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David Lloydsmith is shown outside of the Law Courts in Vancouver on Feb. 17, 2014.BEN NELMS/The Globe and Mail

A government agency set up to punish career criminals in British Columbia has backed down from trying to seize a man's home in a case that has shed light on what critics call a pattern of overreach the powerful office enjoys.

B.C.'s Civil Forfeiture Office ended its most high-profile case Monday after a stinging defeat at the province's top court this year, choosing to abandon the proceedings rather than continue down a path that appeared likely to raise constitutional questions about the legislation under which it operates.

The office, which was created in 2006 to fight organized crime but has come to have a far broader reach, filed its notice of discontinuance in the case of David Lloydsmith on Monday, ending its years-long pursuit of his home. The office has faced questions about the cases it takes on and the fairness of the process after a recent Globe and Mail investigation.

"I'm trying to wrap my head around all this," Mr. Lloydsmith, whose story was told in the Globe series on civil forfeiture, said in an interview. "… In my heart of hearts, I was hoping and praying for it. I didn't know."

Mr. Lloydsmith, a former electrician on partial disability in the Fraser Valley community of Mission, opened the front door of his residence on Oct. 15, 2007, after a knock from an RCMP officer. The Mountie told Mr. Lloydsmith he was investigating a 911 call and asked to search the home. Mr. Lloydsmith refused and was arrested.

The officer found marijuana plants growing in the basement but charges were never laid and the officer would write in a report that the offence was "minor." A judge would later deem the police search "unreasonable" and rule it violated Mr. Lloydsmith's Charter rights.

But the Civil Forfeiture Office – which does not need a conviction or even charges to pursue a file, and has been far more aggressive in seizing property than its counterparts in other provinces – continued to pursue the house. In February, it took one aspect of Mr. Lloydsmith's case to the province's highest court, where it lost.

The Court of Appeal's decision meant the Charter violations in Mr. Lloydsmith's case would have to be dealt with before a full trial. The Court of Appeal also said the system has an imbalance of power that can put ordinary citizens at the office's mercy. The office's director last year told The Globe that 99 per cent of the people the office targets settle on terms in its favour.

The office could have continued fighting the case in the lower-level B.C. Supreme Court, but instead chose to discontinue the proceedings. An exact reason was not provided.

Bibhas Vaze, Mr. Lloydsmith's lawyer, said both he and his client are relieved the case is over.

He said he hopes Mr. Lloydsmith can move on with his life and retire in the modest home, though the process has taken an emotional toll.

Mr. Vaze said he hopes the case will help other defendants and that this outcome shows defendants can sometimes win if they fight back. Many can't afford to do so; Mr. Vaze was working the case at a drastically reduced rate.

When asked why he thought the office gave up now, Mr. Vaze, citing the earlier rulings, said: "They've been dealt enough blows in the process."

B.C. Justice Minister Suzanne Anton has repeatedly defended the civil forfeiture program, saying it's working as it should. There have been calls from three B.C. Liberal caucus members, the Official Opposition, and both a former solicitor-general and a former attorney-general for a review.

Phil Tawtel, the Civil Forfeiture Office's director, in an e-mail Monday confirmed the notice of discontinuance. Neither he nor Ms. Anton was immediately available for further comment.

The Globe investigation found the Civil Forfeiture Office has rapidly increased the number of files it accepts in recent years, and the amount of money it brings in. It has seized more property than Ontario's office, despite opening three years later. Critics have said the penalties handed out in civil-forfeiture cases can be wildly disproportionate to the offence.

Kash Heed, the province's former solicitor-general, has said the office was started with the best of intentions but has become a cash cow tasked with funding crime-prevention programs the government doesn't want to pay for through other means.