R. v. Serban

2018 BCSC 2059 R. v. Serban

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: R. v. Serban, 2018 BCSC 2059 Date: 20181122 Docket: OTR140585 Registry: Vancouver Regina v. Romeo Serban and Cristina Serban Before: The Honourable Associate Chief Justice H. Holmes Ruling re Application to Vary "Restraint and Management Order" Made in Relation to Forfeiture Counsel for the Crown: H. Russell Counsel for Romeo Serban and Cristina Serban: N.J. Preovolos Place and Date of Hearing: Vancouver, B.C. June 7 and September 19, 2018 Written Submission from Counsel for Romeo Serban and Cristina Serban: October 29, 2018 and November 6, 2018 Place and Date of Judgment: Vancouver, B.C. November 22, 2018

INTRODUCTION [1] Romeo and Cristina Serban apply for an order allowing them to sell their former home pending the final determination of Mr. Serban's appeal from his convictions for offences under the Controlled Drugs and Substances Act. When Mr. Serban was convicted after a trial, half of his 50% interest in the home was ordered forfeit to the Crown under the forfeiture provisions of the CDSA. Mr. Serban appealed his convictions to the Court of Appeal without success, and will be seeking leave to appeal to the Supreme Court of Canada. The forfeiture order, however, has not been stayed or appealed. [2] Mr. and Ms. Serban now ask the Court to allow the sale by varying the Restraint and Management Order (RMO) that was made under the CDSA when the forfeiture proceedings were initiated. [3] The Crown does not oppose the terms of the proposed sale, which would require 25% of the net proceeds of sale to be paid into Court or held in trust to protect the Crown's interest under the forfeiture order pending the final determination of Mr. Serban's conviction appeal. [4] However, the Crown submits that the Court has no jurisdiction or basis on which to allow a sale because at this stage there is no order in effect with respect to the forfeiture proceedings. This, says the Crown, is because the RMO came to an end when the forfeiture order was made (according to the plain language of the

CDSA provisions), and the forfeiture order itself is necessarily suspended pending Mr. Serban's appeal from his convictions. [5] For the reasons given below, I cannot agree with the Crown. On my reading of the applicable provisions in the CDSA, the restraint aspect of the RMO has indeed come to an end; however the management aspect continues in effect, as does the forfeiture order itself, allowing the Court to grant the relief Mr. and Ms. Serban seek. [6] Before I explain those conclusions, I will briefly outline the background to the application and the evolution in the way it has been addressed.

BACKGROUND AND EVOLUTION OF THE APPLICATION [7] Mr. and Ms. Serban were both charged with cultivating marihuana and possessing marihuana for the purposes of trafficking after a large marihuana grow operation was found in the basement of their home in Maple Ridge. [8] After a trial, Verhoeven J. convicted Mr. Serban of both offences, and acquitted Ms. Serban (2017 BCSC 16). [9] Verhoeven J. also made the forfeiture order to which this application relates (2017 BCSC 1443). Under s. 16 of the CDSA, he ordered forfeit to the Crown half of Mr. Serban's 50% interest in the home. However, under s. 19.1(3), he granted Mr. Serban partial relief from forfeiture, allowing him to retain the other half of his 50% interest, leaving both Mr. Serban and the Crown with a 25% interest. Under s. 19(3), Verhoeven J. granted Ms. Serban complete relief from forfeiture in relation to her own 50% interest. As I said before, neither of the Serbans nor the Crown have pursued their rights of appeal from the orders relating to forfeiture, and nobody has asked that it be stayed pending Mr. Serban's conviction appeal. [10] Mr. and Ms. Serban depose that they bring the present application to sell the home (while also protecting the Crown's 25% interest under the forfeiture order) because they have moved to another community and cannot afford the costs of maintaining their combined 75% interest in the former

home as well as the costs of the home in their new community. [11] When the application was first heard on June 7, 2018, the Crown's position was the same as it is now, namely that the Court lacks jurisdiction to make an order providing for the proposed sale of the home: the RMO was brought to an end when the forfeiture order was made, and the forfeiture order (though not under appeal and not subject to a stay) is necessarily suspended pending the determination of the appeal from the convictions on which it is founded. In the hearing on June 7, Mr. Serban's conviction appeal had been filed in the Court of Appeal but not yet heard. [12] At the hearing on June 7, 2018, Mr. and Ms. Serban agreed with the Crown that the forfeiture order is necessarily suspended until Mr. Serban's conviction appeal has been determined - their position has since changed, as I will explain below. They also submitted that, despite certain language in the CDSA which, on a literal interpretation, might suggest otherwise, the RMO remains in effect and gives the Court a jurisdictional basis to provide for the proposed sale. They submitted that a generous and purpose-based interpretation of the forfeiture provisions of the CDSA is required in order to allow a means (through the RMO) to provide for the safeguarding of the home between the time of the forfeiture order and the time of the final determination

of an appeal from the conviction that grounds the forfeiture order. [13] After hearing submissions on June 7, 2018, I reserved judgment on the application. [14] On July 3, 2018, I caused a memorandum to be sent to the parties that asked for further submissions concerning whether the forfeiture order is necessarily suspended pending the conviction appeal. I noted that Mr. Serban's conviction appeal was governed by provisions in the Criminal Code, and asked for submissions about whether the Code provisions about the suspension of forfeiture orders (made under the Code) might cast light on the interpretation of provisions in the similar regime under the CDSA. The memorandum read as follows: As you know, Madam Justice Holmes (now Associate Chief Justice Holmes) reserved judgment on this matter on June 7, 2018. Having had an opportunity to reflect further on the evidence and submissions, she now asks for further submissions on a point that does not appear to have been fully addressed. Both the Crown and the defence made submissions that argued or assumed that the forfeiture order, which is not under appeal, is suspended pending Mr. Serban's conviction appeal. However, the submissions concerning the interpretation and application of the CDSA do not appear to have taken into account the provisions of the Criminal Code (as well as s. 34(2) of the Interpretation Act and the definitions

of "enactment" and "Act") by which the conviction appeal is governed. While those provisions may not apply directly, they may have some bearing on how the relevant CDSA provisions should be interpreted. For example, s. 689(1) of the Code expressly suspends the operation of a Criminal Code forfeiture order pending an appeal from conviction, while neither that provision nor any other provision in the Code or the CDSA appears to expressly suspend a CDSA forfeiture order pending an appeal from conviction. Madam Justice Holmes therefore asks for your further submissions on how, if at all, this and other Code provisions (such as s. 462.45 and s. 683(5)) cast light on whether Parliament intended CDSA forfeiture orders to be automatically suspended pending an appeal from conviction. Counsel are asked to kindly contact Supreme Court Scheduling to arrange for a further hearing before Associate Chief Justice Holmes at their earliest convenience. [15] In response to the memorandum, counsel appeared on September 19, 2018, and made further helpful submissions. [16] Mr. Serban revised his original position in two ways. First, he distinguished the "restraint" and "management" aspects of the RMO, and submitted that, on the proper interpretation of the CDSA provisions, a restraint order terminates with the making of a forfeiture order, but a management order continues in effect until the

forfeiture order is enforced and the forfeit property transferred to the Crown. Second, Mr. Serban retracted his submission that a forfeiture order is necessarily suspended pending the determination of an appeal from a conviction on which the order is based. He submitted instead that, unless stayed pending an appeal from the conviction or the order itself, a forfeiture order remains in effect throughout the appeal process. [17] The Crown's position was unchanged from June 7, 2018. [18] At that time, on September 19, 2018, Mr. Serban's conviction appeal had been argued (on September 14, 2018), and judgment was under reserve. [19] After the Court of Appeal dismissed Mr. Serban's conviction appeal on October 19, 2018 (R. v. Serban, 2018 BCCA 382), I caused a further memorandum to be sent to counsel, asking whether this application was now moot and unnecessary and/or inadvisable to decide, and, if it was not, also seeking submissions about amendments to the forfeiture provisions of the CDSA that had come into force on June 21, 2018, but had not been noted in counsels' oral or written submissions to that point. The material portion of the memorandum read as follows: You will recall that Associate Chief Justice Holmes once again reserved judgment on Mr. and Ms. Serban's application after hearing the parties' further submissions on September 19, 2018. She had asked for submissions on

a point relating to whether a forfeiture order is automatically suspended pending an appeal from a conviction that supports the order. Given the Court of Appeal's recent decision in R. v. Serban, 2018 BCCA 382, upholding Mr. Serban's conviction, Associate Chief Justice Holmes is inclined to view the application as moot. Although there was some discussion on September 19, 2018 about the potential benefit of having a decision nonetheless on the points in issue, Associate Chief Justice Holmes has come to the preliminary view that the disadvantages of issuing such a decision are greater: for example, the losing party might have no avenue of appeal. Counsel are asked to confer and either to submit a consent order withdrawing the application, or to arrange within ten days to appear at their earliest mutual appearance [sic -- should be convenience]. In such an appearance, counsel would be asked (a) for submissions on mootness and whether the application should be addressed, and (b) for updated references to the legislative provisions relating to the application, in light of the amendments to the Controlled Drugs and Substances Act that came into force (per SI/2018-46) on June 21, 2018. [20] Mr. Preovolos responded (on October 29, 2018 and further on November 6, 2018) that the application is not moot because Mr. Serban is seeking leave to appeal his convictions to the Supreme Court of

Canada. He explained that he expects the application for leave to remain outstanding until early January 2019. If leave is granted, Mr. Preovolos does not expect the appeal to be heard until the late spring at the earliest. [21] Mr. Preovolos also described the present application as of the utmost urgency from Mr. Serban's perspective because of the family's financial difficulties, especially with Mr. Serban in custody, as he was at the time of the October 29 submission. [22] Mr. Preovolos indicated that in his view, the amendments to the CDSA that came into force on June 21, 2018 have no bearing on Mr. Serban's application. He indicated that when he spoke to Crown counsel Ms. Russell a few days before his November 6, 2018 letter, she was of the same view on that point.

ANALYSIS [23] I will first address whether the RMO is still in effect despite the forfeiture order having been made, before then addressing whether the forfeiture order is necessarily suspended pending the final determination of Mr. Serban's conviction appeal. Did the RMO End when the Forfeiture Order was Made? [24] Expressed with more precision than in the sub-heading immediately above, the question is whether either or both of the "restraint" and "management" aspects of the RMO ended when the forfeiture order was made. [25] The RMO is a single order, but the parties agree that it amounts to an amalgamation of a restraint order and a management order for which the CDSA makes separate provision. The parties appeared to agree that there is no bar to interpreting the CDSA provisions and applying them to the RMO as though the RMO were two separate orders. [26] Section 14 allows the Attorney General to apply ex parte for a restraint order, and for a judge to grant such an order, prohibiting any person from disposing or dealing with an interest in property where there are reasonable grounds to believe that the property is offence-related. Section 14.1 (now replaced by the new s. 15.1) allows a judge, on application by the Attorney General, to also make a management order by appointing a person to take control of and manage, or otherwise deal with, all or part of property that is

subject to a restraint order. [1] [27] The duration of restraint and management orders, respectively, is addressed in ss. 14(9) and 15.1(9). Subsection 14(9) provides that a restraint order "remains in effect until an order of forfeiture of the property is made ". Subsection 15.1(9) provides that a management order "ceases to have effect when the property is forfeited": 14(9) A restraint order made under this section remains in effect until (a) an order is made under subsection 19(3) or 19.1(3) of this Act or subsection 490(9) or (11) of the Criminal Code in relation to the property; or (b) an order of forfeiture of the property is made under subsection 16(1) or 17(2) of this Act or section 490 of the Criminal Code. 15.1(9) A management order ceases to have effect when the property that is the subject of the management order is returned in accordance with the law to an applicant or forfeited to Her Majesty. [28] The Crown submits that both restraint and management orders thus terminate when an order for forfeiture is made, even if the forfeiture order is not enforced pending, as here, a conviction appeal. [29] The Crown submits that the plain language of s. 14(9) requires this interpretation in saying that a restraint order terminates when "an order of forfeiture is made". [30] The Crown acknowledges that s. 15.1(9), concerning management orders, is less explicit on the point

when read in isolation: a management order terminates when "the property is forfeited". However, the Crown submits that Parliament must have intended the two types of order to operate in tandem, and for that reason s. 15.1(9) should be read as referring to the time the forfeiture order is made, not the time when the order is enforced or the property transferred to the Crown. The Crown attributes the different language of s. 14(9) and s. 15.1(9) to weaknesses in the statutory draft. [31] I agree with the parties that a restraint order comes to an end when a forfeiture order is made. The language of s. 14(9) is plain on this point in both its English and its French versions: A restraint order remains in effect until ... an order of forfeiture of the property is made ... L'ordonnance de blocage demeure en vigeur jusqu'à ... une ordonnance de confiscation du bien est rendue ... [32] However, I cannot agree with the Crown that a management order comes to an end at that same time. Rather, the drafters used different language, in both the English and the French versions of s. 15.1(9), from which a different intention is evident: A management order ceases to have effect when the property that is the subject of the management order is returned in accordance with the law, destroyed or forfeited to Her Majesty. L'ordonnance de prise en charge cesse d'avoir effet lorsque les biens qu'elle

vise sont restitués, conformément au droit applicable, détruits ou confisqués au profit de Sa Majesté. [33] The Crown submits that "is forfeited", in s. 15.1(9), should be construed generously to bring its meaning into accord with s. 14(9), which uses "an order of forfeiture of the property is made". This, says the Crown, would allow restraint and management orders to run in tandem and thus come to an end at the same time, as Parliament must have intended. [34] I cannot accept this submission for two main reasons. [35] First, and as I have noted, the submission takes no account of the different language used in the two provisions, in both their English and their French versions, as I have noted. Parliament is to be presumed to have had a reason for using different language. This principle applies with all the more force where, as here, the two different uses of language appear in provisions dealing with orders (for restraint and management) that are closely related to each other and within the same statutory scheme. [36] Second, the Crown's position fails to take account of the different purposes of restraint and management orders, respectively. [37] A restraint order by its nature signals the Crown's potential interest in the property and prevents the disposal of the property pending forfeiture proceedings. The restraint order has no purpose once a forfeiture order is made,

because the forfeiture order takes over as evidence of the Crown's interest. [38] A management order, on the other hand, provides for the management of the property while the owner is deprived of that authority because of the forfeiture proceedings. The need for management does not end when a forfeiture order is made; it continues until the forfeiture order is enforced or the property is dealt with by being returned, transferred to the Crown, entirely or partially, or destroyed. [39] For these reasons, I cannot accept the Crown's submission that Parliament must have intended management orders always to end at the same time as restraint orders, and that the express language of s. 15.1(9) therefore must reflect a drafting weakness. [40] I conclude that in this case the restraint aspect of the RMO is no longer in effect, because it came to an end when the forfeiture order was made, and that the management aspect continues to have effect because the property has not yet been returned, transferred, or destroyed. [41] I turn now to consider whether, as the Crown submits, the forfeiture order is necessarily suspended pending the final determination of Mr. Serban's conviction appeal. Is the Forfeiture Order Suspended Pending the Conviction Appeal? [42] The Crown submits that the forfeiture order is necessarily suspended pending the determination of Mr. Serban's conviction appeal,

because the order could not have been made without one or both of the convictions now under appeal: see s. 16(1) of the CDSA. [43] In support of their original position to the same effect (expressed in the hearing on June 7, 2018) Mr. and Ms. Serban relied on s. 22(b) of the CDSA. Section 22, quoted in full to give context to para. (b), reads as follows: 22 Notwithstanding anything in this Act, the operation of an order made in respect of property under subsection 16(1), 17(2) or 20(4) 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 restoration or forfeiture of the property, or (b) any appeal taken from an order of forfeiture or restoration in respect of the property, and the property shall not be disposed of or otherwise dealt with until thirty days have expired after an order is made under any of those provisions. [emphasis added] [44] Mr. and Ms. Serban submitted that, on a broad and purpose-based interpretation, s. 22(b) is engaged not only by appeals from forfeiture orders but also by appeals from conviction where the conviction is part of the foundation of a forfeiture order. [45] Although, as I have explained, Mr. and Ms. Serban no longer make that submission, I will briefly state why I would not accept it. [46] First, the interpretation

would enlarge s. 22(b)'s reach well beyond the scope of its plain language, and would effectively import to s. 22(b) a legal consequence Parliament has chosen not to legislate in the CDSA. The provision refers specifically to "any appeal taken from an order of forfeiture or restoration in respect of the property"; it makes no mention at all of appeals from conviction. [47] Second, the proposed interpretation is inconsistent with the meaning of identical language in the Code, where a more developed regime offers a richer context from which to discern Parliament's intent. For example, in language identical to that of s. 22(b) of the CDSA, s. 462.45(b) of the Code suspends the operation of certain types of forfeiture orders pending "any appeal taken from an order of forfeiture or restoration in respect of the property". Despite this, the Code in s. 689(1) (which is under Part XXI - Appeals - Indictable Offences) expressly suspends the operation of those same types of Code forfeiture orders pending any appeal from conviction. Subsection 689(1) would not have been necessary (insofar as it relates to forfeiture orders) if Parliament had intended s. 462.45(b) to suspend the forfeiture orders listed in that provision pending appeals from conviction. [48] These observations also support my conclusion that the forfeiture order is not automatically or necessarily suspended pending Mr.

Serban's conviction appeal. [49] The Code's regime for appeals for indictable offences has direct application to CDSA offences - though not directly to CDSA forfeiture orders - by virtue of s. 675(1)(a) of the Code, read in light of s. 34(2) of the Canada Interpretation Act and that Act's definitions of "Act" and "enactment" in s. 2(1). Those provisions read as follows: 675 (1) A person who is convicted by a trial court in proceedings by indictment may appeal to the court of appeal (a) against his conviction (i) on any ground of appeal that involves a question of law alone, (ii) on any ground of appeal that involves a question of fact or a question of mixed law and fact, with leave of the court of appeal or a judge thereof or on the certificate of the trial judge that the case is a proper case for appeal, or (iii) on any ground of appeal not mentioned in subparagraph (i) or (ii) that appears to the court of appeal to be a sufficient ground of appeal, with leave of the court of appeal; or 34 (2) All the provisions of the Criminal Code relating to indictable offences apply to indictable offences created by an enactment, and all the provisions of that Code relating to summary conviction offences apply to all other offences created by an enactment, except to the extent that the enactment otherwise provides. 2 (1) Act, means an Act of Parliament enactment means an Act or regulation

or any portion of an Act or regulation. [50] Mr. Serban's right to appeal his CDSA convictions therefore arises from the Code. The Code regime governs his conviction appeal except to the extent that the CDSA (or some other federal statute) provides. [51] In my view, an examination of the Code's regime for appeals and the suspension of court orders pending appeals reveals that Parliament did not intend CDSA forfeiture orders to be automatically suspended pending appeals from the convictions that underlie them. [52] As I have noted, s. 689(1) of the Code expressly suspends the operation of certain Code forfeiture orders pending an appeal from conviction. Subsection 689(1) does not directly apply in this case, because the forfeiture was made under the CDSA, not the Code. However, in my view the provision clearly reveals an expectation on Parliament's part that, unless suspended as s. 689(1) provides, a Code forfeiture order would continue in effect pending an appeal from conviction. Subsection 689(1) reads as follows: 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. [53] A similar expectation on Parliament's part appears in s. 683(5) of the Code, which provides for a court of appeal to order the suspension of a forfeiture order, pending an appeal from conviction, if to do so is in the interests of justice: 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. [54] Like s. 689(1), s. 683(5) strongly implies that Parliament contemplates a forfeiture order remaining in effect pending a conviction appeal unless the order is expressly suspended by operation of law or by court order. [55] As I noted, the Code regime governs Mr. Servan's conviction appeal (except to the

extent that the CDSA or some other federal statute provides), and the CDSA is silent about the suspension of forfeiture order pending a conviction appeal, as I have noted. Parliament's intention, as clearly expressed in the Code regime I have discussed, must be taken to apply also to the parallel CDSA regime. [56] Nothing expressly suspends the forfeiture order in this case. The order does not fall within s. 689(1), because it was made under s. 16 of the CDSA - not under the various Code provisions to which s. 689(1) refers. Nothing in the CDSA expressly suspends it. And no application has been made under s. 683(5) or on any other basis for the forfeiture order to be suspended pending Mr. Serban's conviction appeal. [57] I conclude that the forfeiture order therefore remains in effect.

ORDER [58] Since I am satisfied that the management aspect of the RMO remains in effect, I am content to vary the RMO to allow for the proposed sale on the terms the Crown does not oppose. [59] The form of variation order submitted with the application requires some revision. [60] The RMO should not be defined in the proposed order as "the Restraint Order", because I have found that the restraint aspect of the RMO has come to an end and only the management aspect continues. References throughout the proposed order to the restraint order should be revised accordingly. [61] Also, the reference to the forfeiture being suspended pursuant to s. 22 of the CDSA must be removed because I have concluded that it is not suspended, and certainly not pursuant to s. 22. [62] If counsel have difficulty agreeing on the revised terms of the proposed order, they may arrange within 14 days to appear back. [63] Alternatively, since, as I conclude, the forfeiture order remains in effect, the Crown may choose to enforce it forthwith. Ms. Russell indicated that in fairness the Crown would not execute on the order pending the final determination of Mr. Serban's appeal from the convictions underlying the order. However, in the present circumstances, Mr. and Ms. Serban may prefer this route to a sale (subject to a term similar to that in the proposed variation order that would hold 25% of the net

proceeds of sale in trust pending the conviction appeal), as it seems they can no longer afford to maintain their 75% interest in the property, whether Mr. Serban's conviction appeal ultimately succeeds or not. "The Honourable Associate Chief Justice H. Holmes" [1] The former s. 14.1 was repealed and, for the most part, replaced by the new s. 15.1, which came into force on June 21, 2018 (2017, c. 7, s. 14, SI/2018-46). The parties referred to the former s. 14.1 in their submissions, and the new s. 15.1 that replaces s. 14.1 is not identical. For example, former s. 14.1 related to all offence-related property, while the new s. 15.1 refers exclusively to "non-chemical" offence-related property. However, in light of the parties' positions, recently conveyed through Mr. Preovolos' letter, that the amendments have no effect on Mr. Serban's application, I will refer in the following discussion to the new s. 15.1, and not the former s. 14.1 to which the parties referred in their submissions, because s. 15.1 is current.