The British Columbia Director of Civil Forfeiture ordered to return $2 million in cash that was seized as part of the largest money-laundering case in BC history, due to misconduct at an ex parte hearing. The decision can be found here and the reasons on the original ex parte hearing here.
“The Court must take the misconduct very seriously, because misleading statements in an ex parte hearing undermine the integrity of the process, and may even obliterate it. Misleading statements are of all the greater concern when they are made on behalf of a state actor carrying public authority and trust, whose actions have significant implications for individual rights and interests.”
The Court of Appeal requires a new certificate be issued by the British Columbia Minister of Environment and Minister of Natural Gas for the Trans Mountain Pipeline, even though the province cannot prevent or impede construction or operation of the pipeline.
And one more example of why you shouldn’t try to conduct your own trial without a lawyer, as the Court of Appeal denies an after the fact application to unseal the youth court record of a complainant.
Automatically Transcribed on September 19, 2019 – MULLIGAN DEFENCE LAWYERS
Legally Speaking Sep 19, 2019
Adam Stirling [00:00:00] Time now for Legally Speaking on CFAX 1070 as always, joining us is Michael Mulligan Barrister and Solicitor with Mulligan Defence Lawyers. Michael good morning. How are you?
Michael Mulligan [00:00:09] I’m doing great. Good to be here.
Adam Stirling [00:00:11] Some interesting stories to talk about today, including that thorny issue of civil forfeiture and where the balance should be struck between the ability of a person to have control over their private property and the ability of the state to seize that property, if indeed, the circumstances merited as just.
Michael Mulligan [00:00:30] Yeah this is I think an important case and it’s a substantial case in B.C. The decision that came out this week relates back to the case and I’m sure listeners are familiar with it’s that case where the Attorney General last year came out and said that he was quote” incredibly disappointed” by charges being stayed with respect to allegations of B.C.’s largest money laundering allegation ever. And the basics of that were, that there was an outfit storefront outfit over, and it was Richmond. And the allegation was that this outfit would, The Silver International, the name it went by would facilitate money laundering by providing funds to high rolling Chinese gamblers basically. And they would combine money laundering with circumventing China’s currency export requirements. The way that would work with somebody would want to come here who was a rich gambler, they couldn’t take enough money out of China in their private plane or whatever they were coming on, and this outfit was alleged to have taken cash, that would presumably be from some unlawful source, they would provide large amounts of cash was alleged serve a million and a half dollars a day, to prospective high rolling gamblers. So, they get their cash to go into the casino. They would go into the B.C. casino’s and by and large lose it in the casino. They weren’t like cashing it out to turn it into a check. They would do as most gamblers would and lose it in the casino. And then the high rolling gambler would repay the organization by a bank transfer in China. So, the organization would then allegedly launder the money by turning piles of cash, presumably with white powder on them, into a bank deposit in China. The high roller gets their money to gamble at the casino, B.C. gets the money. But that was viewed obviously as not being desirable given that it was facilitating allegedly money laundering.
Adam Stirling [00:02:30] I was going to say it’s the gambling of the money is not the issue it’s getting those dollar bills to the high roller in the first place the activities that must be engaged in, the white powder perhaps involving activities.
Michael Mulligan [00:02:41] Ya.
Adam Stirling [00:02:41] That causes real harm to the public.
Michael Mulligan [00:02:43] And it’s also it’s an offence actually to be in possession of proceeds of crime.
Adam Stirling [00:02:47] Oh really.
Michael Mulligan [00:02:47] You’re not permitted to just say sure give me your bag of drug money I’ll happily change it in to…
Adam Stirling [00:02:52] I didn’t know that was its own offence.
Michael Mulligan [00:02:53] That its own offence, can’t’ do that.
Adam Stirling [00:02:54] Alright.
Michael Mulligan [00:02:55] If you’re offered the bag of money. Don’t take it.
Adam Stirling [00:02:57] All right.
Michael Mulligan [00:02:58] In any case those charges against individuals were stayed or dropped last year producing the Attorney General coming out saying how incredibly disappointed he was by that turn of events. It would appear in retrospect that that may have occurred as a result of the charges being dropped, as a result of inadvertently identifying police informants in the case, and they had to drop the proceedings to avoid identifying these people and presumably putting them in grave danger.
Adam Stirling [00:03:25] Was there a disclosure error. I can’t remember if that was this case.
Michael Mulligan [00:03:28] That’s what it appears to have been sort of a, whoops we accidentally sent out information about who the informants were. Stop the proceeding.
Adam Stirling [00:03:36] Like the reply all joke at the office where you send the e-mail to everybody. But that’s not what happened. But that sort of horrible oh no we disclosed to the wrong thing to the wrong side. OK.
Michael Mulligan [00:03:45] So the criminal charges get dropped. The Attorney General’s incredibly disappointed. Then counsel for the individuals who were charged made an application for the return of a bunch of things which had been seized as part of that criminal investigation and the proceeds of crime. Those things included: two million dollars in cash, some casino chips, a property in Richmond, which we made some fun of I think at the time on the radio given it’s rather tasteless although obviously expensive appearance.
Adam Stirling [00:04:15] I recall that it was very ornate and distinct.
Michael Mulligan [00:04:18] It was as varied as I think it had columns maybe a lot of gold leaf on it. It was the sort of you know, it is perhaps just the picture itself might suggest…
Adam Stirling [00:04:26] That is the central theatrical version of the house that you want to check.
Michael Mulligan [00:04:29] Yes.
Adam Stirling [00:04:30] Ya, Ya, All right.
Michael Mulligan [00:04:30] So it involved these various things. When the charges were stayed or dropped. Counsel for the accused made an application for the return of the things that had been seized as part of that investigation. And a judge ordered those things returned, pursuant to a provision of the Criminal Code that allows for an order for things to be given back when the proceedings aren’t going on anymore. So that was asked for in the order was made. The Attorney General then comes out and makes these statements about being incredibly disappointed and needing better coordination with the federal government and prosecutions. It’s all a terrible tragedy. Then what happens? That brings us to the case this week. So about two or three weeks go by and when one of those orders is made for the return of property there’s a 30-day waiting period before it becomes effective. That allows for an appeal. All right.
Adam Stirling [00:05:18] That makes sense.
Michael Mulligan [00:05:19] But rather than appealing the order under the Criminal Code that the money and other stuff be given back. What the Provincial Government does, in the form of the Director of Civil Forfeiture, is that they show up in court in Victoria on December the 20th, pursuant to the Civil Forfeiture Act a Provincial Act which allows for the province to on a civil basis try to seize property that they believe to be the proceeds of crime or property which would be sort of involved in criminal activity. Right. Now that Civil Forfeiture Act is one which is different from the Criminal Code for a number of reasons. First of all, you need not be convicted of anything; second of all, it’s a civil thing, so the standard would be probably was this stuff the proceeds of crime, or property used in an offence.
Adam Stirling [00:06:12] Than balance of probability. Is that the term?
Michael Mulligan [00:06:14] That’s right.
Adam Stirling [00:06:15] Where are you… The judge is presented with the two scenarios and prefers which one is more likely.
Michael Mulligan [00:06:19] Yeah that’s right.
Adam Stirling [00:06:20] OK.
Michael Mulligan [00:06:20] And moreover they’ve even now reversed the burden. So, you would have to prove that the stuff the government wants to take is not the proceeds of crime. So, there would be some reason to argue that that Act may be unfair. It’s how it operates, right, sort of causing somebody to have to prove that their property was not the proceeds of crime in order to get to keep it. But nonetheless, that’s the law in British Columbia. So, what happens on December 20th? Well, a lawyer for the Director of Civil Forfeiture. Now it’s the Director Civil Forfeiture is an employee of the Provincial Government, shows up in court in Victoria having filed an application the day before, and on what’s called an ex parte basis, makes an application to keep all of this stuff, the money and other things, which a judge a few weeks earlier had ordered returned. Now here’s how things started to go off the rails in this case. And as was illuminated in the decision which came out this week, when in a civil case, just like in a criminal case, I suppose. There would be a strong presumption that, if you’re going to be suing somebody, you’re going to court asking for some order, that the other party be given notice of it. You tell them. And so that permits a number of things which would sort of go-to broad fairness like, allowing that person or their lawyer to show up in court and argue why you shouldn’t get what you’re asking for. Right. That’s generally how it works. You have an adversarial system which relies upon both people being told about what’s being asked for. And so, they could come to court and argue why it should or shouldn’t happen. But here the lawyer for the Director of Civil Forfeiture chose not to do that didn’t and showed up in court in Victoria to make what one of these things called an ex parte application.
Adam Stirling [00:08:06] I guess say it’s out of one side. Right. Oh.
Michael Mulligan [00:08:08] Yeah.
Adam Stirling [00:08:08] One part is like.
Michael Mulligan [00:08:09] I haven’t even told the other side this is happening. It’s the lawyer going in front of the judge saying, look I’m just here asking for something and I haven’t even told the other side about it and they’re not here. So that’s what the lawyer for the Director Civil Forfeiture chose to do. And the law on that is clear in this respect. And this I think goes to sort of the broader issue of the obligations of a lawyer. Lawyers aren’t simply an advocate. You can’t just go into anything you might possibly do to sort of advantage your client. And when a lawyer is showing up on one of these ex parte applications, this is the language used; the duty on counsel in an ex parte application is weighty indeed. The law is clear that an applicant must make full frank and fair disclosure of facts known to them that would support the position of the other side. You’ve got to present the whole thing. You can’t show up on an application where you haven’t even told the other side about it and just act like an advocate only telling the judge things you think will help your side. You’ve got to show up and you’ve got to provide the whole picture to the judge because after all you’ve sort of subverted the basic starting point which should be. Tell the other person what you’re doing so they can come out and argue against it.
Adam Stirling [00:09:16] An adversarial system without an adversary.
Michael Mulligan [00:09:18] Yeah not much of a system.
Adam Stirling [00:09:20] Yeah.
Michael Mulligan [00:09:20] So there’s this very high burden on counsel to do that. You’ve got to tell the judge about the other side’s possible arguments things that might be an issue. And when you read the decision that came out on December 20th you can see that the judge hearing that which was a different judge from the one who ordered the stuff be given back the money, was very concerned about it. That’s why you can see in the reasons, concerned about why the other side wasn’t told and you know those basic requirements. And here’s where things went really off the rails as elucidated by the decision which just came out this week from Associate Chief Justice Holmes, which dealt with the Director of Civil Forfeiture showing up and asking that this interim order continue. Right, because the interim order that they got without telling the other side didn’t go on forever. And when they showed up the Director Civil Forfeiture showed up asking that this thing carry on and they get to keep the money. Basically. They then got a transcript of what the lawyer said back in that application on December 20th. And the judge that had to deal with the matter this week found that, this is the important part, this essentially this; in essence the Directors Counsel conducted herself as an advocate for the Directors position in responding to Justice Johnston the judge who heard that thing December 20th, concerns about having the hearing take place ex parte, and in the face of the Section 490 order, the other one the judge had been to give the stuff back, said that the lawyer allowed no room for opposing views, views of the law, or its application to the situation, made no apparent effort to put forward the position of the opposing counsel would likely have taken, had they been present. And she also misstated the law on one foundational point in a way that favoured the Director’s position.
Adam Stirling [00:11:04] That’s not good.
Michael Mulligan [00:11:04] Now you know, courts aren’t, and judges aren’t known for making sort of over-the-top inflammatory language but that’s about as strong as you’re going to see from a judge to criticizing Counsel for how they’ve conducted the application. And the reason why I think this is important for people is the judge goes on to make clear that her criticism isn’t simply with respect to the particular lawyer who showed up making that application to keep the stuff without telling the other side. The judge made clear that her concern was, that it included the fact, that the Director’s response to the application, like the hearing that took place most recently about whether that should go on, indicated or suggested to her, that it did not inspire confidence that a different approach should be taken in the future. And the… With respect to misstatements on the law, the way the counsel conducted themselves and the judge found that a whether the through the original lawyer showing up there in December the misstatements were a result of carelessness or confusion on counsel’s part or whatever it might be. It was particularly troubling that the Director of Civil Forfeiture continued to not acknowledge the serious problem caused when somebody shows up and acts in that fashion sort of as a pure advocate, not providing a clear statement of the other side, doing it without telling the other side. The judge found that the conduct of the civil… Director of Civil Forfeiture must be taken very seriously. Misleading statements on the ex parte hearing undermined the integrity of the process and may even be obliterated, indicated the judge found that misleading statements are of greater concern when they are made on behalf of a state act carrying public authority and trust.
Adam Stirling [00:12:53] Interesting.
Michael Mulligan [00:12:53] So it was a round condemnation of how the Director Civil Forfeiture conducts himself in December and the fact that they didn’t acknowledge how problematic behaving in that way is and how that can undermine confidence in the system, generally. The result of all this is that the Associate Chief Justice Holmes refused the Director’s Application to continue to keep the money. That result of this is going to be the two million dollars in cash is going to go back to the people alleged to been running that money laundering operation and the not unreasonable concern that the Director expressed was, well we’re not likely to ever see that again, that’s likely to disappear into the ether. And that may well be so. But the takeaway message here and it’s an important takeaway message is that when counsel are acting on behalf particularly of a government entity, that’s doing something like this, trying to take somebodies property, you have to take very seriously, your obligations as counsel to ensure the integrity of the process. And that means you can’t simply conduct yourself as an advocate. It’s not enough to show up and say anything you think might help your side when you’re not telling the other side about your application in particular. There just needs to be full frank and complete disclosure. And the really troubling thing here based on the findings of the judge is that the Director Civil Forfeiture, still doesn’t seem to acknowledge how problematic that behaviour was back in December. It causes the judge great concern that that kind of behaviour may not change in the future. So that’s a round condemnation about how that office is conducting itself. And from a public point of view the net result of this now is; not only where the criminal allegations stayed as a result of a appears to be mistakenly identifying the informant. Now the two million dollars in cash is going to be returned to the people who are alleged to have engaged in that and that has happened because of how the Director of Civil Forfeiture chose to conduct its business in this case.
Adam Stirling [00:15:05] Not a great day for the B.C. government. Quick break, after the break. Court of Appeal of British Columbia and the Trans Mountain Pipeline, son of the ruling recently a partial appeal allowed what does it mean and what happens next we’ll talk about it after this [00:15:18][13.3]
Commercial [00:15:19] COMMERCIAL BREAK
Commercial [00:19:02] It’s Adam Sterling on CFAXs 1070.
Adam Stirling [00:19:05] Well the nice thing about the horrible pipeline war that never ends, is I get to learn all about Canada’s legal system; for example, the Federal Court of Canada. We learned about that when discussing the litigation between Alberta and British Columbia. I didn’t even know that level of court existed. I knew there was a Federal Court of Appeal above it. Now the B.C. Court of Appeal, a different court, yet again, making a ruling a partial appeal allowed regarding an environmental assessment certificate given by the province in relation to the Trans Mountain Pipeline. Michael Mulligan help us understand what’s happening.
Michael Mulligan [00:19:39] Sure this one sure does need a little bit of explanation. So, this is a Court of Appeal decision which just came out. It was an appeal brought by the Squamish Nation and others, challenging the issuance of an environmental assessment certificate pursuant to the Environmental Assessment Act, which was a Provincial act in British Columbia. Now if you look at the Environmental Assessment Act of B.C. It would contemplate a requirement for various large projects like this pipeline being a requirement. And it is something which ultimately would be a certificate issued by the British Columbia Minister of Environment and Minister of Natural Gas. So, this was a challenge brought saying, hey you shouldn’t have issued that certificate, and furthermore the Squamish Nation says you didn’t consult with us sufficiently before deciding to issue the certificate. Now here is the point that kind of makes this ruling a little a bit of a head-scratcher. The Provincial Government, we should remember, has no authority to regulate the construction or operation of an interprovincial pipeline. And this was a point where all the parties to this litigation agreed. The court said this: “the parties except the British Columbia cannot prevent or impede construction or operation of the pipeline”. What is really gone on here, is that the Province of British Columbia has passed this act the Environmental Assessment Act, that requires one of these certificates to be issued and it would be issued on the basis of the Minister reviewing a report prepared by the Federal Agency the National Energy Board report on it. Now the Provincial Government did consultation with the Squamish Nation and others about the issuance of the certificate, but the thing is they are required to issue the certificate and even if the certificate wasn’t issued it can have no practical impact whatsoever because the Province of British Columbia has no authority to impede the construction of the pipeline or its operation. So, while we have a legal regime in place that contemplates the Minister having to issue one of these certificates; the certificate or absence of a certificate can’t really impede the operation of this or construction of this pipeline. Well really at all. So, I’m hard-pressed to imagine quite what that consultation or accommodation might look like, given that you know we can’t do anything about it. But nonetheless, it’s a legal requirement that this thing be produced and there be consultation before it be produced and so hence this litigation that now wound its way up to the Court of Appeal. Interestingly, the Court of Appeal at the end of the day found that the consultation was adequate.
Adam Stirling [00:22:25] Which is interesting because that stopped Northern Gateway that stopped Trans Mountain on August 30th, 2018. So that was fulfilled in this case.
Michael Mulligan [00:22:31] True, but I can’t. It’s really hard again for me to imagine quite what that accommodation and consultation looks like when, ultimately, the person who’s negotiating and consulting with you and accommodating you, really has no control over the thing at the end of the day anyways because it’s just out of their Constitutional Jurisdiction. But there we are. The nonetheless the Court of Appeal found that the consultation was adequate. That may have some bearing on what the Federal Court of Appeal does now when it’s examining the consultation that occurred over the past year, but through no fault of anyone, and if the court finds the Minister who is required to issue the certificate must review the new report that was prepared by the National Energy Board following that last appeal up to the Federal Court of Appeal and then must issue the certificate again. That’s just all various requirements of this Provincial Act. So presumably they will do so, but once again it seems to me on, when you carefully consider all of this, it’s a requirement to issue a certificate that really can have no impact whatsoever if the Minister didn’t issue the certificate it seems to me. What difference does that make your level of government has no control over this, but there it is. So now presumably the Minister of Environment and Minister of Natural Gas Development will review, as they are required to under the Act, the new and updated environmental assessment report will appear by the National Energy Board and shall issue that certificate. Because all of that of course is a requirement of the Provincial Environmental Assessment Act. But it’s all so much a legal requirement without much impact because the province just doesn’t have control over this.
Adam Stirling [00:24:10] Fifteen years since Haida and we’re still working out that template on what the constitutional duty to consult and accommodate Aboriginal peoples really means.
Michael Mulligan [00:24:18] Yes.
Adam Stirling [00:24:19] We’re getting there.
Michael Mulligan [00:24:19] We’re getting there.
Michael Mulligan [00:24:20] But once again, I don’t know what that accommodation looks like when you’re consulting and accommodating yet have no authority to do anything. It’s sort of like some municipality setting up some bylaw whereby they must issue some certificate to approve the pipeline. That’s all very interesting, but it’s just not there… that’s just not their area.
Michael Mulligan [00:24:41] Burnaby tried to do that with their tree cutting permit, denying it. The Provincial Government became an intervenor in that case. They got crushed. Kinder Morgan got costs. That’s how that trial ended or that case ended. Michael Mulligan pleasure as always, we have 80 seconds left. I know you’ve got some other stories here. Would you like to reflect on this story?
Michael Mulligan [00:24:57] Sure.
Adam Stirling [00:24:57] You’ve done or talk about the new one.
Michael Mulligan [00:24:59] I think I can probably sum it up in 80 seconds. So, this was another decision over the B.C. Court of Appeal this week. The underlying issue was a fellow trying to appeal his long since a passed conviction for sexual assault that arose out of some activity with a person who was 14 years of age and the issue was whether that person had said that she was 14 or not. That’s the underlying issue. The appeal this week dealt with this fellow’s effort to try to get a copy of this person’s alleged youth court record, the young person, and he says that that would have had some impact on the original trial because it might have gone to that person’s credibility. His problem was that he did that trial on his own. He didn’t have a lawyer.
Adam Stirling [00:25:43] Oh no.
Michael Mulligan [00:25:43] There has to be an application made to unseal a youth court record to get that thing. He didn’t have a lawyer. He didn’t know he had to make that application. He didn’t get the record and he was convicted by a jury a number of years ago and he’s ever since then been struggling to try to get this thing and have a new trial. He hasn’t gotten very far. The Court of Appeal finally concluded that there is no jurisdiction to under seal, unseal the youth court record on appeal, that had to have been done way back at the time of trial. The takeaway from all of this is don’t try to conduct your own jury trial, if, at all possible, that’s not going to go well for you, and trying to unscramble the egg afterwards is likely to be a multi-year effort and frustration as it will be, as it has been now for this fellow. We’ll never know what the result might have been had the application has been made prior to the trial, but there it is.
Adam Stirling [00:26:31] Michael Mulligan thank you for your knowledge and insight as always appreciate it.
Michael Mulligan [00:26:34] Thank you.
Adam Stirling [00:26:34] Michael Mulligan every Thursday here at CFAX 1070, Barrister and Solicitor with Mulligan Defence Lawyers.