Executive Summary: Key Legal and Evidentiary Issues

• Appeal concerned dismissal of an action after the corporation appeared for trial without legal counsel.

• Adjournment request was denied due to previous delays and concerns over fairness and prejudice.

• Court upheld that a corporation must be represented by counsel and rejected shareholder’s request to conduct the trial.

• Appellate court found Debut failed to obtain necessary permission to appeal pre-trial adjournment decision.

• Trial judge properly exercised inherent jurisdiction to dismiss the action due to inability to proceed.

• Appeal was dismissed and costs awarded to respondents pursuant to Schedule C, Column 1 of the Rules.

Background and procedural history

Debut Developments Incorporated (“Debut”) is a privately held corporation with two shareholders, including Danica Prpick. The company planned and constructed a residential development in the Town of Redcliff (the “Town”). In 2011, Debut commenced legal proceedings against the Town and certain officials, alleging malfeasance that caused financial losses (the “Debut Action”).

Over the years, Debut was represented by several lawyers. A trial originally set for December 2020 was adjourned sine die after Debut’s counsel withdrew in August 2020. Debut was repeatedly ordered to retain new counsel. In some instances, Ms. Prpick was granted a limited right of audience to address procedural matters.

In March 2022, Debut applied to have Ms. Prpick conduct the trial. On April 5, 2022, the case management judge dismissed this application pursuant to rule 2.23(4) of the Alberta Rules of Court and section 106 of the Legal Profession Act. The judge found that Ms. Prpick, while personally invested, lacked the capacity to conduct the litigation in an orderly, professional, and economical manner. The judge concluded that the presumption requiring corporations to be represented by counsel had not been rebutted. This ruling was not appealed.

Application for adjournment and dismissal of action

Approximately one month before trial, Debut and Ms. Prpick sought an adjournment of the trial scheduled from November 28 to December 15, 2022. They also requested that Ms. Prpick be appointed litigation representative for shareholder interests pursuant to rule 2.16. The application was heard as a preliminary matter at the start of the trial dates. Since Debut had no lawyer, Ms. Prpick was given a limited right of audience to argue the adjournment.

Respondents opposed the adjournment and requested dismissal if no counsel appeared. The trial judge warned Debut of the consequences and gave them time to respond. On December 1, 2022, the trial judge orally denied the adjournment request and dismissed the Debut Action because the corporation was unrepresented and unable to proceed with trial.

Appeal and ruling of the Alberta Court of Appeal

Debut appealed the dismissal, arguing errors in the denial of adjournment and claiming the dismissal was unfair and improperly granted without an application for summary judgment.

The Alberta Court of Appeal held that permission to appeal was required under Rule 14.5(1)(b) for the adjournment decision and that Debut had failed to obtain such permission. This ground of appeal was therefore dismissed.

Even if permission had been obtained, the appellate court found that the trial judge acted within the correct legal framework, considered relevant factors, and conducted a fair hearing. The decision to deny adjournment was found to be reasonable.

On the issue of dismissal, the appellate court confirmed that the Court of King’s Bench has inherent jurisdiction to manage its processes. It held that dismissal was appropriate where Debut failed to retain counsel, as previously ordered, and was unable to proceed.

The appeal was dismissed. Costs were awarded to the respondents under Schedule C, Column 1 of the Rules. The exact dollar amount is not specified in the judgment.