R. v. Rafilovich: A Need for Legislative Amendment

R. v. Rafilovich,¹ a 2019 decision by the Supreme Court of Canada, involved consideration of Part XII.2 of the Criminal Code,² which encompasses the provisions governing the seizure, restraint, and forfeiture of proceeds of crime.³ The essential purpose of the provisions is to “ensure that ‘crime does not pay,’”⁴ allowing the Crown to seize property that is believed to have been acquired through criminal activity.⁵ If the accused is found not guilty, the property in question is returned to them as long as it is not deemed to have been acquired through criminal activity.⁶

One exception set forth in the Criminal Code allows the accused to receive access to the property in order to pay legal fees “if the judge is satisfied that the applicant has no other assets or means available.”⁷ Such property, however, remains subject to forfeiture.⁸ Section 462.37(3) of the Criminal Code outlines the process where the property is proven to be proceeds of crime but is not available for forfeiture as a result of it having been spent (e.g. for legal fees). In such a case, a sentencing judge may order the convicted individual to pay a fine equal to the amount proven to be proceeds of crime.⁹ This is what was at issue in Rafilovich.¹⁰ This case commentary will consider the implications of Rafilovich, as well as whether there is a need for statutory reform.

In 2009, Yulik Rafilovich was arrested for possession of cocaine for the purpose of trafficking.¹¹ Police found approximately $47,000 worth of cocaine and $42,000 in cash.¹² The cash was seized as alleged proceeds of crime.¹³ Prior to trial, an application requesting that the funds be returned in order to “pay for reasonable legal fees associated with the case” was granted as the judge found that Rafilovich met the financial need requirement.¹⁴ At trial, Rafilovich pled guilty.¹⁵

At the sentencing hearing, the Crown sought a fine equalling the amount that had been returned to cover legal fees as the money had been proven to be proceeds of crime.¹⁶ The sentencing judge exercised her discretion and declined to impose a fine because Rafilovich did not have any funds to pay for legal representation, did not obtain a benefit, did not divert any of his assets, and because the non-payment of the fine would lead to further sentencing, an outcome which would not occur if the accused had access to funds or legal aid.¹⁷

On appeal, the Ontario Court of Appeal unanimously disagreed, holding that the sentencing judge’s exercise of discretion was inappropriate as the exercise of discretion “cannot hinder the achievement of the objectives that the proceeds of crime regime seeks to achieve.”¹⁸ In this case, the objective hindered by the decision was that an offender ought not profit from criminal conduct.¹⁹ Further, the Court of Appeal held that the judge erred in considering that Rafilovich could be imprisoned for failing to pay.²⁰ In doing so, the Court of Appeal relied on the decision in R. v. Wu²¹ that stands for the proposition that offenders cannot be imprisoned for failing to pay a fine when they are unable to do so.²² The Court went on to impose a fine equalling the amount of the proceeds of crime seized.²³

The majority of the Supreme Court overturned the Ontario Court of Appeal decision, stating that a sentencing judge can decide whether or not to charge a fine.²⁴ Further, the majority held that sentencing judges should not normally fine someone to recoup the amount used to pay for their legal defence.²⁵ The purpose of the legal expense return provisions in the Criminal Code is to provide access to counsel and give meaningful weight to the presumption of innocence. The majority held that “clawing back reasonable legal fees as a fine instead of forfeiture would undermine these purposes.”²⁶

As was accepted by the majority, the primary objective of the statutory regime is to ensure that crime does not pay, or, in other words, that the offender does not derive a benefit from the proceeds of crime.²⁷ However, the majority avoided resting their decision on this primary purpose by considering what they deemed to be secondary purposes.²⁸

In essence, the ruling of the majority provides a scheme in which the proceeds of crime can be used in order to derive a benefit, provided the accused is not required to pay an equivalent fine if ultimately found guilty. Retaining an experienced private defence lawyer with the proceeds of a crime arguably constitutes a benefit. There is no enshrined constitutional principle which states that an accused is entitled to private counsel. Although s. 10(b) of the Canadian Charter of Rights and Freedoms²⁹ provides that everyone has the right on arrest to retain counsel, this does not guarantee the general right to be provided counsel.

The majority rests its decision on two secondary purposes: access to counsel and the presumption of innocence.³⁰ However, mandating a fine if the accused is found guilty impedes neither of these purposes. The argument is not that an accused should not be permitted to have the funds returned in order to retain private counsel, thereby violating the presumption of innocence and access to counsel. Rather, the argument is that if they are found guilty, they should be required to pay a fine as they directly derived a benefit from the proceeds of crime. Without mandating a fine, the secondary purposes are being given precedence over the primary purpose as criminals are benefiting from their illegal actions.

The point of this case commentary is not to assert that the majority was incorrect in their interpretation, but rather that Parliament ought to amend the legislation to ensure that crime does not pay. As the dissent argues, the only instance where a fine should not be imposed is if the sentencing judge determines that “representation by counsel was essential to the offender’s constitutional right to a fair trial under ss. 7 and 11(d) of the Canadian Charter of Rights and Freedoms.”³¹ The legislation should be amended to reflect this position in order to ensure that there is no possibility whatsoever for criminals to benefit from their actions.

²⁹ Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11.