



COURT OF APPEAL
    FOR ONTARIO

CITATION: United States v. Fafalios, 2012 ONCA 365

DATE: 20120531

DOCKET: C52980

Doherty, Goudge and Epstein JJ.A.

BETWEEN

The
    Attorney General of Canada on
    behalf of The
    United States of America

Appellant

and

Marc Fafalios and George Fafalios

Respondents

Moiz Rahman and Monika K. Rahman, for the appellant

Richard H. Shekter, for the respondent George Fafalios

Heard: October 25, 2011

On appeal from the order of Justice Nancy Backhouse of
    the Superior Court of Justice dated November 26, 2010.

Epstein J.A.:

A.      INTRODUCTION

[1]

This case raises the issue of the options available to the Crown when
    confronted with an adverse interlocutory ruling in a criminal or quasi-criminal
    prosecution.

[2]

On September 19, 2007, the respondents, George and Marc Fafalios, were
    arrested and charged in Canada with fraud over $5000 in connection with an
    alleged scheme to defraud several large American corporations.

[3]

In connection with the arrests, Canadian police executed search warrants
    and seized evidence from the respondents. The police subsequently sent some of
    the seized evidence to American authorities.

[4]

On May 2, 2008, the fraud charges in Canada were withdrawn. On May 27, 2009,
    the U.S. sought the respondents extradition. As a result, Canadian authorities
    arrested them on January 5, 2010.

[5]

At the commencement of the extradition hearing, the respondents brought
    an application for disclosure of information relating to the conduct of the
    Canadian authorities in sending evidence to the U.S. authorities. The
    application was based on the respondents allegation that this sharing of
    information breached their
Charter

rights. In defence, the
    Crown argued that there was no air of reality to the
Charter
breach
    argument.

[6]

On April 1, 2010, the extradition judge granted the request for
    disclosure, holding that the respondents had established more than an air of
    reality to the
Charter
issues raised.

[7]

After the Crown partially complied with the April disclosure order, the
    respondents brought another application for production seeking full compliance
    with the first order and further disclosure. On November 23, 2010, the
    extradition judge made a second disclosure order that not only mandated full compliance
    with the April order but also granted the relief sought in the second
    application  relief that included obtaining evidence from a number of lawyers
    associated with the gathering and transmission of evidence to U.S. authorities.

[8]

On November 26, 2010, the Crown advised the extradition judge that it
    was not prepared to supply any more disclosure and invited the court to stay
    the proceedings or grant a discharge. The extradition judge chose to discharge
    the respondents.

[9]

In this Crown appeal from the discharge order, both parties have
    addressed the correctness of the two disclosure orders. However, the argument
    upon which the respondents primarily rely is that the Crowns conduct in
    refusing to comply with the orders, terminating the proceeding and then appealing
    the validity of the orders on the basis of arguments not raised before the
    extradition judge, constitutes an abuse of process. The respondents further
    contend that this appeal, if heard on the merits, would amount to a
    continuation of that abuse.

[10]

For the reasons that follow, I agree. I am therefore of the view that
    this court should exercise its inherent jurisdiction to protect its process and
    dismiss the appeal without considering the merits of the impugned orders.

B.      FACTUAL BACKGROUND

(1)

Preceding the commencement of the extradition proceedings  evidence is
    gathered and sent to the U.S.

[11]

In early 2007, Canadian and American police conducted a joint
    investigation seeking to identify the perpetrators of a scheme to defraud
    American companies. It was alleged that the offenders created email accounts in
    the names of actual executives at supplier companies. These false identities
    and accounts were used to redirect, for the benefit of the perpetrators,
    payments meant for the suppliers.

[12]

On May 31, 2007, the United States government sent a request to the
    Central Authority in Canada under the Mutual Legal Assistance Treaty between
    Canada and the United States
[1]
requesting assistance in obtaining telephone and internet records to help identify
    those involved in the fraudulent conduct. On July 4, 2007, Rivard J. granted an
    Order to Gather Evidence pursuant to the
Mutual Assistance in Criminal
    Matters Act
, R.S.C. 1985 c. 30 (4
th
Supp.) (MLACMA).

[13]

The perpetrators were identified as the respondents.

[14]

On September 19, 2007, the respondents were arrested and charged in
    Canada with fraud over $5000, possession of property obtained by crime and
    theft of telecommunications services. In conjunction with the arrests, Canadian
    police executed search warrants and seized evidence from the respondents.
    Detective Carmine Palermo of the Toronto Police Service Fraud Squad headed the
    investigation.

[15]

The seized evidence included a laptop and a hard drive that contained
    evidence of an electronic trail connecting the respondents to the email addresses
    used for the purposes of the fraud.  Canadian police also gathered internet
    records from Rogers Cable, which connected specific Canadian locations to IP
    addresses used to log on to the same email accounts. These internet records
    were gathered pursuant to the July 4 evidence-gathering order.

[16]

On September 28, 2007, the U.S. authorities sent a supplementary treaty
    request to the Canadian authorities seeking additional information to assist in
    the investigation. In response, the International Assistance Group of the
    Department of Justice authorized the police to share copies of some of the
    requested material with the U.S. authorities.

[17]

In November and December 2007, Palermo shared forensic copies of the
    laptop and hard-drive with U.S. authorities pursuant to an informal
    information-sharing agreement. He also mistakenly shared the telephone and
    internet records gathered pursuant to the July 4 order, and sent them without a
    proper Order to Send under the MLACMA. These records were returned by U.S.
    authorities on February 11, 2008, and properly re-sent pursuant to a Sending Order
    issued on March 27, 2008.

[18]

On May 2, 2008, the Canadian charges were withdrawn. In exchange for
    having the charges withdrawn, the respondents consented to their computers and
    other electronic equipment being sent to the United States.

[19]

In response to a request by the U.S. for extradition of the respondents,
    the Minister of Justice issued an Authority to Proceed on June 1, 2009,
    pursuant to s. 15 of the
Extradition Act
, S.C. 1999, c. 18,
    authorizing the Attorney General of Canada to seek an order for the committal
    of the respondents for the equivalent Canadian offences of attempted fraud and
    personation.

[20]

The Record of the Case for Prosecution submitted by the United States
    Department of Justice includes evidence gathered in Canada in support of the
    extradition request.

(2)

The Extradition Proceedings

[21]

From the outset of the extradition proceedings, the respondents alleged
    that their
Charter

rights had been breached by the manner in
    which the Canadian authorities sent the Canadian-gathered information to the
    U.S. authorities. In contemplation of a
Charter

application to
    exclude this evidence from the extradition proceedings, the respondents brought
    an application on March 17, 2010, for disclosure of all materials relevant to
    the gathering and transmitting of evidence to the U.S.

[22]

On March 17, 2010, the first application for disclosure was argued
    before the extradition judge. The respondents asked for extensive disclosure
    including an order that they be entitled to cross-examine Palermo before the
    extradition judge. Appended to the respondents factum was a detailed list of 41
    categories of items requested along with an outline of the evidence the
    respondents wished to obtain from Palermo. Rather than address the individual
    items on the list, the Crown defended the application solely on the basis that
    there was no air of reality to the allegations of a
Charter
breach. The
    Crown did not raise any issue of privilege or any other specific objection.

[23]

When the parties returned before the extradition judge on April 1, 2010,
    the extradition judge granted all of the relief requested, holding that the respondents
    had established more than an air of reality to the
Charter
issues
    raised. The Crowns response to being advised of the ruling was to broach additional
    arguments in defence of the application, arguments pertaining to privilege and
    third party records. The extradition judge expressed concern that those points should
    have been raised when the matter was argued in March but agreed to hear them at
    the next attendance.

[24]

In the meantime, the Crown provided some of the disclosure that was
    subject to the April 1 order under cover of a letter dated June 14. Significantly,
    in that letter the Crown advised that it was waiving litigation privilege in
    respect to the disclosure provided:

A significant portion of the attached disclosure includes
    material that is protected by litigation privilege. However, in the unusual
    circumstances of the case, and in order to move this matter forward as
    expeditiously as possible, both the Attorney General of Canada and the Attorney
    General of Ontario are prepared to waive the privilege in respect of the
    attached material..... The only outstanding piece of disclosure that remains to
    be disclosed is Detective Palermos notes.

[25]

This position was confirmed by Crown counsel in open court on June 21,
    when he advised the extradition judge:

In keeping with the spirit of Your Honours order and to move
    this forward, the Attorney General of Canada and the Attorney General of
    Ontario, included documents that are otherwise protected by litigation
    privilege and have included what you had read in the package. So, the package
    that has been provided is the fulsome package..... [Subject to Palermos notes
    and some photocopying errors] we have now provided all documents responsive to
    that order.

[26]

At the next attendance before the extradition judge on August 17, counsel
    for the respondents expressed dissatisfaction with the Crowns compliance with the
    disclosure order. Crown counsel responded by arguing that, while litigation
    privilege had been waived, solicitor-client privilege had not. The thrust of
    his argument was that the Crown had, in fact, produced information in
    accordance with the spirit of the April 1 order. He added however that if the
    court intended everything on the list to be produced thats a different matter.

[27]

The extradition judge instructed the Crown to produce everything on the
    initial list that had not yet been produced. The Crown undertook to do so.

[28]

By letter dated September 13, 2010, the Crown made further disclosure,
    including communications between Palermo and the Crown Law Office-Criminal. Crown
    counsel described these communications as privileged but advised that they were
    being produced, again citing the unique and particular circumstances of this
    case.

[29]

At the next court appearance, on September 30, 2010, Crown counsel took
    the position that the April 1 order had been fully complied with.  Counsel for
    the respondents disagreed but advised that he would deal with the deficiencies in
    the course of a second disclosure application.

[30]

The respondents brought their second disclosure application on November
    19. They submitted that nine of the 41 categories of items that were ordered
    produced in the first order remained outstanding and sought reinforcement of the
    Crowns obligations under that order. The respondents also requested affidavit
    evidence from six lawyers from the Toronto Police Service, the Ontario Ministry
    of the Attorney General, and the Department of Justice who had been involved in
    the extradition process, and the opportunity to cross-examine the lawyers on
    their affidavits. Once again, the Crown resisted the application only on a
    general basis  arguing that the respondents
Charter
application was
    without merit and that the disclosure requests were nothing more than fishing
    expeditions.

[31]

The issue of privilege was addressed in the Crowns factum only to this
    extent:

The [respondents] raise the question of whether privilege has
    been waived. With respect, that is not the issue. The relevant inquiry is
    whether the [respondents] abuse of process allegation has any basis whatsoever
    that could possibly support such a request. It does not.

In other words, the Crown
    mentioned privilege only to dismiss it as irrelevant.

[32]

On November 23, 2010, the extradition judge granted the relief sought in
    the second disclosure application.

[33]

What followed was a brief appearance on November 26, 2010, during which Crown
    counsel simply advised the extradition judge that he was not prepared to provide
    any additional disclosure. Crown counsel then invited the extradition judge to order
    that the respondents be discharged or to enter a stay of the proceedings. He provided
    no notice of his intention to take this step. He provided no explanation for refusing
    to provide further disclosure and requesting that the proceedings be
    terminated.

[34]

The extradition judge discharged the respondents. She also indicated
    that she was prepared to make an order staying the proceedings as an abuse of
    process.

[35]

It is not disputed that at the conclusion of the hearing on November 26,
    2010, the Crown had in hand two notices of appeal  one in the event that a
    stay was imposed and the other available if the court granted a discharge. The
    latter notice of appeal, dated November 26, 2010, was served and filed with
    this court that day.

C.      The
    issues


[36]

As I have indicated, the Crowns steadfast and only position throughout
    the dispute over the respondents requests for disclosure was lack of relevance
    - that the respondents application for exclusion of evidence, based on a
    breach of their
Charter
rights arising out of the way in which
    Canadian police shared information with U.S. authorities, was doomed to fail.

[37]

According to the Crown, the extradition judges error stemmed from an
    incorrect approach to the
Charter
analysis in two respects. First, she
    incorrectly placed an onus on the Crown to prove that the evidence in issue was
    dealt with by Canadian authorities in a
Charter
-compliant fashion
    rather than requiring the respondents to demonstrate a
Charter
breach.
    Second, the legal assertion underlying the
Charter
claim, that prior
    judicial authorization was necessary to share information, was incorrect.

[38]

Before this court the Crown argues that the orders were wrong in law for
    the same reason as the one consistently advanced before the extradition judge 
    the information and documentation requested was not relevant to the extradition
    proceeding as there is no air of reality to the
Charter
argument. 
    Crown counsel also raises two additional arguments against disclosure not advanced
    below  that compliance with the orders would violate privilege and harm
    international relations.

[39]

For reasons that I will explain, the focus of this appeal is not the
    correctness of the interlocutory orders but rather whether the conduct of the
    Crown in response to the orders amounts to an abuse of process.  In my view, it
    does.

(1)

The Applicable
    Legal Principles

[40]

The foundation of the respondents abuse of process argument is that
    parties to an extradition proceeding have a right of appeal only from a final
    order that brings the matter to an end.  Orders made during the proceeding,
    like interlocutory orders in criminal matters generally, are not the subject of
    an immediate right of appeal.  Those orders can be challenged on appeal only
    after the proceedings are complete and a final order is made.

[41]

The policy reasons underlying the bar against interlocutory appeals
    include the promotion of efficiency and protecting the system and those
    involved in it from the disadvantages associated with fragmentation:
R. v.
    Johnson
(1991), 3 O.R. (3d) 49 (C.A.). In my view, these concerns are
    especially relevant in the extradition process, which is, by design, an
    expedited process that is less complex and extensive than a criminal trial:
United
    States of America v. Dynar
, [1997] 2 S.C.R. 462, at paras. 122, 131.

[42]

While the prosecution has no immediate right of appeal when faced with
    an interlocutory ruling to which it takes serious objection, the Crown is not
    without a remedy. It has two options. It can continue with the proceeding and,
    depending on the result and the effect of the ruling on that result, launch an
    appeal in which the adverse ruling is challenged. Or it can do what the Crown
    did here; it can bring the proceedings to a halt and launch an appeal
    challenging the correctness of the interlocutory order.

[43]

However, this second option is strictly limited to cases where the Crown
    can clearly demonstrate that it had no reasonable alternative. If the record
    does not support such a finding, allowing the Crown to argue its appeal from
    the interlocutory order would amount to an abuse of process.

[44]

A review of the authorities reveals that two types of circumstances have
    been recognized as putting the Crown in the position where there is no
    reasonable alternative other than to pursue what may be called a functional appeal
    of an interlocutory order. These two circumstances broadly can be identified as
    where the record demonstrates: a) that the effect of the interlocutory ruling
    is to exclude evidence sufficiently important to the prosecution that the Crown
    is unable to continue; or b) that compliance with the interlocutory order
    raises a reasonable prospect of harm to an interest the court deems worthy of
    protection.

[45]

It follows that, except where the Crown can demonstrate that it really
    had no other reasonable option, it will generally be considered an abuse for
    the Crown to appeal from an order that it agreed to, much less one that it
    invited the court to make.

(a)

When the Trial Judge has Excluded Evidence upon which the Prosecution
    Depends

[46]

The most common situation in which the prosecution is allowed
    effectively to bring an appeal from an interlocutory order occurs where a judge
    has made a ruling during the proceedings that, for all practical purposes,
    decides the case against the Crown.  An example is where the judge makes an
    interlocutory order the effect of which is to exclude evidence critical to the
    prosecution such as in
R. v. Banas and Haverkamp
(1982), 36 O.R. (2d)
    164 (C.A.), where the trial judge excluded intercepted private communications
    upon which the Crowns case depended. The Crown declined to call any further
    evidence and agreed that a directed verdict of acquittal was appropriate.
    Martin J.A. held, at p. 169, that the Crown could appeal, as continuing with
    the trial in the light of the order would have been fruitless.  See also
R.
    v. Whittle
(1992), 59 O.A.C. 218 (C.A.),
R. v. Wilcox
, 2001 NSCA
    45, 192 N.S.R. (2d) 159,
R. v. Bailey
(1983), 4 C.C.C. (3d) 21 (Ont. C.A),
R. v. Brown
, [1987] O.J. No. 65 (C.A.).

[47]

R. v. Power
, [1994] 1 S.C.R. 601, was
a case of this type.
There, the accused
    was charged with impaired driving causing death and two counts of impaired
    driving causing bodily harm. The Crown elected not to continue with the
    prosecution following the trial judges ruling excluding breathalyzer evidence.
    The court held that there was no abuse of process as [t]here is not one iota
    of evidence that the Crown prosecutors conduct was prompted by bad faith or an
    improper motive...nor did the prosecution intend to frustrate the
    administration of justice or even to circumvent the rules of criminal law
    regarding interlocutory appeals (at p. 616). This holding was informed by the
    fact that the excluded evidence was, in fact, crucial to the Crowns case (at p.
    631).

[48]

In such a situation, the prosecution will not be obliged to waste time
    and resources completing a proceeding where the result is inevitable.  Instead,
    the more prudent course of action is for the Crown to explain to the court how
    the ruling has had the effect of determining the matter and invite the court to
    enter a final order so that the prosecution can challenge the exclusion of
    evidence on appeal.

(b)

When Compliance Would Potentially Cause Harm

[49]

The common thread in this second category of cases is evidence demonstrating
    that compliance with an interlocutory order raises a reasonable prospect of
    harm to a legally recognized interest worthy of protection. Such interests
    include disclosure of the identity of a confidential informant or violation of
    privilege.

[50]

This category may also involve situations in which the Crown can
    demonstrate that compliance with the interlocutory order would cause
    irreparable harm to the administration of justice such as situations where the
    prosecution can make the case that compliance with the interlocutory order
    would require an inordinate expenditure of prosecutorial and judicial resources.

[51]

In
R. v. Chiarantano
, [1989] O.J. No. 2950 (Dist. Ct.), the
    trial judge ordered the Crown to disclose the identity of a police informant.
    The Crown refused to do so and the trial judge entered a stay. This court
    considered the merits of the disclosure order and allowed the appeal, ordering
    a new trial: [1990] O.J. No. 2603 (C.A.). A further appeal to the Supreme Court
    was dismissed: [1991] 1 S.C.R. 906.

[52]

In
R. v. Creswell
, 2000 BCCA 583, 146 C.C.C. (3d) 286, the
    British Columbia Court of Appeal considered an appeal on its merits from the
    Crowns refusal to comply with a disclosure order. In that case, the trial
    judge ordered the production of legal opinions relied on by the police in the
    course of an undercover operation. The Crown raised privilege, but the trial
    judge held that it had been waived. The Crown refused to disclose the legal
    opinions and invited a stay. The Court of Appeal agreed to review the
    legitimacy of the order, at paras. 11-12:

Once the trial judge made her ruling that the legal opinions
    had to be disclosed, the Crown had a choice. It could either release the
    opinions or discontinue its case against the respondent... In my view, the
    actions of the Crown do not demonstrate contempt for the court but a practical
    resolution of the problem which arose. If the issue of privilege was to be
    tested in this Court there was no other way for the Crown to proceed.

[53]

The court in
Creswell
identified
Chiarantano
as a case
    where necessity dictated the Crowns course of action, and as such, did not
    amount to an abuse of process.

[54]

R. v. Cassidy
(2004), 69 O.R. (3d) 585 (C.A.), was a case in
    which the Crown failed to demonstrate harm to a protected interest. The trial
    judge ordered the Crown to provide two software programs used to extract child
    pornography from computers and the hard drives they were found on, and, if
    required, pay the costs of training someone to operate the program. The Crown
    refused to comply and consented to a stay. On appeal, the Crown submitted that
    its position as argued at trial was wrong, but on other grounds maintained that
    the disclosure order went too far. This court drew an analogy between the
Banas
and the
Power
type of cases and the circumstances in
Cassidy
.
    The court concluded that
Cassidy

was a case in which the Crown
    proceeded directly to appeal when it had a reasonable alternative; namely, an
    order pertaining to the computer equipment and search program that the Crown,
    on appeal, ultimately agreed would have been appropriate. As a result, this
    court held that Mr. Cassidy was exposed to a potentially unnecessary appeal,
    and it would be an unfair and abusive exercise of prosecutorial discretion to
    allow the Crown to force [him] to a new trial (at paras. 22-23).

(c)     Conclusion regarding when the Crown can
    effectively appeal an Interlocutory Order

[55]

When the Crown requests a premature termination of a proceeding after an
    adverse interlocutory ruling, it must establish the existence of circumstances
    where a direct appeal of the ruling is absolutely necessary  where there is no
    reasonable alternative.  The onus on the Crown is formidable due to the
    exceptional nature of a procedure that essentially circumvents the rule against
    a direct appeal from an interlocutory order.

[56]

Before applying these principles to this case, I will comment briefly on
    the Crowns argument that the principle I have just set out is not inviolate
    and that this court should review the merits of the two orders that it submits
    are wrong in law.

[57]

In trying to make this argument, the Crown relies on the decisions in
Creswell
,
Cassidy
,
United States of America v. Tang
(2002), 66 W.C.B.
    (2d) 30 (Ont. S.C.), revd
United States of America v. Chan
(2003), 59
    W.C.B. (2d) 568 (Ont. C.A.), and
R. v. Fitch
, 2006

SKCA 80,
    [2006] 10 W.W.R. 1.

[58]

In my view, these cases do not assist the Crown.

[59]

As discussed above, in
Creswell
, the Crown clearly had no
    reasonable alternative as the disclosure of potentially privileged information
    was at stake. In
Cassidy
,
this court did comment on the merits
    of the disclosure order below but, relying on abuse of process, upheld the
    stay.

[60]

Tang
is a different case than the one at bar.  There, the
    extradition judge ordered the U.S. to produce further information elaborating
    on the record submitted in the extradition hearing. The U.S. refused and the
    extradition judge granted a stay. The Court of Appeal allowed the appeal
    holding that if the extradition judge was of the opinion that there was
    insufficient evidence to satisfy the test for committal, the proper remedy was
    a discharge, rather than a disclosure order.  The merits of the appeal were
    considered only because the extradition judge had no basis to make the order in
    the first place. Here, the jurisdiction to make a disclosure order is
    unquestioned. It is the correctness of the order that is attacked.

[61]

This takes me to the decision of the Saskatchewan Court of Appeal in
Fitch
,
    where, in aid of the accuseds
Charter
application, the trial judge
    ordered the disclosure of a police officers history of stopping and searching
    vehicles. The Crown refused to comply but indicated that it was prepared to
    continue with the trial. It also invited the court to stay the charges if the
    trial judge concluded that the information in issue was necessary for a fair
    trial. The accused then applied for and was granted a stay of proceedings. The
    Crown appealed the stay by arguing the disclosure order was in error. The Court
    of Appeal fully considered the merits of the underlying order and, concluding
    that it was in error, allowed the appeal and set aside the stay.

[62]

To the extent that
Fitch
appears to permit a review of
    interlocutory orders in circumstances such as this, I am respectfully of the
    view that its reasoning is inconsistent with the preponderance of authority,
    including from the Supreme Court.

[63]

It follows, therefore, that the legal merits the Crown raised in its
    factum have no relevance unless the case can be made that the proposed appeal
    falls within that narrow band of cases in which what are in effect appeals from
    interlocutory orders are properly taken by the prosecution.

[64]

It is this issue to which I now turn.

D.      PRINCIPLES
    APPLIED TO THIS CASE

[65]

Crown counsel attempted to tease out an argument that it must be able to
    advance in order to persuade this court to review the merits of the impugned
    interlocutory orders  that compliance with the orders would have put it in an
    impossible position. The Crown now takes the position that compliance would have
    harmed two important interests: the protection of privileged communications and
    the protection of international relations.

[66]

On this record I am of the view that the no reasonable alternative
    argument is not available to the Crown.

[67]

First, as previously noted, neither breach of privilege nor concern
    about harm to international relations was relied upon by the Crown in its
    attempts to resist the respondents requests for the two disclosure orders.

[68]

Notwithstanding that the extradition judge allowed the Crown to raise
    the issue even after the first order was made, the record demonstrates that the
    Crowns position concerning privilege was neither clear nor pressed on a
    consistent basis.

[69]

The Crown specifically waived litigation privilege over the disclosure it
    provided on June 14, 2010.  Then, in court on June 21, 2010, the Crown did not
    mention privilege.  It took the position that it had fully complied with the
    first disclosure order, with the exception of Palermos notes and a few
    photocopying errors.

[70]

The Crown raised solicitor-client privilege for the first time on August
    17, 2010, when it advised the court that it had waived litigation privilege
    over certain documents, but had not waived solicitor-client privilege generally.
    On September 13, 2010, the Crown provided further disclosure, including
    correspondence between Palermo and legal counsel, indicating that it was
    prepared to produce the documents in the unique and particular circumstances
    of this case.  Again, there was no further mention of privilege.  As noted
    above, the Crowns factum on the second disclosure motion mentioned privilege
    only to the extent of dismissing it as a relevant issue.

[71]

The concern that compliance would harm international relations is made
    for the first time before this court.

[72]

Not surprisingly, given the fact that the two issues the Crown now
    raises in support of its argument that it had no reasonable alternative but to fold
    its tent and appeal were not argued in the court below, the Crown faces
    another insurmountable problem  there is nothing in the record to support
    either concern.

[73]

I have reviewed in detail the privilege issue.  The claim about possible
    harm to international relations is a bald assertion that the Crown now makes. Nothing
    more.

[74]

Finally, it is of significance, in my view, that the Crown made no
    attempt before the extradition judge to explain either decision  to provide no
    further disclosure and to invite the termination of the proceedings.

[75]

Crown counsel also submits that compliance with the disclosure orders
    would let the genie out of the bottle in the sense that the information would
    be irretrievably disclosed. Put another way, any appeal would have been
    rendered moot. I find no merit in this argument. If the Crown made the
    disclosure as ordered, the
Charter
application was successful and the
    respondents were discharged for reasons relating to the Crowns inability to
    rely on the excluded evidence, the Crown would have every right to appeal and
    argue that the disclosure orders were improper. Furthermore, this argument
    could be said to apply to virtually all disclosure orders. If accepted, it
    would essentially create a right of appeal from an interlocutory order where
    the rules do not allow one.

[76]

All of this together with the fact that Crown counsel came before the
    extradition judge on the last day of the proceedings with two notices of appeal
    in hand  one drafted if a stay had been ordered and one drafted in the event
    of a discharge  seems somewhat highhanded and disrespectful.  In my view, it
    attracts a finding that the Crowns refusal to continue with the extradition
    proceeding was for the sole purpose of obtaining an interlocutory appeal on an
    adverse ruling as described in
Power
, at p. 619, and therefore constitutes
    an unfair and abusive exercise of the prosecutorial discretion.

E.      CONCLUSION


[77]

A fair summary of the Crowns conduct is as follows. It refused to
    comply with the interlocutory disclosure orders and, without notice or explanation,
    the Crown folded its tent and invited the extradition judge to terminate the
    proceeding either through a stay or discharge. The Crown made no effort before
    the extradition judge to bring this situation within the exceptions; namely that
    compliance would cause harm to an interest deserving of court protection. The
    Crowns efforts now to justify its actions are not persuasive.

[78]

Given the narrow issues raised in the extradition context, the Crown may
    have had good reason to be concerned about the nature, extent and even the
    legality of the first disclosure order, concerns that may well have been
    exacerbated by the second order, particularly given that it required testimony
    by Crown lawyers.  However, these concerns did not justify the route it chose
    to take.  It had alternatives.  Since the Crown only objected to the
    correctness of the disclosure orders, it was required to comply with them. If
    the respondents were later discharged for reasons relating to the orders, the
    Crown could have challenged their correctness on appeal. If, however, the Crown
    had objected to the orders on the basis of privilege or harm to international
    relations, and had supported this objection with evidence, it could have
    refused to comply and appealed to this court. It did neither. Instead, without
    explanation, the Crown invited the extradition judge to end the proceedings.

[79]

This constitutes an unfair exercise of prosecutorial discretion and
    amounts to an abuse of process  an abuse that this court should not
    countenance by examining the merits of the impugned order.

[80]

The unsatisfactory nature of this disposition is palpable.     The
    charges are serious.   The

Crown

withdrew

fraud

charges

in

Canada

to

facilitate the extradition of the respondents to the
    United States.  However, the responsibility for the fact that there will now be
    no determination of the extradition request on its merits lies with the Crown. 
    It chose to bring the proceedings to an end without explanation.  It then found
    itself in this court with a record that was devoid of evidence to justify the
    extraordinary procedure it chose to follow.

f.       disposition

[81]

It is on this basis that I would dismiss the appeal.

Released:

DD                                         Gloria
    Epstein J.A.

MAY 31 2012                          I
    agree Doherty J.A.

I
    agree S.T. Goudge J.A.





[1]

Treaty between the Government of Canada and the Government of the United
    States of America on Mutual Legal Assistance in Criminal Matters
, 18 March
    1985, Can. T.S. 1990 No. 19 (entered into force 24 January 1990).


