Proceeds of Crime Used for Legal Fees

Friday, November 22, 2019

The question of whether money seized by police during a criminal investigation and considered proceeds of crime can be retuned to the accused was recently decided by the Supreme Court of Canada. In R v. Rafilovich, the accused was arrested in possession of cocaine for the purposes of trafficking. While searching his various vehicles and apartments, police seized roughly $42,000 in cash as potential proceeds of crime under Part XII.2 of the Criminal Code. Prior to trial, Mr. Rafilovich applied under section 462.34(4) of the Criminal code for the return of the seized funds in order to pay his legal fees. The money was retuned, the lawyer paid and the accused eventually pled guilty to multiple offences at the commencement of his trial. The sentencing judge imposed a jail term but refused to impose a fine instead of forfeiture equal to the amount of money seized and then returned and used for legal fees. The Crown appealed and the Ontario Court of Appeal varied the sentencing order to include a fine equal to the amount seized with an additional 12 months jail if the fine was not paid. 

Proceeds of Crime Used for Legal Fees

The case eventually arrived at the Supreme Court of Canada and Justice Sheilah Martin (formerly of this author’s law firm), writing for the majority, concluded that generally speaking, sentencing judges should not impose a fine instead of forfeiture in relation to seized funds that have been returned for the use of legal fees. 

The statutory discretion to impose a fine rather than forfeiture must be exercised in accordance with the proceeds of crime regime which, as a whole, seeks to ensure that crime does not pay or benefit the offender. However, Parliament was wise enough to envision that fact that lawyers rarely work without pay and that seized funds may be required to mount a defence and that funds can explicitly be retuned for this very purpose. 

The return provisions pursues two secondary purposes: providing access to counsel and giving meaningful weight to the presumption of innocence. Clawing back reasonable legal expenses as a fine would undermine these purposes.

The Supreme Court found that the Criminal Code does not expressly indicate whether returned funds ought to be subject to a fine instead of forfeiture. As a result, this issues requires the implementation of statutory interpretation (legal jargon for deciding what Parliament meant when drafting the provision). This means that courts must look at the words Parliament used and their intentions when drafting the provisions. The primary goal was to ensure that crime does not pay. However, the legal expenses return provision was designed to provide access to legal counsel and to give meaningful weight to the presumption of innocence. These secondary goals must be balanced against the primary goal that crime does not pay. 

To unfairly tip the scales in favor of the primary goal would erode trial fairness including concepts of fair notice and reliance. 

The Court determined that in the end, when an accused person cannot access legal counsel, the presumption of innocence suffers because it is near-impossible for lay persons to effectively navigate the complexity of criminal cases. For the courts to impose retroactive penalties on accused person who rely on the presumption of innocence undermines the presumption and the protection it affords. 

Returning seized funds to pay for reasonable legal fees was not the type of benefit that Parliament sought to take away by imposing a fine after the fact. Parliament’s concern with proceeds of crime was that an accused person could hide, dissipate or distribute property that may later be determined to be proceeds of crime. An accused person’s lawyer is not some unknown entity receiving funds by uncontrolled and private transactions. Therefore, not imposing a fine instead of forfeiture in relation to funds returned to pay legal fees is in accordance with Parliament’s intent. 

Seized Money Can Be Used for Legal Fees

The Supreme Court of Canada has made it very clear that those accused of criminal offences can appropriately rely on the presumption of innocence and request the return of money seized in order to pay reasonable legal fees. An accused person can do so without worry that those funds will be clawed back should they subsequently be found guilty at trial or plead guilty.  

Cory Wilson is a criminal defence lawyer based in Calgary. If you have been charged with a criminal offence or are a suspect in a criminal investigation, call today for a free, no obligation consultation.