A landmark British Columbia law designed to crack down on money laundering has cleared a major legal hurdle. The province's new unexplained wealth order legislation has survived its first constitutional challenge in the B.C. Supreme Court.
Court Upholds Law in Key Ruling
In a significant decision, B.C. Supreme Court Justice Neena Sharma approved an unexplained wealth order targeting millions of dollars held in a Vancouver lawyer's trust account. The funds belong to U.K. citizen Kevin Patrick Miller, who was last known to be living in Malta.
The judge dismissed arguments from Miller's legal team that the law violated Section 8 of the Canadian Charter of Rights and Freedoms, which guards against unreasonable search and seizure. In her 37-page ruling, Justice Sharma concluded the legislation strikes a reasonable balance.
"I find the balance between the (unexplained wealth order’s) interference with respondents’ privacy interests in pursuit of the goals of the legislation is reasonable and does not infringe (Section) 8 of the Charter," Sharma wrote.
The Case and the Province's Allegations
The case centers on an estimated $4.5 million held in the trust account of disbarred lawyer Ronald Norman Pelletier. The B.C. government alleges this money is connected to a massive US$78-million pump-and-dump stock fraud that was prosecuted by the U.S. Securities and Exchange Commission.
Justice Sharma acknowledged that the unexplained wealth order does gather private information from the respondent. However, she noted that because the information comes directly from the individual, the risks of it being inaccurate or unreliable are low, and that risk is not inherent to the law itself.
Safeguards and Legal Framework
The ruling highlighted several important safeguards built into the legislation that support its reasonableness. Sharma pointed out that:
- An unexplained wealth order can only be issued by a court.
- The province must submit evidence explaining the suspicion that property is linked to criminal activity.
- The defendant can seek modifications to an order.
- The court may impose any terms or conditions it considers appropriate.
This legal tool was part of a package of new laws introduced by the B.C. NDP government in 2023 to combat money laundering and other serious financial crimes. The orders effectively reverse the onus of proof in certain cases, requiring an individual to explain the legitimate source of funds used to acquire assets when there is a suspicion of criminal activity or corruption.
As of this ruling, the province's B.C. Civil Forfeiture Office has launched four unexplained wealth order applications in the courts. Miller's lawyer did not respond to inquiries about a potential appeal, and no appeal is currently listed on B.C.'s online court system.
Legal experts, such as lawyer and asset forfeiture authority Jeffrey Simser, view this ruling as a critical test for the province's enhanced arsenal against illicit finance. The decision sets an early precedent for how courts will interpret the boundaries and applications of this powerful new investigative tool.
