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A convicted drug trafficker should not have to pay a fine as part of his punishment to offset the fact he used money he obtained from his crimes to pay his legal fees, the Supreme Court of Canada ruled Friday.

The 6-3 decision gives new guidance to sentencing judges on how they should exercise their discretion under what it called the “complex and multifactored regime” governing proceeds of crime. The provision was enacted by Parliament in 1988 to ensure that “crime does not pay.”

Friday’s case involves Yulik Rafilovich, a Toronto man who pleaded guilty to cocaine trafficking and possession of property obtained through crime. When police arrested Mr. Rafilovich they seized 560 grams of cocaine, $41,130 in Canadian cash and US$651.

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Mr. Rafilovich could not afford legal fees and did not qualify for legal aid, so he successfully applied under a Criminal Code provision for permission to use the seized funds to pay his lawyers.

After he pleaded guilty to five charges, the funds were found to be proceeds of crime and, at his sentencing, the Crown sought an order imposing a fine in lieu of forfeiture of $41,976.

The sentencing judge decided not to grant the fine, but the ruling was overturned on appeal. Mr. Rafilovich appealed to the Supreme Court and won.

Six Supreme Court judges ruled that, in general, sentencing judges should not impose a fine instead of forfeiture for funds that had been returned to an accused under a court order.

“By enacting the return provision, Parliament not only foresaw the possibility that seized funds may be needed to mount a defence, but explicitly allowed individuals to spend returned funds for this purpose,” Justice Sheilah Martin wrote for the majority.

Justice Martin noted that while the provision tries to ensure that “crime does not pay,” allowing an accused person to access the funds for their defence serves two purposes. It provides access to a lawyer and gives “meaningful weight to the presumption of innocence,” both of which ensure fairness in criminal cases.

“Clawing back reasonable legal fees as a fine instead of forfeiture would, in most cases, undermine these equally valid purposes,” Justice Martin wrote.

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She said allowing seized funds to be used to pay lawyers would not apply in all cases, including if an accused doesn’t have a real financial need or if there was a misrepresentation of the accused’s financial position.

Three dissenting judges said accused people should not be allowed to benefit from their crimes, but the use of seized assets to pay for a defence lawyer can be allowed if it is essential to safeguard the constitutional right to a fair trial.

“This follows from a straightforward application of the primary objective of the proceeds of crime regime – namely, ensuring that crime does not pay,” Justice Michael Moldaver wrote for the dissenters, which included Chief Justice Richard Wagner.

“However, where a sentencing judge is satisfied that representation by counsel was essential to the offender’s constitutional right to a fair trial … the judge should exercise his or her limited discretion not to impose a fine in lieu in respect of the released funds.”

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