Alberta (Justice and Attorney General) v. Lee, 2012 ABQB 136

Court of Queen ’ s Bench of Alberta Citation: Alberta (Justice and Attorney General) v. Lee, 2012 ABQB 136 Date: 20120229 Docket: None Registry: Edmonton Between: Minister of Justice and Attorney General for Alberta Applicant - and - Samuel Chunghyun Lee and Chief of Police, Edmonton Police Service Respondents _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Brian R.

Burrows _______________________________________________________ [ 1 ] The Minister of Justice for Alberta applies ex parte for a restraint order under the Victims Restitution and Compensation Payment Act , S.A. 2001, c. V-3.5. The property sought to be restrained is a 2006 Infiniti FX, a 2005 Ford F-150, both owned by Samuel Chunghyun Lee, and $89,590 in Canadian currency allegedly found in Mr.

Lee’s custody. [ 2 ] The Minister seeks a restraint order in respect of the Canadian currency under ss. 4 and 19.3 of the Act on the basis that there are reasonable grounds to believe it is both “ property acquired by illegal means ” as defined in s. 1(1)(3) of the Act and an “ instrument of illegal activity ” as defined in s. 1(1)(3.1) of the Act. He seeks a restraint order in respect of the vehicles under s.19.3 on the basis that there are reasonable grounds to believe they are “ instruments of illegal activity ” .

[ 3 ] The Minister applies ex parte because the Act, in ss. 4(2) and 19.3(2), requires that the application be brought ex parte . [ 4 ] The Minister ’ s application is supported by two affidavits, one by Det. Trevor Czernik and the other by Cst. Jared Hrycun, both of the Edmonton Police Service. Det. Czernik ’ s affidavit contains no personal knowledge. It is based entirely on “ information and belief ” , that is, on hearsay. Cst. Hrycun ’ s affidavit says it contains both his personal knowledge and hearsay but which of the information it contains is in each category is not identified.

In s. 52(1), the Act permits, but does not require, the Court to accept hearsay evidence in applications made under the Act. [ 5 ] Det. Czernik swears that in September 2011, the EPS began to investigate Mr. Lee for drug dealing. Mr. Lee was previously charged with drug trafficking and related offences in January 2011. Indeed, property owned by Mr. Lee has previously been restrained under the Act. The affidavits do not disclose the current status of those previous proceedings under the Act, or the current status of the prosecution of Mr.

Lee initiated in January 2011. [ 6 ] Information developed in this investigation led police to believe that Mr. Lee used an uninhabited apartment suite as the base for an illegal drug enterprise. In judicially authorized covert searches of that apartment conducted on 10 occasions between mid November 2011 and the end of January 2012, the EPS determined that large quantities of cocaine and money were stored at or passed through the apartment. Cst. Hrycun swears that on 51 occasions in the same period, EPS officers saw Mr.

Lee attend at the apartment suite and on most occasions he used a key to gain entrance. [ 7 ] Cst. Hrycun describes EPS surveillance of Mr. Lee on January 11, 2012. On that day, EPS observed both the Ford F-150 and the Infiniti FX parked in the driveway of Mr. Lee ’ s residence. EPS observed Mr. Lee drive the Infiniti FX from the residence to the apartment suite. Later they observed him leave the apartment suite carrying a box. He drove to his residence. He took a “ messenger bag ” from the Infiniti FX and entered the Ford F-150.

He returned to the Infiniti FX and drove away. [ 8 ] He drove to Kingsway Mall, parked, exited the vehicle, and walked toward the mall. About half an hour later he returned to the vehicle with another man. Mr. Lee got in the Infiniti FX driver ’ s seat. The other man got in the front passenger seat. Police apparently did not see the other man get out of the vehicle but they did see Mr. Lee drive the Infiniti FX out of the parking lot a few minutes after he had got in the vehicle. The other man, at that point, was not in the vehicle. [ 9 ] Cst. Hrycun labels the encounter between Mr.

Lee and the other man in the Kingsway Mall parking lot “ Transaction #1 ” and swears: “ Based on my experience as an officer with EDGE [Edmonton Drug and Gang Enforcement], I believe Transaction #1 to be consistent with a drug transaction because the transaction was short in duration and took place in a vehicle out of the public eye, and in a relatively dark and deserted area. ” Transaction #1 occurred between 2:15 and 2:19 p.m. on an early January afternoon. [ 10 ] EPS followed Mr. Lee in the Infiniti FX to another commercial parking lot. He visited a Shopper ’ s Drug Mart briefly.

He moved his car within the parking lot to the vicinity of a bank. He was seen talking on a cell phone. Another vehicle parked beside him. Police observed another man exit the other vehicle and enter the Infiniti FX on the passenger side. Four minutes later the other man exited the Infiniti FX, “ with his left arm in a very stiff straight fashion, holding close against his body ” and returned to the second vehicle. Cst. Hrycun labels the encounter between Mr.

Lee and the man in the second parking lot “ Transaction #2 ” and swears, “ I believe Transaction #2 to be consistent with an illegal drug deal in that the meeting was short in duration and took place inside a vehicle outside of the public ’ s view. Furthermore, I believe that the unknown male was concealing something such as illegal drugs or other illegal items under his left arm. ” Cst. Hrycun ’ s did not himself observe the other man or his stiff straight left arm.

His conclusion as to what the other man was carrying, that it was illegal drugs or some other illegal item, is based on his understanding of another officer ’ s report of what the other officer saw. [ 11 ] EPS followed the other vehicle from the scene of Transaction #2. They saw it move and park beside a third vehicle in the same parking lot. A third man got out of the third vehicle and entered the other vehicle from Transaction #2. Less than a minute later the third man exited, got in the third vehicle and drove away. This encounter Cst.

Hrycun labels “ Transaction #3 ” and swears that it was also consistent with an illegal drug deal because it was of short duration and took place in a vehicle out of the public view. [ 12 ] Cst. Hrycun also describes EPS surveillance of Mr. Lee on January 29, 2012. On that day EPS again saw Mr. Lee exit his residence and drive the Infiniti FX to a house of a known associate in northeast Edmonton. Several hours later EPS observed Mr. Lee

drive his Ford F-150 out of the garage of the residence. Cst. Hrycun believes that the driving pattern in which Mr. Lee engagedthereafter indicates that he was attempting to determine whether he was the subject of police surveillance. [13] About 15 minutes later, EPS observed Mr. Lee park and another man enter his vehicle on the passenger side. Mr. Lee droveoff. Surveillance could not be maintained, but when police next saw Mr. Lee driving the Ford F-150, 4 minutes after he picked the otherman up, the other man was not in the vehicle. Again Cst.

Hrycun swears that this encounter, which he labels “Transaction #4”, was adrug transaction. [14] EPS stopped Mr. Lee shortly after Transaction #4 and arrested him. The Ford F-150 was searched pursuant to a warrant. In a“sophisticated hidden compartment” in the rear seat of the vehicle the EPS found a large quantity of soft cocaine, material used toconvert soft cocaine into crack cocaine, 88 rounds of ammunition for “Luger”, and $20,000 Canadian currency. Det. Czernik swears thatthe quantity of cocaine seized was the second largest quantity ever seized by the EPS Drug and Gang Enforcement Unit. [15] After Mr.

Lee’s arrest, EPS also searched the apartment suite pursuant to a warrant and found $56,850 Canadian currency, abullet proof vest, and items useful in drug dealing. [16] EPS also searched the residence the garage of which they had observed Mr. Lee leaving that day and found nothing ofsignificance except personal use marihuana. [17] EPS also searched the Infiniti FX and found nothing of significance. [18] EPS also searched Mr. Lee’s residence and found $12,740 Canadian currency in his bedroom. Neither affidavit indicates thebasis upon which the EPS concluded that the room in which the currency was found was Mr.

Lee’s bedroom. [19] The currency and vehicles which are the subjects of this application are in the possession of the EPS. [20] The Act authorizes the eventual disposal of property acquired by illegal means or of instruments of illegal activity and the useof the proceeds for the benefit of victims of crime. In ss. 3(1) and 19.2(1) the purpose of proceedings taken under the Act in respect ofproperty is stated to be: (

a) to obtain restitution or compensation for property victims and other persons, including the Crown and prescribed public bodies; (

b) to remove financial incentives to commit illegal acts, including disgorging financial gains from illegal acts; (

c) to prevent property that has been acquired by illegal means from being used to carry out future illegal acts; (

d) other purposes provided for in the regulations. [21] The Supreme Court of Canada has held that similar Ontario legislation is a valid exercise of provincial legislative authority:Ontario (Attorney General) v. Chatterjee, 2009 SCC 19 , [2009] 1 S.C.R. 624. [22] The present application, the application for a restraint order, is the initial step of the process established by the Act. If theorder is granted, a “property disposal hearing must be held no later than 45 days after the date of the restraint order”. (ss. 5(2)(a)(

i) and19.4(2)(a)(

i) The disposal hearing is on notice to the Respondents.

[ 23 ] As mentioned, the Act requires this restraint application to be made ex parte. In Alberta (Justice and Attorney General) v. Pazder , 2010 ABCA 183 , Slatter J.A. said of this requirement, “ Obviously this is because of the risk that property will be disposed of or hidden before the court can adjudicate on its forfeiture. ” [ 24 ] That explanation for the ex parte requirement would not seem applicable to this case given that the property sought to be restrained is already in police custody. Cst. Hrycun swore that at the time of the application, February 8, 2012, the currency was held pursuant to s. 6(1)(

b) of the Act and that the vehicles were held pursuant to s. 19.5(1)(b). In ss. 6(3)(b), 6(5), 19.5(3)(b), and 19.5(5) the Act contemplates the Court extending the duration of that custody beyond the 10 days set out in the Act. (I expect the currency and at least the F-150 are also held as evidence in criminal proceedings against Mr.

Lee, if there are any, which, as will be discussed below, the Court has not been informed.) [ 25 ] The test to be applied by the Court in determining whether to order restraint of the property is, in the case of property alleged to have been acquired by illegal means, whether “ the Court is satisfied that there are reasonable grounds to believe that the property that is the subject of the application has been acquired by illegal means ” . (s. 5(1)) In the case of property alleged to have an instrument of illegal activity, the test is whether, “ the Court is satisfied that there are reasonable grounds to believe that the property that is the subject of the application is an instrument of illegal activity ” . (s. 19.4(1)) [ 26 ] The Act provides that in an application for a restraint order, “ . . . it is not necessary for the Minister to establish that any person has been charged with, found guilty of or convicted of or otherwise held responsible for any illegal act in relation to any matter related to the property in respect of which the application is made . . . ” (s. 5(3)(

a) and s. 19.4(3)(a)) [ 27 ] The Act further provides (in ss. 5(3)(

b) and 19.4(3)(b)) that: . . . the Court may grant a restraint order notwithstanding that a person has not been charged with, found guilty of or convicted of or otherwise held responsible for any illegal act in relation to any matter related to the property in respect of which the application is made. [ 28 ] At a disposal hearing relating to property allegedly acquired by illegal means, the onus is on the Minister to establish on a balance of probabilities that the restrained property was acquired by illegal means. (s. 13(1)(a)) But the onus is on the Respondent to establish, again on a balance of probabilities, that he was not involved in the commission of the illegal act in respect of which the property was restrained. (s. 13(1)(b)(ii) [ 29 ] At a disposal hearing relating to property which is alleged to be an instrument of illegal activity, the onus is on the Minister to establish on a balance of probabilities that the property was an instrument of illegal activity. (s. 19.93(1)(a)) But the onus is on the Respondent to establish, again on a balance of probabilities, that he “ . . .(

A) has not been or would not have been involved in or associated with carrying out an illegal act using, or associated with, the restrained property, and (

B) did not know and would not reasonably be expected to know that the restrained property was or was likely to be used in carrying out an illegal act. ” (s. 19.93(1)(b) (ii)) [ 30 ] A Respondent who wishes to contest a disposal hearing must file an affidavit containing the evidence upon which he relies to discharge the onus assigned to him no less than 5 days before the disposal hearing. If required to do so by the Minister, the Respondent must submit to cross-examination on that affidavit. Alternatively the Court may allow oral evidence at a disposal hearing.

Again a Respondent giving such evidence is subject to cross-examination. [ 31 ] If a Respondent fails to attend in person or by representative at the disposal hearing, or fails to attend a cross-examination on his affidavit, or fails to answer questions when cross-examined in Court, he forfeits all right to the property. [ 32 ] The onus placed on the Respondent and the consequence of default of response by a Respondent are of considerable significance when the Respondent is also an accused person subject to prosecution for the alleged illegal act upon which the application is founded.

Where criminal proceedings have not been completed, a Respondent who is or who potentially is also an accused, may risk significant prejudice to his defence in criminal proceedings by participating in the disposal hearing and seeking to discharge the onus placed on him by the Act.

[ 33 ] In light of these features of the disposal hearing, the granting of a restraint order, in my view, should not be considered a matter of insignificant routine.

The Legislature has seen fit to require a judicial determination, indeed a judicial determination to be made without the benefit of submissions from all interested parties, and without the benefit of information as to the status of criminal proceedings, before the significant consequences of a restraint order (as to onus and consequences of default) are imposed on a Respondent. [ 34 ] As noted, the Act does not require that the Court be advised of the status of criminal proceedings. Neither, however, does it prohibit the Minister from giving the Court that information.

Further, the Act permits, but does not require, the Court to grant a restraint order where it does not have that information. [ 35 ] The affidavits here are completely silent as to whether Mr. Lee has been charged with any offence, though given the quantities of cocaine and currency allegedly found in his custody, it is difficult to conceive that he has not been charged. If he has not been, it would be relevant to the test the Court is instructed by the Act to apply in this application for the Court to know why not.

The affidavits are also completely silent as to current status of any criminal proceedings against Mr.

Lee if there are any. [ 36 ] In my view, the Court should not exercise its discretion to grant a restraint order when it is totally blind as to whether or not doing so will require the Respondent to choose between attempting to satisfy the burden imposed by the Act or accepting the consequences of not doing so, on the one hand, and preserving his rights as an accused person in criminal proceedings, on the other. [ 37 ] There is nothing about the accomplishment of the stated goals of the Act which requires that the property be disposed of before criminal proceedings against the Respondent, if he is an accused, have been completed. [ 38 ] I therefore dismiss the present application.

However, I give the Minister leave to renew the application when either it is determined that there will be no criminal proceedings against Mr. Lee or when such criminal proceedings as are brought against him are completed. In the meantime I grant an order under s. 6(3)(

b) and s. 19.5(3)(

b) directing that the directions made by a peace officer under s. 6(1)(

b) and s. 19.5(1)(

b) not expire until 10 days after the entry of a conviction, an acquittal, a stay or the disposition in any other way of criminal proceedings against Mr. Lee relating to the illegal activity alleged in this application or after the filing in these proceedings of an affidavit stating that there will be no criminal proceedings brought against Mr. Lee in relation to that alleged illegal activity. Heard on the 8 th day of February 2012. Dated at the City of Edmonton, Alberta this 29 th day of February 2012. Brian R. Burrows J.C.Q.B.A. Appearances: Sarah Dolgoy

for the Applicant The Respondents were not given notice of the application.