December 12, 2016 - Press Release:
New Case Highlights Unconstitutional Abuse of Ontario’s Civil Forfeiture Laws

Today, the Canadian Constitution Foundation (CCF) announces its involvement in one of the most egregious cases of civil forfeiture abuse we have ever seen:

Background

Let me introduce you to Margaret and Terry Reilly of Orillia, ON. The Reillys own several rental properties, some of which are former single-family homes that they have converted into rooming houses for low-income tenants. Margaret has been involved in alleviating poverty and homelessness since her father became the priest at an inner-city Anglican church in Toronto and opened a youth hostel there, while Terry has served on the City of Orillia Homeless Committee. Providing housing to marginalized members of society was a deliberate choice for the Reillys.

They never thought it would be easy. Some of the Reillys’ tenants have engaged in illegal drug activity. That is not disputed. In fact, the Reillys have evicted more than 50 tenants over the years for dangerous behaviour and tried, unsuccessfully, to have other tenants evicted for drug use. As Margaret has explained, under Ontario’s generous tenancy laws, proving the sort of drug activity required to evict a tenant is extremely difficult and judges often suggest that the landlord offer the tenant a second chance.

The Reillys’ tenants paid their rent using funds from various government housing support programs. Usually funds were provided directly from a government agency, though some tenants received their benefits directly and paid the Reillys themselves.

In 2008, after police surveillance confirmed drug activity at two of the Reillys’ rental properties, a branch of the government called the Director of Asset Management took control of them. Since then, the properties have languished largely unoccupied, falling into progressively worse repair. Stripped of their rights as landlords, the Reillys had no choice but to watch their properties deteriorate physically and depreciate in value.

Then, in 2012, the Government of Ontario brought a motion to permanently seize and sell the properties on the grounds that some of the tenants’ rents may have been paid, in part, with the proceeds of their drug activity. There is no evidence that any funds paid by tenants was derived from drug money; the state merely assumed that cash payments must have come from the proceeds of illegal activity.

The Reillys were dumbfounded. There was no allegation that they themselves had ever engaged in any illegal activity. They knew that some of their tenants were not upstanding citizens, but that is why they were trying to give them a helping hand. As Terry said in an affidavit to the Court:
 

I am well aware that my tenants are poor and embody a host of social ills. I once read a study which found that if you are able to give an opportunity to someone who lives in poverty, they will often gain self-respect and tend to look after their environment and themselves with a renewed sense of pride. … Many of my tenants were in abusive relationships, others had drug or alcohol addictions, while still others struggled with their mental health.


Margaret and Terry thought they were doing the right thing, and here was the Government of Ontario trying to seize their property. In sworn affidavits, Terry and Margaret described how they would help their tenants, encouraging them to get proper counselling and speak to government case workers, and driving them to detoxification centres, Narcotics and Alcoholics Anonymous meetings, and to personal appointments.

In contrast to the Reillys’ care for their tenants and their properties, the government’s treatment of the Reillys and those same properties has been disgraceful.

The Reillys invested substantial money and effort to improve and maintain the two properties and Terry would visit them regularly. After it took them over in 2008, the government let them fall apart. A private investigator reported that one of the houses is “run down and unkempt … [t]he grounds are littered with debris … [t]he kitchen was covered in filth, beer bottles and there were obvious signs of drug use.” The government’s own appointed manager of the properties admitted that before entering the property he donned a “hazmat” suit, goggles, and a breathing apparatus for his own safety.

So, ironically, while the government assumed management of the properties because of suspected drug use, under the government’s “care,” they have become uninhabited and dangerous drug dens. The Judge at the initial forfeiture hearing agreed, saying:
 

The Respondents [Reillys] attended to their property, cared for their tenants, communicated to the police about problems in the properties and assisted police when help was requested. It is clear the Reillys did a better job managing the two properties than has the Applicant [the government]. The Applicant has essentially no tenants and has allowed 42 Nottawasaga to deteriorate.


Adding insult to injury, the Ontario government’s campaign against the Reillys and their tenants took on a personal and bizarrely aggressive tone. The judge at their initial hearing noticed this and mentioned in his ruling that: “[t]he contents  of  the affidavits filed by the Applicant [Government of Ontario] are at times sweeping in scope, exaggerated in content and patently disrespectful to the unfortunates who occupied the premises.” He went on to question the credibility and reliability of the government’s exaggerated accounts of the Reillys’ alleged lack of concern about the drug activity on their properties.

The Problem of Civil Forfeiture Abuse

So, how can something like this happen? How can an attempt to help the poorest and most marginal members of society result in the government trying to take away your property and smear your reputation?

As the CCF highlighted in a recent report, Canada’s provincial civil forfeiture laws were originally intended to deter crime and compensate victims. Today, however, in many cases they have become a supplement or alternative to the criminal law. This transformation has had a profound impact on many of the most important rights enjoyed by Canadians. Revenues generated through successful forfeiture proceedings are returned to provincial governments and their law enforcement agencies, which incentivizes these authorities to seek the forfeiture of more property without regard to the original objectives of deterring crime and compensating victims.

The Government of Ontario in particular often seeks the forfeiture of property on the merest suspicion of an unlawful act or, as we see in the Reillys’ case, may even seek the forfeiture of property belonging to individuals they know to be innocent and unconnected to the underlying unlawful acts. Who, for example, are the victims who will compensated by the sale of Reillys properties? The Reillys are the only “victims” here.

We have not been able to find another case anywhere in Canada where a private citizen has had his property seized without any allegation of involvement in the underlying crime giving rise to the civil forfeiture action, with the exception of the quite different case where a landlord was aware of, but did nothing to stop, a tenant from running a large grow-op in the rented property. If the seizure of the Reillys’ properties is upheld, it will be a new low for civil forfeiture abuse in Canada.

What the CCF Is Doing to Help

The Canadian Constitution guarantees that the government cannot take arbitrary action against you. It cannot deprive you of a right or your property without complying with the principles of fundamental justice. Nor can it - and this should go without saying - slander and abuse innocent citizens in an attempt to bully them into going along with the seizure of their property.

Trying to confiscate real property over the actions of a few tenants, without so much as a suspicion of involvement by the landlords and owners of the property in the alleged illegal activity, is a gross abuse of Ontario’s civil forfeiture laws. It strikes us as a clear violation of the constitutional principles of fundamental justice. As the Judge at the hearing warned:
 

The Reillys' tenants may well be unsavoury, mentally ill and drug addicted; but they needed somewhere to live. To take this property away from the Reillys would work an injustice and would send a chilling message to any landlord who opened doors to less than desirable tenants.
 
The Canadian Constitution Foundation exists to help people like the Reillys, to bring attention to their stories, and to help them secure the legal representation they need to fight oppressive and unconstitutional government action. We will be standing with the Reillys as they fight this abuse of Ontario’s civil forfeiture laws.
The Canadian Constitution Foundation (“Freedom’s Defence Team”) is a registered charity, independent and non-partisan, whose mission is to defend the constitutional freedoms of Canadians through education, communication and litigation.
 
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For further information, contact:

Derek From
Staff Lawyer
Canadian Constitution Foundation
Toll-free: 888-695-9105 x. 103
dfrom@theccf.ca

Shawna Fattal
Counsel of Record
Fattal Law
416.290.0529
shawna@fattallaw.com


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