R. v. Quan, 2011 ONCJ 194

Citation: R. v. Quan , 2011 ONCJ 194 ONTARIO COURT OF JUSTICE OLD CITY HALL, TORONTO REGION BETWEEN: HER MAJESTY THE QUEEN — AND — TRONG TIEN QUAN — AND — THI TUYET VU Before Justice S.R. Shamai Ruling released April 7, 2011 Ms. Althea Francis ..……..…………………………… for the Director of Public Prosecutions Mr. Barry Fox ............................................................. for the accused, Trong Tien Quan Ms. Michelle Johal .......................................................... for the accused, Thi Tuyet Vun SHAMAI J:

PART I: INTRODUCTION AND OVERVIEW [ 1 ] Thi Tuyet Vu and Trong Tien Quan are charged with six counts of criminal conduct, contrary to the Controlled Drugs and Substances Act (CDSA) and the Criminal Code , compendiously referred to as produce marijuana, possession for the purpose of trafficking, and possession of proceeds.

For reasons which will become plain, the details of the charges have considerable significance in this case. [ 2 ] They are charged that they did unlawfully produce a controlled substance, namely cannabis sativa, on July 15, 2008, and possessing that substance for the purpose of trafficking on July 24, 2008. They face further charges of possession of property, knowing that all or part of the property was obtained directly or indirectly by the commission in Canada of an indictable offence.

The latter offence is particularized in four separate counts, each one referable to a separate dwelling house, or in the case of the final count on the information, commercial real estate in the City of Toronto. Each of those counts specifies different time periods, referable to the alleged time within which the accused had possession of the individual property.

The Crown has provided particulars in relation to the produce and possession for the purpose charges, stipulating that production is alleged at 17 Wheelwright Crescent and 55 Brewster Crescent in Toronto, and possession for the purpose of trafficking also at 17 Wheelwright Crescent. (fn counts) [1] [ 3 ] No defence evidence was called, with the result that information about their personal circumstances must be gleaned from the material compiled by the accountant, by way of documents seized by police and examined by him, bank records produced in compliance with court orders, and corporate documents relating to their business and tax records.

Mr. Quan and Ms. Vu were married at common law, then separated. They have roots in Vietnam, but have been in Canada for some years. It appears that Mr. Quan’s sister, Thi Thuy Pham, along with her husband and two children and Quan and Pham’s mother Minh Nguyet Cat, now live in the Toronto area also. Ms. Pham was co-accused on some of the offences, and settled her matters with guilty pleas to counts of possession for the purpose of trafficking, and possession of proceeds of crime, namely several thousand dollars, on June 17, 2009. The accused before this Court vigorously contest the Crown’s case.

They take the position that the Crown’s case, showing complex investigation and several expert

opinions, lacks the fundamental proof of their alleged connection to the marijuana at issue. As a consequence they assert that the Crown has no proof that their assets derive from criminal conduct.

These people are either hardworking new immigrants with a garden supply business and real estate holdings funded by the partially undeclared earnings of the business and cash funneled through them by their countrymen, with perilously close ties to the illegal business of marijuana cultivation and distribution that nonetheless do not cross the line of legality, as their lawyers argue; or they are part of an international network of marijuana growers and distributers who have channeled their ill-gotten gains through a series of term deposits and investments to conceal the proceeds of what is usually a cash business, and real estate holdings in their own names and the names of Mr.

Quan’s sister. The latter is the Crown’s position. [ 4 ] The case against Quan and Vu in terms of possession for the purpose may be highlighted by the following features of the evidence: Quan and Vu run a business called T&L Garden Equipment. According to the Crown’s witness, Detective Constable Barry Smith of York Regional Police Service, they sell supplies used in grow operations, although these items are used in ordinary gardening as well. Some items, as will be detailed below are peculiarly suited to the indoor cultivation of marijuana, however.

Quan gifted his sister a sum towards the purchase of her house, where she lives with her family. That residence, 17 Wheelwright, was observed to be frequented by Mr. Quan along with two other men during the brief surveillance period, at the same time as two women who arrived empty handed and left with small bags in hand.

The significance of these bags, contends Crown is illuminated by the discovery of 77 pounds of marijuana in half pound bags, as well as marijuana clones and young plants wrapped in newspaper in a basement refrigerator upon the execution of a search warrant. [ 5 ] Other evidence which Crown would add to the series of circumstances leading to the sole conclusion that Quan and Vu were producers of marijuana and in possession of the marijuana at Wheelwright for the purpose of trafficking involve the state of renovation at 55 Brewster Crescent, a place where Ms. Vu was surveilled briefly on one occasion.

This address is a house which she purchased on April 10, 2007.

Again, according to Detective Constable Smith, and relying as well on the testimony of Toronto Hydro employee Debbie Kupcho, Crown says the condition of the latter property demonstrates the involvement of the accused in the production of marijuana on an extensive basis. [ 6 ] Crown’s case moves from evidence of D’s involvement in the production of marijuana, and the case showing constructive possession of marijuana for the purpose of trafficking, to show that their trafficking activities resulted in possession of proceeds, in the form of real estate they owned.

The extensive reports of forensic accountant Aaron Chan provide the analysis of the financial activities of Quan and Vu, intended “to determine if the subjects had sufficient funds available from known sources to pay their expenses and account for the increase in their net worth during the period under analysis”. [ 7 ] Crown relies on the financial analysis revealing significant amounts of unexplained income, together with evidence of criminality, to leave no available inference for the court but proof beyond reasonable doubt of guilt on the proceeds charges.

The results of the analysis, together with the evidence leading to no other conclusion but that the accused were trafficking marijuana, show that the increase in the accuseds’ assets can be attributed to nothing other than the proceeds of the trafficking. [ 8 ] On behalf of the accused, Mr. Fox and Ms. Johal contend that the evidence of both possession of and the purpose of trafficking in marijuana is chimerical. They argue that the evidence fails to show that either accused was in possession, according to law, of the marijuana seized at Wheelwright.

The Crown has particularized the production counts, relating the production charge in count one to marijuana produced at 55 Brewster and 17 Wheelwright Crescent. Through an analysis similar to that relating to the possession issue, the defence says there is no proof that the accused did anything by way of producing marijuana. The analysis of the financial information amassed by Mr. Chan, they say, is of no significance in the absence of proof of commission of that offence, and in any event can support conclusions other than the one sought by the Crown.

In the result, the defence says the test for a circumstantial case fails in every way.

PART II: THE PHYSICAL EVIDENCE AND THE OPINION EVIDENCE ON PRODUCTION AND POSSESSION 1. Background of Investigation and Surveillance [ 9 ] Detective Constable Tam Bui of the Toronto Police Service testified that he became aware of the accused Trong Tien Quan and Thi Tuyet Vu as a result of surveillance of an individual, one Tien Nguyen, named in an authorized interception of communications order. The investigation context of that order involved a marijuana production and distribution operation in which $220,000 was seized in Buffalo. Mr.

Nguyen was alleged to have been involved in the transfer of those funds to Toronto, in the trafficking context. He was asked to attend a meeting regarding the loss of money, according to an intercepted conversation described by Det. Cst. Bui. Surveillance of him in that context led officers to 229 Oakdale in Toronto, on July 15, 2008. Photo’s taken at the parking lot behind that address, part of a commercial-industrial unit in northwest Toronto, showed Mr. Nguyen behind the T&L Equipment premises.

A red Dodge Caravan (license BCEC 178) later learned to be registered to Trong Tien Quan, pulled up to the garage bay. The driver was later identified as Ms. Vu. After a few minutes a man later identified as Trong Tien Quan assisted in offloading bags from Nguyen’s van. Apparently the bags, which seemed to the officer to contain “tubular objects” were being discarded in the dumpster. A blue Dodge Caravan registered to Ms. Vu (AVJR 808) was seen at this address, as well as a blue Avalon sedan registered to Quan. Garbage bags, believed to contain soil in the

shape of potting containers were removed from the van to the dumpster behind the store. However, no evidence indicted the source of the soil. This is their place of business. The Oakdale property is owned by Ms. Vu, purchased on August 19, 2003. [ 10 ] Ms. Vu’s red van was viewed subsequently the same day in front o 55 Brewster, then about 20 minutes later in the driveway at Wheelwright . Quan and Nguyen are observed at 17 Wheelwright that day, having arrived there from the Oakdale address.

A few minutes after they enter the Wheelwright house, a woman arrives, parks in the driveway, and after going to the door, leaves a few minutes later with a small bag in her hand. Quan and Nguyen leave shortly after this happens. Mr. Quan is observed to return a few hours later, with Mr. Nguyen and a third man. A similar series of observations is made, with a different woman. Later the same evening, a similar event is observed at 17 Wheelwright, but neither party is identified. Observations of the vehicles are made the following day as well, suggesting a pattern of activity between the three addresses. 2.

What the Search Warrant Yielded [ 11 ] On July 24, 2008, search warrants were executed at a number of addresses including 229 Oakdale, 17 Wheelwright Crescent and 55 Brewster Crescent. The Crown relies on the seizures and observations of those places to show production of cannabis and possession of cannabis for the purpose of trafficking, and to provide evidence in support of the proceeds counts. 229 Oakdale [ 12 ] As indicated earlier, this is the address of T&L Equipment. The commercial property was owned by Thi Tuyet Vu, having been purchased by her on August 19, 2003 (Chart 5, Report of Aaron Chan).

T&L is a company registered as a garden supply store, and during the time of the alleged wrongdoing was operated by two numbered corporations. T&L Equipment Supply was operated by 1564171 Ontario Ltd, wholly owned and incorporated by Quan on February 27, 2003, filed returns for the business for the years ending December 31, 2003 to 2005. 1685458 Ontario Ltd, wholly owned and incorporated by Ms. Vu on January 11, 2006, operated the business as TL Equipment Supplies and filed corporate income tax returns for the years ending December 31, 2006 and 2007.

The company reported no revenue or expense for the 2007 year-end. [ 13 ] Upon the execution of search warrant, photos of inventory were taken. At trial, Detective Constable Barry Smith gave his opinions as to the significance of many of the items found.

It was agreed that his training and experience qualified him to testify to his opinions regarding electrical wiring and consumption of electricity in relation to indoor marijuana growing operations, marijuana cultivation culture and modus operandi of the marijuana culture, trends in the set-up and operation of these enterprises, the cannabis culture, processing and costs, growing seasons, and the “habits and modus operandi of the marijuana production culture”.

While much of the material seized would be of use for a variety of garden applications, several categories were of particular interest: water wands, charcoal air filters, HID light bulbs, inline blowers, large furnace blowers, compressed bags of soil and steel duct work, as well as chemicals and ceramic plant food pellets. A variety of light bulbs were seized. Boxes of new ballasts for the light bulbs were found. Equipment consistent with ventilating the humid environment of an indoor grow operation were seized. Customized timer panel boards were seized, with the timer set for eighteen hours.

The timer cycles and light bulbs were described by the officer as being suited to the indoor cultivation of marijuana. [ 14 ] As well, the blue van, previously observed by surveillance (AVJR 808) was observed inside the premises, at the rear by the garage bay. [ 15 ] Detective Bui testified to the 289 documents which he seized. They included receipts, cash register tape, invoices and MLS listings, showing properties for sale. 17 Wheelwright Crescent [ 16 ] Chart 6 to Mr. Chan’s report describes the purchase of 17 Wheelwright Crescent by Thu Thuy Pham on June 30, 2008 for $392, 928. Ms.

Pham received $10,000 from Trong Tien Quan, on March 27, 2008, pursuant to a letter of gift. Asset tracing by Mr. Chan shows a further $60,000 channeled to Ms. Pham by Mr. Quan prior to the purchase. [ 17 ] The evidence shows that she is his sister. Ms. Pham obtained the RBC mortgage for the property on the strength of an employment letter from Ms. Vu, asserting that she was the accounts manager for TL Supplies, in that capacity since 2007, and earning $70,000 per annum.

The analysis of TL’s records shows no support for such a position existing, nor the cash flow to support the position, much less any such salary being paid to Ms. Pham. The evidence in fact showed that she received social assistance. Ms. Pham

had used the Brewster Crescent address for banking purposes, vehicle registration and driver’s licence. Her husband, Dao Nguyen, had received mail at Quan’s residence, 9 Ardwold Gate, Richmond Hill. [ 18 ] The search of Wheelwright resulted in the seizure of 333 marijuana “clones”, located in a room in the basement, as well as 77 pounds of dried and packaged marijuana, some in garbage bags in the freezer, and others in garbage bags on the floor. The room where the marijuana was found was not locked, but the key was in the lock, and Ms. Vu was in the basement at the time the police executed the warrant.

The marijuana was packaged in half pound ziplock bags. Of the marijuana seedlings, which I understand the term “clones” to refer to, 220 of them were in six plastic trays under fluorescent lights. The balance of the plants was wrapped in wet newspaper, in a refrigerator in the basement. PC Polak of TPS testified to his participation in the search of the basement and seizure of the marijuana in its different forms.

He said that the dried marijuana from the cold storage room had a total weight of 4020 grams (4 kilo’s 20 grams); a bulk quantity of 129.77 grams from a bedroom; and from a freezer, a bulk weight of 5160 gms. A further quantity of 2240 gms was the next quantity he listed, and finally 4570 in another room in the basement. A total of 35,095.8 grams, combined wet and dried marijuana, from seedling to dried product was seized. As noted, Ms. Pham entered a guilty plea to a count of possession for the purpose of trafficking in relation to this seizure, and possession of proceeds of crime.

The officer said that the area where the marijuana was found was like a basement apartment, although the basement door was not locked, nor was the fridge or freezer where quantities of marijuana were found. Only the room with the clones was locked. Exhibit 28 comprises photos of the premises where the marijuana was seized. Documents were seized at this place as well, including a copy of a bank draft to RBC on March 28, 2007 to Maximus Realty, and a Record of Landing, showing that Van Dao Nguyen arrived in Canada accompanied by his wife Thi Thuy Pham. Indeed, Mr.

Nguyen and two young children were upstairs in the residence at the time of the search. [ 19 ] Other items were seized at different locations in the course of the search but I ruled on April 29, 2010 in favour of the accused on their application to exclude other items as the searches and seizures were in violation of their Charter rights under

section 8, and the circumstances warranted exclusion. However, the above noted items I found to be admissible. [ 20 ] In describing the physical evidence I will refer finally to observations at 55 Brewster Crescent, although no items were removed, or seized on the strength of the warrant. 55 Brewster Crescent [ 21 ] Ms. Vu purchased this property on April 10, 2007 for $472,800 cash. Photos taken at the time of the execution of search warrant were the subject of comment by the expert on marijuana grow operations, Detective Smith. The photos depicted a dumpster outside in the drive, uncovered.

A range hood, wrapped in plastic wrap was seen in the dumpster. Other construction garbage was in it as well. In the house, new ductwork was being installed through holes in the garage wall. Numerous large metal vents were poking through them. As well, a large hole had been cut through the garage wall, from the house. Inside the house, various holes had been cut in closet walls, and floors. A trace of black, consistent with mould, appeared on a wall.

Detective Barb Adams of the Toronto Police Service testified that the ductwork and the apparent work ongoing in the house, as well as an unseasonal Christmas tree, suggested to her, the sort of “staged” indicia of residence which such operators may resort to. She said she did not know when the work on the house had been done, nor could she recall just where walls with black marks, which could be mould, were located. The officer had extensive previous experience in investigations of alleged growing operations. Various documents were seized, showing Ms.

Vu’s recent travel to China, via Vancouver, and as well in relation to Cat Nguyet, Mr. Quan’s mother, who apparently walked in during the search. Detective Adams stated that no drugs were seized during the search. 3. Hydro Records and Ms. Kupcho’s Evidence [ 22 ] Hydro records were tendered for the two addresses where Crown alleges marijuana was being produced by the accused. [ 23 ] In relation to 17 Wheelwright, the house purchased by Mr. Quan’s sister Ms, Pham in June 2008, hydro records were tendered for a period from February 11, 2005, to February 17, 2010 (Ex. 33 Appendix H, I).

The billings name on the account is Thuy Pham Thi. No evidence suggesting usage in comparable dwellings was tendered. The usage ranges from a low of 1.91 kwh per day in the billing of August 2009, to a high of 55.72 kwh per day in February 2010. The readings reflect a median around 20 kwh per day; a pattern of a high-ish reading in August of 2005, 2006, 2007 and 2008 may be observed, with readings at 26.02, 28.62, 26.32, and 31.89 respectively. These are the highest daily usages in the years of records tendered, apart from the December 2009 and February 2010 readings.

I note that the allegation date in relation to Wheelwright is between April 10, 2007 and July 24, 2008. There is no evidence of any connection either accused may have with the premises, apart from Ms. Pham’s purchase on June 28, 2008, as the Crown alleges her to be the “nominee” of the accused. I heard no expert evidence in relation to these readings. [ 24 ] The evidence of hydro readings at 55 Brewster were the subject of expert opinion from Detective Constable Smith, and also, although not qualified as an expert, by the hydro employee Ms. Kupcho. The records spanned periods of time beyond the allegation date,

and evinced something less than clarity in terms of ownership and payors of hydro bills. [ 25 ] Detective Constable Richard Warr of TPS participated in the search of 55 Brewster. He was asked about hydro records in relation to a previous hydro subscriber at that address, to whom I will refer as KXT, Detective Warr opined that he appeared to have been a tenant as well as previous owner. He acknowledged that he learned later, as Detective Adams alluded to as well, that KXT owned a property on Davistow Cres, where he grew marijuana. [ 26 ] Ms.

Debbie Kupcho was called by the Crown to testify to the significance of the records. Her title is Energy Service Advisor in the Customer Management Services, Revenue Protection Department at Toronto Hydro-Electric System Limited. She testified that she performed energy audits at Toronto Hydro from 1988 until deregulation; since 2007 she responds to requests within her company to assist in investigations with a view to theft protection in the context of marijuana grow operations. She described her task in terms of protecting energy resources from “these culprits who use our energy unwisely”.

She says as well that her mandate extends to public safety as “we don’t want the transformers to be overloaded or damaged due to illicit overuse”. Ms. Kupcho has become familiar with the hydro demands of appliances and related household usages. She has been consulted about consumer complaints regarding billing. She asserted with respect to 55 Brewster Crescent that typically a residential property of its size would consume 20-40 kilowatts a day. She stated that in determining comparable properties, for the purpose of determining typical use, an aerial photo is used.

Hydro records for two previous owners, to whom I will refer by their initials, were placed before the court, covering the billing dates of December 2002 to March 2007, in order to provide comparators for the usage which Crown asserts as an indicator of illicitly high hydro use, consistent with marijuana production. [ 27 ] Owned by A.N., consumption ranged as follows: 49.8 to 97.53 kilowatt hours per day. [ 28 ] Owned by K.X.T., consumption ranged as follows: 126.93 kilowatt hours per day to 297.94 kilowatt hours per day. [ 29 ] Owned by Ms. Vu, the hydro bills were paid either by Ms.

Vu (January 11, 2008, May 10, 2009, January 9, 209, May 21, 2008) or Trong Tien Quan (March 13, 2008, July 14, 2008, September 5, 2008). Consumption ranged as follows: 3.22 kilowatt hours per day to 231.51 kilowatt hours per day. [ 30 ] Ms. Kupcho testified to her comparison of the 55 Brewster hydro consumption to that of two “comparables”, the hydro records for which were produced, anonomysed, for the period from December 2005 to August 2009. She said that “comparables” were selected by reference to an aerial photo, based on the appearance of similar size to 55 Brewster. Ms.

Kupcho noted significant differences between 55 Brewster’s hydro consumption and that of the other houses. The records for the comparables, found under Tab A, Exhibit 33, show a high daily consumption in August 2008 at 62.95 kwh per day, and a low of 19.02 kwh per day recorded in June 2007. For the second comparable, usage varied from a high in February 2006 of 97.53 kwh per day, to a low of 35.55 kwh per day in June 2007.

The variation of mean usage appears considerable between the two houses, but clearly even the house with the higher daily usage consumed significantly less electricity than the values registered at 55 Brewster. There was no indication of why, as between the comparables, there was such variance, nor was there information for example about the size of the place, whether there were more people living at one than another, whether the structure was different or what hydro needs appeared to be required. [ 31 ] Ms. Kupcho testified that she attended the house on July 24, 2008, and observed a 400 amp service.

This is twice the norm. There had been alterations to the wiring, and as a result, a notice was posted on the door requiring the residents to have an electrical safety review by Toronto Hydro. On her inspection, Ms. Kupcho noticed nothing like a pool, hot tub or any other item which normally required unusually high electrical consumption. She noted a gas furnace as well as gas meter, indicating that the house was likely heated by natural gas. As it is an economical alternative to electric heat, Ms.

Kupcho discounted the likelihood of electrical heaters boosting the hydro consumption. [ 32 ] Asked about the comparative usages of hydro at Brewster, DC Smith said it was so high it warranted further investigation. I will examine that opinion more closely, below. 4. The Testimony of Detective Constable Barry Smith [ 33 ] Detective Constable Barry Smith of York Regional Police Service was proffered as a witness as an expert on issues of marijuana grow operations.

As indicated above, it was agreed the Court could receive his opinion evidence on: - marijuana cultivation culture and modus operandi re marijuana culture

- electrical wiring and consumption related to indoor marijuana grow operations - trends in set up and operation of these types of enterprises: the indoor marijuana growing industry. [ 34 ] Given Detective Constable Smith’s attendance at numerous grow houses (467 to date), in the execution of search warrants, defence were prepared to concede his expertise. The officer had been a qualified electrical contractor prior to taking up a career in policing, so again, on that basis his qualification to offer opinions on wiring as it is used in grow operations was not contested.

However, with no apparent special knowledge of “trends” or modus operandi, that area was not agreed. Crown did not press for the further basis on which to tender Detective Constable Smith’s opinions. [ 35 ] Detective Constable Smith’s testimony was interesting with regard to the inventory seized at 229 Oakdale, at T&L Equipment. As well, he discussed the needs of marijuana plants, and their growth cycles.

He described distribution networks for marijuana grown in Ontario, and the prices for it. [ 36 ] As alluded to earlier, Detective Constable Smith testified to some of the customized and other items in the inventory photographed at T&L as being uniquely suited to marijuana cultivation.

He described ballasts, set up to transform household electricity to the high intensity discharges systems required for these plants; timers, which simulate a cycle of light and no light as in optimal outdoor growing conditions, during the different stages of plant development; watering cycles staged as well; and equipment to minimize the humidity and heat, in terms of their effects indoors. Shown pre-assembled circuit boards, the witness opined that they would never be approved by the Electrical Standards Authority, but that they did have labels on the plugs: 120, 240.

This would permit the user to determine what gets plugged in where, in order to avoid sparking and possible blow-ups. The timer boards he was shown were intended to operate lights, he said. They indicated the phase of growth which they were set for, requiring twelve or eighteen hours light. These were not manufactured, but custom assembled. He described the function of charcoal filters, to eliminate the smell of marijuana, chemicals to fertilize the plants and provide nutrients in the sterile soil or other media used for hydroponic growing.

He explained too, that given the high consumption of nutrients by plants developed in this environment, it was commonplace to see growers discard the soil after a growing cycle. The nutrient value would have been exhausted by a crop, and the soil made toxic by the pesticides and the nutrient residue. He said that although everything in the store can be used for lawful purposes, it had been converted to the specific needs of marijuana growers. He discussed the specific light bulbs, simulating different aspects of the light spectrum for instance.

He commented that suppliers of these ingredients become the hub in distribution, from growing supplies to brokering sales of the finished product, and even dealing with waste products. He said that shops such as T&L might offer disposal services for used soil, as was possibly the conclusion to be drawn from Detective Bui’s observations on July 15-16, 2008 behind 229 Oakdale. [ 37 ] He described the distribution networks he is currently aware of, with the main market in the US.

A pound of marijuana might fetch $3000 in Ontario, but $6500 in Texas, due to the severe penalties for growing it there. [ 38 ] Detective Constable Smith offered his opinions of the meaning, if any, of the hydro consumption data at 55 Brewster Crescent. It was his view that the sheer volume of consumption warranted a second look. By his analysis of the consumption data, during the longest consumption period, average daily consumption was 135.59 kwh/day during the period from October 4, 2006 to March 31, 2007. During the period from March 31, 2007 to August 14, 2008, consumption averaged 112.81 kwh per day. Mr.

Quan’s name went on the billings for March 30 - 31, 2007, which coincides with the date he took ownership of the property. Mr. KXT, the previous owner, resumed as the Hydro account holder from March 31, 2007 until July 18, 2007. He apparently had stayed on as the tenant. Mr. Quan returned to the bill as of July 18. The officer said that the readings are abnormal, extremely high, and should be investigated. He said that when he makes that assessment, he looks at two or three comparables of houses about the same size on the same street.

By that comparison, using the data provided to him by Detective Constable Bui, “normal” consumption during the period from December 12, 2005 to February 12, 2009 averaged 26.12 kwh per day. However he acknowledged that he did not have information about the comparables which informed the conclusion of truly comparable as he teaches it ought to be done: he had no information about the number of occupants at either property, nor information about the square footage of the “target” property of the comparables.

He did not know anything about the build of the houses, nor if there was a hot tub or swimming pool, or whether heating was by gas or electric. [ 39 ] Detective Constable Smith did form an opinion that 55 Brewster may have been used to grow marijuana. He based that opinion on the renovations or repairs evident in the house, and also the hydro consumption data. The holes in the walls, and in garage wall to the house, along with the appearance of mold on a wall, and the range hood in the dumpster, wrapped in plastic, were the aspects which gave him concern, in combination with the abnormally high hydro consumption.

He was not asked for his opinion of the date of the renovation, or the date when the premises might have been used as a grow house. [ 40 ] Asked about the pots which Detective Constable Bui said he observed being dumped at Oakdale, Detective Constable Smith said he saw none of a similar description in the photo’s of Brewster. Asked if the inventory at Oakdale included range hoods or plastic wrap, he said he was not aware of any. The detective expressed the opinion that the dried marijuana seized at Wheelwright had been grown

somewhere else, he named a number of factors which influenced his opinion: “there were only babies there, there was no middle stage and no growing room”. Thus the dried material had to have been grown somewhere, packaged and brought to Wheelwright. His conclusions that there was no “middle stage” at Wheelwright was based on the inspection of the house captured on video: there were no lights, ballasts, or timer boards. Nor were there any at Brewster. Nothing suggested it had been grown at Oakdale.

With neither clones nor seedlings nor mature plants at Brewster, it was impossible to say what “level” of grower might have been operating Brewster. However, Detective Constable Smith viewed the places as connected, as people were followed in transit from one location to the next and back. Finally, although nothing in the nature of a debt list or scales were found at Wheelwright, the officer said that of the 467 grow operations he had visited, none had a debt list; the absence of scales meant to him that weighing and packaging of product was done somewhere else. 5. Evidence of Aaron Chan [ 41 ] Mr.

Chan is a senior forensic accountant employed with the Forensic Accounting Management Group (FAMG) of Public Works, Government Services Canada. His expertise as such was conceded. He prepared a report dated February 16, 2010, with ten schedules. A series of supplementary reports was prepared to respond to additional information and to the pre-trial rulings, which impacted the admissible evidence. [ 42 ] I will make the barest of summaries of Mr. Chan’s testimony and the exhibits which he prepared, at this stage. His evidence supports the Crown’s case on the proceeds charges.

Crown’s allegations in counts 8, 9, 10 and 11 link Mr. Quan and Ms. Vu’s ownership of four properties to property, or financial resources which the accused knew was derived directly or indirectly from the commission of indictable offences in Canada. As a forensic accountant Mr. Chan amassed and analyzed the financial information identified by the officer in charge of the case, and by Mr. Chan himself, in order to trace assets related to the accused, to the their sources. IN large measure, the defence does not take issue with the reports produced by Mr.

Chan, except on the significant point that he did not have a complete picture of relevant information. However accurately or inaccurately Mr. Chan performed his task, it only matters if the Crown has shown the involvement of the accused in the commission of indictable offences in Canada. They contend that the Crown has failed to show the basis for the proceeds charges in terms of criminality of the accused. Thus the accuracy of the accounting is a moot point. For this reason I will briefly state the accountant’s evidence, in light of the conclusion I will draw in due course. [ 43 ] In a nutshell, Mr.

Chan’s work traces assets attributed to the accused starting in December 31, 2002. He shows the acquisition of 229 Oakdale by Ms. Vu at the price of $234,500.00, on August 19, 2003 (Sched. 2C). The house at 55 Brewster Crescent was purchased by Ms. Vu, for $472,800.00 on April 10, 2007 (Ex 39 Sched 2F). The house at 539 Dufferin Street was purchased by Mr. Quan on August 15, 2007 for $304,653.55 (Sched 2G). The allegation of possession of proceeds in the form of the house at 17 Wheelwright rests on asset tracing with regard to funds provided by the accused Quan to his sister Ms.

Pham, in the timeframe shortly before the purchase of the property. It was purchased for $392,907 on June 30, 2008 (Chart 6, Ex. 38 ). The method engaged by Mr. Chan was to determine the extent of funds which could not be explained by known sources, and propose that in the circumstances of the Crown’s contention of producing marijuana and possessing it for the purpose of trafficking, the only available inference is that the approximately $2.2 million dollars unexplained was obtained by the commission of those indictable offences by the accused.

The accused have raised a series of questions concerning the analysis proposed by the Crown, however, as indicated earlier I do not propose to examine this until I have disposed of the predicate charges. The possession of funds from unexplained sources is, in the absence of the link to the commission of indictable offences within the knowledge of the accused, not a crime in itself.

PART III: THE LAW 1. Production of Cannabis [ 44 ] Crown theory is that it has provided a circumstantial case from which only one inference can be drawn, that the accused were producing a controlled substance, namely cannabis sativa (marijuana). The definition of “produce”, for the purpose of s. 7(2)(

b) of the CDSA is contained in

Section 1: “produce” means, in respect of a substance included in any of Schedules I to IV, to obtain the substance by any method or process including (

a) manufacturing, synthesizing or using any means of altering the chemical or physical properties of the substance, or (

b) cultivating, propagating or harvesting the substance or any living thing from which the substance may be extracted or otherwise obtained. Clearly Subsection (

b) is relevant in this case.

[45]

Section 7 creates an offence of producing a substance under the Schedules to the Act. In relation to cannabis (marijuana) it is anindictable offence with a maximum term of imprisonment not exceeding seven years. [46] The offence of cultivation under the CDSA has been the subject of a series of reported cases in the British Columbia Courtof Appeal. In the 2009 decision in Q.H. Nguyen and T.H. Nguyen v. The Queen [2009] B.C.J. No.341 does the Court touch on thedefinition of cultivation. At paragraph 29 the Court notes that “Ms.

Nguyen correctly notes that the offence of production of marijuanarequires proof of active participation in the growing of the plants.” This recalls the definition articulated in 1972 by the Yukon TerritoriesCourt of Appeal in the case of R. v. Busby (1972), (YK CA), 7 C.C.C. 234 by Mr.

Justice Tysoe, with the concurrenceof Branca and McLean JJA, by adopting the Oxford English Dictionary as follows: “To bestow labour and attention upon land in order to the raising of crops, to till, to improve and render fertile by husbandry” [47] That definition has been adopted and made subject of comment by Courts of Appeal in various provinces, including ours inOntario in the 1982 decision in R. v. Gauvreau (ON CA), 65 C.C.C. (2d) 316. The British Columbia Court of Appealnoted in 1990 in the case of R. v.

Arnold (BC CA), 74 C.R. (3d) 394 that the offence is a continuing offence,commencing when the seeding takes place and continuing until the plants are harvested or the accused abandons the task of raising thecrop. “A person who undertakes the task of raising the crop to maturity does not cease to cultivate during periods of deliberate inactivitywhere the crop is left alone to grow and mature in the environment created by that person”. That definition was found helpful by JusticeHill of our Superior Court in the case of R. v. Emes, ([1999] O.J. 1311 para 24) although cultivation was not an issue in that case.

Hecites it at length: A helpful definition of “cultivation” is found in Regina v. Arnold (1990), (BC CA), 74 C.R. (3d) 394 (B.C.C.A.) at398-9: In our judgment, the prohibited conduct commences when seeding takes place and continues until the marijuana plants are harvestedor they die. Once a person normally takes on the task of raising a plant or crop of marijuana to maturity, he is “cultivating” that cropuntil such time as he abandons the task or the crop is harvested. Inevitably, there will be periods of days, weeks or even months when nothing is actively done to the plants.

The crop is beingcultivated simply by being left alone to grow and mature in the environment created by the person who undertook the cultivation of theplants. It is not to be said that a person who undertakes the task of raising a crop to maturity ceases to cultivate during such periods ofdeliberate inactivity. In coming to the foregoing conclusion, we are relying in great part on the principle that cultivating marijuana is a continuingoffence. [48] I note however that both our Court of Appeal and Quebec’s excludes “the mere drying or curing of marijuana plants” from thedefinition of cultivation. [49] The B.C.

Court of Appeal in the case of Hubble, [2002] B.C.J. No 2327 refers to the degree of control as well as knowledgerequired to prove the production count, agreeing with the position of counsel that acquiescence in the act of another is not an offence. [50] In this case the Crown’s allegation of production does not involve the hands on tasks of sowing seeds, and providing water andlight and other incidents of bringing the seeds through to a mature plants ready to be harvested, cured and marketed.

Rather, the Crownalleges that the accused “can be a party to the offence of producing a substance by aiding or abetting the offence”. (Final Submissions ofthe Crown, paragraph 15). To that end, the Supreme Court of Canada in R. v. Dunlop and Sylvester (SCC), [1979] 2S.C.R. 881 lays down the rule, that aiding and abetting in the commission of the offence requires at least encouragement; it is

an act tofacilitate the commission of the act, not passive acquiescence or mere presence, unless that presence is bolstered by circumstances. 2. Possession for the Purpose of Trafficking [51] It is not controversial that possession is defined in

Section 2 of the Criminal Code for the purposes of the CDSA, and that controlin this case requires knowledge, consent and control, as the possession alleged is with respect to the 77 pounds of marijuana seized at 17Wheelwright Crescent. It was not in the actual physical possession of the accused. As it is alleged that both were in possession however,it is thus an allegation of joint constructive possession. The subsection provides: 4 (3)(

a) a person has anything in possession when he has it in his personal possession or knowingly:

(

i) has it in the actual possession or custody of another person or (ii) has it in any place, whether or not that place belongs to or is occupied by him for the use of benefit of himself or another person;and (

b) where one of two or more persons with the knowledge and consent of the rest has anything in his custody or possession, it shallbe deemed to be in the custody and possession of each and all of them [52] Where the allegation is of constructive possession, I must find “there must be knowledge which extends beyond mere quiescentknowledge and discloses some measure of control over the item to be possessed.” (R. v. Pham, (ON CA), [2005] O.J.No. 5127 @ para 14). Our Court of Appeal continues to summarise the law in that case: “In order to constitute joint possession pursuantto section 4(3)(

b) of the Code there must be knowledge consent and a measure of control on the part of the person deemed to be inpossession”. The Court refers to the decision of the Supreme Court of Canada in R. v. Terrence, (SCC), [1983] 1S.C.R.357 in support of this point. (para. 16) [53] Justice Ritchie, in Terrence, adopts the reasoning on this issue of an earlier Ontario Court of Appeal decision: “Knowledge and consent” which is an integral element of joint possession in s.5(2) must be related to and read with the definition of“possession in the previous s. 5(1)(b).

It follows that “knowledge and consent” cannot exist without the co-existence of some measure ofcontrol over the subject matter. If there is the power to consent there is equally the power to refuse and vice versa. They each signify theexistence of some power or authority which is here called control, without which the need for their exercise could not arise or beinvoked”. (emphasis added) 3.

Possession of Proceeds of Crime [54] In this case, the Crown alleges that the possession of the real estate at four separate locations in Toronto were obtained by eitheror both of the accused, “knowing that all or part of the property was obtained or derived directly or indirectly from the commission inCanada of an offences punishable by indictment, contrary to section 354(1)(

a) of the Criminal Code”.

The properties at issue may bedescribed in relevant terms as follows: COUNTACCUSEDDATES OF ALLEGATIONADDRESS OFPROPERTY8 Quan & VuApril 10, 2007July 24, 200855 Brewster Crescent,Toronto9 Quan April 15, 2008July 24, 2008539 Dufferin Street,Toronto10 Quan June 30, 2008July 24, 200817 Wheelwright Crescent12 Quan & VuAugust 19,2003 July 24, 2008229 Oakdale Road,Toronto [55] Crown relies on the forensic accounting evidence of Aaron Chan to demonstrate the existence of large sums of funds inpossession of the two accused, from “unknown sources”, which funds made their way into the purchase of the properties alleged to beproceeds of crime.

The report of Mr. Chan shows as well that the total amounts of funds and assets in possession of the accused, to hisknowledge, far exceeded their legitimate sources of revenue. His analysis shows an excess of $2.2 million in the relevant time period.Crown asserts that the constellation of circumstances alleged by the evidence led at trial leave no reasonable inference open to the Courtbut that the properties at Oakdale, Wheelwright, Brewster and Dufferin Street were acquired by proceeds of crime. [56] I note that no specific crime is alleged in the possession of proceeds counts, as the predicate offence.

The Crown supports itsposition in large measure through reference to decisions under the forfeiture provisions relating to enterprise crime. Under Section462.38 of the Code, it is a precondition of an order for forfeiture in those proceedings that the property to be forfeited in beyond areasonable doubt, proceeds of crime; that proceedings in respect of an enterprise crime offence committed in relation to that propertywere commenced, and that the accused have absconded or died: R. v. Clymore, [1992] B.C.J No. 1705.

The Court in that case conductsa helpful review of the jurisprudence concerning the relationship of underlying offence to proceeds count.

[57] In the case of R. v. Henderson, [1997] B.C.J. No. 3168, the Court considered the application of

section 462.37, which permitsforfeiture of any proceeds of crime directly related to an “enterprise crime offence (as defined by the Code) for which a person isconvicted. The

section further permits that, “if the evidence does not establish to the satisfaction of the court that the enterprise crime offence of which the offender is convicted ordischarged under

section 730 was committed in relation to property in respect of which an order of forfeiture would otherwise be madeunder subsection (1) but the court is satisfied beyond a reasonable doubt, that the property is proceeds of crime, the court may make anorder of forfeiture under subsection (1) in relation to that property” [58] To interpret that apparently broad provision Judge Palmer in Henderson looks to the decision of the Supreme Court of Canada inR. v. Tortone (SCC), [1993] S.C.J. No. 86.

Crown relies on these decisions for the proposition that the alleged proceedsdo not need to be derived from any one specific drug transaction, but rather “it suffices to demonstrates that Quan and Vu hadunexplained wealth combined with criminality” (Crown’s final submissions, paragraph 43) [59] It is important to note that in Tortone, the Supreme Court was reviewing a number of issues arising from convictions on thesubstantive trafficking and possession counts at trial, alongside acquittals on the proceeds counts.

It was the trial judge’s professedinability to find requisite proof on each count of laundering proceeds, as related to each specific substantive charge, as well as theacquittal on a “global count”, which encompassed the entire time period during which specific counts of trafficking, possession ofnarcotics and conspiracy were alleged, which gave rise to the ruling of Justice Major, for the SCC, that, “…although [the trial judge] could not identify which of the transactions particularized in the various proceeds counts involved theproceeds of narcotic trafficking, the Crown had proven beyond a reasonable doubt that at least one of those transactions involved theproceeds of narcotic trafficking.

If so, the result should have been to convict the appellant on the global count…” para 29 (SCC), [1993] S.C.J. 86 [60] In the case of R. v. Cruikshank [1992] B.C.J. No.3061, it appears the B.C. Superior Court heard a trial on 16 counts of possessingproperty alleged to be the proceeds of crime, under then

Section 4 of Narcotics Control Act. Although the report seems to indicate thatcharges of trafficking were not before the court, extensive evidence was heard by the Court about the accused’ drug trafficking, andmade findings of fact in relation to the drug offences. It was thereupon that the allegations of proceeds were considered. [61] Although Crown adduced evidence of financial analysis of assets, in the Cruikshank case, it is significant in considering what theCrown needs to prove on this type of offence, that specific instances of crime were alleged and proved prior to the Court’s considerationof proceeds.

As with Tortone and Henderson, there were counts of possession of proceeds of crime related to specific transactions and aglobal count as well. 4. Circumstantial Case: Drawing Inferences [62] The assessment of the evidence, in order to determine whether the Crown has proved all necessary elements of each offence to therequisite degree, is not straightforward in a circumstantial case. The general proposition has recently been restated by Justice Charronfor the Supreme Court of Canada in the case of R. v.

Griffin, 2009 SCC 28 , [2009] SCJ No. 28 para 33 “The essential component of an instruction on circumstantial evidence is to instill in the jury that in order to convict they must besatisfied beyond a reasonable doubt that the only rational inference that can be drawn from the circumstantial evidence is that theaccused is guilty” [63] Much as I may instruct myself to this effect, as a trier of fact, the proper drawing of inferences is, as Justice Ducharme points outin the case of Munoz, has been the subject of “comparatively little discussion about the process involved in drawing inferences fromaccepted facts”.

He proceeds in that decision to set out a very helpful guide to the process of drawing inferences, complete with a reviewof the formal logic of deductive and inductive reasoning. This is a process which I will attempt to apply to the primary facts as I findthem in relation to the charges before this court, in order determine the resulting permissible inferences, not founded on impermissiblespeculation: An inference is a deduction of fact which may logically and reasonably be drawn from another fact or group of facts found or otherwiseestablished in the proceedings.

It is a conclusion that may, not must be drawn in the circumstances…. The boundary which separatespermissible inferences from impermissible speculation in relation to circumstantial evidence is often a very difficult one to locate” [64] I draw strength as well from the meticulous exemplification of the process of drawing permissible inferences in Justice Code’srecent decision in R. v. McLetchie [2011] O.J. No. 1244 starting at paragraph 58. He describes the process succinctly: “The first step in a circumstantial case, is to determine what primary facts have been proved. The second step is to determine what

rational non-speculative inferences flow from the primary facts” (paragraph 59) [ 65 ] On behalf of the Supreme Court of Canada, the Chief Justice refers at paragraph 23 to

definitions of circumstantial evidence: “… any item of evidence, testimonial or real, other than the testimony of an eyewitness to a material fact.

It is any fact from the existence of which the trier of fact may infer the existence of a fact in issue” (Watt’s Manual of Criminal Evidence); “[circumstantial evidence… may be testimonial, but even if the circumstances depicted are accepted as true, additional reasoning is required to reach the desired conclusion” (McCormick on Evidence at pp.641-42” [ 66 ] Thus, before embarking on the process of “additional reasoning” as Professor McCormick puts it, or determining the permissible inferences in the manner prescribed by Justice Munoz, I will find the primary facts established by the evidence, as I have reviewed it, on each count.

PART IV: CONCLUSIONS OF FACT PRIMARY FACTS [ 67 ] The primary facts are not entirely controversial. The main area of dispute is with regard to the report and testimony of Mr. Chan. The factual issue relates to the completeness of his source information, and hence the inferences which might be drawn. The following is a

summary of conclusions, which I draw upon as primary facts. - Quan and Vu operate a garden supply store, T&L Equipment, which had in inventory items commonly sold and as well customized, such as circuit boards for electricity with timers, to the requirements of indoor marijuana growers The stock included light bulbs and ballasts used for this purpose, and others, as well as “jiffy pucks” or plant starter pellets and chemical nutrients for horticulture.

Many items of inventory at the time of the search are peculiarly suited to the needs of hydroponically grown marijuana; however most items are useful for other types of garden and indoor cultivation. The accused have operated the business since 2003 at 229 Oakdale. - According to their individual tax returns and the corporate returns for the company, the business is not particularly lucrative. The search of the premises revealed significant inventory which was not reflected in the level of sales. Even factoring in those invoices, which was not done by Mr.

Chan in any of his reports or addendums, the cash business suggested by this inventory was only a fraction of what Mr. Chan found to be the funds from unknown sources in possession of the accused. - The store and the accused came to the attention of police through surveillance of an individual identified through wiretaps relating to an international marijuana production and marketing scheme. The individual, Tien Nguyen, drove with Mr. Quan to the rear parking lot of 229 Oakdale.

Unbeknownst to them, they were under police surveillance. - Surveillance of the parking area behind 229 Oakdale on July 15 and 16, 2008 showed vans owned by Mr. Quan and Ms Vu. Ms. Vu drove in a van from which bags of soil were apparently unloaded. - Surveillance showed further that a van driven by Ms. Vu went from Oakdale to Brewster, then to Wheelwright, that day and the next. - Surveillance showed further that Mr. Quan and Mr. Nguyen drove to 17 Wheelwright that evening, where Mr. Nguyen used a key to enter the premises with Mr. Quan.

Minutes after their entry, a woman arrived, and left shortly after with a small bag in her hand. The two men left the house, and returned a few hours later, accompanied by a third unidentified man. Again, a woman attended shortly after their return, and left after a few minutes with a small bag in her hand. The men left shortly after that. - This house, 17 Wheelwright, had been purchased on June 30 2008 by Thi Pham. Ms. Pham had received $10,000 from Mr. Quan on March 27 2008 to assist with the purchase.

In the documentation supporting the RBC mortgaging of the property, the $10,000 was characterized in a Letter of Gift provided to the bank as having been received from Ms. Pham’s brother, Mr. Quan. The RBC mortgage documentation also disclosed an employment letter signed by Ms. Vu, on T&L stationery, describing Ms. Pham as Accounts Manager for T&L since (year), and been salaried at $70,000 per annum. Nothing in the T&L records or in records relating to Ms. Pham support this: the letter was undoubtedly fraudulent. Ms.

Pham was apparently in receipt of social assistance, and lived at 17 Wheelwright with her husband and two young children. Financial records analysed by Mr. Chan show that an additional $60,000 was provided by Mr. Quan (and Vu??) to assist with the purchase of the property

- Ms. Pham pleaded guilty to possession of marijuana for the purpose of trafficking in relation to the 77 pounds of marijuana and 333 seedlings found in the basement at 17 Wheelwright, upon execution of a search warrant there on July 24, 2008. - The execution of search warrants on July 24, 2008 led to the discovery of the quantities of dried and growing marijuana at 17 Wheelwright. The plants were in the basement of the house.

The seedlings were in plastic starter trays under artificial light a room with the key in the lock; a number of clones (seedlings) were wrapped in newspaper in a refrigerator in another part of the basement, as was the dried marijuana. The dried marijuana was packaged in half pound sealed plastic bags (ziplock or skywide brand), and contained in a green garbage bag.

Neither the refrigerator nor the green garbage bag was in a locked place. - According to Detective Constable Smith, none of the growing equipment at 17 Wheelwright could be linked to the inventory at T&L, in terms of the plastic growing trays, the particular lights or ballasts, or any of the other items he described at Oakdale as being suited to marijuana cultivation. Nor had he noted the ziplock type bags in inventory at T&L. - Search warrants were also executed at T&L and at 55 Brewster.

A videotape and photos of the search of T&L was produced, and many of the photographs made exhibits, and made the subject of comment by Detective Constable. Smith. While nothing was seized at 55 Brewster, photos were taken, and the observations of officers in attendance were placed in evidence. At Brewster, the house was in a state of renovation. Holes through the garage wall, which abutted the house, were consistent with a possible vent to the garage from the house. The duct into the garage was of a material which Detective Constable Smith had not seen used in marijuana grow operations previously.

Detective Adams was familiar with this type of material in such set-ups.The holes in a closet floor were consistent with hoes to permit additional wiring to be run through the house. Detective Adams observed, on her attendance at the house during the search, that there were marks on a all consistent with mould. However, she could not say where the wall was, nor was any testing of the marks done to determine whether they were in fact mould. In the driveway was a disposal bin containing construction refuse. The bin was open, not locked. The only noteworthy item in the bin was a range hood wrapped in plastic wrap.

Detective. Constable Smith said he had seen this treatment of a range hood in other grow operations he had attended. It was his opinion on all the evidence he had, including hydro readings which I will discuss below, that the house at 55 Brewster Crescent MAY have been used as a grow house.

He was unprepared to say when that use might have been, and agreed that his opinion was tentative, and guarded. - Hydro records were tendered in evidence for 55 Brewster and two “comparable” properties by a Toronto Hydro employee, who regularly investigates grow operations in houses from a safety point of view and to assist police in their investigations. While Ms.

Kupcho no doubt endeavoured to provide accurate information spanning the period of time covered by the allegations in relation to Brewster, the information she provided about comparables raised and did not answer significant questions, about the criteria for “comparability”. No information was available about the size of the premises compared, or the number of occupants in each house, or the means of heating and cooling, or existence of things like swimming pools or sauna’s or other devices which might require significant electrical consumption.

No doubt the usage at Brewster showed high readings, more than double the highest readings at one of the comparables, and even greater than the other’s reading; however, the ratio of usage as between the two comparables showed significant variation. Of significance as well was the evidence showing the difference between usage of a previous owner of 55 Brewster and the usage once Mr. Quan purchased it. The usage was much higher after Mr.

Quan purchased the house. - I accept Detective Constable Smith’s opinion however, that the hydro use was one of the factors he used in reaching his qualified opinion about past use of the house as a grow house. - The hydro records for Brewster showed as well, however, that the house had been rented to an individual who paid the very high hydro bills for a while, and who had been linked to another grow house, which link two officers mentioned in their testimony. It appeared that the hydro bill was unpaid for a time after the tenant, whom I refer to by his initials KXT, was the responsible person on hydro records.

Then, either Ms. Vu or Mr. Quan paid the high bills for electricity at the house. No further information was available to the court concerning the tenancy or other details about the occupation or use of the premises until the brief observations of Ms. Vu in her vehicle were made on July 15, 2008.

Nor was any other information available to the court concerning the relationship of the accused to KXT. - Hydro records for Wheelwright , which was clearly being used for the 333 seedlings during the month prior to the execution of the search, show daily consumption at a level elevated beyond some months during that period, but not dissimilar to usage years before the purchase by Ms. Pham, and well below the usage billed in February 2010. Crown did not need hydro records to show that this address was being used for growing marijuana, but the records are illustrative nonetheless.

On the one hand the comparison of records over years limits the utility of the hydro records in relation to this address; on the other hand, it brings in to question the inferences sought in reference to the Brewster address. High usage during the time that the accused were on bail, if indeed the property was still owned by Ms. Pham at that time, could surely not be consistent with a grow operation. If that is so, then the significantly lower readings while the place was being used for the seedlings tests the validity of the inference sought on the Brewster property.

- In large measure, the report of Aaron Chan was uncontested to the extent that it showed the flow of funds leading to the purchases ofthe properties in question. Sources, whether known or unknown, were traced through a labyrinth of accounts. The funds used to purchaseeach property were traced this way. The source of funds or assets owned by the accused at the starting point for analysis, December 31,2002, was however not made subject of comment.

That analysis showed as well a conclusion that the couple, as a single economic entity,had a net worth which increased by $2,422,205 during the period from January 1, 2003 to August 23, 2008, of which $822,000 was infunds from third parties and $200,000 in unidentified deposits. The accountant acknowledged in his testimony however, that on theinformation available to him, he identified $353,367.00 excess inventory, which if sold but not recorded for income tax purposes “couldaccount for excess deposits and provide additional net funds” (Written submissions on behalf of Vu, paragraph 10).

Further inventorypurchases not reflected in T&L bank accounts or corporate tax returns were demonstrated by invoices seized from 229 Oakdale on July24, 2008. If turned into cash sales at the markup reflected in other company records, these invoices could have generated nearly half amillion dollars. This appearance of a significant volume of cash sales was based on information available through the search of thepremises on July 24, 2008, in light of business records and corporate filings. - Some of the records used by Mr. Chan were banking records from six financial institutions.

Bank of China was not among theinstitutions from which records were produced, further to court order. However, the analysis of records shows significant transfer offunds by Mr. Quan’s mother, Minh Nguyet Cat on a Bank of China transfer.

Schedule 2J to the Main Report of Mr. Chan, Exhibit 38,details disbursements to and receipts from Ms. Cat. I understand the

Schedule to show a net amount of nearly half a million dollarshaving been received from her over the period of analysis. INFERENCES PERMITTED BY PRIMARY FACTS 1. Production of Marijuana [68] The law is clear that the production offence involves activity promoting the development of marijuana from seed to mature plant.In relation to the Brewster Crescent property, there MAY have been marijuana grown there at some point prior to the execution of thewarrant on July 24 2008. Mr. Quan owned the property from March 2007, and apparently rented it to someone known to have beeninvolved in marijuana crime previously.

The tenant, Mr Quan and Ms Vu variously paid hydro bills exceeding norms of past use forelectricity consumption. There is no evidence of access to the property by either accused however during that period. There is an absenceof other evidence to suggest that Mr. Quan or Ms. Vu did anything to either assist marijuana plants’ growth, if indeed any were grownthere during that time. The possibility that marijuana was being cultivated during the time Mr.

Quan owned it, and that they knew thatthere were plants there, which required high electricity consumption, and so in paying for their tenants’ hydro they were aiding andabetting the production of marijuana, is far too tangential to amount to a reasonable inference. [69] In relation to Wheelwright, there is no issue that marijuana was being cultivated there. Mr. Quan did assist his sister Ms. Phamwith the purchase of the property. The evidence is clear that Ms.

Pham in fact lived in the premises with her family and that themarijuana, both the seedlings and the bulk of packaged dried marijuana, were not in plain view, but rather in the basement. The driedmarijuana was packaged in half pound baggies, all contained in a green garbage bag, and the seedlings were for the most

part in plasticplanter trays in a room with the key in the lock, and Ms. Pham close to it as police executed a search warrant. In the case of the unplantedclones, they were individually wrapped in newspaper in a refrigerator. No signs of cultivation greeted a visitor to the house who mightstep inside the front door for a few minutes. No “equipment” related to marijuana cultivation was noted at 17 Wheelwright as being frominventory at T&L Equipment. The only evidence of either of the accused having actual access to the place was on July 15 when Mr.Quan went there with Mr. Nguyen on one occasion, and with Mr.

Nguyen and another person, later that same day. Both times, theevidence shows that on the first visit Mr. Nguyen used a key to open the place, and that on the second occasion; the record is equivocalabout who had a key. Nothing about the visits says Mr. Quan was in the basement.

Although the pattern of activity, with a womanattending briefly each time they were there, and leaving with a small bag, perhaps the size of a half pound of marijuana, is suspicious,the record is entirely insufficient to support an inference that either accused had knowledge of the marijuana seedlings in the basement,that they had any power to give or withhold consent to that activity taking place, or that they exercised control over it. There is nosuggestion on all the evidence that they were actively involved in the production of marijuana.

I am not prepared to find that the financialassistance offered months before the purchase of the property by Mr. Quan to his sister fits within the definition of aiding production ofmarijuana. The inferential gap is a chasm in this instance, and the necessary bridge is absent. [70] For similar reasons, I find the evidence is lacking with regard to the possession for the purpose counts. Possession requires thatthe accused have knowledge of the object in question and that they exercise control over it. The only marijuana at issue is that found at17 Wheelwright Crescent.

I have described the location in the house of the marijuana, the relationship of Mr. Quan to the premises, andnote that there is no direct evidence linking Ms. Vu to the place at all. Again, Mr. Quan’s brief visits on July 15, 2008 against thisbackdrop of information are entirely insufficient to vest him with knowledge and control of the marijuana in the place. There is nothingto show that he was in some way controlling or directing Ms. Pham in relation to the marijuana, and we know she has claimed thenecessary elements of possession in entering her guilty plea. Indeed, the cloud of suspicion over Mr.

Nguyen, who had the means to gainaccess to 17 Wheelwright on July 15, and who was the subject of surveillance leading to Mr. Quan and Ms. Vu, blurs the inferencesought by Crown as well, and makes it impossible to conclude that the constellation of factors around Mr. Quan’s relationship to 17Wheelwright lead unambiguously to a conclusion of knowledge and control, hence possession. It follows that for all the inferences of“purpose of trafficking” which might attend a finding of possession, the counts of possession for the purpose of trafficking against thetwo accused founder on the issue of possession.

Even if all the circumstances urge an inference of knowledge, I refer to our Court ofAppeal in the case of R. v. Pham (2005) (ON CA), 203 CCC (3d) 326, characterizing the requisite knowledge asbeyond quiescent; disclosing means of control over the item to be possessed. No such inference can be obtained in the circumstanceshere. Even considering the conclusion that my colleague Justice Clarke drew in the case of R. v. Hoang, [2006]ONCJ 70, that controlneed not be exclusive, so long as the evidence shows an exercise of some control (para’s 45 to 57), the element of control fails on the

evidence here. [71] The evidence of the growth in assets cannot assist the inference finding process with respect to the production and possession (forthe purpose) issues. The reasoning would be circular, an hence impermissible were I to say that the undocumented deposits to theaccused’ bank accounts suggest any of the elements of possession of production, as those deposits are significant only once predicated onthe very conclusion I would be seeking to draw or reject.

Thus to assume the conclusion of an incompleted process of inference drawingis not the process of rational inference drawing described by the judicial precedents, referenced above, and I will not engage that illogicalroute. [72] With regard to the counts of proceeds however, I note a significant concern that I have about those counts, not addressed bycounsel in their otherwise thorough submissions. The counts of possession of proceeds do not name the “offence punishable byindictment” which was the source of the property, and that within the knowledge of the accused.

The authorities seem to require that theillicit activity be named in some fashion, although, as the Court of Appeal points out in the case of R. v. Bell, (ON CA),[1966] 1 O.R. 637, the law does not go so far as to require that the accused know the difference between indictable and non-indictableoffences, giving rise to the necessary conclusion of knowledge. [73] The Supreme Court of Canada in R. v. Streu (1989), (SCC), 48 CCC (3d) 321 holds by extension of the samereasoning that the “crime” by which stolen goods were obtained may be proved without proof of a specific theft.

In similar fashion, themore recent cases considering the possession of proceeds of enterprise crime, forfeiture or possession of proceeds of crime (e.g. R. v.Clymore, [1992] BCJ 1705;, R. v. Cruikshank [1992] BCJ; R. v. Henderson [1997] BCJ No. 3168), the Courts have held consistentlythat the proof of a specific crime is not required. In the case of R. v.

Tortone, (SCC), [1993] 2 SCR 973, Justice Majorspoke for the Court on this point, again in relation to whether a global count of possession of proceeds of narcotics trafficking relating toa particular period might form the foundation of conviction, even when proof beyond reasonable doubt was impossible on the specificcounts of trafficking. (pp.986-87) However this is in the context of proof having been established beyond reasonable doubt that the partyagainst whom the order, or judgment sought, has been found guilty beyond reasonable doubt of a specific crime, and that crime is thefoundation for the proceedings of forfeiture, or the proceeds charge. [74] In this case, the Crown has not stipulated what crime the proceeds are alleged to derive from.

It would be tempting to say, wellobviously in the context of the prosecution, the proceeds relate to the alleged production and possession for the purpose of trafficking.However, there are ambiguities raised with respect to other possible offences committed by the accused, on a close examination of thefinancial information amassed and analysed by Mr. Chan. [75] Clearly there is a conflict in the reporting of tax information by the two accused. Clearly there is more than a suggestion that theywere not reporting the entirety of their sales of inventory at T&L.

That suggestion arises from an analysis of invoices seized on July 242008. Extrapolated over time, a more substantial flow of cash business would not be an unreasonable inference. The letter supportingMs. Pham’s mortgage raises a clear specter of mortgage fraud by Ms. Vu. I will not speculate further about some of the activitiessuggested by deposits of large sums into the accounts of the two accused, for this purpose. So, on the one hand, neither the accused northe Court have not been clearly apprised of the nature of criminal activity alleged as the basis for the proceeds counts.

On the otherhand, the Court cannot be enlisted to assist the Crown by inferring or incorporating by contextual reference the other substantive countson the information as the basis for the proceeds counts. This is a far cry from the principles illustrated by the cases of Cruikshank,Clymore, Henderson, Tortone, etc. In those cases, criminal activity had clearly been established beyond reasonable doubt. The questionwas, whether proceeds had to be linked to specific acts of criminality, or whether, against a backdrop of several proven counts ofcriminal conduct, a global count of proceeds could be made out.

The proposition that “certain property is in fact derived from crime[may be deduced] in the absence of direct evidence linking the specific property of profits to specified criminal activity” to specifiedcriminal activity must not be read out of context. [76] Here, there is no specific allegation of criminal activity to predicate the essential element of the offence that the property derived“from the commission of an indictable offence…” in Counts 8, 9, 10, and 12. I find that in the absence of such an allegation, I cannotcome to a conclusion in the Crown’s favour, beyond reasonable doubt.

Too many options arise inferentially on an allegation which isdeficient in its broad allegation. [77] If I am wrong in terms of the requirement that the Crown link the allegation to particular criminal activity, and infer that the“commission in Canada of an offence punishable by indictment” – the broad statutory terms of

section 354 (a) – I will ground myfindings on the conclusions I draw on the production and possession for the purpose charges.

PART V: CONCLUSIONS

[ 78 ] For the reasons delineated above, I find that the evidence fails to show evidence that the accused committed the offence of production of marijuana at 55 Brewster Crescent or at 17 Wheelwright Crescent, either by their direct actions or by aiding and abetting. I dismiss that count against both accused. [ 79 ] Similarly, as detailed above, the evidence does not drive a reasonable inference of knowledge and control of the marijuana seized at 17 Wheelwright as being in the possession of either accused.

I dismiss that count. [ 80 ] Finally, in the absence of proof beyond reasonable doubt of knowledge of any criminal source of the funds from unnamed sources, resulting in the purchase of the named properties in possession of the accused, or any linkage of those funds or properties beyond reasonable doubt to criminal conduct, general or specific, I dismiss the four proceeds counts. Released: April 7, 2011 Signed: “Justice S.R. Shamai”