British Columbia (Director of Civil Forfeiture) v. PacNet Services Ltd.
In British Columbia (Director of Civil Forfeiture) v. PacNet Services Ltd., Gudmundseth Mickelson LLP acted for the Province between 2018 and 2023, resulting in the largest settlement of a civil forfeiture case in British Columbia’s history:
The case involved a money services business alleged to have serviced a global network of direct mail fraudsters, whose misleading sweepstakes and psychic ‘promotions’ have wrongfully deprived elderly victims of hundreds of millions of dollars.
Since February 2018 Gudmundseth Mickelson LLP has successfully:
- Brought an ex parte application for the freezing of bank accounts;
- Resisted the defendants’ attempt to seal the entire court file from public view;
- Resisted the defendants’ application for further particulars of the claim; and
- Resisted the defendants’ applications to delay document production.
- Resisted the defendants’ application for further particulars of the claim;
- Resisted the defendants’ application for document production from the Vancouver Police Department; and
- British Columbia (Director of Civil Forfeiture) v. PacNet Services Ltd., 2023 BCSC 1113, leave to appeal refused, 2023 BCCA 364
- Resisted the defendants’ application for a stay of the trial based on constitutional grounds;
COUNSEL: Howard A. Mickelson, K.C., Allan L. Doolittle, and Gabriel Boothroyd-Roberts
MEDIA COVERAGE:
- CBC News: Millions sought from Vancouver company accused of processing mail fraud payments
https://www.cbc.ca/news/canada/british-columbia/pacnet-mail-fraud-courts-1.4537960
- Vancouver Sun: Vancouver-based PacNet fights legal action to confiscate $15.5 million in properties, bank accounts
THE FACTS AND HISTORY OF THE CASE:
The action against the defendants’ bank accounts and real property was commenced on February 14, 2018. With the commencement of the action our lawyers placed a charge on the title of the real property thereby preventing sale, and in addition, successfully obtained an ex parte interim preservation order in court, prohibiting the defendants from dealing with the bank accounts at issue.
In October and November 2018, a BC Supreme Court chambers judge heard eight interconnected applications in this action brought by the defendants: first, seeking the entire file be sealed; second, seeking further particulars of the Director’s pleading; and third, seeking the Director disclose documents but that their own document disclosure obligations be postponed.
As a basis for these applications the defendants argued the case was “quasi-criminal” and so should be subject to a “unique” approach under the Supreme Court Civil Rules. Our lawyers argued that the civil Rules sufficiently protect the interests of defendants in civil forfeiture proceedings, and there was no need to create a framework separate and apart from them.
The chambers judge held for our client on every disputed issue in all of the applications before the Court and agreed with the position our lawyers advanced that there was nothing unique about civil forfeiture cases that would justify disregarding the normal conduct of civil litigation in favour of a process resembling criminal procedure.
In 2023, our lawyers successfully defended a multi-day chambers applications seeking broad document disclosure from the Vancouver Police Department, resulting in a leading BC Supreme Court chambers decision on the test for document disclosure by a third party. We then successfully resisted an application for leave to appeal that order to the Court of Appeal.
Further, in 2023, our lawyers successfully defended an application to stay the action pending resolution of the criminal indictment of the defendants in the state of Nevada, following cross-examination of leading experts on international criminal law during a multi-day chambers hearing in the BC Supreme Court. The defendants agreed to forfeit $10,000,000 to the Province of British Columbia shortly thereafter.
WHY IS THIS CASE IMPORTANT?
These decisions highlight the comprehensive nature of the Supreme Court Civil Rules, which ensure trial fairness for civil litigants in even the most high-stakes litigation. Trial fairness includes ensuring that a defendant may not unduly restrict the progress of litigation by means of applications for particulars, or create unreasonable delay in relation to document disclosure obligations. These decisions are also important as they provide guidance where criminal and civil proceedings intersect, allowing the public interest to be served through the timely and efficient resolution of civil disputes when parallel criminal prosecutions are pending.
FURTHER INQUIRIES
If you have further inquiries about this or other complex commercial, public law or regulatory matters, please contact Howard A. Mickelson, K.C. or Allan L. Doolittle.