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Estoppel - Issue Estoppel - Criminal (2). R. v. Breton [issue estoppel]
In R. v. Breton (Ont CA, 2025) the Ontario Court of Appeal dismissed a criminal appeal, here brought against a Crown-successful "application for an order under s. 490(9) of the Criminal Code" ['Disposal of things seized'].
The court considered an issue estoppel argument - here where the defendant was acquitted of charges, but the Crown pursued the CCC 490(9) forfeiture application. The case is useful for distinguishing how different issues may or may not have estoppel attach to them:[1] Police seized over $1.2 million in cash secreted around the appellant’s house and garage, including $1,235,620 found inside a Rubbermaid tub buried under the dirt floor of the garage. There were numerous other items seized, including drugs, drug paraphernalia, motorized vehicles and the like. This appeal concerns only the cash found secreted in the garage.
[2] The appellant was charged with possession of the proceeds of crime and various other offences. At trial, he successfully challenged the search warrant under which the seizures were made, a challenge brought pursuant to s. 8 of the Canadian Charter of Rights and Freedoms. The trial judge excluded all of the evidence under s. 24(2) of the Charter. The exclusion of the evidence resulted in the Crown calling no evidence and, as a corollary, acquittals being entered.
[3] This left the question of what to do with the cash – should it be returned to the appellant or forfeited to the Crown? The Crown brought an application for an order under s. 490(9) of the Criminal Code, R.S.C. 1985, c. C-46. Although the Crown originally sought the forfeiture of almost all seized items, in the end, the Crown focused on the seized cash. The appellant countered with an application to have the evidence excluded from the forfeiture proceeding. This time the trial judge[1] denied the s. 24(2) application, declining to exclude the cash and evidence surrounding its seizure from the forfeiture proceeding. He ultimately ordered that the cash found in and under the garage be forfeited to the Crown.
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ii. Law of issue estoppel following an acquittal
[37] Issue estoppel is one branch of res judicata, which is a doctrine that prevents unfair relitigation of matters that have already been decided: R. v. Mahalingan, 2008 SCC 63, [2008] 3 S.C.R. 316, at paras. 14-16. In the context of criminal cases, it “prevent[s] the Crown from relitigating an issue that has been determined in the accused’s favour in a prior criminal proceeding, whether on the basis of a positive finding or reasonable doubt”: Mahalingan, at para. 31. Issue estoppel serves the goals of (1) fairness to the accused, who should not have to confront issues already decided in their favour; (2) integrity and coherence of the criminal law; and (3) judicial finality and economy: Mahalingan, at paras. 2, 38.
[38] Issue estoppel has three core requirements:(1) that the same question has been decided;
(2) that the judicial decision which is said to create the estoppel was final; and
(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies: Mahalingan, at para. 49. [39] To satisfy the first requirement, an accused must show that the question “was or must necessarily have been resolved on the merits in the accused’s favour in the earlier proceeding”: Mahalingan, at para. 52. The question will be whether the finding said to be in favour of the accused is one that is “logically necessary” to the acquittal, to be determined by reference to the essential elements of the verdict: Mahalingan, at para. 53. In a multi-issue jury trial where there are no reasons, it will sometimes be harder to rely on issue estoppel because it will not always be clear which issues were decided in favour of the accused: Mahalingan, at para. 54; Punko, at para. 22.
[40] In Punko, the Supreme Court applied the test from Mahalingan in the context of a multi-issue jury trial. The issue was whether the Crown was estopped from proving that a chapter of the Hells Angels was a criminal organization because the issue was decided adversely to the Crown in a prior jury trial. At the first jury trial, the appellants were acquitted of counts allegedly committed for the benefit of, or at the direction of, a criminal organization. The Supreme Court concluded that issue estoppel did not apply and that it was open to the Crown to seek to prove the criminal organization issue at the second trial. This is because where there is more than one logical explanation for a verdict, and if one of these explanations does not depend on the relevant issue having been resolved in favour of the accused, the verdict cannot be relied upon in support of issue estoppel: Punko, at para. 8.
iii. Application
[41] In my view, issue estoppel did not preclude the Crown from arguing at the forfeiture hearing that the cash the appellant possessed was obtained unlawfully, for two reasons:(1) A finding about whether the seized cash was obtained unlawfully was not logically necessary to the appellant’s acquittal.
(2) Regardless, the trial judge cannot have made any findings about the cash found in and under the garage, since it was not in evidence. [42] We need to start by grounding ourselves in why the appellant was acquitted across the board. Here, the trial judge did not provide reasons explaining why he entertained a reasonable doubt as to one or more of the elements of the offence. Rather, following the exclusion of the evidence under s. 24(2), and the Crown opting to call no evidence, acquittals were necessarily entered. This is reflected in the trial judge’s brief endorsement offering his sole explanation for acquitting the appellant: “As [Crown] calls no evidence, I find Marcel Breton not guilty”. That is it.
[43] The appellant argues that Grdic governs this appeal. He contends that the verdict of not guilty is tantamount to a “declaration of innocence” for all purposes: R. v. Verney (1993), 1993 CanLII 14688 (ON CA), 87 C.C.C. (3d) 363 (Ont. C.A.), at p. 371. Leaning on Grdic, the appellant maintains that it makes no difference whether the appellant was acquitted as a result of a Charter application or whether he was acquitted after a full review of the evidence, given that Grdic, at p. 825, makes clear that an “‘acquittal is the equivalent to a finding of innocence’”. And if he has been found innocent, he cannot have been unlawfully in possession of the disputed cash.
[44] I do not read Grdic in the same way as the appellant. In my view, it does not stand for the proposition advanced by the appellant.
[45] Indeed, the suggestion that the fact of an acquittal precludes any issue raised in a previous trial from being dealt with at a subsequent proceeding has been referred to as a “misreading” of Grdic: Mahalingan, at para. 22. It is only those issues that were specifically decided in the accused’s favour during the first trial, either by way of a factual finding or a reasonable doubt, that become the subject of issue estoppel at the subsequent proceeding. As the majority in Mahalingan found, whether the Crown was estopped from relitigating an issue is dependent, not on the fact of the acquittal, but on “whether the issue in question has been decided in the accused’s favour in a previous proceeding”: at para. 21. To proceed otherwise is to conflate the concept of double jeopardy on the ultimate verdict (not in issue here), with the central concern behind issue estoppel, which is to preclude the litigation of issues that have been specifically resolved in reaching a verdict: Mahalingan, at para. 21.
[46] Therefore, not every issue at a trial that results in an acquittal will be estopped at a subsequent proceeding. Only those issues that were “expressly resolved or, given how the case was argued, had to be resolved for there to be an acquittal” are estopped from reconsideration: Mahalingan, at para. 23. This is to be decided on the whole of the record. The whole of the record here demonstrates that no estoppel on the issue of whether the seized cash was obtained unlawfully arises from the acquittal.
[47] First, I agree with the Crown that a finding about whether the seized cash was obtained unlawfully was not logically necessary to the appellant’s acquittal. Therefore, the trial judge was not bound by issue estoppel on this point, and it was open to him to conclude that the cash found in and under the garage was the proceeds of crime, satisfying the requirement in s. 490(9) that “possession of it by the person from whom it was seized is unlawful”.
[48] The appellant was charged with and acquitted of possession of the proceeds of crime under ss. 354(1)(a) and 355(a) of the Criminal Code. This offence can be broken down into at least three elements: the property must have been obtained or derived from the commission of an indictable offence in Canada, the property was in the accused’s possession, and the accused must have known the property was unlawfully obtained: R. v. Farnsworth, 2017 ABCA 358, 356 C.C.C. (3d) 255, at paras. 32-36.
[49] Failure to prove any of these elements beyond a reasonable doubt would result in an acquittal. We simply cannot conclude that any one of these issues was “logically necessary” to the acquittal. For example, if the trial judge were convinced that the seized cash was proceeds of crime but was not satisfied either that the appellant was in possession of it or that he had knowledge of its origins, this would have resulted in an acquittal. As the trial judge provided no reasons other than a brief endorsement on the indictment noting that the Crown had called no evidence, it cannot be said which issue or issues were resolved for purposes of arriving at the acquittal. This is not unlike a jury verdict where the basis of the acquittal is not explained, and all we know is that the trier of fact had a reasonable doubt about something, more than one thing or possibly everything.
[50] I recognize that in a situation where the Crown calls no evidence, we might conclude that the trial judge must have had a reasonable doubt about every element of the offence. Having been presented with zero evidence, how could the trial judge have been convinced of anything beyond a reasonable doubt? But it does not follow that issue estoppel should apply in these circumstances. Issue estoppel in the criminal context is necessarily narrow: Mahalingan, at para. 1; Punko, at para. 7. It only applies to findings that are logically necessary to a verdict: Mahalingan, at para. 53. In a multi-issue jury trial, “it will be rare for an acquittal to ground issue estoppel, because such an acquittal will often have more than one possible basis”: Punko, at para. 22; Mahalingan, at paras. 24, 54. In my view, this case is analogous to a multi-issue jury trial, in the sense that there is more than one possible basis for the acquittal and there are no reasons explaining what the basis is.
[51] Second, regardless of what we can logically infer from the verdict of acquittal, in my view the trial judge cannot have made any finding with respect to the seized cash at the criminal trial because the seized cash was not before him, having been excluded as inadmissible under s. 24(2).
[52] To understand what the appellant was acquitted of, we must look to the indictment. The indictment does not specify the seized cash from in and under the garage. It simply alleges that the appellant was in possession of “proceeds of property of a value exceeding five thousand dollars” in general terms:Marcel Donald BRETON, on or about the 1st day of December in the year 2009 at the Township of Gorham, in the said Region, unlawfully did have in his possession proceeds of property of a value exceeding five thousand dollars, knowing that all or part of the currency was obtained or derived directly or indirectly from the commission in Canada of an offence punishable by indictment, contrary to Section 354(1)(a) of the Criminal Code thereby committing an offence under Section 355(a) of the Criminal Code. [Emphasis added.] [53] Even though the trial judge surely had a reasonable doubt about whether the appellant possessed proceeds “of a value exceeding five thousand dollars” given that the Crown called no evidence, it does not follow that the trial judge had a reasonable doubt about whether the seized cash was the proceeds of crime. Quite simply, that cash was not in evidence at the trial at the point that the decision to acquit was made and so the trial judge cannot have made any findings about its status, either explicitly or on the basis of reasonable doubt, one way or the other.
[54] In my view, this conclusion is entirely consistent with the goals of issue estoppel, as set out in Mahalingan, at para. 38.
[55] First, there is no unfairness to the appellant because the issue of whether he unlawfully possessed the cash in and under the garage was not determined at his trial because it was not litigated in light of the exclusion of the evidence – including the cash itself – pursuant to s. 24(2).
[56] Second, this result does not undermine the integrity or coherence of the criminal process, because the appellant’s acquittal of possession of the proceeds of crime did not entail or depend on a finding that the seized cash was not the proceeds of crime.
[57] Finally, and for the same reasons, this conclusion does not undermine the institutional values of finality and judicial economy. While these values are of course essential to preserving the public’s confidence in the administration of justice, and relitigation is barred in order to preserve these values, there was no original litigation on the core issue in this case that resulted in findings upon which issue estoppel could rest.
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