



COURT OF APPEAL FOR ONTARIO

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

DATE: 20140516

DOCKET: C56421

MacPherson, Cronk and Gillese JJ.A.

BETWEEN

Attorney General of Ontario

Applicant (Respondent)

and

51 Taylor Avenue, Chatham, Ontario (PIN:
    00550-1103(R))

Respondent (Appellant)

Craig Bryson, for the appellant

William J. Manuel and Dan Phelan, for the respondent

Heard: February 25, 2014

On appeal from the order of Justice Bruce G. Thomas of
    the Superior Court of Justice, dated November 27, 2012, with reasons reported
    at 2012 ONSC 6355.

MacPherson
    J.A.:

A.

INTRODUCTION

[1]

The appellant, 51 Taylor Avenue, Chatham, Ontario (51 Taylor or the Property)
    appeals from the forfeiture order of Thomas J. of the Superior Court of Justice
    dated November 27, 2012.  The order provides:

1. THIS COURT ORDERS that, pursuant to section 8(1) of the
Civil
    Remedies Act
, the subject property, 51 Taylor Avenue, Chatham, [PIN:
    00550-1103(R)], is forfeited to the Crown in Right of Ontario.

[2]

The appeal involves the interpretation of several sections of the
Civil
    Remedies Act
,
2001
, S.O. 2001, c. 28 (
CRA
), including
    the terms responsible owner and interests of justice in the context of possible
    exceptions to making a forfeiture order.

B.

FACTS

(1)

The parties and events

[3]

51 Taylor is a 12-unit residential apartment building in Chatham. The
    Property is owned by Marlowe and Patricia Van Dusen.  The Van Dusens also own a
    number of other properties in the Chatham area.

[4]

Marlowe purchased the Property on March 10, 1995 for $308,000.  There is
    currently no mortgage on the Property and its present value is estimated at
    about $400,000.

[5]

On May 1, 2002, Marlowe transferred the Property to his wife for two
    dollars and natural love and affection.  Marlowes evidence was that this was
    done for estate planning and income tax purposes.  In their evidence, both Van
    Dusens stated that Marlowe continued to be responsible for managing the Property.
     Marlowe asserted that his wife has a 50 per cent interest in the Property.

[6]

Between 1989 and 1995, before Marlowe purchased the Property, the police
    attended at 51 Taylor on only two recorded occasions.

[7]

Between March 10, 1995 and May 1, 2002, while Marlowe was the registered
    owner, there were 81 documented police occurrences.  Between May 1, 2002 and
    August 13, 2007, when the respondent Attorney General of Ontario (AGO)
    obtained a preservation order, there were 311 documented police occurrences. 
    During the same period, 21 search warrants were executed at the Property,
    primarily at three apartments, resulting in 49 arrests, with 119 charges being
    laid.  Most of the arrests related to drug charges.

[8]

In contrast, two neighbouring properties that were similar multi-unit
    residential buildings had five and 12 police occurrences during the May 1, 2002
    to August 13, 2007 period.

[9]

On August 10, 2007, the AGO brought an application seeking forfeiture of
    51 Taylor.  In support of the application, the AGO filed affidavit evidence
    from property owners on Taylor Avenue.  They deposed that the Property has had
    a negative impact on neighbouring owners and residents.  They reported constant
    foot traffic on the Property, the continual presence of people who were
    slurring their speech and staggering and conducting what appeared to be drug
    transactions, incidents of vandalism and drug use, and threats, intimidation
    and violence.

(2)

The application judges decision

[10]

The
    application judge held that the Property was an instrument of unlawful
    activity pursuant to s. 7(1) and (2) of the
CRA
.  Indeed, he
    described the unlawful activity at the Property (mainly drug transactions) as
    permeat[ing] the entire building inside and out.

[11]

The
    application judge also held that Marlowe Van Dusen was not a responsible
    owner within the meaning of s. 7(1) and therefore could not avail himself of
    the forfeiture exception in s. 8(3) of the
CRA
.

[12]

Finally,
    the application judge held that the appellant had not established, under s. 8
    of the
CRA
, that it would clearly not be in the interests of justice
    to make a forfeiture order.

[13]

The
    appellant contests the application judges second and third findings.

C.

ISSUES

[14]

The
    appellant raises two issues on the appeal:

(1)

Did the application judge err by
    concluding that the Van Dusens were not responsible owners within the meaning
    of s. 7(1) of the
CRA
?

(2)

Did the application judge err by
    concluding that the appellant had not established that it was clearly not in
    the interests of justice to order forfeiture of the Property?

D.

Analysis

(1)

The responsible owner exception to forfeiture

[15]

The
    appellant challenges the application judges reasoning that the Van Dusens were
    not responsible owners on two bases.

[16]

First,
    the appellant contends that the legal owner of the Property was Patricia Van
    Dusen, Marlowes wife, and that the application judge failed to consider her
    interest in the Property and her conduct relating to the use of the Property.

[17]

I
    do not accept this submission.  In my view, the appellant is precluded from
    arguing on appeal that Patricia was
the
relevant responsible owner of
    the Property.  The appellants own evidence was that Patricia was a mere
    nominee owner and its counsel asserted that its a jointly held property 
    This was done for tax planning purposes In Marlowe and Patricias mind, they
    own the property equally.  I also note that the appellant did not argue at the
    forfeiture hearing that forfeiture should be denied because of Patricias
    interest in the Property.  Instead, the appellant seeks to advance this
    argument for the first time on appeal.

[18]

Second,
    the appellant submits that the application judge erred in finding that Marlowe
    did not take sufficient steps to evict the tenants who were engaging in
    criminal activities.

[19]

I
    disagree.  The application judge expressly rejected Marlowes evidence that he
    did not know about the criminal activity taking place at the Property.  In my
    view, there was strong, even overwhelming, evidence to support this
    conclusion.  Given the volume of police occurrences at the Property and
    Marlowes role as property manager, it was impossible that he did not know of
    the extensive criminal activity at the Property.  Indeed, a police sergeant
    gave evidence that the police spoke to Marlowe after the execution of each of
    the 21 search warrants at the Property.

[20]

Despite
    being aware of the criminal activity taking place at the Property, Marlowe took
    no meaningful steps to evict the problematic tenants.  For example, he did not
    seek police assistance to evict any of the tenants.  Accordingly, it cannot be
    said that Marlowe did all that could reasonably be done, in the language of s.
    7 of the
CRA
, to prevent the property from being used to engage in
    unlawful activity.

(2)

The interests of justice exception to forfeiture

[21]

The
    appellant submits that the application judge erred by concluding that the
    appellant could not bring itself within the language of the forfeiture exception
    in s. 8(1) of the
CRA
, namely, that it would clearly not be in the
    interests of justice to make a forfeiture order.  In support of this position,
    the appellant points out that the owners, the Van Dusens, were not found to
    have committed any crime on the Property, that the Property is a multi-unit residence
    where the criminal activity took place in only some of the units, and that the Property
    is worth $400,000.

[22]

I
    do not accept this submission.  The application judge explicitly addressed this
    courts interpretation of the interests of justice exception to forfeiture
    under the
CRA
in the leading case,
Ontario (Attorney General) v.
    1140 Aubin Road, Windsor and 3142 Halpin Road, Windsor (In Rem) et al.
,
    2011 ONCA 363, 279 O.A.C. 268, including the relevant factors to consider in
    the context of the exception.  As relevant here, those factors were the
    connection between the property and the illegal activity, the reasonableness of
    the conduct of the party whose property is the subject of the forfeiture
    application, and the value of that partys interest in the property compared to
    the overall value of the property that is tainted by the unlawful activity.

[23]

The
    reality here is that the Van Dusens are the exclusive owners of a relatively
    small apartment building where several units were used for a substantial amount
    of criminal activity over many years.  In my view, the application judge was
    entitled to describe the unlawful activity as permeat[ing] the entire building
    inside and out and to conclude, as he did, that the community, armed with the
    same information available to me, would see this as a deserving forfeiture.

E.

Disposition

[24]

I
    would dismiss the appeal.  I would award the respondent its costs of the appeal
    fixed at $10,000, inclusive of disbursements and HST.

Released: May 16, 2014 (J.C.M.)

J.C. MacPherson J.A.

I agree. E.A. Cronk J.A.

I agree.
E.E.
    Gillese J.A.


