In broad terms, Section 462.37(3) of the Criminal Code of Canada should not be used, by judges, to levy a “fine instead of forfeiture” with regards to funds that have been judicially returned to the accused for the payment of reasonable legal fees associated with their criminal defence. This was the essence of the decision by the Supreme Court of Canada in Regina v. Rafilovich, 2019 SCC 51, at paras. 8, 54.
In Rafilovich, supra, the charge before the Court was possession of cocaine for the purpose of trafficking. The car and apartments of the accused were searched by the police, and a large sum of cash was seized. Specifically, it was seized as potential proceeds of crime under Part XII.2 of the Criminal Code. Prior to the trial, an application was made under s.462(34(3)(c) of the Code by the accused to pay for the proceeds that were seized to pay for legal expenses and fees. The application was granted. Guilty pleas were entered at the trial.
The sentencing judge sentenced Mr. Rafilovich to 36 months in custody, which was reduced by 13 months for pretrial custody and by another 9 months to account for the terms of his interim release. In addition to this sentence, Mr. Rafilovich was required to forfeit to the Crown his 50 percent interest in an apartment that was “offence-related property” as defined in s. 2 of the Controlled Drugs and Substances Act, S.C. 1996, c. 19 (“CDSA”). Mr. Rafilovich’sterm of imprisonment and the forfeiture of the interest in the apartment are not at issue in this appeal. At the sentencing hearing, the Crown also sought a fine instead of forfeiture under s. 462.37(3), equal to the amount seized and then returned to Mr. Rafilovich to pay for his legal counsel. The sentencing judge declined to impose the discretionary fine for four reasons. First, as the application judge found, Mr. Rafilovich did not have any funds to pay for legal representation and did not qualify for legal aid. Therefore, “[i]t was necessary for the seized funds to be released” (2013 ONSC 7293, at p. 20 (CanLII)). Second, Mr. Rafilovich did not obtain a benefit from the returned funds except to have legal representation. This was not a situation where an offender profited from criminal conduct. Third, Mr. Rafilovich did not squander or divert any of his other assets. Fourth, the non-payment of the fine would lead to the imposition of a further sentence of imprisonment of 12 to 18 months — an outcome that offenders who have access to funds or legal aid would not have to face.
The majority of the Supreme Court of Canada (6:3) allowed the accused’s appeal and set aside the Court of Appeal’s variance of the sentencing judge’s order. Justice Martin of the Supreme Court of Canasda, writing for the majority, held that the statutory discretion given to sentencing judges to impose a fine must be exercised in accordance with the purposes of the proceeds of crime regime. While the primary goal of the legislation was to ensure that crime does not pay or benefit the offender, the legal expenses return provision in s.462.34(4)(c)(ii) pursues two (2) secondary purposes: (a) providing access to counsel, and (b) giving meaningful weight to the presumption of innocence. Underlying these secondary objectives “is a desire to ensure fairness to the accused in criminal prosecutions. Clawing back reasonable legal fees as a fine instead of forfeiture would, in most cases, undermine these equally valid purposes” (at para. 9). The majority concluded that, in the instant case, ordering a fine would undermine Parliament’s intent in enacting the legal expenses return provision.
However, the Court stated that there would be circumstances where “…it turns out that the offender did not have a real financial need or the funds were not used to alleviate that need, it would be appropriate for a judge to impose a fine instead of forfeiture, as this would align with Parliament’s intent” (at para. 10)”
For example, this might occur where there is wrongdoing in the return of funds application, such as the misrepresentation of the accused’s financial position. It might also occur where there is wrongdoing in the administration of the return order, such as funds not being applied in the manner contemplated, expenditures for purposes outside the scope of the return order, or fees in excess of judicially-authorized limits. Further, it might occur where the accused experiences an unexpected change in circumstances after the funds have been returned but before sentencing, such that recourse to returned funds is no longer necessary after the accused became aware of the changed circumstances. These are examples of the kinds of situations that undermine the basis of the return order such that Parliament would have intended to recover the returned monies by way of a fine.
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