The Forfeiture of Offence-Related Property: Craig v Her Majesty the Queen

On November 13, 2008, the Supreme Court of Canada (“SCC”) heard Judy Ann Craig’s appeal of a judgment rendered against her by the British Columbia Court of Appeal (“BCCA”). Ms. Craig’s appeal was heard alongside R c Ouellette, 2004 CanLII 26616 (QCCQ) and R v KT Nguyen; R v NT Nguyen, 2007 BCCA 474, but this post will only summarize the circumstances of Ms. Craig’s appeal.

The three appeals were heard together because they all dealt with the forfeiture of offence-related property under the Controlled Drugs and Substances Act, SC 1996, c 19 [CDSA]. With respect to Ms. Craig’s appeal, the SCC was to decide whether the BCCA erred in several ways. Among the many questions submitted to the SCC were whether the BCCA erred in (a) allowing evidence of a grow-op to go to forfeiture based on the CDSA, (b) failing to consider the appellant’s age, lack of record and the fact that her grow-op was not affiliated with organized crime, (c) failing to adequately address the concept of disproportionality, and, (d) in neglecting to consider the merits of imposing a fine as an alternative to forfeiture.

Ms. Craig was under suspicion of operating a marijuana grow-op out of her North Vancouver home. She was invited to the police station to “discuss” these suspicions, but declined the offer. The police then observed Ms. Craig and two others removing plants and paraphernalia from this residence and attempting to conceal them on city property. All three individuals were subsequently arrested. Following her arrest, Ms. Craig’s house and vehicle were searched, and the police discovered that the entire basement and portions of the main floor were devoted to the grow-op. The house contained growing rooms, a drying room, industrial growing lights, ventilation and irrigation systems, packaging material, scales, growing instructions, and score sheets documenting marijuana sales. Furthermore, the police located one pound of packaged marijuana and seized 186 marijuana plants. The search of Ms. Craig’s car yielded over $20,000 in cash and traveller’s cheques, as well as score sheets and five pounds of marijuana in quarter-pound bags. An expert in the field of marijuana sales estimated that the value of the seized marijuana was $15,000.

At the time of the offence, Ms. Craig was 52 years old, and had no previous criminal record. At her sentencing hearing, Ms. Craig testified that following her divorce, she was depressed and unemployed, and, in order to support herself, had mortgaged an inherited house and re-mortgaged her North Vancouver home. Compounding her depression was a subsequent relationship with a person she described as a “sociopath.” Convinced that she could not enter the workforce in her condition, Ms. Craig heeded the advice of a friend, and began growing marijuana as a means of supporting herself. Ms. Craig justified her actions by pointing out that she only sold marijuana to friends sick with AIDS, tradespersons, and other professionals. Ms. Craig recalled being approached by an individual involved in organized crime, but testified that she refused the offer because she would not have been able to continue to sell to her current customers.

At trial, Ms. Craig pleaded guilty to one count of producing marijuana contrary to s. 7(1) of the CDSA. She was given a conditional sentence of 12 months’ imprisonment, a fine of $100,000 and a victim surcharge of $15,000. Both the Crown and Ms. Craig applied to the BCCA regarding the appropriateness of this sentence. The Crown argued that the conditional sentence should be converted to conventional incarceration, and that the house from which Ms. Craig ran her grow-op should be forfeited. For her part, Ms. Craig sought an order to dismiss the Crown’s appeal and reducing the fine to $15,000 payable over a period of three years. The appellate court allowed the Crown’s appeal with respect to the order of forfeiture, and ordered that Ms. Craig’s home be forfeited in accordance with s. 16 of the CDSA. However, The Crown’s argument for conventional incarceration was dismissed. The BCCA granted Ms. Craig’s appeal to the extent that the $100,000 fine was set aside.

Writing for a unanimous BCCA, Ryan J.A. began by commenting on the forfeiture provisions of the CDSA. Section 16(1) of the CDSA makes an order of forfeiture mandatory upon the Crown proving, on a balance of probabilities, that personal property is related to an offence. S. 19.1(3), however, offers an important qualification. It requires that the sentencing judge consider the impact of an order of forfeiture of real property and whether it would be disproportionate having regard to four considerations: (1) the nature and gravity of the offence, (2) the circumstances surrounding the commission of the offence, (3) the offender’s criminal record, and (4) if the real property is a dwelling-house, the impact of forfeiture on those, other than the offender, who use it as their principal residence.

After setting out this process, Ryan J.A. went on to consider the issues raised by the Crown and Ms. Craig in their respective appeals. She first addressed Ms. Craig’s argument that forfeiture under the CDSA is limited to organized crime. It was Ms. Craig’s position that because s. 16(1) of the CDSA was part of an omnibus bill intended to tackle organized crime, it was not intended to capture individuals like her. Ryan J.A. disagreed, holding that there is nothing in the section’s language that indicates a specific application to organized crime. She noted that the presence of organized crime is relevant in determining whether forfeiture would be disproportionate pursuant to the s. 19.1(3) factors, but concluded that the application of the forfeiture provisions should not be limited to organized crime.

Ryan J.A. also considered whether the sentencing judge failed to utilize the appropriate two-step process when applying sections 16(1) and 19.1(3) of the CDSA to the circumstances. The Crown submitted that after the offender is convicted of a “designated substance offence,” the combination of s. 16(1) and 19.1(3) creates a process whereby, once the Crown proves that the property in question is “offence-related property” and that the offence was committed in relation to that property, an order of forfeiture automatically follows. Forfeiture can only be avoided if the offender demonstrates that the impact of the forfeiture would be disproportionate based on the s. 19.1(3) factors.

The BCCA disagreed with the Crown in this respect as well. Ryan J.A. clarified that under s. 16(1), the onus is indeed on the Crown to establish that a person has been convicted of a designated substance offence, that the property is offence-based property, and that the offence was committed in relation to that property. However, she disagreed that a forfeiture order would then immediately follow. Rather, pursuant to s. 19.1(3), a sentencing judge must then consider whether the impact of such an order would be disproportionate, taking into account the enumerated factors. Only then does the burden shift to the offender to establish that the impact of forfeiture would be disproportionate.

Though the BCCA disagreed with the Crown’s characterization of the two-step process, Ryan J.A. went on to assess whether the sentencing judge followed the aforementioned, clarified forfeiture test. The problem with the sentencing judge’s conclusion, according to the appellate court, was that she did not limit her analysis to whether the impact of forfeiture would be disproportionate under the s. 19.1(3) factors. Ryan J.A. wrote that, since the property in question was offence-related property, s. 16(1) required the court to order the property forfeited, subject only to the s. 19.1(3) factors.

Because the sentencing judge’s analysis was flawed, the BCCA conducted the clarified two-step process on its own. With regard to the first factor, the nature of the offence, Ryan J.A. wrote that marijuana production is a serious offence, as it is punishable by seven years imprisonment. The appellate court also considered the four-year length of Ms. Craig’s operation, and the fact that she was the owner and operator of this business. Factors in Ms. Craig’s favour, however, were that the operation was not connected to organized crime, the business developed because she had few alternatives, the grow-op had a compassionate side to it because it primarily serviced ill customers, and Ms. Craig had no criminal record.

The BCCA then weighed the proportionality of an order for forfeiture against these factors. Ryan J.A. wrote that forfeiture would heavily impact Ms. Craig, as she was facing a large tax bill. To pay that bill, she would likely have to sell her home, and if that house was forfeited, she would have to use the equity from her other, inherited house to pay the bills. But though this impact would be heavy, the BCCA did not think it would be disproportionate. Ms. Craig had received a university education and had a previous career in real estate. She was not without options when she initiated her grow-op, and she could have easily pursued legal commercial endeavours. The s. 19.1(3) factors did not offset the other serious aspects of her offence, and Ryan J.A. concluded that an order of forfeiture was appropriate. The BCCA allowed the Crown’s appeal with respect to the order of forfeiture.

Finally, the appellate court considered whether the conditional sentence of imprisonment was unfit. The Crown argued that it was, in light of the fact that Ms. Craig’s small home had been almost exclusively turned over to her marijuana business. Ryan J.A. agreed that a conditional sentence was unfit, and that conventional incarceration would have been appropriate. However, Ryan J.A. also noted that fitness of the primary penalty must be viewed in light of the order of forfeiture. Because the newly-ordered forfeiture would economically impact, as well as have a significant deterrent effect upon, Ms. Craig, the BCCA held that the conditional sentence of imprisonment was appropriate. It dismissed the Crown’s appeal against the conditional sentence of imprisonment, and in consideration of the forfeiture, the appellate court allowed Ms. Craig’s appeal against the fine and victim surcharge.

In this fashion, the BCCA set aside the sentencing judge’s decision. Ms. Craig’s home was ordered forfeited under s. 16 of the CDSA, but because of the heavy impact of this order, the conditional sentence was held to be appropriate and the $100,000 fine and victim surcharge were set aside. Though Ms. Craig’s appeal was indeed granted, and the impugned fines were eliminated, she ended up in a significantly worse position. She has appealed the forfeiture order to the SCC, and she will soon discover whether it would have been better to have accepted the fines and conditional sentence in order to ultimately keep her house.