Supreme Court allows property forfeiture hearing after criminal charges stayed for delay

The Supreme Court of Canada has ruled that ending a criminal prosecution because of unreasonable delay does not automatically require the return of property seized during the investigation. Courts may still consider forfeiture under statutory powers that operate independently of a trial or sentencing.

In R. v. Nguyen, 2026 SCC 10, a unanimous court allowed the Crown’s appeal in part and returned a dispute over cash, real estate and other assets to the Court of Québec. The April 17 decision did not order the disputed property forfeited or declare its owners guilty. It required the lower court to consider both the Crown’s forfeiture application and the respondents’ request for their property back.

Justice Nicholas Kasirer drew a distinction between the end of a prosecution and the unresolved legal status of property held under court supervision. The ruling also set limits on the Crown: powers tied to trial or sentencing could no longer be used in this case, and the remaining route required proof that possession was unlawful.

Property dispute outlasted the prosecution

The case arose from a Montreal police investigation launched in 2013 into an alleged cannabis-production network. The three respondents, Thi Huyen Nguyen, Thi Hong Cun and Alexander Nguyen, were among those charged. Police seized property in Quebec and British Columbia, while restraint orders froze real estate and bank accounts.

The assets included proceeds exceeding $200,000 from the sale of two Montreal residences and more than $170,000 in frozen bank balances. Those figures described property affected by the investigation, not a forfeiture award made by the Supreme Court.

One co-accused, who was not a respondent in the appeal, pleaded guilty to producing cannabis and was sentenced in 2016. In December 2017, the Court of Québec stayed the proceedings against the remaining eight co-accused, including the three respondents, because delay had violated their constitutional right to a trial within a reasonable time. The Quebec Court of Appeal upheld that stay in 2019.

After the stay became final, the respondents sought the return of their property. The Crown then sought forfeiture. The Court of Québec accepted jurisdiction under several provisions tied to trial or sentencing but rejected jurisdiction under the Criminal Code’s general rules for disposing of seized property. The Superior Court declined to stop the forfeiture proceeding; the Court of Appeal subsequently held that it could not proceed, while declining to order the property returned.

Ending charges does not decide ownership

Kasirer said the stay brought the proceedings to determine criminal liability to a conclusive end and left the respondents presumptively innocent. But forfeiture proceedings address a different question: whether property is connected to unlawful activity in a way that permits its confiscation under legislation.

The court rejected the proposition that forfeiture always requires a prior finding of guilt against the person possessing the property. Some statutory powers apply even where no accused has been tried. Their purpose is to prevent courts from returning unlawfully held property in circumstances that would facilitate illegality, while respecting the interests of lawful owners.

The delay ruling had not resolved whether the alleged offences occurred. It therefore did not prevent the Crown from presenting evidence on those issues in a separate forfeiture hearing. That conclusion did not reopen the stayed prosecution or decide that the disputed property was criminally tainted.

Trial and sentencing powers had expired

The Crown could not, however, rely on the completed guilty plea and sentencing of the other co-accused to invoke powers under sections 462.37 and 491.1 of the Criminal Code and section 16 of the Controlled Drugs and Substances Act.

Those provisions require a connection to trial or sentencing proceedings. The Supreme Court explained that their reach can extend beyond property directly linked to the particular offence of conviction, and beyond property belonging to the person found guilty. But there must still be a sufficient connection to the criminal allegations underlying the proceedings, and the relevant trial or sentencing court must remain seized of the matter.

Here, the co-accused’s sentencing proceedings had ended in 2016, and the respondents had never been tried. Another judge could not reopen that completed forfeiture decision. The Supreme Court therefore prohibited further forfeiture proceedings under those three provisions in this case.

A remaining route carries a demanding burden

Section 490(9) of the Criminal Code supplied a different basis for dealing with much of the property. It governs the disposition of seized property, and certain restrained property, when its continued detention is no longer required. The Supreme Court rejected an interpretation that would make the provision unavailable merely because criminal proceedings had once begun and later ended.

That interpretation would risk leaving assets indefinitely frozen, with neither a forfeiture order nor a return to a lawful possessor. Instead, the court held that the provision can continue to operate after proceedings have definitively ceased.

For forfeiture under section 490(9), the Crown must satisfy the statutory conditions governing the end of detention, establish that possession was unlawful or that nobody possessed the property when it was seized, and show that no other known person lawfully owns it or is entitled to possess it. Possession immediately before seizure is presumed lawful. To overcome that presumption, the Crown must prove unlawful possession beyond a reasonable doubt.

The court also identified a separate provision, section 462.43, for some property restrained as suspected proceeds of crime that might fall outside section 490. It left the Court of Québec to apply the appropriate powers and decide the competing claims.

The result preserved the respondents’ opportunity to recover lawfully held property while allowing the Crown to try to establish a legal basis for forfeiture. The Supreme Court settled the jurisdictional dispute; it did not settle who ultimately gets the assets.

Source: R. v. Nguyen, 2026 SCC 10.