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2005 Legislative Session: 6th Session, 37th Parliament

FIRST READING

The following electronic version is for informational

purposes only.

The printed version remains the official version.

HONOURABLE RICH COLEMAN

MINISTER OF PUBLIC SAFETY

AND SOLICITOR GENERAL

BILL 5 – 2005

CIVIL FORFEITURE ACT

Contents

Section

Part 1 –

Interpretation

Definitions

Application

Part 2 – Forfeiture Orders

Application for forfeiture order

Parties and respondents

Forfeiture order

Effect of forfeiture order

Part 3 – Interim Preservation Orders, Protection Orders and Other Related Orders

Division 1 – Interim Preservation Orders

Interim preservation order

Application made without notice

Receiver manager

Personal Property Security Act

Division 2 – Protection Orders and Other Orders Related to Forfeiture

Definition

Protection order

Orders related to forfeiture orders and protection orders

Part 4 – Proceedings, Presumptions and Proof

Proceedings

Standard of proof

Proof of unlawful activity

If no conviction or finding of unlawful activity

Determination respecting proceeds of unlawful activity

Part 5 – Administration

Division 1 – Director

Director

Powers, functions and duties of director

Division 2 – Filing Notice of Application

Filing notice in registries

Part 6 – Distribution of Proceeds

Definitions

Establishment of civil forfeiture account

Allocation of funds

Payment out of civil forfeiture account

Application for compensation

Payment to eligible victim

Manner of payment

Reconsideration of decision

Repayment of excess compensation received

Part 7 – General Provisions

If possession is unlawful

No limitation period

Application of

section 21 (3) of Financial Administration Act

Regulations

Consequential Amendment

Commencement

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 –

Interpretation

Definitions

(1) In this Act:

"court" means the Supreme Court;

"director" means a person who is designated as director under

section 19 (1);

"forfeiture order" means a court order made under

section 5 (1) or (2);

"instrument of unlawful activity" means property likely to be used to engage in unlawful activity that, in turn, is likely to or is intended to

(

a) result in the acquisition of property or an interest in property, or

(

b) cause serious bodily harm to a person;

"interest in property" or "interest in the property" means a right, a title, an interest, an estate or a claim to or in property;

"interim preservation order" means a court order made under

section 7 (3);

"personal property registry" means the personal property registry established under the Personal Property Security Act ;

"proceeds of unlawful activity" means the whole or a portion of an interest in property that is acquired directly or indirectly as a result of unlawful activity, whether or not the whole or the portion was acquired before or after the coming into force of this Act;

"property" means a parcel of real property or tangible or intangible personal property and, for greater certainty, includes cash;

"protection order" means an order made by a court under

section 12 (1);

"receiver manager" means a person who is appointed as a receiver manager under

section 7 (3) (c);

"security interest" means security interest as defined in the Personal Property Security Act ;

"unlawful activity" means

an act or omission described in one of the following paragraphs:

(

a) if

an act or omission occurs in British Columbia, the act or omission, at the time of occurrence, is an offence under

an Act of Canada or British Columbia;

(

b) if

an act of omission occurs in another province of Canada, the act or omission, at the time of occurrence,

(

i) is an offence under

an Act of Canada or the other province, as applicable, and

(ii) would be an offence in British Columbia, if the act or omission had occurred in the Province;

(

c) if

an act or omission occurs in a jurisdiction outside of Canada, the act or omission, at the time of occurrence,

(

i) is an offence under

an Act of the jurisdiction, and

(ii) would be an offence in British Columbia, if the act or omission had occurred in British Columbia;

but does not include an offence under an enactment of any jurisdiction if the enactment or jurisdiction is prescribed under this Act.

(2) For the purpose of the definition of "instrument of unlawful activity" in subsection (1), proof that the property was used to engage in unlawful activity that, in turn, resulted in the acquisition of other property or caused serious bodily harm to a person is proof, in the absence of evidence to the contrary, that the property is likely to be used to engage in unlawful activity that, in turn, is likely to result in the acquisition of other property or in serious bodily harm to any person.

Application

2 This Act applies to an unlawful activity occurring before or after the date this

section comes into force.

Part 2 – Forfeiture Orders

Application for forfeiture order

(1) If the director is satisfied that the whole or a portion of an interest in property is proceeds of unlawful activity, the director may apply to the court for an order forfeiting the whole or the portion of the interest in property to the government.

(2) If the director is satisfied that property is an instrument of unlawful activity, the director may apply to the court for an order forfeiting the property to the government.

(3) An application for a forfeiture order under this

section applies only with respect to an interest in property or property located in British Columbia.

Parties and respondents

(1) In proceedings commenced under

section 3 (1), the director must name as a party

(

a) a person who is a registered owner of the whole or the portion of the interest in property that is the subject of the application for forfeiture, and

(

b) a person who the director knows is an unregistered owner of the whole or the portion of the interest in property that is the subject of the application for forfeiture.

(2) In proceedings commenced under

section 3 (2), the director must name as a party

(

a) a person who is a registered owner of the property that is the subject of the application for forfeiture, and

(

b) a person who the director knows is an unregistered owner of the property that is the subject of the application for forfeiture.

(3) In proceedings commenced under

section 3 (1) or (2), the director must notify a person required by the court or by the regulations in the manner established by the regulations, unless the court orders a different manner of notification.

Forfeiture order

(1) Subject to subsection (4), if proceedings are commenced under

section 3 (1), the court must make an order forfeiting to the government the whole or the portion of an interest in property that is proceeds of unlawful activity.

(2) Subject to subsection (4) and

section 12 (1), if proceedings are commenced under

section 3 (2), the court must make an order forfeiting to the government property that is an instrument of unlawful activity.

(3) If a portion of an interest in property is acquired directly or indirectly as a result of unlawful activity, the portion of the interest that is subject to a forfeiture order under subsection (1) is equal to the proportion of the interest in property that was so acquired.

(4) If a court determines that the forfeiture of property or the whole or a portion of an interest in property under this Act is not in the interests of justice, the court may

(

a) refuse to issue the forfeiture order under this section,

(

b) limit the application of the forfeiture order, or

(

c) put conditions on the issuance of the forfeiture order.

Effect of forfeiture order

(1) A forfeiture order made with respect to property or the whole or a portion of an interest in property, as the case may be, is effective on,

(

a) in the case of real property or an interest in real property registered in the land title office, the earlier of

(

i) the date a notice stating that proceedings were commenced under this Act for the forfeiture order was filed in the land title office under

section 21, and

(ii) the date the court issues the forfeiture order, and

(

b) in the case of personal property or an interest in personal property, the earlier of

(

i) the date a notice stating that proceedings were commenced under this Act for the forfeiture order was registered in the personal property registry under

section 21, and

(ii) the date the court issues the forfeiture order.

(2) If property or the whole or a portion of an interest in property is forfeited under this Act, the government does not, as a result of the forfeiture, assume responsibility for any covenants or other obligations under an encumbrance, a lien or another security interest to which the property or the whole or the portion of the interest is subject.

Part 3 – Interim Preservation Orders, Protection Orders

and Other Related Orders

Division 1 – Interim Preservation Orders

Interim preservation order

(1) As part of a proceeding under

section 3 (1) for forfeiture of the whole or a portion of an interest in property, the director may make an application to court for one or more interim preservation orders in relation to

(

a) the whole or the portion of the interest in property, or

(

b) the property in which the whole or the portion of interest in property is held.

(2) As part of a proceeding under

section 3 (2) for forfeiture of property, the director may make an application to court for one or more interim preservation orders in relation to the property.

(3) On application under subsection (1) or (2), the court may make one or more of the following orders for preservation of property or the whole or a portion of an interest in property that is the subject matter of an application under

section 3:

(

a) an order restraining the disposition of the property or the whole or the portion of the interest in property;

(

b) an order for the possession, delivery to the director or safekeeping of property;

(

c) an order appointing a person to act as a receiver manager for property or the whole or a portion of an interest in property;

(

d) an order for the disposition of the property or the whole or the portion of the interest in property in order to better preserve the value of the property or the whole or the portion of the interest in property;

(

e) any other order that the court considers just for the preservation of

(

i) the property or the whole or the portion of an interest in the property, or

(ii) the value of the property or the whole or the portion of an interest in the property;

(

f) for the purpose of securing performance of an obligation imposed by an order made under

Part 2 of this Act or this Part, an order granting to the director a lien for an amount set by the court

(

i) on the property or the whole or the portion of an interest in property that is the subject matter of proceedings under

section 3, or

(ii) on property or an interest in property specified in the order, in place of the property or the whole or the portion of an interest in property referred to in subparagraph (i);

(

g) any other order that the courts considers appropriate in the circumstances.

(4) The amount set by the court under subsection (3) (

f) is deemed for the purposes of the Personal Property Security Act

(

a) to be the full value of the property or the whole or portion of the interest in property that is the subject of the proceedings, unless the court orders otherwise, and

(

b) to include the expenses referred to in

section 59 (2) (

a) of the Personal Property Security Act .

(5) Unless it is not in the interests of justice, the court must make an interim preservation order applied for under this

section if it is satisfied that there are reasonable grounds to believe that

(

a) the whole or the portion of the interest in property that is the basis of the application under subsection (1) is proceeds of unlawful activity, or

(

b) the property that is the basis of the application under subsection (2) is an instrument of unlawful activity.

(6) An application with respect to an interim preservation order applies only with respect to property or an interest in property located in British Columbia.

Application made without notice

(1) Subject to subsection (2), a court may make an interim preservation order under

section 7 without notice to any person.

(2) An order made without notice under subsection (1) may not be made for a period greater than 14 days.

(3) A court may grant one or more extensions to an order referred to in subsection (2) only if notice of the application to extend the order is given to every person who is required to be given notice of the application, other than any party who, in the opinion of the court,

(

a) has been evading service,

(

b) is unable to be located, in spite of the director's reasonable efforts, or

(

c) need not be served because of exceptional circumstances.

Receiver manager

(1) A person appointed to act as a receiver manager under

section 7 is the receiver manager of the property or the whole or a portion of the interest in property specified by the court.

(2) If directed by the court, a receiver manager

(

a) may receive and hold property or the whole or a portion of an interest in property and dispose of property or the whole or a portion of an interest in property in the ordinary course of business,

(

b) has the authority to manage the business and affairs conducted in relation to the property or the whole or a portion of the interest in property of the person named, and

(

c) has all the incidental powers necessary to hold and manage the property or the whole or a portion of the interest in property.

Personal Property Security Act

(1) Despite

section 4 (

a) of the Personal Property Security Act , but subject to this section, the Personal Property Security Act applies with respect to a lien and the enforcement of a lien on personal property or the whole or a portion of an interest in property that is personal property granted under this Act.

(2) Sections 64, 65 and 66 (1) (

a) of the Personal Property Security Act do not apply to a receiver manager appointed under

section 7 of this Act.

(3) If an order under

section 7 gives the director a lien on personal property or the whole or a portion of an interest in property that is personal property,

(

a) the lien is deemed to be a security interest taken in the personal property or the whole or a portion of the interest in property, as the case may be, to secure the payment of the amount of the lien granted by a court under

section 7, and

(

b) the lien is deemed to continue until it is discharged by the director.

(4) The director, by registration of the lien under the Personal Property Security Act , perfects the lien as if the lien were a security interest perfected under that Act.

Division 2 – Protection Orders and Other Orders Related to Forfeiture

Definition

11 In this Division, "uninvolved interest holder" means a person who

(

a) owns, at the time of application for an order under

section 3, the whole or a portion of an interest in property that is an instrument of unlawful activity, and

(

b) did all that could reasonably be done to prevent the property from being used to engage in the unlawful activity that resulted or is likely to result in the property being found by a court to be an instrument of unlawful activity.

Protection order

(1) Subject to subsection (3), if a court finds

(

a) that property is an instrument of unlawful activity, and

(

b) that a person is an uninvolved interest holder with respect to that property,

the court must make the orders necessary to protect the interest in the property held by the uninvolved interest holder.

(2) A protection order issued with respect to property that is subject to a forfeiture order has effect from the date that the property is forfeited to the government under the forfeiture order unless the court orders otherwise.

(3) A court may refuse to issue a protection order if the issuance is not in the interests of justice.

Orders related to forfeiture orders and protection orders

13 On application of the director, a court may make, at the time of or subsequent to making a forfeiture order under

section 5, one or more of the following orders:

(

a) an order requiring

(

i) the disposition of property or the whole or the portion of the interest in property forfeited, or

(ii) the disposition of property that includes the whole or the portion of the interest in property forfeited;

(

b) an order directing the manner of disposition of property or the whole or the portion of the interest in property forfeited, including the appointment of a receiver manager to manage and dispose of the property or the whole or the portion of the interest in property;

(

c) an order directing that the money arising from the disposition of property or the whole or the portion of the interest in property is applied in accordance with the direction of the court after taking into account all encumbrances that have lawful priority over the property or the whole or the portion of the interest in property forfeited to the government;

(

d) an order requiring the severing or partition of property, an interest in property or a portion of an interest in property;

(

e) an order providing that, on forfeiture, the government takes property, an interest in property or a portion of an interest in property, subject to the interest of an uninvolved interest holder or another person.

Part 4 – Proceedings, Presumptions and Proof

Proceedings

14 The director may commence proceedings under this Act by originating application or action.

Standard of proof

15 Findings of fact in proceedings under this Act are to be made on the balance of probabilities.

Proof of unlawful activity

16 In proceedings under this Act, proof that a person was convicted, found guilty or found not criminally responsible on account of mental disorder in respect of an offence is proof that the person engaged in the unlawful activity.

If no conviction or finding of unlawful activity

17 In proceedings under this Act, an unlawful activity may be found to have occurred even if

(

a) no person has been charged with an offence that constitutes the unlawful activity, or

(

b) a person charged with an offence that constitutes the unlawful activity was acquitted of all charges in proceedings before a criminal court or the charges are withdrawn or stayed or otherwise do not proceed.

Determination respecting proceeds of unlawful activity

18 In an application for forfeiture made under

section 3 (1), proof that a person

(

a) participated in an unlawful activity that resulted in or was more likely than not to result in the person receiving a financial benefit, and

(

b) subsequently acquired the whole or the portion of an interest in the property that is the subject of the application,

is proof, in absence of evidence to the contrary, that the whole or the portion of the interest in property that is the subject of the application is proceeds of unlawful activity as a result of the unlawful activity referred to in paragraph (a).

Part 5 – Administration

Division 1 – Director

Director

(1) The minister may in writing designate as director a person who is appointed under the Public Service Act .

(2) The director may delegate, with or without conditions, any or all of the powers, functions and duties of the director under this Act to a person or class of persons.

(3) A delegation under subsection (2) must be in writing and may include any terms or conditions the director considers advisable.

Powers, functions and duties of director

(1) Without restricting

section 19 (2), the director is responsible for

(

a) collecting and managing the use and disclosure of information and maintaining records for the purposes of this Act and, on the basis of information collected, determining if proceedings should be commenced under this Act,

(

b) commencing and conducting proceedings under this Act, and

(

c) managing the distribution of proceeds from property, an interest in property or a portion of an interest in property forfeited to the government under this Act.

(2) The director may administer and dispose of property or the whole or the portion of the interest in property forfeited under this Act in accordance with the orders of the court and the regulations.

(3) With the prior approval of the Lieutenant Governor in Council, the director may enter into information-sharing agreements with

(

a) Canada, a province or another jurisdiction in or outside of Canada, or

(

b) a public body as defined in the Freedom of Information and Protection of Privacy Act .

Division 2 – Filing Notice of Application

Filing notice in registries

(1) After commencing proceedings under

section 3 that relate to real property or the whole or a portion of an interest in real property registered in the land title office, the director may file, in the prescribed manner, in the land title office the prescribed form of notice setting out that the proceedings commenced may affect the land or the whole or a portion of an interest in the land referred to in the notice.

(2) After commencing proceedings under

section 3 that relate to personal property or the whole or a portion of an interest in property that is personal property, the director may register, in the prescribed manner, in the personal property registry the prescribed form of notice setting out that the proceedings commenced may affect the personal property or the whole or a portion of an interest in the personal property referred to in the notice.

(3) The director may amend, extend or revoke a notice referred to in subsection (1) or (2) by filing or registering, in the same manner as the notice was filed or registered, the amendment, extension or revocation in the land title office or the personal property registry, as applicable.

(4) The registrar under the Land Title Act must register a notice, an amendment, an extension or a revocation filed under this

section in the prescribed manner.

(5) Subject to

section 6 (1), a notice and any amendments or extensions filed or registered under subsection (4) have the same effect as a certificate of pending litigation registered under the Land Title Act .

Part 6 – Distribution of Proceeds

Definitions

22 In this Part and

Part 7:

"civil forfeiture account" means the special account established by

section 23;

"eligible victim" means a person who

(

a) suffered pecuniary loss as a direct result of unlawful activity that resulted in forfeiture under this Act of property or the whole or a portion of an interest in property,

(

b) did not knowingly participate in or aid in the commission of the unlawful activity, and

(

c) meets criteria prescribed under this Act.

Establishment of civil forfeiture account

(1) There is established a special account in the consolidated revenue fund called the civil forfeiture account.

(2) The civil forfeiture account consists of money paid into the account under

section 24.

Allocation of funds

24 The director must pay into the civil forfeiture account

(

a) cash forfeited to the government under this Act, and

(

b) proceeds resulting from the disposition of property or the whole or a portion of an interest in property forfeited to the government under this Act.

Payment out of civil forfeiture account

(1) Subject to this Act and the regulations, the director may make payments out of the civil forfeiture account for one or more of the following purposes:

(

a) for the administration of the Act, including the compensation of eligible victims;

(

b) for the prevention of unlawful activities;

(

c) for remediation of the effect of unlawful activities;

(

d) for other prescribed purposes.

(2) The director may make payments out of the civil forfeiture account for purposes referred to in subsection (1) (b), (

c) or (

d) only with the approval of the Minister of Finance.

Application for compensation

26 A person may apply, in accordance with the regulations, for compensation from the civil forfeiture account as an eligible victim.

Payment to eligible victim

(1) Subject to this Act and the regulations and on receipt of an application under

section 26, the director may pay an amount to an eligible victim in the circumstances and subject to the conditions and limitations that the director considers appropriate.

(2) The director may not pay an amount to an eligible victim under subsection (1) unless

(

a) the amount is compensation for pecuniary losses of the eligible victim,

(

b) the payments are permitted under the regulations, and

(

c) in the opinion of the director, the pecuniary losses were sustained by the eligible victim as a direct result of the unlawful activity.

Manner of payment

28 In compensating an eligible victim under

section 25, the director may do the following:

(

a) pay an eligible victim in one or more installments;

(

b) prorate payments in accordance with the regulations among eligible victims or a category of eligible victims.

Reconsideration of decision

29 On application to the director, or on the director's own initiative, the director may reconsider a decision under

section 27 respecting the payment of compensation or eligibility for compensation.

Repayment of excess compensation received

30 If an eligible victim receives money from the civil forfeiture account that is in excess of the amount owed to the eligible victim under this Act, the eligible victim is liable to repay to the government the amount of compensation to which the person was not entitled.

Part 7 – General Provisions

If possession is unlawful

31 For the purposes of a proceeding under this Act, a person may not claim to have an interest in property if, under the law of Canada or British Columbia, it is unlawful for that person to possess the property.

No limitation period

32 There is no limitation period for the commencement of proceedings by the director under this Act.

Application of

section 21 (3) of Financial Administration Act

Section 25 applies despite

section 21 (3) of the Financial Administration Act .

Regulations

(1) The Lieutenant Governor in Council may make regulations referred to in

section 41 of the

Interpretation Act .

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows:

(

a) governing the giving of notice of proceedings under this Act, including service of notice and deemed service of notice and setting out the persons or classes of persons who are to be notified;

(

b) respecting compensation of eligible victims under this Act, including the application for and the information in support of an application for compensation under this Act;

(

c) respecting circumstances when no payment of compensation may be made to an eligible victim or a category of eligible victims;

(

d) respecting the process for adjudication of an application for compensation and the factors to be considered in determining the amount, if any, of compensation to be awarded to an eligible victim;

(

e) establishing circumstances when an amount is required to be deducted or set off from an amount that is to be paid under this Act to an eligible victim;

(

f) respecting the filing under the Personal Property Security Act of a notice under

section 21 (2) of this Act, and the legal effect of that filing;

(

g) respecting the disposition of property or the whole or portion of an interest in property forfeited to the government;

(

h) respecting the civil forfeiture account and payments from that account.

(3) In making regulations under this section, the Lieutenant Governor in Council may do one or more of the following:

(

a) make different regulations for different classes of persons, property or unlawful activities;

(

b) delegate a matter to a person;

(

c) confer a discretion on a person.

Consequential Amendment

Court Rules Act

Section 1 (2) of the Court Rules Act , R.S.B.C. 1996, c. 80, is amended by adding the following paragraph:

(

h) all matters arising under the Civil Forfeiture Act .

Commencement

36 This Act comes into force by regulation of the Lieutenant Governor in Council.

Explanatory Note

The Civil Forfeiture Act establishes a legislative scheme that permits, if the court orders, the forfeiture to the government of proceeds resulting from an unlawful act and of an instrument used in the commission of an unlawful act. Proceeds resulting from the disposition of forfeited property may be used to compensate eligible victims of an unlawful act, to fund the prevention of unlawful acts and to remedy the effects of unlawful acts.

Copyright

© 2005: Queen's Printer, Victoria, British Columbia, Canada