A woman walks past the Supreme Court of Canada in Ottawa on June 20, 2008. (Tom Hanson/Canadian Press)

In a landmark ruling, the country's top court said Friday that a convicted marijuana grower in North Vancouver won't lose her house as part of her sentence.

It's the first time the Supreme Court of Canada has tested federal drug laws that allow confiscation of assets related to crime.

It ruled 5-2 that Judy Ann Craig, convicted in 2003 of growing pot worth more than $100,000 in her home, does not have to give up her house as crime-related property.

Prosecutors had said the laws are a powerful deterrent against home-based grow-ops. But Craig's lawyer Howard Rubin argued the law should target only organized traffickers and not unfairly punish home-based growers.

Lower courts had issued conflicting rulings on whether it was appropriate to order the seizure of grow-op houses as proceeds of crime.

A former real estate agent, Craig, 58, started growing marijuana in her home in 1998 to "kick-start" her life after her divorce — at the urging of a friend with HIV.

She was arrested after police found 186 marijuana plants in her basement, which was set up as an organized grow-up, with "hired hands."

Craig pleaded guilty at her trial and was given a 12-month conditional sentence, fined $100,000, and was also ordered to pay a victim surcharge of $15,000.

The Crown had also sought a forfeiture order against Craig's home. At the time, she owed $250,000 in unpaid taxes from her pot earnings and her two-storey home was valued at $460,000.

But the court refused to impose a forfeiture order, saying the fine was sufficient.

Both the Crown and Craig appealed. In 2005, the B.C. Court of Appeal upheld the conditional sentence and ordered the forfeiture, but set aside the fine and victim surcharge.

The court ruled that imprisonment and forfeiture had to be considered together as a single "global punishment."

However, the Supreme Court ruled that the lower court erred in its global approach.

The only accused who would benefit from such an approach "are those with property available for forfeiture, who will be able to argue that its imposition should result in a more lenient jail term," said Justice Rosalie Abella, writing for the majority.

"A legal system that tolerates differences about who goes to jail based on whether they have property, risks impairing its own integrity and credibility."

Therefore the forfeiture order is set aside, the top court ruled.

Moreover, as the sentence has been served and the Crown did not seek reinstatement of the $100,000 fine imposed by the sentencing judge, "I see no reason to do so in the absence of such a request," wrote Abella.