In upholding a $1 million costs award against the Crown in a decision released today, the Ontario Court of Appeal has provided significant protection to commercial landlords and mortgage lenders against forfeiture proceedings for illegal activity they are not involved in. The Controlled Drugs and Substances Act entitles the Crown to seek forfeiture of "offence-related property" from those connected with certain drug offences. After multiple marijuana grow operations were found in leased parts of a former Molson Brewery Plant in Barrie, Ontario, the Crown brought a forfeiture application against the owner of the property, Fercan Developments Inc., and the mortgage lender, FirstUnion Credit Union Limited. It also sought forfeiture of a residential property owned by a third respondent, GRVN Group Inc. After 36 days of evidence, the application was dismissed, with the application judge finding that the respondents were innocent of any complicity or collusion in the illegal activity. Characterizing the application as meritless, the application judge proceeded to award the respondents $1 million in costs. Although costs awards are highly exceptional in criminal proceedings and there was no express authority in the governing legislation to award costs, the Ontario Court of Appeal upheld the award as necessary to denounce the Crown's conduct and deter future applications brought in the same vein.
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