COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Attorney General) v.
    Norwood Estate, 2021 ONCA 493

DATE: 20210706

DOCKET: C68474

Huscroft, Paciocco and Jamal
    JJ.A.

BETWEEN

Attorney General of Ontario

Applicant/Moving Party

(Respondent)

and

Michael Norwood (Estate of) and
    947014 Ontario Inc.

Respondents/Respondents on Motion

(Appellants)

and

Rosa
    Norwood

Interested Party

Geoffrey
    Adair, Alan Brass and Erica Tanny, for the appellants

Antonin I.
    Pribetic and Paul Kim, for the respondent

Robert
    Meagher, for the interested party

Jessica L.
    Kuredjian and Robert Sniderman, for the intervener Canadian Constitution
    Foundation

Heard: May 12, 2021 by video conference

On appeal from the order of Justice Charles
    T. Hackland of the Superior Court of Justice, dated June 4, 2020, with reasons
    reported at 2020 ONSC 3510.

Paciocco J.A.:

OVERVIEW

[1]

Michael Norwood (Michael) faced narcotics-related
    criminal charges, but died before he could stand trial. As a result of those
    charges, and before Michaels death, the Attorney General of Canada (Canada) seized
    Michaels home at 11 Cassone Court (the Cassone Court property) and commenced
    proceedings to secure its forfeiture. Pending Canadas forfeiture proceedings,
    the Cassone Court property was sold on consent. The proceeds were paid into
    Canadas Seized Property Management Directorate.

[2]

After Michaels death, Canada terminated its
    forfeiture proceedings. Before the proceeds of sale of the Cassone Court property
    could be returned to Michaels estate, the Attorney General of Ontario
    (Ontario) commenced proceedings under the
Civil Remedies Act, 2001
,
S.O. 2001, c. 28 (the
Civil Remedies Act
 or the Act), seeking its
    own forfeiture order. The proceeds of sale of the Cassone Court property were subsequently
    paid into court.

[3]

Michaels mother, Rosa Norwood (Rosa), notified
    Ontario of her claim to an interest in the Cassone Court property. Before
    Ontarios forfeiture claim could be resolved, Ontario agreed with Rosa that she
    should receive $120,000 from the sale proceeds. On May 6, 2020, pursuant to s.
    18.1 of the
Civil Remedies Act
, Ontario moved for approval of this proposed
    settlement. Michaels estate (the Estate) and 947014 Ontario Inc. (947),
    a company Michael controlled before his death, opposed Ontarios motion and the
    payment of funds to Rosa. On June 4, 2020, the motion judge granted an order
    approving the settlement between Ontario and Rosa, which required payment of $120,000
    to Rosas counsel in trust.

[4]

The Estate and 947 are the appellants in this
    appeal. Ontario is the respondent. Rosa is an interested party and relies on
    Ontarios submissions; she advanced no oral or written submissions of her own.

[5]

The appellants contend that the motion judge
    erred in approving the agreement between Ontario and Rosa prior to a judicial
    determination that Ontarios forfeiture claim was successful.

[6]

I agree. In my view, properly interpreted, to
    constitute a settlement in relation to a proceeding under this Act in the
    meaning of s. 18.1(1) of the
Civil Remedies Act
, the proposed agreement
    must relate to the
in rem
property interests being litigated in the underlying
    forfeiture proceedings. Although Ontario and Rosa could settle their relative
in
    personam
claims, they could not, between themselves, settle the
in rem

interests of others, such as the Estates interest in the Cassone Court
    property. Put another way, their so-called settlement was not a settlement in
    the meaning of the Act at all, and therefore not properly subject to judicial
    approval under s. 18.1.

[7]

Things would have been different, however, if before
    approving the agreement the motion judge had determined that the sale proceeds
    of the Cassone Court property were the proceeds and/or instruments of unlawful
    activity, and that forfeiture was not clearly contrary to the interests of
    justice. Such a determination would have given Ontario a higher right to the Cassone
    Court property to the exclusion of all others, subject to Rosas outstanding
    claim that she was a legitimate or responsible owner. Ontario and Rosa
    could then have entered into an agreement resolving the
in rem

property
    interests in the proceeds of the Cassone Court property being litigated in the forfeiture
    proceedings under the
Civil

Remedies

Act
, an
    agreement which would have constituted a settlement in the meaning of s. 18.1.

[8]

Put simply, absent a finding of unlawful
    activity, there was no settlement in relation to a proceeding under [the] Act
    between Ontario and Rosa for the motion judge to approve. Therefore, I conclude
    that the motion judge erred in approving the agreement between Ontario and Rosa.
    Accordingly, I would set aside the motion judges order of June 4, 2020.

MATERIAL FACTS & PROCEEDINGS BELOW

[9]

On October 7, 1993, Michael acquired the property
    at 11 Cassone Court, Ottawa (formerly Nepean). On September 22, 1995, a charge
    was registered against the Cassone Court property in favour of Michaels
    mother, Rosa. Rosas charge against the Cassone Court property was discharged twelve
    years later, on October 10, 2007.

Procedural history leading to the settlement
    approval motion

[10]

In February 2015, after a prolonged
    drug-trafficking investigation, Michaels Cassone Court residence was searched
    and the property itself was seized. So too was the Silver Dollar nightclub, which
    Michael owned and operated through 947.

[11]

As a result of its investigation, Canada laid drug-related
    charges against Michael, and instituted forfeiture proceedings against the
    Cassone Court property and the Silver Dollar, pursuant to s. 17 of the
Controlled
    Drugs and Substances Act
, S.C. 1996, c. 19, and ss. 462.38(2) and 490(9)
    of the
Criminal

Code
, R.S.C. 1985, c. C-46.

[12]

On October 19, 2015, Canada obtained a restraint
    order relating to the seized properties. The next day, October 20, 2015, Michael
    executed a promissory note in favour of Rosa in the amount of $138,000. On
    October 23, 2015, Michael directed his counsel to register a collateral charge
    against the Cassone Court property in Rosas name, also for $138,000.

[13]

Rosa claims that the promissory note and collateral
    charge retroactively evidenced an informal arrangement between herself and Michael,
    dating back to the mid-1990s, through which she provided her son with $138,000.
    Rosa asserts that, in return, Michael renovated the Cassone Court property to
    provide her with an apartment, promised her she could reside there until her
    death, and agreed to repay her from the proceeds of sale if the property were ever
    sold. However, when Rosa attempted to register the collateral charge, she was
    unsuccessful because Canadas restraint order against the Cassone Court property
    was in place.

[14]

Subsequently, Michael and Canada agreed that the
    Cassone Court property would be sold. The sale closed in July 2016 for
    $243,098.88. The net proceeds of sale were paid into Canadas Seized Property
    Management Directorate, along with the net proceeds of the Silver Dollar, which
    had also been sold.

[15]

On October 4, 2016, an order was made releasing
    some of the property Canada had seized from Michael to his criminal lawyer to
    assist in paying his legal fees, including $105,099 of the proceeds of sale of
    the Cassone Court property:
R. v. Norwood
, 2016 ONSC 6207. In making
    that order, Parfett J. (who was not the motion judge who made the order now
    under appeal), found that Michael had a possessory right in the seized
    property [including the Cassone Court property] to the exclusion of anyone else
    and no other means or assets with which to pay his legal expenses: at para.
    30.

[16]

Michael died around one year later, on October
    17, 2017. On February 8, 2019, Canada secured another order from Parfett J. terminating
    its forfeiture proceedings and ordering the return of the remaining proceeds of
    sale of the Cassone Court property, approximately $145,000 plus interest, to the
    Estate.

Ontarios forfeiture application and Rosas
    claim

[17]

On February 15, 2019, before the proceeds contemplated
    in Parfett J.s order could be paid to the Estate, Ontario began forfeiture
    proceedings pursuant to the
Civil Remedies Act
relating to the
    proceeds of sale of both the Cassone Court property and the Silver Dollar.

[18]

On February 21, 2019, Rosas counsel wrote to
    Ontario to advance Rosas $138,000 claim against the proceeds of sale from the Cassone
    Court property.

[19]

On March 7, 2019, Ontario obtained an interim
    preservation order relating to the proceeds of sale of the Cassone Court
    property and the Silver Dollar. That preservation order was renewed, on consent,
    in October 2019.

The proposed settlement and the settlement
    approval motion

[20]

On April 24, 2020, Ontario made an offer to
    settle Rosas claimed interest in the forfeiture proceedings by payment of
    $120,000 from the proceeds of sale of the Cassone Court property. The Estate
    rejected the offer. Rosa accepted it.

[21]

On May 6, 2020, Ontario brought an urgent
    motion pursuant to s. 18.1 of the
Civil Remedies Act

for
    approval of its proposed settlement with Rosa. The motion was heard before Ontario
    had served an application record setting out the evidentiary basis for its
    underlying forfeiture application.

[22]

The Estate opposed the approval motion,
    contending that Rosas claim was without merit. It maintained that, by hearing
    the motion before the Estate could challenge the forfeiture proceedings, the
    court would effectively deprive the Estate of a defence in those proceedings.

The order under appeal

[23]

On June 4, 2020 the motion judge ruled against
    the Estate, granting an order approving the settlement between Ontario and
    Rosa and directing payment of $120,000 in trust to Rosas counsel (the order
    under appeal).

[24]

The motion judges reasons for granting the
    order under appeal do not disclose a detailed exercise of statutory
    interpretation relating to s. 18.1. Notably, the motion judges reasons do not
    expressly contemplate whether he had the authority to approve the proposed settlement
    between Ontario and Rosa. The sole basis the motion judge offered for rejecting
    the Estates submission that the approval motion should not be heard in the
    face of an outstanding contested forfeiture application was that s. 18.1
    confers courts with a broad power to approve settlements. In support of his
    view, the motion judge stated that [n]otably, it is not required [under s.
    18.1] that any amount to be paid out of the preserved funds be first
    established to be proceeds of crime.

ISSUES ON APPEAL

[25]

The appellants advance three submissions with
    respect to the order under appeal.

[26]

First, their principal submission is that the
    motion judge erred in law in determining that the approval of a settlement
    under s. 18.1 of the
Civil Remedies Act
did not require a prior
    determination that the funds seized were the proceeds of unlawful activity.

[27]

Second, the appellants argue that Rosa is not a
    legitimate owner or responsible owner of the Cassone Court property, but a
    mere creditor incapable of entering into a settlement within the meaning of s.
    18.1 of the Act, and that the motion judge erred in finding otherwise.

[28]

Third, the appellants submit that the motion
    judge erred in deciding the approval motion based on hearsay evidence from a
    lawyer about the nature of the agreement between Rosa and Michael. On this
    ground, the appellants raise other related legal objections to the motion
    judges findings that I need not recount.

[29]

For reasons that follow, I would accept the
    first ground of appeal. As this disposes of the appeal, I will not comment on
    the second and third grounds. Suffice it to say that my silence should not be
    taken as either a favourable or unfavourable comment on the appellants
    remaining grounds of appeal or on the motion judges reasoning relating to
    those issues.

ANALYSIS

[30]

Section 18.1(1) of the
Civil Remedies Act
authorizes a court to approve a settlement in relation to a proceeding under
    this Act. In my view, the agreement between Ontario and Rosa was not a
    settlement in relation to a proceeding under the
Civil Remedies Act
and therefore not properly subject to judicial approval.

[31]

I will begin the analysis that leads me to this
    conclusion by setting out or describing the relevant provisions of the Act.

A.

The Material Provisions of the
Civil
    remedies Act

Purpose of the Act

[32]

The purpose of the
Civil

Remedies

Act
is specified in s. 1, as follows:

The purpose of this Act is to
    provide civil remedies that will assist in,

(a)
compensating persons who suffer
    pecuniary or non-pecuniary losses
as a result of unlawful activities
;

(b)
preventing persons who engage in
    unlawful activities and others from keeping property that was
acquired as a
    result of unlawful activities
;

(c)
preventing property, including
    vehicles as defined in Part III.1, from being
used to engage in certain
    unlawful activities
; and

(d)
preventing injury to the public that
    may result from
conspiracies to engage in unlawful activities
. [Emphasis
    added.]

Forfeiture

[33]

Although the
Civil Remedies Act

provides
    in some cases for damages or monetary payments, forfeiture is the primary
    mechanism to accomplish its purpose.

[34]

The Act does not define forfeiture. However, in
Chatterjee v. Ontario (Attorney General)
, 2009 SCC 19, [2009] 1 S.C.R.
    624, at para. 18, Binnie J. described forfeiture under the
Civil Remedies
    Act
as the transfer of property from the owner to the Crown. As such, until
    forfeiture occurs and the consequential transfer of property from the owner to
    the Crown has taken place, Ontarios rights in the subject property do not
    materialize, nor are the rights of others expunged.

[35]

The
Civil Remedies Act

provides for
    three categories of forfeiture of property linked to unlawful activity: proceeds
    of unlawful activity (Part II); instruments of unlawful activity (Part III); and
    vehicles linked to vehicular unlawful activity (Part III.1). The nature of the required
    link between the subject property and the unlawful activity varies with each
    category; hence my practice at times in this judgment of speaking generally
    about the requisite link between the property and the unlawful activity.

Unlawful activity

[36]

Unlawful activity is defined under Parts II and
    III, in ss. 2 and 7(1), as follows:

unlawful activity means an act or
    omission that,

(a) is an offence under an Act of
    Canada, Ontario or another province or territory of Canada, or

(b) is an offence under an Act of
    a jurisdiction outside Canada, if a similar act or omission would be an offence
    under an Act of Canada or Ontario if it were committed in Ontario,

whether the act or omission occurred
    before or after this Part came into force.

Forfeiture of property that is proceeds or an
    instrument of unlawful activity

[37]

Ontario brought its forfeiture application
    relating to the proceeds of the Cassone Court property and the Silver Dollar
    pursuant to Parts II and III of the
Civil

Remedies

Act
.
    The application is based in part on the allegation that, in Michaels hands,
    the Cassone Court property was the proceeds and/or an instrument of unlawful
    activity. As ss. 3 and 8 provide, for forfeiture under either Part II or III to
    occur, a court must find that the property is tainted by unlawful activity.

[38]

Section 2 of the Act defines proceeds of
    unlawful activity as property acquired directly or indirectly, in whole or in
    part, as a result of unlawful activity.

[39]

Section 7(1) defines instrument of unlawful
    activity as property that is likely to be used to engage in unlawful activity
    that, in turn, would be likely to or is intended to result in the acquisition
    of other property or in serious bodily harm to any person, which includes any
    property that is realized from the sale or other disposition of such property.

[40]

Section 3(1), under Part II, states:

In a proceeding commenced by the
    Attorney General, the Superior Court of Justice shall, subject to subsection
    (3) and except where it would clearly not be in the interests of justice, make
    an order forfeiting property that is in Ontario to the Crown in right of
    Ontario
if the court finds that the property is proceeds of unlawful
    activity
. [Emphasis added.]

[41]

Section 8(1), under Part III, is identical except
    that the requisite finding supporting forfeiture is that the property is an
    instrument of unlawful activity.

Legitimate owner, uninvolved interest holder
    and responsible owner

[42]

Section 3(3), the provision referred to in s.
    3(1), has been amended since the order under appeal was made.
[1]

[43]

Namely, the term legitimate owner in s. 3(3)
    has now been replaced by the term uninvolved interest holder, as follows:

If the court finds that property is
    proceeds of unlawful activity and a party to the proceedings proves that he,
    she or it is
a legitimate owner
[now,
an uninvolved interest holder
]
    of the property, the court, except where it would clearly not be in the
    interests of justice, shall make such order as it considers necessary to
    protect the legitimate owners interest in the property. [Emphasis added.]

[44]

Likewise, the definition of uninvolved interest
    holder now in force under s. 2 is identical to the former definition of
    legitimate owner, which was as follows at the time of the order under appeal:

legitimate owner
 [now,
uninvolved
    interest holder
] means, with respect to property that is proceeds of
    unlawful activity, a person who did not, directly or indirectly, acquire the
    property as a result of unlawful activity committed by the person, and who

(a)

was the rightful owner of the property before
    the unlawful activity and was deprived of possession of the property by means
    of the unlawful activity,

(b)

acquired the property for fair value after the
    unlawful activity occurred and did not know and could not reasonably have known
    at the time of the acquisition that the property was proceeds of unlawful
    activity, or

(c)

acquired the property from a person mentioned in
    clause (a) or (b).

[45]

The term responsible owner is used under Part
    III in ss. 8(1) and 8(3), the comparable provisions to ss. 3(1) and 3(3) with
    respect to instruments of unlawful activity.

[46]

Section 7(1) defines responsible owner as
    follows:

responsible owner means, with
    respect to property that is an instrument of unlawful activity, a person with
    an interest in the property who has done all that can reasonably be done to
    prevent the property from being used to engage in unlawful activity, including,

(a)

promptly notifying appropriate law enforcement
    agencies whenever the person knows or ought to know that the property has been
    or is likely to be used to engage in unlawful activity, and

(b)

refusing or withdrawing any permission that the
    person has authority to give and that the person knowns or ought to know has
    facilitated or is likely to facilitate the property being used to engage in
    unlawful activity.

Standard of proof in proceedings under the
Civil
    Remedies Act

[47]

Part V is the General part of the
Civil
    Remedies Act
. Under Part V, s. 16 specifies that, subject to exceptions
    not relevant to this appeal, findings of fact in proceedings under the Act shall
    be made on the balance of probabilities.

[48]

When the requisite standard of proof is applied
    to the material factual issues referred to in the preceding sections, the
    scheme of the Act as it relates to forfeiture applications under Parts II and
    III can be described in the following simple terms. If Ontario establishes on
    the balance of probabilities that the subject property is the proceeds and/or an
    instrument of unlawful activity, the court is authorized and required to make
    an order forfeiting the subject property, subject to the following two
    exceptions arising from elements of Parts II and III of the Act referenced
    above.

Exceptions to forfeiture

[49]

The first exception, pursuant to ss. 3(1) and
    8(1), provides that no forfeiture order may be made if the court finds that
    such an order would clearly not be in the interests of justice.

[50]

Pursuant to ss. 3(3) and 8(3), the second
    exception is engaged if a claimant satisfies the court on the balance of
    probabilities that they are a legitimate owner (now, an uninvolved interest
    holder) or a responsible owner of property that has been proven as the
    proceeds or an instrument of unlawful activity, respectively. If so satisfied,
    the court must make an order that is necessary to protect the legitimate or
    responsible owners interest in the property, unless it would clearly not be in
    the interests of justice to do so.

Special purpose account

[51]

Where Ontario succeeds in obtaining forfeiture by
    proving the subject property is the proceeds or an instrument of unlawful
    activity, and where the forfeited property has been converted into money, ss. 6
    and 11 provide for its payment into a special purpose account.

[52]

Money from a special purpose account may be used
    to compensate Ontario for its costs incurred in the proceedings, and/or to make
    payments for designated purposes, including compensating persons who suffered
    losses as the result of the impugned unlawful activity, assisting victims of
    unlawful activity generally, or compensating Ontario, a municipal corporation,
    or a public institution for pecuniary losses suffered as a result of unlawful
    activity.

[53]

Finally, three further provisions found in Part
    V are relevant to this appeal.

Actions
in rem

[54]

First, s. 15.6(1) provides:

All proceedings, including
    proceedings for an interlocutory order, under Parts II, III and III.1, whether
    by action or application, are
in rem
and not
in personam
.

Where possession unlawful

[55]

Second, s. 18 stipulates that a person cannot have
    a claim in property subject to proceedings under the Act if their possession of
    the subject property is unlawful:

For the purposes of a proceeding
    under this Act, a person cannot claim to have an interest in property  if,
    under the law of Canada or Ontario, it is unlawful for the person to possess
    the property.

Settlements

[56]

Third, s. 18.1  the provision authorizing court
    approval of settlements which is the primary focus of this appeal  provides as
    follows:

(1) Despite anything to the contrary
    in this Act, the court may approve a settlement in relation to a proceeding
    under this Act, on the motion of the Attorney General or of any other party to
    the proceeding with the Attorney Generals consent.

(2) For greater certainty, the power
    to approve a settlement under subsection (1) includes a power to approve a
    settlement that provides for the full or partial forfeiture of the property
    that is the subject of the proceeding.

(3) For greater certainty, the power
    to approve a settlement under subsection (1) includes a power to approve a settlement
    that provides for payment of a monetary amount instead of the full or partial
    forfeiture of property that is the subject of the proceeding.

[57]

Of note, ss. 18.1(1) and (2) were added to the
Civil
    Remedies Act
shortly after the Divisional Courts decision in
Ontario
    (Attorney General) v. $29,900 in Canadian Currency (in rem)
, 2017 ONSC
    2003, 137 O.R. (3d) 221 (Div. Ct.). In that case, Nordheimer J. (as he then
    was) upheld the application judges decision below refusing to approve Ontarios
    proposed agreement that would have resulted in the partial forfeiture of $4,000
    to a claimant who had not proved she was the legitimate owner of any of the subject
    property. Nordheimer J. explained his reasoning as follows, at para. 36:

In my view, the application judge was correct
    in concluding,
once he was satisfied that the monies were proceeds of
    unlawful activity
, that the entire amount had to be forfeited, absent any
    evidence that could satisfy the court that any other order was necessary,
    either in the interests of justice [under the terms of s. 3(1)], or in order to
    protect the interests of the legitimate owner of the monies [under the terms of
    s. 3(3)]. [Emphasis added.]

[58]

Sections 18.1(1) and (2), enacted in 2018, now
    authorize the approval of proposed agreements for partial forfeiture like the
    one refused in
$29,900 in Canadian Currency (in rem)
, a point I will revisit
    below.

B.

The Correct Interpretation of section 18.1

[59]

Ontario submits that any agreement between the
    Attorney General and any party to forfeiture proceedings constitutes a
    settlement within the meaning of s. 18.1, even if Ontario has not yet secured a
    finding that the property is the proceeds of unlawful activity.

[60]

I do not agree. In my view, correctly
    interpreted, s. 18.1 authorizes courts to approve settlements that relate to the
in rem
interests
in property subject to forfeiture
    proceedings (in my analysis that follows, I will refer to this as the
in
    rem

settlement interpretation). As I will explain, before Ontario
    can achieve an agreement that settles the
in rem

interests in
    the subject property, it must first secure a finding that the required link
    between that property and unlawful activity exists.

[61]

In the case before us, the requisite finding was
    that the proceeds of the Cassone Court property were the proceeds and/or
    instruments of unlawful activity. Absent such a finding, I would find that the
    motion judge erred in granting the order under appeal.

Prior judicial interpretation of s. 18.1

[62]

The authority put before us on this appeal supports
    this view.

[63]

While Ontario relies in its submissions on
AGO
    v. $80 Cdn., et al.
, 2021 ONSC 988, that decision is not consistent with
    Ontarios position. In fact, it is consistent with the
in rem

settlement
    interpretation I have just described. In
$80 Cdn.
, one of five
    respondents to Ontarios s. 18.1 settlement approval motion, Ms. Flynn, was the
    registered owner of a vehicle from which the subject property was seized. Nicholson
    J. approved a settlement between Ontario and Ms. Flynn releasing some of the subject
    property to her, but not before satisfying himself on the balance of
    probabilities that all the property at issue was either the proceeds or an
    instrument of unlawful activity: at para. 24.

[64]

Similarly, in
Ontario (Attorney General) v. 269
    Weldrick Road West (in rem)
, 2020 ONSC 4605, Ontario sought the forfeiture
    of property as either the proceeds or instruments of unlawful activity. Ontario
    entered into an agreement to release a motor vehicle and around $280,000 out of
    approximately $550,000 liquidated from seized assets to a claimant whose common
    law spouse had been convicted of fraud and forgery offences. Ontario maintained
    that Sanfilippo J. could approve the agreement without inquiring into the
    substantive requirements of the
Civil

Remedies

Act
,
    including whether the subject property was the proceeds or instruments of
    unlawful activity. Sanfilippo J. disagreed. Like Nicholson J. in
$80 Cdn.
,
    before approving the settlement Sanfilippo J. made a finding on the balance of
    probabilities that the subject property was either the proceeds or instruments
    of unlawful activity: at para. 27.

[65]

In my view, the judges who rendered these decisions
    were correct to make the requisite unlawful activity findings before approving
    the proposed settlements before them. As I have indicated and will explain in
    more detail below, the need for a finding of unlawful activity arises from a
    correct statutory interpretation of the words a settlement in relation to a proceeding
    under this Act in s. 18.1 of the
Civil

Remedies

Act
.

The governing legal principles in
    interpreting s. 18.1

[66]

There is no dispute about the legal principles
    governing the interpretive exercise to be conducted on this appeal. Watt J.A.
    stated the core rule in
R. v. Stipo
, 2019 ONCA 3, 144 O.R. (3d) 145,
    at paras. 175-76:

It is well settled that statutory
    interpretation cannot be founded on the wording of the legislation alone.
    Instead, the approach is that advocated by Elmer Driedger in his
Construction
    of Statutes

(2nd ed., 1983):

Today there is only one principle
    or approach, namely, the words of an Act are to be read in their entire context
    and in their grammatical and ordinary sense harmoniously with the scheme of the
    Act, the object of the Act, and the intention of Parliament.

See,
Bell ExpressVu Limited Partnership v.
    Rex
,
2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26;
Rizzo &
    Rizzo Shoes Ltd. (Re)
, [1998] 1 S.C.R. 27, at para. 21;

Wilson v.
    British Columbia (Superintendent of Motor Vehicles)
, 2015 SCC 47,
    [2015] 3 S.C.R. 300, at para. 18.

This preferred approach recognizes the
    significant role that context must play when courts construe the written words
    of a statute. No statutory provision is an island in itself. Its words take
    their colour from their surroundings:
Bell ExpressVu
, at para. 27. All
    issues of statutory interpretation involve the fundamental question of what
    Parliament intended. To discover what Parliament intended, we look at the words
    of the provision, informed by its history, context and purpose:
R. v. Mabior
,
    2012 SCC 47, [2012] 2 S.C.R. 584, at para. 20.

Ontarios proposed interpretation of s. 18.1

[67]

Ontario urges that the modern approach to
    statutory interpretation, as articulated in
Stipo
,

favours its proposed
    interpretation of s. 18.1. It advances three supporting arguments in this
    regard: (1) the ordinary and grammatical meaning of s. 18.1(1) gives courts
    broad discretion to approve settlements without a prior finding of unlawful
    activity; (2) this broad interpretation aligns with the object and purpose of
    the Act and the intention of the legislature; and (3) the expansive authority flowing
    from this interpretation will be duly confined by the Attorney Generals obligation
    to act in the public interest and by the proper bounds of judicial discretion.

[68]

I would reject these submissions. I am persuaded
    that the broad interpretation of s. 18.1 that Ontario offers is incorrect and
    that the
in

rem

settlement interpretation I have
    articulated is correct.

[69]

In outlining the analysis that leads me to this
    conclusion, I will address each of Ontarios arguments in turn. It is convenient
    to begin with Ontarios last point.

(1)

The Role of the Attorney General and the
    Approving Judge

[70]

Ontario urges us to have confidence that the
    broad settlement authority it claims s. 18.1 provides will not be used unfairly
    because, (a) the Attorney General, in his or her dual role as Minister of
    Justice, is obliged to act fairly and in the public interest when agreeing to
    settlements, and (b) judges must exercise their discretion reasonably in
    approving settlements.

[71]

I would not accept this submission. The fact
    that the Attorney General is also the Minister of Justice and therefore bound to
    act reasonably and responsibly is irrelevant to the proper interpretation of s.
    18.1. The underlying challenge in interpreting a legislative provision is to
    identify the meaning intended by the legislation. The task is not to determine
    whether a public official with delegated legislative power would properly exercise
    that power.

[72]

For the same reason, the fact that judicial
    discretion must be exercised reasonably is equally irrelevant in identifying
    the proper interpretation of legislation. Our interpretive task with respect to
    s. 18.1 is to determine the reach of the legal authority that the legislation
    confers on the judge asked to approve a settlement. Confidence that appellate review
    is available if a judge acts unreasonably within the scope of the authority conferred
    by legislation plays no role in the interpretation of that legislation.

(2)

The Grammatical and Ordinary Meaning of the
    Words

[73]

Ontario also argues that the ordinary and
    grammatical meaning of s. 18.1 is clear and gives courts broad discretion to
    approve any settlement in a forfeiture proceeding. Ontario points out that s. 18.1(1)
    does not expressly require a finding that the subject property is the proceeds
    or an instrument of unlawful activity before a settlement may be approved. In
    making this submission, Ontario relies on the opening words of s. 18.1(1):
    Despite anything to the contrary in this Act, the court may approve a
    settlement. It calls this phrase unambiguously expansive, arguing that the
    phrase, and indeed s. 18.1 itself, would be rendered meaningless if settlements
    could be approved only after a finding of unlawful activity has been made.

[74]

I do not accept Ontarios position that the
    grammatical and ordinary meaning of the words used in s. 18.1 supports its proposed
    expansive interpretation. The words of the Act are to be read in their entire
    context. Section 18.1(1) does not simply say, Despite anything to the contrary
    in this Act, the court may approve a settlement. Crucially, it provides that,
    Despite anything to the contrary in this Act, the court may approve a
settlement
    in relation to a proceeding under this Act
 (emphasis added).

[75]

In this regard, it is important to recall that a
    proceeding under the applicable parts of the
Civil Remedies Ac
t
is an
in rem

proceeding engaged to settle title to property
    that is allegedly linked to unlawful activity. It is not an
in personam

proceeding conducted to resolve disputes
    between individuals about their relative rights. When the words a settlement in
    relation to a proceeding under this Act are read in this context, it is clear that
    they describe a settlement that relates to the
in rem
interests in the property
    being litigated in the proceedings. This is what I have already characterized
    as the
in rem

settlement interpretation. In my view, to
    constitute a settlement relating to the
in rem

interests in
    the property, an agreement must resolve the
in rem

rights in
    the subject property. In other words, it must be capable of settling, to the
    exclusion of all others, the rights of the parties before the approving judge.

[76]

Quite clearly, the agreement between Ontario and
    Rosa could not resolve the
in rem

rights in the subject
    property. Even leaving aside the potential
in

rem

interests
    of non-parties to the litigation, the Estate claims an interest in the proceeds
    of sale of the Cassone Court property that has not been displaced by any
    forfeiture order. An agreement between Ontario and Rosa might well settle their
    personal dispute relating to ownership of the Cassone Court property, but that
    agreement is incapable of resolving the Estates
in

rem

rights
    in that property. Therefore, on a proper contextual, grammatical, and ordinary reading
    of the language of s. 18.1, in my view the agreement between Ontario and Rosa
    could not be a settlement in relation to a proceeding under this Act.

[77]

I see nothing in the language of s. 18.1 or
    elsewhere in the Act that could alter this conclusion. Section 18.1 does not,
    by its terms, authorize some of the parties in the
in

rem

proceeding
    to settle the
in

rem

claims of all others in the
    subject property. The only authority s. 18.1 provides is that of courts to
    approve settlements in relation to a proceeding under this Act. Since I would
    find that the personal agreement between Ontario and Rosa is not a settlement
    within the meaning of s. 18.1, the motion judge had no authority under s. 18.1(1)
    to approve that agreement.

[78]

Things would be different, however, if before
    approving the agreement the motion judge had made a finding that the proceeds
    of sale of the Cassone Court property were proceeds and/or instruments of
    unlawful activity and that forfeiture was clearly not contrary to the interests
    of justice. Had that determination been made, subject to Rosas outstanding
    claim that she was a legitimate or responsible owner, Ontario would have had
    a claim to the subject property to the exclusion of all others, including the Estate.
    Since, in this scenario, only Ontario and Rosa would have had outstanding
    claims to the Cassone Court property, they could have agreed to settle the
in

rem

interests in that property.

[79]

Ontario resists the
in

rem

settlement
    interpretation just described. It argues that to require an unlawful activity
    finding before a settlement can be approved would denude s. 18.1 of meaning. If
    Ontario were right about this, the
in

rem

settlement
    interpretation would be contrary to the well accepted principle of statutory
    interpretation that no legislative provision should be interpreted so as to
    render it mere surplusage:
R v. Proulx
, 2000 SCC 5, [2000] 1 S.C.R.
    61, at para. 28.

[80]

However, I do not agree with Ontario on this
    point. Once a determination has been made that the subject property is linked
    to the applicable unlawful activity, the grammatical and ordinary language of s.
    18.1 permits a wide range of settlements between Ontario and those asserting
    claims to the property. As I have indicated, if Ontario had shown that the
    proceeds of the Cassone Court property are the proceeds and/or instruments of
    unlawful activity, Ontario would have been free to settle with Rosa on the
    agreed upon terms, or any other lawful terms.

[81]

Similarly, I do not accept Ontarios position
    that this interpretation renders meaningless the phrase, Despite anything to
    the contrary in this Act. Once Ontario establishes the requisite link between
    the subject property and unlawful activity to support forfeiture, this broad
    language empowers courts to approve any settlement that Ontario enters into,
    even where the agreed outcomes are not otherwise contemplated by the Act. As
    Nicholson J. explained in
$80 Cdn.
, at para. 29, s. 18.1 now permits courts
    to approve settlements based on compromise between the parties, thereby avoiding
    all or nothing outcomes. This kind of compromise settlement was not
    permissible prior to the passage of s. 18.1, as confirmed by Nordheimer J.s 2017
    decision in
$29,900 in Canadian Currency (in rem)
.

[82]

Section 18.1 also now permits courts to approve
    settlements that approximate a claimed amount, without a determination of the
    precise entitlement contemplated by the
Civil Remedies Act
:
$80
    Cdn.
, at paras. 32-33. Moreover, under s. 18.1 courts may approve payments
    to claimants without first showing that their claim as an uninvolved interest
    holder or responsible owner has merit:
$80 Cdn.
, at para. 31.
[2]

[83]

I am therefore persuaded that the grammatical
    and ordinary meaning of s. 18.1 is incompatible with Ontarios interpretation
    and compatible with the
in

rem

settlement
    interpretation I have described.

(3)

The Scheme and Object of the Act and the
    Legislatures Intention

[84]

Finally, Ontario urges that the broad
    interpretation it offers is in keeping with the object and purpose of the
Civil

Remedies

Act
and with legislative intent, since
    settlements are to be encouraged in preference to litigation. It argues that
    interpreting s. 18.1 to confer broad settlement approval authority advances the
    purposes of the Act and the intention of the legislature by promoting
    efficiency and flexibility in achieving the benefits of forfeiture, including
    compensation and support for victims.

[85]

I would not accept these submissions, either. As
    I will explain, in my view the
in

rem
settlement
    interpretation, not Ontarios interpretation, is consistent with the scheme of
    the Act, the object of the Act, and the intention of the legislature. I will
    begin with the object, or purpose, of the Act.

(i)      The object of the
Civil Remedies
    Act

[86]

Professor Ruth Sullivan describes formal purpose
    statements appearing in the body of legislation as the most direct and
    authoritative evidence of legislative purpose: Ruth Sullivan,
Sullivan on
    the Construction of Statutes
, 6th ed. (Toronto: LexisNexis Canada, 2014),
    at
§
9.45.

[87]

Section 1 contains the formal purpose statement
    appearing in the
Civil

Remedies

Act
. Reproduced
    above, at para. 32 of these reasons, s. 1 characterizes each of the four
    express purposes of the Act as providing civil remedies to address certain
    harms arising from unlawful activities.

[88]

In
Chatterjee
, while exploring the
vires

of the
Civil Remedies Act
, Binnie J. had occasion, at para. 23, to
    comment on its purposes:

In essence, therefore, the [
Civil

Remedies

Act
] creates a property-based authority to seize money and other
    things shown on a balance of probabilities to be tainted by crime and
    thereafter to allocate the proceeds to compensating victims of and remedying
    the societal effects of criminality. The practical (and intended) effect is also
    to take the profit out of crime and to deter present and would-be perpetrators.

[89]

In my view, Ontarios interpretation is not in
    keeping with the object of the
Civil Remedies Act
as articulated in s.
    1 and
Chatterjee
. To the contrary, it would enable property to be
    forfeited without any regard to whether it is tainted by unlawful activity. In
    contrast, the
in

rem
settlement interpretation is true
    to the purpose of the Act because it ensures that before forfeiture occurs, the
    subject property
has
been tainted by unlawful activity.

(ii)    The scheme of the
Civil Remedies
    Act

[90]

Not only is Ontarios interpretation not in
    keeping with the object of the
Civil Remedies Act
, for related reasons
    it is also inconsistent with the scheme of the Act.

[91]

In a disputed proceeding,
[3]
the scheme of the Act empowers
    a court to eradicate a citizens lawful interest in the subject property through
    a forfeiture order, but only after making a finding that Ontario has established
    the requisite link between the property and unlawful activity. Yet Ontarios
    position is that s. 18.1 authorizes a court to permit a citizens interest in
    the property to be extinguished without such a finding, and without Ontario having
    to meet any burden of proof relating to unlawful activity. Quite simply, this
    interpretation is not in keeping with the scheme of the Act.

[92]

Further, I would reject the two overarching arguments
    Ontario offers in contending that its proposed interpretation is consistent
    with the scheme and purpose of the
Civil Remedies Act
.

[93]

First, although I agree with Ontarios
    submission that settlements are generally to be encouraged, the settlements to
    be encouraged are those which are consistent with the scheme and object of the
    Act. As I have sought to demonstrate, the settlements that Ontarios
    interpretation would support, such as the one between Ontario and Rosa, are not
    consistent with the scheme and object of the Act.

[94]

Second, I would reject entirely Ontarios
    submission that its proposed interpretation pursues the object of the Act by
    promoting efficiency and flexibility in achieving the benefits of forfeiture,
    including compensation and support for victims. Absent a determination that the
    subject property is the proceeds or instruments of unlawful activity, there is
    a risk that a settlement eradicating the interest of others would deprive a
    legitimate owner of their property. In this regard, the words of Nordheimer J.
    in
$29,900 in Canadian Currency (in rem)
, at para. 36, are apt: [I]t
    is necessary to ensure that the interests of the legitimate owner of property,
    that is seized under this statute, are not trampled over by a rush to conclude
    the proceeding.

(iii)   The intention of the legislature in enacting
    the
Civil Remedies Act

[95]

Finally, Ontarios interpretation cannot find
    support in legislative intention. As Watt J.A. instructed in
Stipo
, at
    para. 175, To discover what Parliament intended, we look at the words of the
    provision, informed by its history, context and purpose. As I have just
    described, the context and purpose of s. 18.1 are not in keeping with Ontarios
    proposed interpretation.

[96]

Nor does the history of s. 18.1 support Ontarios
    interpretation. I do agree with Ontarios submission that s. 18.1 was enacted
    in response to Nordheimer J.s decision in
$29,900 in Canadian Currency (in
    rem)

and that this history strongly suggests that the legislature
    intended s. 18.1 to redress the shortcoming exposed in that decision, namely,
    the inability of judges,
after making the requisite unlawful activity
    finding
, to order anything other than full forfeiture unless one of the two
    statutory exceptions is satisfied. However, that shortcoming can be overcome
    without interpreting s. 18.1 as Ontario contends, which would confer judicial
    discretion to approve proposed settlements entered into by some parties to forfeiture
    proceedings even where those settlements purport to eradicate the
in

rem

property interests of others.

[97]

Indeed, the shortcoming exposed in
$29,900
    in Canadian Currency (in rem)

can be resolved through the
in

rem

settlement interpretation, which would empower judges,
after
    making the requisite unlawful activity finding
, to make orders other than
    full forfeiture. Simply put, Ontarios proposed interpretation of s. 18.1 goes
    further than required to satisfy the apparent historical objective of the
    provision, whereas the
in

rem

settlement
    interpretation is better targeted to achieve that historical objective.

The legislature did not intend for s. 18.1 to
    produce absurd consequences

[98]

I would offer one additional point related to
    the legislatures intention in enacting s. 18.1 of the
Civil Remedies Act
.
    The absurdity principle (often called the golden rule of statutory
    interpretation), holds that if an interpretation would lead to an absurdity, a
    court may reject it in favour of a plausible alternative which avoids the
    absurdity:
Ontario v. Canadian Pacific Ltd.
[1995] 2 S.C.R. 1031, at
    para. 65;
Schnarr v. Blue Mountain Resorts Limited
, 2018 ONCA 313, 140
    O.R. (3d) 241, at para. 72, leave to appeal refused, [2018] S.C.C.A. No. 187; Sullivan,
    at §10.5.

[99]

In
Stipo
, at para. 177, Watt J.A.
    affirmed the well-established principle of statutory interpretation holding
    that the legislature does not intend to produce absurd consequences. Watt
    J.A. reminded us that absurdity occurs if a proposed interpretation:

i.

leads to ridiculous or frivolous consequences;

ii.

is extremely unreasonable or inequitable;

iii.

is illogical or incoherent;

iv.

is incompatible with other provisions or with
    the object of the enactment; or

v.

defeats the purpose of the statute or renders
    some aspect of it pointless or futile.

[100]

Where a potential absurdity is identified,
Gonthier
    J. explained the relevant interpretive exercise as follows, at para. 65 of
Canadian

Pacific
:

One method of avoiding absurdity is through
    the strict interpretation of general words  Where a provision is open to two
    or more interpretations, the absurdity principle may be employed to reject
    interpretations which lead to negative consequences, as such consequences are
    presumed to have been unintended by the legislature.

[101]

The absurdity principle, as articulated above, reinforces my view to
    reject Ontarios proposed interpretation in favour of the
in

rem

settlement interpretation. I have already
explored
    the incompatibility between Ontarios interpretation and the object of the Act;
    I need say no more on this point. However, at least two additional forms of
    absurdity recounted by Watt J.A. in
Stipo

could apply.

[102]

First, Ontarios interpretation is illogical and incoherent. It will
    be recalled that the motion judge approved a settlement in which Rosa was to be
    paid
some
, not all, of the sale proceeds of the Cassone Court property.
    If the order under appeal were to stand, in order to resolve what is to happen
    to the balance of those proceeds, an adjudicated hearing would be required to
    determine whether forfeiture is appropriate. What if, at that hearing, the court
    found that Ontario had not met its burden of establishing that the sale
    proceeds of the Cassone Court property are the proceeds and/or instruments of
    crime? Would Rosa be entitled to keep the $120,000, or would she have to return
    it?

[103]

Ontario could not answer these questions. As I see it, neither
    alternative is logical or coherent. If Rosa were permitted to keep the money,
    under a proceeds of crime statute she would have received property that is not
    the proceeds or instruments of crime. If she were required to return the money,
    even leaving aside the logistical problems this would present, the law would,
    illogically and incoherently, be treating the settlement as having been lawful
    pursuant to s. 18.1, yet invalid.

[104]

Second, Ontarios interpretation would produce extremely
    unreasonable or inequitable outcomes. I am certain I have already betrayed my
    conviction that it would be unreasonable and inequitable in the extreme to
    permit courts to approve settlements between Ontario and others that deprive
    third parties of their rights in private property, without any inquiry into
    whether the subject property was tainted by unlawful activity. This outcome,
    which violates due process, is not merely hypothetical. It is the very position
    Ontario seeks to uphold in this appeal.

[105]

Indeed, Ontario argues before us that s. 18.1 enables it to seek
    court approval for settlements it enters into with anyone authorized to receive
    payments from a special purpose account, pursuant to ss. 6 and 11 of the Act,
    without the need for prior judicial determination that the property was tainted
    by unlawful activity. If Ontario is correct, it would be permitted to seek
    approval for settlements it arrives at with alleged victims of entirely
    unproven crimes to compensate them using money that legally belongs to a
    suspect from whom it has been seized. In my view, if this court were to accept
    Ontarios proposed interpretation, the potential for well-intentioned but
    abusive settlements is palpable.

[106]

In contrast, there is nothing absurd about the
in

rem

settlement interpretation of s. 18.1 I
    have described. I do not accept Ontarios objection that this interpretation
    would bar the release of seized property to a claimant without a judicial
    determination on unlawful activity. Ontario can accomplish the release of
    seized property by simply abandoning its application. Where there is common
    ground that some of the seized property is not, in fact, tainted by unlawful
    activity, or that a claimant is, in fact, an uninvolved interest holder or
    responsible owner and therefore exclusively entitled to the property interest
    they claim, Ontario can accomplish the release of that property by withdrawing
    the forfeiture proceedings against it, pursuant to s. 1.7 of the
Civil Remedies Act
.

[107]

Nor do I accept Ontarios submission that the
in

rem

settlement interpretation would require
    a full hearing on the merits, even where all interested parties consent or
    agree to the proposed settlement. In that scenario, where no one opposes the
    settlement, the requisite hearing is apt to be simple and efficient.

[108]

In sum, applying the golden rule against absurd consequences, in my
    view Ontarios interpretation must be rejected in favour of the
in

rem

settlement interpretation.

Conclusion on the
    correct contextual and purposive interpretation of s. 18.1

[109]

In light of the foregoing application of the modern approach to
    statutory interpretation, I would find that the
in

rem
settlement interpretation of s. 18.1, rather than Ontarios proposed
    interpretation, best accords with the words of the
Civil

Remedies

Act
, read in their entire context and in their grammatical and
    ordinary sense harmoniously with the scheme of the Act, the object of the Act,
    and the intention of the legislature.

[110]

Accordingly, I would accept the appellants submission that the
    motion judge erred in approving the agreement between Ontario and Rosa as a
    settlement in the meaning of s. 18.1.

(4)

Residual Principles: Resolving Ambiguity Through
    Strict Construction

[111]

Assuming I am wrong, and Ontarios interpretation and the
in

rem

settlement interpretation are equally in accord with the purpose
    of the
Civil Remedies Act
and the intentions of the legislature, I
    would still reject Ontarios interpretation.

[112]

This alternative conclusion is based on the presumption that
    legislation designed to curtail the rights of citizens must be strictly
    construed: Sullivan, at §15.37. This presumption is available to assist in
    resolving a real ambiguity, meaning an ambiguity between two or more equally
    plausible interpretations that remains even after interpreting the provision at
    issue according to the modern purposive and contextual approach described above:
Bell ExpressVu Limited Partnership v. Rex
, 2002 SCC 42, [2002] 2
    S.C.R. 559, at paras. 28-30; Sullivan, at §15.38.

Strict construction
    and private property

[113]

As Major J. stated in
Crystalline Investments Ltd. v. Domgroup
    Ltd.
, 2004 SCC 3, [2004] 1 S.C.R. 60, at para. 43, [E]xplicit statutory
    language is required to divest persons of rights they otherwise enjoy at law.

[114]

In explaining the link between this general presumption of strict
    construction and state confiscation of private property, Cory J. said as
    follows in
Toronto Area Transit Operating Authority v. Dell Holdings Ltd.
,
    [1997] 1 S.C.R. 32, at para. 20:

The expropriation of property is one of the
    ultimate exercises of governmental authority. To take all or part of a persons
    property constitutes a severe loss and a very significant interference with a
    citizens private property rights. It follows that the power of an
    expropriating authority should be strictly construed in favour of those whose rights
    have been affected.

[115]

Similar statements of principle can be found in
Harrison v.
    Carswell
, [1976] 2 S.C.R. 200, at p. 219, and
Pacific National
    Investments Ltd. v. Victoria (City)
, 2000 SCC 64, [2000] 2 S.C.R. 919, at
    para. 27.

[116]

In my view, the presumption of strict construction favours the
in
    rem
settlement interpretation over Ontarios interpretation of s. 18.1 of
    the
Civil

Remedies

Act
. As such, even if I
    were persuaded that the provision could support both interpretations on a
    proper application of the modern approach, I would arrive at the same
    conclusion.

CONCLUSION

[117]

Properly interpreted, to constitute a settlement in relation to a
    proceeding under this Act in the meaning of s. 18.1(1) of the
Civil
    Remedies Act
, a proposed agreement must relate to the
in

rem
property interests being litigated in the underlying forfeiture proceedings.

[118]

Since Ontario did not establish that the proceeds of sale from the
    Cassone Court property were subject to forfeiture as the proceeds and/or
    instruments of unlawful activity, it never acquired a higher claim to the
in

rem

rights in that property than all non-parties to its agreement
    with Rosa. It follows that Ontarios agreement with Rosa was not a settlement
    in relation to a proceeding under this Act within the meaning of s. 18.1(1). Therefore,
    in my view, the motion judge erred in law in approving that agreement.

[119]

Accordingly, I would allow the appeal and set aside the order under
    appeal, dated June 4, 2020, which purported to approve the settlement between
    Ontario and Rosa.

[120]

As agreed between the parties, I would award costs to the appellants
    in the amount of $15,000 inclusive of HST and disbursements.

Released: July 6, 2021 G.H.

David M. Paciocco J.A.

I agree. Grant Huscroft J.A.

I agree. M. Jamal J.A.

[1]
The
    amendment is inconsequential; it is nothing more than a change in terminology.
    However, I must describe the change because later in these reasons I will
    address recent authority where the new terminology is used.

[2]
I have
    serious reservations about the holding to the contrary in
269 Weldrick Road West (in rem)
, 2020
    ONSC 4605, at paras. 18, 23, 29. When Sanfilippo J. held that he could not
    approve a settlement without first deciding whether the claimant was a lawful
    owner, he had not been alerted that s. 18.1 was not in force when the
    Divisional Court decision in
$29,900 in
    Canadian Currency (in rem)
was rendered. He mistakenly believed himself
    bound by that decision. Sanfilippo J. subsequently issued a supplementary
    endorsement in which he noted that, had it come to his attention that s. 18.1
    was enacted after the decision in
$29,900
    in Canadian Currency (in rem)
, this might have affected the analysis
    but does not change my decision: 2020 ONSC 4657, at para. 4. To be clear, for
    the reasons I provide in this judgment, it is my view that Sanfilippo J. was
    correct to insist on proof that the seized property was either the proceeds of
    unlawful activity or the instrument of unlawful activity, and that he was
    entitled to approve the settlement before him. The reservations I have about
    his reasoning relate to his insistence that, before he could approve the
    settlement, it had to be proved that the claimant was a lawful owner. For the
    purposes of this appeal, however, this issue need not be resolved.

[3]
Administrative
    forfeiture is possible without a finding of unlawful activity, but only where:
    (1) Ontario has reason to believe that the property is the proceeds of
    unlawful activity or an instrument of unlawful activity; (2) Ontario has
    provided proper notice of intention to forfeit; and (3) Ontario has not
    received any notice of dispute regarding the proposed forfeiture on or before
    the statutory deadline:
Civil Remedies
    Act, 2001
, S.O. 2001, c. 28, at ss. 1.2-1.3 and 1.8.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Carignan, 2021 ONCA 496

DATE: 20210706

DOCKET: C65806

Doherty, Trotter and Thorburn JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Patrick Carignan

Appellant

Jeff Marshman, for the appellant

Michael S. Dunn, for the respondent

Heard: June 1, 2021 by video
    conference

On appeal from the conviction entered on
    November 21, 2017 by Justice Cindy A.M. MacDonald of the Superior Court of
    Justice, sitting with a jury.

REASONS
    FOR DECISION

INTRODUCTION

[1]

The appellant was convicted of second degree
    murder for killing Emanuelle DAmours. He was sentenced to life imprisonment
    with no parole eligibility for 16 years.

[2]

The appellant appeals his conviction on two
    grounds. First, he submits that the trial judge erred in finding that his
    statements were voluntary. Second, the appellant contends that the trial judge
    erred in permitting the jury to find that the statements were fabricated and to
    use them as evidence of guilt.

[3]

At the conclusion of the appellants
    submissions, we dismissed the appeal. The following reasons explain why we
    reject both grounds of appeal.

FACTUAL BACKGROUND

[4]

Ms. DAmours was found dead in the appellants
    house at about 8:35 a.m. on February 18, 2015. She had been strangled with a
    ligature. The appellant was found, apparently unconscious, with a ligature
    around his neck. Police officers thought that he too was dead. However, when he
    gasped for air, his ligature was removed with a knife and he started to breathe
    on his own.

[5]

The appellant and Ms. DAmours were romantically
    involved, although she had a partner. The appellant helped her out financially.

[6]

From the beginning of the investigation, the
    appellant told the police that he and Ms. DAmours were attacked by an intruder.
    However, the police came to believe that the appellant had killed Ms. DAmours
    and then staged the scene to support the intruder scenario. This was borne out by
    the timeline of events, the appellants communications on social media, the use
    of his cell phone, and forensic evidence.

(a)

The timeline

[7]

Ms. DAmours left her house at about 7:45 p.m.
    on February 17, 2017, leaving her children with a babysitter. She was expected
    home by 11 p.m. When she did not return by 12:15 a.m., the babysitter called
    911 to report her missing.

[8]

The police searched for Ms. DAmours truck.
    They found it in the appellants driveway at 3:30 a.m. There was a purse and
    iPhone inside the truck. The engine was off. However, ice pellets under the
    exhaust pipe suggested that it had been left running for more than 30 minutes.
    The appellants next-door neighbours reported seeing the parked truck with its
    lights on and engine running at 9:00 p.m., 9:30 p.m., 12:00 a.m., and 2:30 a.m.
    The keys to the truck were subsequently found inside the appellants residence,
    which was locked when the police arrived.

[9]

The police knocked loudly on the appellants door
    at 3:30 a.m., 3:45 a.m., 5:15 a.m., and 5:30 a.m. They received no response. They
    called the appellants phone at 4:19 a.m. The phone rang and then closed off.
    The police tried again; this time it would appear that the appellants phone
    was dead. The police knocked again and then breached the door at 8:35 a.m.

[10]

When the police were at the appellants
    residence from 3:30 a.m. onwards, nobody entered or left the house.

(b)

Forensic evidence

[11]

The ligature found around the Ms. DAmours neck
    was a pillowcase. She had hand injuries that were consistent with attempting to
    relieve the pressure from her neck. The appellant had scratches on his neck and
    lower face. DNA evidence established that the appellant could not be excluded
    as the source of blood under Ms. DAmours fingernails, on the ligature, and on
    her jeans.

(c)

Electronic communications

[12]

The appellant sent Facebook messages to a friend
    at 12:02, 12:09 a.m., 12:21 a.m., 12:52 a.m., and 6:14 a.m. The last message
    was sent well after the police had been on the scene and knocking loudly on his
    door. In his messages, the appellant said that someone came into his house,
    tied him up, put something in his mouth, and stole money from him.

[13]

Forensic analysis determined that Ms. DAmours
    phone connected to the WiFi in the appellants house at 9:18 p.m. This was
    after the appellants neighbour first noticed Ms. DAmours truck parked, but
    still running, in the driveway.

[14]

Examination of the appellants phone was even
    more revealing. Forensic analysis proved that the Facebook messages were sent
    from his phone. It also showed that someone physically declined the call made
    to his phone by the police at 4:19 a.m. Evidence also showed that someone was
    using his phone to send, draft, or look at messages between 6:14 a.m. to 6:27
    a.m. The appellants phone was plugged in between 6:14 am. and 7:59 a.m., but
    it was not within arms length of where the police found him with a ligature
    around his neck.

[15]

All of this evidence pointed to the appellant
    placing the ligature around his own neck well after reporting the intruder
    scenario to his friend, and while the police were outside his residence. In his
    closing address to the jury, defence counsel acknowledged that the evidence was
    consistent with the appellant placing the ligature on himself, but that it could
    be evidence that the appellant panicked and tried to reconstruct the situation.

(d)

The appellants statements

At the house

[16]

After the appellant was revived, he told an
    officer, They tied my, they, they tied my hands up and I couldnt breathe and
    I got loose. He told this same officer that he had been seeing Ms. DAmours
    for a while and she was supposed to move in with him. He also said that he and
    Ms. DAmours had been followed and that someone had sent photos of them to Ms.
    DAmours partner. At this point, the appellant was cautioned and all further
    interactions with him were recorded.

[17]

As discussed below, there was a good deal of
    evidence about the appellant feeling cold while he was at the house. He was
    asked to put his shoes on but he refused to do so without first having socks.
    He was told he could not have socks because the house was now a crime scene.
    When he was assessed by paramedics in the ambulance, the appellant
    spontaneously said, We were supposed to die together. He refused to go to the
    hospital.

In the police car and at the police station

[18]

On the way to the station, the appellant spoke
    spontaneously, but did not say much. He said, her [
sic
]

wants to
    run away with me and I didnt touch her.

[19]

At the police station, when identification
    officers went into the interview room to take photographs and obtain DNA, they
    asked the appellant whether he had any questions. He said, alright when I did
    uh tried to  like the thing was hard around her neck so I tried to take it off.
    When he was asked why his eye looked sore, I got punched in the eye. The
    appellant also said something about Valentines Day and that he had sex with her
    and her ex-boyfriends  pretty jealous. He told the officers that he and Ms.
    DAmours were being followed and that proof of that was on his cell phone.

[20]

The appellant was interviewed for about 3 hours
    and 45 minutes by Detective Sergeant Darryl Sigouin. He told the officer that
    Ms. DAmours came to his house earlier in the night. She had a key to his
    house, but he believed he may have left the door unlocked for her. When she
    arrived, they hugged and kissed for 10 to 15 minutes. Ten minutes later,
    someone was knocking on his door. When the appellant answered the door, he was
    punched in the face by a man he did not recognize. He was pushed down the
    stairs and his head went through the drywall. The intruder tied him up and put
    a sock in his mouth when he resisted. Both his hands and Ms. DAmours were
    restrained with zip ties. The intruder said something about cheating and took
    an envelope containing $12,000.

[21]

The appellant said that Ms. DAmours was able to
    loosen his ligature enough so that he could talk a bit. He lost consciousness
    two times and was choking on his vomit for two hours. At least four hours
    later, the appellant went upstairs to get a knife and came back downstairs to
    cut his zip ties. He checked on Ms. DAmours but he did not try to help her
    because she was already dead.

[22]

The appellant repeatedly denied killing Ms. DAmours.
    He provided the same narrative and denial to other officers a few weeks later,
    on March 11, 2015.

ANALYSIS

(a)

Voluntariness

[23]

The appellant contested the admissibility of all
    of his statements on the basis they were involuntary. His approach was
    multi-faceted. However, he focused mostly on the presence of oppressive
    circumstances, including the following: the failure to provide him with socks
    (even though blankets were provided); the delay in obtaining water; not
    allowing him to use the washroom when he asked; and not accounting for his apparent
    fatigue (evidenced by the fact that he repeatedly fell asleep in the hours
    leading up to the formal interview). The appellant also contended that the
    interrogation itself was oppressive.

[24]

On appeal, the appellant submits that the trial
    judge failed to conduct a contextual inquiry; instead, she dealt with the
    evidence in a piecemeal fashion. He further contends that the trial judge
    misapprehended the evidence and failed to consider relevant evidence, resulting
    in an unreasonable decision that the statements were voluntary. We disagree.

[25]

This court recently said in
R. v. Al-Enzi
,
    2021 ONCA 81, at para. 80: Where a trial judge applies the correct test and
    considers all relevant circumstances, deference is owed to the trial judges
    ultimate determination on voluntariness. See also
R. v. Oickle
, 2000
    SCC 38, [2000] 2 S.C.R. 3, at para. 71;
R. v. Spencer
, 2007 SCC 11,
    [2007] 1 S.C.R. 500, at para. 17; and
R. v. Pearson
, 2017 ONCA 389, 348
    C.C.C. (3d) 277, at para. 14, leave to appeal refused, [2017] S.C.C.A. No. 465.

[26]

The trial judge identified the correct legal
    principles for determining voluntariness. Relying on
Oickle
, she
    recognized that determining whether a statement or utterance is voluntary goes
    beyond merely running through a checklist of items. The question is whether the
    Crown has proven beyond a reasonable doubt that the will of the accused person
    is not overborne by the police:
Spencer
, at paras. 13-15.

[27]

The trial judge considered the evidence under
    the headings identified in
Oickle
 threats and promises, oppressive
    circumstances, an operating mind, and police trickery. This is how counsel
    structured their submissions on the
voir dire
.

[28]

The trial judge was especially focused on whether
    oppressive circumstances had any bearing on the will of the appellant. This was
    responsive to the evidentiary foundation on the
voir dire
, and the
    submissions of counsel. She concluded this portion of her analysis by saying,
    at para. 80:

To conclude on the issue of oppression, Mr. Carignan
    was denied socks but he was offered blankets. He was not immediately given
    water or bathroom breaks upon request but did have reasonable opportunities to
    use the washroom. He was given water and Gatorade at reasonable intervals. The
    tone of the interrogation was not overly aggressive. In fact, for the most
    part, it was quite pleasant. The tone became more accusatory and
    confrontational at times, but never intimidating or aggressive.  On the second
    occasion, Mr. Carignan was in the interview room from 20:02 to 23:42. During
    that time he continued to be offered food and drink and was kept reasonably
    comfortable in the circumstances.

[29]

The evidence supported these findings. We reject
    the appellants submission that they were unreasonable. Having applied the
    correct test, they are entitled to deference.

[30]

Having addressed the
Oickle
factors on the
    record before her, the trial judge emphasized, more than once, that she
    considered the overall circumstances in coming to the conclusion that the
    appellants statements were voluntary. As she said in the concluding passages
    of her ruling, at paras. 89 and 98-99):

Considering the overall circumstances
, the question is whether the Crown has proven that the statement was
    given voluntarily.
This must be considered contextually
and keeping in
    mind the Courts twin goals of protecting the rights of the accused without
    unduly limiting societys need to solve crimes.

. . .

Considering all of the circumstances
, I am convinced that the statement was voluntary. I am convinced
    beyond a reasonable doubt that the overall circumstances, in combination, were
    not sufficiently objectionable to affect voluntariness. The circumstances may
    have been unpleasant, however the will of the accused was not overborne by such
    conditions.

I find, beyond a reasonable doubt that the
    statements made during the interviews and interactions considered on this voir-dire
    were given voluntarily by Mr. Carignan. [Emphasis added.]

[31]

The appellant submits that, although the trial
    judge said she considered all of the circumstances, her analysis suggests
    otherwise. We disagree. The trial judge focused on the areas that counsel
    emphasized, but within the context of the broader framework established in the
    case law.

[32]

We dismiss this ground of appeal.

(b)

Fabrication

[33]

The appellant submits that the trial judge erred
    by instructing the jury that it could infer that his statements were not just
    false, but fabricated, and could be used as circumstantial evidence of guilt. He
    submits that the manner in which this issue arose was procedurally unfair
    because the trial judge did not make a fabrication ruling on the voluntariness
voir

dire
. He also submits that there was no independent evidence of
    fabrication, only falsity. We reject these arguments.

[34]

This court held in
R. v. OConnor
(2002),
    170 C.C.C. (3d) 365 (Ont. C.A.), at para. 30, that when the Crown seeks to
    introduce evidence to show that an accused has fabricated out-of-court
    statements, the trial judge should determine whether there is sufficient independent
    evidence of falsity at the admissibility stage: see also
R. v. Hall
,
    2010 ONCA 724, 263 C.C.C. (3d) 5, at para. 164, leave to appeal refused, [2010]
    S.C.C.A. No. 499;
R. v. Clause
, 2016 ONCA 859, 133 O.R. (3d) 321, at
    para. 56. However, the failure to do so is not necessarily fatal.

[35]

In
OConnor
, on a
voir

dire
into voluntariness and whether there had been a breach of s. 10(b) of the
Charter
,
    defence counsel did not object to the proposed use of the statements to
    demonstrate fabrication and there was no formal ruling: at para. 29. The appeal
    was allowed on another basis. Similarly, in
Clause
, Brown J.A. observed
    that the trial judge did not make such a ruling because he was not asked to do
    so; nonetheless, the court dismissed the appeal because there was ample
    evidence of fabrication on the record: at paras. 55-58. The same reasoning was
    employed in
R. v. Pomeroy
, 2008 ONCA 521, 91 O.R. (3d) 261, in which
    Weiler J.A. said, at para. 69: However, because I am of the opinion that such
    evidence did exist, the omission of the Crown to seek such a determination is
    of no import.

[36]

The purpose of making a ruling at the
    admissibility stage is to ensure that the accused person is aware of the case
    to meet, and to prevent the jury from being exposed to statements that have no
    evidentiary value. In this case, although the trial judge did not rule on the
    issue of fabrication, she was not asked to. The appellant now submits that, had
    he been put on notice that his statements could be used as evidence of
    fabrication, he would have approached the case differently. He submits that he
    was denied the opportunity to make full answer and defence by, for example,
    conducting examinations, calling evidence, making submissions as to why a fabrication
    instruction should not be given, or making submissions aimed at rebutting the
    inference that his statement was fabricated. However, when pressed on this
    submission during the oral hearing, counsel gave no concrete examples to
    support this claim.

[37]

The manner in which the trial unfolded on this
    issue reflected no unfairness. The appellant submits that he anticipated that
    his statements were admitted to be used only for the purposes of
    cross-examination in the event that he testified. However, this is not borne
    out by the record. Had this been the case, the statements would likely have been
    marked as lettered exhibits and would only have become known to the jury if and
    when the appellant testified. Instead, the appellants statements were
    introduced before the jury as part of the Crowns case, with no objection from defence
    counsel.

[38]

That a broader use of the statements was
    contemplated is reflected in the pre-charge proceedings. The trial judges
    draft instructions included an instruction on fabrication. When asked about this
    instruction (discussed below), defence counsel expressed no surprise, nor did
    he assert unfairness. Instead, he merely made reference to the submissions he
    had made about the trial judges more general instruction on after-the-fact
    conduct, in terms of word changes and a no probative value instruction on the
    issue of intent.

[39]

Accordingly, there was no procedural unfairness
    in the manner in which this issue developed at trial. As in
Pomeroy
, the
    failure to obtain a ruling was of no import.

[40]

Moreover, there was ample evidence of
    fabrication. The appellant submits that the evidence that the trial judge
    referred to in this context provided no independent proof of fabrication. Her
    instruction referred to the following: (a) evidence of the officers that the
    appellant had a ligature around his neck and his face was dark, grey, or blue
    when they first entered the home; (b) the ligature was so tight it had to be
    cut with a knife to remove it; (c) as soon as the ligature was removed, the
    appellants colour returned to normal; (d) evidence that the appellant rejected
    a call to his phone after the alleged assault; and (e) his evidence that he
    walked upstairs in the middle of the night to get a knife to cut off his zip
    ties.

[41]

The question of whether there is independent
    evidence of fabrication is a case and fact-specific inquiry. Examples of
    independent evidence of fabrication include the following: the timing of the
    statement; whether the statement was given when the accused was not a suspect;
    the scope of exculpation in the statement; the degree of detail provided; and
    post-arrest statements that are inherently implausible: see
OConnor
, at
    paras. 24-31;
R. v. Wright
, 2017 ONCA 560, 354 C.C.C. (3d) 377, at para.
    48.

[42]

There was strong independent evidence of
    fabrication in this case. Recall the appellants Facebook messages to his
    friend, the first of which was sent roughly eight hours before the police
    arrived. Then there was evidence of the appellants use of his phone during the
    night. Evidence concerning Ms. DAmours truck and when it was turned off and
    the subsequent location of her keys was also capable of contributing to a
    conclusion that the statements were fabricated. Finally, and most importantly,
    the observations of the officers on the scene  the appellant with a ligature
    tied so tightly around his neck that his face was blue, hours after the
    apparent intruder attack.

[43]

If accepted by the jury, this body of evidence
    demonstrated an intent to mislead the police or others or an intent to deflect
    suspicion:
OConnor
, at para. 26. Taken together, this was evidence the
    appellant staged the crime scene to look like someone else had killed Ms. DAmours.
    It was cogent evidence of fabrication.

[44]

In her closing address, the Crown reviewed the
    internal and external inconsistencies in the appellants lengthy statement to
    Detective Sergeant Sigouin. However, she concluded this part of her address by
    saying, [T]he Crown does not ask you to convict the accused because of the
    inconsistencies in his statement. The Crown submits that the evidence of  guilt
    is overwhelming on its own.

[45]

There was nothing wrong with this submission.
    However, it necessitated that the jury be provided with guidance on the
    difference between simply disbelieving a statement and finding that it had been
    fabricated. Without it, the jury may have mistakenly equated disbelief with
    fabrication. The trial judge provided such an instruction, which included the
    following passage:

There is a big difference between disbelief of
    a version of events and fabrication of that same version of events. Disbelief
    of a version of events does not mean that the version of events was fabricated.
    Not at all. Evidence that leads you only to disbelieve a version of events is
    not independent evidence that the version of events was fabricated.

[46]

There was no objection to the fabrication
    instruction, either before or after it was delivered. No issue is taken with
    the correctness of this instruction on appeal. It was correct (see
Al-Enzi
,
    at para. 41) and it was balanced.

[47]

We dismiss this ground of appeal.

Disposition

[48]

The appeal against conviction is dismissed.

POSTSCRIPT

[49]

Following the dismissal of his conviction appeal
    at the conclusion of the hearing on June 1, 2021, the appellant filed a Notice
    of Appeal for Inmate Appeal at the institution where he is incarcerated, dated June
    22, 2021. The Notice lists several grounds of appeal against conviction, some
    of which were not advanced as part of his solicitor appeal. The appellant also
    claims that the sentence he received was excessive.

[50]

The appeal against conviction has already been
    dismissed. Therefore, we decline to consider the further grounds of appeal now
    advanced by the appellant. As for the appeal against sentence, the appellant
    did seek leave to appeal his sentence in an Amended Notice of Appeal, filed on
    August 23, 2018. However, a Notice of Abandonment of the sentence appeal was
    filed on October 5, 2020. Consequently, the fitness of the appellants sentence
    was not properly before this court when his appeal was heard.

Doherty J.A.

Gary Trotter J.A.

J.A. Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Ruddy, 2021 ONCA 490

DATE: 20210706

DOCKET: C65944

Watt, Pardu and Trotter JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Patrick Ruddy

Appellant

Eric Granger, for the appellant

Maria Gaspar, for the respondent

Heard: June 28, 2021 by video
    conference

On appeal from the sentence imposed on
    September 7, 2018 by Justice Paul R. Currie of the Ontario Court of Justice.

REASONS
    FOR DECISION

[1]

The appellant was an officer with the Canada
    Border Services Agency (CBSA) for 13 years. On April 13, 2018, he entered
    guilty pleas to one count each of conspiring to import cocaine (
Controlled
    Drugs and Substances Act
, S.C. 1996, c. 19,

s. 6(1)) and
    breach of trust (
Criminal Code
, R.S.C. 1985, c. C-46, s.
    122). He was sentenced to 10 years imprisonment and made subject to other
    ancillary orders.

Background

[2]

The investigation began after the appellant was
    seen at a secure cargo facility removing a package from a container sent from
    Pakistan. He provided no receipt or documentation when he removed the package.
    Over a seven-month period, from September 7, 2016 until the end of April 2017,
    RCMP investigators intercepted private communications between the
    appellant and three co-conspirators, including another CBSA officer and Roberto
    Leyva. The intercepts captured the co-conspirators planning to import multiple
    shipments of cocaine through Toronto Pearson International Airport.
    Drawing on his knowledge and experience as a CBSA officer, the
    appellant advised Leyva on an ongoing basis about how to import
    cocaine undetected, including means, methods, and opportune
    times.

[3]

On April 20, 2017, the RCMP intercepted a
    conversation between the appellant and Leyva discussing a cocaine shipment
    that was arriving on a flight from Kingston, Jamaica, the next
    evening. The appellant confirmed that it was five that was coming on that
    flight. The following night, the CBSA seized 5.5 kilograms
    of cocaine from a flight from Kingston, Jamaica, shortly after it
    landed at Pearson. The circumstances of the seizure were consistent with many
    of the details discussed in the intercepted communications.

[4]

At the time of the offence, the value of the
    cocaine that was seized, if sold at the kilogram or multi-kilogram level, was
    between $45,000 and $65,000.

[5]

The appellant was 37 years old at the time of
    the offences. Being a trusted CBSA officer, he had no criminal record. The
    appellant is a member of the Bonnechere Algonquin First Nation, of Métis
    descent. At the time of sentencing, he was married. The appellant enjoyed the
    support of his family and friends. He expressed what the sentencing judge
    regarded as sincere remorse for his actions.

[6]

The Crown sought a sentence of 10 to 12 years,
    whereas the appellant sought a sentence of 5 to 6 years.

The sentencing judges reasons

[7]

In his reasons, the sentencing judge outlined
    the applicable principles of sentencing for this type of case, placing heavy
    reliance on the decision of this court in
R. v. Hamilton
(2004), 186
    C.C.C. (3d) 129 (Ont. C.A.). He also referred to
R. v. Duncan
, 2016
    ONSC 1319, in which Code J. identified ranges of sentence for cocaine
    importers, based on the role played by the accused in the enterprise and amount
    of cocaine involved. Based on that case, the sentencing judge identified the
    appropriate range as 12 to 19 years. However, given the appellants guilty
    plea, the Crown suggested a range of 10 to 12 years.

[8]

The sentencing judge held that the appellants
    role as a CBSA offer significantly increase[d] his moral culpability in this
    case. After taking into account a number of mitigating circumstances, the
    sentencing judge imposed a sentence of 10 years imprisonment, at the lower end
    of the range submitted by the Crown.

Discussion

[9]

The appellant submits that the sentencing judge
    did not correctly identify the proper range. Instead of a 10- to 12-year
    spread, he submits that the proper range was 8 to 12 years. Given the numerous
    mitigating factors, the appellant submits that he should fall at the lower end
    of this range. We disagree.

[10]

Assuming that the range extends as low as the
    appellant submits on appeal, we are of the view that the appellants sentence
    is properly located within this range. The sentencing judge identified the
    applicable aggravating and mitigating circumstances in this case. The
    importation of cocaine requires a sentence that emphasizes the principles of
    denunciation and general deterrence. The egregious breach of trust in this case
    was a serious aggravating factor. We must show deference to how the sentencing
    judge balanced the aggravating and mitigating factors. It cannot be said that a
    sentence of 10 years imprisonment was demonstrably unfit:
R. v. Lacasse
,
    2015 SCC 64, [2015] 3 S.C.R. 1089, at paras. 36-55;
R. v. Friesen
,
    2020 SCC 9, at paras. 25-29.

[11]

The appellant submits that the sentencing judge
    erred by failing to give credit for the time that the appellant spent on strict
    bail conditions that included roughly 15 months on house arrest. In
R. v.
    Downes
(2006), 205 C.C.C. (3d) 488 (Ont. C.A.), at para. 33, this court
    held that it is an error in principle for a judge to fail to take into
    account as a mitigating circumstance in sentencing time spent on stringent bail
    conditions, especially house arrest. See also:
R. v. Ijam
, 2007 ONCA
    597, 87 O.R. (3d) 81, at para. 67,
per
Sharpe J.A. (concurring).
    However, there is no prescribed formula for taking this mitigating factor into
    account; it is within the discretion of the sentencing judge:
R. v. Place
,
    2020 ONCA 546, at para. 20.

[12]

The sentencing judge did take house arrest into
    account in determining the ultimate sentence he imposed. He said, In [defence
    counsels] submissions that an appropriate range of sentence would be some five
    to six years, he asks the court to look at the fact that Mr. Ruddy has been
    essentially on house arrest since his release from custody. Later in his
    reasons, the sentencing judge said, Mr. Ruddy, I give you full credit for all
    of the mitigating factors in your case.

[13]

It would have been preferable had the sentencing
    judge said more about the time the appellant spent on house arrest, however, we
    are satisfied that he took it into account in determining the ultimate sentence
    he imposed, which fell in the middle of the appropriate range submitted by the
    appellant on appeal.

[14]

The appellant submits that the sentencing judge
    failed to credit the appellant for the five days he spent in pre-sentence
    custody before being released on bail. The sentencing judge made no mention of
    this time, even though it was raised in submissions. There was no reason to
    refuse credit for the time the appellant spent in pre-sentence custody. The five
    days spent will be credited on a 1.5:1 basis, for a total credit of eight days,
    rounded.

[15]

At the sentencing hearing, the Crown requested a
    mandatory firearms and weapons prohibition under s. 109 of the
Criminal
    Code
for a period of 10 years. The sentencing judge made a lifetime order.
    On appeal, the Crown agrees that, pursuant to s. 109(2)(a), the order should be
    for 10 years.

[16]

Finally, the sentencing judge imposed a victim surcharge.
    He made this order before the Supreme Court of Canadas decision in
R. v.
    Boudreault
, 2018 SCC 58, [2018] 3 S.C.R. 599. The Crown concedes that this
    order should be set aside.

Disposition

[17]

Leave to appeal sentence is allowed. The
    appellant is entitled to be credited with eight days of pre-sentence custody.
    Accordingly, the custodial portion of his sentence is reduced by eight days.
    The mandatory firearms and weapons prohibition is reduced to 10 years. The
    victim surcharge is set aside.

David Watt J.A.

G. Pardu J.A.

Gary Trotter J.A.