In this case, a large marijuana grow operation had been found at a residence owned by the Defendant, Mr. Cheung. The Defendant acknowledged that the home had been rented by his brother, who was complicit in the illegal activity.
The residence in question was sold at the outset of the litigation, and this action concerned the proceeds of the sale, being $250,104.73, which were being held in trust by the Defendant’s lawyer. The Director of Civil Forfeiture sought an interim preservation order, preventing the Defendant from accessing the funds until the matter had been either settled or resolved in court.
Mr. Justice Metzger of the BC Supreme Court ruled that the interim preservation order should be granted, on the grounds that there was a “serious issue to be tried,” as follows:
“[21] The evidence is that the Property has been used to engage in unlawful activity, that is, the possession, production and provision of controlled substances within the definitions contained in s. 2 of the CDSA. The evidence reasonably supports the inference that the marijuana was produced for sale, and thus the activity likely resulted in the acquisition of property, namely cash.
[22] In the present case, as in Tse, there are reasonable grounds for the belief that the unlawful activity at the Property generated a financial benefit for the defendant Cheung, being rent received from his brother and sister-in-law, and that financial benefit in turn was used to reduce the debt obligation on the Property.
[23] Thus, I conclude there is a serious issue to be tried.”
This case demonstrates the ability of the Director of Civil Forfeiture to tie up property alleged to be proceeds of crime, pending the resolution of complex and lengthy litigation, thereby preventing Defendants to access their equity in order to fund their legal defence.
Decided by the BC Supreme Court on June 24, 2008.
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