Schreiber v. The Federal Republic of Germany et al.

[Indexed as: Schreiber v. Canada (Attorney General)]

Citation: 57 O.R. (3d) 316; [2001] O.J. No. 4778; Docket No. C35810 Court: Court of Appeal for Ontario Judges: Morden, Carthy and MacPherson JJ.A. Date: December 10, 2001

Application for leave to appeal to the Supreme Court of Canada dismissed with costs August 22, 2002 (McLachlin C.J., Iacobucci and Arbour JJ.). S.C.C. File No. 29077. S.C.C. Bulletin, 2002, p. 1160.

Headnotes

Civil procedure -- Stay of proceedings -- Germany bringing extradition proceedings against plaintiff -- Plaintiff arrested by Canadian officials at request of Germany -- Plaintiff bringing action against Canada and Germany for damages -- Canada applying for stay of action pending determination of extradition proceedings -- Motions judge erring in granting stay in absence of exceptional circumstances which would justify stay.

Extradition -- Concurrent civil proceedings -- Stay of proceedings -- Germany bringing extradition proceedings against plaintiff -- Plaintiff arrested by Canadian officials at request of Germany -- Plaintiff bringing action against Canada and Germany for damages -- Canada applying for stay of action pending determination of extradition proceedings -- Motions judge erring in granting stay in absence of exceptional circumstances which would justify stay.

The plaintiff was arrested and detained by Canadian officials at the request of Germany for extradition to face investigative proceedings concerning alleged tax evasion. He brought an action against Germany and Canada claiming damages for negligence and abuse of power. The Crown moved successfully for a stay of the action pending the extradition proceedings. The plaintiff appealed.

Held, the appeal should be allowed.

Per Carthy J.A.: The threshold test for granting a stay is a high one, requiring the demonstration of extraordinary or exceptional circumstances.

In granting the stay, the motions judge relied on there being no prejudice to the plaintiff if a stay was granted. The defendant, as the applicant for the stay, was required to show exceptional circumstances. Circumstances could not be said to be exceptional because the plaintiff would not be prejudiced. The motions judge also relied on the fact that the plaintiff could attain the vindication he sought as well in the extradition proceeding as in the civil proceeding. This assumed that the plaintiff was only interested in vindication and not in the damage claim of $1 million. The third ground on which the motions judge relied was the danger of inconsistent findings, and the fourth was the likelihood that the determination of the extradition proceedings would have a significant impact upon the civil proceeding. These are common features to some degree whenever criminal and civil proceedings overlap and proceed in tandem. Even when the accused person seeks to stay civil proceedings because of exposure to discovery on the same issues, the stay may be refused. The motions judge erred in principle in his application of the test for issuing a stay. There was no basis for finding the exceptional circumstances which would justify a stay.

Per Morden J.A. (concurring): The parties to an application for a stay do not start even; they start with a presumption against the granting of a stay. This has a direct bearing on the range and nature of the considerations that may properly be taken into account in the exercise of the motions judge's discretion, and therefore on the degree of deference that should be shown on appellate review.

When the Crown moves for a stay in a case such as this one, it must satisfy the threshold test of showing, on the facts, that the prejudice to it or to some aspect of the administration of justice clearly outweighs the fundamental right of the plaintiff to timely access to the courts. The motions judge did not find that the civil proceeding resulted in any significant prejudice to Canada in connection with its extradition obligations, and the defendant did not argue that he erred in that regard. It was reasonable to infer that, whatever delay there was in the extradition proceeding, the civil proceeding was not a cause of it and did not constitute a threat to its future progress.

Per MacPherson J.A. (dissenting): The granting of a stay of proceedings is an interlocutory order and is essentially made in the exercise of judicial discretion. An appellant seeking to overturn a motions judge's exercise of discretion faces a very high hurdle. The motions judge in this case did not fail to consider relevant factors and did not give no weight, or no sufficient weight, to relevant factors. The motions judge did not err by focusing on the prejudice to the plaintiff of a potential stay of the civil proceeding. A decision by the motions judge not to grant the stay would have prejudiced both parties and, more fundamentally, would have brought the administration of justice into disrepute. An extradition hearing must proceed expeditiously. Germany requested the plaintiff's extradition in August 1999. In May 2000, when the motion for a stay of the civil proceeding was heard, granting the stay would have flown in the face of the purposes of the Extradition Act, S.C. 1999, c. 18, the legitimate expectations of foreign governments pursuant to important treaties with Canada, and clear and strong statements by the Supreme Court of Canada. Given the length and complexity of the extradition proceeding, a parallel civil proceeding would inevitably have further slowed an extradition proceeding that already appeared to be advancing at a snail's pace.

While a victory in the extradition proceeding would not provide the plaintiff with the financial compensation he sought in the civil proceeding, it was obvious that his primary concern was that he not be extradited to Germany, where he might face a long criminal trial and, ultimately, a period of imprisonment. The motions judge was correct to find that vindication could be accomplished to a substantial extent in the extradition hearing.

There was no reason for disputing the motions judge's identification and application of the factor of the prospect of inconsistent findings, or his finding that the determination of the extradition proceeding would have a significant impact on the civil action.

APPEAL from an order of Nordheimer J. (2001), 2000 22376 (ON SC), 48 O.R. (3d) 521, 187 D.L.R. (4th) 146 granting a stay of proceedings.

Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1 (C.A.), consd Other cases referred to British Columbia Government Employees' Union v. British Columbia (Attorney General), 1988 3 (SCC), [1988] 2 S.C.R. 214, 31 B.C.L.R. (2d) 273, 71 Nfld. & P.E.I.R. 93, 53 D.L.R. (4th) 1, 87 N.R. 241, [1988] 6 W.W.R. 577, 50 C.R.R. 397n, 44 C.C.C. (3d) 289, 30 C.P.C. (2d) 221, 88 D.T.C. 14,047 (sub nom. B.C.G.E.U., Re); Charles Osenton & Co. v. Johnston, [1942] A.C. 130; Duhamel v. R., 1984 126 (SCC), [1984] 2 S.C.R. 555, 35 Alta. L.R. (2d) 1, 14 D.L.R. (4th) 92, 57 N.R. 162, [1985] 2 W.W.R. 251, 15 C.C.C. (3d) 491, 43 C.R. (3d) 1 (sub nom. R. v. Duhamel (No.2)); Falloncrest Financial Corp. v. Ontario, [1995] O.J. No. 1931 (Gen. Div.); Friends of Oldman River Society v. Canada (Minister of Transport) (1992), 1992 110 (SCC), 48 F.T.R. 160n, [1992] 1 S.C.R. 3, 84 Alta. L.R. (2d) 129, 88 D.L.R. (4th) 1, 132 N.R. 321, [1992] 2 W.W.R. 193; Gillis v. Eagleson (1995), 1995 7190 (ON SC), 23 O.R. (3d) 164, 37 C.P.C. (3d) 252 (Gen. Div.); MacKenzie v. Palmer (1921), 1921 565 (SCC), 62 S.C.R. 517, 63 D.L.R. 362, [1922] 1 W.W.R. 880; McVey, Re, 1992 48 (SCC), [1992] 3 S.C.R. 475, 73 B.C.L.R. (2d) 145, 97 D.L.R. (4th) 193, 144 N.R. 81, [1993] 1 W.W.R. 289, 77 C.C.C. (3d) 1 (sub nom. McVey Re, McVey v. United States of America); Reza v. Canada, 1994 91 (SCC), [1994] 2 S.C.R. 394, 116 D.L.R. (4th) 61, 167 N.R. 282, 21 C.R.R. (2d) 236; Smith v. Selwyn, [1914] 3 K.B. 98, [1914-15] All E.R. Rep. 229, 83 L.J.K.B. 1339, 111 L.T. 195 (C.A.); Stickney v. Trusz (1974), 1974 1379 (ON SCDC), 3 O.R. (2d) 538, 46 D.L.R. (3d) 80, 17 C.C.C. (2d) 278, 28 C.R.N.S. 125 (Div. Ct.), affg (1973), 1973 423 (ON SC), 2 O.R. (2d) 469, 45 D.L.R. (3d) 275, 16 C.C.C. (2d) 25, 25 C.R.N.S. 257 (H.C.J.); Straka v. Humber River Regional Hospital (2000), 2000 16979 (ON CA), 51 O.R. (3d) 1, 193 D.L.R. (4th) 680, 1 C.P.C. (5th) 195 (C.A.), affg (1999), 1999 15086 (ON SC), 45 O.R. (3d) 630 (S.C.J.); United States of America v. Dynar, 1997 359 (SCC), [1997] 2 S.C.R. 462, 147 D.L.R. (4th) 399, 213 N.R. 321, 44 C.R.R. (2d) 189, 115 C.C.C. (3d) 481, 8 C.R. (5th) 79 Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6, 106 Extradition Act, S.C. 1999, c. 18 Authorities referred to Fleming, J.G., The Law of Torts, 9th ed. (Sydney: LBC Information Services, 1998)

Counsel: Edward Greenspan, Q.C., and David Stratas, for appellant. Harvey Frankel, Q.C., Eric Noble and Michael Morris, for respondent.

Reasons for Decision

[1] CARTHY J.A.: -- This is an appeal from that portion of the order of Nordheimer J. which granted a stay of proceedings against the Attorney General of Canada. The other portion of that order dismissed the action against the Federal Republic of Germany on the ground of immunity. The latter was a final order, was appealed directly to this court, and the appeal was dismissed on February 12, 2001, with reasons reported at 2001 23999 (ON CA), 52 O.R. (3d) 577. The Supreme Court of Canada granted leave to appeal on September 13, 2001, [2001] S.C.C.A. No. 201. The order staying the action against the Attorney General was an interlocutory order, leave to appeal to the Divisional Court was granted by Lang J., and the appeal was transferred to this court by order of Catzman J.A. pursuant to s. 6(2) and (3) of the Courts of Justice Act, R.S.O. 1990, c. C.43. By the time the two appeals had been brought together, the first had been listed for hearing and time was not available to hear them at the same time.

[2] The action itself arises out of the arrest and detention of the appellant at the request of Germany for extradition to face "investigative proceedings" concerning alleged tax evasion. Following his release on bail, the appellant commenced this action claiming damages for negligence and abuse of power grounded on the allegation that the extradition agreement between Canada and Germany does not contemplate extradition for investigative purposes, nor for income tax offences. After the appellant's arrest, the grounds for extradition were broadened to include bribery and aiding and abetting fraud and breach of trust.

[3] The Crown moved for a stay of the action pending the extradition proceedings. The grounds cited in the notice of motion were that the same facts and law would be considered in each proceeding, that if there is an extradition the claim for damages will have little merit, and that multiplicity of proceedings and inconsistent findings can be avoided if a stay is granted.

[4] I observe at the outset that if those grounds are sufficient to stay a civil proceeding then all such proceedings would be stayed wherever there is an overlap with criminal proceedings. Yet the case authorities are clear that the threshold test for granting a stay is a high one, requiring the demonstration of extraordinary or exceptional circumstances. In Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1, this court stated at p. 7:

Several reported cases have suggested that the rationale underlying a stay of civil action pending the conclusion of a related criminal prosecution is the protection of the accused's right to a fair trial: see, for example, Seaway Trust Co. v. Kilderkin Investments Ltd. (1986), 1986 2580 (ON SC), 55 O.R. (2d) 545, 29 D.L.R. (4th) 456 (H.C.J.); Belanger v. Caughell (1995), 1995 7178 (ON SC), 22 O.R. (3d) 741 (Gen. Div.). In the present case, however, the party moving for the stay is the Crown, and the accused's rights are not at issue. The Crown must, then, show that other extraordinary or exceptional circumstances justify a stay.

The cases are clear that the threshold test to be met before a stay is granted is high. The mere fact that criminal proceedings are pending at the same time as civil proceedings is not sufficient ground for a stay of the latter: Stickney v. Trusz, supra. Even the potential disclosure through the civil proceedings of the nature of the accused's defence or of self-incriminating evidence is not necessarily exceptional: see Belanger v. Caughell, supra; Stickney v. Trusz, supra; Seaway Trust Co. v. Kilderkin Investments Ltd., supra. This high threshold test should not be relaxed merely because it is the Crown that requests the stay. An applicant, whether it is the Crown or the accused, must meet the same burden of proving extraordinary or exceptional circumstances. The test is not on a balance of convenience for the Crown and something higher for the accused. To the extent that the motions court judge held that it is, he erred.

[5] The reasons of Nordheimer J. are found at 2000 22376 (ON SC), 48 O.R. (3d) 521. It appears that he was strongly influenced by the words of Zuber J. in Stickney v. Trusz (1973), 1973 423 (ON SC), 2 O.R. (2d) 469, 45 D.L.R. (3d) 275 (H.C.J.). Nordheimer J. states at pp. 534-35 O.R. (emphasis is that of Nordheimer J.):

Returning to the considerations of whether a stay should be granted, I was referred to four cases in addition to Nash. The first in time is Stickney v. Trusz (1973), 1973 423 (ON SC), 2 O.R. (2d) 469, 45 D.L.R. (3d) 275 (H.C.J.), affirmed (1974), 1974 1379 (ON SCDC), 3 O.R. (2d) 538, 46 D.L.R. (3d) 80 (Div. Ct.), affirmed (1974) 3 O.R. (2d) 539, 46 D.L.R. (3d) 80 at 82 (C.A.), leave to appeal refused [1974] S.C.R. xii. This case provides the modern source of the "exceptional or extraordinary" requirement for a stay although the genesis of that language appears to go as far back as 1921. However, a review of the decision of Zuber J. in the first instance in Stickney suggests to me that the use of this language was not intended to set as high a barrier to the granting of a stay as might initially appear from the language itself. Mr. Justice Zuber referred to the argument before him as to whether the use of the words "exceptional or extraordinary" created a high hurdle as being "more apparent than real". He went on to say, at p. 471:

Since there is now no general rule that civil cases must be stayed because of criminal charges arising out of the same facts, and since the matter is now within the discretion of the Court, it is obvious that it is incumbent upon the applicant to show some reason why the discretion should be exercised. In that sense he must demonstrate that his case is an exception or a case other than ordinary.

Mr. Justice Zuber then identified the dilemma in applying the test for a stay that I must say I was left with after first reading the Court of Appeal's decision in Nash. That dilemma is, as Zuber J. said, again at p. 471:

Most of the cases that deal with the question of the exercise of discretion in exceptional cases say little or nothing about the principles upon which the discretion should be based.

[6] And then, after reviewing the authorities, Nordheimer J. states at p. 537 O.R.:

Having reviewed all of the above authorities, I do not find that any solution has emerged to the dilemma, of which Zuber J. spoke more than 25 years ago, regarding the principles upon which the discretion to stay should be based. Adopting the words of Zuber J. from Strickney, and turning back to the case that is before me, the question becomes: Is there some reason that this action should be stayed in the sense that it is an exception or other than ordinary?

[7] The motions judge then sets down four reasons supporting a stay. I will deal with these in order.

[8] His first ground is that there will be no prejudice to the appellant if a stay is granted. In my view this is looking through the wrong end of the telescope. An applicant for a discretionary remedy must justify the request and could reasonably be expected to show prejudice if the order sought is refused: that is generally why the order is sought. It was the failure of the applicant to show prejudice that led Zuber J. in Stickney to refuse a stay. Here, the Crown alleges no prejudice to it if the stay is refused and the motions judge relied on there being no prejudice to the appellant if one is granted. It is the applicant who must show the exceptional circumstances and they cannot be said to be more exceptional than other factors indicate because the respondent to the motion will not be prejudiced. Moreover, there is an element of prejudice in any stay order in that the plaintiff is denied early access to the civil justice that is sought and, if it is later sought to remove the stay, the onus will be upon the plaintiff.

[9] Justice Nordheimer's second ground was that the plaintiff could attain the vindication he seeks as well in the extradition proceeding as in the civil proceeding. This assumes that the plaintiff is only interested in vindication and not interested in the damage claim of $1 million. Further, the extradition hearing is now based on much broader grounds than when the appellant was arrested. It is entirely possible that those proceedings will be resolved on the basis of the newer allegations and that the tax investigations that led to the warrant will become redundant.

[10] The third ground on which the motions judge relied was the danger of inconsistent findings, and the fourth was the likelihood that the determination of the extradition proceedings will have a significant impact upon the civil proceeding, either negating or supporting it.

[11] My observations upon ground two apply equally to these. Whether or not there is vindication or resolution of issues in the extradition proceeding and whether or not inconsistent findings are avoided, these are common features to some degree whenever criminal and civil proceedings overlap and proceed in tandem. As pointed out in Nash, supra, even when the accused person seeks to stay civil proceedings because of exposure to discovery on the same issues, the stay may be refused. One stay was left standing in Nash, but that concerned an action which was the complete reciprocal of the criminal prosecution and was commenced with the appearance of intent to interfere with the criminal process. There is no suggestion of improper motive in the present case.

[12] For these reasons, I conclude that the motions judge erred in principle in his application of the test for issuing a stay. There was, in my opinion, no basis for finding the exceptional circumstances which would justify a stay. The appeal should be allowed with costs to the appellant here, on the motion to transfer, on the leave motion, and on the motion itself.

[13] The stay should be set aside and the motion for the stay dismissed.

[14] MACPHERSON J.A. (dissenting): -- I have had the advantage of reading the draft reasons prepared by my colleague, Carthy J.A. With respect, I do not agree with my colleague's analysis or proposed disposition of the appeal. Because my colleague has set out the relevant factual background and the applicable legal test as enunciated in the case law, I can state my reasons for disagreement in brief fashion.

[15] The Crown's motion for a stay of the civil proceeding initiated by Mr. Schreiber was brought pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43, which provides:

106. A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[16] The granting of a stay in proceedings is an interlocutory order and is "essentially one to be made in the exercise of judicial discretion": see Stickney v. Trusz (1974), 1974 1379 (ON SCDC), 3 O.R. (2d) 538 (C.A.) at p. 540, per Schroeder J.A.

[17] An appellant seeking to overturn a motions judge's exercise of discretion faces a very high hurdle. In Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 110 (SCC), [1992] 1 S.C.R. 3 at pp. 76-77, 88 D.L.R. (4th) 1, La Forest J. considered the "principles governing appellate review of a lower court's exercise of discretion" and expressly adopted this analysis from Viscount Simon L.C.'s speech in Charles Osenton & Co. v. Johnston, [1942] A.C. 130 at p. 138:

The law as to the reversal by a court of appeal of an order made by the judge below in the exercise of his discretion is well-established, and any difficulty that arises is due only to the application of well-settled principles in an individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion, had it attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight, or no sufficient weight, has been given to relevant considerations such as those urged before us by the appellant, then the reversal of the order on appeal may be justified.

(Emphasis added)

See also: Reza v. Canada, 1994 91 (SCC), [1994] 2 S.C.R. 394 at p. 404, 116 D.L.R. (4th) 61.

[18] The question in this appeal, then, is whether the motions judge, Nordheimer J., gave "no weight, or no sufficient weight" to relevant considerations.

[19] The motions judge applied the test for granting a stay of proceedings in the face of existing criminal proceedings enunciated by this court in Nash v. Ontario, supra, at p. 6 O.R. ("Nash"), namely that the applicant must demonstrate that the case "is an extraordinary or an exceptional one" justifying a stay.

[20] The appellant contends that although the motions judge purported to rely on Nash, he misapplied it in several respects. The appellant summarizes his argument relating to the alleged misapplication of the Nash test in para. 12 of his factum:

(a) he asked himself whether "it is just and convenient that a stay should be granted" -- a much lower test than "extraordinary or exceptional circumstances", as set out in Nash;

(b) he applied a "considerable overlap in issues" test -- a much lower test than the "extraordinary or exceptional circumstances" test in Nash;

(c) he took into account the "prospect of inconsistent findings" which, again, is not part of the Nash test;

(d) he erred in requiring Mr. Schreiber to show that a stay of the action would not prejudice him rather than requiring Canada (the party seeking the stay) to show prejudice, contrary to Nash.

[21] With respect, I think that the appellant's submission on this issue confuses the test for granting a stay and factors which may be relevant in applying the test. The words "extraordinary and exceptional circumstances" in Nash are not self-defining. In every case, it will be necessary for a judge seeking to apply this test, which I would describe as a highly general test, to identify and consider a variety of factors. That is precisely what the motions judge did in this case.

[22] The real question is whether the motions judge failed to consider relevant factors or gave "no weight, or no sufficient weight" to relevant factors. In my view, he did not.

[23] In his reasons, the motions judge identified four factors which suggested to him that a stay of Mr. Schreiber's civil proceeding should be granted: (1) there would not be any serious or substantial prejudice to Mr. Schreiber if a stay were granted; (2) the vindication of Mr. Schreiber's rights could "to a substantial extent" be accomplished by a finding in his favour in the extradition proceeding; (3) there is a serious risk of inconsistent findings if the extradition hearing and the civil action move forward concurrently; and (4) it is "almost certain" that the determination of the extradition proceeding would have a significant impact on the civil action.

[24] With respect to the first factor, I do not agree with the appellant's submission that the motions judge erred by focusing on the prejudice to Mr. Schreiber of a potential stay of the civil proceeding. The reality is, as the motions judge indicated in his reasons, that the appellant argued precisely this point at the hearing of the motion. Accordingly, although it might have been preferable for the motions judge to apply a prejudice analysis explicitly to both parties, I do not fault him for dealing directly with an argument made forcefully by the appellant.

[25] On the merits, in my view, a decision by the motions judge not to grant the stay would have prejudiced both parties and, more fundamentally, would have brought the administration of justice into disrepute. I reach this conclusion because it arises, in my view, from a proper understanding of the special nature of proceedings under the Extradition Act, S.C. 1999, c. 18.

[26] An extradition proceeding is not a criminal trial. Moreover, an extradition hearing must proceed expeditiously. These two points have been articulated often by the Supreme Court of Canada. For example, in Re McVey, 1992 48 (SCC), [1992] 3 S.C.R. 475 at p. 528, 97 D.L.R. (4th) 193, La Forest J. stated:

[E]xtradition proceedings are not trials. They are intended to be expeditious procedures to determine whether a trial should be held.

In a similar vein, in United States of America v. Dynar, 1997 359 (SCC), [1997] 2 S.C.R. 462 at p. 514, 147 D.L.R. (4th) 399, Cory and Iacobucci JJ. said:

A judge hearing an application for extradition has an important role to fulfil. Yet it cannot be forgotten that the hearing is intended to be an expedited process, designed to keep expenses to a minimum and ensure prompt compliance with Canada's international obligations.

(Emphasis added)

[27] Germany requested the extradition of Mr. Schreiber on August 27, 1999. Mr. Schreiber was arrested in Toronto on August 31. He commenced his civil action on November 12. The Crown initiated its motion for a stay of the civil action on December 13. The motion was scheduled to be heard on February 24, 2000, but for reasons not apparent in the record it was heard by Nordheimer J. on May 12. By that date, more than eight months had passed since the initial extradition request. In my view, the passage of this much time without resolution of the extradition hearing begins to impinge on the Supreme Court of Canada's strictures regarding "expeditious procedures" and "ensur[ing] prompt compliance with Canada's international obligations".

[28] In my view, it is important for both parties to work diligently to comply with the objectives of the Extradition Act as enunciated by the Supreme Court of Canada. I am concerned that by May 12, 2000, the extradition hearing had not advanced very far. [See Note 1 at end of document] In my view, the requirement of "expeditious procedures" and the objective of "ensur[ing] prompt compliance with Canada's international obligations" meant that in May 2000, eight months after Germany's initial extradition request, Mr. Schreiber should either have been in Germany facing the serious charges that Germany had made against him, or he should have been a free man in Canada with all the rights his Canadian citizenship accords him, including the right to bring a civil action against the Attorney General of Canada.

[29] Accordingly, on May 12, 2000, when the motion for a stay of the civil proceeding was heard, in my view a refusal to grant the stay would have flown in the face of the purposes of the Extradition Act, the legitimate expectations of foreign governments pursuant to important treaties with Canada, and clear and strong statements by the Supreme Court of Canada. Given the demonstrated length and asserted (by the appellant) complexity of the extradition proceeding, a parallel civil proceeding would inevitably have slowed down even more an extradition proceeding that appeared to be advancing at only a snail's pace. In my view, this would bring the administration of justice in an important and visible domain into disrepute. It would also prejudice both parties who are entitled to obtain resolution of the extradition matter in an expeditious fashion.

[30] With respect to the second factor, I agree with the motions judge's analysis. It is true that a victory in the extradition hearing would not provide Mr. Schreiber with the financial compensation he seeks in the civil proceeding. However, it is obvious that Mr. Schreiber's principal concern is that he not be extradited to Germany where he might face both a long criminal trial and, ultimately, a long period of imprisonment. Accordingly, if, as the appellant asserts, it is vindication he seeks, I think the motions judge was correct to find that vindication could be accomplished "to a substantial extent" in the extradition hearing. The secondary vindication of financial compensation can wait.

[31] Turning to the third factor, I can see no reason for disputing the motions judge's identification and application of the factor of the prospect of inconsistent findings. He cited Lamer J.'s observation in Duhamel v. R., 1984 126 (SCC), [1984] 2 S.C.R. 555 at p. 562, 14 D.L.R. (4th) 92 ("Duhamel"), that "having regard to the efficiency and reputation of the judicial system . . . the scandal of conflicting decisions be avoided".

[32] It may be true, as my colleague observes, that the risk of inconsistent findings is a common feature "to some degree whenever criminal and civil proceedings overlap and proceed in tandem". It may also be true that the risk might remain unrealized because, as the appellant asserts, "the good sense and judgment of the judges of the Superior Court of Justice involved could be, and, indeed, presumptively must be, trusted to avoid inconsistency" (Factum, para. 18). However, these observations are speculative. They are not sufficient, in my view, to support a conclusion that the motions judge erred when, relying on Duhamel, he identified the avoidance of inconsistent findings as a worthy objective that would be promoted by granting a stay in the civil proceeding.

[33] The fourth factor that the motions judge identified and applied was that the determination of the extradition proceeding would have a significant impact on the civil action. I agree with the motions judge's analysis on this point.

[34] The appellant is correct in saying that the extradition and civil proceedings "do not stand or fall together" (Factum, para. 16). It is possible that Mr. Schreiber could be extradited to Germany to face a criminal trial and win his civil action for damages in Canada. This is because Mr. Schreiber's civil action is focused on the documents and events relating to his initial arrest and detention in Canada. The initial extradition request from Germany and the arrest of Mr. Schreiber related to suspected income tax offences. Mr. Schreiber takes the position that offences in this category are not extraditable. Later, Germany expanded its extradition request to cover other criminal offences, including fraud, bribery and accepting a secret commission. Accordingly, if Mr. Schreiber were extradited to Germany only on the basis of the new offences, he might win his civil action in Ontario based on the initial arrest and detention relating to the tax offences.

[35] Conversely, it is also possible that Mr. Schreiber might not be extradited to Germany yet might lose his civil action. This could happen if the extradition judge decides that Mr. Schreiber should not be extradited, either for procedural (abuse of process) or substantive grounds, but the judge presiding at the civil action decides that the Crown did nothing wrong relating to the initial arrest and detention of Mr. Schreiber.

[36] However, in my view, these scenarios are speculative and, frankly, somewhat far-fetched. The reality is that if Mr. Schreiber is extradited to Germany to face a large number of serious criminal charges, there would be little chance of succeeding in a civil action in Ontario relating to the arrest and detention which commenced the extradition process. Equally, if Mr. Schreiber is not extradited, either because the substantive grounds for extradition are not established or because of an abuse of process on the part of the Crown, his chances of success in the civil action would soar. Accordingly, I think the motions judge was precisely right when he stated that it was "almost certain" that the determination of the extradition proceedings would have a significant impact on the civil action.

[37] Before concluding, I want to mention one other factor which, in my view, also supports the motions judge's decision -- namely, the qualified nature of the stay order imposed by the motions judge. Nordheimer J. did not impose the stay requested by the Crown, namely a stay until the final resolution of the extradition proceeding. Instead, he imposed a stay "until the extradition proceeding is determined in the first instance, or until further order of this court". Moreover, he also observed that if the extradition proceeding did not move forward expeditiously, then "that might also provide the basis for a motion to lift the stay". It seems to me that these are carefully tailored and appropriate qualifications on, and observations about, the stay the motions judge ordered. They indicate that the motions judge was alive to the wording of s. 106 of the Courts of Justice Act which permits a motions judge to stay a proceeding "on such terms as are considered just".

[38] In summary, if the appellant wants to proceed with his civil action, there are two routes open to him: (1) he can work co-operatively with the Crown to move the extradition hearing forward in an expeditious fashion in the knowledge that the resolution of the extradition issue will lay a good deal (perhaps all) of the foundation for the success or failure of the civil action, or (2) if the 27-month passage of time in the extradition process is the fault of the Crown, he can apply to have the stay lifted.

[39] The appellant chose a third route, namely seeking to have the motions judge's stay order overturned on appeal. I conclude that this third route is closed. The motions judge did not err. He applied the correct legal test and he identified relevant factors and did not give "no weight, or no sufficient weight" to those factors.

[40] I would dismiss the appeal.

[41] MORDEN J.A. (concurring): -- I have read the reasons of my colleagues Carthy J.A. and MacPherson J.A. I agree with Carthy J.A. and add the following.

[42] The order under appeal is, no doubt, made in the exercise of a discretion but, having regard to the "exceptional or extraordinary circumstances" test (about which I shall say something shortly) the scope for the exercise of the discretion is narrow.

[43] Under the governing case law the parties do not start even, as they do, for example, in many cases of motions for an interlocutory injunction where the balance of convenience will govern the decision. The parties start with a presumption against the granting of a stay. This has a direct bearing on the range and nature of the considerations that may properly be taken into account in the exercise of the discretion and, therefore, on the degree of deference that should be shown on appellate review. I shall deal with the considerations taken into account by the motions judge in this case, but shall first comment on the "exceptional and extraordinary circumstances" test.

[44] It appears that this test, as was noted indirectly by the motions judge, has its roots in a dictum of Duff J. in MacKenzie v. Palmer (1921), 1921 565 (SCC), 62 S.C.R. 517 at p. 520, 63 D.L.R. 362 in a discussion of the old "felonious tort rule" which Duff J., referring to Smith v. Selwyn, [1914] 3 K.B. 98, [1914-15] All E.R. Rep. 229, described:

where the facts constituting the foundation of a cause of action in themselves constitute a felony the right of action for tort is suspended until the plaintiff has prosecuted the defendant if the plaintiff is the person on whom the duty of prosecution falls; . . .

[45] For the reasons he gave, Duff J. expressed the view at p. 520 S.C.R. that "it is, at least, I think, exceedingly doubtful whether in this country any action ought to be stayed on such a ground", i.e., that the plaintiff had not prosecuted the defendant. On this point he concluded:

[t]hat is a question which does not strictly arise here because no application was made for a stay of the action and the rule, if not entirely obsolete, ought at least to operate only within the straitest limits allowed by precedent.

[46] I shall not trace the case law which resulted in "within the straitest limits allowed by precedent" becoming "in exceptional and extraordinary circumstances". I would note, however, that there appears to be no logical or practical connection between the proper interpretive approach in administering a rule, now obsolete, that a plaintiff first prosecute a defendant, and a rule relating to the exercise of a discretion to stay civil proceedings where there are concurrent civil and criminal proceedings. The policy of the first rule was to encourage prosecutions and to ensure the Crown's long obsolete right to forfeit a felon's chattels (Fleming, The Law of Torts, 9th ed. (Sydney: LBC Information Services, 1998) at p. 42). These policies have nothing to do with the current stay rule.

[47] It would appear that this point, or one like it, was raised before Zuber J. in Stickney v. Trusz (1973), 1973 423 (ON SC), 2 O.R. (2d) 469 (H.C.J.) but without effect on his decision in that case to apply the exceptional and extraordinary circumstances approach.

[48] Zuber J., however, did observe at p. 471 O.R. that "the difference in terminology is more apparent than real" and that the rationale underlying the cases was "that the right of the accused to a fair trial should not be prejudiced". This, no doubt, is the true principle that governs motions for a stay in cases where the moving party is the defendant/accused and it gives more concrete and logical guidance than "exceptional or extraordinary circumstances".

[49] In Nash v. Ontario (1995), 1995 2934 (ON CA), 27 O.R. (3d) 1 at p. 7 (C.A.), this court held that in cases where the accused is the plaintiff and the party moving for a stay is the Crown, the same approach should be followed. "An applicant, whether it is the Crown or the accused, must meet the same burden of proving extraordinary or exceptional circumstances." The court also stressed that it was "a high threshold test".

[50] When the Crown/defendant is the moving party, the applicable principle, of course, does not relate to prejudice to the fair trial of the accused/plaintiff but, by analogy to this, to prejudice to the Crown or to the administration of justice generally.

[51] What is the interest of a plaintiff facing a motion to stay his or her action? It is, clearly, timely access to the courts and this has been recognized as a fundamental right: British Columbia Government Employees' Union v. British Columbia (Attorney General), 1988 3 (SCC), [1988] 2 S.C.R. 214 at pp. 228-30, 53 D.L.R. (4th) 1, Gillis v. Eagleson (1995), 1995 7190 (ON SC), 23 O.R. (3d) 164, 37 C.P.C. (3d) 252 at p. 256 (Gen. Div.), and Straka v. Humber River Regional Hospital (2000), 2000 16979 (ON CA), 51 O.R. (3d) 1 at p. 23, 193 D.L.R. (4th) 680 (C.A.).

[52] Accordingly, when the Crown moves for a stay in a case such as the present, it must satisfy the threshold test of showing, on the facts, that the prejudice to it or to some aspect of the administration of justice clearly outweighs the fundamental right of the plaintiff to timely access to the courts.

[53] Turning to the present case, it appears to me that the considerations that the motions judge took into account did not have any significant connection to "exceptional or extraordinary circumstances" as Carthy J.A. has held, or to the competing prejudices I have referred to above. The motions judge, a few paragraphs before he dealt with his considerations, said in para. 35: "In the end result, [i]n my view, it is a question of whether, considering all of the facts in a given case, it is just and convenient that a stay should be granted." Even though later in his reasons he used the expression "exceptional and extraordinary circumstances", it seems to me that his analysis was more in accord with the standard of convenience. If this were the applicable test, I would be inclined to agree with him, but it is not.

[54] The motions judge addressed the possible issue of improper motivation for this action and very fairly observed, in favour of the plaintiff, that "[t]here is no evidence before me that raises even a hint of improper or ulterior motive regarding the commencement of this action." Accordingly, it cannot be said that the decision of this court in Falloncrest Financial Corp. v. Ontario, one of the Nash v. Ontario actions, to uphold a stay of a civil action commenced against the Crown is a precedent supporting the granting of a stay in this case, even if it could be said that this action is the reciprocal of the extradition proceedings.

[55] I do not exclude from my consideration the importance of expedition in extradition proceedings and prompt compliance with Canada's international obligations. Whether the civil proceeding results in any significant prejudice to Canada in connection with its extradition obligations is entirely a question of fact. The motions judge did not find any prejudice in this regard and, before us, it was not argued by the respondent that he erred in this regard. No submission was made that the civil proceeding prejudiced the progress of the extradition proceeding. It is reasonable to infer that, whatever delay there is in the extradition proceeding, the civil proceeding has not been a cause of it nor that it constitutes a threat to its future progress.

Appeal allowed.

Notes

Note 1: This can be gleaned from the fact that in the appellant's factum on this appeal, which was heard more than two years after Germany's initial request for extradition, the appellant states that the extradition proceeding is still at "an embryonic stage" and that the proceeding "could take years" (paras. 16 and 23).