R v Nguyen, 2023 ABKB 607

Court of King’s Bench of Alberta Citation: R v Nguyen 2023 ABKB 607 Date: 20231027 Docket: 220937833Q1 Registry: Calgary Between: His Majesty the King Respondent - and - Van Thi Nguyen, Van Duc Hoang, Donald Hoang, Grace Tang Applicants Docket: 220876544Q1 Registry: Calgary Between: His Majesty the King Crown - and - Cynthia Thi Nguyen, Yuong Van Nguyen, Lein Hung Ha Accused _______________________________________________________

Ruling #2 on Access to Seized Funds (Disbursement of Funds and Terms of Access) Honourable Justice N.E. Devlin _______________________________________________________ [ 1 ] The seven Applicants are charged with operating a large-scale and long-running professional money-laundering organization within their extended family.

The investigation leading to their arrest culminated with the seizure and detention of over $16 million in cash, deposit accounts, and real property in Alberta, British Columbia, and Ontario. [ 2 ] In R v Nguyen , 2023 ABKB 519 , I found that the Applicants were entitled to access the cash and cash-equivalent portions of the restrained assets to fund their defence.

In this next step, the Court must set the reasonable conditions for access to those monies. [ 3 ] The hearing at this stage proceeded with the Crown making broad-stroke submissions on the terms which would make funding reasonable, followed by an in camera hearing at which the defence outlined their proposed approach. At this juncture little or no privileged strategic information was exchanged or relied upon, as counsel have had minimal opportunity to delve into the disclosure, save for in preparation for the previous application. [ 4 ] The Court’s present task is to craft an order (

i) setting rates for the legal work to be done, (ii) outlining such other terms as are necessary to make the expenditure of restrained assets to fund the Applicants’ defence reasonable, and (iii) establishing a structure for rendering, review, and payment of accounts. Statutory framework [ 5 ] The Applicants’ entitlement for legal funding is defined by

section 462.34(4) (c)(ii) of the Criminal Code , which provides for the release of restrained funds “for the purpose of meeting the reasonable business and legal expenses of a person…”. Reasonableness, in turn, is evaluated through one or more hearings, as provided by

section 462.34(5): Hearing

(5) For the purpose of determining the reasonableness of legal expenses referred to in subparagraph (4)(c)(ii), a judge shall hold an in camera hearing, without the presence of the Attorney General, and shall take into account the legal aid tariff of the province . [emphasis added] [ 6 ] The ultimate evaluation of reasonableness is conducted retrospectively, as accounts are rendered. This process is governed by s. 462.34(5.2): Taxing legal fees

(5.2) The judge who made an order under paragraph (4)(

c) may, and on the application of the Attorney General shall , tax the legal fees forming part of the legal expenses referred to in subparagraph (4)(c)(ii) and, in so doing, shall take into account (

a) the value of property in respect of which an order of forfeiture may be made; (

b) the complexity of the proceedings giving rise to those legal expenses; (

c) the importance of the issues involved in those proceedings; (

d) the duration of any hearings held in respect of those proceedings; (

e) whether any stage of those proceedings was improper or vexatious; (

f) any representations made by the Attorney General; and (

g) any other relevant matter. [emphasis added] [ 7 ] Despite the factors enumerated in ss. 463.34(5.2) relating expressly to the taxation of accounts, these same factors determine the quantum and mode of initial releases of funding: R v Su , Ont SCJ (unreported) cited in R v Murtaza , 2011 ONSC 7577 at para 42 [ Murtaza ]. Governing principles [ 8 ] The early jurisprudence around access to funds for criminal legal representation grappled with the question as to whether such orders should be made at legal aid rates, or above. Those cases rejected the paradigm that saw this funding model as akin to a retainer from public funds: R v Figueroa et al ,

(2003) CanLII 42300 (ON CA) at para 23 [ Figueora ]; R v Love , [1990] AJ No 1290

(QB) at para 30. Nevertheless, the mandatory incorporation of legal aid rates into the reasonableness analysis, coupled with the right ofinput from the Attorney-General and a judicial oversight function on billings, signal that funds released from restraint are not to betreated as simply the accused’s own money to be spent however he or she wishes.

As Hill J. held in R v Murtaza at para 10: … though restrained from use, control and enjoyment of the seized funds or realty, the relevant item remains the property of that thatperson until it is ordered forfeited — there remains a private character to the seized item although it has the potential to become a publicasset if forfeited. [9] Therefore, both the statutory and jurisprudential guidance defining “reasonableness” for the purposes of s. 462.34(4)(ii)(c)characterize the money being spent as private funds impressed with a contingent public interest that tempers unrestrained outlay.Similarly, the recent exemption from subsequent fines in lieu of forfeiture for assets expended on legal fees in R v Rafilovich, 2019 SCC51 [Rafilovich], creates a further need for caution.

As accused persons have been somewhat disincentivized from modesty or prudence inthe dissipation of restrained assets, the Courts must discharge a tempering function to prevent money-no-object spending on legal fees. [10] That said, counsel of choice, advancing a thorough rather than bare-bones defence, should be funded where the rates andscope of proposed work are reasonable: R v Peterman, (ON CA) at paras 26-27; Rafilovich, at para 81. [11] The Court’s essential task is to balance these factors in crafting a funding order that is realistic, reasonable, responsive to therights and needs of the accused, and reflective of the competing interests at hand: see Murtaza at para 9.

The Court may exercise itsdiscretion to control the expenditure of legal funds through the setting of appropriate hourly and/or daily rates and capping expendituresfor various stages of the trial process: R v Wilson, [2002] NSJ No 221 (NSSC) at paras 60-63.

Specific Relevant Factors in this case [12] Based on my review of the application record from the initial access hearing, together with the submissions of Crown anddefence counsel, I find that the following factors inform the assessment of reasonableness in this case: i. the charges stem from a multi-year, multi-jurisdictional investigation; ii. more than 300 judicial authorizations were issued in this case; iii. these include

Part VI authorizations to intercept private communications; iv. disclosure is voluminous; v. the prosecution is summarized in a comprehensive 400-page Report to Crown Counsel [“RTCC”] which ishyperlinked to key source materials; vi. there are seven co-accused on the indictments; vii. more than $16 million in cash and homes have been restrained, effectively constituting this family-group’sentire asset- base; and viii. the charges include money-laundering at the highest level and criminal organization counts which may attractconsecutive sentences. [13] Therefore, this case falls into the highest echelon of complexity, with a great deal at stake for the Applicants.

It bears a highdegree of similarity the facts of Murtaza, with the exception that it is larger in scale. I find that it is reasonable to retain highlyexperienced counsel with specific, related experience. The counsel proposed all meet those qualifications. [14] The aforementioned scale of the case creates a situation where, perhaps somewhat uniquely within the reported caselaw,funding will have to be determined and approved in stages. Counsel have declined, not unreasonably, to commence a review of the casewithout an order in place, and thus are not yet in a position to provide a case plan or roadmap to trial.

Scope of the legal work at Stage 1 [15] The present task at hand for counsel is to read and digest the 400-page RTCC and delve selectively into the supportingdisclosure, sufficiently to provide their clients with a roadmap of options for a potential defence, including proposed pre-trial motions,together with reasonably detailed draft notices of application for those motions. [16] This work must commence promptly and be completed within the near term to keep the case on track.

Counsel’s availabilityand capacity to perform this work in a timely fashion, respecting the dictates of R v Jordan, 2016 SCC 27, as it applies to a case of thiscomplexity, is implicit in their offer to be retained. The Court of course appreciates that a case of this nature bears the potential toovertake a lawyer’s practice, and that is neither expected nor desirable. [17] Once counsel have completed this first stage, the Court will convene a second s. 462.34(5) hearing to review and approve thefurther steps for bringing the matter to and through the pre-trial motion hearing stage.

Fees [18] The Applicants proposed the following

schedule of fees, which Counsel emphasized already reflect a discount from their

nominal full retail rates: Years of Call Hourly Rate 10 or more $450 4 to 10 $350 Under 4 $250 Articling Students $150 [ 19 ] These fees are contrasted to the base Alberta Legal Aid rate, which was recently raised to $125/hr. As a further point of comparison, the Applicants offered the scales of costs for profession legal fees paid by the Alberta Energy Regulator which, on an inflation adjusted basis, are broadly similar to the rates they seek. They also helpfully provided a survey of decided cases that considered appropriate rates of remuneration for criminal cases of varying complexity. Source Year Years of Experience Hourly Rate Adj. for Inflation R v Alves , 2015 ONSC 4489 (Kurke

J) One-issue case, One week trial , focused on s. 8 voir dire 2015 All Counsel $150 $187.06 R v Murtaza , 2011 ONSC 7577 (Hill

J) At least moderately complex; voluminous disclosure Scheduled for 6 weeks of pre-trial motions + J&J trial (for 6 weeks) 2011 Lead Counsel [11 years] Junior Counsel $250 $125 $328.57 $164.28 R v Bedi , [2003] OJ No 5825 (ONSC) (Nordheimer

J) Large number of drugs, weapons and proceeds offences 2003 Lead Counsel [11 years] Junior Counsel $250 $125 $384.34 $192.17 R v Devries , 2012 NUCJ 1 (Johnson

J) Multiple CCC and CDSA charges 2012 20+ years $200 $259.84 R v Su , Unreported (ONSC, (Karakatsanis J) 2007 Lead Counsel Junior Counsel $325 $150 $460.34 $212.47 R v Paryniuk , 2001 CarswellOnt 4039 (ONSC) (Campbell J) - a case of “considerable difficulty” and “significant legal and factual complexity” 2001 Lead Counsel [9 years] Junior Counsel $250 $125 $401.88 $200.94 R v Davidson , 2016 ONSC 7440 (Varpio

J) Variety of drug charges stemming from two separate incidents “heightened level of complexity” – was not a simple drug case involving narrow discrete issues, but one that involved multiple CIs and required “reasonably intricate legal work” 2016 Senior Counsel Junior Counsel $400 $200 $492.24 $246.12

R v Lam, 2013 ONSC 7410 (Campbell

J) Number of serious offences arisingfrom an alleged inter- provincialdrug trafficking and moneylaundering conspiracy Preparation for preliminaryinquiry capped at $60,000 2013 Senior Counsel Junior Counsel $300 $150 $385.64 $192.82 [20] The Applicants also provided a small survey of cases in which rates had been set for counsel acting as amicus or in othercourt-appointed roles paid from state funds.

Sample of Rates for Amicus Curiae & Court-Appointed CounselR v White, 2010 SCC 59 (Binnie J) - Ineffective Assistance of CounselAppeal from Sexual AssaultConviction 2010 20 years $175 $237.2830 years $225 $305.07 R v Chemama, 2008 ONCJ 31 (Green J) - Charge of Dangerous Operation,Public Mischief and Obstruct PO 2008 LessExperienced $150 $205.49 MoreExperienced $200 $273.98 R v Greenspon, (Ratushny J) - Charge of First Degree Murder 2009 LessExperienced $125 $172.73 MoreExperienced $250 $345.47 [21] Of the sample cases provided, I find that Murtaza, Paryniuk, and Lam are the most similar in nature and complexity to thepresent prosecution.

These cases all involve allegations of high-level organized criminal activity, investigated through the use of covertsurveillance and interception techniques requiring special judicial authorizations, presenting the defence with a significant volume ofdisclosure. This case is bigger than any of those, in both depth of time and breadth of suspects and jurisdictions. It is not, however, morelegally complex. [22] I find that an hourly rate of $400 for lead counsel is appropriate in this case.

Counsel with 4-10 years will be compensated at$275/hr, lawyers with under four years at the bar $175/hr, and articling students at $100. These rates make allowance for significantrecent increases in costs cross-sectorally and seek to strike a balance between commercial reality and the modest rates paid by legal aid. Proportionality of work [23] Much was made of the volume of disclosure in this case. While relevant, the raw volumetric description of disclosure risksbecoming a red herring justifying bottomless time-consumption.

A private client in the shoes of these accused would not pay top-levelcounsel to spend thousands of hours reading every single word of the disclosure. That is both likely neither possible from a time andhuman resources standpoint nor necessary to mount a full and effective defence. [24] The RTCC is a comprehensive guide to the case the accused have to meet, as well as the primary device for designing adefence.

Counsel of the skill and experience levels retained here will be able to form a well-grounded understanding of the strength ofthe Crown’s case, its factual and legal lynchpins, and the points of vulnerability for attack, from careful consideration of the RTCC andexamination of key supporting materials within it. [25] Identification and detailed review of key judicial authorizations, coupled with appropriately scaled due diligence on thesupporting materials, will almost certainly be the main mode of practical preparation.

Deeper dives into those facets of the caseidentified as most relevant will also be appropriate as preparation progresses. [26] That is what a fully private client in the position of the Applicants would likely ask for, and what is reasonable.

Appropriatedelegation of disclosure review tasks to more junior counsel, and cooperative work where accused have tightly similar interests, are alsoexpected throughout. [27] While neither the Court nor counsel are in a position to provide precise estimates of the scale of the task at this stage,experience suggests, and counsel preliminarily confirmed, that professionals with their skills and experience, appropriately aided byjuniors and students, should be able to come to grips with the case, provide their clients with a roadmap of pre-trial applications, andhave the matter ready to progress to setting pre-trial hearings, well within the funds presently available.

I emphasized that this is not aninvitation to deplete the presently available funds, but rather a preliminary expression of reasonable expectations, subject to review as thematter progresses. [28] All counsel on this case have busy practices, which dictates that the work on this file, urgent as it is, will be spread out overtime, understandably reducing the efficiency of the process to some degree, and my comments on the reasonable scope of work take this

into account. Administration of the Fees [ 29 ] This case is somewhat unique in that it will involve the oversight of multiple stages of the proceeding, comprising potentially complex and multifarious applications, followed by a potentially lengthy trial. A one-time retainer through to the end of the proceeding is not possible. In answer to the obvious need for ongoing and active oversight, the Applicants creatively suggest that the approval of billings on this matter be overseen and administered by an individual appointed specifically for that task, ideally with related criminal law expertise.

They specifically proposed that a retired judge would be ideally suited to the task. [ 30 ] While this is an excellent idea, and one which would obviate the need for ongoing judicial involvement in the payment of counsel, the proposal runs headlong into the provision of

section 462.34(5.2), which requires the judge who granted access to restrained funds to personally conduct the assessment of counsel’s billings if the Attorney-General applies for them to do so. Therefore, an alternative ex-judicial mechanism may be possible, but could be ousted automatically by the Attorney-General if he prefers for the Court to undertake this supervisory role. As such, the Court will retain this function. Payment for the 462.34(4) application [ 31 ] Counsel additionally seek compensation for the applications which have led to this point.

I agree that it is appropriate that the Applicants’ have resort to the released funds to cover these costs: Murtaza at para 53 . I note that certain counsel appear to have taken the lion’s share of the work on that motion which, given the Applicants’ interests, was appropriate and efficient. [ 32 ] Counsel may submit their accounts relating to these motions to the Court, with copies to the Crown so it may exercise its rights under ss. 462.34(5.2). Order [ 33 ] As discussed at the hearing, $275,000 from the released asset pool will be transferred to each solicitor’s trust account.

The Applicants will prepare a draft Order, consistent with that provided in Murtaza , modified as necessary, for approval by the Crown. [ 34 ] One term on which I depart from the model offered by Hill J., is that the Attorney-General is directed to designate counsel in relation to the ongoing administration of this matter who is not involved in the prosecution. It is uncomfortable for an accused person to send his or her legal accounts, even in redacted form, to the person who is concurrently prosecuting them.

Similarly, the administration of justice benefits greatly when Crown and defence counsel can communicate and cooperate forthrightly about a their case, without any background tensions relating to one of them questioning or critiquing the other’s retainer.

Finally, Crown counsel with vested effort in a case may be loathed to make submissions regarding the defence retainer that could delay or potentially derail the prosecution, putting them in a potential conflict with the interests of the Attorney-General in respect of the management of seized property. [ 35 ] None of these observations are meant to be critical of Crown counsel in this case, who have handled this phase of the proceedings with the utmost professionalism.

Rather, they are intended to explain why a different lawyer should have future conduct of the 462.34 proceedings in this unusual situation where ongoing active oversight and administration is required during the course of the proceedings. That counsel may, of course consult with the prosecution team in regard to the status and nature of the case, but may not transmit retainer and account information back to them, nor take any instructions or direction from them regarding the Attorney- General’s position in 462.34 proceedings. [ 36 ] If the terms of the Order cannot be settled, the parties may contact me.

Work on the case should begin forthwith. Heard the 20 th of October 2023. Dated at the City of Calgary, Alberta this 27 th day of October, 2023. N.E. Devlin J.C.K.B.A. Appearances: Tyler Lord and Frank Polak

for the Public Prosecution Service of Canada Greg DelBigio K.C. for Van Thi Nguyen Elliot Holzman For Van Duc Hoang Kelsey Sitar For Donald Hoang Andrea Urquhart for Grace Tang Derek Jugnauth for Cynthia Thi Nguyen Gavin Wolch for Yuong Van Nguyen Daniel Song KC for Lien Hung Ha