COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

R. v. Craig,

 

2007 BCCA 234

Date: 20070424


Dockets: CA033450, CA033453

Docket:  CA033450

Between:

Regina

Appellant

And

Judy Ann Craig

Respondent

-  and  -

Docket:  CA033453

Between:

Regina

Respondent

And

Judy Ann Craig

Appellant


Before:

The Honourable Madam Justice Rowles

The Honourable Madam Justice Ryan

The Honourable Mr. Justice Low

 

W.P. Riley

R.D. Leong

Counsel for

The Department of Justice

H. Rubin, Q.C.

Counsel for

Judy Ann Craig

Place and Date of Hearing:

Vancouver, British Columbia

January 4 & 5, 2006

Place and Date of Judgment:

Vancouver, British Columbia

April 24, 2007

 

Written Reasons by:

The Honourable Madam Justice Ryan

Concurred in by:

The Honourable Madam Justice Rowles

The Honourable Mr. Justice Low

Reasons for Judgment of the Honourable Madam Justice Ryan:

Introduction

[1]                These are applications by the Crown and Judy Ann Craig for leave to appeal and, if granted, both appeal the sentence imposed on Ms. Craig after her plea of guilty to one count of producing marihuana contrary to s. 7(1) of the Controlled Drugs and Substances Act, S.C. 1996, c. 19 (the “CDSA” or the “Act”).  On September 5, 2005, the Honourable Gedye P.C.J. imposed a conditional sentence of 12 months’ imprisonment, a fine of $100,000, and a victim surcharge of $15,000 on Ms. Craig.

[2]                Both parties have raised a number of grounds of appeal regarding the appropriateness of the sentence imposed on Ms. Craig.  The Crown urges this Court to convert the conditional sentence of imprisonment to a term of conventional incarceration and to order the forfeiture of the house in which Ms. Craig produced the marihuana.  The Crown says that, if its appeal is allowed to that extent, the fine and victim surcharge should be set aside.

[3]                Ms. Craig, on the other hand, seeks orders dismissing the Crown appeal and allowing her appeal to the extent that the fine be reduced to $15,000 payable over a period of three years.

[4]                These applications for leave to appeal raise important issues about the interpretation and operation of the forfeiture provisions of the CDSA in the context of sentencing under that Act.  For that reason I would grant both parties leave to appeal.

[5]                For the reasons that follow, I would allow the Crown’s appeal with respect to the order of forfeiture, set aside the decision of the sentencing judge, and order the North Vancouver home be forfeited to Her Majesty in right of Canada to be disposed of in accordance with s. 16 of the CDSA.  I would, however, dismiss the Crown’s appeal against the conditional sentence of imprisonment, and I would allow Ms. Craig’s appeal to the extent of setting aside the fine of $100,000.

[6]                Although there are two appeals before this Court, the issues are intertwined.  I refer to them collectively as “this appeal”.

Background

[7]                This appeal turns on the interpretation of the forfeiture provisions of the CDSA and the complex inter-relationship between forfeiture under that Act and the substantive sentencing provisions of the Criminal Code, R.S.C. 1996, c. C-46 (the “Criminal Code”).  The appeal arises from Ms. Craig’s conviction for operating a marihuana grow operation in her home in North Vancouver.  She was charged on a two-count indictment, sworn October 22, 2003, for trafficking in marihuana, contrary to s. 5(2) of the CDSA, and for unlawfully producing marihuana, contrary to s. 7(1) of the CDSA.  On June 14, 2005, Ms. Craig pleaded guilty to the count of producing marihuana and was sentenced on September 5, 2005, by Gedye P.C.J.

Circumstances of the Offence

[8]                On October 21, 2003, believing that there was a marihuana grow operation in Ms. Craig’s house on Alder Street in North Vancouver (the “Alder Street house”), a police officer telephoned Ms. Craig and invited her to the police station “to discuss it”.  Ms. Craig decided not to go to the police station.

[9]                The police followed up the conversation by watching the Alder Street house.  That afternoon they observed Ms. Craig and two others remove plants and paraphernalia from the residence and attempt to conceal them on city property.  All three were arrested.

[10]            Ms. Craig’s house and a vehicle were searched.  The Alder Street house is an older two level dwelling with a total of 1,000 square feet of floor space.  There is a small shed adjacent to the house.  The entire basement level and portions of the main floor were devoted to the grow operation.  There were three growing rooms and one drying room.  The operation utilized 16 electrically-timed industrial growing lights that ran through a system of electrical ballasts.  A ventilation system was in place involving a system of intake, exhaust and wall fans.  An irrigation system and sump pump took water to and from the growing plants.  The police also located a large amount of packaging material, scales, score sheets, growing instructions and calendars going back three years.  A container was found with approximately one pound of marihuana packaged in ounce, quarter-pound, and half-pound bags.

[11]            In all, 186 marihuana plants were seized.  Of those, 51 were three feet tall, 17 were 1.5 feet tall, and the remaining 88 plants were clones.  (A clone is a clipping taken from a mother plant in vegetative growth used to start a new plant.)  The Crown filed the report of a police officer, an expert in the field of marihuana sales, who projected the estimated yield from 186 plants.  His opinion was that the 186 plants would produce approximately three ounces of marijuana each, resulting in a total yield of 35 pounds of commercially-saleable marihuana.  The officer said that a pound of marihuana can be sold wholesale for $2,500.  Thus, the value of the 186 plants would be $87,500.  At these rates, the value of the marihuana seized from the car was $15,000.

[12]            From Ms. Craig’s car, the police seized $22,275 in cash, $2,390 in traveller’s cheques, $787 USD, and five pounds of marihuana in quarter-pound bags, as well as “score sheets” documenting marihuana sales.

[13]            Ms. Craig testified at the sentencing hearing, held after her June 14, 2005, guilty plea to the count of producing marihuana.  She disputed many of the Crown’s allegations.  She said that the plants seized represented two separate crops of marihuana.  The first crop consisted of the 51 mature plants and 17 smaller plants, making a total of 68 plants.  Ms. Craig said that she only grew about 68 plants for harvest.  Thus, of the 88 clones she had growing in her residence, she planned to keep only 68 of the best and to throw the rest away.  She also said that each plant produced 1.5 ounces, not three, of saleable marihuana.  Accepting Ms. Craig’s figures, a 136 plant crop (2 x 68) would produce 204 ounces of marihuana, or 12.75 pounds.  At $2,500 a pound wholesale, she would have taken in $31,875 from the sale of the marihuana produced from the plants seized from the home.  Ms. Craig’s calculations did not challenge the estimation that the marihuana found in the car would fetch $15,000.

[14]            At the time of sentencing, Ms. Craig had been assessed $250,000 by the Canada Revenue Agency (“CRA”) for unpaid taxes relating to her marihuana earnings going back to 1998.  The transcript of the submissions on sentence reveals that Ms. Craig had hired an accountant to dispute the amount of back taxes she owed.  The $250,000 remained outstanding at the time of sentence.

[15]            By means of a search warrant, the police had obtained documents submitted to the CRA by Ms. Craig in support of her complaint that her tax assessment was too high.  The documents were filed by the Crown as exhibits at the sentencing hearing.  Counsel for Ms. Craig objected to the admissibility of the documents on the basis that they were made “without prejudice”, but counsel eventually abandoned his objection at the sentencing hearing.  Although he mentioned it in passing in this Court, the issue was not squarely raised so I will deal with the record as placed before the sentencing judge.

[16]            The tax documents reveal a claim that the enterprise produced seven crops a year and that each crop consisted of 80 plants.  On this appeal, Counsel for the Crown, Mr. Riley, submitted that seven crops of 68 to 80 plants a year would generate $105,000 to $122,500 in annual revenues.

[17]            In the tax documents, Ms. Craig claimed expenses for the cost of hiring help for trimming, cloning and transplanting.  Ms. Craig also hired someone to house sit while she took time off for a month each year.  The tax documents disclose $29,320 in “start up costs” for the grow operation in 1998, including costs for construction work for drying, storage and processing facilities, construction of a “hidden entranceway” from the basement to the shed, and for modifications to the electrical system.

[18]            By way of submissions to the CRA, Ms. Craig claimed 70% of her housing costs in connection with the grow operation.  She said that of the 1,000 square feet in the house, 650 were devoted for the grow operation with the rest reserved for personal use.

[19]            In her testimony at sentencing, Ms. Craig attempted to distance herself from the documents filed with the CRA and minimize the costs and size of her operation.  She asserted that the documents submitted to the tax department were the work of her accountant.  The reasons for sentence do not make it clear as to the sentencing judge’s findings of fact with respect to the tax documents; however, for purposes of this appeal, the exact amounts are unimportant.  The documents clearly indicate that Ms. Craig ran a successful commercial operation that grossed over $100,000 a year in a house largely dedicated to the growing of marihuana.

Personal Circumstances of the Offender

[20]            Ms. Craig was 52 years of age at the time of the offence.  She had no previous criminal record.  In 1985, Ms. Craig inherited the family home in Richmond.  In 1986, she purchased the Alder Street house for $113,000 and paid for it with cash inherited from her father and through a $73,000 mortgage.

[21]            University educated, Ms. Craig worked in real estate in the 1970s before marrying and living abroad.  She testified that she returned from abroad to live in Canada permanently in the early 1990s.  Not long afterwards she divorced.  She was left depressed and without employment and supported herself by mortgaging the Richmond house and re-mortgaging the Alder Street house.

[22]            Ms. Craig testified that in 1998 she had a very bad experience with someone she described as a sociopath.  She said the relationship ended with the person trying to stab another friend of hers.  This depressed her further.  She said she started to experience panic attacks and knew that she could not enter the workforce in that condition.  Eventually, at the suggestion of a friend with AIDS, she decided to grow marihuana.

[23]            Ms. Craig ran a soil-based operation and learned the business by trial and error.  She said that she sold the marihuana to friends sick with AIDS, to tradespersons, professional people and people from other walks of life.  She testified that a few years into the operation she was approached by a criminal who was part of an organized crime effort who told her he was “going to make her dreams come true”.  She said that he offered her $200 more than the going rate for her product.  Ms. Craig said that if she had accepted his offer, she would not have been able to supply marihuana to her friends who had AIDS and that she refused.

[24]            Ms. Craig said that she used the money that she earned to maintain a garden on her North Vancouver property.  A 2002 article published in a magazine, “Gardens West”, shows a photograph of Ms. Craig’s house enveloped in a fragrant species of white clematis.  The article describes how, in three years, the vines had grown up to the second floor of the house to cover her deck and how the clematis had “tak[en] over the house.”  Ms. Craig testified that all she had as the result of her efforts was the approximate amount of $25,000 found in her car, a 1992 Honda Accord, her mortgaged houses and the garden.

[25]            The Alder Street house was said to be worth $460,000 at the time of sentencing, with $119,000 remaining on the mortgage.  The Richmond property was worth about the same, with about $135,000 remaining on that mortgage.  Both properties, however, were subject to a lien in the amount of $259,790 in favour of the CRA.  This amount represents taxes and penalties the agency claims from Ms. Craig.  At the sentencing hearing, Ms. Craig continued to fight this assessment.  Her counsel advised the sentencing judge that it would probably take years to resolve.

Reasons for Sentence

[26]            As I mentioned earlier, on September 5, 2005, the Honourable Judge Gedye sentenced Ms. Craig to a 12-month conditional sentence of imprisonment, a fine of $100,000 and a victim surcharge of $15,000.  She also ordered forfeiture of the equipment used to commit the offence, but refused to accede to the Crown’s application for an order of forfeiture of the Alder Street house as being “offence-related property” pursuant to s. 16(1) of the CDSA.

[27]            Section 7(2) of the CDSA provides for a maximum sentence of seven years for the unlawful production of marihuana no matter what the amount.  In addition, when a person is convicted of a “designated substance offence” under the CDSA, if the offence was committed in relation to “offence-related property”, his or her punishment will consist of the penalty for committing the offence (in this case governed by s. 7(2) of the Act) and can include forfeiture of the “offence-related property” used in the commission of the offence, pursuant to s. 16(1) of the CDSA.

[28]            The sentencing judge began with the application for forfeiture of the house.  She said this at paragraphs 15-19 of her reasons:

There are a lot of numbers floating around that I need to consider.  If I look at, first of all, the estimate of the illegal income and subtract from that with respect to, ill-gotten gains, I suppose, might be one way of phrasing it, subtract from that some estimate of the expenses, end up with illegal profits.  If you subtract from that what has been assessed by Revenue Canada as taxes owing on that, with or without the estimate of the expenses, and that is the argument that has been back and forth with respect to Revenue Canada, you end up with a balance of illegal profits that have been used to the benefit of the accused.

It seems to me that the numbers that have been used to calculate the balance that has gone to the benefit of the accused has been dealt with in the past by way of fine in terms of people trying to sort out a situation where others of like mind are deterred.  The accused is penalized so that all of the profit motive is removed from the equation and there is a greater likelihood that the accused would not repeat the offence.

Since the re-wording of the forfeiture sections of the Act [do] not now require that there be an extra building specifically for the purpose of the grow-op and I can take into consideration a house that has been used, it seems to me that the point of the forfeiture, both with respect to deterrence of this accused and like-minded individuals, is to make sure that there is not a repetition of the offence, and that that is specifically with respect to the taking of the house, the forfeiture of the house.

In this case there is no question that the house was used for, at least my finding is that the house was used for the grow-op and that it is, therefore, subject to the forfeiture.  With respect to the way that Miss Craig came into possession of the house, that is not from the profits of this activity, although she was able to maintain the house and maintain her equity interest in the house presumably with the profits.  A large part of that profit has been reduced by the amount owing to Revenue Canada.

I am not going to allow the forfeiture of the house.  The difference in this case is the assessment by Revenue Canada and that amounts to the equivalent of the forfeiture of the house.  Anything in addition to that by way of penalty for the criminal aspects of this case will be dealt with by way of a fine, not the actual forfeiture of the house, so that she has conduct of the sale and she will pay off Revenue Canada and pay off the fine and whatever is left will be to her benefit with respect to my understanding of what she inherited from her parents’ efforts.

[29]            The sentencing judge went on to impose a 12-month conditional sentence order which included a three-month curfew, noting that Ms. Craig was a middle-aged woman with no criminal record.  She said, “The deterrent effect for her of all of the legal aspects of being charged I hope is, in part, enough of a deterrent.”

[30]            Noting that Ms. Craig was well-off, and that she had operated her business since 1998, the sentencing judge said this at paras. 24-26 of her reasons:

… By many standards in the world a wealthy person.  Perhaps property rich and cash poor, but nevertheless, very well off by many, many people’s standards.  She decides that she is going to make a living and involve a number of friends in quite an extensive grow-op, for a great deal of time, was, I do not know how long, but there is some evidence in her estimate of costs that she is involved for a considerable period of time, and at least since 1998 with respect to her estimate of income and expenses in an activity that she apparently did not think was wrong, or at least that she was willing to put a great deal of time and effort into, ignoring the fact that she was putting herself in jeopardy.

I do not think that the cases have established that there should be a jail sentence.  It is very, very unusual for this to go by way of a suspended sentence or anything other than a jail sentence.  I am not prepared to make it actual jail, it will be a conditional sentence order, primarily because I do not think that it should be anything above two years because it is a first offence.

The size of the operation and the number of years that it was in operation, I suppose in some ways trying to negotiate with Revenue Canada makes it all very open and above board, but it also makes it all very, not aggravated, but blatant in terms of the extent of your devotion to this type of behaviour and your involvement of a number of other people,  I think you lost sight of the fact that it was and is, unfortunately for you from your perspective, illegal, and unless and until there are major political changes you and other people, this is not a dangerous situation from the look of it, but there are plenty of other situations where it is.

[31]            After dealing with the curfew and other conditions of the order, the sentencing judge went on to impose a fine.  At paras. 32-33 she said :

In addition to the conditional sentence order, and I will listen to counsel if there are any more conditions, but I want to impose and I am imposing in addition to, and keeping in mind the assessment by Revenue Canada and the other submissions with respect to your financial situation, a $100,000 fine.  That will be payable, whatever timeframe.

[PROCEEDINGS]

THE COURT:  Well, with respect to a fine payable to the court based on the criminal conviction, and if there are ongoing negotiations with Revenue Canada with respect to whether or not the amounts change or houses are sold, I would hope that a fine payable to the court with respect to this matter would take precedence over any ongoing negotiations and whatever submissions are going to be made to Revenue Canada, if that is going to change.  I can see that that could take years to resolve.  I will make the fine payable within 12 months.  She is at liberty to apply for an extension.  I suppose I do not look forward to going through all of the numbers in future.

[32]            Following the imposition of the fine, the sentencing judge ordered the forfeiture of the equipment used to grow the marihuana.

[33]            Finally, the sentencing judge acknowledged the claim that the CRA had on the cash found in Ms. Craig’s vehicle and ordered that the money be forfeited to the CRA for the payment of her taxes.  The validity of this last order has not been questioned by the parties.

The Grounds of Appeal

[34]            For the purposes of this appeal, it is sufficient to say the production of cannabis (marihuana) is a “designated substance offence” as defined in s. 2 of the CDSA.  Section 2 also defines “offence-related property” as:

“offence-related property” means … any property, within or outside Canada,

(a)   by means of or in respect of which a designated substance offence is committed,

(b)   that is used in any manner in connection with the commission of a designated substance offence, or

(c)   that is intended for use for the purpose of committing a designated substance offence;

[35]            In the case at bar, there is no issue that Ms. Craig’s North Vancouver dwelling-house used for the production of marihuana, is “offence-related property” and therefore potentially subject to forfeiture under s.16(1) of the CDSA.

[36]            Counsel for the Crown, Mr. Riley, says the sentencing judge erred in law by failing to order forfeiture of Ms. Craig’s home and that a conditional sentence was unfit in the circumstances.  The Crown also argues that forfeiture should be determined independently from the question of the fitness of the conditional sentence and the fitness of the conditional sentence independently from the question of forfeiture.  If the appeal is allowed, the Crown urges this Court to convert the conditional sentence to a term of conventional incarceration and order forfeiture of the Alder Street home.  If the appeal is allowed to that extent, the Crown says that the fine and victim surcharge should be set aside.

[37]            In response, counsel for Ms. Craig, Mr. Rubin, rejects the grounds raised by the Crown and further submits that s. 16(1) of the CDSA was designed to deal with criminal organizations alone, not an independent “entrepreneur” such as Ms. Craig.  Mr. Rubin says, at the very least, the fact that Ms. Craig was not associated with a criminal organization should be a determinative factor in deciding whether forfeiture in her case would be “disproportionate.”  Mr. Rubin also says that the sentencing judge overemphasized the seriousness of the offence by taking into account uncharged criminal conduct that was not the subject of the indictment.  Finally, he argues that the sentencing judge erred by failing to determine Ms. Craig’s ability to pay a fine and imposed a fine that was “out of line” with fines for similar conduct.   Ms. Craig seeks an order dismissing the Crown’s appeal and allowing her appeal to the extent that the fine be reduced to $15,000 payable over a period of three years.

Discussion and Analysis

[38]            In these reasons I have organized the issues raised by the parties as follows:

1.      Is forfeiture under the CDSA limited to organized crime?

2.      Should forfeiture and the primary sentence be considered in isolation of one another?

3.      Did the sentencing judge err by failing to apply a two-step process to the application of ss. 16(1) and 19.1(3) of the CDSA?

4.      Did the sentencing judge err by conflating tax liability with criminal forfeiture?

5.      Did the sentencing judge err in taking into account uncharged criminal activity?

6.      Did the sentencing judge err in ordering a fine in place of forfeiture; and if so, should an order of forfeiture be made?

7.      In the circumstances, was a conditional sentence of imprisonment unfit?

[39]            Before addressing each of these issues, I begin by examining the statutory scheme for forfeiture in the CDSA, as this provides the necessary framework for the evaluation of the issues on appeal.

The Statutory Scheme

[40]            Forfeiture is not a new concept in Canadian criminal law.  Forms of it have been found over the years in statutes related to customs and excise, as well as those related to the control of drugs and narcotics.  The CDSA, which replaced the Narcotic Control Act, R.S.C. 1985, c. N-1 in 1997, is among the more recent manifestations of forfeiture in Canadian law.

[41]            With respect to the cultivation of marihuana, the offence of production of a controlled substance is found in Part I of the CDSA.  Part I is entitled “Offences and Punishment”.  Section 7(1) creates the offence of producing a controlled substance.  Section 7(2) defines the punishment, which I refer to as the “primary sentence”, for production of marihuana:

Every person who contravenes subsection (1)

...

(b)        where the subject-matter of the offence is cannabis (marihuana), is guilty of an indictable offence and liable to imprisonment for a term not exceeding seven years;

[42]            The forfeiture provisions are found in Part II of the CDSA entitled “Enforcement”.  These provide for the seizure and forfeiture of “offence-related property”, the definition of which I reproduced earlier in these reasons.  Sections 11 to 14 in Part II provide for the issuance of search warrants to seize offence-related property, for orders detaining or returning seized property, and for restraint orders prohibiting any person from disposing of or otherwise dealing with any interest in offence-related property.

[43]            Section 16 provides for forfeiture of the offence-related property.  It mirrors similar provisions set out in s. 490.1(1) of the Criminal Code.  The relevant portions of s. 16(1) provide:

(1)        Subject to sections 18 to 19.1, where a person is convicted of a designated substance offence and, on application of the Attorney General, the court is satisfied, on a balance of probabilities, that any property is offence-related property and that the offence was committed in relation to that property, the court shall

            …

(b)        in the case of any other offence-related property,

(i)  where the prosecution of the offence was commenced at the instance of the government of a province and conducted by or on behalf of that government, order that the property be forfeited to Her Majesty in right of that province and disposed of by the Attorney General or Solicitor General of that province in accordance with the law, and

(ii)  in any other case, order that the property be forfeited to Her Majesty in right of Canada and disposed of by such member of the Queen’s Privy Council for Canada as may be designated for the purposes of this subparagraph in accordance with the law.

[Emphasis added.]

[44]            The CDSA also provides for other powers in relation to forfeiture, including: permitting forfeiture where an accused has died or absconded (s. 17); setting aside a conveyance or transfer that occurs after property is seized or restrained (s. 18); and the requirement that notice be given to those who have valid interests in property that is subject to an order (s. 19).

[45]            When the criteria in s. 16(1) are met, it would appear that an order of forfeiture is mandatory except as it affects an interest in real property or a dwelling-house, which is dealt with under s.19.1.  Much of this appeal turns on the application of that section.  In addition to requiring that notice be given to persons residing in a dwelling-house that is offence-related property, s. 19.1 requires the court to consider other factors in deciding whether to make an order of forfeiture of real property.  Sections 19.1(3) and (4) provide:

(3)        Subject to an order made under subsection 19(3), if a court is satisfied that the impact of an order of forfeiture made under subsection 16(1) or 17(2) in respect of real property would be disproportionate to the nature and gravity of the offence, the circumstances surrounding the commission of the offence and the criminal record, if any, of the person charged with or convicted of the offence, as the case may be, it may decide not to order the forfeiture of the property or part of the property and may revoke any restraint order made in respect of that property or part.

(4)        Where all or part of the property that would otherwise be forfeited under subsection 16(1) or 17(2) is a dwelling-house, when making a decision under subsection (3), the court shall also consider

(a)        the impact of an order of forfeiture on any member of the immediate family of the person charged with or convicted of the offence, if the dwelling-house was the member’s principal residence at the time the charge was laid and continues to be the member’s principal residence; and

(b)        whether the member referred to in paragraph (a) appears innocent of any complicity in the offence or of any collusion in relation to the offence.

[Emphasis added.]

[46]            To summarize, the forfeiture provisions of the CDSA provide a process whereby offence-related property will be forfeited to the Crown.  The process under s. 16(1) effectively makes the order of forfeiture mandatory upon the Crown proving, on a balance of probabilities, that personal property is offence-related property.  There are, however, different considerations that guide the forfeiture of real property; in particular, s. 19.1(3) requires the sentencing judge to consider the impact of an order of forfeiture of real property and whether it would be disproportionate having regard to (1) the nature and gravity of the offence; (2) the circumstances surrounding the commission of the offence; (3) the offender’s criminal record; and (4) if the real property is a dwelling-house, the impact of forfeiture on those, other than the offender, who use it as their principal residence.

The Issues on Appeal

[47]            Having set out the bare structure of the process for forfeiture, I now return to analyze the issues raised by the Crown and Ms. Craig in this appeal.  These issues effectively provide a gloss on the framework I provided above.

1.       Is forfeiture under the CDSA limited to organized crime?

[48]            The first issue I will deal with is whether the forfeiture provisions were intended to be uniquely applicable to organized crime.  Counsel for Ms. Craig submitted in the court below and again in this Court, that the forfeiture provisions of the CDSA were not intended for people like Ms. Craig.  Mr. Rubin says that s. 16(1) of the CDSA was part of an omnibus bill, Bill C-24, passed in 2002, that was calculated to tackle the problems of organized crime both in this country and abroad.

[49]            The issue Ms. Craig raises is fundamentally a matter of statutory interpretation and, more specifically, raises the question of deducing Parliamentary intent.  In this regard, in R. v. Sharpe, [2001] 1 S.C.R. 45, 2001 SCC 2, McLachlin C.J.C. (for the majority), quoting E.A. Driedger, said this (at para. 33) about statutory interpretation:

… Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. …

[50]            Applying this approach to the present appeal, I find nothing in the language or the history of the enactment that suggests the provisions for forfeiture are limited to organized crime.  In the first place, the relevant provision on appeal is not ambiguous and there is no language in the Act that says that its purpose was to apply to organized crime alone.  Section 16(1) states that the forfeiture of “offence-related property” applies to “a person convicted of a designated offence”.  Read in its grammatical and ordinary sense, the main limitation is that s. 16(1) applies only to interests in property where the property interest has been the instrument of the commission of a designated drug offence; the only other limits are those set out in s. 19.1 when the Crown makes an application in relation to real property.

[51]            While I am not persuaded that it was the intent of Parliament that the forfeiture provisions apply only to organized crime, I am of the view that the presence or participation of organized crime will be an important factor in determining whether forfeiture would be disproportionate pursuant to the factors set out in s. 19.1(3) of the CDSAAs set out above, ss. 19.1(3) and (4) of the CDSA instruct the court to weigh the impact of forfeiture against the “nature and gravity of the offence, the circumstances surrounding the commission of the offence and the criminal record, if any, of the person charged with or convicted of the offence.”

[52]            In my view, an evaluation of the “nature and gravity of the offence” would include, but is not limited to, such factors as whether there were weapons on the premises, whether the operation was harmful to the neighbourhood, whether the theft of electricity was involved, the number of plants being cultivated, and the sophistication of the enterprise.  The “circumstances of the offence” would include whether it was done because of pressure from other members of the community, the financial circumstances of the offender, whether the operation was undertaken for profit alone, whether the offender lives in the house, and other such matters.  The fact that the offender has or does not have a criminal record will also be considered.

[53]            Many of these factors will support a forfeiture order where a party is a member of a criminal organization and is operating the enterprise as such.  It follows that the presence of organized crime would be a significantly aggravating factor in deciding whether or not to order forfeiture.

[54]            In sum, there is no basis to limit the application of the forfeiture provisions to circumstances involving organized crime.  I would not therefore accede to this ground of Ms. Craig’s appeal.

2.       Should forfeiture and the primary sentence be considered in isolation of one another?

[55]            The next issue I will address touches on the important question of the relationship between forfeiture and sentencing.  The tension, here, rests with whether a sentencing judge, in deciding to order forfeiture, should take account of the primary sentence when ordering forfeiture or should decide each issue in isolation.

[56]            There is very little case law on this issue in the context of the CDSA, and virtually none as regards the comparable provisions under s. 490.1(1) of the Criminal Code.  I note, however, that this issue was recently considered by the Nova Scotia Court of Appeal in R. v. Siek, 2007 NSCA 23, a decision that was not available when the appeal in the case at bar was heard in this Court.

[57]            Like the case at bar, Siek, involved the forfeiture of real property, a house, used in connection with a marihuana grow operation.  The respondent offender pleaded guilty to charges of unlawful production of marihuana, possession for the purpose of trafficking, and diversion of electricity.  He was sentenced to a total of two years' incarceration and an order of forfeiture was made in relation to certain offence-related personal property, including the grow operation equipment, but not the real property that housed the operation.  In allowing the Crown’s appeal, the court reached a number of conclusions regarding the application of the CDSA.  Regarding the issue of the inter-relationship between the primary sentence and forfeiture, the Nova Scotia Court of Appeal held that the sentencing judge erred by considering the primary sentence in determining whether forfeiture should be ordered.  In that regard, Olan J.A., at para. 46 held:

… I am of the view that the judge erred in taking into account the sentence imposed on the respondent in determining whether forfeiture was disproportionate. Forfeiture is a consequence of property having been converted into offence-related property. While part of the sentencing process, it is not part of the sentence itself. It follows that forfeiture, if granted, should not affect the sentence imposed for the offence. Similarly, the sentence should not be impacted by a forfeiture order….

[58]            While that analysis may apply to provisions dealing with the proceeds of crime (see R. v. Lavigne, [2006] 1 S.C.R. 392, 2006 SCC 10.) I cannot, with respect, agree with this conclusion with respect to forfeiture of offence-related property – i.e. the instruments of crime.  As I read the jurisprudence, unless otherwise provided, forfeiture has consistently been understood as something that should be considered in conjunction with sentencing.  In so far as permitted by the provision, a decision with respect to one penalty will have an effect on the other and, to that extent, each cannot be considered in isolation.

[59]            To begin, the provisions of the Criminal Code and the CDSA specifically treat forfeiture as an aspect of sentencing.  For example, pursuant to s. 16(3) of the CDSA, a person may appeal an order of forfeiture “as if the appeal were an appeal against the sentence imposed on the person in respect of the offence”.  (Emphasis added.)

[60]            Similarly, in the context of an order made in relation to real property, s. 20 of the Act provides:

An applicant or the Attorney General may appeal to the court of appeal from an order made under subsection (4), and the provisions of Part XXI of the Criminal Code with respect to procedure on appeals apply, with such modifications as the circumstances require, in respect of appeals under this subsection.

[61]            Finally, s. 673 of the Criminal Code sets out definitions for the purposes of Part XXI (appeals relating to indictable offences).  Included in the definition of “sentence” is:

[A]n order made under subsection 16(1) of the Controlled Drugs and Substances Act;

[62]            As this indicates, the statutory scheme of the CDSA and Criminal Code as a whole envisions forfeiture as being an aspect of sentencing and subject to the same considerations.

[63]            In addition, the strong relationship between sentencing and forfeiture must, in the first place, be understood as a function of the federal government’s legislative power pursuant to s. 91(27) of the Constitution Act, 1867.  One of the earliest cases to identify this relationship is I.A.C. v. The Queen, [1953] 2 S.C.R. 273.  In that case, the Supreme Court of Canada dealt with the constitutional validity of a forfeiture provision in the Opium and Narcotic Drug Act, 1929, S.C. 1929, c. 49.  Section 21 of that Act required forfeiture of any property used to facilitate the commission of the crime, even if the property was owned by a third party.  The Supreme Court of Canada rejected the constitutional challenge to the legislation and upheld the forfeiture provisions of that Act as valid criminal law.  In so doing, Rand J. said this at 278:

From this uniform legislative judgment [a reference to British legislation relating to smuggling and excise violations], it is at once apparent that forfeiture has from the beginning been treated as one of the necessary conditions for compelling substantial obedience to revenue laws.  It was conceded that so far as it applied to the property of the offender, no question of validity arose; but long experience has shown that the seizure of such property cannot be made the starting point for civil contests over ownership.  The absolute forfeiture is an inseparable accompaniment of punitive action, and the administration of the law would be seriously impeded were any obstacles to prompt and conclusive action placed in the way of its enforcement.

These considerations apply a fortiori to the suppression of such an evil as the narcotics traffic.  Here, not the revenue, but the health as well as the moral and social condition of the community are endangered by a most insidious and destructive exploitation of human weakness.  The difficulties attending its detection are multiplied many fold and the necessity for these strict and unqualified measures correspondingly greater.

The forfeiture of property used in the commission of such offences is then an integral part of criminal law, a subject matter of legislation by s. 91 committed to the Dominion Parliament and the contention against its validity must be rejected….

[Emphasis added.]

[64]            A more modern analysis of an analogous provision is found in R. v. Zelensky, [1978] 2 S.C.R. 940.  In that case, the Supreme Court of Canada dealt with a constitutional challenge to s. 653 of the Criminal Code.  That section, to paraphrase, provided that the court could order an accused convicted of an indictable offence to pay compensation to a “person aggrieved” for loss or damage to property suffered in the course of the commission of the offence.  The accused challenged the provision on the basis that it dealt with property and civil rights, an area of provincial jurisdiction.  In finding the section to be valid criminal law, the majority in the Supreme Court of Canada, led by Chief Justice Laskin, concluded that the validity of the provision was based on its association with the sentencing process.  Laskin C.J.C. said this at 960:

It would be wrong, therefore, to relax in any way the requirement that the application for compensation be directly associated with the sentence imposed as the public reprobation of the offence.

[65]            As this indicates, the constitutional validity of the forfeiture provisions depends on their being a part of the criminal law or, to borrow the words of Mr. Justice Rand in I.A.C., an “inseparable accompaniment of punitive action”.  Consequently, the question is not whether forfeiture is a part of sentencing – which it clearly is – but whether the consideration of forfeiture should be isolated from the determination of the primary sentence.  Conversely, the question is whether the primary sentence should be considered without taking into account that an order for forfeiture will be or has been made.

[66]            With respect to the order of forfeiture, the answer to these questions is a function of the wording of the CDSA.  Unlike forfeiture of personal property, real property is subject to ss. 19.1(3) and (4), which require the court to consider the “impact of forfeiture” in deciding whether it would be disproportionate.  As I read these sections, their words do not require the court to consider whether forfeiture, as an objective concept, would be disproportionate given the nature and gravity of the offence.  If they did, s. 19.1(3) might read: “if a court is satisfied that an order of forfeiture would be disproportionate …”  Instead, what it says is, “if a court is satisfied that the impact of an order of forfeiture would be disproportionate …”

[67]            Parliament’s choice of the word “impact” brings a subjective element into the analysis.  As I read it, s. 19.1(3) requires the court to ask what effect forfeiture will have on the offender and whether its impact would be disproportionate to the nature, gravity and circumstances surrounding the offence.  The term ‘impact’, in my view, is broad enough to include consideration of a primary sentence.  Indeed, a sentencing judge could not adequately assess the impact of forfeiture of real property or a dwelling-house without knowing the personal circumstances of the offender, which include the primary sentence that has been or will be imposed on that offender.

[68]            This conclusion is more readily understood when one compares it to provisions where the court does not have the discretion to consider the offender’s personal circumstances.  If there is no discretion conferred by the statute, which is the case for most offence-related property under s. 16(1), then the sentencing judge cannot consider the primary sentence.  As I alluded to earlier, a similar conclusion was reached by Deschamps J. in R. v. Lavigne, supra.  In that case the Quebec Court of Appeal had examined s. 462.37(3) of the Criminal Code to determine whether a sentencing judge could consider the offender’s ability to pay a fine when deciding whether to impose a fine in place of the mandatory order of forfeiture required by s. 462.37(1).  The provision reads:

(3)        Where a court is satisfied that an order of forfeiture under subsection (1) should be made in respect of any property of an offender, but that that property or any part thereof or interest therein cannot be made subject to such an order and, in particular,

(a)   cannot, on the exercise of due diligence, be located,

(b)   has been transferred to a third party,

(c)   is located outside Canada,

(d)   has been substantially diminished in value or rendered worthless, or

(e)   has been commingled with other property that cannot be divided without difficulty,

the court may, instead of ordering that property or part thereof or interest therein to be forfeited pursuant to subsection (1), order the offender to pay a fine in an amount equal to the value of that property, part or interest.

[Emphasis added.]

[69]            The Quebec Court of Appeal held that the provision included a broad discretion to adjust the amount of the fine by applying the general principles of sentencing.  At the Supreme Court of Canada, however, Madam Justice Deschamps held that the discretion was limited by the purpose of the order to be made and said (at paras. 23-4):

The court’s discretion is necessarily limited by the purpose of the order to be made.  It may be exercised only to impose a fine instead of forfeiture.  This option is not available in every case.  The discretion may be exercised only where the court cannot order forfeiture or where forfeiture is not practicable.  Because the purpose of forfeiture is to deprive offenders of the proceeds of crime and in so doing to deter the offenders themselves as well as criminal organizations from committing the designated offences, the discretion must also be exercised having regard to the fact that Parliament is seeking to deter not only offenders, but also criminal organizations.

The list of circumstances in which the court may, inter alia, impose a fine instead of forfeiture also illustrates the limits of the discretion.  For instance, the discretion may be exercised (a) where the property cannot, on the exercise of due diligence, be located or (b) where the property has been transferred to a third party.  The list does not appear to be restrictive, given the use of the expression “in particular”, which suggests that there are other circumstances that do not appear on the list.  However, those circumstances must be similar in nature to the ones that are expressly mentioned.  The judge could not therefore decline to impose a fine simply because the offender is no longer in possession of the property or simply because (c) the property is located outside Canada.  Thus, the judge cannot transform circumstances in which a fine may be ordered instead of forfeiture into circumstances that justify not imposing a fine.

[Emphasis added.]

[70]            As this indicates, if there is a closed or limited discretion that ousts the court’s ability to consider the primary sentence, then the sentencing judge has no discretion to do so.  In other words, the court is required to exercise its discretion within the confines imposed on it by Parliament.  This would, for example, be the case with orders made pursuant to s. 16(1) in relation to personal property.  With respect to the forfeiture of real property, however, Parliament has left it open to consider the “impact of forfeiture”, which, I repeat, is broad enough to include the existence and terms of a primary sentence.

[71]            On the other side of it, in crafting the primary sentence, a sentencing judge must also take into account the personal circumstances of the offender which, in my view, would include the fact that a forfeiture order has been made.  The link between forfeiture and the primary sentence has been made in a number of cases that considered comparable statutory schemes.  For example, in R. v. Moscone, [1985] B.C.J. No. 1755 (QL) (C.A.), this Court determined that the effect of a compensation order under the Criminal Code must be considered in determining the overall sentence to be imposed on the offender.  There, the appellant was sentenced to a period of four years’ imprisonment and ordered to pay compensation to his victim in the amount of $373,000.  Mr. Justice Lambert (speaking for himself) said this about an order for compensation at paras. 31 and 32:

Section 653 [as it then stood] is part of the sentencing process.  Its constitutionality rests on that.  It is intended to have a role in deterrence, both individual deterrence and general deterrence.

As general deterrence, a compensation order may be one of the weapons of society to prevent a criminal from coming out of prison and living on the fruits of his crime.

[72]            In the same case, Taggart J.A. said this at para. 22:

In this case, the authorities referred to by the Crown indicate clearly that the Crown is of the view that an appropriate sentence would be six years.  It is impossible to say what the trial judge in the case at bar would have done had he decided not to make an order for compensation.  It would certainly not have surprised me had he imposed a sentence of six years.

[73]            As this suggests, it is appropriate to consider compensation when determining the overall fitness of a sentence, reasoning that has been followed in other cases: see R. v. Hoyt, [1992] B.C.J. No. 2315 (QL) (C.A.) at para. 35.

[74]            A similar conclusion was again reached by this Court in R. v. Sandover-Sly, (2002) 163 B.C.A.C. 312, 2002 BCCA 56.  That case involved the forfeiture provisions in the Fisheries Act, R.S.C. 1985, c. F-14, which are akin to those of the CDSA.  There, the accused, Sandover-Sly, had been convicted of unlawfully harvesting, possessing and selling abalone.  The sentencing judge fined him $7,000 and ordered that the vessel – a tug and house barge – used in the illegal operation be forfeited.  On appeal, Sandover-Sly argued that the imposition of the order of forfeiture offended the principle of parity and made the sentence unfit, harsh and excessive.  The relevant provisions of the Fisheries Act were ss. 72(1) and 86(1) and read:

72(1)  Where a person is convicted of an offence under this Act, the court may, in addition to any punishment imposed, order that any thing seized under this Act by means of or in relation to which the offence was committed, or any proceeds realized from its disposition, be forfeited to Her Majesty.

86(1)  For the purpose of Part XXI of the Criminal Code, any order and any decision not to make an order under subsection 71.1(1), subsection 72(1), (2) or (3) or section 79, 79.1, 79.2 or 79.3 as well as any sentence passed by the court under this Act shall be considered a sentence within the meaning of section 673 of the Criminal Code.

[Emphasis added.]

[75]            In determining the parity issue, this Court held that the question was whether the order of forfeiture was “penal or regulatory in nature,” the theory being that if it was penal, it was a part of the sentence; if regulatory, it was not.  After referring to conflicting case law on similar provisions, Finch C.J.B.C. cited the following passage from D.A. Thomas, Principles of Sentencing, 2nd ed., (London:  Heinemann, 1979) at 336:

These cases may justify the view that where the property is specifically adapted for the commission of the offence, or has no other use to the offender, it may be confiscated without regard to the totality of the other sentence or sentences imposed; but where the property is used for a wide variety of purposes and used incidentally in connection with the offence, a confiscation order should be treated as analogous to a fine.

Where the sentencer considers that a confiscation order may be appropriate, he should raise the issue so that the offender may mitigate in relation to it.  The sentencer should consider any special hardship which the offender may suffer as a result of the forfeiture of the property concerned.  [Citation omitted.]

[76]            Following this reasoning, the Court determined that in the case of Sandover-Sly, the vessel was essential, not incidental to the offence and could therefore be confiscated without regard to the totality of the sentence imposed.

[77]            Also of note in Sandover-Sly is reference to R. v. Smith (1978), 15 Nfld. & P.E.I.R. 115 (Nfld. C.A.), a decision of the Newfoundland Court of Appeal under the now repealed Narcotic Control Act, supra.  In that case, a magistrate had ordered forfeiture of a vehicle used in connection with the offence of trafficking in a narcotic.  Rather than imposing a fine, the magistrate ordered the forfeiture of the vehicle.  The Crown appealed on the basis that the sentencing judge erred in finding that forfeiture formed part of the sentence imposed and by substituting forfeiture for a fine.  Referring to the magistrate’s substitution, Gushue J.A. (writing for the Court) said this at 117:

[The imposition of forfeiture rather than a fine] was incorrect.  Under the relevant provisions in the Narcotic Control Act, it is apparent that forfeiture is a special remedy available to the Crown when a conveyance has been utilized in the commission of an offence under Sections 4 or 5, to be exercised at the discretion of the trial Judge, and from which there is no appeal by the person convicted of the offence.  There is a right given under subsection (5) and (6) of Section 10 to apply for restoration of a thing seized, but this is expressed to be subject to the provisions of subsection (9), indicating that such application could not be made after an order is made under the latter subsection.  Further, Section 11 of the Act gives the right to a person with an interest in the conveyance to apply to the court to protect such interest, but this right does not extend to the offender.

Thus, in my view, the Magistrate erred in considering the forfeiture as part of the sentence imposed.  However, this is not to say that, in exercising his discretion in the matter of sentencing, he is not entitled to take into consideration the fact of a prior forfeiture order, or, further, in exercising his discretion as to whether or not he should grant a forfeiture order, if such an order is requested after sentencing, he could not take into consideration the sentence already imposed.

[Emphasis added.]

[78]            There are, of course, major differences between the provisions dealt with in this appeal and those in Smith.  In particular, unlike s. 16(1) of the CDSA, there was a general discretion under the Narcotic Control Act to consider the primary sentence when making the forfeiture order.  However, what can be drawn from Smith, as well as Sandover-Sly and Moscone, is the principle that forfeiture is a relevant consideration when crafting the primary sentence.  As I said above, I am also of the view that this is consistent with the statutory scheme of the CDSA and with the understanding that forfeiture must be treated as an aspect of punishment to be consistent with the Constitution: I.A.C. v. The Queen; R. v. Zelensky; R. v. Moscone.

[79]            In sum, while the idea that forfeiture and the primary sentence should be considered in air-tight compartments is outwardly appealing, it does not accord with the provisions of the CDSA or the jurisprudence.  When faced with an application for forfeiture of real property, the sentencing judge may consider the primary sentence in evaluating the impact of forfeiture.  Likewise, in determining the overall fitness of the primary sentence, the sentencing judge may consider the existence of an order for forfeiture.

[80]            In reaching this conclusion, I am cognisant of the fact that the CDSA does not require the application for forfeiture to take place at the time the primary sentence is imposed, although this is preferable and has typically occurred as a matter of course: see R. v. Siek at para. 46; R. v. Smith at 118.  Where both do not occur at the same time and an unfit sentence or inappropriate order of forfeiture results, this can be remedied through the traditional remedy of appellate review.

[81]            I would therefore not accede to this ground of the Crown’s appeal.

3.       Did the sentencing judge err in failing to apply a two-step process in the application of ss. 16(1) and 19.1(3) of the CDSA?

[82]            The next issue relates to how the sentencing judge should approach the issue of forfeiture.  Counsel for the Crown, Mr. Riley, submitted that the combination of s. 16(1) and s. 19.1(3) of the CDSA creates a two-step process.  Once the Crown has met the s. 16(1) requirements, he says, a presumption of law arises.  According to the Crown this “presumption of forfeiture” can only be displaced if the offender satisfies the court that the impact of forfeiture would be disproportionate.

[83]            To be more specific, it is the Crown’s position that after the conviction of the offender of a “designated substance offence”, all it need do to obtain an order for forfeiture of real property is prove that the property in question is “offence-related property” and that the offence was committed in relation to that property.  Once those matters are proved, the order will follow as a matter of course unless the offender raises and calls evidence that the impact of forfeiture would be disproportionate given the factors set out in ss. 19.1(3) or (4).

[84]            This “two-step process” was examined by the Nova Scotia Court of Appeal in R. v. Siek.  There, the Court adopted the approach advocated by the Crown in the present appeal and held (at paras. 44-5) that forfeiture would follow automatically from the Crown proving that property was offence-related, “unless the property is real property and the offender can satisfy the court under s. 19.1(3) that forfeiture would be disproportionate, having regard to the factors listed in that provision.”  (See also R. v. Ouellette (29 March 2007), Montreal Doc. No. 500-10-002828-02 (Que. C.A.).)

[85]            With respect, for reasons which I will develop, I am not persuaded that the provisions of ss. 16(1) and 19.1(3) operate in such a perfunctory manner.

[86]            Before discussing the interaction between ss. 16(1) and 19.1(3), I will first turn, for completeness, to comparable provisions in the Criminal Code dealing with the forfeiture of property derived from, as opposed to property used in, the commission of an offence.  (In other words – the proceeds of crime as opposed to the instruments of crime.)  Section 462.37(1), of the Criminal Code provides for forfeiture of “proceeds of crime” on conviction for a “designated offence”.  Under s. 462.3(1), “proceeds of crime” means:

any property, benefit or advantage, within or outside Canada, obtained or derived directly or indirectly as a result of

(a)   the commission in Canada of a designated offence, or

(b)   an act or omission anywhere that, if it had occurred in Canada would have constituted a designated offence.

[87]            Subsection 462.3(1) defines a designated offence as any indictable offence under the Criminal Code or any other Act of Parliament other than an indictable offence prescribed by regulation.

[88]            Section 462.37(1) provides:

Subject to this section and sections 462.39 to 462.41, where an offender is convicted, or discharged under section 730, of a designated offence and the court imposing sentence on the offender, on application of the Attorney General, is satisfied, on a balance of probabilities, that any property is proceeds of crime and that the designated offence was committed in relation to that property, the court shall order that the property be forfeited to Her Majesty to be disposed of as the Attorney General directs or otherwise dealt with in accordance with the law.

[Emphasis added.]

[89]            Once the conditions precedent of this section are established on a balance of probabilities by the Crown, the order of forfeiture is mandatory: R. v. Lavigne, at para. 15.  This is so whether the property involved is personal property or real property.  What is notable is that s. 462.37(1) does not contain an equivalent to the “disproportionate” test set out in s. 19.1(3) of the CDSA when real property is at stake.  In other words, s. 462.37(1) involves a single-stage process that offers little assistance by way of analogy to an application for an order of forfeiture of real property under the CDSA.

[90]            The Crown accepted these differences and instead turned to other provisions of the Criminal Code in support of its position that, when real property is in issue, ss. 16(1) and 19.1(3) operate to create a two-step process.

[91]            As an example, counsel provided the case of R. v. R.C., [2005] 3 S.C.R. 99, 2005 SCC 61, , where the Supreme Court of Canada examined the provisions of the Criminal Code that require a person to provide a DNA sample.  Mr. Justice Fish (for the majority) said at para. 20:

… Where an offender is convicted of a primary designated offence, … ss. 487051(1)(a) and (2), read together, provide that a DNA order must be made unless the judge is satisfied that the offender has established that s. 487.051(2) should apply instead.

[92]            In R. v. R.C. however, the Court was dealing with ss. 487.051(2) which provides that the court is not required to make the order requiring a DNA sample “if it is satisfied that the personhas established that, were the order made, the impact on the person’s … privacy and security … would be grossly disproportionate. …”  Unlike the CDSA, s. 487.051(2) specifically requires that the person establish that the impact of the order would be grossly disproportionate and therefore clearly imposes a burden on the offender.  The CDSA is less precise, s. 19.1(3) only requires “if a court is satisfied”.

[93]            The wording of ss. 16(1) and 19.1(3) is therefore more closely analogous to that of s. 742.1 of the Criminal Code which provides for conditional sentences.  Section 742.1 states:

Where a person is convicted of an offence, except an offence that is punishable by a minimum term of imprisonment, and the court

(a)  imposes a sentence of imprisonment of less than two years, and

(bis satisfied that serving the sentence in the community would not endanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing set out in sections 718 to 718.2,

the court may, for the purpose of supervising the offender’s behaviour in the community, order that the offender serve the sentence in the community, subject to the offender’s complying with the conditions of a conditional sentence order made under section 742.3.

[Emphasis added.]

[94]            Like the provisions for forfeiture in the CDSA, there is no explicit burden of proof placed on the person convicted.  This was remarked upon by Lamer C.J.C. in R. v. Proulx, [2000] 1 S.C.R. 61, 2000 SCC 5, where, (at para. 120) he said:

… The wording used in s. 742.1 does not attribute to either party the onus of establishing that the offender should or should not receive a conditional sentence.  To inform his or her decision about the appropriate sentence, the judge can take into consideration all of the evidence, no matter who adduces it.  [Citation omitted.]

[95]            The reason for the failure to attribute the onus to either party is not immediately apparent.  I suspect that it is because it is open to either the Crown or the offender to propose a conditional sentence.  Thus, the onus will fall upon whoever seeks the conditional sentence.  Lamer C.J.C. alluded to this at para. 122:

The sentencing judge can take into account the submissions and evidence presented by counsel (s. 723), but is in no way bound by them in the decision as to the sentence.  Having said this, in practice, it will generally be the offender who is best situated to convince the judge that a conditional sentence is indeed appropriate.  Therefore, it would be in the offender’s best interests to establish those elements militating in favour of a conditional sentence. …

[Emphasis added; citation omitted.]

[96]            These comments must be read in light of the fact that, in our adversarial system, one of the parties must always bear the burden of proof.  As Wigmore observed:

The apportionment of the task of adducing evidence is one of the most characteristic features of the Anglo-American system.  It is placed wholly upon the parties to the litigation: it is not required or expected of the judge[1]

And later:

Since then, the risk and burden of adducing evidence falls upon the parties themselves, how is it to be apportioned between them?  In short, which party has the burden of proof?[2]

[Emphasis in original.]

[97]            Thus, as I read the last quoted paragraph from Proulx, the court understood s. 742.1 to place the onus of proof on whichever party makes the application for a conditional sentence.

[98]            As I said earlier, like s. 742.1 of the Criminal Code, s. 19.1(3) of the CDSA does not explicitly attribute to either party the onus of establishing that the impact of forfeiture would be disproportionate.  It is curious that the drafters of the CDSA would employ the same type of language in s. 19.1(3) as found in s. 742.1 of the Criminal Code because unlike s. 742.1, only one party may initiate the application – the Attorney General.

[99]            Both counsel for the Crown and counsel for Ms. Craig accept that s. 16(1) of the CDSA places the initial onus of proof upon the Attorney General once the application for forfeiture is made.  To succeed, the Crown must prove, on a balance of probabilities, that the property in question is “offence-related property” and that the offence in question was committed in relation to that property.  The section operates however, “subject to sections 18 and 19.1”.

[100]        I am of the view that because the governing provision, s. 16(1), is subject to s. 19.1, the order of forfeiture is not automatic.  In my view, s. 16(1) requires the court, before making an order of forfeiture with respect to real property, to examine whether the impact of forfeiture would be disproportionate in light of the factors set out in s. 19.1(3) (and s.19.1(4) if applicable).

[101]        At that stage the onus will shift to the offender, against whom the order is being sought, to establish that the impact of the order would be disproportionate.  The offender need not call evidence.  He or she may rely on the evidence called in the Crown’s case.  Thus, if the Crown’s case shows that an offender with no criminal record grew one or two plants of marihuana for his or her own use, barring other circumstances, the offender will have established that the impact of the order is disproportionate.  In most cases, however, there will be little in the Crown’s case that would demonstrate the subjective impact of forfeiture on the offender.  Therefore, speaking practically, the offender will be obliged to call evidence that would satisfy the judge that the impact of forfeiture would be disproportionate.

[102]        In my view, the analysis of s. 19.1(3) applies a fortiorari to a “dwelling-house” under s. 19.1(4).  That section provides that where the real property is a dwelling-house the court “shall” consider the impact of forfeiture on any member of the offender’s immediate family if the dwelling-house was the family member’s principal residence at the time of the offence.  This imposes a duty on the court to consider the “impact of forfeiture”, regardless of whether it is raised by the offender.  Again, the evidence of the impact on the family member will normally be within the knowledge of the offender, not the Crown.  Therefore, if the offender wishes to contest forfeiture under s. 19.1(4), he or she will be obliged to call evidence on those matters and might include evidence that the dwelling-house is a principal residence.  However, this does not require the offender to raise the matter; if the sentencing judge can rely on any evidence adduced by the Crown alone.

[103]        To summarize, the CDSA does not impose a two-step process as advocated by the Crown.  Rather, with respect to forfeiture of real property pursuant to s.16(1), the onus is on the Crown to establish that a person has been convicted of a “designated substance offence”, that the property in question is “offence-based property”, and that the offence was committed in relation to that property.  If the subject matter is real property, the court, pursuant to s. 19.1(3), is required to go on to consider whether the impact of such an order would be disproportionate, taking into account the nature and gravity of the offence, the circumstances surrounding it, and the criminal record of the offender.  At this point the burden shifts to the offender to establish that the impact of forfeiture would be disproportionate.  The offender may choose to rely on the Crown’s case for proof, or may call evidence in support of his or her position.  In addition, if the property is a dwelling-house, the court, pursuant to s. 19.1(4), must consider the “impact of forfeiture” on any member of the offender’s family who uses the location as a principal residence.

[104]        With respect to the case at bar, the sentencing judge erred in failing to consider the question of forfeiture in accordance with the test as I have described it. 

[105]        I will return to the consequences of this failure later in these reasons.

4.       Did the sentencing judge err by conflating tax liability with criminal forfeiture?

[106]        The next issue relates to the sentencing judge’s consideration of Ms. Craig’s civil tax liability in deciding whether to order forfeiture.  The Crown alleges that the sentencing judge erred in law in conflating civil tax liability with criminal forfeiture.  In particular, the Crown submits, and I agree, that Gedye P.C.J.’s reasons disclose that she refused to order forfeiture because a large part of the profit made by Ms. Craig had been reduced by the amount owing to the CRA.

[107]        The question, then, is whether the financial situation of the offender is a proper consideration to take into account in determining whether the provisions of s. 19.1(3) have been satisfied.  As mentioned above, Parliament’s choice of the word “impact” brings the subjective element of the offender’s personal circumstances into the analysis.  It seems to me that the financial situation of the offender forms part of his or her personal circumstances and is an appropriate factor to consider.

[108]        Therefore, the sentencing judge did not err in considering Ms. Craig’s newly-acquired tax burden, and I would not therefore allow the appeal on this issue.

5.       Did the sentencing judge err in taking into account uncharged criminal activity?

[109]        The next issue is whether the sentencing judge erred by taking into account alleged criminal activity outside the dates identified in the indictment.  In assessing the seriousness of the offence, Gedye P.C.J. noted that Ms. Craig had been in business since about 1998.  Mr. Rubin says that this was wrong as it took into account criminal activity that was not the subject matter of the indictment.

[110]        The difficulty with this argument is that by its nature, the production of marihuana is a continuing offence that can span months or years.  The information charging Ms. Craig with producing marihuana stated the offence date as 21 October 2003.  When the police entered the home on October 21, it was in full-scale production.  Records seized showed that Ms. Craig had grown marihuana in the house for many years.  In her testimony, Ms. Craig explained the nature of the operation, how long she had been in the business, and to whom her harvests were sold.

[111]        In my view, when determining the “seriousness of the offence” under s. 19.1(3) of the CDSA, and for purposes of the primary sentence, the question of whether a venture is a fledgling or mature operation is relevant in the same way that the presence or absence of organized crime is relevant.  Indeed, this consideration allows the court to determine, among other things, the extent of the operation and whether it was profitable or not.  Consideration of these factors cannot therefore be said to constitute reliance on “uncharged offences” to increase the penalty.

[112]        In any event, to accede to this argument would be to permit Ms. Craig to have the benefit of the evidence, but not its burden.  In mitigating her culpability, Ms. Craig testified as to the circumstances that drew her into the enterprise.  She talked of her personal circumstances in 1998 and why she concluded that she had few options but to go into the business of growing marihuana.  She explained that while the police discovered 88 clones in her home, it was her practice over the years to cultivate only the best and to throw away the remainder.  Ms. Craig relied on her enormous tax debt, accumulated as a result of her years in the business, as a circumstance militating against forfeiture.  Ms. Craig cannot now say that evidence with respect to the operation of the business can only be used for, but not against her.

[113]        Therefore, I would not accede to this ground of Ms. Craig’s appeal.

6.       Did the sentencing judge err in ordering a fine in place of forfeiture; and if so, should an order of forfeiture be made?

[114]        In light of all of the above, it is necessary to now evaluate whether an order of forfeiture would have been appropriate in the case at bar.  The Crown says that the sentencing judge erred in imposing a fine in place of forfeiture and, furthermore, that the Alder Street house should have been forfeited.

[115]        I have considered the reasons for judgment (set out above) and I do not take from them the conclusion that the sentencing judge saw the imposition of a fine as standing in place of forfeiture.  Having determined that she would not order the Alder Street house forfeited, the sentencing judge went on to consider the appropriate sentence.  She considered a fine in conjunction with the conditional sentence to be appropriate.  However, the reasons for sentence disclose that, in looking at the question of forfeiture, Gedye P.C.J. did not limit her analysis to whether the impact of forfeiture would be disproportionate given the factors set out in s. 19.1(3) of the CDSA.

[116]        As discussed above, the notion of a limited discretion is found most clearly in R. v. Lavigne dealing with proceeds of crimeThere, the Supreme Court of Canada held that the court’s decision was limited by the object and purpose of the provision, as well as the considerations enumerated in it.  I am of the view that the same reasoning must be applied to a court ordering forfeiture under the CDSA.  The forfeiture provisions exist to deprive offenders of the means by which the crime was committed and for the purposes of specific and general deterrence.  Section 19.1(3) limits the factors that the sentencing judge may consider.  Thus, though I concluded above that the primary sentence and forfeiture cannot be viewed in isolation, the discretion with respect to the order of forfeiture is limited, and does not include the myriad of other principles and objectives found in Part XXIII of the Criminal CodeTo the extent that a fine or any other aspect of the primary sentence is relevant, it is only in relation to the “impact of forfeiture” under s. 19.1(3).  It would therefore be an error to substitute a fine for an order of forfeiture.

[117]        Returning then to the case at bar, I have reproduced Gedye P.C.J.’s reasons for refusing forfeiture above.  Judge Gedye began with the proposition that the purpose of the forfeiture provisions was to make sure that the offender did not repeat the offence.  She noted that Ms. Craig had not purchased the Alder Street home with the profits of crime, but that she had been able to maintain it with the profits of the marihuana grow operation.  Having noted that earlier decisions had attempted to remove the profit made by the offender, the sentencing judge concluded that this had been achieved in this case by the CRA’s reassessment of taxes owing.  Judge Gedye concluded that the reassessment amounted to forfeiture.  She declined to make the order and treated the forfeiture application as if it were the primary sentence subject to all the considerations set out in Part XXIII of the Criminal Code.  In so doing, she failed to consider the relationship between ss. 16(1) and 19.1(3) of the CDSA and was therefore in error.

[118]        What then should the sentencing judge have done?  Since the property in question was “offence-related property”, s. 16(1) of the CDSA required the court to order the property forfeited, subject to the provisions of s. 19.1.  Section 19.1(3) required the sentencing judge to consider the impact of forfeiture having regard to the nature and gravity of the offence, the circumstances surrounding the commission of the offence, and the criminal record, if any, of the offender.

[119]        Turning first to the nature of the offence, the offence was marihuana production, punishable by seven year’s imprisonment and is a serious offence.  The offence was also grave in the sense that it consisted of a mid-level, profitable, commercial operation that had been in full production for at least four years.  A large section of the Alder Street home was devoted to marihuana production.  Ms. Craig was the owner/operator; she hired people to assist her; she answered to no-one.  On the other hand, there was no evidence suggesting that the operation was connected to organized crime.

[120]         As to the circumstances of the offence, Ms. Craig’s evidence was that she turned to marihuana production because she had few alternatives.  She said that her business had a compassionate side to it in that it counted amongst its customers people who were ill and found solace in the drug.

[121]        Lastly, Ms. Craig has no criminal record. 

[122]        The next question is whether the impact of forfeiture on Ms. Craig would be disproportionate to these factors?  The impact would be a heavy one.  Ms. Craig is facing an enormous tax bill.  To pay it she would likely have had to sell the Alder Street house.  If the house is forfeited, she would likely have to turn to the equity in her Richmond property to pay the tax bills.

[123]        I cannot, however, say that the impact of forfeiture would be disproportionate.  When Ms. Craig turned to growing marihuana she was not without options.  She had a university education.  She had worked in real estate.  Backed by what was left of her inheritance, she could have turned her obviously impressive gardening skills to legitimate use.  Instead, she chose to operate outside the law and to devote all her ability to an illegal endeavour.  Ms. Craig did not grow one or two plants for personal use.  Her operation, while described as mid-level, was a full-time, year-round business from which Ms. Craig earned her only income.  Furthermore, Ms. Craig’s tax bill has arisen because Ms. Craig earned money for which she did not declare income.  The monies owed to the CRA are not a penalty but an accumulated debt on money already earned.  While Ms. Craig is now middle-aged and has no prior criminal record, I do not see those factors as off-setting the other serious aspects of the offence.  For that reason, I cannot say that an order of forfeiture would be disproportionate and would order forfeiture of the Alder Street house.

[124]        I would allow the Crown’s appeal with respect to the order of forfeiture.

7.       In the circumstances, was the conditional sentence of imprisonment unfit?

[125]        The Crown says that a conditional sentence order was unfit in the circumstances of this case.  The Crown says the fact that Ms. Craig operated a mid-level commercial grow operation in a house in a residential neighbourhood is an aggravating factor.  The relatively small house (1,000 square feet) had been turned over, almost exclusively, to the marihuana business.  While no plants grew in the living room area, Ms. Craig says that this is where she conducted the sales end of the business.

[126]        I agree with the Crown that, viewed in isolation of forfeiture, a conditional sentence as the primary sentence was unfit, and a sentence of conventional incarceration would have been appropriate.  Most recently, in R. v. Van Santvoord, 2007 BCCA 23, this Court said that the owner/operator of a large commercial marihuana production will generally receive a sentence of conventional incarceration.

[127]        While I appreciate that Ms. Craig faced a difficult situation with the break-up of her marriage and her depression, she was not without resources to turn to a lawful activity to support herself.  She had no dependents and was in receipt of an inheritance from her family.  She had a university education and had sold real estate in the past.  She had an interest in gardening.  Ms. Craig’s decision to turn to marihuana growing was not anything approaching a necessity.

[128]        That being said, the fitness of the primary penalty cannot be examined without considering the order of forfeiture.  Unlike R. v. Van Santvoord, where forfeiture was not an issue, the conditional sentence in this case must now be seen in light of the order of the forfeiture of the Alder Street house.  In my view, the order of forfeiture in the case at bar will have a significant general and specific deterrent effect.  It will have a serious economic impact on Ms. Craig.

[129]        In these circumstances, I cannot say that the conditional sentence of imprisonment is unfit.  I would therefore dismiss the Crown appeal against the conditional sentence of imprisonment.

[130]        However, in consideration of the forfeiture, I would also allow Ms. Craig’s appeal against the fine and victim surcharge.

Conclusion

[131]        For the reasons I have given, I would allow the Crown appeal with respect to the order of forfeiture, set aside the decision of the sentencing judge, and order the Alder Street home to be forfeited to Her Majesty in right of Canada to be disposed of in accordance with s. 16 of the CDSA.

[132]        In light of this forfeiture order, I would dismiss the Crown appeal against the conditional sentence of imprisonment.

[133]        I would allow Ms. Craig’s appeal to the extent that the $100,000 fine and the victim surcharge are set aside.

[134]        Finally, I would dismiss the other grounds with respect to the applicable process for forfeiture under ss. 16(1) and 19.1 of the CDSA.

“The Honourable Madam Justice Ryan”

I agree:

“The Honourable Madam Justice Rowles”

I agree:

“The Honourable Mr. Justice Low”



[1] 9 Wigmore, Evidence, para. 2483, (Chadbourn rev. 1981).

[2] Ibid, para. 2485.