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The B.C. Supreme Court applies the Brakes to the Director of Civil Forfeiture

B.C.’s Civil Forfeiture Office, still a relatively new entity, is becoming more aggressive in its approach to seeking forfeiture of what it sees as illicitly acquired assets or property that is being used for an unlawful purpose.  In September 2011, the Director of Civil Forfeiture seized five “high-end sports cars” for allegedly street racing.  In October 2011, the Director seized a helicopter apparently used in the drug trade.  In November 2011, Kim Bolan reported the forfeiture of a modified Chevy Suburban belonging to James Raich, said to be a member of the Independent Soldier gang.  Mr. Raich tried to oppose the forfeiture but, after an unsuccessful attempt to preclude the introduction of evidence from Provincial Court criminal proceedings, caved in and reached a settlement with the Director.

More often than not, the Director’s claims are undefended.   In 2009, the Director concluded 59 cases without trial resulting in $5.6 million being forfeited.  Since inception, the Director has obtained forfeiture of over more than $22 million in assets and cash.  This lack of opposition to forfeiture claims likely has many causes.  Sometimes there is just no defence.  However, it is often because the owner fears of adverse media scrutiny, lacks funds to defend, or figures the value of the asset is not worth the risk and cost of litigation.  In such cases, the forfeiture sought may be unfair, improper or unjust, but nothing is done to prevent it. 

However, the B.C. Supreme Court recently put a road block in the Director’s path in uncontested forfeiture cases.  In British Columbia (Director of Civil Forfeiture) v. Kingdon, the court considered three cases in which the Director sought forfeiture by default.  The cases involved land allegedly used as a grow-op and two motor vehicles used in “dial-a-dope” schemes, along with cash found in them.  In each case, the Director sought desk orders of forfeiture from the court registry because the claims were undefended.  The failure to defend, the Director said, meant that the allegations in the claim were deemed to be admitted.  As a result, there was no need to actually prove either the “unlawful activity” giving rise to the forfeiture or the value of the assets being forfeited.

Rather arrogantly, the Director took the position that it was “entitled to default judgements” and that the court had no jurisdiction to direct a hearing.  The desk orders requested had to be issued.  The Court disagreed, reasoning that it had an independent role in controlling its own processes and in ensuring substantive compliance with the provisions of the Civil Forfeiture Act.  A court order of forfeiture is a judicial act, not an administrative or bureaucratic one.  Because there is the possibility of a defence as to the amount the Director is entitled to claim in every forfeiture case, the matter cannot be dealt with by desk order.  If nothing else, there is always an argument that there should be relief from forfeiture.  That question can only be decided by having the court consider issues of proportionality and fairness in each case.  That alone made default by desk order inappropriate in most forfeiture cases. 

The Court went on to reject the Director’s submission that desk order applications could not be referred for a substantive hearing.  Though several reasons were given, the most salient was that preventing the court from ordering a full hearing would “effectively constitute in camera disposition of controversial without notice applications and deny other potentially interested parties and the legal profession as a whole knowledge about how such issues have been decided.” 

The Civil Forfeiture Act provides draconian powers and legal remedies to the Director of Civil Forfeiture.  To date it has been a runaway success in recovering funds and forfeiting assets.  This is often because the proceedings are undefended.  There is a risk that such a one-sided regime will be abused.  The Court in Kingdon evidently thought so and made it known that the courts in B.C. will be keeping a watchful eye over forfeiture claims to prevent unfairness and injustice. 

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This blog is authored by members of the Litigation and Dispute Resolution Department. We follow new and interesting issues emerging in the legal and business communities. The wide range of experience among the members of our litigation group will provide a diverse and insightful examination of current legal trends and topics. Our goal is to provide a source of valuable information and insight on a wide variety of matters for our readers.

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