On November 9, 2015, Justice Penny of the Ontario Superior Court of Justice granted a motion under Rule 24.01(c) of the Rules of Civil Procedure for an order dismissing an action for delay (2015 ONSC 6825).
The underlying action was commenced in 1987 by Planon Systems Inc., and Douglas Verkaik against multiple defendants, including Michel Morand and Etna Design Inc. Morand is an industrial designer who carried on business through his corporation, Etna, and worked for Planon in 1985. The action, commenced in 1987, generally concerned the misuse of confidential information obtained from Planon to manufacture specialized filing systems sold in competition with those of Planon.
There are three elements in the test to dismiss an action for delay under Rule 24.01(c). First, the delay must be inordinate, as measured by the length of time since commencement of the action. Second, the delay must be inexcusable. Third, the defendants must be prejudiced by the delay. While noting that an order dismissing an action for delay is a severe remedy, Justice Penny stated:
 … Thus, the remedy may be granted where inexcusable delay for which the plaintiff is responsible gives rise to a substantial risk that a fair trial of the issues in the litigation will no longer by possible.
Justice Penny held that the plaintiffs’ explanation for the delay amounted to nothing more than ordinary hurdles of litigation and that a delay of over 25 years from commencement and 30 years from the relevant events to today, is inordinate. Justice Penny also held that the plaintiffs’ explanation for the delay was inexcusable, noting the defendants’ had no explanation for several periods of time spanning multiple years where nothing happened to progress the action towards trial.
In considering the prejudice to the defendants, Justice Penny stated:
 It is well-established that prejudice is inherent in long delays. Memories fade and fail, witnesses become unavailable and documents and other potential exhibits are lost. The longer the delay, the stronger the inference of prejudice to the defendants following from that delay…
Justice Penny noted that two material witnesses are no longer available and that it would be grossly unfair to restrict Etna and Morand to prior trial transcripts from the unavailable witnesses because, in part, issues in the present action were not canvassed in the prior trial transcripts. The unavailability of two material witnesses to testify was held to constitute material, actual prejudice that was a direct result of the plaintiffs’ delay.
Justice Penny also held that the availability of prior discovery transcripts was not an answer to the presumed prejudice resulting from delay, stating:
 … The purpose and conduct of oral examinations for discovery is very different from viva voce evidence given at trial. Experience shows that discovery transcripts are a poor substitute for live evidence and cross examination.
In dismissing the action for delay Justice Penny stated that Etna and Morand were responsible for none of the delay and forcing them into a trial would be grossly unfair.
A copy of Justice Penny’s decision can be found here.