



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v. 855 Darby Road,
    Welland (In Rem), 2019 ONCA 31

DATE: 20190121

DOCKET: C64650

Rouleau, Watt and Paciocco JJ.A.

BETWEEN

Attorney General of Ontario

Applicant (Respondent)

and

855 Darby Road, Welland, and All Contents (in
    rem)

Respondent (Appellant)

Ryan Naimark and Alex Nikolaev, for the appellant

Lisa Will, for the respondent

Heard: October 22, 2018

On appeal from the order of
    Justice J.T. Akbarali of the Superior Court of Justice, dated November 6, 2017
    with reasons reported at 2017 ONSC 4953.

Rouleau J.A.:

Overview

[1]

This appeal involves the civil forfeiture of the property situated at
    855 Darby Road, Welland as well as various Hells Angels Motorcycle Club (HAMC) paraphernalia
    that were seized on the premises under the
Civil Remedies Act, 2001
,

S.O. 2001, c. 28 (
CRA
)
. On an application by the provincial
    Crown, the application judge ordered forfeiture of the property on the basis
    that it was both proceeds and an instrument of unlawful activity.

[2]

The appellant 855 Darby Road, Welland, and all contents (
in rem
)
    argues that the application judge committed numerous errors in reaching the
    decision to order forfeiture of the property. In its submission, the appeal
    should be allowed and the application for civil forfeiture dismissed.

[3]

For the reasons that follow, I would dismiss the appeal.

Facts

[4]

In 2001, Gerald Ward, Richard Ward (who died in 2005), Tim Panetta and
    Randy Beres purchased 855 Darby Road, Welland. The purchasers modified the
    property, which had been used as a machine shop, and rented it to the Niagara
    Prospect Chapter of the HAMC to which all four belonged. As part of the
    renovations made to the property, opaque sheeting was installed on part of the
    existing fencing, the first floor windows were replaced with cement blocks and
    the front door was replaced with a cement-filled steel door. Security cameras
    were also installed.

[5]

Sometime after 2001, the Niagara Prospect Chapter of the HAMC became a
    full patch chapter of the HAMC.

[6]

The Hells Angels members and prospects were required to pay dues for
    membership. These dues were used to pay bills related to the property,
    including regular mortgage payments.

[7]

Following a police operation in 2006, a number of Niagara HAMC Chapter members,
    including Gerald Ward, were arrested for drug trafficking-related offences. Mr.
    Beres had left the Hells Angels by this point, although he remained an owner of
    the property. As for Mr. Panetta, he remained an owner of the property and
    a HAMC member at all relevant times.

[8]

Mr. Ward pleaded guilty to the drug offences and was convicted at trial of
    instructing the commission of an offence for a criminal organization. At Mr.
    Wards trial, the Crown filed an expert report on the structure, organization,
    hierarchy, purposes and activities of the HAMC prepared by Detective Sergeant
    Kenneth Davis. The trial judge relied on D/S Daviss report to conclude that the
    HAMC is a criminal organization.

[9]

At the outset of those criminal proceedings, the federal Crown had
    placed restraint orders on some of Mr. Wards property, including vehicles,
    cash, his matrimonial home and 855 Darby Road. In exchange for Mr. Ward
    pleading guilty to the drug charges, the federal Crown agreed to propose a
    reduced sentence and seize only one of his vehicles and the cash. It would then
    lift the restraint orders on the balance of the property, including 855 Darby
    Road.

[10]

After
    the federal Crown lifted the restraint order on 855 Darby Road, the Attorney
    General for Ontario commenced
CRA
proceedings seeking forfeiture of
    855 Darby Road as well as various HAMC paraphernalia seized from the premises.

[11]

On
    the provincial Crowns application, the judge first considered the appellants
    challenge to the admissibility of some of the Crowns evidence. She found that
    although no Acknowledgement of Experts Duty (Form 53) had been filed as
    ordinarily required by r. 53.03(2.1) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, D/S Daviss
expert
    evidence could be received by the court. In the application judges view, D/S
    Davis fell into the category of participant experts and, pursuant to this
    courts decision in
Westerhof v. Gee Estate
,
2015 ONCA 2006, 124 O.R. (3d) 721, participant experts need
    not execute a Form 53 or comply with r. 53.03(2)s other requirements for
    their evidence to be admissible.

[12]

The
    application judge also rejected the suggestion that the expert evidence
    tendered by the Crown, including the evidence of D/S Davis, should be rejected
    because it contained many statements of information and belief. The appellant
    argued that these statements of information and belief were inadmissible
    pursuant to r. 39.01(5) as they related to contentious facts not otherwise
    proven.

[13]

Finally,
    the application judge held that the agreed statement of facts from Mr. Wards
    guilty plea in the criminal proceedings could be admitted and relied on by the
    Crown as part of its case.

[14]

The
    application judge then turned to the merits of the application and, on two
    different bases, concluded that 855 Darby Road ought to be forfeited to the
    Crown. First, she found that 855 Darby Road was an instrument of unlawful
    activity because it had been used as a safe space to plan unlawful activity. Second,
    she held that 855 Darby Road constituted proceeds of unlawful activity. The
    record established that the mortgage payments on the property had been funded
    in part from dues paid by HAMC members. These dues, in turn, were shown to have
    come from the unlawful for-profit activities of the members.

[15]

The
    application judge also held that some of the seized HAMC paraphernalia qualified
    as instruments of unlawful activity. The paraphernalia used or worn to
    intimidate rival gangs and the public and signal the wearers trustworthiness
    to the criminal community fell into this category.

[16]

The
    application judge further rejected the appellants arguments that the
    responsible owner and legitimate owner exceptions in the
CRA
apply to
    spare 855 Darby Road and the HAMC paraphernalia from forfeiture.

[17]

Finally,
    the application judge rejected the appellants submission that the plea
    agreement between Mr. Ward and the federal Crown, in which the federal Crown
    agreed to lift the restraint orders over 855 Darby Road and several other
    properties, resulted in forfeiture being clearly not in the interests of
    justice. As a result, the application judge ordered forfeiture of 855 Darby
    Road and the identified category of HAMC paraphernalia.

Issues

[18]

On
    appeal, the appellant raises the same three evidentiary issues and the same
    issues on the merits as it did in the court below. They are as follows:

1.

Evidentiary issues:

(a) Did the
    application judge err in admitting D/S Daviss evidence absent a Form 53?

(b) Did the
    application judge err in admitting the Crowns expert evidence despite its
    reliance on disputed hearsay evidence contrary to r. 39.01(5)?

(c) Did the
    application judge err in admitting the agreed statement of facts from Mr.
    Wards criminal proceedings?

2.

Issues on the merits:

(a) Did the
    application judge err in holding that 855 Darby Road constituted proceeds of
    unlawful activity and in rejecting the legitimate owner exception?

(b) Did the
    application judge err in holding that 855 Darby Road was an instrument of
    unlawful activity and in rejecting the responsible owner exception?

(c) Did the
    application judge err in holding that the HAMC paraphernalia were instruments
    of unlawful activity and in rejecting the responsible owner exception?

(d) Did the application
    judge err in holding that the plea agreement between Mr. Ward and the federal
    Crown did not make it clearly not in the interests of justice to order
    forfeiture of 855 Darby Road?

Analysis

(1)

Evidentiary issues

(a)

Did the application judge err in admitting the expert evidence of D/S
    Davis absent a Form 53?

[19]

As
    part of its case on the application, the Crown tendered an affidavit sworn by
    D/S Davis. The affidavit was, with minor differences, the same expert report that
    D/S Davis had prepared and that was tendered as evidence by the federal Crown at
    Mr. Wards criminal trial. A copy of that previous expert report was appended as
    an exhibit to D/S Daviss affidavit.

[20]

The
    appellant argues that the application judge erred in accepting D/S Daviss
    evidence because no Form 53 expert acknowledgement was provided as required by
    r. 53.03(2.1). Subrule 53.03(2.1) provides that the report of an expert that a
    party intends to call at trial shall contain the following information:

1.

The experts name, address and area of expertise.

2.

The experts qualifications and employment and educational experiences
    in his or her area of expertise.

3.

The instructions provided to the expert in relation to the proceeding.

4.

The nature of the opinion being sought and each issue in the proceeding
    to which the opinion relates.

5.

The experts opinion respecting each issue and, where there is a range
    of opinions given, a summary of the range and the reasons for the experts own
    opinion within that range.

6.

The experts reasons for his or her opinion, including,

i.

a
    description of the factual assumptions on which the opinion is based,

ii.

a description of
    any research conducted by the expert that led him or her to form the opinion,
    and

iii.

a list of every
    document, if any, relied on by the expert in forming the opinion.

7.

An
    acknowledgement of experts duty (Form 53) signed by the expert.

[21]

Subrule
    53.03(2.1) applies to expert evidence that a party seeks to lead at the trial
    of an action. Prior to 2015, there was conflicting case law as to whether this
    rule also applied to expert evidence sought to be led on a motion or an
    application. That conflict was resolved with the 2015 amendment to the Rules,
    which introduced r. 39.01(7). That provision reads:

Opinion evidence provided by an expert witness for
    the purposes of a motion or application shall include the information listed
    under subrule 53.03(2.1).

[22]

Strictly
    speaking, r. 39.01(7) requires that the information contained in r. 53.03(2.1)
    be included as part of the opinion evidence provided by the expert. Although a
    report and a signed Form 53 may not be required by r. 39.01(7), it is
    nonetheless clear that the same information outlined in r. 53.03(2.1),
    including an acknowledgement of duty by the expert, needs to be included in the
    evidence tendered by the expert.

[23]

As
    noted earlier, the application judge determined that D/S Daviss evidence
    should be accepted despite the absence of a Form 53. In her view, compliance
    with r. 53.03(2.1) was not required because D/S Davis was a participant expert.
    In
Westerhof
, this court explained that participant experts could
    testify to their involvement and observations without having to comply with r. 53.03(2.1).

[24]

On
    appeal, the appellant argues that the application judge erred in her interpretation
    of
Westerhof
. In its submission, D/S Davis was not a participant
    expert and compliance with the rule was a prerequisite to the admissibility of
    his evidence. I agree with the appellants submission that D/S Davis was not a
    participant expert but, as I will explain, I have concluded that the evidence
    ought nonetheless to be admitted.

[25]

In
Westerhof
,
Simmons
    J.A. described the participant expert exception as follows, at para. 60:

[A] witness with special skill, knowledge, training, or
    experience who has not been engaged by or on behalf of a party to the
    litigation may give opinion evidence for the truth of its contents without
    complying with rule 53.03 where:

·

the opinion to be given is based on the witnesss observation of
    or participation in the events at issue; and

·

the witness formed the opinion to be given as part of the
    ordinary exercise of his or her skill, knowledge, training and experience while
    observing or participating in such events.

[26]

Although
    D/S Daviss evidence satisfies some of the criteria set out by Simmons J.A., in
    my view it fails in at least one respect. Specifically, the opinion is not
    based on D/S Daviss observation of or participation in the events at issue.

[27]

It
    is to be recalled that the witnesses found to be participant experts in
Westerhof
were the parties treating physicians. Simmons J.A. observed that such treating
    physicians have in the past been referred to as fact witnesses because their
    evidence is derived from their observations of or involvement in the underlying
    facts: para. 61.

[28]

In
    the present case, D/S Davis had little or no involvement in the underlying
    facts. Nothing in D/S Daviss affidavit indicates that he made observations
    with respect to 855 Darby Road aside from reviewing information he assembled
    after the fact. He neither appears to have been involved in the search
    conducted at 855 Darby Road, nor does he appear to have observed the property
    being used in such a way that it would qualify as an instrument of unlawful
    activity. D/S Daviss affidavit is concerned with the broader questions of
    whether the HAMC is a criminal organization and of how the HAMC operates and
    carries out its activities. In Mr. Wards criminal trial, where D/S Daviss
    original report was filed, the trial judge described it as providing a
    national perspective of the HAMC:
R. v. Ward
, 2008 CarswellOnt 9690
    (Sup. Ct.), at para. 39.

[29]

In
    addition, even if D/S Davis had, to some limited extent, direct involvement in
    the investigation of the HAMCs activities leading to the arrest of Mr. Ward
    and ensuing forfeiture litigation, his affidavit goes well beyond his
    participation in those events. Where a participant expert goes beyond his
    observation and involvement in the underlying facts, the
Westerhof
exception for participant experts no longer applies:
Westerhof
, at
    para. 63.

[30]

Concluding
    that the application judge erred in applying the participant expert exception
    to D/S Daviss evidence does not, however, end the matter. Failure to provide an
    experts acknowledgement of duty is not necessarily fatal to the admissibility
    of that evidence. Had the application judge not accepted that D/S Davis was a
    participant expert exempted from the requirement of providing a Form 53
    acknowledgement, she nonetheless had the discretion to excuse this
    non-compliance with the Rules and receive D/S Daviss evidence: rr. 2.03,
    53.03(3). From my reading of her reasons, it is apparent that she would have
    done so. For the reasons that follow, I have concluded that despite the
    application judges error, it is open to this court to find that D/S Daviss
    evidence was properly admitted, albeit for different reasons, and I would do so:
Courts of Justice Act
, R.S.O. 1990, c. C.43, s. 134(1)(a).

[31]

In
    my view, the appellant suffered no real prejudice from D/S Daviss failure to
    provide the Form 53 acknowledgement. I say so for several reasons. First, the
    affidavit substantially complies with all of the other informational
    requirements of r. 53.03(2.1). D/S Daviss area of expertise,
    qualifications and experience are set out in his affidavit. His opinion as well
    as a detailed explanation of the basis for the opinion are also well explained.
    The only omission of any significance is the absence of the acknowledgement
    required by r. 53.03(2.1)(7).

[32]

While
    I consider the requirement that experts provide such an acknowledgement to be
    important, it is only one component of r. 53.03(2.1). The mischief sought to be
    addressed by r. 53.03(2.1) is much broader than the requirement that an expert
    acknowledge his or her duty to the court. As explained in
Westerhof
,
the amendments to the Rules that
    introduced r. 53.03(2.1) were implemented to ensure the neutrality and
    expertise of expert witnesses, as well as adequate disclosure of the basis for
    an experts opinion: para. 2.

[33]

The
    basis of D/S Daviss opinion is well set out in the affidavit. Further, any  concern
    that D/S Davis is the type of hired gun or opinion for sale witness that
    gave rise to the Civil Justice Reform Projects recommendation leading to the
    adoption of the rule is attenuated: see
Civil Justice Reform Project:
    Summary of Findings & Recommendations
(Toronto: Ontario Ministry
    of the Attorney General, 2007), at p. 75. D/S Daviss opinion was originally
    prepared for the criminal prosecution of Mr. Ward and not for use in this
    proceeding. There can be no concern that, in drafting the opinion, D/S Davis
    somehow tailored his evidence to favour the respondents case for civil
    forfeiture. The affidavit filed in this proceeding is, in effect, a repeat of the
    opinion tendered in the criminal proceeding.

[34]

Finally,
    it can hardly be said that the appellant suffered any prejudice from the
    absence of acknowledgement given that the affidavit was filed years before the
    hearing of the application and no steps were taken to cross-examine D/S Davis
    on the issue of his impartiality or on any apparent failure on his part to
    fairly and objectively present the facts and opinions contained in it. As a
    result, I would reject this ground of appeal.

(b)

Did the application judge err in admitting the Crowns expert evidence
    despite its reliance on disputed hearsay evidence contrary to r. 39.01(5)?

[35]

The
    appellant argues in this court, as it did on the application, that the Crowns
    experts, D/S Davis and Detective Constable Bassi, based their opinions on
    hearsay (
i.e
.
, on information they had received and believed
    rather than on first-hand observation). Much of this information was, in the
    appellants submission, contentious. Subrule 39.01(5) provides that affidavits
    used on an application may contain statements of the deponents information
    and belief with respect to facts that are not contentious. The appellant
    submits that, pursuant to r. 39.01(5), the application judge ought to have
    struck the contentious portions of the affidavits. When the appellant was asked
    by the application judge to identify the parts of the affidavits that were
    alleged to be contentious the appellant, in effect, pointed to the entirety of
    D/S Daviss affidavit. In the appellants submission, therefore, once the
    contentious hearsay contained in the affidavits is removed, the opinions
    tendered are totally undermined and ought to be rejected.

[36]

In
    my view, the application judge did not err in admitting the affidavits and
    opinions of D/S Davis and D/C Bassi. After carrying out a
Mohan
analysis, the application judge found that both were qualified to give expert
    evidence, and expert witnesses are treated differently from usual fact
    witnesses. Those differences bear on the application of r. 39.01(5). This is
    because the affidavit of a usual fact witness is offered to prove facts. A
    factual witness who does not have personal knowledge of facts should not attest
    to facts unless the factual claims are admissible under a hearsay exception or
    are not contentious. In contrast, many statements of fact contained in an
    expert report are offered not to prove the stated facts but to disclose the
    factual foundation underpinning the expert opinion. As explained in
R. v.
    Abbey
,
[1982] 2 S.C.R. 24,
    at p. 42, an experts opinion more often than not will be based on second-hand
    evidence. The testimony as to circumstances upon which the opinion is based
    is not introduced, and cannot be introduced, in order to establish the veracity
    of the second-hand evidence. It is thus not hearsay evidence: at p. 43. The
    hearsay rule does not, therefore, operate to exclude second-hand information
    tendered as part of an experts report. Nor does r. 39.01(5). To the extent
    that the expert opinion rests on second-hand material, the value of the opinion
    may be affected but not its admissibility.

[37]

Contrary
    to the appellants submission, the trial judge was not required to strike the
    contentious portions of the Davis and Bassi affidavits.

(c)

Did the application judge err in admitting Mr. Wards agreed statement
    of facts from his criminal prosecution?

[38]

The
    appellant argues that the application judge ought not to have admitted the
    agreed statement of facts tendered in relation to Mr. Wards guilty plea in his
    criminal proceedings. In support of this submission, the appellant relies on
R.
    v. Caesar
,
2016 ONCA 599,
    339 C.C.C. (3d) 354.

[39]

In
    my view,
Caesar
has no application to the present case. In
Caesar
,
the accused was seeking to tender evidence
    of the facts underlying a
non-party
s guilty plea. She sought to do so
    either through an agreed statement of facts or by calling the officer in charge
    of the investigation who had attended at the time of the guilty plea. The
    non-party in question, although available to testify, had not been called as a
    witness by the accused and she did not reach an agreement with the Crown about tendering
    the evidence as an agreed statement of facts. The proposed means of introducing
    the evidence therefore amounted to hearsay that did not meet the tests of necessity
    and reliability. The circumstances of the present case are totally different
    and are more akin to
R. v. Baksh
(2005), 199 C.C.C. (3d) 201 (Ont. Sup.
    Ct.), affd 2008 ONCA 116, leave to appeal to S.C.C. refused [2008] S.C.C.A.
    No. 155. In
Baksh
, the Crown was permitted to introduce evidence from
    an accuseds own agreed statement of facts for the truth of its contents. The statement,
    which the accused signed in the course of a previous trial, was a voluntary
    admission and was not subject to an express or implied limitation as to its
    use. The statement could therefore be relied on in the subsequent proceeding,
    but it could not be treated as conclusive. The defence was entitled to explain,
    attack or otherwise counter the evidence.

[40]

Mr.
    Ward is one of the owners of 855 Darby Road who, in this proceeding, is seeking
    to prevent his property from being forfeited. In substance, he is a party to
    the proceeding. As a result, factual admissions made by him are admissible in
    the proceeding and can properly affect the shared interests of his co-owners.

[41]

Indeed,
    Mr. Ward testified on the application and was given the opportunity to comment
    on the agreed statement of facts from his criminal proceeding tendered by the
    respondent. The application judge explained that in assessing the weight to be
    given to the agreed statement of facts, she would consider Mr. Wards evidence
    in which he sought to explain and qualify the statements contained therein. I
    see no error in the application judges admission and treatment of the agreed
    statement of facts.

(2)

Issues on the merits

(a)

Did the application judge err in holding that 855 Darby Road constituted
    proceeds of unlawful activity and in rejecting the legitimate owner exception?

[42]

The
    appellant maintains that there was insufficient evidence to conclude that the
    propertys mortgage was paid down using the proceeds of unlawful activity. In
    its view, the application judges finding is the result of pure speculation. Nothing
    short of a tracing of monies sourced in criminal proceedings directly into the
    acquisition of the property was required.

[43]

I
    disagree. A precise tracing and proof that every payment made in acquiring the
    asset was funded from criminal activity are not required. Pursuant to s. 3(1)
    of the
CRA
, an order forfeiting property is made where the property is
    found to be proceeds of unlawful activity. Section 2 of the
CRA
defines
    proceeds of unlawful activity as property acquired, directly or indirectly, in
    whole or in part, as a result of unlawful activity.

[44]

The
    Crown, therefore, need only prove that property was acquired
in part
as
    a result of unlawful activity. Should a difference exist between the value of
    an interest in the property and the value of the property that is tainted by
    unlawful activity, that consideration is more properly weighed when determining
    whether forfeiture is clearly not in the interests of justice:
Ontario
    (Attorney General) v. 8477 Darlington Crescent
, 2011 ONCA 363, 333 D.L.R.
    (4th) 326, at paras. 98, 104-106.

[45]

The
    evidence led by the Crown clearly established that the mortgage on 855 Darby
    Road was paid down using monthly dues paid by members of the Niagara HAMC
    Chapter. It was also clear from the evidence that during the period in which
    they paid their dues, Mr. Ward and other HAMC members had been convicted of various
    for-profit offences, including trafficking in drugs. Based on this evidence and
    the balance of the record showing widespread criminal activity within the HAMC,
    it was open to the application judge to draw the inference that the mortgage
    was indeed paid down at least in part using funds acquired through unlawful
    activity. A precise forensic tracing of specific criminally-acquired funds into
    identifiable payments made to the mortgage was not required.

[46]

The
    appellant further argues that the application judge erred in finding that the
    legitimate owner exception provided in the
CRA
did not apply. The
    relevant statutory provision is as follows:

3(3)

If the court finds that
    property is proceeds of unlawful activity and a party to the proceeding proves
    that he, she or it is a legitimate 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 legitimate owners interest in
    the property.

[47]

Section
    2 of the Act defines a legitimate owner as:

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 occurred and was deprived of
    possession or control 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);

[48]

The
    appellant notes that there is no suggestion in the evidence that the original
    acquisition of the property by the owners was funded by illegally obtained
    funds. In the appellants view, the application judge erred in inferring that
    because the owners of the property had participated in meetings (referred to as
    church meetings) of the Niagara HAMC Chapter held at 855 Darby Road they must
    have had knowledge of, participated in or facilitated the criminal activity of
    dues-paying members. Without this inference, there is no basis for rejecting
    the legitimate owner exception.

[49]

I
    would dismiss this ground of appeal. The record clearly establishes that Mr. Ward,
    a dues-paying member of the HAMC, was involved in drug trafficking. The record
    also fully supports the application judges finding that at various times, Mr.
    Beres and Mr. Panetta participated in the church meetings at the club. The
    inference drawn by the application judge that criminal ventures were discussed
    and planned at such meetings was available on this record.

[50]

The
    owners of the property would therefore have known that a not insignificant part
    of the dues collected and used to fund the mortgage payments were proceeds of
    unlawful activity. As a result, whether (or not) the owners were themselves personally
    involved in unlawful activity, they facilitated the unlawful activity of others
    and knowingly used the proceeds of that activity for the payment of the
    mortgage. The appellant has not met the onus of showing that any of the owners
    were legitimate owners as defined in the
CRA
. Evidence that it was
    possible for them to pay down the mortgage without resort to unlawful activity
    is not sufficient to discharge this onus:
Ontario (Attorney General) v.
    $104,877 in U.S. Currency (In rem)
,
    2016 ONCA 71, 129 O.R. (3d) 312,
at para. 7.

(b)

Did the application judge err in holding that 855 Darby Road was an
    instrument of unlawful activity and in rejecting the responsible owner
    exception?

[51]

As
    I have concluded that the forfeiture was justified pursuant to s. 3 of the
CRA
,
    I need not address the alternate basis for forfeiture, that forfeiture pursuant
    to s. 8 of the
CRA
was made out as the property was an instrument of
    unlawful activity.

(c)

Did the application judge err in holding that the HAMC paraphernalia were
    instruments of unlawful activity and in rejecting the responsible owner
    exception?

[52]

The
    appellant argues that the application judge erred in finding that certain of
    the Hells Angels paraphernalia forfeited to the Crown were instruments of
    unlawful activity. Section 8 of the
CRA
provides that forfeiture is
    available where, subject to the responsible owner exception and the interests
    of justice, the court finds that the property is an instrument of unlawful
    activity.

[53]

In
    the appellants submission, the application judges finding is based on D/S
    Daviss evidence, evidence that ought to have been rejected either for non-compliance
    with r. 53.03(2.1) or for non-compliance with r. 39.01(5). As I have concluded
    that the evidence of the D/S Davis was properly admitted, I see no basis to
    interfere with the application judges finding that the Hells Angels paraphernalia
    are instruments of unlawful activity. The evidence of D/S Davis clearly
    demonstrates that, as the application judge found at para. 109, the
    paraphernalia forfeited were used to intimidate rival gangs and the public,
    and to signal the wearers trustworthiness to the criminal community and used
    to engage in unlawful activity that is likely to result in the acquisition of
    other property, including money from drug transactions. The requirements under
    s. 8 of the
CRA
are made out.

[54]

I
    also see no basis to interfere with the application judges finding that none
    of the owners fell within the responsible owner exception to forfeiture. The
    owners were full patch members of the HAMC. Although by the time the property
    was seized Mr. Beres was no longer a member of the Hells Angels, he would have
    been well aware of the uses made of the paraphernalia to intimidate others,
    mark their territory and signal to the criminal community that they were
    trustworthy business partners. There is no basis for concluding that the responsible
    owner exception applies and I would therefore dismiss this ground of appeal.

(d)

Did the application judge err in holding that the plea agreement between
    Mr. Ward and the federal Crown did not make it clearly not in the interests of
    justice to order forfeiture of 855 Darby Road?

[55]

The
    appellant argues that allowing the provincial Crown to sidestep a plea
    agreement reached with the federal Crown is inherently unfair and should have
    led the application judge to conclude that, pursuant to s. 3 of the
CRA
,
    it would clearly not be in the interests of justice to make a forfeiture
    order. In the appellants submission, the evidence established that an
    agreement was reached between Mr. Ward and the federal Crown to return 855
    Darby Road to Mr. Ward in exchange for his guilty plea. It was also clear that
    Mr. Ward was unaware of the divisibility between the federal and provincial
    Crowns and in these circumstances, fairness dictated that, in the interests of
    justice, the forfeiture order ought not to be made.

[56]

The
    appellant submits that pursuant to this courts decision in
Ontario
    (Attorney General) v. 714 Railton Avenue
,
2014 ONCA 397, 310 C.C.C. (3d) 448, a person such as Mr. Ward who was induced
    to enter into a plea agreement believing, reasonably, that he would not have to
    forfeit 855 Darby Road, should not thereafter find this agreement circumvented
    by allowing forfeiture to the provincial Crown. Such a result is clearly not in
    the interests of justice.

[57]

I
    disagree. In
Railton
, the trial judge found as a fact that the federal
    Crown had misled or at least lulled the accused into a false sense of security.
    In that case, the court found that the accused had reasonably believed that, in
    exchange for entering into a plea agreement, a final decision had been made
    that he would not have to forfeit his home: see paras. 11 and 23. No such
    finding was made in the present case. To the contrary, as explained by the
    application judge, it was apparent from the transcripts of the criminal
    proceedings that forfeiture of 855 Darby Road was not addressed on the record
    and no explicit promise was made to Mr. Ward. That finding was available to the
    application judge on the evidence. As a result, I see no basis to interfere
    with the application judges disposition of this issue.

Conclusion

[58]

For
    these reasons, I would dismiss the appeal and award the respondent costs fixed
    in the amount of $13,000, together with $913 for disbursements and applicable
    taxes on disbursements.

Released:

PR                                                            Paul
    Rouleau J.A.

I
    agree David Watt J.A.

JAN 21 2019                                              I
    agree David M. Paciocco J.A.


