Part 9 of the Supreme Court Civil Rules provides an array of tools to dispose of a case (or slices of it) before trial. One of the more obscure of these is a special case under Rule 9-3. In British Columbia (Director of Civil Forfeiture) v. Violette, 2016 BCSC 1314 ("Violette"), Davies J. denied applications for a special case pursuant to Rule 9-3 by various members of the Hells Angels in which they sought orders that would allow them to dispose of their clubhouses that are targets of civil forfeiture proceedings and effectively conclude the proceedings.
In Violette applications for a special case pursuant to Rule 9-3 were heard in the context of two actions in which the Director of Civil Forfeiture (the "Director") seeks the forfeiture of three clubhouses. The Director alleges the clubhouses are likely to be used by the Hells Angels as "instruments of unlawful activity" as defined by the Civil Forfeiture Act, S.B.C. 2005, c. 29.
Justice Davies described the actions as having been the subject of "seemingly interminable interlocutory applications": para. 42. In one action, commenced in 2007, the Director sought forfeiture of the clubhouse in Nanaimo (the "Nanaimo Clubhouse") and in the other action, commenced in 2012, the Director sought forfeiture of clubhouses in Vancouver (the "East End Clubhouse") and Kelowna (the "Kelowna Clubhouse").
The applications arose from orders made in 2015 allowing the Director to amend the notice of civil claim to abandon claims for forfeiture of the clubhouses based upon allegations they were subject to forfeiture as "proceeds" of unlawful activity and that they had been used in the past as instruments of unlawful activity. The Director now proceeded only on the basis the clubhouses would be likely to be used as instruments of unlawful activity in the future.
In response to these amendments the defendants brought applications each seeking that points of law be heard by way of a special case under Rule 9-3(2). The objective of each application was for the registered owners to be permitted to sell the clubhouses and retain the proceeds. The applications were advanced on different bases, as the Director had obtained an interim preservation order over the Nanaimo Clubhouse, but not the East End Clubhouse or Kelowna Clubhouse. Specifically (and in simplified terms):
1. In the action involving the East End Clubhouse and Kelowna Clubhouse, the defendants sought an order that the following questions be answered:
a. Whether proceeds realized from the sale of the East End Clubhouse and Kelowna Clubhouse are an "instrument of unlawful activity" within the meaning of the Civil Forfeiture Act?
b. If not, whether the Court may permit the defendants to sell the East End Clubhouse and Kelowna Clubhouse, keep the proceeds, and dismiss the Director's action?
c. Whether any conditions need be imposed on such a sale or its proceeds?
2. In the action involving the Nanaimo Clubhouse the defendants sought an order that the following questions be answered:
a. Whether the statutory definition of "instrument of unlawful activity" in the Civil Forfeiture Act, insofar as it includes property realized from the disposition of property that is alleged to be likely to be used to engage in unlawful activity in the future, is ultra vires the Province?
b. Whether certain clauses of the interim preservation order are thus of no force and effect?
c. If the answer to (a) and (b) is yes, whether the Court may permit the defendants to sell the Nanaimo Clubhouse, keep the proceeds, and dismiss the Director's action?
Rule 9-3(2) provides:
The court may order a question or issue arising in a proceeding, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be stated in the form of a special case.
Justice Davies found that neither application stated questions that, in the circumstances, were appropriate to be heard by way of a special case.
The legal theory that supported the special case application in the action concerning the East End Clubhouse and Kelowna Clubhouse was that, in the absence of an interim preservation order, the registered owners could sell them with the proceeds of sale being free of any claims by the Director, as the claim to forfeiture is now solely based on the future use aspect of the definition of "instrument of unlawful activity."
While the facts were not agreed, as required for a special case under Rule 9-3(2), the defendants conceded, for the purpose of the application only, that the East End Clubhouse and the Kelowna Clubhouse are instruments of unlawful activity as defined in the Civil Forfeiture Act. Furthermore, those defendants agreed that if they were permitted to sell the East End Clubhouse and Kelowna Clubhouse the registered owners "will not use any of the proceeds of an unencumbered sale to purchase similar properties for use as a clubhouse": para. 25.
The Director opposed the applications on the grounds that the defendants should not be allowed to proceed on a factual assumption that they would withdraw if they were unsuccessful at a hearing of the special case on the merits, and that the complicated ownership of the clubhouses would need to be determined before an order allowing their disposition could be made.
In determining whether to proceed by special case, Davies J. summarized the principles that should be applied in determining whether the Court should order a hearing by way of special case as follows (at para. 28):
1. agreed facts upon which a decision is to be rendered are fundamental to the Court's decision whether to allow a special case to proceed;
2. the question that is proper for the Court to consider is whether there will be a saving of expense to the parties and a saving of time to the Court itself;
3. it is not necessary that the special case will decide all of the issues in the litigation;
4. as a general rule, the law does not anticipate that the Court should provide gratuitous opinions on hypothetical facts involving issues arising during the course of litigation; and
5. however, where the determination of a hypothetical point of law may have a conclusive effect on litigation, the court may choose to proceed with a special case even if it will not necessarily dispose of all of the parties' legal problems, so long as determination of the issue will or may serve a useful purpose.
The application for a special case in the action concerning the East End Clubhouse and the Kelowna Clubhouse was dismissed. The fundamental difficulty with the proposed special case in that action was that the application was based on hypothetical facts that constitute the central issue in the litigation and would not be fully resolved: para. 34.
The application for a special case in the action concerning the Nanaimo Clubhouse was dismissed for the same reasons. Additionally, the application for a special case would require a determination that the "instrument of unlawful activity" provisions of the Civil Forfeiture Act relied upon by the Director are ultra vires the Province and thus unconstitutional; Davies J. already ruled in the context of the litigation that constitutional issues should not be decided without a full evidentiary record: paras. 50-51. Given the duration of the litigation, it was best that the novel interpretation of various provisions of the Civil Forfeiture Act be completed in the context of a full evidentiary record at trial. Perhaps most importantly, the pending trial date in May 2017 would almost certainly be lost.
Violette provides a useful review of the factors for determining whether to proceed by special case. More importantly, however, it illustrates circumstances in which a special case will not provide savings of expense to the parties or of time for the court. Where the special case is based on facts that are conceded only for the purposes of an application, it is less likely that it will be appropriate for determination. Where the special case requires the statutory interpretation of unconsidered statutory provisions, the Court will be more likely to require the full evidentiary record that can only be provided at trial.