Strip club, bikers and drug deals at core of case over private property rights, state power
Adrian Humphreys
POSTMEDIA
Michael Norwood was waiting for his drug trafficking trial when he died four years ago. The owner of a played-out strip club had been caught up in police raids targeting the Hells Angels but is now the centre of a legal battle of a different sort: over the government’s power to grab assets from beyond the grave
Although the root of the case flows from a world of strip clubs and drug deals, implications for property rights and the power of the state elevated the arguments in court and attracted public interest intervention.
Norwood was arrested in 2015 after an Ontario Provincial Police drug trafficking investigation targeted members and associates of the Hells Angels Motorcycle Club and a support club called 13 Crew. At the time, the public focus was on two Correctional Service of Canada employees who were among the 29 people arrested.
As part of the government’s drug prosecution against Norwood, the Silver Dollar, a strip club operating in Ottawa for decades, as well as his nearby home, were seized by the federal government. After Norwood’s death, the drug criminal charges were dropped and federal prosecutors abandoned their claim on his assets in 2017 — but before the money could be returned, the province stepped in, using its civil asset forfeiture act to take control of it.
The home was sold for $146,225 and the business for $840,216, which was paid into court under a preservation order pending the legal outcome. The province says the house and nightclub were proceeds or instruments of his drug trafficking.
The club had some notoriety, including in 2010, when a staff member shot a customer in the leg without warning when the patron got into a scuffle at the club. The gunman was convicted, but the victim sought compensation from the Silver Dollar for his injury.
A court awarded the victim $125,000 in damages. Once Norwood’s assets were seized, the victim sought his money from the government and Ontario’s Attorney General agreed. Last year, an Ontario court judge ordered the victim be paid from Norwood’s estate.
The province asked the court to also approve a $120,000 payout to Norwood’s 86-year-old mother.
Court heard from the mother’s lawyer that she gave her son money in the mid-1990s to renovate his house to make a separate unit for her to live in. That agreement, however, wasn’t put into writing until after Norwood was arrested in 2015.
The Ontario government accepted the mother’s claims, deemed her to be a legitimate owner to the value she said and, with no evidence she was aware of or participated in her son’s alleged criminal activities, approved paying her.
A lower court judge agreed, even though the owner was dead and his money had not yet been declared the proceeds of crime.
The move to make another large payment from the assets, before the money being formally declared criminal profits, has brought legal intervention. The estate appealed that decision.
Geoffrey Adair, lawyer for Norwood’s estate trustees, argued in court Wednesday that allowing the ruling to stand gives the province excessive power over private property.
“This would amount to rubber stamping decisions of the Attorney General, even if those decisions exceeded the very power the court itself,” he told court, “and allow the Attorney General to do whatever it wants.”
He said ordering the payment before establishing a criminal source goes against the intent of the act: “You shouldn’t be able to satisfy debts with the proceeds of crime,” he said.
Antonin Pribetic, representing the Ontario government, rejected Adair’s characterization.
“This is not a circumstance where the Attorney General is rubber stamping a side deal,” he said. He said that if Norwood’s assets end up not being found to be criminal proceeds, then the estate can seek to get the money back from Norwood’s mother, he said.
Concern over the power of the Civil Remedies Act prompted the Canadian Constitution Foundation to seek intervener status in the case.
“Civil forfeiture is an extremely powerful tool in the government’s tool box and because of the power of that tool there need to be limits in how it is exercised,” said Christine Van Geyn, the foundation’s litigation director.
“Civil forfeiture does not just apply to criminals, it can also be used to take the assets of individuals who have never been charged or even suspected of a crime.”
The panel of three appeal court judges reserved their decision until a later date.
• Email: ahumphreys@postmedia.com | Twitter: AD_Humphreys
Adrian Humphreys
POSTMEDIA
Michael Norwood was waiting for his drug trafficking trial when he died four years ago. The owner of a played-out strip club had been caught up in police raids targeting the Hells Angels but is now the centre of a legal battle of a different sort: over the government’s power to grab assets from beyond the grave
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© Provided by National Post The Silver Dollar club in Ottawa.
Norwood’s strip club in Ottawa was called the Silver Dollar; his assets, however, were worth a million times that.
Despite his sudden death, of natural causes, the Ontario government still wants it.
Further complicating the affair, is that even before the court process to determine whether Norwood’s house and business are indeed the proceeds of his criminal activity, the properties have already been sold and the government is trying to pay out some of the money, including to his elderly mother and to a man who was shot at the strip club.
The government is leaning on the power of Ontario’s Civil Forfeiture Act, a tool that can take away a citizen’s property deemed to be the proceeds of crime.
The province’s move against Norwood’s assets and the unusual circumstances of him being dead with outstanding claims against his estate brought years of litigation and, on Wednesday, a hearing before the Court of Appeal for Ontario.
Norwood’s strip club in Ottawa was called the Silver Dollar; his assets, however, were worth a million times that.
Despite his sudden death, of natural causes, the Ontario government still wants it.
Further complicating the affair, is that even before the court process to determine whether Norwood’s house and business are indeed the proceeds of his criminal activity, the properties have already been sold and the government is trying to pay out some of the money, including to his elderly mother and to a man who was shot at the strip club.
The government is leaning on the power of Ontario’s Civil Forfeiture Act, a tool that can take away a citizen’s property deemed to be the proceeds of crime.
The province’s move against Norwood’s assets and the unusual circumstances of him being dead with outstanding claims against his estate brought years of litigation and, on Wednesday, a hearing before the Court of Appeal for Ontario.
Although the root of the case flows from a world of strip clubs and drug deals, implications for property rights and the power of the state elevated the arguments in court and attracted public interest intervention.
Norwood was arrested in 2015 after an Ontario Provincial Police drug trafficking investigation targeted members and associates of the Hells Angels Motorcycle Club and a support club called 13 Crew. At the time, the public focus was on two Correctional Service of Canada employees who were among the 29 people arrested.
As part of the government’s drug prosecution against Norwood, the Silver Dollar, a strip club operating in Ottawa for decades, as well as his nearby home, were seized by the federal government. After Norwood’s death, the drug criminal charges were dropped and federal prosecutors abandoned their claim on his assets in 2017 — but before the money could be returned, the province stepped in, using its civil asset forfeiture act to take control of it.
The home was sold for $146,225 and the business for $840,216, which was paid into court under a preservation order pending the legal outcome. The province says the house and nightclub were proceeds or instruments of his drug trafficking.
The club had some notoriety, including in 2010, when a staff member shot a customer in the leg without warning when the patron got into a scuffle at the club. The gunman was convicted, but the victim sought compensation from the Silver Dollar for his injury.
A court awarded the victim $125,000 in damages. Once Norwood’s assets were seized, the victim sought his money from the government and Ontario’s Attorney General agreed. Last year, an Ontario court judge ordered the victim be paid from Norwood’s estate.
The province asked the court to also approve a $120,000 payout to Norwood’s 86-year-old mother.
Court heard from the mother’s lawyer that she gave her son money in the mid-1990s to renovate his house to make a separate unit for her to live in. That agreement, however, wasn’t put into writing until after Norwood was arrested in 2015.
The Ontario government accepted the mother’s claims, deemed her to be a legitimate owner to the value she said and, with no evidence she was aware of or participated in her son’s alleged criminal activities, approved paying her.
A lower court judge agreed, even though the owner was dead and his money had not yet been declared the proceeds of crime.
The move to make another large payment from the assets, before the money being formally declared criminal profits, has brought legal intervention. The estate appealed that decision.
Geoffrey Adair, lawyer for Norwood’s estate trustees, argued in court Wednesday that allowing the ruling to stand gives the province excessive power over private property.
“This would amount to rubber stamping decisions of the Attorney General, even if those decisions exceeded the very power the court itself,” he told court, “and allow the Attorney General to do whatever it wants.”
He said ordering the payment before establishing a criminal source goes against the intent of the act: “You shouldn’t be able to satisfy debts with the proceeds of crime,” he said.
Antonin Pribetic, representing the Ontario government, rejected Adair’s characterization.
“This is not a circumstance where the Attorney General is rubber stamping a side deal,” he said. He said that if Norwood’s assets end up not being found to be criminal proceeds, then the estate can seek to get the money back from Norwood’s mother, he said.
Concern over the power of the Civil Remedies Act prompted the Canadian Constitution Foundation to seek intervener status in the case.
“Civil forfeiture is an extremely powerful tool in the government’s tool box and because of the power of that tool there need to be limits in how it is exercised,” said Christine Van Geyn, the foundation’s litigation director.
“Civil forfeiture does not just apply to criminals, it can also be used to take the assets of individuals who have never been charged or even suspected of a crime.”
The panel of three appeal court judges reserved their decision until a later date.
• Email: ahumphreys@postmedia.com | Twitter: AD_Humphreys
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