Commercial Litigation and Dispute Resolution Blog

In earlier blogs, I noted the financial success of the Office of the Director of Civil Forfeiture in recovering funds by seeking forfeiture of assets from people who are alleged to have been involved in “unlawful activity”.  As the Director frequently argues, the purpose is to take the profit out of criminal activity, to prevent the use of specific assets to unlawfully acquire wealth, to compensate victims of crime and to fund crime prevention and remediation.  Laudable goals in principle. 

The problem is that the Director frequently overreaches and seeks forfeiture in unjustified circumstances.  In such cases, the owner or interest holder is faced with a lengthy, costly and potentially embarrassing court process to defend their entitlement to retain that asset.  Often the asset being fought over, though significant to its owner, is modest.  More often than is fair, the owner is compelled to make a deal with the Director to avoid a costly trip to court.  This effectively amounts to a second form of punishment for involvement in a criminal offence.  Such settlements with the Director do not benefit from either public disclosure or the scrutiny of the judiciary.  They are often entirely unfair.  This does nothing to enhance respect for the law or the justice system.

However, as more and more cases under the Civil Forfeiture Act (the “CFA”) come before the courts, perhaps the pendulum will swing in favour of those facing a claim of forfeiture.  Judges do not seem to take as expansive a view of the Director’s entitlement to forfeiture as the Director claims.  A recent case, B.C. (Director of Civil Forfeiture) v. Wolff is a refreshing example.

Mr. Wolff, a retired firefighter, did a silly thing.  On one of his regular trips to Williams Lake to go hunting in 2005, he agreed to deliver a duffle bag to a “Mr. Y”.  When he was pulled over in his 2003 Dodge Ram for speeding, the arresting officers smelled marijuana which then led to their discovery of 4 pounds of it in the duffle bag.  In June 2007, Mr. Wolff pled guilty to possession for the purposes of trafficking.  He was given a conditional discharge as he had no prior criminal record. 

In December 2007, the Director commenced a claim seeking forfeiture of Mr. Wolff’s truck, alleging it had been used “as an instrument of unlawful activity” contrary to the CFA.  By this point, Mr. Wolff had paid out the lease on his truck.  In all, he paid some $52,000 to buy the vehicle.  The Director argued that Mr. Wolff should lose his truck or, in the alternative, should pay part of its value to the Director.  The Director said this was required as it was likely Mr. Wolff would use his truck to commit similar offences in future. 

Mr. Wolff’s only defence (as he had been convicted of a criminal offence) was to seek to avoid forfeiture under section 6 of the CFA.  That provision gives the court a discretion to refuse to grant a forfeiture order, to limit its application or to put conditions on it where forfeiture of the property “is clearly not in the interests of justice”.  Mr. Wolff bore the onus of establishing forfeiture was not in the interests of justice.

The Court set out a variety of considerations it would take into account when weighing the interests of justice and pointed out that a forfeiture order is not intended to be punitive.  There was no evidence Mr. Wolff had used the proceeds of any unlawful activity to purchase his truck.  Despite the Director’s assertions, there was also no evidence that Mr. Wolff otherwise used or intended to use his truck to commit similar offences.  The Court was also sceptical of the Director’s delay in seeking forfeiture of the truck.  The claim was not started until over two years after Mr. Wolff’s arrest and after he had paid out his truck lease. 

In denying the Director’s claim for forfeiture, the Court said:

I do not agree that forfeiture would be preventative in this case. The trafficking occurred nearly four years ago.  There is no evidence that Mr. Wolff has engaged in any further unlawful activity.  Even if I order the Truck forfeited, there is nothing stopping Mr. Wolff from borrowing or renting a vehicle should he choose to engage in similar activities in the future.

Furthermore, I do not agree that prevention should be elevated above the dominant considerations of proportionality and fairness.  If the Director’s true motive was to prevent prospective unlawful activity, then the Director would have moved in a timelier manner to initiate the proceedings.  Instead, the Director waited until December 2007, after Mr. Wolff had been convicted, sentenced, and had legitimately bought out the lease on the Truck, before commencing these proceedings.  While I recognize that the CFA does not impose a limitation period in which to commence an action, I do not agree that it is in the interests of justice for the Director to wait an inordinate amount of time and then rest his case on the goal of prevention.

If Mr. Wolff had a history of trafficking or if there was some evidence, rather than mere speculation, that he would have engaged in trafficking using the Truck again, my decision in this regard would have been different.  In those events, it would not be clearly unjust to order forfeiture as a preventative measure.

After considering and taking into account proportionality and fairness, as well as Mr. Wolff’s degree of culpability demonstrated by the evidence, the need for compensation in the circumstances and, finally, the need to prevent future harm and deterrence, I am satisfied that the forfeiture of the whole of the Truck is clearly not in the interests of justice.

This case is a good precedent for those who face forfeiture claims.  Based on this decision, the Director will need to present far more cogent evidence establishing that the property owner will use the given asset for further “unlawful activity” or that the asset was purchased with the proceeds of such activity.  Without such evidence, it will likely not be in the interests of justice to order forfeiture.

The case is also interesting for another reason.  One of the Director’s submissions was that the court ought to consider the costs to society of the type of crime in issue.  In this case, the Director argued that the annual societal costs of marijuana use were over $140 million.  That fact ought to count in favour of forfeiture as the value of the asset was small compared to this harm and would be used to ameliorate it.  The Court disagreed saying it offended the principles of fairness and proportionality to make Mr. Wolff responsible for the total social costs of marijuana use.  Such a result would be “capricious and unfair”.