In British Columbia (Director of Civil Forfeiture) v. Angel Acres Recreation and Festival Property Ltd., 2020 BCSC 880, Mr. Justice Barry M. Davies determined that mediation of disputes by or between Hells Angels’ members/chapters is not an unlawful activity under B.C.’s Civil Forfeiture Act, SBC 2005, c 29 even if the subject matter of the disputes may involve unlawful activity. In refusing to grant forfeiture of clubhouses used by the Hells Angels, Davies J. determined that use of the clubhouses as venues to resolve disputes did not constitute the use of property to engage in unlawful activity. He agreed that the Director of Civil Forfeiture had proven that mediation of disputes among Hells Angels’ members/chapters plays a role in ensuring relative harmony within the Hells Angels so that internal discord is kept to a minimum but disagreed that the Director had proven that “resolving these disputes maintains the Hells Angels brand so that members and associates of the club continue to benefit from the opportunity to monetize the brand through criminal means”.
Invoking the provisions of B.C.’s Civil Forfeiture Act, SBC 2005, c 29 (“CFA”), B.C.’s Director of Civil Forfeiture (“Director”) sought the forfeiture of three (3) clubhouses (“Clubhouses”) located in B.C. and belonging to three (3) separate chapters of the Hells Angels Motorcycle Club (“Hells Angels”). The first forfeiture proceedings, concerning a clubhouse located in Nanaimo, began in November 2007. In November 2012, the Director added proceedings targeting two (2) other clubhouses located in East Vancouver and Kelowna.
The forfeitures were each based on three (3) allegations made by the Director that the Clubhouses: were acquired directly or indirectly from proceeds of unlawful activity; had, in the past, been used as instruments of unlawful activity; and, will, in the future, likely be used as instruments of unlawful activity.
The Director had originally made allegations involving past activity but, prior to the hearing before Davies J., abandoned them in August 2015 to pursue only future-use allegations. As a result, the Director’s allegations sought forfeiture based only upon the allegation that the Clubhouses will, in the future, likely be used as instruments of unlawful activity.
As preface to his analysis, Davies J. at paras 24-29 briefly reviewed “the difference between the making of allegations and the proof of those allegations”. He explained that the need to preface his analysis with that review was based on two (2) reasons. First, the “great deal of public attention” given to the litigation due to “the reputation of the Hells Angels”. Second, the novel issue raised by, what Davies J. described as being, the Director’s “reliance on the maxim “the past is the best predictor of the future” as the foundation for his future use allegation”.
Davies J. characterized the Director’s post-amendment future-use focus as being premised on “three essential propositions” which he listed at para. 12 of his reasons:
“1) The Hells Angels is a “worldwide criminal organization” in the sense that the primary purpose of the Hells Angels is to enable and empower its members to engage in serious crime for financial gain while minimizing the risk of detection by law enforcement and prosecution;
2) The Clubhouses play an important role in enabling and empowering members of the Hells Angels to engage in serious crime for financial gain while minimizing the risk of detection by law enforcement and prosecution by acting as local bases of operation as: “safe houses”; “intelligence hubs” and “planted flags”; and
3) It is the shifting membership of the Hells Angels as a criminal organization more than the identity or actions of any of the specific defendants in these proceedings that make it likely that the Clubhouses will in future be used as instruments of unlawful activity”.
In defence, the Hells Angels argued the following, as summarized by Davies J. at para. 15 of his reasons:
“1) The Director relies upon an overly broad interpretation of the provisions of the Act in seeking the forfeiture of the Clubhouses as instruments of unlawful activity;
2) The Director’s allegations about the nature of the Hells Angels as a worldwide criminal organization are unsubstantiated;
3) The Director’s allegations concerning the likely future use of the Clubhouses are speculative;
4) There is little evidence of the past use of any of the Clubhouses by any member of the Hells Angels for any unlawful activity and the scant evidence that has been adduced is both unreliable and dated; and
5) There is no evidence of any past use of the Clubhouses for unlawful activity by any of the present defendants”.
Davies J.’s 326 page, 1502 paragraph decision identified, addressed and determined a complex list of issues and facts, including the Hells Angels’ counterclaims raising the constitutionality of the CFA provisions and, in reply by the Director, the Hells Angels’ standing to raise those counterclaims.
To illustrate the complexity of the issues and facts, Davies J. set out at para. 21 the detailed structure required in only the first half of his decision to address part of the issues in dispute before him. That list outlined the analysis he adopted to determine whether the Director had proven that one (1) or more of the Clubhouses was “in the future” likely to be used “as an instrument of unlawful activity”. The corresponding paragraphs of his decisions are indicated in brackets inserted into Davies J.’s list:
1) The statutory framework and relevant provisions of the Act (including issues of burdens of proof). [paras 30-72]
2) The history of the pleadings and the conduct of these proceedings to the extent necessary to address both costs and standing issues that must be decided. [paras 73-136]
3) The history of the Hells Angels from its origins in the United States and its expansion into Canada and British Columbia. [paras 137-178]
4) The organizational structure of the Hells Angels on worldwide, national, regional and local bases. [paras 179-238]
5) The “World Rules” of the Hells Angels as well as relevant national, regional and local rules, both written and unwritten. [paras 239-248]
6) The Director’s allegations concerning the use of profits from criminal activity by the Hells Angels including allegations concerning “Defence Funds”. [paras 249-265]
7) The membership structure of local chapters of the Hells Angels and the process of becoming or ceasing to be a member of the Hells Angels. [paras 266-285]
8) Symbols and paraphernalia associated with the Hells Angels including their meaning, ownership and use in the context of the Director’s allegations concerning the “power of the patch”. [paras 286-310]
9) The criminal history and activities of the Hells Angels including the criminal convictions of Hells Angels’ members in British Columbia. [paras 311-641]
10) Common characteristics of Hells Angels’ clubhouses in general and of the Nanaimo Clubhouse, East End Clubhouse and Kelowna Clubhouse in particular. [paras 664-722]
Following completion of those components of his analysis, Davies J. then, at para. 723 et seq., undertook his discussion and analysis of the issues.
Further into his analysis, Davies J. at paras 1115-1294 discussed whether the Director had proven, on a balance of probabilities, that the Clubhouses have been used in the past as instruments of unlawful activity. Determining forfeiture based on likely future use as instruments of unlawful activity required Davies J. to consider whether the Director had adduced evidence establishing use of the Clubhouses in the past as instruments of unlawful activity in one (1) or more ways alleged by the Director. Davies J. also explained that his determination would be informed not only by the admissible evidence but application of the CFA provisions set out at paras 730-777.
“[1117] The Director submits that Hells Angels clubhouses serve important functions in enabling and empowering members of the Hells Angels to engage in unlawful activity while reducing the risk of detection by the police and prosecution by the Crown by acting as local bases of operation as safe houses; intelligence hubs; and, planted flags”.
Davies J. then considered the facts of the past adduced and considered them in light of the applicable provisions of the CFA. He grouped his analysis into three (3) sections: “Safe Houses” – paras 1119-1219, “Intelligence Hubs” – paras 1220-1261 and “Planted Flags” – paras 1262-1273.
In the section on Safe Houses, Davies J. considered a series of activities the Director grouped under various headings and whether any or each was contrary to the Criminal Code, RSC 1985, c C-46 (“Code”) and the Controlled Drugs and Substances Act, SC 1996, c 19 (“CDSA”).
Davies J. considered the Director’s allegations as comprising two (2) broad categories.
First, that the Clubhouses served as safe houses used to engage in or facilitate unlawful conduct: (i) conspiring in secrecy to commit crimes and counsel each other to commit crimes; (ii) taking delivery of drugs and drug proceeds; (iii) committing other crimes including assault; (iv) storing weapons; and, (v) mustering to travel elsewhere to commit crimes.
Second, the Clubhouses served as safe houses in the past to facilitate the commission of unlawful acts and minimize the risk of detection and prosecution: (vi) venue for dispute resolution; (vii) criminal networking and culture building; and, (viii) fundraising.
Venue for Dispute Resolution to Facilitate Commission of Unlawful Acts – At paras 1201-1206, Davies J. evaluated the Director’s submissions that one (1) of the Clubhouses had been used as venue for dispute resolution amongst members and between chapters of the Hells Angels.
“[1203] The Director submits that mediation of disputes (typically in a clubhouse) among members or chapters of the Hells Angels plays a role in ensuring relative harmony within the organization so that internal discord is kept to a minimum. He further submits that “resolving these disputes maintains the Hells Angels brand so that members and associates of the club continue to benefit from the opportunity to monetize the brand through criminal means”.
[1204] The first of those propositions is supported by the evidence and flows from it. There is, however, no evidentiary support for the second proposition.
[1205] Also, the mediation of disputes is not an unlawful activity as defined by the [Civil Forfeiture Act, SBC 2005, c 29]. That is so even if the subject matter of the dispute may involve unlawful activity.
[1206] I thus find that the use of the Clubhouses as venues in which to resolve disputes does not constitute the use of property to “engage in unlawful activity”, which is required before property is subject to forfeiture as an instrument of unlawful activity under the [Civil Forfeiture Act, SBC 2005, c 29]”.
At para. 1274, Davies J. concludes that “[a]fter considering the totality of the evidence and the submissions of counsel I have concluded that the Director has proven on a balance of probabilities that the East End Clubhouse was on some occasions between 2004 and early 2005 used by some Hells Angels members and associates in the commission of discrete unlawful acts”. The generality and scope of his conclusion is nuanced further at paras 1275-1294.
At para. 1295, Davies J. then pivoted to the key issue as to whether the Director had also proven that the Clubhouses would likely in the future be used as instruments of unlawful activity. Based on his analysis, Davies J. at paras 1296-1319 concludes that the Director had failed to adduce evidence capable of proving on a balance of probabilities likely use in the future as instruments of unlawful activity.
Davies J. also dealt with the Counterclaims at paras 1324-1502, determining that sections of the CFA dealing with property being a past instrument of unlawful activity are intra vires the B.C. legislature and that the provisions on being a future instrument were ultra vires.
urbitral note – First, this is a long decision and contains far more legal material on other key issues than flagged in this note. The decision grapples with many evidentiary and substantive issues and merits close reading to mine the case for insights applicable to other practice areas.
For example, see Davies J.’s handling of adverse inferences, deficient document production, spoliation, use of examination for discovery evidence and adverse inferences due to alleged failure to adduce evidence at paras 778-869.
For further example, see Davies J.’s handling of standing to challenge the CFA at paras 1330-1353.