Quebec (Attorney General) v. Laroche

Quebec (Attorney General) v. Laroche
Collection
Supreme Court Judgments
Date
2002-11-21
Neutral citation
2002 SCC 72
Report
[2002] 3 SCR 708
Case number
28417
Judges
McLachlin, Beverley; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; Iacobucci, Frank; Bastarache, Michel; Arbour, Louise; LeBel, Louis
On appeal from
Quebec
Subjects
Constitutional law
Criminal law
Notes
SCC Case Information: 28417
Decision Content
Quebec (Attorney General) v. Laroche, [2002] 3 S.C.R. 708, 2002 SCC 72
The Attorney General of Quebec Appellant
v.
Laurent Laroche and Garage Côté Laroche Inc. Respondents
and
The Honourable Claude Pinard, J.C.Q. Mis en cause
and
The Attorney General of Canada and
the Attorney General for Ontario Interveners
Indexed as: Quebec (Attorney General) v. Laroche
Neutral citation: 2002 SCC 72.
File No.: 28417.
2002: January 16; 2002: November 21.
Present: McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Bastarache, Arbour and LeBel JJ.
on appeal from the superior court of quebec
Criminal law — Proceeds of crime — Restraint order — Special warrant of seizure — Application for review — Burden of proof — Exercise of power of review — Whether power of review may be exercised only within limits defined by courts in wiretap authorization reviews — Whether review judge may consider validity of search warrants underlying seizure and restraint proceedings — Whether review judge erred in quashing restraint order and special warrants of seizure — Criminal Code, R.S.C. 1985, c. C‑46, ss. 462.32 , 462.33 , 462.34 , 462.37 .
Criminal law — Proceeds of crime — Restraint order — Nature and scope of restraint orders — Whether restraint order a seizure within meaning of s. 8 of Canadian Charter of Rights and Freedoms — Criminal Code, R.S.C. 1985, c. C‑46, s. 462.33(3) .
Constitutional law — Charter of Rights — Unreasonable search or seizure — Restraint order on certain property under Criminal Code — Whether restraint order a seizure within meaning of s. 8 of Canadian Charter of Rights and Freedoms — Criminal Code, R.S.C. 1985, c. C‑46, s. 462.33(3) .
L operated Garage Côté Laroche Inc., whose principal business was repairing seriously damaged road vehicles. Renting out industrial condominiums was added to the business, and the rentals are an important source of income. In the course of an audit, an employee of the Société de l’assurance automobile du Québec (SAAQ) found serious irregularities in five rebuilt vehicle files submitted by the Garage. The employee was convinced that the certificates of technical compliance for the vehicles had been obtained illegally, and referred the files to the police. After an investigation, the five vehicles were seized. The Crown filed charges of forgery, uttering forged documents and possession of stolen property against L. The police investigation covered dozens of rebuilt vehicle files as well as recent real estate acquisitions. Based on the affidavit of an investigator, the Court of Québec granted a restraint order and issued seven special warrants of seizure under ss. 462.32 and 462.33 of the Criminal Code , covering both the immovable properties and the vehicles. When the police executed the warrants, they seized 24 vehicles that were not covered by the warrants and restraint order. The respondents then brought an application for review in the Superior Court under s. 462.34 of the Code and s. 24(1) of the Canadian Charter of Rights and Freedoms . The Superior Court granted the application and quashed the restraint order and special warrants of seizure in full.
Held (McLachlin C.J. and Arbour J. dissenting in part): The appeal should be allowed in part. The restraint order and warrants of seizure authorized by the Court of Québec should be restored, except in respect of the 24 motor vehicles seized without authorization.
Per L’Heureux‑Dubé, Gonthier, Iacobucci, Bastarache and LeBel JJ.: The special warrant of seizure provided for in Part XII.2 of the Criminal Code constitutes a seizure with change of possession. A restraint order must be characterized as a seizure within the meaning of s. 8 of the Charter . Such an order supplements seizures that are taking place contemporaneously and freezes the property. The status of the person in possession of the property is that of caretaker or administrator of his or her own property. The property is placed under the legal and actual control of the criminal justice system. The purpose of this measure for exercising control is to facilitate criminal investigations and prevent the disappearance or wasting of the property. Doing this makes it possible to punish the crimes in question more effectively and facilitates the enforcement of any orders of forfeiture.
A judge may make a restraint order or issue a general warrant of seizure in respect of property if there are reasonable grounds to believe that an order of forfeiture may be made in respect of the property under s. 462.37(1) or 462.38(2). The express reference to s. 462.37(1) in the English version of s. 462.37(2) means that any order of forfeiture made under that second subsection is in fact made under the first subsection.
While the principles stated in the wiretap case law concerning the importance of the role of the authorizing judge, and the obligations of the public officials who seek those wiretaps, remain relevant, the wording of s. 462.34(6) of the Code calls for the use of an analytical framework which differs substantially from the framework by which a judge who must review a wiretap authorization is governed. The reviewing judge must decide whether he or she would have made the same decision as the authorizing judge, having regard to all of the evidence in the judge’s possession following the hearing. If the reviewing judge is of a different opinion, he or she must correct the initial error. The applicant bears the burden of establishing, on a balance of probabilities, that the authorization should not have been granted. The applicant must demolish the appearance of validity attached to the authorization.
The Superior Court correctly held that it could review the validity of the search warrants underlying the seizure and restraint proceedings. In this case, recognizing that the reviewing judge has jurisdiction that permits him or her to consider allegations that s. 8 of the Charter has been seriously violated does not adversely affect the fundamental interests of the administration of justice and makes it possible to offer an effective remedy against a restraint order and warrants of seizure. The restraint order will not necessarily be debated and reviewed in the course of the criminal trial. When the defects in the decision authorizing a warrant of seizure or restraint order result from some unconstitutional illegality in the underlying search warrants, it would be difficult to examine the legal situation properly without considering those various proceedings as a whole, and without having regard to their close legal and factual connections. A requirement that the remedy be sought by certiorari would amount to undue procedural strictness. The Superior Court already exercises inherent jurisdiction over all aspects of the proceedings. Moreover, an application for a remedy under s. 24 of the Charter may be joined with the application for review and so allows that aspect of the case to be brought before the court in any event.
The information obtained by the SAAQ employee had originally been provided by the respondents in compliance with legislative and regulatory obligations. They should have known that this information would be examined and audited by the SAAQ and was therefore not private in relation to the government. In carrying out and expanding his investigation, and transmitting information to the police, the employee was merely performing the duties of his position. That information constituted reasonable and probable grounds for obtaining the search warrants. The affidavit sworn by the investigator contained weaknesses and errors, but they did not mean that it could be given no weight at all for the purposes of making the order. Having regard to the information obtained through the administrative investigations and searches, the Crown had reasonable and probable grounds, at the authorization stage, to believe that the property in respect of which the restraint order and warrants of seizure were sought was proceeds of crime and could eventually have been the subject of an order of forfeiture. The onus was on the respondents, on review, to establish that the warrants of seizure should not have been issued and the restraint order should not have been made by the authorizing judge, on a balance of probabilities. Having failed in their attack on the underlying warrants, the respondents then had to present evidence to explain the source of the property, in order to establish, on a balance of probabilities, that it was not proceeds of crime. In this case, if the reviewing judge had applied Colarusso correctly, and had correctly understood the nature of the evidence that was required for judicial review, he would have had to dismiss the application for review, except in respect of the 24 vehicles seized without authorization. There was no basis in law for the restraint or seizure of those vehicles, and the Crown was unable to establish that those vehicles were connected with criminal activities. Nor did it establish that the vehicles might be the subject of an order of forfeiture as proceeds of crime. For the other vehicles, the evidence wrongly excluded by the review judge related those vehicles to criminal activities involving fraud, falsifying documents and possession of stolen property and the respondents presented no evidence that effectively contradicted the information relied on in support of the application for the restraint order. With respect to the immovables, the respondents had to establish, on a balance of probabilities, that they were not proceeds of crime and that therefore there were no reasonable and probable grounds for making the restraint order. It was not required that innocence be proved at that stage. Essentially, they had to establish the origin of the funds with which the immovables had been purchased, according to that standard of proof, something which they did not succeed in doing.
Per McLachlin C.J. and Arbour J. (dissenting in part): The Superior Court erred in setting aside the warrants and the restraint order on the vehicles covered by the warrants. Assuming without deciding that the court had the power to exclude the evidence obtained as a result of the initial seizures, its decision to do so cannot be justified. The SAAQ was entitled to report the information it obtained in the course of its own internal audit to the police. It is difficult to conclude that there was a reasonable expectation of privacy in the basic information turned over. The subsequent warrants flow directly from the discoveries the police made in connection with the first five vehicles. This is textbook police work, not a “fishing expedition”.
The Superior Court did not err in setting aside the restraint order with respect to L’s real property. It found that the evidence did not support a reasonable belief that the real property was the proceeds of crime and it was not asserted that this property was needed for the purpose of investigation or evidence. Section 462.34(6)(a) of the Code does not envisage a further requirement that the owner demonstrate that the affected property was not acquired with the proceeds of crime to have a restraint order lifted. This reflects the presumption of innocence.
Cases Cited
By LeBel J.
Applied: R. v. Lanteigne (1994), 156 N.B.R. (2d) 17; R. v. Fremanco Ltd. (1995), 135 Nfld. & P.E.I.R. 327; R. v. Domm (1996), 111 C.C.C. (3d) 449; R. v. Araujo, [2000] 2 S.C.R. 992, 2000 SCC 65; not followed: R. v. Seman (1994), 93 Man. R. (2d) 151; British Columbia (Attorney General) v. Felix, [1993] B.C.J. No. 1870 (QL); referred to: R. v. Colarusso, [1994] 1 S.C.R. 20; Wilson v. Canada (1993), 86 C.C.C. (3d) 464; Oerlikon Aérospatiale Inc. v. Ouellette, [1989] R.J.Q. 2680; 170888 Canada Ltée v. La Reine, [1999] R.J.Q. 1008; R. v. Brown, [2002] 2 S.C.R. 185, 2002 SCC 32; R. v. Garofoli, [1990] 2 S.C.R. 1421; R. v. Mac, [2002] 1 S.C.R. 856, 2002 SCC 24; R. v. Lamy, [2002] 1 S.C.R. 860, 2002 SCC 25; R. v. Bisson, [1994] 3 S.C.R. 1097; R. v. Dyment, [1988] 2 S.C.R. 417; Thomson Newspapers Ltd. v. Canada (Director of Investigation and Research, Restrictive Trade Practices Commission), [1990] 1 S.C.R. 425; Wilson v. The Queen, [1983] 2 S.C.R. 594; R. v. Meltzer, [1989] 1 S.C.R. 1764; Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892; R. v. Litchfield, [1993] 4 S.C.R. 333; Dagenais v. Canadian Broadcasting Corp., [1994] 3 S.C.R. 835; R. v. O’Connor, [1995] 4 S.C.R. 411; R. v. Beaulac, [1999] 1 S.C.R. 768; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms, ss. 8 , 24(1) .
Criminal Code, R.S.C. 1985, c. C‑46 [am. c. 42 (4th Supp.)], ss. 462.3 “proceeds of crime” [am. 1993, c. 25, s. 95; am. c. 37, s. 32; am. 1996, c. 19, s. 70(b)], 462.3 “judge”, 462.31 [am. 1996, c. 19, s. 70(c); am. 1997, c. 18, s. 28], 462.32 [am. 1997, c. 18, s. 29], 462.33 [am. 1993, c. 37, s. 21; am. 1996, c. 16, s. 60(1)(d); am. 1997, c. 18, s. 30], 462.34 [am. 1996, c. 19, s. 70(d) and (e); am. 1997, c. 18, ss. 31 and 140(d)(i)], 462.35 [am. 1997, c. 18, s. 33], 462.37 [am. 1995, c. 22, s. 10 (Sch. 1, items 15 to 17)], 462.38 [am. 1997, c. 18, s. 35], 462.43, 487 to 492, 490.8, 490.9, 504, 552, 673.
Highway Safety Code, R.S.Q., c. C‑24.2, ss. 546.1 et seq.
Supreme Court Act, R.S.C. 1985, c. S‑26, ss. 40 , 65.1 .
Authors Cited
Béliveau, Pierre, et Martin Vauclair. Traité général de preuve et de procédure pénales, 7e éd. Montréal: Thémis, 2000.
Chevrette, François, and Hugo Cyr. “La protection en matière de fouilles, perquisitions et saisies, en matière de détention, la non‑rétroactivité de l’infraction et la peine la plus douce”, in Gérald‑A. Beaudoin and Errol Mendes, eds., The Canadian Charter of Rights and Freedoms . Scarborough, Ont.: Carswell, 1996, 10-1.
German, Peter Maurice. Proceeds of Crime: The Criminal Law, Related Statutes, Regulations and Agreements. Scarborough: Carswell, 1998 (loose‑leaf updated 2002, release 1).
Gold, Alan D. Proceeds of Crime: A Manual with Commentary on Bill C‑61. Toronto: Carswell, 1989.
Hutchison, Scott C., James C. Morton and Michael P. Bury. Search and Seizure Law in Canada. Toronto: Carswell, 1993 (loose‑leaf updated 2002, release 2).
Reynolds, D. D. Graham. “Selected Aspects of the Proceeds of Crime Provisions of the Criminal Code ”, in Renee Pomerance and Anil K. S. Kapoor, eds., Search and Seizure: New Developments. Toronto: Department of Continuing Legal Education, Law Society of Upper Canada, 1998, 5‑1.
APPEAL from a decision of the Quebec Superior Court, [2001] Q.J. No. 7209 (QL), granting an application for review and setting aside a restraint order and seven special warrants of seizure issued by the Court of Québec. Appeal allowed in part, McLachlin C.J. and Arbour J. dissenting in part.
Serge Brodeur, Alain Pilotte, Gilles Laporte and Patrick Michel, for the appellant.
Christian Desrosiers and Denis Lavigne, for the respondents.
Bernard Laprade and François Lacasse, for the intervener the Attorney General of Canada.
Trevor Shaw, for the intervener the Attorney General for Ontario.
The reasons of McLachlin C.J. and Arbour J. were delivered by
1 The Chief Justice (dissenting in part) — Sections 462.32 and 462.33 of the Criminal Code (Part XII.2, Proceeds of Crime), R.S.C. 1985, c. C-46 , allow the police to impound property and prevent an owner from dealing with it, even before charges are laid. The initial restraint order or seizure may be made without notice to the property owner. However, s. 462.34 goes on to provide that the property owner may challenge the seizure before a judge, at which time he can present evidence and tell his side of the story. This appeal raises the issue of what a person charged with an “enterprise crime offence” must show to set aside a seizure under this provision.
2 Section 462.34 provides that a special search warrant or a restraint order may be set aside if the reviewing judge is satisfied on a balance of probabilities: (1) that the warrant “should not have been issued” or that the order “should not have been made”; and (2) that the property “will no longer be required for the purpose of any investigation or as evidence in any proceeding”. The section reads, in pertinent part:
(6) An order under paragraph (4)(b) in respect of property may be made by a judge if the judge is satisfied
(a) where the application is made by
(i) a person charged with an enterprise crime offence or a designated substance offence, or
. . .
that a warrant should not have been issued pursuant to section 462.32 or a restraint order under subsection 462.33(3) should not have been made in respect of that property, or
. . .
and that the property will no longer be required for the purpose of any investigation or as evidence in any proceeding.
3 Mr. Laroche was in the automobile reconstruction business. He owned real property as well as a large inventory of motor vehicles. The Crown alleged that he was in the business of selling vehicles constructed from stolen parts, commonly called a “chop shop”. Charges were laid against him on May 4, 2000. On July 13, 2000, on the basis of an affidavit of Inspector Morin, the Crown obtained seven warrants and a restraint order seizing five Toyota Tacoma vehicles, 70 other vehicles and six parcels of real property.
4 Mr. Laroche applied to Grenier J. of the Quebec Superior Court to have the orders set aside under s. 462.34 of the Criminal Code and s. 24(1) of the Canadian Charter of Rights and Freedoms . He called evidence from his accountants showing that he had legitimate assets sufficient to acquire the real property and challenging Inspector Morin’s affidavit as flawed, misleading and incomplete.
5 Grenier J. set aside the orders with respect to the vehicles and the real property. On the real property, he found that Inspector Morin’s assertions had been discredited, removing the basis for the order. On the vehicles, he took the view that the Société de l’assurance automobile du Québec (SAAQ), the provincial vehicle licensing agency, had erred in giving the Quebec Police the information that had initiated the investigation without a warrant. He concluded that this amounted to an illegal search or seizure, and held that all the subsequent warrants and seizures were invalid as a result of the initial illegal search. Characterizing the investigation as a mere [translation] “fishing expedition”, Grenier J. excluded the evidence relating to the vehicles and set aside the orders with respect to them.
6 The question before us is whether Grenier J. erred in setting aside the orders. I agree with my colleague Justice LeBel that he erred in setting aside the warrants and the restraint order on the vehicles covered by the warrants. Assuming without deciding that Grenier J. had the power to exclude the evidence obtained as a result of the initial seizures, his decision to do so cannot be justified. The SAAQ became aware of the alleged crimes with respect to the first five Toyota Tacomas in the course of an audit of its own files. It was entitled to report this information to the police. Indeed, s. 504 of the Criminal Code allows an entity like the SAAQ to swear out an information directly when it discovers a crime. If it can do this, surely it can report basic information to the police for further investigation. Moreover, it is difficult to conclude that there was a reasonable expectation of privacy in the basic information turned over — name, product and registration information. The subsequent warrants flow directly from the discoveries the police made in connection with the first five Toyota Tacomas. This is textbook police work, not a “fishing expedition”. It follows that the first condition of setting aside a warrant or an order — showing that the warrant should not have been issued or that the order should not have been made — was not fulfilled, and that Grenier J. ought not to have set it aside.
7 However, I cannot agree that the restraint order should stand with respect to Mr. Laroche’s real property. The order required evidence supporting a reasonable belief that the property was the proceeds of crime; mere insinuations cannot justify a restraint order. Grenier J. found that Inspector Morin had failed to disclose documents showing that Laroche had taken out substantial loans to purchase and build the real estate in question, and heard testimony from accountants who discredited Inspector Morin’s allegations that the buildings could only have been constructed with the proceeds of crime. Based on the evidence before him, he concluded that [translation] “[d]espite insinuations, nothing in the evidence establishes a connection between the real property seized and enterprise crime offences” ([2001] Q.J. No. 7209 (QL), at para. 10). Grenier J. accordingly discounted the allegations that the real property had been acquired with the proceeds of crime. This removed the foundation for the order. It was not asserted that the property was needed for the purpose of investigation or evidence. Accordingly, the two conditions for setting aside the order against an accused person under s. 462.34 were met with respect to the real property, and Grenier J.’s ruling to that effect should stand.
8 My colleague LeBel J. suggests that, so as to have the restraint order lifted, it is not enough for the property owner to show that the order should not have been made and for the judge to determine that the property is not required for the purpose of investigation or evidence. In his view, to have a restraint order lifted, the owner must also demonstrate that the affected property was not acquired with the proceeds of crime. With the greatest respect, this requirement is not envisaged by the Code for persons charged with an “enterprise crime offence” under s. 462.34(6)(a). Showing lawful ownership or possession is only required for other applicants under s. 462.34(6)(b), which reads:
(b) in any other case, that the applicant is the lawful owner of or lawfully entitled to possession of the property and appears innocent of any complicity in an enterprise crime offence or designated substance offence or of any collusion in relation to such an offence, and that no other person appears to be the lawful owner of or lawfully entitled to possession of the property . . . .
9 The burden in the two situations is importantly different. The absence of the need to demonstrate lawful ownership or possession in the case of a person charged with an enterprise crime offence reflects the presumption of innocence, even at the expense of the possibility that not all proceeds of crime will be frozen pending the outcome of a criminal trial.
10 I would allow the appeal in part, varying the original restraint order of Judge Pinard of the Court of Québec to release the real property and those vehicles that were seized without a warrant.
English version of the judgment of L’Heureux-Dubé, Gonthier, Iacobucci, Bastarache and LeBel JJ. delivered by
LeBel J. —
I. Introduction
11 This is an appeal concerning the validity of a restraint order made and seven special warrants of seizure issued under ss. 462.32 and 462.33 of the Criminal Code, R.S.C. 1985, c. C‑46 , in the course of a police investigation into a business involving the possession and sale of stolen car parts that the respondents, Garage Côté Laroche Inc. and its principal shareholder and owner, Laurent Laroche (“Laroche”), were allegedly running in Victoriaville, Quebec. The Attorney General has appealed from the judgment of the Superior Court quashing a restraint order and special warrants relating to a large number of motor vehicles and immovable properties owned by or in the possession of the respondents. This appeal raises the issue of the scope of the power of review exercised by the Superior Court under s. 462.34 Cr. C. For the following reasons, but without adopting the position advanced by the appellant as to the nature and extent of that power of review, I conclude that the restraint order and the special warrants of seizure must be restored in part, in respect of a certain number of vehicles and all of the immovable properties.
II. Facts
12 For several years, the respondent Laurent Laroche and his wife operated Garage Côté Laroche Inc., whose principal business was repairing seriously damaged road vehicles. A few years later, they added renting out industrial condominiums to that business, and the rentals are now an important source of income for the respondent Laroche. The building of the condominiums was financed out of substantial investments, the source and legality of which the appellant has questioned.
13 In Quebec, for road safety reasons, strict regulations have been put in place and must be complied with when a rebuilt vehicle is put on the road. Under ss. 546.1 et seq. of the Highway Safety Code, R.S.Q., c. C‑24.2, a person who wishes to license a rebuilt vehicle must obtain a certificate of technical compliance from the Société de l’assurance automobile du Québec (SAAQ). The SAAQ or one of its agents will issue a certificate of compliance only when the rebuilt vehicle has been inspected and meets the manufacturer’s standards.
14 In the course of an internal audit at Charest Automobile Ltée, which is an agent of the SAAQ, an SAAQ employee found serious irregularities in five rebuilt vehicle files submitted by Garage Côté Laroche Inc. When the invoices and photos in the files were compared, it appeared that the same parts from a damaged vehicle had apparently been used to rebuild more than one vehicle. The employee was convinced that the certificates of technical compliance for the vehicles in question had been obtained illegally, and referred the five fraudulent files to the Victoriaville police. The files involved five Toyota Tacomas which, miraculously, shared some of the same parts.
15 After an investigation, the five Toyota Tacomas were seized from their new owners pursuant to a warrant issued under s. 487 Cr. C. Investigations by experts from the Sûreté du Québec and the Groupement des assureurs automobiles showed that no major repairs had been done on the allegedly rebuilt vehicles and that the serial numbers on some of the parts had been altered. On May 4, 2000, based on those analyses, the Crown filed charges of forgery, uttering forged documents and possession of stolen property against Laurent Laroche.
16 Over the next few months, the police investigation took on dimensions that had been unsuspected at the outset. It covered dozens of rebuilt vehicle files submitted between 1998 and 2000. During the period of the investigation, the police obtained a number of search warrants under ss. 487 and 487.01 Cr. C., and in addition, on February 18, 2000, they seized 154 rebuilt vehicle files involving Garage Côté Laroche Inc. and other companies related to Laurent Laroche from the SAAQ agent, which had issued the certificates of compliance for the five Toyota Tacomas. An analysis of 142 of those 154 files showed serious irregularities in 98 cases. They included the fact that identical invoices and photographs were found in more than one file, as well as invalid serial numbers. A number of invoices were from businesses either non‑existent or no longer in operation on the billing date. As well, parts that had apparently been purchased in the United States had been invoiced in French, with the G.S.T. and Q.S.T shown on the invoice!
17 The scope of the respondents’ illegal activities prompted the police to extend their investigation to Laurent Laroche’s recent real estate acquisitions. The title searches done regarding Laroche’s properties showed that he had apparently purchased immovables valued at about $1,800,000, and that there were no hypothecary charges against them. On those findings being made, a police officer who was an investigator with the city of Victoriaville, Luc Morin, signed an affidavit in support of an application for a restraint order and special warrants of seizure, and the affidavit was submitted to Judge Pinard of the Court of Québec. That application is what led to these proceedings.
III. Judicial History
A. Court of Québec
18 On July 13, 2000, based on the allegations in the affidavit of the investigator Luc Morin, Judge Pinard granted a restraint order and issued seven special warrants of seizure under ss. 462.32 and 462.33 Cr. C. The restraint order covered both the immovable properties and the vehicles described in the special warrants of seizure, in case some of the vehicles had been resold by the time the special warrants were executed. When the police executed the special warrants of seizure, they seized 24 vehicles that were not covered by the warrants and restraint order.
B. Quebec Superior Court, [2001] Q.J. No. 7209 (QL)
19 The respondents brought an application for review in the Superior Court under s. 462.34 Cr. C. and s. 24(1) of the Canadian Charter of Rights and Freedoms . In that application, they sought to have the restraint order and special warrants of seizure quashed and the property that had been seized restored to them.
20 At the hearing before Grenier J., the parties presented new testimony and documentary evidence concerning the respondents’ financial situation, the source of the respondents’ property and the conduct of the police investigation. When the hearing concluded on February 8, 2001, the Superior Court quashed the restraint order and special warrants of seizure in full. Grenier J. agreed at the outset that the applicants bore the burden of proof. However, in his opinion, all of the proceedings had been vitiated by a serious defect from their very beginning. In Grenier J.’s opinion, the SAAQ employee could not hand over the five fraudulent files discovered at Charest Automobiles Ltée to the police. The disclosure of that information was prohibited by the judgment in R. v. Colarusso, [1994] 1 S.C.R. 20. Second, he said that the search warrants issued prior to the application for the restraint order and special warrants of seizure had been issued on the basis of mere suspicions, without reasonable or probable cause. In his opinion, therefore, the police had gone on a giant fishing expedition into the respondents’ business, with no legal authority and in breach of their constitutional rights. Third, the restraint order, in his opinion, had been obtained on the basis of incomplete and misleading information regarding the respondents’ business activities and the source of their movable or immovable property. For one thing, nothing in the evidence could connect the fraud, the possession of stolen property and the purchase of the real estate.
C. Quebec Superior Court
21 On March 6, 2001, De Blois J. of the Superior Court granted a stay of execution under s. 65.1 of the Supreme Court Act, R.S.C. 1985, c. S‑26 , until judgment was rendered on the application for leave to appeal to this Court. Leave to appeal was then granted. This is a direct appeal under s. 40 of the Act, because the legislation in question does not provide for any appeal to another court.
IV. Issues
22 The central issue in this appeal is whether Grenier J. properly exercised his power of review when he quashed the restraint order and special warrants of seizure issued in respect of the respondents’ property. To answer that question, I shall examine, first, the legal nature and the purpose of restraint orders. Although the respondents have not challenged the constitutionality of the provisions of Part XII.2 of the Criminal Code governing restraint orders and special warrants of seizure, I shall also, in the course of that review, consider whether a restraint order constitutes a seizure within the meaning of s. 8 of the Charter . Second, I shall examine the procedure for reviewing restraint orders and special warrants of seizure, and the extent of the powers of a judge to whom an application for review is made. Finally, I shall consider whether Grenier J.’s judgment was correct, having regard to the principles and legal rules that have been identified. Before doing this, however, we should briefly review the legislative framework governing restraint orders and special warrants of seizure, in order to gain a better understanding of the nature of the legal issues raised by this appeal and the difficulties they present.
V. Legislative Framework Governing Restraint Orders and Special Warrants of Seizure
23 The procedure governing restraint orders and special warrants of seizure is found in Part XII.2 of the Criminal Code . Parliament introduced those measures into Canadian criminal procedure as one of the components of a set of legislative reforms made for the purpose of combatting enterprise crime and drug trafficking. For that purpose, Bill C‑61, which was enacted in September 1988 and was proclaimed in force on January 1, 1989, created new offences and gave the state and police forces expanded powers (on this point, see P. M. German, Proceeds of Crime: The Criminal Law, Related Statutes, Regulations and Agreements (loose-leaf), at pp. 3‑1 et seq.; A. D. Gold, Proceeds of Crime: A Manual with Commentary on Bill C‑61 (1989), at pp. 15 et seq.).
24 The enactment of Part XII.2, entitled “Proceeds of Crime”, was a central element of those major reforms of the criminal law and criminal procedure. Part XII.2 provides for a new offence in relation to laundering proceeds of crime (s. 462.31 Cr. C.), interim measures that apply before conviction or even trial or charge, and provisions that facilitate the forfeiture of proceeds of crime once a finding of guilt has been made. That Part, at the relevant time, applied only to two new categories of offence: enterprise crime and designated drug offences (s. 462.3 Cr. C.). However, those two categories encompassed virtually all offences in the Criminal Code , other than minor offences, as well as crimes associated with drug trafficking, not including simple possession (see Gold, supra, at p. 5).
25 The legislative objective of Part XII.2 plainly goes beyond mere punishment of crime: an analysis of the provisions of that Part shows that Parliament intended to neutralize criminal organizations by taking the proceeds of their illegal activities away from them. Part XII.2 intends to give effect to the old adage that crime does not pay (see Wilson v. Canada (1993), 86 C.C.C. (3d) 464 (Ont. C.A.), at p. 469; Oerlikon Aérospatiale Inc. v. Ouellette, [1989] R.J.Q. 2680 (C.A.), at p. 2687). As German, supra, has observed, Part XII.2 organizes the fight against organized crime around a strategy that focuses on the proceeds of crime, as opposed to the offender. As well, the effectiveness of that struggle depends largely on the speed with which proceeds of crime can be identified, located, seized and ultimately forfeited. For that reason, Part XII.2 provides for new enforcement techniques that enable the police to freeze or immobilize the property of criminal organizations regardless of whose possession it may be in, even before charges are laid.
26 Part XII.2 creates two procedures for the interim preservation of property, which are governed by ss. 462.32 and 462.33 Cr. C. respectively: special warrants of seizure and restraint orders. Those two provisions plugged the loopholes in the Criminal Code , which, until then, had not permitted the seizure and restraint of immovable property, intangible property or proceeds of crime associated with certain serious drug offences. The purpose of these measures, which precede trial, is to prevent the wasting of illegally obtained property and to make it possible for that property to be forfeited after a conviction is secured. Although the objective of the two procedures is the same, they apply to separate matters, and certain aspects of the procedural rules that govern them are different. While a special warrant of seizure deals with movable, tangible property such as vehicles and jewellery, a restraint order targets real estate, or intangible property such as bank accounts (see D. D. G. Reynolds, “Selected Aspects of the Proceeds of Crime Provisions of the Criminal Code ”, in R. Pomerance and A. K. S. Kapoor, eds., Search and Seizure: New Developments (1998), 5‑1, at p. 5‑4; P. Béliveau and M. Vauclair, Traité général de preuve et de procédure pénales (7th ed. 2000), at pp. 264 et seq.).
27 These interim preservation measures applied, at the relevant time, only to “proceeds of crime”, which included any property, benefit or advantage that may relate to the commission of an enterprise crime offence or a designated drug offence (s. 462.3 Cr. C. “proceeds of crime”). Because of the possible effect of those measures on the rights of third parties, the judge to whom an application for authorization is made may require that certain precautions be taken to protect those rights (see Gold, supra, at p. 3). For example, before issuing a warrant of seizure or making a restraint order, the judge may require notice to be given to third parties who appear to have a valid interest in the property. However, the judge may not order that notice be given if giving notice could result in the disappearance, dissipation or reduction in value of the property (ss. 462.32(5) and 462.33(5) Cr. C.). In all cases, however, the judge must make sure that the Attorney General has given appropriate undertakings to compensate the persons affected for any damages and costs that might be caused by the execution of the warrant of seizure or restraint order (ss. 462.32(6) and 462.33(7) Cr. C.).
28 Moreover, the procedural rules that apply to these two mechanisms differ somewhat, although they are closely related. I shall therefore examine seizures and restraint orders separately, and then go on to examine the procedure for reviewing the decisions of the authorizing judge.
A. Seizure
29 A judge may issue a warrant under s. 462.32 if there exist reasonable grounds to believe that there is to be found, in a particular place, property in respect of which an order of forfeiture may be made under s. 462.37(1) or 462.38(2) because it is connected to a designated drug offence. The procedure for obtaining a warrant of seizure is substantially similar to the rules governing the issuance of search warrants, set out in ss. 487 to 492 Cr. C. However, a special warrant may be obtained only on the application of the Attorney General in writing (s. 462.32 Cr. C.). In addition, the application must be made to a judge of a superior court, who may hear it ex parte (s. 462.32(2) Cr. C.). In Quebec, however, a judge of the Court of Québec also has jurisdiction to hear the application (ss. 462.3 “judge” and 552 Cr. C.).
30 The warrant of seizure must specify the property to be seized. However, the officer who carries out the seizure may seize, in addition to the property named in the warrant, any other property that he finds in the place if he believes, on reasonable grounds, that an order of forfeiture may be made in respect of that property (final portion of s. 462.32(1) Cr. C.). The officer who carries out the seizure must retain the property seized or give custody of it to another person, taking the necessary care, however, to ensure that the property is preserved. The officer must also report within seven days of the seizure (s. 462.32(4) Cr. C.).
B. Restraint Order
31 Like an application for a warrant of seizure, an application for a restraint order is made in writing by the Attorney General to a judge of a superior court or, in Quebec, a judge of the Court of Québec. The applicatio