BILL 13 – 2005
CIVIL FORFEITURE ACT

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 -- Interpretation

Definitions

1 (1) In this Act:

"court" means the Supreme Court;

"director" means a person who is designated as director under section 21 (1);

"forfeiture order" means a court order made under section 5 (1) or (2);

"instrument of unlawful activity" means property that

(a) has been used to engage in unlawful activity that, in turn,

(i) resulted in the acquisition of property or an interest in property, or

(ii) caused serious bodily harm to a person, or

(b) is likely to be used to engage in unlawful activity that is intended to

(i) result in the acquisition of property or an interest in property, or

(ii) cause serious bodily harm to a person;

"interest in property" or "interest in the property" means a right, a title, an interest, an estate or a claim to or in property;

"interim preservation order" means a court order made under section 8 (3);

"personal property registry" means the personal property registry established under the Personal Property Security Act;

"proceeds of unlawful activity" means any of the following:

(a) the whole or a portion of an interest in property if the whole or the portion of the interest, as the case may be, is acquired directly or indirectly as a result of unlawful activity;

(b) the whole or a portion of an interest in property that is equivalent in value to the amount of an increase in value of the whole or the portion of the interest in property if the increase in value results directly or indirectly from unlawful activity;

(c) the whole or a portion of an interest in property that is equivalent in value to the amount of a decrease in a debt obligation secured against the interest or the portion of the interest in property, if the decrease in debt obligation results directly or indirectly from unlawful activity;

"property" means a parcel of real property or tangible or intangible personal property and, for greater certainty, includes cash;

"protection order" means an order made by a court under section 13 (1);

"receiver manager" means a person who is appointed as a receiver manager under section 8 (3) (c);

"security interest" means security interest as defined in the Personal Property Security Act;

"unlawful activity" means an act or omission described in one of the following paragraphs:

(a) if an act or omission occurs in British Columbia, the act or omission, at the time of occurrence, is an offence under an Act of Canada or British Columbia;

(b) if an act or omission occurs in another province of Canada, the act or omission, at the time of occurrence,

(i) is an offence under an Act of Canada or the other province, as applicable, and

(ii) would be an offence in British Columbia, if the act or omission had occurred in British Columbia;

(c) if an act or omission occurs in a jurisdiction outside of Canada, the act or omission, at the time of occurrence,

(i) is an offence under an Act of the jurisdiction, and

(ii) would be an offence in British Columbia, if the act or omission had occurred in British Columbia,

but does not include an act or omission that is an offence

(d) under a regulation of a corporation, or

(e) under an enactment of any jurisdiction if the enactment or the jurisdiction is prescribed under this Act.

(2) For the purpose of the definition of "proceeds of unlawful activity", "equivalent in value" means equivalent in value as determined or established by the regulations.

Application

2 (1) This Act applies to an unlawful activity occurring before, on or after the date this section comes into force.

(2) This Act applies to proceeds of unlawful activity, whether or not

(a) the acquisition of the whole or the portion of an interest,

(b) the increase in the value of the whole or the portion of an interest, or

(c) the decrease in the debt obligation,

as referred to in the definition of "proceeds of unlawful activity", occurred before, on or after the coming into force of this Act.

Part 2 -- Forfeiture Orders

Application for forfeiture order

3 (1) The director may apply to the court for an order forfeiting to the government

(a) the whole of an interest in property that is proceeds of unlawful activity, or

(b) the portion of an interest in property that is proceeds of unlawful activity.

(2) The director may apply to the court for an order forfeiting to the government property that is an instrument of unlawful activity.

(3) An application for a forfeiture order under this section applies only with respect to property or an interest in property located in British Columbia.

Parties and notification

4 (1) In proceedings commenced under section 3 (1), the director must name as a party

(a) a person who is a registered owner of the whole or the portion of the interest in property that is the subject of the application for forfeiture, and

(b) a person who the director has reason to believe is an unregistered owner of the whole or the portion of the interest in property that is the subject of the application for forfeiture.

(2) In proceedings commenced under section 3 (2), the director must name as a party

(a) a person who is a registered owner of the property that is the subject of the application for forfeiture, and

(b) a person who the director has reason to believe is an unregistered owner of the property that is the subject of the application for forfeiture.

(3) In proceedings commenced under section 3 (1) or (2), the director must

(a) notify a person if required to do so by the court or the regulations, and

(b) notify a person in the manner established by the regulations, unless the court orders a different manner of notification.

Forfeiture order

5 (1) Subject to section 6, if proceedings are commenced under section 3 (1), the court must make an order forfeiting to the government the whole or the portion of an interest in property that the court finds is proceeds of unlawful activity.

(2) Subject to section 6 and section 13 (1), if proceedings are commenced under section 3 (2), the court must make an order forfeiting to the government property that the court finds is an instrument of unlawful activity.

Relief from forfeiture

6 If a court determines that the forfeiture of property or the whole or a portion of an interest in property under this Act is not in the interests of justice, the court may

(a) refuse to issue a forfeiture order,

(b) limit the application of the forfeiture order, or

(c) put conditions on the forfeiture order.

Effective date of forfeiture order

7 A forfeiture order made with respect to property or the whole or a portion of an interest in property, as applicable, is effective,

(a) in the case of real property or an interest in real property registered in the land title office,

(i) at the time a notice is filed under section 23 (1) with respect to the property or the whole or a portion of an interest in property, or

(ii) at the time the forfeiture order is filed in the land title office with respect to the property or the whole or a portion of an interest in property, if no notice is filed under section 23 (1), and

(b) in the case of personal property or the whole or a portion of an interest in personal property,

(i) at the time a notice is registered under section 23 (2) with respect to the property or the whole or a portion of an interest in the property, or

(ii) if the court determines that registration in the personal property registry is not required, on the date the court makes the forfeiture order.

Part 3 -- Interim Preservation Orders, Protection
Orders and Other Related Orders

Division 1 -- Interim Preservation Orders

Interim preservation order

8 (1) As part of a proceeding under section 3 (1) for forfeiture of the whole or a portion of an interest in property, the director may make an application to court for one or more interim preservation orders in relation to

(a) the whole or the portion of the interest in property, or

(b) the property in which the whole or the portion of interest in property is held.

(2) As part of a proceeding under section 3 (2) for forfeiture of property, the director may make an application to court for one or more interim preservation orders in relation to the property.

(3) On application under subsection (1) or (2), the court may make one or more of the following orders for preservation of property or the whole or a portion of an interest in property:

(a) an order restraining the disposition or transmission of the property or the whole or the portion of the interest in property;

(b) an order for the possession, delivery to the director or safekeeping of property;

(c) an order appointing a person to act as a receiver manager for property or the whole or a portion of an interest in property;

(d) an order for the disposition of the property or the whole or the portion of the interest in property in order to better preserve the value of the property or the whole or the portion of the interest in property;

(e) for the purpose of securing performance of an obligation imposed by an order made under Part 2 of this Act or under this Part, an order granting to the director a lien for an amount set by the court on property or the whole or the portion of an interest in property;

(f) any other order that the court considers just for the preservation of

(i) the property or the whole or the portion of an interest in the property,

(ii) the value of the property or of the whole or the portion of an interest in the property, or

(iii) the rights of creditors and other interest holders;

(g) any other order that the court considers appropriate in the circumstances.

(4) The amount set by the court under subsection (3) (e) is deemed for the purposes of the Personal Property Security Act

(a) to be the full value of the property or the whole or portion of the interest in property that is the subject of the proceedings, unless the court orders otherwise, and

(b) to include the expenses referred to in section 59 (2) (a) of the Personal Property Security Act.

(5) Unless it is not in the interests of justice, the court must make an interim preservation order applied for under this section if the court is satisfied that there are reasonable grounds to believe that

(a) the whole or the portion of the interest in property that is the basis of the application under subsection (1) is proceeds of unlawful activity, or

(b) the property that is the basis of the application under subsection (2) is an instrument of unlawful activity.

(6) An application with respect to an interim preservation order applies only with respect to property or an interest in property located in British Columbia.

(7) On application of the director, the land title office may release a lien referred to in subsection (3) (e).

Application made without notice

9 (1) Subject to subsection (2), a court may make an interim preservation order under section 8 without notice to any person.

(2) An order made without notice under subsection (1) may not be made for a period greater than 30 days.

(3) A court may grant one or more extensions to an order referred to in subsection (2) only if notice of the application to extend the order is given to every person who is required by the court to be given notice of the application, other than a person who, in the opinion of the court,

(a) has been evading service,

(b) is unable to be located, in spite of the director's reasonable efforts, or

(c) need not be served because of exceptional circumstances.

Receiver manager

10 (1) A person appointed to act as a receiver manager under section 8 (3) (c) is the receiver manager of the property or the whole or a portion of the interest in property specified by the court.

(2) If directed by the court, a receiver manager

(a) may receive and hold property or the whole or a portion of an interest in property and dispose of property or the whole or a portion of an interest in property in the ordinary course of business,

(b) has the authority to manage the business and affairs conducted in relation to the property or the whole or a portion of the interest in property of the person named, and

(c) has all the incidental powers necessary to hold and manage the property or the whole or a portion of the interest in property.

Personal Property Security Act

11 (1) Despite section 4 (a) of the Personal Property Security Act, but subject to this section, the Personal Property Security Act applies with respect to a lien granted under this Act and the enforcement of a lien granted under this Act on personal property or the whole or a portion of an interest in property that is personal property.

(2) Sections 64, 65 and 66 (1) (a) of the Personal Property Security Act do not apply to a receiver manager appointed under section 8 of this Act.

(3) If an order under section 8 gives the director a lien on personal property or the whole or a portion of an interest in property that is personal property,

(a) the lien is deemed to be a security interest taken in the personal property or the whole or a portion of the interest in property, as applicable, to secure the payment of the amount of the lien granted by a court under section 8, and

(b) the lien is deemed to continue until it is discharged by the director.

(4) The director, by registration of the lien under the Personal Property Security Act, perfects the lien as if the lien were a security interest perfected under that Act.

(5) Sections 58 (3) to (5), 62 and 67 of the Personal Property Security Act do not apply to this Act.

Division 2 -- Protection Orders and Other Orders Related to Forfeiture

Definition

12 In this Division, "uninvolved interest holder" means a person who

(a) owns, at the time of application for an order under section 3, the whole or a portion of an interest in property that is an instrument of unlawful activity, and

(b) did not directly or indirectly engage in the unlawful activity that is the basis of the application referred to in paragraph (a).

Protection order

13 (1) Subject to subsection (3), if a court finds

(a) that property is an instrument of unlawful activity, and

(b) that a person is an uninvolved interest holder with respect to that property,

the court must make the orders necessary to protect the interest in the property held by the uninvolved interest holder.

(2) A protection order issued with respect to property that is subject to a forfeiture order has effect from the date that the forfeiture order is effective, unless the court orders otherwise.

(3) A court may refuse to issue a protection order if the issuance is not in the interests of justice.

Orders related to forfeiture orders and protection orders

14 On application, a court may make, at the time of or subsequent to making a forfeiture order under section 5, one or more of the following orders:

(a) an order requiring

(i) the disposition or transmission of property or the whole or the portion of the interest in property forfeited, or

(ii) the disposition or transmission of property that includes the whole or the portion of the interest in property forfeited;

(b) an order directing the manner of disposition of property or the whole or the portion of the interest in property referred to in paragraph (a) (i) or (ii), including the appointment of a receiver manager to manage and dispose of the property or the whole or the portion of the interest in property;

(c) an order directing that the money arising from the disposition of property or the whole or the portion of the interest in property referred to in paragraph (a) (i) or (ii) is applied in accordance with the direction of the court after taking into account all encumbrances;

(d) an order requiring the severing or partition of property, or the whole or a portion of an interest in property;

(e) an order requiring the cancellation of the whole or a portion of an interest in property;

(f) an order providing that, subject to the interest of an uninvolved interest holder or another person, the government, on forfeiture, may take possession of or seize

(i) the property forfeited or the property in which an interest in property or a portion of an interest in property is forfeited, or

(ii) the interest in property or a portion of an interest in property that is forfeited;

(g) any other order that the court considers appropriate in the circumstances.

Part 4 -- Proceedings, Presumptions and Proof

Proceedings

15 The director may commence proceedings under this Act by originating application or action.

Standard of proof

16 Findings of fact in proceedings under this Act and the discharge of any presumption are to be made on the balance of proba-bilities.

Proof of unlawful activity

17 (1) In this section:

"conviction" means a conviction

(a) that is not subject to appeal or further appeal, or

(b) for which no appeal is taken;

"finding of guilt" includes a finding of guilt by a court, whether or not the court orders an absolute or conditional discharge under section 730 of the Criminal Code, but does not include a finding of guilt if

(a) the finding is subject to appeal or further appeal, or

(b) an appeal is being taken in respect of the finding of guilt;

"found guilty" has a corresponding meaning to the definition of "finding of guilt".

(2) In proceedings under this Act, proof that a person was convicted, found guilty or found not criminally responsible on account of a mental disorder in respect of an offence that constitutes an unlawful activity is proof that the person engaged in the unlawful activity.

(3) A certificate that

(a) sets out a copy of the charge and whether or not there was a conviction or finding of guilt with respect to the charge, and

(b) purports to be signed by

(i) the officer having custody of the records of the court in which the offender was convicted or found guilty, or

(ii) a person authorized to act for the officer,

is, on proof of the identity of the person named in the certificate as the offender, sufficient evidence of the conviction of that person or the finding of guilt against that person, without proof of the signature or the official position of the person purporting to have signed the certificate.

(4) A certificate that

(a) sets out a copy of the charge and a finding of not criminally responsible on account of a mental disorder with respect to the charge, and

(b) purports to be signed by

(i) the officer having custody of the records of the court in which the person named was found not criminally responsible on account of a mental disorder, or

(ii) a person authorized to act for the officer,

is, on proof of the identity of the person named in the certificate as the person who was charged, sufficient evidence of the finding that the person named was found not criminally responsible on account of a mental disorder, without proof of the signature or the official position of the person purporting to have signed the certificate.

(5) If proof of a conviction, a finding of guilt or a finding that a person was not criminally responsible on account of a mental disorder is admitted in evidence under this section, the contents of the information, complaint or indictment relating to the offence for which the person was convicted, found guilty or found not criminally responsible on account of a mental disorder is admissible in evidence.

If no conviction or finding of unlawful activity

18 In proceedings under this Act, an unlawful activity may be found to have occurred even if

(a) no person has been charged with an offence that constitutes the unlawful activity, or

(b) a person charged with an offence that constitutes the unlawful activity was acquitted of all charges in proceedings before a criminal court or the charges are withdrawn or stayed or otherwise do not proceed.

Determination respecting proceeds of unlawful activity

19 In an application for forfeiture made under section 3 (1), proof that a person

(a) participated in an unlawful activity that resulted in or is likely to have resulted in the person receiving a financial benefit, and

(b) subsequently did one or more of the following:

(i) acquired the whole or the portion of an interest in property that is the subject of the application;

(ii) caused an increase in the value of the interest or the portion of the interest in property that is the subject of the application;

(iii) caused a decrease of a debt obligation secured against the interest or the portion of the interest in property that is the subject of the application,

is proof, in absence of evidence to the contrary, that the whole or the portion of the interest in property that is the subject of the application is proceeds of unlawful activity as a result of the unlawful activity referred to in paragraph (a).

Presumption of advancement

20 For the purposes of this Act, the presumption of advancement does not apply to a transfer of property or of an interest or a portion of an interest in property.

Part 5 -- Administration

Division 1 -- Director

Director

21 (1) The minister may in writing designate as director a person who is appointed under the Public Service Act.

(2) The director may delegate, with or without conditions, any or all of the powers, functions and duties of the director under this Act to a person or class of persons.

(3) A delegation under subsection (2) must be in writing and may include any terms or conditions the director considers advisable.

Powers, functions and duties of director

22 (1) In this section, "public body" means public body as defined in the Freedom of Information and Protection of Privacy Act.

(2) The director may administer and dispose of property or the whole or a portion of an interest in property under this Act in accordance with the orders of the court and the regulations.

(3) Without restricting section 21 (2), the director is responsible for

(a) collecting and managing the use and disclosure of information and maintaining records for the purposes of this Act and, on the basis of information collected, determining if proceedings should be commenced under this Act,

(b) commencing and conducting proceedings under this Act, and

(c) managing the distribution of proceeds from property, an interest in property or a portion of an interest in property forfeited to the government under this Act.

(4) Subject to the regulations, the director may enter into information-sharing agreements that are reasonably required by the director in order to exercise his or her powers or perform his or her functions and duties under this Act with the following:

(a) Canada, a province or another jurisdiction in or outside of Canada;

(b) a public body.

(5) Subject to the regulations, the director is entitled to information that is

(a) in the custody or control of a public body prescribed by the Lieutenant Governor in Council, and

(b) reasonably required by the director in order to exercise his or her powers or perform his or her functions and duties under this Act.

(6) A public body that has custody or control of information to which the director is entitled under subsection (5) must, on request, disclose that information to the director.

(7) This section applies despite any other enactment, but is subject to a claim of privilege based on a solicitor-client relationship.

Division 2 -- Filing Notice of Application

Filing notice in registries

23 (1) After commencing proceedings under section 3 that relate to real property or the whole or a portion of an interest in property that is real property registered in the land title office, the director may file, in the prescribed manner, in the land title office the prescribed form of notice setting out that the proceedings commenced may affect the real property or the whole or a portion of an interest in the property that is the real property referred to in the notice.

(2) After commencing proceedings under section 3 that relate to personal property or the whole or a portion of an interest in property that is personal property, the director may register, in the prescribed manner, in the personal property registry the prescribed form of notice setting out that the proceedings commenced may affect the personal property or the whole or a portion of an interest in the property that is the personal property referred to in the notice.

(3) The director may amend, extend or cancel a notice referred to in subsection (1) or (2) by filing or registering, in the same manner as the notice was filed or registered, the amendment, extension or cancellation in the land title office or the personal property registry, as applicable.

(4) The registrar under the Land Title Act must register a notice, and an amendment, an extension or a cancellation of a notice referred to in subsection (1), if

(a) the notice, amendment, extension or cancellation is filed in the prescribed manner, and

(b) the prescribed fee, if any, is paid to the registrar.

(5) A notice and an amendment or extension of a notice registered under subsection (4) has the same effect as a certificate of pending litigation registered under the Land Title Act.

Part 6 -- Distribution of Proceeds

Definitions

24 In this Part and Part 7:

"civil forfeiture account" means the special account established by section 25;

"eligible victim" means a person who

(a) suffered pecuniary loss as a direct result of an unlawful activity that resulted in forfeiture under this Act of property or the whole or a portion of an interest in property,

(b) did not directly or indirectly engage in the commission of the unlawful activity, and

(c) meets the criteria prescribed under this Act.

Establishment of civil forfeiture account

25 (1) There is established a special account in the consolidated revenue fund called the civil forfeiture account.

(2) The civil forfeiture account consists of money paid into the account under section 26.

Allocation of funds

26 The director must pay into the civil forfeiture account

(a) cash forfeited to the government under this Act, and

(b) proceeds resulting from the disposition of property or the whole or a portion of an interest in property forfeited to the government under this Act.

Payment out of civil forfeiture account

27 (1) Subject to this Act and the regulations, the director may make payments out of the civil forfeiture account for one or more of the following purposes:

(a) compensation of eligible victims;

(b) prevention of unlawful activities;

(c) remediation of the effect of unlawful activities;

(d) administration of the Act;

(e) other prescribed purposes.

(2) The director may make payments out of the civil forfeiture account for purposes referred to in subsections (1) (b) to (e), only with the approval of the Minister of Finance.

Application for compensation

28 A person may apply, in accordance with the regulations, for compensation from the civil forfeiture account as an eligible victim.

Payment to eligible victim

29 (1) Subject to this Act and the regulations and on receipt of an application under section 28, the director may pay an amount to an eligible victim in the circumstances and subject to the conditions and limitations that the director considers appropriate.

(2) Despite subsection (1), the director may not pay the eligible victims of an unlawful activity a total amount that exceeds the net proceeds, as determined by the regulations, resulting from the disposition of property or the whole or a portion of an interest in property forfeited as a result of the unlawful activity.

Manner of payment

30 In compensating an eligible victim under section 27, the director may do the following:

(a) pay an eligible victim in one or more installments;

(b) prorate payments in accordance with the regulations among eligible victims or a category of eligible victims.

Reconsideration of decision

31 On application to the director, or on the director's own initiative, the director may reconsider a decision under section 29 or 30 respecting the payment of compensation or eligibility for compensation.

Repayment of excess compensation received

32 If an eligible victim receives from the civil forfeiture account money that is in excess of the amount awarded to the eligible victim under this Act, the eligible victim is liable to repay to the government the amount of compensation to which that eligible victim was not entitled.

Part 7 -- General Provisions

If possession is unlawful

33 For the purposes of a proceeding under this Act, a person may not claim to have an interest in property if, under the law of Canada or British Columbia, it is unlawful for that person to possess the property.

Obligations of government on forfeiture

34 If property or the whole or a portion of an interest in property is forfeited under this Act, the government does not, as a result of the forfeiture, assume responsibility for any covenants, debts or other obligations under an encumbrance, a lien or another security interest to which the property or the whole or the portion of the interest in property is subject.

Limitation period

35 The time limit for commencing an action or an originating application under this Act is 10 years from the date on which the unlawful activity occurred.

Application of section 21 (3) of Financial Administration Act

36 Section 27 applies despite section 21 (3) of the Financial Administration Act.

Section 5 of Offence Act does not apply

37 Section 5 of the Offence Act does not apply to this Act or the regulations.

Regulations

38 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows:

(a) governing the giving of notice of proceedings under this Act, including service of notice and deemed service of notice and setting out the persons or classes of persons who are to be notified;

(b) respecting compensation of eligible victims under this Act, including the application for and the information in support of an application for compen-sation under this Act;

(c) respecting circumstances when no payment of compensation may be made to an eligible victim or a category of eligible victims;

(d) respecting the process for adjudication of an application for compensation and the factors to be considered in determining the amount, if any, of compensation to be awarded to an eligible victim;

(e) establishing circumstances when an amount is required to be deducted or set off from an amount that is to be paid under this Act to an eligible victim;

(f) respecting the registration under the Personal Property Security Act of a notice under section 23 (2) of this Act, and the legal effect of that registration;

(g) respecting the disposition of

(i) a property forfeited or a property in which an interest in property or a portion of an interest in property is forfeited, or

(ii) an interest in property or a portion of an interest in property that is forfeited;

(h) respecting the civil forfeiture account and payments from that account;

(i) defining a word or expression used but not otherwise defined in this Act;

(j) prescribing fees that are to be paid under this Act;

(k) prescribing forms for the purposes of this Act;

(l) establishing circumstances in which the director may enter into an agreement referred to in section 22 (4);

(m) establishing preconditions to the director being entitled to information under section 22 (5) from a public body or class of public body, or to a type of information;

(n) establishing one or more methods or formulas for determining the interest or portion of an interest in property that is equivalent in value for the purpose of the definition of "proceeds of unlawful activity";

(o) determining net proceeds for the purposes of section 29 (2), including the establishment of one or more methods of calculating net proceeds.

(3) In making regulations under this section, the Lieutenant Governor in Council may do one or more of the following:

(a) make different regulations for different circumstances or classes of persons, property or unlawful activities;

(b) delegate a matter to a person;

(c) confer a discretion on a person.

Consequential Amendment

Court Rules Act

39 Section 1 (2) of the Court Rules Act, R.S.B.C. 1996, c. 80, is amended by adding the following paragraph:

(h) all matters arising under the Civil Forfeiture Act.

Commencement

40 This Act comes into force by regulation of the Lieutenant Governor in Council.