Navigating civil forfeiture and Charter rights: Guidance from the British Columbia Supreme Court

A recent decision of the British Columbia Supreme Court in British Columbia (Director of Civil Forfeiture) v Norgan (“Norgan”) is one of the first to interpret and apply the BC Court of Appeal’s jurisprudence in British Columbia (Director of Civil Forfeiture) v. Conrad (“Conrad”). The Court of Appeal’s decision in Conrad had clarified the law and provided much needed direction on the test and principles to be applied to Charter arguments in civil forfeiture proceedings.

Background

As part of a police investigation into drug trafficking, the Vancouver Police Department executed a warrantless search of 100 Canada Post packages and found three to contain psilocybin mushrooms, a controlled substance under the Controlled Drugs and Substances Act. Subsequent judicially authorized surveillance operations and searches led VPD to a residence where police located and seized $334,890.05 in cash along with other evidence of a drug trafficking operation. Mr. Norgan was not a subject of the investigation until he attended the residence during the search and was consequently arrested and charged with drug-related offences.

In addition to the criminal charges, the British Columbia Director of Civil Forfeiture filed an Amended Notice of Civil Claim against Mr. Norgan, seeking forfeiture of the Funds as proceeds of crime and an instrument of crime. Mr. Norgan disputed the Claim, claiming an ownership interest in the Funds and raising a challenge under the Canadian Charter of Rights and Freedoms. The Charter challenge alleged that both the search of the Packages and Mr. Norgan’s arrest violated his Charter rights and therefore, evidence resulting from the search ought to be excluded from the Forfeiture Proceedings or the Forfeiture Proceedings ought to be stayed. Mr. Norgan signaled his intention to raise the same Charter arguments in his criminal trial, seeking the same remedies.

Mr. Norgan brought an Application to sever the Charter issues from the Forfeiture Proceedings, in order to allow determination of the Charter breach allegations and any remedy for such breaches prior to determination of other issues in the Forfeiture Proceedings. Mr. Norgan also sought to limit the scope of his examination for discovery and document production to issues relevant and material to the Charter breaches, excluding any discovery related to his alleged criminality. The Director opposed the Application, arguing there would be no savings of time or effort with severance and the Director’s right of discovery should not be limited.

After the filing of the Application but prior to the hearing, the British Columbia Court of Appeal released Conrad.

Severance of the Charter issues

Citing Conrad, the British Columbia Supreme Court in Norgan articulated the following principles relevant to the Application:

• severance is a discretionary order that does not require the establishment of “exceptional circumstances” but does require the applicant evidence more than “bare assertions” that time savings or economies will be achieved with severance and that severance is in the interests of justice having regard to the dispositive potential of the issues to be severed, the nature of the issues to be tried first, proportionality, potential prejudice and benefits arising from severance and timeliness;
• there is no presumption for or against severance in Charter issues in civil forfeiture cases. Rather, each case is to be decided on the relevant circumstances before the court;
• lower courts should not “delve too deeply” into “hypothetical outcomes of the Charter arguments” given such applications are generally brought early in proceedings; and
• the test for severance is a “low bar”, only requiring the applicant to establish on a balance of probabilities that there is a “meaningful possibility the outcome of the Charter issues could be dispositive” or that the applicant’s Charter position is “at least arguable”.

The Director conceded that Mr. Norgan had an arguable case that there were Charter breaches, leaving the Court to determine only the nature of the Charter issues in the context of the proceedings, proportionality, and any potential prejudice or benefits resulting from severance. Finding each of these remaining factors weighed in favour of severance, the Court determined the interests of justice were served by ordering severance of the Charter Litigation from the Forfeiture Proceedings. In particular, the Court determined severance would provide multiple opportunities for the parties to assess risk and consider settlement, saving both time and cost for Mr. Norgan in light of the Director’s unlimited resources.

The scope of discovery

Mr. Norgan conceded that the release of the Court of Appeal’s decision in Conrad precluded the seeking of his original remedy to postpone the Director’s right of discovery in its entirety until after determination of the Charter issues. Instead, Mr. Norgan sought to limit the scope of discovery to only those issues directly relevant to the alleged Charter breaches, expressly excluding examination by the Director on issues relating to Mr. Norgan’s alleged criminality.

The Court, citing Conrad but noting the Court of Appeal declined to address the appropriateness of the Director’s intention to question the defendant on criminality and the general the paucity of law on this discrete issue, provided the following principles:

• postponement of discovery is a discretionary order and such order (if made) must be in the interests of justice;
• allowing the Director’s full right of discovery to proceed on evidence that may be subject to exclusion as a result of a Charter breach may have the effect of compounding the harm following from such a breach;
• the Director’s right to pursue the truth-finding goal of discovery must be balanced against the defendants’ privacy interests that are irrelevant to the litigation, irrespective of potential delays that might result; and
• delay in and of itself does not prejudice the Director.

Prior to the release of Conrad, the BC Supreme Court decided the matter of British Columbia (Civil Forfeiture) v. Langdon (Landon) wherein Mr. Langdon also sought severance (bifurcation) of the Charter issues from the civil forfeiture litigation and postponement of the Director’s right of discovery. The Court in Langdon granted full postponement of the Director’s discovery of Mr. Langdon and severance. The Court in Norgan does not opine on why the relief granted in Langdon was not addressed in Conrad or whether Conrad closed the door on courts granting a full postponement of discovery on any issue pending Charter litigation, noting only that Conrad “changed the landscape” and that Mr. Norgan was no longer seeking a full postponement, only a limitation on the scope of discovery.

Finding that the interests of justice would be best served by limiting the Director’s right of discovery of Mr. Norgan, the Court set the following procedure:

• before the Charter breach issues are decided, the Director can examine Mr. Norgan on ‎issues relating to the occurrence of the alleged Charter breaches;
• based upon that evidence, the parties can conduct the voir dire on the existence of ‎Charter breaches‎;
• if Charter breaches are found, the Director will have a further right of discovery restricted to matters of the alleged Charter breaches and will exclude questions or documents related to Mr. Norgan’s criminality (past or present) and the source or possible future use of the Funds;
• if there is a ruling that the Funds are admissible in evidence, the Director will have the right to examine Mr. Norgan on issues necessary to establish whether the Funds fall within the definition of “instrument of unlawful activity”.

Mr. Norgan’s full right of discovery against the Director remained unaffected.

Takeaways

Applying the principles set out in Conrad, Norgan establishes a clear test and procedure for courts to assess applications for severance of Charter issues and limits on discovery in civil forfeiture proceedings. Importantly, Norgan sets a strong foundation for further development of these discrete issues of law for which there exists little jurisprudence. It remains to be seen whether the approach taken in Norgan in setting limits on the Director’s right of discovery will proceed to the Court of Appeal and provide the BCCA an opportunity to return to an important issue they declined to address in Conrad.