity
    finding before a settlement can be approved would denude s. 18.1 of meaning. If
    Ontario were right about this, the
in

rem

settlement
    interpretation would be contrary to the well accepted principle of statutory
    interpretation that no legislative provision should be interpreted so as to
    render it mere surplusage:
R v. Proulx
, 2000 SCC 5, [2000] 1 S.C.R.
    61, at para. 28.

[80]

However, I do not agree with Ontario on this
    point. Once a determination has been made that the subject property is linked
    to the applicable unlawful activity, the grammatical and ordinary language of s.
    18.1 permits a wide range of settlements between Ontario and those asserting
    claims to the property. As I have indicated, if Ontario had shown that the
    proceeds of the Cassone Court property are the proceeds and/or instruments of
    unlawful activity, Ontario would have been free to settle with Rosa on the
    agreed upon terms, or any other lawful terms.

[81]

Similarly, I do not accept Ontarios position
    that this interpretation renders meaningless the phrase, Despite anything to
    the contrary in this Act. Once Ontario establishes the requisite link between
    the subject property and unlawful activity to support forfeiture, this broad
    language empowers courts to approve any settlement that Ontario enters into,
    even where the agreed outcomes are not otherwise contemplated by the Act. As
    Nicholson J. explained in
$80 Cdn.
, at para. 29, s. 18.1 now permits courts
    to approve settlements based on compromise between the parties, thereby avoiding
    all or nothing outcomes. This kind of compromise settlement was not
    permissible prior to the passage of s. 18.1, as confirmed by Nordheimer J.s 2017
    decision in
$29,900 in Canadian Currency (in rem)
.

[82]

Section 18.1 also now permits courts to approve
    settlements that approximate a claimed amount, without a determination of the
    precise entitlement contemplated by the
Civil Remedies Act
:
$80
    Cdn.
, at paras. 32-33. Moreover, under s. 18.1 courts may approve payments
    to claimants without first showing that their claim as an uninvolved interest
    holder or responsible owner has merit:
$80 Cdn.
, at para. 31.
[2]


[83]

I am therefore persuaded that the grammatical
    and ordinary meaning of s. 18.1 is incompatible with Ontarios interpretation
    and compatible with the
in

rem

settlement
    interpretation I have described.

(3)

The Scheme and Object of the Act and the
    Legislatures Intention

[84]

Finally, Ontario urges that the broad
    interpretation it offers is in keeping with the object and purpose of the
Civil

Remedies

Act
and with legislative intent, since
    settlements are to be encouraged in preference to litigation. It argues that
    interpreting s. 18.1 to confer broad settlement approval authority advances the
    purposes of the Act and the intention of the legislature by promoting
    efficiency and flexibility in achieving the benefits of forfeiture, including
    compensation and support for victims.

[85]

I would not accept these submissions, either. As
    I will explain, in my view the
in

rem
settlement
    interpretation, not Ontarios interpretation, is consistent with the scheme of
    the Act, the object of the Act, and the intention of the legislature. I will
    begin with the object, or purpose, of the Act.

(i)      The object of the
Civil Remedies
    Act

[86]

Professor Ruth Sullivan describes formal purpose
    statements appearing in the body of legislation as the most direct and
    authoritative evidence of legislative purpose: Ruth Sullivan,
Sullivan on
    the Construction of Statutes
, 6th ed. (Toronto: LexisNexis Canada, 2014),
    at
§
9.45.

[87]

Section 1 contains the formal purpose statement
    appearing in the
Civil

Remedies

Act
. Reproduced
    above, at para. 32 of these reasons, s. 1 characterizes each of the four
    express purposes of the Act as providing civil remedies to address certain
    harms arising from unlawful activities.

[88]

In
Chatterjee
, while exploring the
vires

of the
Civil Remedies Act
, Binnie J. had occasion, at para. 23, to
    comment on its purposes:

In essence, therefore, the [
Civil

Remedies

Act
] creates a property-based authority to seize money and other
    things shown on a balance of probabilities to be tainted by crime and
    thereafter to allocate the proceeds to compensating victims of and remedying
    the societal effects of criminality. The practical (and intended) effect is also
    to take the profit out of crime and to deter present and would-be perpetrators.

[89]

In my view, Ontarios interpretation is not in
    keeping with the object of the
Civil Remedies Act
as articulated in s.
    1 and
Chatterjee
. To the contrary, it would enable property to be
    forfeited without any regard to whether it is tainted by unlawful activity. In
    contrast, the
in

rem
settlement interpretation is true
    to the purpose of the Act because it ensures that before forfeiture occurs, the
    subject property
has
been tainted by unlawful activity.

(ii)    The scheme of the
Civil Remedies
    Act

[90]

Not only is Ontarios interpretation not in
    keeping with the object of the
Civil Remedies Act
, for related reasons
    it is also inconsistent with the scheme of the Act.

[91]

In a disputed proceeding,
[3]
the scheme of the Act empowers
    a court to eradicate a citizens lawful interest in the subject property through
    a forfeiture order, but only after making a finding that Ontario has established
    the requisite link between the property and unlawful activity. Yet Ontarios
    position is that s. 18.1 authorizes a court to permit a citizens interest in
    the property to be extinguished without such a finding, and without Ontario having
    to meet any burden of proof relating to unlawful activity. Quite simply, this
    interpretation is not in keeping with the scheme of the Act.

[92]

Further, I would reject the two overarching arguments
    Ontario offers in contending that its proposed interpretation is consistent
    with the scheme and purpose of the
Civil Remedies Act
.

[93]

First, although I agree with Ontarios
    submission that settlements are generally to be encouraged, the settlements to
    be encouraged are those which are consistent with the scheme and object of the
    Act. As I have sought to demonstrate, the settlements that Ontarios
    interpretation would support, such as the one between Ontario and Rosa, are not
    consistent with the scheme and object of the Act.

[94]

Second, I would reject entirely Ontarios
    submission that its proposed interpretation pursues the object of the Act by
    promoting efficiency and flexibility in achieving the benefits of forfeiture,
    including compensation and support for victims. Absent a determination that the
    subject property is the proceeds or instruments of unlawful activity, there is
    a risk that a settlement eradicating the interest of others would deprive a
    legitimate owner of their property. In this regard, the words of Nordheimer J.
    in
$29,900 in Canadian Currency (in rem)
, at para. 36, are apt: [I]t
    is necessary to ensure that the interests of the legitimate owner of property,
    that is seized under this statute, are not trampled over by a rush to conclude
    the proceeding.

(iii)   The intention of the legislature in enacting
    the
Civil Remedies Act

[95]

Finally, Ontarios interpretation cannot find
    support in legislative intention. As Watt J.A. instructed in
Stipo
, at
    para. 175, To discover what Parliament intended, we look at the words of the
    provision, informed by its history, context and purpose. As I have just
    described, the context and purpose of s. 18.1 are not in keeping with Ontarios
    proposed interpretation.

[96]

Nor does the history of s. 18.1 support Ontarios
    interpretation. I do agree with Ontarios submission that s. 18.1 was enacted
    in response to Nordheimer J.s decision in
$29,900 in Canadian Currency (in
    rem)

and that this history strongly suggests that the legislature
    intended s. 18.1 to redress the shortcoming exposed in that decision, namely,
    the inability of judges,
after making the requisite unlawful activity
    finding
, to order anything other than full forfeiture unless one of the two
    statutory exceptions is satisfied. However, that shortcoming can be overcome
    without interpreting s. 18.1 as Ontario contends, which would confer judicial
    discretion to approve proposed settlements entered into by some parties to forfeiture
    proceedings even where those settlements purport to eradicate the
in

rem

property interests of others.

[97]

Indeed, the shortcoming exposed in
$29,900
    in Canadian Currency (in rem)

can be resolved through the
in

rem

settlement interpretation, which would empower judges,
after
    making the requisite unlawful activity finding
, to make orders other than
    full forfeiture. Simply put, Ontarios proposed interpretation of s. 18.1 goes
    further than required to satisfy the apparent historical objective of the
    provision, whereas the
in

rem

settlement
    interpretation is better targeted to achieve that historical objective.

The legislature did not intend for s. 18.1 to
    produce absurd consequences

[98]

I would offer one additional point related to
    the legislatures intention in enacting s. 18.1 of the
Civil Remedies Act
.
    The absurdity principle (often called the golden rule of statutory
    interpretation), holds that if an interpretation would lead to an absurdity, a
    court may reject it in favour of a plausible alternative which avoids the
    absurdity:
Ontario v. Canadian Pacific Ltd.
[1995] 2 S.C.R. 1031, at
    para. 65;
Schnarr v. Blue Mountain Resorts Limited
, 2018 ONCA 313, 140
    O.R. (3d) 241, at para. 72, leave to appeal refused, [2018] S.C.C.A. No. 187; Sullivan,
    at §10.5.

[99]

In
Stipo
, at para. 177, Watt J.A.
    affirmed the well-established principle of statutory interpretation holding
    that the legislature does not intend to produce absurd consequences. Watt
    J.A. reminded us that absurdity occurs if a proposed interpretation:

i.

leads to ridiculous or frivolous consequences;

ii.

is extremely unreasonable or inequitable;

iii.

is illogical or incoherent;

iv.

is incompatible with other provisions or with
    the object of the enactment; or

v.

defeats the purpose of the statute or renders
    some aspect of it pointless or futile.

[100]

Where a potential absurdity is identified,
Gonthier
    J. explained the relevant interpretive exercise as follows, at para. 65 of
Canadian

Pacific
:

One method of avoiding absurdity is through
    the strict interpretation of general words  Where a provision is open to two
    or more interpretations, the absurdity principle may be employed to reject
    interpretations which lead to negative consequences, as such consequences are
    presumed to have been unintended by the legislature.

[101]

The absurdity principle, as articulated above, reinforces my view to
    reject Ontarios proposed interpretation in favour of the
in

rem

settlement interpretation. I have already
explored
    the incompatibility between Ontarios interpretation and the object of the Act;
    I need say no more on this point. However, at least two additional forms of
    absurdity recounted by Watt J.A. in
Stipo

could apply.

[102]

First, Ontarios interpretation is illogical and incoherent. It will
    be recalled that the motion judge approved a settlement in which Rosa was to be
    paid
some
, not all, of the sale proceeds of the Cassone Court property.
    If the order under appeal were to stand, in order to resolve what is to happen
    to the balance of those proceeds, an adjudicated hearing would be required to
    determine whether forfeiture is appropriate. What if, at that hearing, the court
    found that Ontario had not met its burden of establishing that the sale
    proceeds of the Cassone Court property are the proceeds and/or instruments of
    crime? Would Rosa be entitled to keep the $120,000, or would she have to return
    it?

[103]

Ontario could not answer these questions. As I see it, neither
    alternative is logical or coherent. If Rosa were permitted to keep the money,
    under a proceeds of crime statute she would have received property that is not
    the proceeds or instruments of crime. If she were required to return the money,
    even leaving aside the logistical problems this would present, the law would,
    illogically and incoherently, be treating the settlement as having been lawful
    pursuant to s. 18.1, yet invalid.

[104]

Second, Ontarios interpretation would produce extremely
    unreasonable or inequitable outcomes. I am certain I have already betrayed my
    conviction that it would be unreasonable and inequitable in the extreme to
    permit courts to approve settlements between Ontario and others that deprive
    third parties of their rights in private property, without any inquiry into
    whether the subject property was tainted by unlawful activity. This outcome,
    which violates due process, is not merely hypothetical. It is the very position
    Ontario seeks to uphold in this appeal.

[105]

Indeed, Ontario argues before us that s. 18.1 enables it to seek
    court approval for settlements it enters into with anyone authorized to receive
    payments from a special purpose account, pursuant to ss. 6 and 11 of the Act,
    without the need for prior judicial determination that the property was tainted
    by unlawful activity. If Ontario is correct, it would be permitted to seek
    approval for settlements it arrives at with alleged victims of entirely
    unproven crimes to compensate them using money that legally belongs to a
    suspect from whom it has been seized. In my view, if this court were to accept
    Ontarios proposed interpretation, the potential for well-intentioned but
    abusive settlements is palpable.

[106]

In contrast, there is nothing absurd about the
in

rem

settlement interpretation of s. 18.1 I
    have described. I do not accept Ontarios objection that this interpretation
    would bar the release of seized property to a claimant without a judicial
    determination on unlawful activity. Ontario can accomplish the release of
    seized property by simply abandoning its application. Where there is common
    ground that some of the seized property is not, in fact, tainted by unlawful
    activity, or that a claimant is, in fact, an uninvolved interest holder or
    responsible owner and therefore exclusively entitled to the property interest
    they claim, Ontario can accomplish the release of that property by withdrawing
    the forfeiture proceedings against it, pursuant to s. 1.7 of the
Civil Remedies Act
.

[107]

Nor do I accept Ontarios submission that the
in

rem

settlement interpretation would require
    a full hearing on the merits, even where all interested parties consent or
    agree to the proposed settlement. In that scenario, where no one opposes the
    settlement, the requisite hearing is apt to be simple and efficient.

[108]

In sum, applying the golden rule against absurd consequences, in my
    view Ontarios interpretation must be rejected in favour of the
in

rem

settlement interpretation.

Conclusion on the
    correct contextual and purposive interpretation of s. 18.1

[109]

In light of the foregoing application of the modern approach to
    statutory interpretation, I would find that the
in

rem
settlement interpretation of s. 18.1, rather than Ontarios proposed
    interpretation, best accords with the words of the
Civil

Remedies

Act
, read in their entire context and in their grammatical and
    ordinary sense harmoniously with the scheme of the Act, the object of the Act,
    and the intention of the legislature.

[110]

Accordingly, I would accept the appellants submission that the
    motion judge erred in approving the agreement between Ontario and Rosa as a
    settlement in the meaning of s. 18.1.

(4)

Residual Principles: Resolving Ambiguity Through
    Strict Construction

[111]

Assuming I am wrong, and Ontarios interpretation and the
in

rem

settlement interpretation are equally in accord with the purpose
    of the
Civil Remedies Act
and the intentions of the legislature, I
    would still reject Ontarios interpretation.

[112]

This alternative conclusion is based on the presumption that
    legislation designed to curtail the rights of citizens must be strictly
    construed: Sullivan, at §15.37. This presumption is available to assist in
    resolving a real ambiguity, meaning an ambiguity between two or more equally
    plausible interpretations that remains even after interpreting the provision at
    issue according to the modern purposive and contextual approach described above:
Bell ExpressVu Limited Partnership v. Rex
, 2002 SCC 42, [2002] 2
    S.C.R. 559, at paras. 28-30; Sullivan, at §15.38.

Strict construction
    and private property

[113]

As Major J. stated in
Crystalline Investments Ltd. v. Domgroup
    Ltd.
, 2004 SCC 3, [2004] 1 S.C.R. 60, at para. 43, [E]xplicit statutory
    language is required to divest persons of rights they otherwise enjoy at law.

[114]

In explaining the link between this general presumption of strict
    construction and state confiscation of private property, Cory J. said as
    follows in
Toronto Area Transit Operating Authority v. Dell Holdings Ltd.
,
    [1997] 1 S.C.R. 32, at para. 20:

The expropriation of property is one of the
    ultimate exercises of governmental authority. To take all or part of a persons
    property constitutes a severe loss and a very significant interference with a
    citizens private property rights. It follows that the power of an
    expropriating authority should be strictly construed in favour of those whose rights
    have been affected.

[115]

Similar statements of principle can be found in
Harrison v.
    Carswell
, [1976] 2 S.C.R. 200, at p. 219, and
Pacific National
    Investments Ltd. v. Victoria (City)
, 2000 SCC 64, [2000] 2 S.C.R. 919, at
    para. 27.

[116]

In my view, the presumption of strict construction favours the
in
    rem
settlement interpretation over Ontarios interpretation of s. 18.1 of
    the
Civil

Remedies

Act
. As such, even if I
    were persuaded that the provision could support both interpretations on a
    proper application of the modern approach, I would arrive at the same
    conclusion.

CONCLUSION

[117]

Properly interpreted, to constitute a settlement in relation to a
    proceeding under this Act in the meaning of s. 18.1(1) of the
Civil
    Remedies Act
, a proposed agreement must relate to the
in

rem
property interests being litigated in the underlying forfeiture proceedings.

[118]

Since Ontario did not establish that the proceeds of sale from the
    Cassone Court property were subject to forfeiture as the proceeds and/or
    instruments of unlawful activity, it never acquired a higher claim to the
in

rem

rights in that property than all non-parties to its agreement
    with Rosa. It follows that Ontarios agreement with Rosa was not a settlement
    in relation to a proceeding under this Act within the meaning of s. 18.1(1). Therefore,
    in my view, the motion judge erred in law in approving that agreement.

[119]

Accordingly, I would allow the appeal and set aside the order under
    appeal, dated June 4, 2020, which purported to approve the settlement between
    Ontario and Rosa.

[120]

As agreed between the parties, I would award costs to the appellants
    in the amount of $15,000 inclusive of HST and disbursements.

Released: July 6, 2021 G.H.

David M. Paciocco J.A.

I agree. Grant Huscroft J.A.

I agree. M. Jamal J.A.





[1]
The
    amendment is inconsequential; it is nothing more than a change in terminology.
    However, I must describe the change because later in these reasons I will
    address recent authority where the new terminology is used.



[2]
I have
    serious reservations about the holding to the contrary in
269 Weldrick Road West (in rem)
, 2020
    ONSC 4605, at paras. 18, 23, 29. When Sanfilippo J. held that he could not
    approve a settlement without first deciding whether the claimant was a lawful
    owner, he had not been alerted that s. 18.1 was not in force when the
    Divisional Court decision in
$29,900 in
    Canadian Currency (in rem)
was rendered. He mistakenly believed himself
    bound by that decision. Sanfilippo J. subsequently issued a supplementary
    endorsement in which he noted that, had it come to his attention that s. 18.1
    was enacted after the decision in
$29,900
    in Canadian Currency (in rem)
, this might have affected the analysis 
    but does not change my decision: 2020 ONSC 4657, at para. 4. To be clear, for
    the reasons I provide in this judgment, it is my view that Sanfilippo J. was
    correct to insist on proof that the seized property was either the proceeds of
    unlawful activity or the instrument of unlawful activity, and that he was
    entitled to approve the settlement before him. The reservations I have about
    his reasoning relate to his insistence that, before he could approve the
    settlement, it had to be proved that the claimant was a lawful owner. For the
    purposes of this appeal, however, this issue need not be resolved.



[3]
Administrative
    forfeiture is possible without a finding of unlawful activity, but only where:
    (1) Ontario has reason to believe that the property is the proceeds of
    unlawful activity or an instrument of unlawful activity; (2) Ontario has
    provided proper notice of intention to forfeit; and (3) Ontario has not
    received any notice of dispute regarding the proposed forfeiture on or before
    the statutory deadline:
Civil Remedies
    Act, 2001
, S.O. 2001, c. 28, at ss. 1.2-1.3 and 1.8.


