David Mihalyko had a 1998 Chevrolet Blazer. He also had an injured foot. He was presribed Oxycontin for his foot. On September 19, 2010 he needed some gas for his Blazer but he did not have any money; he did have his Oxys. He decided to sell some Oxys for gas money. He approached a woman, he thought was a prostitute, to see if she knew anyone who wanted Oxys. She was an undercover officer. Ultimately he sold $60 worth of Oxys to an undercover officer. He was charged and convicted. Forfeiture of the Blazer was sought under the Seizure of Criminal Property Act. The Queen's Bench refused to order forfeiture. That order was appealed. The Saskatchewan Court of Appeal allowed the appeal: 2012 SKCA 44.
On appeal the court first considered the purpose of the Act and specifically section 7(1) which provides:
Subject to section 8, and unless it clearly would not be in the interests of justice, the court shall make an order forfeiting proprety to the Crown if the court finds that the property is proceeds of unlawful activity or an instrument of unlawful activity.
The court held that the purpose is to "discourage unlawful activity and to compensate the victims of crime. This purpose is accomplished by the use of civil forfeiture of property gained by or used in unlawful activity" [para 17].
Next the court considered the onus - on the issue of whether seizure was in the interest of justice. The court held that "once the property has been found to be either proceeds of unlawful activity or an instrument of unlawful activity, the party relying on the exception...bears the burden of proving that the exception under s. 7(1) applies" [para 22].
Turning to consider the test and factors that are determinative of the "interests of justice" the court noted that it is not simply a balancing of pros and cons. Rather, the issue is whether the party that bears the onus has demonstrated that the order for forfeiture would be "manifestly harsh and inequitable" in the circumstances [para 29]. The factors that are relevant to this analysis include the conduct of the party; the value of the property compared to the value of the property that is tainted by the unlawful activity; and the interplay between the purposes of the legislation and the exercise of the interests of justice discretion [para 34].
In the end the Court of Appeal held that the Queen's Bench judge erred by not taking into account all relevant facts. The appeal was allowed.