Executive Summary: Key Legal and Evidentiary Issues

• Dismissal of the appellant's action for undue delay was ordered by the Federal Court under Rule 167 of the Federal Courts Rules.

• A three-prong test governs Rule 167 motions: whether there was undue delay, whether it was excusable, and whether the respondent would be seriously prejudiced.

• The appellant alleged extricable errors of law, claiming the Federal Court distorted, misapprehended, and misconstrued the applicable test.

• Appellate review applied the palpable and overriding error standard to findings of mixed fact and law, which is highly deferential.

• Whether a case management direction dated April 16, 2024 precluded the respondent's motion for dismissal was contested but ultimately rejected.

• Alternatives to dismissal were found to have been exhausted, as the matter had been under special case management since November 2020 with incomplete discovery.

Background of the dispute

Jamie Morgan Boulachanis brought an action against His Majesty the King in the Federal Court. The matter had been under special case management since November 2020, and during this prolonged period, the discovery of the plaintiff had not yet been completed. The respondent brought a motion to dismiss the action for undue delay pursuant to Rule 167 of the Federal Courts Rules.

The Federal Court's decision

On December 23, 2024, Justice St-Louis of the Federal Court granted the respondent's motion and dismissed Boulachanis's action (2024 FC 1845). The Federal Court applied the established three-prong test under Rule 167, which requires the court to determine whether there has been an undue delay, whether the delay is excusable, and whether the respondent is likely to be seriously prejudiced by it. After applying each limb of the test to the evidence, Justice St-Louis concluded that dismissal was warranted. The Federal Court also considered whether a sanction less drastic than dismissal would be appropriate, but found that alternatives had already been exhausted without producing any concrete results.

The appellant's arguments on appeal

Boulachanis appealed to the Federal Court of Appeal, alleging several extricable errors of law. She argued that the Federal Court had distorted, misapprehended, and misconstrued the applicable test. Additionally, the appellant contended that a case management direction dated April 16, 2024 had effectively resolved the issue of outstanding undertakings, concluded the discovery phase, and therefore should have precluded the respondent from bringing a motion for dismissal for undue delay. In her view, the Federal Court's conclusion was disproportionate, drastic, and deprived her of her day in court.

The appellate standard of review

The Federal Court of Appeal, composed of Justices Locke, Goyette, and Rochester, heard the appeal in Montréal on February 17, 2026, and delivered judgment from the bench the same day. The Court noted that discretionary orders are reviewable under the appellate standard: questions of law are assessed on the correctness standard, while findings of fact and mixed fact and law require a palpable and overriding error to be overturned. The Court emphasized that this standard is highly deferential and not easily met, and that a decision to dismiss a proceeding instead of imposing another sanction under Rule 167 is largely a question of mixed fact and law.

The appeal court's findings

The Federal Court of Appeal found no reviewable error in the lower court's decision. The Court held that the Federal Court had identified and applied the correct test. The appellant's arguments were characterized as tantamount to a request to reevaluate the evidence, which the appellate court declined to do, noting that an appeal from the Federal Court's discretionary order is not a redo. On the issue of the April 2024 Direction, the Court agreed with the Federal Court that the appellant had not demonstrated that the Direction precluded the respondent's Rule 167 motion. Neither the Direction nor its reference to Rule 248 relieved Boulachanis of her obligation to provide answers to her undertakings.

Ruling and outcome

While the Court acknowledged Boulachanis's disappointment, it concluded that she had failed to identify a reviewable error warranting appellate intervention. The appeal was dismissed with costs in favour of the respondent, His Majesty the King. No specific monetary amount was awarded beyond costs, the quantum of which was not specified in the decision.