Executive Summary: Key Legal and Evidentiary Issues

• The Court held that, because no trial date had ever been set for the 1001 Action, rule 4.36(1) applied and Piikani Nation had the right to file the 2025 Discontinuance against the remaining defendants without needing leave under rule 4.36(2).

• Justice Marion concluded that neither McMullen nor the remaining defendants should receive permission (a Fiat) to challenge the 2025 Discontinuance, finding that the proposed application to set it aside would be hopeless and that filing the discontinuance was not abusive or in breach of case management directions.

• The Court rejected arguments that the 2025 Discontinuance was invalid because of alleged filing or service problems, noting that the remaining defendants clearly had notice of it and that any service deficiency could be remedied, while also directing Piikani Nation to file affidavits of service.

• The judge found that ending the 1001 Action did not prevent the Indemnity Actions from moving forward, did not violate the 2014 and 2017 orders adjourning those matters to be heard with the 1001 Action, and did not create res judicata or issue estoppel issues because there had been no final merits decisions in the 1001 Action.

• The proposed application to strike the 1001 Action for delay under rules 4.31 and 4.33 was ruled moot and hopeless, because the 2025 Discontinuance had already terminated the claim against the remaining defendants and they could point to that discontinuance to show the claim had been abandoned.

• Costs were structured so that Piikani Nation is prima facie entitled to costs against McMullen on the Fiat Request about the discontinuance, Piikani Nation and the remaining defendants bear their own costs of that same Fiat Request, the costs of the delay-related Fiat Request will be treated as part of costs in the 1001 Action, and the remaining defendants may seek costs of defending the 1001 Action under rule 4.36(4) if they advise the Court by the deadline set.

Facts of the case

The 1001 Action was commenced in 2010. The plaintiffs are Piikani Nation, Piikani Nation Chief and Council, Piikani Oldman Hydro Limited Partnership, Chief Reg Crow Shoe, Councilor Adam North Peigan and Councilor Erwin Bastien. The defendants in that action include Dale McMullen and the remaining defendants: Stephanie Ho Lem, Shelley Small Legs, Kerry Scott, Stan Knowlton, Edwin Yellow Horn and Jordie Provost.

The 1001 Action alleges, among other things, breaches of legal and equitable duties relating to the affairs of Piikani Investment Corporation (PIC) and Piikani Energy Corporation (PEC); arranging PIC/PEC’s affairs for the defendants’ own benefit; improperly spending monies drawn by PIC/PEC from the Piikani Trust; paying themselves exorbitant remuneration; committing the tort of maintenance in respect of lawsuits against the plaintiffs; improperly paying monies belonging to the plaintiffs or some of them; causing PIC/PEC to default on loans to Piikani Trust; breaching the Piikani Trust’s trust agreement; failing to prepare financial statements for PIC/PEC and others; failing to report to Piikani Nation’s council; and concealing their activities. The claim seeks $6,300,000 in damages and disgorgement of monies received by the defendants.

In 2011, McMullen filed the 1101 Action, in which he claims indemnity relief against Piikani Nation. By November 30, 2012, McMullen and the remaining defendants had all filed statements of defence in the 1001 Action. On November 30, 2012, Ho Lem also filed a Counterclaim against Piikani Nation in the 1001 Action seeking a declaration or damages related to her alleged right to indemnity under an indemnity agreement, and Piikani Nation defended that counterclaim in January 2013.

In 2014, further actions were filed by some of the remaining defendants involving claims to indemnity relief against Piikani Nation. These include the Small Legs Action (1401-00460) and the Provost Action (1401-01354). Together with the McMullen Action and the Ho Lem Counterclaim, these are referred to as the “Indemnity Actions.” By orders of Associate Chief Justice Rooke in 2014, the McMullen Action, the Small Legs Action and the Provost Action were adjourned to be heard at or concurrently with the trial of the 1001 Action. In 2017, ACJ Rooke also directed that the Ho Lem Counterclaim be adjourned to be heard and determined concurrently with the trial of the main claim in the 1001 Action.

The 1001 Action has been under active case management. According to the remaining defendants, the 1001 Action was stayed for a period in 2013, and from 2013 to 2017 there were various case management meetings, orders and steps related to affidavits of records. Piikani Nation delivered a supplemental affidavit of records in January 2017. The remaining defendants say that from January 2017 to the time of this decision there has been no questioning or discoveries, no exchange of expert reports and no trial date set for the 1001 Action, and that there is no litigation plan in place. The Court notes, however, that during this same period there have been numerous fiat requests, interlocutory applications and appeals, and that the lawsuit has not progressed to questioning and has been bogged down in procedural applications and appeals.

Over the years, several decisions have been issued in related case-managed litigation. In 2020, ACJ Rooke decided a series of fiat-related applications involving McMullen and others, including a decision that allowed McMullen to apply to strike or dismiss the 1001 Action against him for delay but stayed that application pending his attempt to disqualify Gowlings. McMullen appealed those 2020 decisions, and his appeal was dismissed by the Court of Appeal.

In 2024, Case Management Justice Graesser found McMullen in contempt of court, sanctioned him for that contempt, and disqualified the law firm Gowlings from acting against him. McMullen appealed the contempt and sanction decisions, and Gowlings appealed the disqualification decision. McMullen’s appeal of the contempt decision was deemed abandoned, and his application to restore it was denied. McMullen advised that his appeal of the sanction decision was also struck. The case management judge in this decision is not aware of any steps taken to revive either appeal and treats the contempt and sanction decisions as final orders. The appeal from the Gowlings decision appears to be proceeding and is understood to be scheduled for hearing in February 2026.

In the sanction decision, CMJ Graesser ordered, among other things, that McMullen is not entitled to any costs of defending the 1001 Action up to and including the date of that decision. On October 30, 2024, relying on that aspect of the sanction decision, Piikani Nation filed a partial discontinuance of the 1001 Action as against McMullen (the McMullen Discontinuance).

Justice Marion was appointed as case management justice in December 2024. The Court then undertook a process to gather information about the status and next steps of the various case-managed actions, including the 1001 Action and the Indemnity Actions, and scheduled case management conferences (CMCs). At a June 16, 2025 CMC, Piikani Nation advised that the 1001 Action remained extant as against the remaining defendants (other than McMullen), but that it was attempting to have direct resolution discussions with them.

In August 2025, Justice Marion issued an endorsement in which, among other things, the Court directed certain remaining defendants (including Small Legs, and later Ho Lem) to bring Fiat Requests by a specific date if they wished to apply to strike the 1001 Action for long delay. The Court also required Scott and Yellow Horn to provide information about whether their third party claims in the 1001 Action had been served and whether they intended to pursue them. Scott and Yellow Horn did not provide the requested information, so their third party claims were struck without further order. As a result, no third party claims remained in the 1001 Action, and the only parties left were the plaintiffs and the remaining defendants.

On September 19, 2025, the Court received a Fiat Request from the remaining defendants seeking permission to bring an application to strike the 1001 Action for delay under rules 4.31 and 4.33. On September 22, 2025, counsel for the plaintiffs advised that they had filed the 2025 Discontinuance and that the 1001 Action was now entirely at an end subject only to costs. McMullen and Ho Lem objected to this discontinuance. On September 26, 2025, Justice Marion issued an endorsement confirming that Piikani Nation was expected to respond to the strike-related Fiat Request and giving a deadline for McMullen and the remaining defendants to bring a Fiat Request to challenge or set aside the 2025 Discontinuance if they wished to do so.

On October 8, 2025, the Court received a Fiat Request from McMullen and the remaining defendants seeking permission to file an application to set aside the 2025 Discontinuance. These reasons deal with that Fiat Request (the proposed discontinuance set-aside application) and with the earlier Fiat Request to bring the delay-based striking application.

Policy terms, rules and legal framework considered

The central rule considered is rule 4.36 of the Alberta Rules of Court, which governs discontinuance of claims. Rule 4.36(1) provides that before a date is set for trial, a plaintiff may discontinue all or any part of an action against one or more defendants. Rule 4.36(2) requires, after a trial date has been set but before the trial starts, either written agreement of every party or the Court’s permission to discontinue all or part of an action. Rule 4.36(3) requires court permission to discontinue after the trial starts. Rule 4.36(4) requires the discontinuance to be in the prescribed form, to be filed and served, and states that, after service of the notice of discontinuance, the defendant is entitled to a costs award against the plaintiff for having defended against the discontinued claim. Rule 4.36(5) states that a discontinuance may not be raised as a defence to any subsequent action for the same or substantially the same claim.

The Court notes that, in an “ordinary situation,” rule 4.36 permits filing a discontinuance as of right before a trial date is set. However, the Alberta Court of Appeal has confirmed that there are limits on a plaintiff’s ability to discontinue even before a trial date is set. The Court retains inherent jurisdiction to intervene and to preclude, set aside or ignore a discontinuance in certain circumstances, including where the discontinuance amounts to an abuse of process, where the Rules are being used in an obstructive, abusive or unfair manner, where there are outstanding issues between the parties, where the discontinuance is filed for a collateral purpose such as blocking a legitimate procedural step by a defendant, where the stage of the litigation makes it inappropriate for the plaintiff to abandon the proceeding, or where the relief sought by the plaintiff also benefits the defendant.

Justice Marion reviews a range of decisions from Alberta and other provinces illustrating when courts have either set aside or upheld discontinuances in various factual settings, including where discontinuances were used in attempts to avoid existing court orders, to circumvent pending applications, or to affect substantive rights such as matrimonial property claims or jurisdiction issues. This review emphasizes the tension between a plaintiff’s right to control its own claim and the Court’s duty to prevent misuse of procedure.

The decision also discusses the legal concept of issue estoppel, a branch of res judicata. The Court quotes the Supreme Court of Canada’s explanation that for issue estoppel to operate, three preconditions must be met: the issue must be the same as the one decided in a prior decision, the prior judicial decision must have been final, and the parties to both proceedings must be the same or their privies. The judge also notes that normally a discontinuance does not preclude relitigation and refers to rule 4.36(5) in that context.

In relation to service of the discontinuance, the Court considers rule 11.27, which allows the Court to validate service done in a manner not specified by the rules if the method used brought, or was likely to have brought, the document to the attention of the person served. The decision cites appellate authority that service is a specialized form of notice focused on ensuring the person actually receives notice of proceedings and that unconventional service can be effective if it achieves that goal.

Analysis of the discontinuance and the attempt to set it aside

Justice Marion first identifies that rule 4.36(1) applies to this case because no trial date has been set in the 1001 Action. The 2014 orders and the 2017 order did not set a trial date; they directed that the Indemnity Actions be heard at or concurrently with the trial of the 1001 Action. The Court disagrees with McMullen and the remaining defendants’ assertion that leave was required to file the 2025 Discontinuance under rule 4.36, and finds that Piikani Nation had the right to file it.

With respect to McMullen personally, the Court denies his Fiat Request for several reasons. He did not address the prior “McMullen Restriction Decisions,” which require him to comply with court processes and pay required costs before seeking further relief. The fact that the Court had given him a deadline to file his Fiat Request did not waive those restrictions. In addition, McMullen is no longer a party to the 1001 Action due to the McMullen Discontinuance filed on October 30, 2024. His appeals of the contempt and sanction decisions are no longer extant, and he has not brought any Fiat Request to set aside the McMullen Discontinuance. The Court therefore finds that McMullen has no standing to seek to set aside the 2025 Discontinuance, and in any event considers that his proposed application would be hopeless.

Turning to the remaining defendants, the Court also declines to grant them permission to file the proposed discontinuance set-aside application. Justice Marion finds that such an application has no hope of success, would accomplish little, would not prejudice the remaining defendants’ substantive rights if it is not brought, and would cause disproportionate delay and expense.

The Court explains why. First, because the trial date had not been set, Piikani Nation had the right to file the 2025 Discontinuance and did not breach any case management directions or endorsements in doing so. The discontinuance was consistent with Piikani Nation’s June 2025 statement that it was attempting to resolve the 1001 Action with the remaining defendants.

Second, on the question of service, Piikani Nation asserted that it served the 2025 Discontinuance on October 2, 2025 and provided copies of service letters to the remaining defendants at the email addresses in the service list or as confirmed in a CMC. The remaining defendants jointly brought the Fiat Request to set aside the 2025 Discontinuance, showing that they were aware of it. The Court considers that allowing an application based on lack of service would be wasteful when any deficiency could be addressed by validating service, by proof of service, or by further service. To complete the record, Piikani Nation is directed to file affidavits of service for the 2025 Discontinuance. The Court also notes there is no evidence that Gowlings was involved in service of the 2025 Discontinuance.

Third, the Court observes that this is not a case where a plaintiff discontinues and then seeks to restart the same litigation. Rather, Piikani Nation wishes to end the 1001 Action entirely. It has already discontinued the claim against McMullen and now seeks to do the same against the remaining defendants for what it describes as economic and equitable reasons, including the uneconomic nature of pursuing the claim after years of litigation. The Court notes that it is not abusive, without more, for a plaintiff in long-running litigation without material progress toward resolution to decide that it no longer wishes to advance its claim. The judge also points out that, if Piikani Nation were to change its mind in the future, its claims would likely be long statute-barred.

Fourth, while it might be argued that Piikani Nation filed the 2025 Discontinuance to avoid the remaining defendants’ planned application to strike for delay, the Court distinguishes this situation from cases in which a discontinuance was filed to avoid a summary dismissal application that could resolve the claim on its merits. Here, the 2025 Discontinuance effectively accomplishes the same thing the remaining defendants sought by their proposed strike for delay: it ends the 1001 Action against them. The remaining defendants’ proposed evidence in support of their applications focuses on the lengthy delay in the 1001 Action and the prejudice they say they suffer from its continued existence.

The Court finds that the 2025 Discontinuance meets the remaining defendants’ goal of ending the 1001 Action while avoiding the further time and expense of a contested striking application for delay. Neither the discontinuance nor a successful strike for delay would have led to a substantive decision on the merits of the plaintiffs’ claim. Any question about costs incurred in preparing the Fiat Request for the strike application can be dealt with in the Fiat Process without setting aside the discontinuance.

Fifth, the 1001 Action no longer contains any third party claims to preserve, as all such claims have been struck and there were no appeals.

Sixth, the Court finds that there is no material prejudice to the prosecution or trial of the Indemnity Actions. Because there will be no trial of the plaintiffs’ claim in the 1001 Action, the 2014 and 2017 orders requiring the indemnity matters to be heard together with that trial must be interpreted in context. The Court holds that those orders were not intended to prevent resolution or termination of the plaintiffs’ claims before trial. The Indemnity Actions can still proceed, and the Court remains in a position to address next steps and possible conversion of originating applications to statements of claim. The Court notes that Piikani Nation has acknowledged that neither the McMullen Discontinuance nor the 2025 Discontinuance prevents further advancement of the Indemnity Actions. If necessary, parties may seek permission to use records produced in the 1001 Action under the rules or by obtaining relief from the implied undertaking rule.

The judge is not satisfied that the 2025 Discontinuance creates a real risk of res judicata or issue estoppel that would unduly complicate the Indemnity Actions. The remaining defendants did not identify specific res judicata or issue estoppel concerns; there are no substantive final decisions in the 1001 Action that would form the basis of such doctrines, and rule 4.36(5) provides that a discontinuance may not be raised as a defence to a later action on the same or substantially the same claim.

Seventh, the Court finds no prejudice to the remaining defendants’ costs position if the 2025 Discontinuance is not set aside or ignored. The costs related to the Fiat Request about the strike application can be dealt with as part of the Fiat Process, and under rule 4.36(4) the remaining defendants are entitled to a costs award against the plaintiff for having defended the discontinued claim. Piikani Nation does not appear to dispute that they may seek such costs. The Court notes that whether certain defendants have extant indemnity claims and whether contractual or statutory indemnification would entitle them to more than ordinary costs are matters that may require further determination and, potentially, a trial in the Indemnity Actions.

Eighth, Justice Marion holds that the 1001 Action has not reached a stage where it would be unfair or inappropriate to allow discontinuance. Even though the action has been extant for over 15 years, it remains at a very early stage as measured against the life of a civil action, with no questioning and no trial date. The Court characterizes the 1001 Action as representing a high-water mark for consumption of judicial and party resources with very little actual advancement of the action, in large part due to years of excessive interlocutory procedures and appeals while progress on the main action largely sat dormant. The remaining defendants appear to have been largely content to allow others to direct the course of the litigation. In all the circumstances, the Court concludes it was not prejudicial or abusive for Piikani Nation to file the 2025 Discontinuance.

For all of these reasons, the Court finds that allowing the proposed discontinuance set-aside application would be hopeless. The Fiat Request by McMullen and the remaining defendants to bring that application is denied.

Analysis of the proposed striking-for-delay application

Because the 2025 Discontinuance has ended the 1001 Action against the remaining defendants, there is no live claim against them to strike for delay. Justice Marion notes that, in these circumstances, the proposed striking application is moot, unnecessary and would be hopeless. The remaining defendants can point to the 2025 Discontinuance as showing that the claim against them has never been proven and has been abandoned.

The Court therefore denies the Fiat Request to bring the proposed application to strike the 1001 Action for delay.

Ruling, outcome, and financial implications

The Court’s directions and orders include several cost and procedural outcomes.

First, on the Fiat Request related to the proposed discontinuance set-aside application, McMullen and the remaining defendants have been unsuccessful, while Piikani Nation has been successful. The judge finds that McMullen’s participation in the Fiat Request, despite not being a party to the 1001 Action and without addressing the prior restriction decisions, warrants cost consequences. Piikani Nation is found to be prima facie entitled to costs against McMullen for this Fiat Request, and the Court sets a schedule for written costs submissions and responses from the parties if they cannot agree.

For the remaining defendants, although they were unsuccessful on the same Fiat Request, the Court finds that it was reasonable for them to bring it in the unique circumstances of this case and given the timing of the 2025 Discontinuance. Accordingly, the Court orders that they and Piikani Nation will bear their own costs of this Fiat Request, without prejudice to their positions on other costs in the 1001 Action.

Second, regarding the Fiat Request to bring the strike-for-delay application, the Court has denied permission, but does so because the 2025 Discontinuance already achieved the same substantive result for the remaining defendants. The judge observes that Piikani Nation waited to file the 2025 Discontinuance until the point when, for practical purposes, the remaining defendants had already prepared their Fiat Request, thereby rendering it moot and wasting resources. Because of this, the Court directs that the costs associated with that Fiat Request will be addressed as part of the costs of the 1001 Action.

Third, the decision confirms that the 1001 Action is now at an end as against McMullen and the remaining defendants, subject to costs. As provided in the earlier sanction decision, McMullen is not entitled to costs. Under rule 4.36(4), the remaining defendants are entitled to a costs award against the plaintiffs for having defended against the discontinued claim. The Court states that, if the remaining defendants wish to seek costs against the plaintiffs in respect of the plaintiffs’ claims in the 1001 Action, they may do so without a Fiat Request. They must advise the Court by February 13, 2026 if they intend to pursue those costs; otherwise, they will be taken to have represented that they do not intend to seek such costs. If any remaining defendant indicates an intention to seek costs, the procedure for determining those costs will be discussed at the next CMC.

Finally, the Court sets directions for future case management. In line with the earlier sanction decision and endorsement, the parties are directed to immediately schedule with the Court Coordinator a 1.5-hour joint CMC in February 2026 in the 1001 Action, the 1101 Action, the Small Legs Action and the Provost Action. Counsel for Piikani Nation (JSS) is to take the lead in scheduling and provide an agenda one week before the CMC. The agenda must include the possibility of judicial dispute resolution, the determination of costs in the 1001 Action, and the proposed procedures for moving the Indemnity Actions forward.

In conclusion, Justice Marion denies both Fiat Requests, confirms that the 1001 Action has ended against all defendants subject to costs, preserves the remaining defendants’ ability to seek costs of defending that action under rule 4.36(4), and sets the next procedural steps to address costs and the ongoing Indemnity Actions. No specific monetary amount of costs is fixed in this decision; any amounts will be determined later following the process outlined by the Court.