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FORFEITED Civil Forfeiture and the Canadian Constitution FORFEITED Civil Forfeiture and the Canadian Constitution by Joshua Alan Krane A thesis submitted in conformity with the requirements for the degree of Master of Laws Graduate Department of the Faculty of Law University of Toronto © Copyright by Joshua Alan Krane (2010) FORFEITED Civil Forfeiture and the Canadian Constitution Joshua Alan Krane, B.Soc.Sc., B.C.L/LL.B. Master of Laws Faculty of Law University of Toronto 2010 Abstract The enactment of civil asset forfeiture legislation by Alberta and Ontario in the fall of 2001, followed by the passage of similar legislation in five other provinces, has signalled a dramatic change in the way Canadian constitutional law ought to be understood. This thesis builds on American legal scholarship by highlighting how deficiencies in Canada’s constitutional law could create space for more inva- sive civil forfeiture statutes. Following a historical overview of forfeiture law in Canada, the thesis (i) examines how the Supreme Court of Canada mischaracter- ized this legislation as a matter of property and civil rights; (ii) considers whether the doctrine of federal paramountcy should have rendered the legislation inoper- able and the consequences of the failure by the Court to do so; and (iii) evaluates -ii- the impact of the absence of an entrenched property right in the constitution, in regard to this matter. -iii- Table of Contents INTRODUCTION................................................................................................. 1 The Aim of this Project............................................................................... 6 Outline of the Argument ............................................................................. 8 CIVIL FORFEITURE AND PROCEEDS OF CRIME LEGISLATION IN CANADA ............................................................................................................. 10 The Origins of Civil Forfeiture................................................................. 11 The Proliferation of Forfeiture Laws in Canada....................................... 14 Civil Forfeiture Defined............................................................................ 22 Why All the Fuss?..................................................................................... 27 REDEFINING THE CRIMINAL-CIVIL DIVIDE ......................................... 30 Moving Beyond the Boundaries of the Criminal Law.............................. 32 And Then Came Chatterjee ...................................................................... 39 Forfeiture: In Pith and Substance.............................................................. 42 Mischaracterization of the Purpose as Remedial and not Punitive .. 43 No Resemblance to Civil Law............................................................ 49 No Inquiry as to the Material Effects on the Criminal Law .............. 54 Implied Rights as Limits on Government Authority .......................... 58 Conclusion ................................................................................................ 66 PARAMOUNTCY, LIBERTY, AND THE RESTRAINT OF PROPERTY 68 Comparing the Two Regimes ................................................................... 70 Paramountcy: The Legal Framework........................................................ 78 Chatterjee and the Decline of the Paramountcy Doctrine ........................ 88 -iv- Distortion of the Criminal Law.......................................................... 91 Controlling Discretion....................................................................... 94 Reconsidering the Purpose of the Federal Regime ........................... 96 Conclusions and Recommendations ....................................................... 101 PROPERTY, PROPORTIONALITY, AND INSTRUMENTS OF CRIME ............................................................................................................................. 103 Property Rights in Canadian Constitutional Law ................................... 105 Property, Proportionality & Civil Forfeiture Abroad ............................. 110 Germany .......................................................................................... 111 South Africa ..................................................................................... 116 United States.................................................................................... 120 Proportionality without a Property Right?.............................................. 124 Conclusion .............................................................................................. 133 CONCLUSION ................................................................................................. 136 Table of Figures Figure 1 - Comparison of the Important Federal and Provincial Forfeiture Rules ........................................................................................ 35 Figure 2 - Comparison of the Important Restraint and Confiscation Provisions of the Criminal Code and Civil Remedies Act, 2001 ............. 73 Figure 3 – Two Proportionality Models: The Current Statutory Framework and the Proportionality Framework..................................... 129 -v- Introduction ivil forfeiture is premised on a fundamental principle of morality that no person should profit from his or her own wrongdoing. Governments C generally cast civil forfeiture as a crime-control or crime-prevention measure by contending that the confiscation of illegal profits and the instruments of unlawful activity, both by the participants of crime and by those that acquiesce to its commission, will deter crime.1 Civil forfeiture provides a public form of res- titution whereby the state can exact profits, proceeds, and future interests in prop- erty based on an underlying unlawful act. Archetypal examples of conduct that civil forfeiture legislation aims to address include the accumulation of money through the sale of illegal drugs and profiteering through corporate fraud. Civil forfeiture laws “confer” or, some scholars and legislators would ar- gue, “affirm” the authority of the state to seize and obtain title to property used for, or derived from, the commission of an unlawful act. But those laws actually go further. In the seven provinces with civil forfeiture statutes,2 a court can order the forfeiture of property even when its owner has not been convicted of a crime. Civil forfeiture laws are directed at illicit activity that may not otherwise be read- 1 See generally Simser, Jeffrey, “Perspectives on Civil Forfeiture” in Young, Simon, ed., Civil Forfeiture of Criminal Property: Legal Measures for Targeting the Proceeds of Crime (Edward Elgar Publishing, Inc.: Northampton, MA, 2009) 13 at 13. 2 Alberta: Victims Restitution and Compensation Payment Act, S.A. 2001, c. V-3.5; Ontario: Civil Remedies Act, 2001, S.O. 2001, c. 28 [formerly, Remedies for Organized Crime and other Unlaw- ful Activities Act]. British Columbia: Civil Forfeiture Act, S.B.C. 2005, c. 29; Saskatchewan: Sei- zure of Criminal Property Act, 2009, S.S. 2009, c. S-46.002 [formerly, Seizure of Criminal Prop- erty Act, S.S. 2005, c. S-46.001]; Manitoba: Criminal Property Forfeiture Act, C.C.S.M. c. C306; Quebec: An Act respecting the forfeiture, administration and appropriation of proceeds and in- struments of unlawful activity, R.S.Q. c. C-52.2; Nova Scotia: Civil Forfeiture Act, S.N.S. 2007, c. 27; New Brunswick, Prince Edward Island, and Newfoundland & Labrador do not have civil for- feiture statutes currently in force. -1- ily actionable as criminal offences due to the absence of evidence, a breach of a person’s rights, or the scarcity of resources to investigate or prosecute the crime. Civil forfeiture regimes are popular among law enforcement agencies and victims’ rights groups.3 According to the Ontario regulatory agency that adminis- ters this regime, more than $3.6 million in property was forfeited to the Crown during the first four years of the agency’s operation.4 Part of the property in issue was used for law enforcement programs and to support victims’ services. The value of assets seized has been steadily increasing,5 and the agencies that adminis- ter this regime are working in concert with law enforcement to streamline referral processes to provincial prosecutors that administer these regimes.6 The Ontario figures pale, however, in comparison with the $386 million in assets seized by United States (“U.S.”) federal prosecutors in 2008 alone.7 3 See CNW, “Grants Awarded Under Civil Remedies Act” (22 January 2007), online <http://www.oacp.ca/content/news/article.html?ID=329>, retrieved 5 November 2009; CBC, “Drunk Drivers Risk Losing Their Cars under New Ontario Law” (20 February 2008), online: <http://www.cbc.ca/news/story/2008/02/20/ont-drunk-driving.html>, retrieved 5 November 2009. 4 Ontario, Ministry of the Attorney General, Civil Forfeiture in Ontario, 2007: An Update on the Civil Remedies Act, 2001, online: <www.attorneygeneral.jus.gov.on.ca/.../20070824_CRIA_Update.pdf>, retrieved 1 September 2009. 5 Since November 2003, $11.2 million in property has been forfeited to the Crown under provin- cial civil forfeiture law. An additional $39.6 million in property is frozen pending the completion of civil forfeiture proceedings. See Ontario, Ministry of the Attorney General, “Civil Remedies Program Helps Local Police Increase Community Safety” online: <http://www.attorneygeneral.jus.gov.on.ca/english/news/2009/20090831-cria-nr.asp>, retrieved 26 October 2009. Compare this figure with the $29.9
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