Knowledge House accused fail in bid to derail fraud trial in Nova Scotia

Three men facing criminal charges in connection with the collapse of the Nova Scotia e-learning company Knowledge House Inc. have failed in a bid to derail their trial.

Bruce Clarke, Blois Colpitts and Daniel Potter accused the Crown of abuse of process for taking so long to bring the case against them to trial. The three are facing fraud charges in a trial that is scheduled to begin next month and run into 2016.

Shares in Knowledge House Publishing began publicly trading on the Montreal Stock Exchange in 1998 and on the Toronto Stock Exchange in 1999 after the company changed its name to Knowledge House Inc. Share prices soared from a few cents to more than $9 before the company collapsed in 2001.

The collapse has touched off a flurry of civil, criminal and financial investigations.

Clarke, Colpitts and Potter alleged that delays in going through the criminal case have hurt them personally and financially, and amount to abuse of process.

But in a ruling released Thursday, Nova Scotia Supreme Court Justice Kevin Coady disagreed.

Coady estimated it would be 59 months from the time the indictment was preferred — meaning there would be no preliminary inquiry and the case would go straight to a trial — until the end of the trial. While he said that is a long time, Coady also said it is not unreasonable given the complexity of the case.

The judge noted there have been delays, in part because the investigation and prosecution lacked sufficient resources to move the case forward more quickly.

"The difficulty surrounding obtaining Crown counsel clearly had a stunting effect on the pace of the investigation," Coady wrote.

"I am satisfied that many of the delays grew out of a lack of experienced, fully committed Crown lawyers. If an effective team had been in place, search and production orders would have occurred earlier. More resources would have produced earlier results."

All three men argued they have suffered great losses as a result of this case.

"I accept, without hesitation, that these defendants have suffered terribly as a result of the KHI proceedings," Coady noted in his decision.

"I cannot imagine what it must be like to live in a small community while facing regulatory, civil and criminal proceedings. Notwithstanding, I find that the defendants suffered much of their prejudice as a result of the drawn out, high profile civil and regulatory proceedings."