R. v. Nguyen Date:, 2015 BCPC 79

Citation: R. v. Nguyen Date: 20150415 2015 BCPC 0079 File No: 189645-1 Registry: Surrey IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. HOANG NGUYEN RULING OF THE HONOURABLE JUDGE M.B. HICKS Counsel for the Crown: J.M. Le Dressay Counsel for the Defendant: I. Donaldson, Q.C. Place of Hearing: Surrey , B.C. Date of Hearing: March 31, 2015

Date of Judgment: April 15, 2015 [ 1 ] Hoang Nguyen pled guilty on information 189645-1 that on October 20, 2011 at Delta, British Columbia, he did unlawfully produce cannabis marijuana contrary to s. 7(1) of the Controlled Drugs and Substances Act . Following sentencing submissions, Mr. Nguyen was placed on a 15-month conditional sentence order. That sentence was imposed on July 5, 2013. Pursuant to s. 16(1) of the Controlled Drugs and Substances Act , the Crown seeks an order for forfeiture respecting the proceeds following sale of the residential property where the grow operation was located. Mr.

Nguyen asks the court to apply the factors set out in s. 19.1(3) of the Act and order partial forfeiture only of those proceeds. [ 2 ] The residential property is located at 8642 Delcrest Drive, Delta, British Columbia. It was purchased by Mr. Nguyen on April 6, 2011 for $555,000. At the time of sentencing I was told the property was purchased as the home for Mr. Nguyen and his spouse, Ms. Bui, two teenage children and an infant. A mortgage was required in the amount of $361,075. Monthly payments on the mortgage were $1,233.51.

At sentencing I was advised that although the down payment was made from legitimate savings, Mr. Nguyen struggled to meet the mortgage payments. He was introduced to the opportunity to make extra money through the grow operation and took that opportunity. I was informed at that time that his purpose was to maintain the family home, that he was not motivated by the opportunity to live a lavish lifestyle. I was informed that at the time police executed the search warrant and discovered the grow operation on October 20, 2011, Mr.

Nguyen and his spouse had separated and the children did not reside in the residence full-time but rather visited from time to time. Based on the state of the living areas in the home as described by Crown counsel and depicted in photographs, I concluded, for sentencing purposes, that there was certainly strong evidence that all were living in the residence although the evidence was not sufficient to determine with assurance that they all live there full-time.

I concluded they spent a considerable amount of time there. [ 3 ] I will note here that no evidence was called by the defence at the sentencing hearing nor at this hearing. There is no basis on which I would depart from the conclusion I reached at sentencing that if all of the family members were not present full-time, they were all certainly there at the residence a considerable amount of the time. [ 4 ] On January 1, 2012, following execution of the search warrant and discovery of the grow operation, Mr. Nguyen defaulted on the mortgage held by Toronto Dominion Bank. He did not make any further payments.

The bank filed a petition for foreclosure on March 26, 2012. The Supreme Court of British Columbia granted an order for foreclosure. The amount owing was $361,198.79 with a per diem rate of $21.56. Mr. Nguyen did not redeem the mortgage and the property was sold on December 8, 2014 for $476,000. The balance of funds remaining following payment of the mortgage balance and disbursements was $32,655.39. That is the amount in issue in these proceedings and for which the Crown seeks forfeiture. Precisely when Mr.

Nguyen’s family moved out of the residence is unclear but it appears they have not resided there at least since the foreclosure process began. [ 5 ] Section 16(1) of the Controlled Drugs and Substances Act provides that where a person is convicted of a designated substance offence, which this is, and on application of the Attorney General, and where the court is satisfied on the balance of probabilities that any property is offence related property, and the offence was committed in relation to that property, and the parties agree that is the case here, the court shall order the property forfeited. [ 6 ]

Section 19.1(3) states: Subject to an order made under subsection 19(3), if a court is satisfied that the impact of an order of forfeiture made under section 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. [ 7 ] In R. v.

Craig , 2009 SCC 23 commencing at paragraph 55 and continuing through paragraph 59 the Supreme Court of Canada provided guidance in the application of the proportionality test described in s. 19.1(3): 55. The proportionality test under s. 19.1(3) therefore allows a court to tailor the amount of property to be forfeited in a way that takes into account the relative weight of the listed factors. Partial forfeiture gives the court greater scope for applying the proportionality test so that the only options available to the sentencing judge are not a stark choice between full or no forfeiture.

This establishes a spectrum of potential forfeiture orders that can be adjusted to reflect the relative gravity of the case, pursuant to the purposes of the forfeiture scheme. 56. What, then, should a judge consider under s. 19.1(3)? The nature and gravity of the offence could include the character and quantity of the substance involved, the level of sophistication of the crime and the extent to which the commercial production or distribution of drugs was involved. 57.

The second factor, the circumstances surrounding the commission of the offence, might include consideration of the offender’s role in the commission of the offence, the nature of the property and the manner in which it was used in the offence, risks to the security or safety of the community, whether the property was used in a manner that detrimentally affected its legitimate use and enjoyment, whether the property was fortified or otherwise adapted to accommodate the grow operation, the extent of the offender’s involvement in organized crime and whether the property itself was held by a criminal organization. 58.

The criminal record of the offender is self-explanatory. It will be of particular relevance if the prior offenses were drug related. 59. Based on the particular circumstances of the case, therefore, judges have the discretion to order no forfeiture, partial forfeiture or full forfeiture of offence-related real property. The extent of the property forfeited will vary. Full forfeiture may be anticipated, for

example, in the case of a forfeited property purchased for criminal purposes and solely dedicated to the commercial production and distribution of illegal substances, perhaps with a connection to organized crime. On the other hand, one might decline to order forfeiture in the case of an individual with no criminal record and no connection to organized crime who grows very little marihuana in her home.

Each situation will be subject to a judge’s appreciation of how the s. 19.1(3) factors should be applied in the particular circumstances, which, as previously stated, may result in no, partial or full forfeiture. [ 8 ] The court pointed out that although the scheme is not dedicated solely at defeating organized crime, the involvement of organized crime is a relevant factor. ( R. v. Craig at paragraph 60 ) [ 9 ] In R. v. Wu , 2010 BCCA 366 at paragraphs 36 and 38 Madam Justice Bennett described the purpose of the forfeiture scheme as follows: 36.

The purposes of the forfeiture provisions in the Controlled Drugs and Substances Act include taking the profit out of the production and trafficking of drugs. There is also a punitive aspect to the effect of a forfeiture order. There is also a preventive aspect, as the tools of the crime are removed from the criminal. … 38. The purpose of s. 19.1(3) is to ameliorate the harsh effect of a forfeiture order in relation to real property… [ 10 ] At the sentencing I was informed that Mr. Nguyen and Ms.

Bui were separated at the time the search warrant was executed. [ 11 ] The residential property here is a 2300 sq. ft., two-storey single-family home with the basement. The upper two floors were fully devoted to the living area of the family. Those floors and all three bedrooms appeared to be fully lived in by a family such as Mr. Nguyen’s family. Photographs filed as Exhibit 2 on this hearing show all rooms to be fully furnished and in use. The bathrooms were well-stocked with toiletries.

The bedrooms were clearly in recent use and untidy with clothing and personal items strewn about and the beds essentially unmade. An infant’s crib was present. The kitchen was well provisioned and appeared to be in current use. Clothing for adults and children, male and female, were present. [ 12 ] The basement was about 600 sq. ft. The grow operation was entirely confined to the basement area. Although the basement was set up as a suite with a separate kitchen area and bathroom, there was no sign it was used for that purpose.

There was no evidence that anyone was occupying the basement as a residence. [ 13 ] Marijuana plants were growing in two grow rooms. One room contained 126 plants about 15 inches high in the vegetative stage. They were in pots in soil. Six high pressure sodium lights were suspended from the ceiling. The walls were covered with reflective mylar and plastic. The second grow room contained 149 potted marijuana plants about 2 feet high in the budding stage although not yet harvestable. That room was similarly equipped with six high pressure lights and reflective mylar.

The laundry room was converted to an electrical room with electrical panels and timers. Power was provided through wiring to the clothes dryer and the stove in the kitchen area. Ballasts and capacitors were in place. The timers were set to provide lighting in each grow room for 12 hours each day. [ 14 ] Using fans, stale air was vented through the house chimney and the sewer drain. The chimney stacks for the furnace and hot water heater were removed.

The exhaust, providing a supply of carbon dioxide to assist growing, vented from these appliances into the basement area. [ 15 ] The bathroom in the basement was used as a nutrient room. Several containers of nutrients, gloves and hand-watering gear were present. [ 16 ] Reinforcing bars were in place across the door in the basement to the outside. Otherwise no evidence of a security system was present at the residence. The access door to the basement from the upper floors was unlocked. [ 17 ] No clones were present. This was a two-stage operation.

The Crown says I should conclude the clone stage to have been effectively contracted elsewhere and I should treat this is a 400-plant operation rather than the 275-plant operation which was discovered. The minimum value of the crop which the 275 plants could produce if all survive to reasonable production was about $134,000. The Crown says that once the first crop is harvested a new harvest could be taken about every 30 days on this two-stage operation and yielding about $67,000 on each harvesting.

Thus this operation, although of relatively moderate size, had the potential to be highly profitable and capable, the Crown asserts, of paying off the mortgage in relatively short order. [ 18 ] There is no evidence that a crop had yet been taken. No used pots or other gear nor residue nor packaged marijuana nor packaging materials were found. There is no evidence of the involvement of organized crime. No Hydro bypass was present. [ 19 ] The Crown has provided Hydro records for the property covering a period during which the former owner was in the property, the period of Mr.

Nguyen’s occupancy, and the period during which the TD Bank was responsible for the property. Those records are Tab A to the agreed statement of facts filed as Exhibit 1 at this hearing. [ 20 ] The Crown asserts those records provide evidence that this grow operation was put in place soon after the property was acquired and when compared with daily average power consumption rates for the prior owner and subsequently when the bank had control of the property, support the Crown’s contention that the property was acquired with a grow operation in mind, not as an afterthought to help pay the mortgage as Mr.

Nguyen has asserted. I cannot reach that conclusion. Although the rates of consumption are different, to ascribe that to the grow operation in support of the Crown’s argument would require some expert evidence in interpreting those records. I cannot draw conclusions from those numbers as to what use the property was put to before the Nguyen family moved in or what normal usage for a family of that size would be. I find those records not particularly helpful in the absence of additional

information in advancing the Crown’s position. [ 21 ] Tab B attached to the agreed facts are income tax returns for Mr. Nguyen and Ms. Bui for the tax years 2009, 2010 and 2011. Their combined total income in those years was about $25,000, $42,000 and $32,000 respectively. The Crown asks me to consider those total income figures and conclude there must have been some other illicit source of income to finance the approximate $190,000 down payment made in April 2011 to complete the purchase.

Again, the Crown says, these records should further support the conclusion I am asked to draw that the plan all along was to undertake a marijuana grow operation for profit at this residence and not, as proffered by Mr. Nguyen, an afterthought when he realized he could not afford the mortgage. [ 22 ] The Crown says, and I agree, that it is for Mr. Nguyen to demonstrate disproportionality. The Crown says the circumstances here, the Hydro consumption records and the income tax information, in the absence of any evidence from Mr.

Nguyen, demonstrate his intention all along to use this residence as a grow operation. [ 23 ] I have addressed the Hydro records. The income tax information itself is certainly suspicious. However, as Mr. Donaldson has noted, one cannot simply assume that reported income is his only source of legitimate funds to acquire a residential property. An obvious example would be proceeds from the sale of another property. [ 24 ] It is suspicious that Mr. Nguyen would not have readily recognized that he would not be able to afford this property or the substantial mortgage payments.

However, I am not prepared to cross the gap in information here and conclude an illicit plan was at work from the outset. [ 25 ] Mr. Nguyen is not bound to give evidence in order to advance his s. 19.1(3) position. Here there is no inference to be drawn from his failure to do so. [ 26 ] I have reviewed all of the authorities provided by both counsel. No two cases are completely similar. Each must be decided on its own particular facts. The Supreme Court of Canada decision in R. v .

Craig provides the underlying analytical considerations but the circumstances under which the court set aside a full forfeiture order in that case were slightly unusual and so that outcome is not particularly helpful here. [ 27 ] The second companion decision is R. v. Nguyen , 2009 SCC 25 in which the Supreme Court of Canada upheld full forfeiture.

That case, can be distinguished because the offender and all but an older daughter did not live in the property at the time and the trial court was able to make a finding that the property was bought for the sole purpose of growing marijuana, a finding I am not prepared to make here. There had been an earlier crop as well in that case. [ 28 ] In R. v. Bui , 2010 BCCA 279 , the Court of Appeal upheld full forfeiture. There were some similarities. However, the sentencing court was prepared to find an illicit source of funds for the initial down payment.

Further, the house was built to the offender’s specifications allowing sufficient size in the crawlspace to facilitate the installation of a grow operation. Those factors are not present here. [ 29 ] In R. v. Wu , supra , the Court of Appeal upheld full forfeiture. The circumstances of the grow operation were not substantially dissimilar to the grow operation in the present case. I note, however, there had been a previous crop. [ 30 ] The circumstances in R. v.

Trieu , 2011 BCCA 303 in which the Court of Appeal also upheld full forfeiture are also somewhat similar but distinguishing features which are somewhat more aggravating were present. The grow operation was larger, it utilized to some degree the upper areas of the residence and it was clearly profitable, the offender, in the words of the trial judge, having “…earned enough income from this business that he was able to support himself and his house over one year of little or no income from any other source…” [ 31 ] Here there is no evidence the operation had yet produced a crop or any resulting revenue.

It was not a sophisticated hydroponic level operation but moderate in size, although commercial. I note Mr. Nguyen lived in the residence and was the principal in the operation. The fact this was carried on in a residential area is a significant concern. I take issue with Mr. Donaldson’s minimizing of the effects of blowing carbon dioxide about the basement and to the implications for those living in the residence. That is a significant concern to the safety of those in the residence as identified by Constable Kirk who gave expert evidence on the subject of marijuana production at this hearing.

Although there was no bypass, the electrical installations and the wiring arrangements as identified in the photographs filed leads to no other conclusion but that there were significant risks created by this arrangement. Whether this family was present all the time or most of the time, the circumstances raise concerns.

The risks of these operations to neighbours and to innocent members of the community are well known. [ 32 ] On the other hand, the grow operation was entirely confined to the basement and the rest of the residence was clearly occupied by the family for residential purposes, at least a substantial amount of time. [ 33 ] Mr. Nguyen has no criminal record. There is no association to organized crime. [ 34 ] R. v. Oulette , 2009 SCC 24 is one of the decisions respecting the proportionality test which accompanied the Supreme Court of Canada decision in R. v. Craig .

The Supreme Court of Canada agreed that full forfeiture in circumstances not substantially different from the case before me would be disproportionate. Forfeiture of one half of the offender’s interest was upheld. [ 35 ] I conclude here that full forfeiture would be disproportionate. I order forfeiture of one half of Mr. Nguyen’s interest in the proceeds of the sale of this residence.

The Honourable Judge M.B. Hicks Provincial Court of British Columbia