T-2457-84
Lyndon Tadich (Plaintiff)
v.
The Queen (Defendant)
INDEXED AS: TADICH V. CANADA
Trial Division, Joyal J.—Toronto, June 23;
Ottawa, July 7, 1987.
Criminal justice — Narcotics — Money seized in narcotics
raid — Plaintiff acquitted of cocaine possession — Provincial
Court Judge denying Narcotic Control Act s. 10(5) application
for restoration of money — Burden of disproving "taint" —
Federal Court civil action for restoration — Issue not res
judicata — S. 10(5) merely procedural — Not causing forfeit
ure of property right — No forfeiture under s. 10(8) without
conviction — Presumption of innocence — Entitlement to be
determined on balance of probabilities — "Taint" rule appli
cable only where turpitude proven in accordance with normal
criminal procedures — When `tainted connection" can be
proven on reasonable doubt standard.
In the course of a narcotics raid at the plaintiffs apartment,
police seized a large amount of money. After she was acquitted
upon charges of possession of cocaine, the plaintiff applied to
the Provincial Court, under subsection 10(5) of the Narcotic
Control Act, for restoration of the money seized. The applica
tion was denied and the plaintiff instituted a civil action in
Federal Court, praying for an order of restoration.
Held, the action should be allowed.
In Aimonetti, the Federal Court of Appeal decided that the
refusal of a restoration order by a Provincial Court Judge
determined conclusively the issue of the right to possession of a
thing lawfully seized under paragraph 10(1)(c) and that the
person claiming restoration is therefore estopped from initiating
restoration proceedings in the Federal Court. However, in a
recent decision of the Supreme Court of Canada, Fleming
(Gombosh Estate) v. The Queen, Wilson J. repudiated the line
of cases based on the ex turpi causa non oritur actio doctrine
as inconsistent with the presumption of innocence at common
law and under the Canadian Bill of Rights and laid down new
rules. Firstly, it is sufficient for the claimant to prove entitle
ment on a balance of probabilities. Secondly, the rule of public
policy as to "taint" should only apply when there is turpitude or
criminal wrong demonstrated in accordance with normal crimi
nal procedures. It was inappropriate that the Crown be
required only to meet the civil standard of proof to establish
"taint" at a restoration hearing. The culpability of the owner of
the seized property must have been proven at antecedent
criminal proceedings. In the absence of a specific finding at
trial of the requisite "tainted connection", the Crown may fill
the evidentiary gap by proving taint on the reasonable doubt
standard at the restoration hearing. That standard was not the
one applied by the Provincial Court Judge in this case.
The plaintiff is entitled to a restoration order. In the absence
of a conviction, the Crown is no longer entitled to the seized
moneys under section 10 of the Act. Nor is the Provincial
Court's refusal of a restoration application a bar to these
proceedings.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss.
35, 40.
Narcotic Control Act, R.S.C. 1970, c. N-1, s. 10 (as am.
by S.C. 1985, c. 19, s. 200).
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Fleming (Gombosh Estate) v. The Queen, [1986] 1
S.C.R. 415; 51 C.R. (3d) 337; overruling R. v. Aimonetti,
[1985] 2 F.C. 370 (C.A.).
CONSIDERED:
Smith v. The Queen, [1976] 1 F.C. 196; (1975), 27
C.C.C. (2d) 252 (T.D.); R. v. Aimonetti (1981), 8 Man.
R. (2d) 271; [1981] 3 W.W.R. 42 (Man. C.A.); Aimo-
netti v. The Queen, [1983] 2 F.C. 282; [1983] 1 W.W.R.
492 (T.D.).
REFERRED TO:
Re R. and Senechal (1980), 18 C.R. (3d) 93; 52 C.C.C.
(2d) 313 (Ont. H.C.); Regina v. Hicks, [1977] 3 W.W.R.
644 (Man. C.A.); Re Collins and The Queen (1983), 7
C.C.C. (3d) 377 (Que. C.A.).
COUNSEL:
Paul D. Copeland for plaintiff.
Marlene I. Thomas for defendant.
SOLICITORS:
Copeland, Liss, Toronto, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
JOYAL J.: On October 23, 1983, police in
London, Ontario, carried out a narcotics raid in an
apartment in which the plaintiff resided. In the
course of their duties, the police seized a large
amount of Canadian and U.S. currency which had
been stashed under a mattress in her bedroom. The
amount seized, as disclosed in an agreed statement
of facts, was $1,108 in U.S. bills and $14,800 in
Canadian bills.
The plaintiff was charged with possession of
cocaine and after a trial held on April 11, 1984,
was acquitted.
The plaintiff then filed an application under
subsection 10(5) of the Narcotic Control Act,
R.S.C. 1970, c. N-1, for restoration of the moneys
seized. The application was heard on June 26,
1984 before His Honour Judge J. L. Menzies of
the Provincial Court who, in a judgment dated
August 14, 1984, refused to grant the necessary
order. He obviously directed his mind to the
burden imposed on the plaintiff to disprove "taint"
as to the source of the moneys seized. He com
pletely disbelieved the plaintiff on this and decided
on a balance of probabilities that she was not
entitled to restoration.
The plaintiff then instituted a civil action in this
Court praying for an order of restoration. The
action raises some interesting issues as to the
various interpretations given by the courts to
money seizures under section 10 of the Narcotic
Control Act [as am. by S.C. 1985, c. 19, s. 200]
and specifically, to restoration of these moneys or
to their ultimate forfeiture by the Crown. It also
raises the problem as to whether the issue before
me, having been previously resolved before Provin
cial Court Judge Menzies, is now res judicata.
Section 10 of the Narcotic Control Act reads as
follows:
10. (1) A peace officer may, at any time,
(a) without a warrant enter and search any place other than
a dwelling-house, and under the authority of a warrant issued
under this section, enter and search any dwelling-house in
which the peace officer believes on reasonable grounds there
is a narcotic by means of or in respect of which an offence
under this Act has been committed;
(b) search any person found in such place; and
(c) seize and take away any narcotic found in such place,
any thing in such place in which he reasonably suspects a
narcotic is contained or concealed, or any other thing by
means of or in respect of which he reasonably believes an
offence under this Act has been committed or that may be
evidence of the commission of such an offence.
(2) A justice who is satisfied by information upon oath that
there are reasonable grounds for believing that there is a
narcotic, by means of or in respect of which an offence under
this Act has been committed, in any dwelling-house may issue a
warrant under his hand authorizing a peace officer named
therein at any time to enter the dwelling-house and search for
narcotics.
(4) For the purpose of exercising his authority under this
section, a peace officer may, with such assistance as he deems
necessary, break open any door, window, lock, fastener, floor,
wall, ceiling, compartment, plumbing fixture, box, container or
any other thing.
(5) Where a narcotic or other thing has been seized under
subsection (1), any person may, within two months from the
date of such seizure, upon prior notification having been given
to the Crown in the manner prescribed by the regulations,
apply to a magistrate within whose territorial jurisdiction the
seizure was made for an order of restoration under subsection
(6).
(6) Subject to subsections (8) and (9), where upon the
hearing of an application made under subsection (5) the magis
trate is satisfied
(a) that the applicant is entitled to possession of the narcotic
or other thing seized, and
(b) that the thing so seized is not or will not be required as
evidence in any proceedings in respect of an offence under
this Act,
he shall order that the thing so seized be restored forthwith to
the applicant, and where the magistrate is satisfied that the
applicant is entitled to possession of the thing so seized but is
not satisfied as to the matters mentioned in paragraph (b), he
shall order that the thing so seized be restored to the applicant
(c) upon the expiration of four months from the date of the
seizure, if no proceedings in respect of an offence under this
Act have been commenced before that time, or
(d) upon the final conclusion of any such proceedings, in any
other case.
(7) Where no application has been made for the return of
any narcotic or other thing seized under subsection (1) within
two months from the date of such seizure, or an application
therefor has been made but upon the hearing thereof no order
of restoration is made, the thing so seized shall be delivered to
the Minister who may make such disposition thereof as he
thinks fit.
(8) Where a person has been convicted of an offence under
section 3, 4 or 5, any narcotic seized under subsection (1), by
means of or in respect of which the offence was committed, any
money so seized that was used for the purchase of that narcotic
and any hypodermic needle, syringe, capping machine or other
apparatus so seized that was used in any manner in connection
with the offence is forfeited to Her Majesty and shall be
disposed of as the Minister directs.
(9) Where a person has been convicted of an offence under
section 4 or 5, the court may, upon application by counsel for
the Crown, order that any conveyance seized under subsection
(1) that has been proved to have been used in any manner in
connection with the offence be forfeited, and upon such order
being made the conveyance is forfeited to Her Majesty and,
except as provided in section 11, shall upon the expiration of
thirty days from the date of such forfeiture be disposed of as
the Minister directs.
A case similar to the one before me was heard
by. Addy J. in 1975 in Smith v. The Queen, [1976]
1 F.C. 196; (1975), 27 C.C.C. (2d) 252 (T.D.),
where an accused, who had not availed himself of
the restoration procedure under subsection 10(5)
of the Narcotic Control Act, applied to the Federal
Court for an order of restoration.
Addy J. notes that subsections 10(5) and (7) of
the statute are merely procedural and custodial.
They provide, he says, a ready mechanism for a
person to obtain the return of anything which has
been seized and also provides for the custody of
same in the event a restoration application is not
made or such an application is denied. They do
not, he says, either explicitly or by necessary
implication, cause any property right to be forfeit
ed. He goes on to suggest that even if the statute
provided for forfeiture, it would be ultra vires as
infringing upon property and civil rights jurisdic
tion of the provinces.
In R. v. Aimonetti (1981), 8 Man. R. (2d) 271;
[1981] 3 W.W.R. 42, the Manitoba Court of
Appeal also considers section 10 of the Narcotic
Control Act. An amount of $24,000 had been
seized on a drug raid which resulted in a convic
tion for possession of a narcotic for the purpose of
trafficking. The possessor's application for restora-
tion before a Provincial Court Judge had been
dismissed.
The appellate tribunal quotes from Re R. and
Senechal (1980), 18 C.R. (3d) 93; 52 C.C.C. (2d)
313 (Ont. H.C.), where it is stated at pages 95
C.R.; 315 C.C.C.:
It has been held that in cases like these the onus is on the
applicant to show on a balance of probabilities that he is
entitled to possession of the thing that has been seized.
The Court of Appeal further notes that the
scheme of the Act is to deny possession of such
funds to one accused and subsequently convicted
of participating in illegal trade (subject to that
person's rights to claim ownership in separate civil
proceedings). The Court states that a Provincial
Court has the jurisdiction to deny the application
for restoration in spite of the fact that the money
in question is not directly identified as flowing
from a transaction involving a narcotic seized from
the premises. So long as there is evidence upon
which a court could reasonably conclude that the
money resulted from illegal trade in narcotics, it
was entitled to treat such money as a thing "in
respect of which ... an offence ... had been
committed", to borrow from the language of para
graph 10(1)(c).
Later on, the appellant Aimonetti applied to the
Trial Division of the Federal Court ([1983] 2 F.C.
282; [1983] 1 W.W.R. 492) for the return of the
money he alleged was rightfully his. The Crown
challenged the jurisdiction of the Federal Court to
order the return of the money and alternatively,
pleaded that the plaintiff was estopped from his
action on the ground that the issue was res
judicata.
Nitikman D.J.T.D., at pages 298-299 F.C.; 510-
511 W.W.R. says this:
In denying the plaintiff's claim for the return to him of the
moneys seized, the Provincial Judge dealt with it only on the
basis that the monies in question were associated with drug
trafficking by the applicant. In refusing the plaintiff's claim
under subsection 10(5), he did not purport to deal with, nor was
there before him, the issue of property or ownership of the said
monies. The only effect of the decision refusing restoration was
that the Minister was entitled to possession of the mcnies and
plaintiff was not so entitled. It in no way dealt with the issue of
ownership.
The Court dismissed the Crown's motion.
On appeal by the Crown to the Federal Court of
Appeal (reported at [ 1985] 2 F.C. 370; 19 C.C.C.
(3d) 481), Mahoney J. on behalf of the Court says
at pages 374-375 F.C.; 484 C.C.C.:
The issues to be determined ... relate exclusively to the relief
claimed. The relief sought is not a declaration. The respondent
is not entitled to proceed to trial simply to have disputed
questions of fact resolved if the relief he claims is not, in law,
available to him. I take it that a person who is not legally
entitled to possession of a sum of money which he owns is not,
in law, entitled to a judgment directing that it be paid to him
by the person who is legally entitled to its possession.
Mahoney J. concludes at pages 376-377 F.C.;
486 C.C.C.:
In any event, an issue estoppel is clearly established. The
refusal of a restoration order ... prescribed by subsection 10(7)
... seems to me to determine conclusively the issue of the right
to possession of a thing lawfully seized under paragraph
10(1)(c).
And there the matter rested until the Supreme
Court of Canada handed down its recent judgment
in Fleming (Gombosh Estate) v. The Queen,
[1986] 1 S.C.R. 415; 51 C.R. (3d) 337. An
accused Gombosh in October 1979 had some
moneys seized in the course of a drug raid. He was
subsequently charged with offences under the
Narcotic Control Act. On December 17, 1979, he
applied for restoration. The hearing was
adjourned. On February 28, 1980, the accused
died before being prosecuted and his administrator
Fleming pursued the restoration of the seized
moneys.
Mme Justice Wilson on behalf of the Court
discusses the issue of "entitlement" of things
seized as that word is found in section 10, what is
meant by the term, who has the burden of its proof
or disproof and what that standard of proof should
be. She notes that "disentitlement" or forfeiture is
mandated where the narrow conditions of subsec
tion 10(8) are met, i.e. where seized moneys were
used for the purchase of a narcotic in respect of
which a person has been convicted of a narcotics
offence. Her Ladyship also reviews the alternative
approaches adopted by the courts in the determi-
nation of this question. Addy J.'s approach in
Smith v. The Queen (op. cit.) as well as the
Manitoba Court of Appeal in Regina v. Hicks,
[1977] 3 W.W.R. 644, reflect, in her view, the
narrow interpretation of the scheme of section 10.
As such, it would require clear terms to provide
such an extraordinary measure as depriving a
person of his property either permanently or tem
porarily. A more recent Quebec Court of Appeal
decision in Re Collins and The Queen (1983), 7
C.C.C. (3d) 377, also suggests that conviction is a
prerequisite to any application of section 10 and
there is no burden on the applicant to disprove
taint in order to establish entitlement.
The harder line of cases adopts the rule of ex
turpi causa non oritur actio, a rule of public policy
which would preclude an accused from enjoying
the benefit of his illegal gains. The word "entitle-
ment" in such approach would mean "lawful enti
tlement" and if considered within the other provi
sions of section 10 of the Narcotic Control Act,
would impose on the applicant the burden of "sat-
isfying" the court that the moneys seized were
legitimately earned.
Wilson J. then observes that such an interpreta
tion is difficult to reconcile with what she calls [at
pages 440 S.C.R.; 356 C.R.] "the substantive and
constitutional limits on statutory construction, and
in particular with the presumption of innocence as
it has evolved at common law and under the
Canadian Bill of Rights."
Wilson J. finally provides the answers to the
questions previously put. She finds that simple
proof of entitlement is sufficient, and this is a
matter where the evidentiary rule of balance of
probabilities applies. Secondly, the rule of public
policy as to "taint" should only apply she says
when there is turpitude which, in the context, she
equates with criminal wrong and which must be
demonstrated in accordance with normal criminal
procedures. In this connection, she concludes that
it would be most inappropriate at a restoration
hearing that the Crown need only meet the civil
standard of proof to establish "taint". The culpa
bility of the owner of the seized property must
have been proven at antecedent criminal proceed
ings.
Wilson J. further notes that in the absence of a
specific finding at trial of the requisite "tainted
connection", the Crown may fill the evidentiary
gap by proving taint on the reasonable doubt
standard at the restoration hearing. This is a
standard which, I might add, was not applied by
Provincial Court Judge Menzies when he denied
the plaintiff before me her restoration application.
The reasoning of the Supreme Court of Canada
in Fleming leads me to conclude that the plaintiff
is entitled to have returned to her the moneys to
which she has a possessory right and against which
no superior title has been asserted. In the absence
of a conviction, the Crown is no longer entitled to
it under section 10 of the Narcotic Control Act.
Nor is the Provincial Court's refusal of a restora
tion application a bar to these proceedings. I
appreciate that this seems to run counter to the
Federal Court of Appeal in Aimonetti but I should
find that on the basis of the Fleming case, it
should no longer apply to the case before me.
The moneys seized by the police under a mat
tress in the plaintiffs apartment were seized as
"things". These things should be returned to her.
These things are in the form of $1,108 (U.S.) and
$14,800 (Can.), all of it paper currency.
In my view, no interest is payable on things and,
in any event, prejudgment interest against the
Crown in a situation of this nature is governed by
section 35 of the Federal Court Act [R.S.C. 1970
(2nd Supp.), c. 10]. As to postjudgment interest,
covered in section 40 of the statute, I would allow
it at the average Bank of Canada rate from the
date hereof to the date of payment.
The plaintiff is also entitled to her costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.