2015 QCCA 590, 2015 QCCA 590

Chun c. R. 2015 QCCA 590 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-10-005727-142 (500-01-017422-046) DATE: MARCH 30, 2015 PRESIDING: THE HONOURABLE NICHOLAS KASIRER, J.A. SY VENG CHUN LENG KY LECH A&A SERVICES MONÉTAIRES INC. PENG HENG OR GOLD INC. APPELLANTS – accused v.

HER MAJESTY THE QUEEN RESPONDENT – prosecutor and ATTORNEY GENERAL OF CANADA IMPLEADED PARTY and THE BANK OF NOVA SCOTIA INTERVENER JUDGMENT [ 1 ] I am seized of two motions, both of which concern the forfeiture of property ordered by the Court of Quebec following a conviction entered by that Court on charges related to money laundering and possession of the proceeds of drug offences. The appellants move to have the order of forfeiture stayed. The Bank of Nova Scotia seeks to intervene in the case with a view to preserving its rights in an immovable that is the object of the forfeiture order.

I Context [ 2 ] On September 15, 2014, Sy Veng Chun, Leng Ky Lech, A&A Services monétaires inc., and Peng Heng Or Gold inc. were found guilty of laundering and possession of the proceeds of drug crimes and of related tax offences by a judgment of the Court of Quebec (the Honourable Patrick Healy presiding). [1] [ 3 ] A notice of appeal from the guilty verdict was filed on November 17, 2014. [ 4 ] On November 24, 2014 – following the conviction, but before a full hearing and decision on sentence – Healy, J. rendered four forfeiture orders pursuant to s. 462.37 Cr.C . at the behest of the Crown.

The judge ordered the following property to be forfeited to Her Majesty: (

i) an immovable in Mont-Saint-Hilaire owned by Ms. Lech; (ii) an immovable in Montreal owned by Ms. Lech; (iii) certain shares in PHSME Specialized Bank Ltd., a bank incorporated pursuant to the laws of Cambodia; and (iv) $600,000 in American currency seized at the Dorval Airport on the person of Mr. Chun.

In his reasons, the judge took care to observe that he was convinced beyond any reasonable doubt that the different items of property constituted proceeds of crime and he pointed to the precise paragraph in his reasons for judgment on the verdict which explained the connection between the property and the money laundering or possession of proceeds of drug offences upon which the convictions rested. [2] This placed his order of forfeiture squarely under subsection 462.37(1) Cr.C.

Moreover, in his judgment on the Crown’s motion for forfeiture, Healy J. observed the requirement that notice be given to all persons who appear to have a valid interest in the property set forth in s. 462.41 Cr.C. had been satisfied. [ 5 ] On December 23, 2014, the Bank of Nova Scotia filed a “Notice of Application by a Person Claiming an Interest for Relief from Forfeiture” pursuant to

section 462.42 Cr.C . before the Court of Quebec. This application is pending. In its proceeding, the Bank states that it is a creditor of Ms. Lech and is the holder of a first-ranking conventional hypothec to secure its loan bearing on her immovable in Mont-Saint-Hilaire. The Bank asserts that it is an innocent third party in good faith, having no involvement with or prior

knowledge of the criminal offences for which the appellants were convicted and which resulted in the forfeiture of the Mont-Saint- Hilaire immovable. Accordingly, the Bank seeks an order directing that the order of forfeiture made by Healy J. does not affect its rights or recourses as hypothecary creditor with respect to the immovable. [ 6 ] The Crown filed a motion to dismiss the appeal, arguing that the notice of appeal had not been filed in a timely fashion.

On March 18, 2015, the Court granted a motion to extend the time limit for the filing of an appeal and dismissed the Crown’s motion to dismiss the appeal. [3] [ 7 ] Healy J. rendered judgment on sentence on March 18, 2015. [4] At present, leave to appeal has not been sought from that judgment. *** [ 8 ] As noted above, I am seized of two motions relating to the forfeited property. [ 9 ] The appellants have moved to suspend the four orders of forfeiture pending the outcome of the appeal of their conviction. [ 10 ] The Bank of Nova Scotia has filed an “Amended Motion for Aggressive Intervention and to Make Representations” pursuant to articles 208 to 211 C.C.P. and subs. 683(3) Cr.C .

The Bank submits that it has sufficient interest to intervene in the case in order to contest the appellants’ motion to suspend execution of the forfeiture orders, by reason of its application made under s. 462.42 Cr.C. as an innocent third party.

It asks that any order in respect of the appellants’ motion to suspend the order of forfeiture be made conditionally, specifying that the order not affect the Bank’s rights as hypothecary creditor in respect of the Mont-Saint-Hilaire immovable. [ 11 ] I propose to consider the motions, which are of course connected, in turn. *** II Motion to Suspend Execution of Forfeiture Orders [ 12 ] The appellant’s motion is made pursuant to paragraph 683(5) (

b) Cr.C ., although at the hearing the appellants also relied on sections 462.45 and 689 Cr.C. [ 13 ] Noting that an appeal from the conviction has been filed, the appellants say that “the interests of justice / l’intérêt de la justice” (within the meaning of subs. 683(5) Cr.C .) require that a suspension of the orders of forfeiture be granted until the final outcome of the appeal is determined. [ 14 ] They contend that they have serious grounds of appeal, recalling that motion to dismiss the appeal was dismissed by the Court on March 18, 2015, and that the execution of the forfeiture order before those arguments are addressed would be unjust. [ 15 ] The Crown, named as respondent, does not contest the motion to suspend execution of the order of forfeiture.

The Crown observes that in the event of a stay of an order of forfeiture in circumstances such as the present case, the Minister of Public Works and Government Services of Canada would be authorized to manage the property pursuant to the Seized Property Management Act . [5] [ 16 ] In point of fact, the Crown is of the view that suspension of the four forfeiture orders arises by operation of law and that the motion brought by the appellants under para. 683(5) (

b) is not necessary. At the hearing, the appellants agreed with the Crown in this latter respect and said that their motion should be considered to be one made de bene esse . [ 17 ] Is the order of forfeiture suspended automatically upon the filing of the notice of appeal against the conviction? [ 18 ] The parties cite on sections 462.45 and 689 Cr.C . in support of this suspension of right. Should the exercise of discretion be required, the appellant relies on paragraph 683(5) (

b) Cr.C. [ 19 ]

Section 462.45 provides:

462.45 Par dérogation aux autres dispositions de la présente partie, l’exécution d’une ordonnance de confiscation ou de restitution de certains biens en vertu des paragraphes 462.34(4), 462.37(1) ou (2.01), 462.38(2) ou 462.41(3) ou de l’article 462.43 est suspendue jusqu’à :

a) décision définitive à l’égard de toute demande de restitution ou de confiscation de ceux-ci présentée sous le régime de l’une de ces dispositions ou d’une autre disposition de la présente loi ou d’une autre loi fédérale;

b) décision définitive sur un appel à l’égard de l’ordonnance de confiscation ou de restitution de ceux-ci;

c) décision définitive dans toutes autres procédures où le droit de saisie est contesté. Toutefois il ne peut être disposé de biens confisqués dans les trente jours qui suivent une ordonnance de confiscation rendue en vertu de l’une de ces dispositions. 462.45 Despite anything in this Part, the operation of an order of forfeiture or restoration of property under subsection 462.34(4), 462.37(1) or (2.01), 462.38(2) or 462.41(3) or

section 462.43 is suspended pending (

a) any application made in respect of the property under any of those provisions or any other provision of this or any other Act of Parliament that provides for the restoration or forfeiture of such property, (

b) any appeal taken from an order of forfeiture or restoration in respect of the property, or (

c) any other proceeding in which the right of seizure of the property is questioned, and property shall not be disposed of within thirty days after an order of forfeiture is made under any of those provisions. [ 20 ] The parties have not convinced me that

section 462.45 gives rises to a stay of the forfeiture order by operation of law in this case. While Healy J.’s order was made pursuant to subs. 462.37(1), the appellants’ appeal from their conviction as the source of a stay of right does not fall readily within any of the scenarios described in paragraphs 462.45 (a), 462.45 (

b) or 462.45 (c). [ 21 ] I recall that, at present, there is no proceeding initiating an appeal from the sentence. Had that been the case, the order of forfeiture could have been subject to that proceeding, given that a forfeiture order is included in the definition of “sentence” (in French “‘sentence, ‘peine’ ou ‘condamnation’”) in paragraph 673 (

b) Cr.C . [6] In those circumstances,

section 462.45 might have been applicable as the source of a stay but I do not have to decide that point. [ 22 ] I do note, as others have before me, that the drafting of

section 462.45 is “problematic”. [7] I prefer to find the source of a stay that obtains by operation of law in paragraph 689(1) (

b) Cr.C . [8] [ 23 ]

Section 689 provides:

(1) Lorsqu’une ordonnance d’indemnisation ou de restitution de biens est rendue par le tribunal de première instance en vertu des articles 738 ou 739 ou qu’une ordonnance de confiscation est rendue en vertu des paragraphes 164.2(1) ou 462.37(1) ou (2.01), l’application de l’ordonnance est suspendue :

a) jusqu’à l’expiration de la période prescrite par les règles de cour pour donner avis d’appel ou avis de demande d’autorisation d’appel, à moins que l’accusé ne renonce à un appel;

b) jusqu’à ce qu’il ait été statué sur l’appel ou sur la demande d’autorisation d’appel, si appel est interjeté ou si demande d’autorisation en est faite.

(2) La cour d’appel peut par ordonnance annuler ou modifier une ordonnance rendue par le tribunal de première instance relativement à l’indemnisation ou à la restitution de biens dans les limites prescrites par la disposition d’après laquelle le tribunal de première instance a rendu l’ordonnance, que la déclaration de culpabilité soit cassée ou non. 689.

(1) If the trial court makes an order for compensation or for the restitution of property under

section 738 or 739 or an order of forfeiture of property under subsection 164.2(1) or 462.37(1) or (2.01), the operation of the order is suspended (

a) until the expiration of the period prescribed by rules of court for the giving of notice of appeal or of notice of application for leave to appeal, unless the accused waives an appeal; and (

b) until the appeal or application for leave to appeal has been determined, where an appeal is taken or application for leave to appeal is made.

(2) The court of appeal may by order annul or vary an order made by the trial court with respect to compensation or the restitution of property within the limits prescribed by the provision under which the order was made by the trial court, whether or not the conviction is quashed. [ 24 ]

Section 689 appears in

Part XXI of the Code entitled “Appeals – Indictable Offences / Appels – Actes criminels”.

Section 675 applies to an appeal against a conviction brought by persons such as the appellants who were convicted for indictable offences. I have asked myself whether the “appeal” alluded to in paragraph 689(1) (

b) refers only to an appeal from an order of forfeiture under subsection 462.37(1) Cr.C ., as opposed to the appeal against the conviction, and I find no necessary textual argument requiring this to be the case. I am comforted in this

interpretation by the fact that s. 689 applies in respect of an “appeal” or an “application for leave to appeal”.

This suggests to me that the automatic suspension would obtain where there is an appeal of right against the conviction (as is the case here under subpara. 675(1)(a)(i)) or where there is an appeal with leave (as would be the case, for example, if the appellants’ grounds for appeal against the conviction involved only a question of fact (subpara. 675(1)(a)(ii)) or in the case where only the sentence were appealed under para. 675(1)(b). [ 25 ] In addition to this textual argument, it seems to me appropriate, given the potentially definitive impact of certain forfeiture orders, that from a policy level they should be suspended where a valid notice of appeal from the conviction justifying the forfeiture is filed. [ 26 ] In my view, then, the stay arises by operation of law here. [ 27 ] That said, should the motion de bene esse for suspension be granted? [ 28 ] I recognize that paragraph 683(5)(

b) sets out a distinct discretionary power to grant an order of suspension pending appeals, by contrast to a suspension arising by operation of law. This provision of the Code gives the Court, or a judge of the Court, the power to suspend an “order of forfeiture / ordonnance de confiscation” until the appeal has been determined. [ 29 ] Section 683(5) Cr. C. provides:

683. […]

(5) Lorsqu’un appel ou une demande d’autorisation d’appel ont été déposés, la cour d’appel ou l’un de ses juges peut, s’il estime que l’intérêt de la justice l’exige, ordonner de suspendre jusqu’à décision définitive sur l’appel :

a) le paiement de l’amende;

b) l’ordonnance de confiscation ou de disposition de biens confisqués;

c) l’ordonnance de dédommagement visée aux articles 738 ou 739;

d) le paiement de la suramende compensatoire visée à l’article 737;

e) l’ordonnance de probation visée à l’article 731;

f) l’ordonnance de sursis visée à l’article 742.1. 683. […]

(5) If an appeal or an application for leave to appeal has been filed in the court of appeal, that court, or a judge of that court, may, when the court, or the judge, considers it to be in the interests of justice, order that any of the following be suspended until the appeal has been determined: (

a) an obligation to pay a fine; (

b) an order of forfeiture or disposition of forfeited property; (

c) an order to make restitution under

section 738 or 739; (

d) an obligation to pay a victim surcharge under

section 737; (

e) a probation order under

section 731; and (

f) a conditional sentence order under

section 742.1. [ 30 ] Contrary to s. 689 , the discretionary power to suspend forfeiture under para. 683(5) (

b) is cast in broader language: it applies to unspecified orders of forfeiture as opposed to those that are specifically made, as was that ordered by Healy J., pursuant to subs. 462.37(1). This suggests to me that in s. 689, Parliament sought to apply a more exacting rule than that found in para. 683(5)(

b) to the circumstance of an appeal from a conviction or sentence which would have an impact on an order of forfeiture of proceeds of crime for the designated offences set forth in subs. 462.37(1), including laundering and possession of the proceeds of drug offences. [ 31 ] If, however, I am wrong in concluding that the stay in the present case obtains by operation of law and, instead, requires an order under para. 683(5) (b), I would exercise that discretion to grant the stay here.

In my view, it is in the interests of justice to order the stay given that the grounds of appeal, which include an alleged unreasonable verdict, may be considered serious ones at this stage of the proceedings. I of course make no further comment on their prospects for success. [ 32 ] To conclude, in respect of the first motion, I am of the view that the motion is not necessary because a stay of the order of forfeiture as of right. Against the possibility that I am wrong on this point, I will grant the de bene esse motion for a stay pending the final determination of the appeal on the merits.

III Motion for Aggressive Intervention by the Bank [ 33 ] Several preliminary comments are in order. [ 34 ] First, the Bank did not make representations before Healy J. in respect of its interest in the Mont-Saint-Hilaire immovable prior to the order of confiscation despite, as the judge observed in his order, the fact that notice under s. 462.41 was given.

Questioned on this at the hearing, counsel for the Bank said that his client was in negotiation with its debtor during this period. [ 35 ] Second, it should be recalled that the Bank has filed in the Court of Quebec an application claiming relief from forfeiture under s. 462.42 which is pending. [ 36 ] Third, the Bank stated at the hearing that the costs associated with the delay it must endure before asserting its rights as hypothecary creditor of Ms. Lech amount to unfair prejudice.

It fears that a suspension of the order of forfeiture would have the effect of imperilling its real right in the immovable through that delay, either through risk of non-payment of the loan or of the reduction in value of the security as the house deteriorates.

On this latter point, the Bank seems to take no comfort from the fact that, notwithstanding a suspension, the Crown says the Minister of Public Works and Government Services is authorized to manage the property pursuant to the Seized Property Management Act . [ 37 ] In its conclusions of the motion presented before me, the Bank asks that it be granted the right to intervene in this case to contest the appellants’ motion to suspend execution of the forfeiture order.

It asks that the appellants’ motion be dismissed to the extent that it results in cancellation or postponement of its own application under s. 462.42 . Finally, it seeks an order from me that its rights are not affected to proceed with its application in the Court of Quebec for relief from forfeiture. [ 38 ] Should the Bank be authorized to intervene? [ 39 ] If the suspension arises as of right, there is no debate before the judge in chambers in respect of which the Bank can intervene.

Its only avenue for intervention would be in the appeal proper. [ 40 ] Moreover, the Bank does not have a sufficient interest to intervene in the appeal on the merits. Where the proposed intervention is not based on considerations of public interest, this Court has been resolute in denying interventions by third parties given the inherent

character of criminal appeals as disputes between the individual and the state. [9] Unlike Caron [10] where intervention was allowed, the Bank does not propose to argue a point of public interest relevant to the inherent character of the dispute, but rather seeks to assert and protect its private interest, as innocent third party, in the property subject to the forfeiture order. This case is unlike those – relatively few and far between – where the imperative of the public interest invites an intervention on the substance of an appeal. [11] [ 41 ] In our case, the Bank can assert its interest in connection with its

section 462.42 application and its presence in a debate between the appellants and the Crown, representing the public interest, on the appeal on the merits would be wholly tangential to the issues before the Court, all of which relate to a consideration of the guilty verdict weighing against the appellants. [ 42 ] If suspension requires a decision pursuant to paragraph 683(5) (

b) Cr.C ., I am nevertheless of the view that the Bank should not be permitted in that dispute either. [ 43 ] I recognize of course that the Bank has a legitimate private interest, as a supposed innocent third party, on the forfeiture matter.

But in my view, that right is properly pursued in the avenue provided for by Parliament at s. 462.42 . [ 44 ] It has rightly been said that the criminal courts are called on to adjudicate matters relating to forfeiture, and in so doing they are required to measure the private interest of third parties in a criminal dispute to do that work. [12] But that private interest does not justify an intervention here.

The appeal and what is incidental thereto is an extension of the original trial on the merits; that is not the subject- matter of the debate relating to relief from forfeiture that the Bank wishes to undertake. [13] Proceedings by the innocent third parties either before or after the order of forfeiture are both contemplated by Parliament, pursuant to sections 462.41 or 462.42 , within the parameters of the scheme it has established for forfeiture.

Indeed, s. 462.42 Cr.C . is the vehicle for “preserving” the Bank’s rights, to use the words of counsel appearing before me, not a motion in chambers before a judge on appeal. [ 45 ] I make no comment about the opportunity of proceeding with that matter before final judgment on the appeal, except to note that the cases recognize that a pending application under s. 462.42 has an impact on the execution of orders of forfeiture. [14] Without saying more, I would add – and this matter was not pleaded before me – that the judgment on sentence contemplates fines in lieu of forfeiture that may have an impact on this aspect of the proceedings. [ 46 ] To sum up, I note my view that the order of forfeiture is suspended as of right by the notice of appeal against the conviction but that I will grant, de bene esse , the motion to suspend under para. 683(5) (

b) Cr.C . Finally, I will dismiss the application to intervene by the Bank given the lack of sufficient interest. [ 47 ] FOR THESE AFOREMENTIONED REASONS , the undersigned: [ 48 ] GRANTS the appellants’ motion de bene esse to suspend execution of the order of forfeiture until a definitive judgment on appeal against the conviction; [ 49 ] DISMISSES the motion for intervention. NICHOLAS KASIRER, J.A.

Mtre Katia Léontieff For the appellants Mtre Fabienne Simon Services des poursuites pénales du Canada For the respondent Mtre Lindy Rouillard-Labbé Ministère de la Justice du Canada For the impleaded party Mtre Robert Kandestin Miller Thomson SENCRL / LLP For the intervener Date of hearing: March 19, 2015