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CIVIL PROCEDURE - Disposition without trial - Stay of action - Another proceeding pending

Monday, November 09, 2020 @ 9:29 AM  

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Appeal by the Director from a stay of proceedings. Director commenced a civil forfeiture action against the defendants after cash totalling $213,670 was found in a vehicle by police during a traffic stop. The defendants, the occupants of the vehicle, were charged with drug offences as a result. The defendants denied that the property was the proceeds of unlawful activity or was otherwise subject to the Criminal Property Forfeiture Act. Before they were examined for discovery, two defendants brought a motion for a stay of proceedings, arguing that the civil proceeding should await the outcome of the criminal proceedings. The motion judge found several circumstances existed which, considered in totality, rendered the case exceptional. This included the fact that the Director had a different position than a civil litigant because he had a relationship with the Federal Criminal Prosecutions Office. Also, the Director suffered no prejudice because of the delay while the defendants might suffer because of the risk of incriminating derivative evidence that might be obtained in the civil case which could be used by the Crown handling the criminal matter. The Director argued the motion judge erred in finding that exceptional or extraordinary circumstances were present which justified staying the civil proceedings.

HELD: Appeal allowed. The motion judge erred in assuming that the Director’s office, the RCMP and the federal prosecution branch had such a close relationship that there was a danger of unauthorized information transfer without any evidence. The defendants’ position was entirely based on speculation and conjecture as to what might unfold. The reference to potential risks and the suggestion that there was a risk of information transfer was not supported by any actual evidence. To say that the Director sustained no personal loss since it was an agent of the state was to ignore the purpose of the Criminal Property Forfeiture Act. The test on a motion for a stay of this nature was not whether the plaintiff would be prejudiced if the action was stayed, but whether the defendant would be prejudiced if it was not. Given the high threshold for obtaining a stay of a civil proceeding when there was a concurrent criminal matter, a lack of prejudice on the part of the plaintiff alone could not fulfil the exceptional or extraordinary circumstances test which the defendants must meet. The nature of the remedy being sought by the defendants was entirely disproportionate to the theoretical concerns they were raising, as well as being premature. Civil and criminal actions were distinct proceedings. The court should not order a stay of proceedings as soon as there was the slightest risk that evidence would be revealed.

Director of Criminal Property and Forfeiture v. Gurniak, [2020] M.J. No. 221, Manitoba Court of Appeal, F.M. Steel, C.J. Mainella and J.A. Pfuetzner JJ.A., October 6, 2020. Digest No. TLD-November92020002