R. v. Chen Date:, 2014 BCPC 55

Citation: R. v. Chen Date: 20140314 2014 BCPC 0055 File No: 202132-3 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. CHUNG YU CHEN EXCERPTS FROM PROCEEDINGS RULING ON FORFEITURE APPLICATION OF THE HONOURABLE JUDGE B. BASTIN Counsel for the Crown: S. Gerrie Counsel for the Defendant: J. Solomon

Place of Hearing: Vancouver , B.C. Date of Hearing: March 14, 2014 Date of Judgment: March 14, 2014 [ 1 ] THE COURT: Regina versus Chung Yu Chen, ruling on forfeiture application. [ 2 ] The subject proceeding is an application by the Crown for an order of forfeiture of offence-related property pursuant to s. 16 of the Controlled Drugs and Substances Act ( CDSA ).

The property in question is the lands and premises with a civic address of 7688 McGregor Avenue in Burnaby, British Columbia. [ 3 ] The principal events leading to this matter being before the court involved a fairly lengthy investigation by the Burnaby RCMP drug squad during the latter months of 2009 and the early months of 2010. The investigation concerned the residence at 7688 McGregor Avenue in Burnaby.

The investigation culminated with the execution of a search warrant at that address on April 8th of 2010. [ 4 ] In the course of the execution of that warrant, the police discovered a marihuana grow operation in the basement of the residence. Certain evidence linked Mr. Chen to the residence and, as a result, he was charged in Information Number 202132 with the offences of producing marihuana and possessing marihuana for the purpose of trafficking. [ 5 ] The trial for those offences commenced before this court on May 1st of 2012.

In the course of the trial, the court made certain evidentiary rulings unfavourable to the accused, Mr. Chen, and as a result, on November 27th, 2012, Mr. Chen changed his plea to one of guilty on Count 2 of the Information, the charge of possessing marihuana for the purpose of trafficking. [ 6 ] Two other persons were charged with Mr. Chen on the two counts in Information Number 202132. The charges against Ms. Shih Huan Kuang were stayed by the Crown prior to the commencement of the May 2012 trial.

The two charges against the co- defendant, Bao-Phuc Le, were dismissed in the course of that trial. [ 7 ] On March 8th of 2013 sentence was imposed on Mr. Chen in respect of Count 2. That sentence was a 18-month conditional sentence order. The Crown stayed proceedings against Mr. Chen on Count 1. [ 8 ] In the course of the sentence proceedings on February 1st and March 8th of 2013, certain exhibits were filed, one of which was a letter of apology from Mr. Chen that was marked as Exhibit 3.

The Crown also made it clear throughout the sentence proceedings that an application for forfeiture of the McGregor Avenue property to the Crown would be made in due course. [ 9 ] There was some delay in the court hearing that application primarily because Mr. Chen had to retain counsel for the application other than his counsel at trial. There was also some uncertainty as to the position of the one-time co-defendant, Ms. Kuang, in reference to the forfeiture application. That issue was ultimately resolved by Ms.

Kuang formally advising that she took no interest in the forfeiture proceedings. [ 10 ] A very large body of material was placed before this court in the course of this forfeiture application that was heard over the course of three days, namely, January 28, 29, and 30 of this year. Decision on the application was reserved until today. [ 11 ] Several exhibits were filed in this proceeding.

Exhibit 1 is an exhibit flowchart that enumerates various items seized by the police from or relating to the April 8th, 2010, execution of the search warrant at the McGregor residence. [ 12 ] Exhibit 2 is a statement of admissions made by Mr. Chen in relation to the sentence hearing of February 1st, 2013, and in relation to the subject forfeiture hearing. [ 13 ] Exhibit 3 is a booklet entitled, "Crown's Book of Documents" and consists of material at seven tabs.

At Tab 3 is a copy of the restraint and management order made by the Supreme Court of British Columbia on March 18th, 2011, in relation to the McGregor property and this application. Exhibit 3A in this hearing is three pages of diagrams, one for each of the three floors of the McGregor residence. [ 14 ] Exhibit 4 is an affidavit of Patricia Fryer, an official with the TD Bank Financial Group. Exhibit "A" to that affidavit consists of 266 pages of records kept by that financial institution. The records relate to Mr.

Chen and to the McGregor residence. [ 15 ] Exhibit 5 is an affidavit of Julia Carter [phonetic], a service representative of the Bank of Montreal. Attached to Ms. Carter's affidavit are 277 pages of financial records kept by the Bank of Montreal and that relate to Mr. Chen and the McGregor property. [ 16 ] Exhibit 6 is a booklet of 146 photographs taken by the police at the McGregor residence on April 8th, 2010. [ 17 ] Exhibit 7 is a booklet entitled, "Defendant's Book of Documents" and consists of material at nine tabs. [ 18 ] Exhibit 8 is a 14-page

article authored by Darryl Plecas and others entitled, "The Marihuana Indoor Production Calculator: A Tool for Estimating Domestic and Export Production Levels and Values." [ 19 ] Exhibit 9 is a two-page assessment roll report dated January 29th, 2014. [ 20 ] Exhibit 10 is two colour photocopies of the driver's licence and CareCard of Yen Ling Huang referred to in Item 23 of Exhibit 1 herein. [ 21 ] Exhibit 11 is a one-page photocopy of a passport photograph of Mr. Chen that is referred to in Item 53 of Exhibit 1 herein.

[22] Exhibit 12 is eight photocopied pages from the Taiwanese bank account of Mrs. Chen, the mother of the defendant. [23] Exhibit 13 is four pages of material related to the title search of a certain property in Langley, British Columbia. [24] Exhibit 14 is the final exhibit in this hearing and it is an email to Mr. Chen's counsel, Mr. J.

Solomon, from RCMP SergeantScott Rintoul, setting out that officer's efforts to locate one Justin Lee for the purpose of serving him with a subpoena requiring him toattend this hearing. [25] In addition to the material filed as exhibits in this hearing, the Crown also provided the court with a booklet of 17 caseauthorities. Crown counsel also provided the court with a written submission to assist the court in following the submissions of theCrown in this proceeding. [26] Three witnesses testified at this hearing on behalf of the Crown applicant.

The evidence of those witnesses related to what wasoccurring at the McGregor residence on and before April 8th of 2010. [27] Constable Liveley of the Burnaby RCMP testified that she was part of the search team that executed the search warrant at theresidence on April 8th, 2010.

By referring to the photographs in Exhibit 6 and the diagrams that are Exhibit 3A, Constable Liveleytestified as to what she saw in the residence in relation to the marihuana grow operation that was occurring therein. [28] The essence of Constable Liveley's evidence was that the grow operation was located in the basement of the home andconsisted of marihuana plants being grown in two rooms in the basement. The officer's evidence and the admissions of fact are that therewere a total of 753 marihuana plants, all in the early vegetative stage.

Constable Liveley testified that the main floor and the upper floorof the residence "looked abandoned." [29] Apart from the growing marihuana in the basement, Constable Liveley testified that she observed certain materials andequipment used in the marihuana growing process. Those items were such things as high-pressure sodium light bulbs, reflective Mylar,shrouds, electric ballasts, timers, and ducting. [30] Mr.

Al Peruzzo is an investigator with BC Hydro and he gave evidence in this hearing as to the use of hydro-electric power atthe McGregor residence at times relevant to when the marihuana grow operation was occurring at that house. [31] Sergeant Korbely of the RCMP testified at this hearing as an expert in relation to the growing and sale of marihuana in Burnaby,British Columbia, in April of 2010. Sergeant Korbely testified that in his opinion each of the 753 marihuana plants could yield "up to"three ounces of usable marihuana for a total of 141 pounds.

The officer testified that the operation involved in this case could beclassified as being in the "mid-range" of such projects. [32] Sergeant Korbely testified that in April of 2010 the marihuana generated from this operation could be sold at the street price of$1,800 per pound for a total value of approximately $253,000.

This figure was adjusted somewhat by the officer in cross-examinationwhen he acknowledged that the three-ounce yield per plant was an optimal figure and that the street-level purchase price per pound couldbe as low as $1,500. [33] Sergeant Korbely disagreed with defence counsel's suggestion arising from the

article that is Exhibit 8 that the grow operationin this case would produce only 16 pounds of usable marihuana, that is, one pound for each high-pressure sodium light used in theoperation. [34] It is not possible to estimate the value of the marihuana crop involved in this case with any degree of precision, but I generallyaccept Sergeant Korbely's evidence as to value and I find, on the balance of probabilities, that that value is in the range of $200,000 ifthe marihuana produced was sold by the pound at street level. [35] Mrs. Huang Yen Ling Chen testified at this hearing on behalf of the accused/respondent.

Mrs. Chen is the mother of Mr.Chen. Mrs. Chen testified that her husband, Mr. Chen's father, practiced as a medical doctor in Taiwan and died in 1996. Mrs. Chentestified that she used some of the funds from her husband's estate to purchase the McGregor property on November 3rd, 1999. At thattime, Mrs. Chen and her son were registered as joint owners of the property. [36] On May 18th of 2005, Mrs. Chen transferred the property to her son alone so that he then became the sole registered owner ofthe property. Mrs.

Chen testified that all of the funds used to purchase the property were hers and that the property was always ownedby her alone despite the fact that her son was at first registered as a joint owner and later as the sole owner of the property. I will reviewMrs. Chen's evidence in more detail below. [37] The respondent, Mr. Chen, did not give evidence at this hearing. [38] The law that applies to forfeiture matters such as the one before this court has been very active in the last few years. Much ofthat law was clarified by the decision of the Supreme Court of Canada on May 29th, 2009, in the case of R. v.

Craig, 2009 SCC 23, [2009] 1 S.C.R. 762. The Craig case established that forfeiture proceedings for offence-related property are to be "a discreetinquiry," and that s. 16 and 19.1 of the Controlled Drugs and Substances Act are a "complete code" for such proceedings. [39] The result of the Craig decision is that once real property is found to be offence-related property, the court must apply adisproportionality test to determine if it is appropriate to order forfeiture of all or part of the property. The disproportionality inquiry isgoverned completely by the factors listed in s. 19.2(3) of the CDSA.

Those factors are the nature and gravity of the offence, thecircumstances surrounding the commission of the offence, and the criminal record, if any, of the offender. The Craig decision made itclear that the circumstances of the offender are not to be considered in the disproportionality analysis. [40] The history of the McGregor property is well documented by the material filed in this hearing. As noted above, the propertywas purchased jointly by Mrs. Chen and her son, the respondent herein, on November 3rd, 1999. The purchase price was $465,000. The

purchase was a cash transaction with no mortgage involved. [ 41 ] On May 18th of 2005, Mrs. Chen transferred the property from joint ownership by herself and her son to having her son registered as the sole owner of the property. The transfer document for that transaction is at Tab 3 of Exhibit 7, the defendant's book of documents. That document states the value of the property to be $668,000. [ 42 ] Consideration for the transfer of Mrs.

Chen's interest in the property to her son is stated to be "one dollar and natural love and affection." The state of title certificate also found at Tab 3 of Exhibit 7 states that as of May 26, 2005, Chung-Yu Chen was the sole registered owner in fee simple of the property. At that date, there was no mortgage on the property and there were no other charges, liens, or interest registered against the property. [ 43 ] On May 12th, 2008, Mr. Chen mortgaged the property with the Bank of Montreal in the amount of $250,000.

It appears from banking records filed in this proceeding that the mortgage payment of $1,103.90 per month was paid by Mr. Chen as required. The execution of the search warrant that led to the discovery of the marihuana grow operation occurred on April 8th of 2010. Constable Liveley testified that forfeiture proceedings were commenced shortly after that date, but were discontinued when it was learned by the police and the Crown that Mr. Chen had sold the property on April 28th, 2010. That sale is evidenced by the documents found at Tab 5 of Exhibit 7.

The purchaser of the property was one Justin Lee. [ 44 ] The sale was unusual in many respects. Although the assessed value of the property was $929,000, the sale price for the property was only $680,000. Also unusual with respect to the transaction was that Mr. Chen took back a mortgage for the property in excess of $520,000. Mr. Lee assumed the existing mortgage on the property with the approximate value of $156,000. However, after the sale, Mr. Chen made the required monthly payments for that mortgage. [ 45 ] The final transaction with respect to the property that involved with Mr. Chen and Mr.

Lee occurred on August 5th of 2010 with Mr. Lee selling the property back to Mr. Chen for the sum of $1,010,000. In connection with that transaction, Mr. Chen mortgaged the property with four personal lenders for the amount of $600,000. That mortgage was paid out by Mr. Chen on October 1st, 2010, and was replaced by a mortgage for $560,000 with the Toronto Dominion Bank. That mortgage remains to this date as a charge against the property. [ 46 ] The assessment roll report that is Exhibit 9 herein shows the current assessed value of the property to be $1,266,000.

For the purposes of this hearing, I accept that current evaluation of the McGregor property. [ 47 ] I will now return to address the evidence of Mrs. Chen given on this hearing. Mrs. Chen testified that she and her husband and two of her three children came to Canada from Taiwan in 1994 as part of the Immigration Investment Program. She testified that her family invested $250,000 in Canadian funds of which $90,000 was received back. [ 48 ] Mrs. Chen testified that her husband died in 1996 and that she used funds from the estate to purchase the McGregor property on November 3rd, 1999, for $465,000.

She testified that the property had herself and her son registered as joint owners, but that her son did not contribute any monies towards the purchase of the property. In her evidence, Mrs. Chen referred to certain entries in Exhibit 12, her bank book for her Taiwanese bank account, to support her evidence as to the source of the funds used to purchase the McGregor property. [ 49 ] As has been noted above, the property was transferred on May 18th, 2005, from being jointly owned by Mrs. Chen and her son to having her son, the defendant, Mr. Chen, registered as the sole owner of the property.

On the important issue of why this was done, Mrs. Chen testified that at the time of the transfer, she was planning to return to Taiwan for an extended period of time to deal with some medical issues concerning herself. [ 50 ] Mrs. Chen testified that she transferred the registration of ownership into her son's name alone to allow her son to represent her if he had to deal with any documents related to the property while she was away from Canada. In short, Mrs. Chen's evidence was that the transfer was for the purpose of convenience and not for the purpose of gifting the McGregor property to her son. Mrs.

Chen testified that the McGregor property was always solely owned by her and that that continued to be the case after the transaction of May 18th, 2005, and continues to be the case today. [ 51 ] Mrs. Chen testified that she was not aware of any of the transactions made by her son in relation to the property that have been referred to above in this ruling. Those transactions involved certain mortgages and transfers of the property. Mrs. Chen testified that she certainly was not aware that the residence was being used to house a marihuana grow operation in or around April of 2010. Mrs.

Chen testified that she only became aware of all of the matters related to the property when she recently returned to Canada in January of this year, 2014, after an absence of approximately seven years. [ 52 ] In cross-examination, Mrs. Chen acknowledged that there was nothing in writing to document what her intent was in signing the transfer document of May 17th, 2005. Mrs. Chen reiterated in her evidence in cross-examination that she did not know of the many financial transactions conducted by her son in relation to the property.

She also maintained her evidence that the May 2005 transaction was to permit her son to act as her agent to manage her affairs in relation to the property and was not intended in any way to be a gift from her to her son. [ 53 ] Mrs. Chen was asked in cross-examination about the statement of her son in the letter of apology that was Exhibit 3 at Mr. Chen's sentence hearing of March 8th, 2013. That statement is as follows [as read in]: I thought about the house every day and how I was stupid to not cherish the only thing my father have left me, not to say how much I hurt my mother. [ 54 ] It was suggested to Mrs.

Chen by Crown counsel that Mr. Chen's statement indicated that the residence was an inheritance for

him from his father and was not owned by her. Mrs. Chen answered this suggestion by stating that in the letter her son may have been referring to the memory of his father and not to the house itself. [ 55 ] In my opinion, the issue of forfeiture in this case cannot be properly decided without the court ruling on the effect of Mrs. Chen's evidence. On that issue, counsel for the respondent submits that Mrs. Chen's evidence as to the ownership of the McGregor property should be accepted and that the court should find that today Mrs.

Chen is the beneficial owner of the property and that she created a constructive trust on May 18th of 2005 when she arranged for her son to be registered as the sole owner of the property. [ 56 ] Counsel for the respondent submits that Mrs. Chen's evidence on the ownership issue is logical and compelling and is founded upon her evidence that all of the funds used for the initial purchase of the McGregor property were hers. In support of this submission on the ownership issue, counsel for the respondent refers to the cases of Director of Civil Forfeiture v. Vo , 2012 BCSC 1476 , and Pecore v.

Pecore , 2007 SCC 17 . [ 57 ] Counsel for the respondent submits that this court should find as a determination of fact that Mrs. Chen is the legal owner of the property and the court should therefore order the property to be returned to her and dismiss the forfeiture application. [ 58 ] As an alternative, counsel for the respondent submits that the same result can be achieved if the court were to find that Mrs.

Chen was the true owner of the property, and therefore the impact of any order of forfeiture for the property would be grossly unfair to her and disproportionate to the defence and should therefore not be made. [ 59 ] Counsel for the Crown disagrees with the respondent's submission as to how this court should deal with the evidence of Mrs. Chen at this hearing. The primary submission on this issue by the Crown is that the defence is actually seeking an order for relief for Mrs. Chen and that such an order is not appropriate or permissible under the forfeiture scheme of the CDSA .

The Crown submits that any ownership claim by Mrs. Chen would have to be pursued in the Supreme Court of British Columbia pursuant to s. 20 of the CDSA after the making of any forfeiture order by this court. [ 60 ] The Crown also submits that Mrs. Chen's evidence as to her ownership of the property cannot be accepted because there is no documentation to support her claim and because Mrs. Chen did not act as one would expect of an owner of property from the time of the transfer in May of 2005 until January of this year. Furthermore, the Crown submits that the conduct of Mr.

Chen in relation to the property was not at all what one would expect from someone who was the trustee of property for another. The Crown submits that Mr. Chen's statement about the McGregor home in his letter of apology tendered as his sentence hearing is not consistent with him being the trustee of property for his mother. [ 61 ] Mrs. Chen's evidence that she provided all of the funds for the purchase of the McGregor property in 1999 is very compelling and convincing. That evidence is supported by other hearing evidence, particularly the evidence showing the purchase funds to come from Mrs.

Chen's Taiwanese bank account. There is no hearing evidence to suggest that Mr. Chen contributed any monies towards the initial purchase of the McGregor residence. I accept Mrs. Chen's evidence that she personally provided all of the funds for the purchase of the McGregor residence in November of 1999. [ 62 ] Mrs. Chen's evidence as to her intent when she transferred the property in May of 2005 to result in her son being the sole registered owner of the property is more problematic. Mrs.

Chen acknowledged in her evidence that there was no documentation at all to indicate that she intended at the time of the transfer transaction to maintain sole beneficial interest in the property for herself and to create a resulting trust where her son would be the registered owner of the property for the sole purpose of managing the property for her. [ 63 ] The transfer transaction of May 2005 occurred at a time when Mrs. Chen was facing significant events in her life. She was returning to Taiwan for medical treatment that was uncertain as to its duration.

If or when she would return to Canada was also uncertain. [ 64 ] Mrs. Chen testified that the McGregor property was her sole retirement asset, yet in the months and years following May of 2005, Mrs. Chen apparently made no inquiries of her son as to basic things related to the home such as taxes, local property values, the general condition of the home, whether the home was rented, et cetera. On the issue of renting the home, Mrs. Chen testified that she suggested to her son that part of the home be rented, but she gave no evidence of ever following up on that suggestion. [ 65 ] Mrs.

Chen did not express the shock or concern one would expect when she learned that her son and his girlfriend were not even living in the McGregor residence, but rather in an apartment in Richmond from July 2009 to July 2010. When asked by Crown counsel about this situation, Mrs. Chen testified that she had heard about it and understood it was because both her son and his girlfriend worked in Richmond. Mrs. Chen also testified that she did not know who, if anyone, was living in the McGregor residence during that time period. Mrs.

Chen's attitude towards what was occurring at a house that was her primary retirement asset, in my opinion, was simply not consistent with her being the sole owner of that property. [ 66 ] Mrs. Chen gave no evidence as to discussing her purported intent regarding the May 2005 transfer with her son and it does not appear from the actions of her son after that date that he understood he was the trustee for a property owned by his mother. Those actions included the mortgaging of the home, the conduct of the marihuana grow operation, and the transfer and sale of the home to Mr.

Justin Lee on April 28th of 2010. [ 67 ] In addition, Mr. Chen's statement in his letter to the court for his sentencing hearing in March of 2013 is not consistent with him being the trustee of the home for his mother. In referring to the home in the letter as "the only thing my father have left me," it is my opinion that Mr. Chen regards himself as the owner of the home as an inheritance from his father. [ 68 ] I cannot say that Mrs. Chen is untruthful in her evidence as to her intent in transferring the McGregor home to her son in May of 2005. That transaction occurred several years before Mrs.

Chen testified about it in this hearing. It is my opinion, in view of the evidence at this hearing, that since the date of the transfer transaction, Mrs. Chen at least has faultily reconstructed in her mind what her intent was at that time.

[ 69 ] In view of the absence of any evidence of documentation or discussions with her son at the time of the transfer and in view of the conduct of Mrs. Chen and her son after the transfer that has been set out above, I find that Mrs. Chen is at least mistaken in her evidence as to her intent at the time of the transfer. At the time of the transfer, Mrs.

Chen's thoughts may have been influenced by her personal circumstances concerning her health, making the timing appropriate to effect her son's inheritance from his father. [ 70 ] In any event, on the basis of the reasoning set out above, I find that the hearing evidence displaces any presumption of a beneficial trust being created by Mrs. Chen by the transfer of the McGregor property to her son on May 18th, 2005. I find, at least on the balance of probabilities, that the transfer of the property by Mrs. Chen to her son on that date was a gift that amounted to an inheritance by Mr.

Chen from his father's estate. [ 71 ] I find, at least on the balance of probabilities, that after May 18th, 2005, except for the period of time from April 28th, 2010, to August 5th, 2010, the respondent, Chung Yu Chen, was the sole lawful owner of the McGregor property. I find that Mrs.

Chen does not have standing to seek relief from forfeiture of the McGregor property pursuant to s. 19(3) of the CDSA . [ 72 ] I will now address the central issue in this hearing which is whether all or part of the McGregor property should be forfeited to the Crown because of the illegal marihuana grow operation that was found to be occurring in the residence on April 8th of 2010. [ 73 ] The first consideration on the forfeiture issue is the determination of whether or not the property in question is "offence-related property" as defined by s. 2 of the CDSA .

The use of the residence at 7688 McGregor Avenue in Burnaby, British Columbia, to house a marihuana grow operation on and before April 8th of 2010 clearly results in that property being "offence-related property" and subject to forfeiture pursuant to s. 16 of the CDSA . This issue is not contested by the respondent in this hearing. [ 74 ] The next step in the forfeiture proceeding process is to consider whether forfeiture of all or part of the property would be disproportionate to the gravity and circumstances of the offence.

In deciding this issue, the court must apply the three factors set out in s. 19.1(3) of the CDSA which are: 1. the nature and gravity of the offence; 2. the circumstances surrounding the commission of the offence; and 3. the criminal record, if any, of the offender. [ 75 ] The court has been referred to several case authorities that give useful guidance to the court as to what things to consider in relation to the factors enumerated above. The case authorities were contained in a booklet provided to the court by Crown counsel.

I have attached as Appendix "A" to this judgment the index of the 17 case authorities contained in the booklet. [ 76 ] Prior to the offence involved in this case, Mr. Chen had no criminal record. It is common ground with counsel that that fact operates in favour of Mr.

Chen and against forfeiture or at least against full forfeiture of the property. [ 77 ] As to the nature and gravity of the offence, Crown counsel submits that possessing marihuana from a grow operation for the purpose of trafficking is a serious offence as evidenced by recent amendments enacted by the Parliament of Canada requiring mandatory minimum sentences for such offences. Crown counsel submits that Mr.

Chen's offence was commercial in nature which weighs in favour of forfeiture. [ 78 ] Crown counsel submits that the illegal operation involved 753 plants which, on the scale of such operations, is in the medium range. The Crown submits that the operation was moderately sophisticated. The Crown submits that the marihuana grow operation in this case was capable of producing four crops per year with a street value at the pound level of approximately $250,000 per crop.

Crown counsel submits that the nature and gravity of the offence mitigates in favour of forfeiture in this case. [ 79 ] As to the circumstances of the offence, the Crown submits that the grow operation took place on a residential street in Burnaby where the safety of neighbours could be at risk from violence associated to so-called "grow rips" where criminals attempt to steal the grown marihuana from the place where it is being grown.

The Crown submits that there may have been health concerns associated with the operation in that carbon dioxide was generated and used to maximize the yield of the marihuana. [ 80 ] Mr. Chen's role in the offence was to facilitate the production of marihuana by providing the premises where that could be done. The result of the grow operation was that an attractive and valuable residential home was altered and converted so that marihuana was grown in the basement and the main and upper floors were uninhabited. Although others were clearly involved with Mr.

Chen in the growing operation, there is no suggestion of organized crime being involved in this case. The Crown submits that the circumstances surrounding the commission of the offence mitigate in favour of forfeiture in this case. [ 81 ] As to the nature and gravity of the offence, counsel for the defence submits that marihuana is not as serious or as dangerous a drug as, for example, cocaine or heroin. The defence submits that the grow operation in this case was not particularly sophisticated and was in the moderate range for size.

The defence submits that this case involves a one-stage grow-op with 750 small plants and, in all the circumstances, was not an alarming or significant grow operation. [ 82 ] The defence disputes the Crown evidence as to the value of the grown marihuana and submits that it was much less than estimated by Sergeant Korbely. The defence submits that the alteration to the McGregor home was only to the basement and that the upper two floors were suitable to be lived in.

The defence submits that the operation did not involve fortifications, weapons, any risk of fire, or any theft of hydro power. [ 83 ] Counsel for the defence submits that the circumstances of the offence in this case are not as serious as those in Craig where no forfeiture order was ultimately made or in the relatively recent British Columbia Court of Appeal case of R. v. Sundstrom , 2013 BCCA 244 , where a forfeiture order for 50 percent of the defendant's interest in the property was made. Counsel for the defence submits that no forfeiture order should be made in this case.

[ 84 ] In the alternative, it is submitted that if the court decides an order of forfeiture is appropriate, such an order should be only for a portion of the property and not for all of it. Furthermore, the defence submits that any order for partial forfeiture ought to be for a modest portion of the property in view of all of the circumstances involved in this case, including the substantial equity held by the defendant in the property. [ 85 ] In my opinion, the role of Mr. Chen in the commission of the subject offence is relevant to the issue of forfeiture. In the course of sentencing proceedings for Mr.

Chen on February 1st of 2013, counsel for the defence submitted that Mr. Chen's involvement in the subject offence was as a result of strong influences exerted on him by "criminal elements" and that Mr. Chen was a follower, not a leader, in relation to the offence. [ 86 ] In the course of passing sentence on Mr. Chen on March 8th, 2013, I essentially agreed with that submission of counsel for the defence and reasons were given for reaching that conclusion. It is clear that other people were involved in the illegal activity at Mr. Chen's residence, but only Mr. Chen has been convicted and sentenced and only Mr.

Chen has been subjected to forfeiture proceedings. [ 87 ] The value of the marihuana grown in this case is relevant to the forfeiture issue. The Crown submits that value to be in the range of $253,000. The defence submits the value to be in the range of only $24,000 (i.e., 16 pounds at $1,500 per pound). I do not accept the defence submission on the value issue.

For reasons stated earlier in this judgment, by making allowance for the concessions of Sergeant Korbely in his cross-examination as to yield of usable marihuana per plant and as to the street value of the marihuana per pound, I find the value of the usable marihuana expected to be produced in this case to be in the range of $200,000. [ 88 ] There is suspicion that a prior crop of marihuana was harvested from the McGregor residence, however, I cannot find on the balance of probabilities that that is so. I agree with the defence submission that Mr.

Chen's banking records are not consistent with the receipt of significant amounts of illegal funds from the sale of marihuana in the months prior to April of 2010. [ 89 ] As to Mr. Chen's intentions for possible future crops of marihuana, it may well be that he had those intentions. The growing operation certainly had the potential for the growing of more crops of marihuana after the harvest of the one occurring in April of 2010.

However, it is simply speculation as to what, if anything, might have occurred with respect to the grow operation after April 8th of 2010 had the police not acted to stop it when they did. [ 90 ] I would describe the marihuana grow operation involved in the subject case as discreet. The police investigation of the McGregor residence took several months before the police had sufficient evidence for grounds to obtain the search warrant for the home.

In my opinion, the discreet nature of the grow operation and the general construction of the operation were such that there was no likelihood of danger to nearby residents as a result of events such as a fire or a criminal invasion of the house that contained the operation. [ 91 ] When I consider all that was involved in the marihuana grow operation at the McGregor house, I would agree with the general characterization advanced by counsel for the defence which was that this case involves a one-stage grow operation that could not be described as alarming. [ 92 ] This court has the benefit of several case authorities that provide guidance as to whether a forfeiture order be made in the case and, if so, whether the order should be for full or partial forfeiture.

I have, of course, considered all of the cited cases, many of which involved orders of full forfeiture. [ 93 ] The case I find most helpful on the forfeiture issue in this case is that of R. v. Sundstrom which was decided by the British Columbia Court of Appeal on May 22nd of last year. Paragraph 6 of that judgment sets out the aggravating factors found by the trial judge respecting the grow operation conducted by Mr. Sundstrom. Those factors included such things as the duration of the operation, the elaborate nature of it, and the exclusive role of the defendant in the operation.

In the Sundstrom case, the court ordered forfeiture of 50 percent of Mr. Sundstrom's interest in the property where the grow operation occurred. It appears that that order resulted in financial loss to Mr. Sundstrom of approximately $300,000. [ 94 ] It is an important fact in the subject case that the property in question has a very significant current value approaching $1.3 million. Mr.

Chen's equity in the property is in the range of $600,000 to $700,000. [ 95 ] Although none of the aggravating circumstances in the Sundstrom case that have been noted above are present in the subject case, there are other aggravating factors in the subject case such as the size and value of the grow operation and, most notably, the fact that it was a commercial operation conducted in a home in a residential neighbourhood. At the time of the police discovery of the operation, the home was being used solely to facilitate the marihuana grow operation. [ 96 ] In view of the absence of Mr.

Chen having a criminal record and in view of all that has been said above as to the nature and gravity of the offence involved in this case and the circumstances surrounding its commission, it is my conclusion that an order of full forfeiture of the property would be disproportionate to those considerations. Upon a consideration of all that is before the court in this hearing and by using the Sundstrom case, in particular, as a guide, my opinion and ruling in this matter is that an order of forfeiture of 50 percent of Mr.

Chen's interest or equity in the McGregor property is appropriate. [ 97 ] However, making an order of forfeiture in those terms would seem to be at variance with the decision of the British Columbia Court of Appeal in R. v. Nguyen , 2011 BCCA 471 . In the Nguyen case, the court ruled that any order of forfeiture should be for "property" and not for an "interest" in property.

It does not appear that the Nguyen case was considered by the court in the Sundstrom case. [ 98 ] Since the Nguyen case specifically addressed the issue of the form of the forfeiture order, it is my opinion that the form of the forfeiture order to be made in the subject case ought to be in accord with the Nguyen decision. At the same time, the order ought to result in Mr.

Chen forfeiting to the Crown 50 percent of his equity in the property for the reasons that have been set out above. [ 99 ] If I understand correctly the mechanics of the forfeiture order, an order of forfeiture of 25 percent of the property involved in

this case would result in forfeiture of property valued at approximately $317,000 (i.e., 25 percent of $1,266,000). That amount closely approximates 50 percent of Mr. Chen's equity in the property, that is, 50 percent of his equity of approximately $650,000 which amounts to $325,000. In my opinion, an order of forfeiture in this case for 25 percent of the McGregor property is in accord with the form of order required by the Nguyen decision and is also in accord with the type of practical result that occurred in the Sundstrom case.

In percentage terms, a 25 percent partial forfeiture is less than most of the cases referred to the court, but that is primarily because of the high value of the McGregor property in relation to the property values in most of the other cases. [ 100 ] In the Nguyen case, the court approved the form of order set out in Appendix A of the Crown's factum filed on that appeal. I have secured a copy of that document and, in my opinion, it includes the ordering of matters that are beyond the jurisdiction of this court.

In this circumstance, I have decided in this case to only make an order of forfeiture with respect to the offence-related property and not to address any other ancillary matters in the order. [ 101 ] Therefore, upon a consideration of all that is before the court in this matter and for all of the reasons set out above, pursuant to s. 16(1) and s. 19.1(3) of the CDSA , I order forfeiture of 25 percent of the property at 7688 McGregor Avenue in Burnaby, British Columbia, to Her Majesty in Right of Canada. That then concludes this proceeding. [ 102 ] MR.

SOLOMON: Your Honour, can we stand down just for two minutes for my colleague and myself to have a discussion and address you perhaps on an issue? [ 103 ] THE COURT: Very well. Court will stand down for about five minutes for that purpose, then. Court will adjourn. [PROCEEDINGS ADJOURNED] [PROCEEDINGS RECONVENED] [SUBMISSIONS RE FORFEITURE ORDER] [PROCEEDINGS ADJOURNED] [PROCEEDINGS RECONVENED] [ 104 ] THE COURT: I return to the Chen matter and I am prepared to deal with the matter raised by counsel a few moments ago. I will make a formal ruling on this issue. Regina v.

Chung Yu Chen, ruling on forfeiture application. [ 105 ] Earlier this afternoon, this court delivered a ruling regarding the Crown application for forfeiture in this case. The essence of the ruling was that the forfeiture order ought to be for 50 percent of Mr. Chen's equity in the property in question.

In the course of that ruling, I said this: If I understand correctly the mechanics of the forfeiture order, an order of forfeiture of 25 percent of the property involved in this case would result in forfeiture of property valued at approximately $317,000 (i.e., 25 percent of $1,266,000). [ 106 ] I then went on to order forfeiture of 25 percent of the property involved in this case.

After the pronouncement of the order, both counsel addressed the court and made a joint submission to the effect that my understanding of the mechanics of the forfeiture was not correct and required amendment to achieve the intended result which was that there ought to be forfeiture of 50 percent of Mr. Chen's equity in the property in this case.

Both counsel advanced that position as a joint submission. [ 107 ] I accept that submission and I hereby amend the order earlier made this afternoon to read as follows: I hereby order forfeiture of 50 percent of the property at 7688 McGregor Avenue in Burnaby, British Columbia, to Her Majesty in Right of Canada. [ 108 ] That is the amended and formal order that is made in this forfeiture matter. [RULING ON FORFEITURE APPLICATION CONCLUDED] APPENDIX "A" INDEX Tab No. Supreme Court of Canada Cases 1. R. v. Craig , 2009 SCC 23

2. R. v. Ouellette, 2009 SCC 24 3. R. v. Nguyen and Nguyen, 2009 SCC 25 4. R. v. Manning, 2013 SCC 1 Appellate Authorities Post-Craig 5. R. v. Baldasaro, 2009 ONCA 676 6. R. v. Van Bemmel, 2010 ONCA 276 7. R. v. Ford, 2010 BCCA 105 8. R. v. Bui, 2010 BCCA 279 9. R. v. Wu, 2010 BCSC 366 10. R. v. Trieu, 2011 BCCA 303 11. R. v. Vu, 2013 BCCA 210 12. R. v. Sundstrom, 2013 BCCA 244 Cases on the Nature of the Proceedings 13. Hells Angels Motorcycle Club v. HMTQ, (ON S.C.) 14. R. v. Van Kessel, 2010 BCSC 257 15. R. v. Van Kessel, 2013 BCCA 221 16. R. v. Black, 2010 NBCA 65 17. R. v. Nguyen, 2011 BCCA 471