2007 BCSC 1648 Director of Civil Forfeiture v. Angel Acres

Before: The Honourable Madam Justice D. Smith

Reasons for Judgment

Counsel for the Plaintiff Attorney
General of British Columbia

T. Leadem, Q.C. and

P. Ameerali

Date and Place of Trial/Hearing:

November 8, 2007,

Victoria, B.C.

I. Overview

[1] On November 8, 2007, the Director of Civil Forfeiture (the “Director”) was granted an interim preservation order (the “order”) pursuant to s. 8 of the Civil Forfeiture Act, S.B.C. 2005, c. 29 (the “Act”). The order authorized the Director to seize, restrain and take immediate possession of a commercial property and its contents (the “property”) commonly known as the Nanaimo Hells Angels Motorcycle Club (the “NHAMC”) clubhouse (the “NHAMC clubhouse”).

[2] The NHAMC clubhouse is located in a residential neighbourhood but is zoned for commercial use. Access to the property is controlled by members of the NHAMC but is not exclusive to members or associates. There is no evidence that anyone lives at the property on a regular basis.

[3] The action in which the order was granted is an in rem proceeding that seeks forfeiture of the property to the provincial government on the grounds that it was acquired as a result of unlawful activity or is an instrument of unlawful activity. Preservation of the property is essential for the action to remain viable.

[4] Pursuant to s. 9 of the Act, the application for a s. 8 interim preservation order was heard without notice to the corporate defendant, Angel Acres Recreation and Festival Property Ltd. (“Angel Acres”), and to the individual defendants, who are the directors of the corporate defendant. Angel Acres is the registered owner of the land and premises upon which the NHAMC clubhouse it situated. Section 9 limits the duration of a without-notice order to no more than 30 days.

[5] The hearing of the s. 8 application was conducted in camera or in private. Pursuant to Rule 52(9) of the Rules of Court, the Court may direct an application to be heard in private for special reasons:

Except in cases of urgency, an application shall be heard in a place open to the public when the application is made, unless the court, in the case of a particular application, directs that for special reasons the application ought to be dealt with in private.

[6] The recording of the hearing, the materials in support of the application for an in camera hearing and the application for an interim preservation order, and the order granted were sealed until the order was executed. The order was executed on November 9, 2007.

[7] These reasons address the procedure employed and the basis for granting the order.

II. The Procedure

[8] At the request of counsel for the Director, the Court entered into an in camera hearing to determine if the application for an interim preservation order should be heard in camera or in open court. The pleadings and materials in support of the applications for an in camera hearing and interim preservation order were filed at the outset of the hearing.

[9] The affidavit material filed in support of the application for an in camera hearing addressed concerns for public safety, the personal safety of individuals who might be acting pursuant to the interim preservation order, and concerns for preservation of the property during the hearing of the interim application if notice of the action, applications and any resulting orders made were given to the defendants, or to any members of the NHAMC or their associates in advance of the order being executed.

[10] The basis for public and personal safety concerns included the criminal nature of the organization (which is a chapter of the larger Hells Angels Motorcycle Club (the “HAMC”) criminal organization in Canada), the fortification of the property, the weapons seized during the execution of a search warrant at the property on December 12, 2003 (“Project Halo”), and the conviction and/or involvement of members of the NHAMC in a number of violent crimes including assaults on police officers. Past searches of other HAMC clubhouses, including the earlier search of the NHAMC clubhouse, have resulted in the discovery of restricted weapons, gang regalia, drug accounting tools and records, and various other instruments of unlawful activity. The potential for an armed and violent resistance to the execution of the order was considered to be real.

[11] The affidavit material also addressed the potential jeopardy of defeating the objective of the in rem litigation through wastage of the assets, fraudulent conveyance and preference, and removal of the contents of the NHAMC clubhouse if the defendants and other members and associates of the NHAMC became aware of the application in advance of the execution of the order.

[12] The Dagenais/Mentuck test (see Dagenais v. Canadian Broadcasting Corp., [1994] 3 S.C.R. 835; and R. v. Mentuck, [2001] 3 S.C.R. 442, 2001 SCC 76), restricts an order that amounts to a publication ban to circumstances where:

(a) such an order is necessary in order to prevent a serious risk to the proper administration of justice because reasonably alternative measures will not prevent the risk; and

(b) the salutary effects of the publication ban outweigh the deleterious effects on the rights and interests of the parties and the public, including the effects on the right to free expression, the right of the individual to a fair and public trial, and the efficacy of the administration of justice.

[13] Application of the Dagenais/Mentuck test to discretionary judicial decisions that limit freedom of expression requires an examination of the risk in question and a weighing of the positive effects against the negative effects of what amounts to a publication ban on the rights and interests of the parties and the public.

[14] Based on the material filed, I was satisfied that special circumstances existed for hearing the application for an interim preservation order in private. In my view, there was a potential risk to public and personal safety, as well as a need to ensure preservation of the property in order to maintain the action. I was also satisfied that an order sealing the court file until the execution of the order was required in order to avoid the dangers that might have posed a serious threat to the administration of justice in this case.

[15] In order to balance the necessity for the making of the restrictive publication orders with the right of the public to be advised of the court proceedings and the right of the defendants to a fair trial, the sealing order was made time-limited. A further term of the order permits the defendants to apply to set aside the order on two days’ notice. Also included are terms recommended in Celanese Canada v. Murray Demolition, [2006] 2 S.C.R. 189, 2006 SCC 36, for inclusion in an Anton Piller order. Those terms provide some protection to the defendants for court-ordered actions that are akin to a private search warrant.

[16] In that regard, the order provides for the appointment of an independent supervising solicitor (the “ISS”) to oversee the execution of the order. The ISS is required to: (i) identify himself and his relationship to the order and to any of the defendants present at the time the order is executed; (ii) explain the meaning and effect of the order in plain language; (iii) advise the defendants of their right to obtain legal advice and that if they choose to do so, the plaintiff may not enter the property for a period of up to two hours; (iv) advise the defendants of their right to claim solicitor-client privilege and privilege against self-incrimination against any items that may be seized; and, (v) advise the defendants that if they disobey the order, they may be found guilty of contempt of court and may be fined or sent to prison.

[17] Upon entering the property, the ISS is authorized to accept any documents or materials over which the defendants may wish to assert privilege, and any computers at the property, and to secure those items in the possession of his law firm. Within 14 days of the order being executed, the ISS is required to prepare and deliver to the parties a list of those materials in his possession and their description, without revealing information that is or could potentially be privileged. Within 21 days of the order being executed, the ISS is required to present to the court a report documenting his actions and providing a list and description of the items that are in the possession of his law firm, and over which the defendants had asserted a claim of privilege.

[18] I turn now to the provisions of the Act.

III. The Civil Forfeiture Act

[19] The Act was enacted in 2005 and parallels the Ontario Civil Remedies Act, 2001, S.O. 2001, c. 28. The objective of the Act is to impose civil consequences for property that is found to have been acquired as a result of, or to have been used in the course of, unlawful activity by making such property the subject of a forfeiture order to the government. Proceeds from the recovery of the forfeited property are targeted for the benefit of the victims of unlawful activity.

[20] An “unlawful activity” is defined in s. 1 of the Act as:

... an act or omission described in one of the following paragraphs:

(a) if an act or omission occurs in British Columbia, the act or omission, at the time of occurrence, is an offence under an Act of Canada or British Columbia.

[21] An “instrument of unlawful activity” is defined as property that:

(a) has been used to engage in unlawful activity that, in turn,

(i) resulted in the acquisition of property or an interest in property, or

(ii) caused serious bodily harm to a person, or

(b) is likely to be used to engage in unlawful activity that is intended to

(i) result in the acquisition of property or an interest in property, or

(ii) cause serious bodily harm to a person.

[22] “[P]roceeds of unlawful activity” is defined as including:

(a) the whole or a portion of an interest in property if the whole or the portion of the interest, as the case may be, is acquired directly or indirectly as a result of unlawful activity.

[23] Section 2(1) provides for the retrospective application of the Act to unlawful activity or proceeds of unlawful activity that occurred before, on or after the date the Act came into force.

[24] Section 3 authorizes the Director to apply for an order that property acquired from proceeds of unlawful activity or that is an instrument of unlawful activity forfeited to the government.

[25] Section 8 authorizes the Director to apply for an interim preservation order. Section 8(5) outlines the test to be met for the granting of that order:

Unless it is not in the interests of justice, the court must make an interim preservation order applied for under this section if the court is satisfied that there are reasonable grounds to believe that

(a) the whole or the portion of the interest in property that is the basis of the application under subsection (1) is proceeds of unlawful activity, or

(b) the property that is the basis of the application under subsection (2) is an instrument of unlawful activity.

[26] The standard of proof in s. 8(5) is “reasonable grounds to believe”.

[27] In the criminal context, the standard of “reasonable grounds to believe” has been described as equivalent to the standard of “reasonable and probable grounds” required for a lawful arrest. It also has been alternatively described as “reasonable grounds”, “reasonable belief”, “probable cause”, and “reasonable probability” (see R. v. Caslake, [1998] 1 S.C.R. 51 at ¶20).

[28] The standard has both a subjective and an objective component. The individual taking the action must subjectively believe that he or she has reasonable grounds to do so, and also must have objectively justifiable grounds that “a reasonable person, standing in the shoes of [the individual taking the action] would have believed that reasonable and probable grounds existed to [take the action]” (R. v. Storrey, [1990] 1 S.C.R. 241 at ¶16). The standard does not require a prima facie threshold be met but does require more than mere suspicion or possibility. It is the cumulative effect of the evidence (Storrey at ¶18) or the totality of the circumstances (R. v. Debot, [1989] 2 S.C.R. 1140 at ¶53) that must be weighed in determining if the standard of “reasonable grounds to believe” has been met.

[29] Section 16 provides that “[f]indings of fact in proceedings under this Act and the discharge of any presumption are to be made on the balance of probabilities”.

[30] Section 17 provides for proof of unlawful activity by a conviction, a finding of guilt by a court, or a finding of not criminally responsible on account of a mental disorder in respect of an offence that constitutes an unlawful activity. Section 18 extends the finding of unlawful activity to circumstances where no charge has been laid for an offence that constitutes an unlawful activity or where there has been an acquittal, withdrawal or stay of a charge for an offence that constitutes the unlawful activity.

IV. The Property

[31] The Act defines property as “a parcel of real property or tangible or intangible personal property and, for greater certainty, includes cash”.

[32] The Director asserts that the property is an instrument of unlawful activity as it is used to engage in unlawful activity. In his opinion, the NHAMC clubhouse is used to promote and facilitate both social and criminal activities for the benefit of its members, prospects, hang-arounds and associates.

[33] His opinion is derived from the affidavit evidence of:

(a) Detective Constable Mark Loader of the Ontario Provincial Police (“OPP”) assigned to the Organized Crime Section, Biker Enforcement Unit (“BEU”) of the OPP, who has participated in the execution of search warrants at five HAMC clubhouses in Ontario, and who was qualified to give expert opinion evidence on the historical overview of the HAMC, the international and domestic face of the HAMC, the characteristics defining an Outlaw Motorcycle Gang (“OMG”) and the HAMC, the HAMC clubhouses, the HAMC reputation for violence, the NHAMC and the expert evidence led in R. v. Lindsay, [2005] O.J. No. 2870 in which Fuerst J. made a finding that the HAMC was a criminal organization within the meaning of s. 467.12(1) of the Criminal Code;

(b) RCMP Inspector Robert Turnball who was a supervisor and investigator in the Organized Crime Agency of British Columbia (the “OCA-BC”) and is now a seconded member to the Combined Forces Special Enforcement Unit of British Columbia (“CFSEU-BC”) and who was qualified to provide expert opinion evidence on OMG’s, the HAMC in B.C., and the NHAMC;

(c) police officer Gregory Johnson of the Central Saanich Police Service and seconded member to CFSEU-BC since April 2007, who provided an overview of the NHAMC, its members and associates, its property, its unlawful activities as recounted by reliable informants, and its interaction with other HAMCs and members; and,

(d) police officer Andrew Richards who was also seconded to CFSEU-BC since April 2004, was personally involved in the execution of four search warrants on three separate HAMC clubhouses in B.C., and who was qualified to provide expert opinion evidence on the history and structure of the HAMC in B.C.

[34] CFSEU-BC is an integrated policing agency comprised of members from municipal police agencies, the precursor investigative agency OCA-BC and the RCMP. The purpose of CFSEU-BC is to investigate, disrupt and suppress organized crime groups.

[35] The above-noted individuals provided the following evidence:

(a) The NHAMC is the Nanaimo chapter of the HAMC which was held to be a criminal organization within the meaning of s. 467.12(1) of the Criminal Code (see Lindsay). The NHAMC functions similarly to other chapters of the HAMC which are found throughout Canada and the world;

(b) The HAMC is involved in a wide variety of criminal activities, the most lucrative of which is drug trafficking. Many members and/or associates have been convicted for the offences of illicit drug importation, exportation, distribution and manufacturing, and trafficking. Additional convictions of murder, theft, possession of stolen merchandise, extortion, firearms possession and money laundering have been registered against HAMC-associated persons;

(c) The HAMC cultivates a reputation for violence in order to facilitate its criminal activities and protect its turf or franchise from encroachment by other individuals involved in criminal activities;

(d) The NHAMC clubhouse displays identifying features of the HAMC that include: being painted in the customary “Red and White” colours that are common to other HAMC clubhouses, displaying a sign on the outside of the clubhouse that includes the words “Hells Angels” and a logo of a “flying death head” that is associated with and trademarked by the HAMC, displaying a large “flying death’s head” logo onto the garage door of the clubhouse with the words “Hells Angels Nanaimo“ painted around it, posting a sign near a parking area with a parking symbol on it that states “Hells Angels Only”, and engraving the knocker on the front door of the clubhouse with the words “Hells Angels Nanaimo”;

(e) The NHAMC clubhouse has hosted parties that have been attended by individuals from a number of HAMC chapters, which assists the NHAMC to facilitate the commission of criminal activities by allowing members to create criminal networks; and

(f) The NHAMC was searched, videotaped and photographed during the execution of a search warrant on December 12, 2003 (Project Halo), during which it was observed:

(i) there were no windows on the ground floor level outside of the fenced compound and therefore no view into the clubhouse proper from the outside;

(ii) the front door was heavily constructed and had a dead bolt, a numeric key pad and a door bell;

(iii) the clubhouse was equipped with a video-monitored security system that included at least eight video cameras mounted outside the clubhouse;

(iv) the mounted cameras appeared to feed numerous video security monitors located throughout the inside of the clubhouse;

(v) displayed on the inside of the main front entrance and exit door was a sign that read “What you do here, what you see here, what you hear here, let it stay here” and “Hells Angels Nanaimo”;

(vi) both the front and rear entrance doors were heavily constructed and there was wire mesh fencing around the south side and rear of the building;

(vii) the central common area of the main floor included a bar, with signage pertaining to the HAMC throughout the room. An electronic audio listening device detector was located in the bar area. The bar had many features of a licensed establishment set up for the sale and consumption of alcohol even though NHAMC is not licensed under the Liquor Control and Licensing Act, R.S.B.C. 1996, c. 267 or any other act or regulation governing the sale of liquor;

(viii) the kitchen area included storage shelves and a liquor cabinet that contained a large amount of liquor;

(ix) a boardroom on the second floor, with apparent access limited to members only, contained two video monitors, numerous examples of Hells Angels regalia, a computer, a file cabinet and a shredder;

(x) during Project Halo, a number of unregistered shotguns were seized from an unlocked gun case in the boardroom closet and a .25 calibre restricted handgun was located in an insecure main floor locker with two boxes of ammunition. Documentation in the locker was in the name of a then member of the NHAMC; and

(xi) two bedrooms and a storage closet were located on the third floor. The bedrooms appeared unoccupied and the storage closet contained “Red and White” Hells Angels support clothing.

[36] Detective Constable Loader confirms that in his opinion the HAMC is a criminal organization and that the NHAMC has all of the same characteristics as the larger HAMC. He attested that the central purpose of a HAMC clubhouse, including that of the NHAMC clubhouse, is the planning of criminal activity in secrecy. He reports that the existence of a HAMC clubhouse in a particular geographical area is a signal that the HAMC has marked their turf and gained territorial control over criminal activity in that area.

[37] After reviewing the affidavits of Inspector Turnball and Officer Johnson, Detective Loader commented that “the HA clubhouse in Nanaimo promotes and facilitates both social and criminal activities for the benefit of its members, prospects, hang-arounds and associates”. He based his opinion on NHAMC’s heavy fortifications to protect its premises from entry by police and/or rival gangs, its series of video cameras that feed into televisions located within the clubhouse, the extent to which it attempts to control and guard conversations overheard and/or observations made by persons attending the clubhouse, the storage of illegal firearms for illicit purposes, and its use of HAMC regalia (colours) when travelling from bar to bar and participating in “bike runs” and “bike events” in order to mark their “turf” and announce their presence within a community.

[38] Inspector Turnball has been directly involved in investigations of members and associates of the NHAMC clubhouse over the course of his 27-year policing career. He was also involved in Project Halo during which he participated in the execution of the search warrant on the NHAMC clubhouse on December 12, 2003.

[39] In his affidavit of November 5, 2007, Inspector Turnball deposes at ¶15:

I believe the Clubhouse has been modified to suit the specific purposes of the NHAMC. Those purposes include maintaining a high level of secrecy over things that occur within the Clubhouse and providing security over the Clubhouse and the surrounding area. The fortifications which include reinforced exterior doors, wire meshed fencing around one side and rear of the Clubhouse, the lack of windows on the ground level outside the fenced area and video monitoring equipment, assist in preventing the forcible entry of the premises by law enforcement personnel. It is also my belief that similar modifications have been observed by other law enforcement agencies when they have entered HAMC clubhouses at other locations in Canada.

[40] In his opinion, the NHAMC clubhouse provides a protected environment in which the NHAMC can operate as an instrument of unlawful activity without interference by the police.

[41] Officer Johnson was also involved in Project Halo and has knowledge of the NHAMC clubhouse and membership. In his opinion, the NHAMC clubhouse operates as a place where criminal planning is conducted in secrecy during weekly “church meetings” that are attended by full patch members. He deposes that all three individual defendants are currently members of the NHAMC and states that other members and associates of the NHAMC have been arrested for possession and production of a controlled substance, possession of a restricted weapon and conspiracy to traffic in cocaine.

[42] In particular, he has knowledge of several assault incidents involving members or associates of the NHAMC. He attests to an assault in secrecy at the NHAMC clubhouse in September 2002. The victim was a NHAMC member who, in the course of being expelled from the NHAMC, was seriously beaten and required admittance to the local hospital for treatment of his injuries. In that instance, the NHAMC clubhouse was used as a safe place to conduct the assault upon the victim in secrecy. Officer Johnson also advised of an August 2000 investigation into an assault of a victim by four associates of the NHAMC. Members of the NHAMC later threatened the victim, who declined to make a formal complaint. Officer Johnson was aware of a further incident that occurred in October 2001. Members of the Nanaimo RCMP attended a complaint at a local hotel where a victim reported that a male wearing full Hells Angels colours had threatened him by pointing a handgun at him. The victim was too frightened to pursue charges.

[43] In summary, Officer Johnson concludes at ¶52-55 of his affidavit of November 5, 2007:

¶52 Based on the information I have received through my extensive review of police investigation reports and records as well as my own observations, some of which I have recorded in this affidavit, I believe that the HAMC is a nationwide criminal organization, and that the NHAMC is a full participant in the unlawful activities of that organization. I believe that Angel Acres Ltd has allowed and continues to allow the NHAMC to use the Clubhouse to facilitate the unlawful activities of the HAMC in Nanaimo and elsewhere, both in the planning and operation stages.

¶53 I further believe that individual members of the NHAMC have in the past used the Clubhouse to facilitate the planning and commission of unlawful activities both in Nanaimo and elsewhere. I believe that the members of the NHAMC are likely to continue using the Clubhouse in that fashion as long as it is available to them to do so.

¶54 In addition, I believe that Angel Acres Ltd and the NHAMC have allowed unlawful activities, including but not limited to the possession of controlled substances, assaults, the possession of restricted weapons and the continuous operation of a booze can [selling liquor without a commercial liquor license], to occur on the premises. I believe that such unlawful activities will continue to be allowed on the premises so long as the Clubhouse is available for that use.

¶55 The Clubhouse has been used in substantially similar fashions by successive OMG’s for over 30 years. The building and the people and organizations who use it have consistently been the subject of numerous police investigations, some of which have led to arrests and criminal charges.

[44] Officer Richards echoed this opinion at ¶17 of his November 5, 2007 affidavit, where he expressed the belief that “the Hells Angels have been historically recognized by other organized criminal groups as one of the most powerful criminal groups in the Province of British Columbia”.

VI. Discussion

[45] I am satisfied the evidence filed in support of the order is more than sufficient to establish reasonable grounds to believe that the property is being used as an instrument of unlawful activity. That unlawful activity includes the planning of criminal activities, the assault of victims in secrecy, and the storage of illegal weapons and controlled substances.

[46] The evidence establishes the Director subjectively believes the property is being used as an instrument for unlawful activity. The evidence of Detective Constable Loader, Inspector Turnball, and Officers Johnson and Richards provides the objectively justifiable grounds to support that subjective belief.

[47] In the face of these findings, s. 8(5) of the Act requires the Court to grant the Director an interim preservation order of the property. In the circumstances of this case, there is no evidence to support the exercise of the limited judicial discretion under s. 8(5) to decline to make such an order.

[48] The province’s authority to implement the Act is grounded in the division of powers allocated to the provinces under s. 92(13) of the Constitution Act, 1867. The Canadian Charter of Rights and Freedoms does not guarantee property rights (except as provided for in s. 35). Therefore, in balancing the property rights of parties with government’s responsibility to safeguard the public interest by preventing unlawful activity, the Court must be vigilant in ensuring that the evidence relied upon to support the extraordinary measure authorized by s. 8(5) of the Act is reliable. Mere assertions, or the taking of judicial notice of commonly accepted or known behaviour patterns of certain individuals or groups, are not, in my view, sufficient to establish the requisite “reasonable grounds to believe”.

[49] In this case, the direct and indirect evidence filed in support of the application established the reasonable grounds to believe that the NHAMC clubhouse was being used to engage in unlawful activity. Accordingly, the granting of the order was “in the interests of justice” and also measured through its limiting terms to ensure the defendants’ rights to a fair trial are maintained.

“D. Smith J.”

Citation:	*Director of Civil Forfeiture v. Angel Acres,*
	2007 BCSC 1648