Commercial Litigation and Dispute Resolution Blog

Some time ago I blogged about the decision in B.C. (Director of Civil Forfeiture) v. Wolff.  That case was something of a setback for the Director of Civil Forfeiture who had sought forfeiture from Mr. Wolff of his $52,000 truck.  In November 2005, Mr. Wolff was arrested for possession for the purposes of trafficking.  As a “favour”, Mr. Wolff was transporting a duffle bag of marijuana in his truck for an unnamed friend.  In June 2007, shortly after buying out the lease on his truck, Mr. Wolff pled guilty and was sentenced to a one year conditional discharge.  

Six months later (over four years after the original arrest), the Director commenced a civil claim seeking forfeiture of Mr. Wolff’s truck as the “instrument of unlawful activity”.  Once it was proven the truck had been used in the commission of an offence, the Civil Forfeiture Act (“CFA”) compelled its forfeiture unless it “is clearly not in the interests of justice”.  The onus to establish this is on the defendant.  At trial, the Director’s claim failed only because the judge found that Mr. Wolff was entitled to relief from forfeiture.  That decision was based on a number of considerations, including the Director’s delay in making the claim and the fact Mr. Wolff was a first time offender.  

As a general observation, the Director has been very aggressive in seeking forfeiture in most cases, regardless of the underlying facts or equities.  The Wolff decision represented a set back and created a precedent for legitimate opposition to the Director.  Presumably grumpy over the loss, the Director appealed.  In a victory for the “little guy”, the Court of Appeal recently upheld the result, though not agreeing entirely with the lower court’s reasoning.  More importantly, this decision provides much needed appellate guidance on what to consider when determining whether forfeiture under the CFA “is not clearly in the interests of justice”.  The case provides hope to all those facing a forfeiture claim by the Director. 

The objectives of the CFA are to:

a)      take the profit out of unlawful activity;

b)      prevent the use of property to unlawfully acquire wealth or cause bodily injury; and

c)      compensate victims of crime and fund crime prevention and remediation.

The Court of Appeal began its analysis by noting that the CFA does not require proof that a particular forfeiture will serve any one or more of these objectives.  Once the Director establishes an asset is the “proceeds of unlawful activity” or an “instrument of unlawful activity”, the court “must order forfeiture, regardless of value, purpose, ownership or condition of the property, unless the offender shows that the order would clearly not be in the interests of justice”.  In that context, the Court of Appeal turned to the specific grounds of the Director’s appeal.

The first ground was that the trial judge erred in inferring the Director deliberately delayed commencing the claim until after Mr. Wolff paid off his truck.  The Court of Appeal agreed this was an error but noted that “inordinate delay . . . might be relevant to the ‘interests of justice’”.  However, the fact the truck was not fully owned by Mr. Wolff at the time of the offence was not a bar to its subsequent forfeiture.

The second ground of appeal involved the nature of Mr. Wolff’s use of his truck in committing the offence.  The trial judge accepted as relevant that the truck was not primarily used for unlawful purposes.  The Court of Appeal held that the nature of use was irrelevant.  The fact the truck had been “used to engage in unlawful activity” (even once) was all the CFA required to trigger forfeiture.  However, the court noted it was not appropriate to hold a defendant responsible for the aggregate social costs of a particular criminal activity in order to justify forfeiture.  The Director argued that the societal costs of the illegal drug trade was over $140 million annually.  As the truck’s value was less than this, its complete forfeiture was justified.  The Court of Appeal rejected this submission, noting the CFA’s purposes do not depend on drawing a direct connection between the property to be forfeited and the “diffuse harms” of criminal offenses.  Instead, the focus should be on the specific asset and the individual circumstances of each case.

Finally, the Court of Appeal addressed the “interests of justice”.  On appeal, the Director argued the CFA’s purposes were the overriding considerations and sought to diminish the scope and weight of other traditional elements.  The Court of Appeal rejected this approach.  They held that the “interests of justice” confers a “very wide discretion”, though it must be exercised judiciously.  Relief from forfeiture in a civil context has been available in equity for centuries.  In B.C., it is codified in section 24 of the Law & Equity Act.  In the private law realm, usually in a contractual context, it affords a case-by-case consideration of competing rights in specific circumstances.  That is quite different from forfeitures under a statutory regime, such as the CFA, which engages important public concerns as well as private rights.  Courts must consider the statutory purposes in deciding whether to relieve from forfeiture and cannot grant relief if it subverts the statutory purposes. 

Despite this, the Court of Appeal held that the “interests of justice” encompass considerations that are much broader than just the statutory purposes.  The scope of these considerations cannot be exhaustively listed and are not subject to any prescribed limits.  The relevant factors include proportionality, fairness, the applicant’s culpability, the extent of the social problems caused by the unlawful activity, the need to remove profit and motive from crime, general deterrence, the offender’s personal and family circumstances, and the reputation of the administration of justice.  These are all to be applied under the overarching rubric of the “dominant principles” of proportionality and fairness.

In the final result, while the Court of Appeal found that the trial judge had made some errors of law, they rejected the harsh and inequitable propositions advanced by the Director.  Rather than remitting the case back to the Supreme Court, the Court of Appeal exercised its discretion to uphold the result relieving Mr. Wolff from the mandatory forfeiture of his truck.  They did so because Mr. Wolff was a first time offender and was “in the main a productive and law-abiding member of society”.  His criminal conviction had serious consequences for him as he had lost his job as a fire captain.  There was no evidence he had been involved in criminal activity either before or after this particular event, or that Mr. Wolff had made any profit.  There was also no evidence the truck itself had ever been used for any other unlawful activity or that it had been purchased from proceeds of such activity.  Indeed, the truck’s value greatly exceeded that of the marijuana found in it.  As a result, the Court of Appeal concluded that the trial judge was not in error in concluding that “it would be manifestly contrary to the interests of justice to order forfeiture of all or part of the value of the truck”.

This decision should provide comfort to individuals caught up in a forfeiture claim by the Director.  It firmly anchors the wide discretion available to courts to provide relief from such claims in appropriate circumstances.  It signals that the courts will not necessarily accede to the Director’s claim for forfeiture.  If the Director is demanding an unfair bargain to resolve a forfeiture claim, this decision illustrates that there is no certainty the Director will get that result in court.  A defendant can now go to court with greater confidence that, if the circumstances warrant, they can avoid or ameliorate a forfeiture.  As a result of this case, the playing field, while still tipped in favour of the Director, is a more level now than it was previously.