Executive Summary: Key Legal and Evidentiary Issues

• Rule 120 of the Federal Courts Rules requires a corporation to be represented by a solicitor unless the Court grants leave, in special circumstances, for representation by an officer.
   
• Cartesian Theatre Corp sought leave to have its founder, Kip Warner, represent it on a judicial review application without alleging that the corporation could not afford a lawyer.
   
• Established Federal Court of Appeal jurisprudence treats the inability to afford a lawyer as the most important, and effectively necessary, factor for granting leave under Rule 120.
   
• Cartesian Theatre argued that the Cabinet Directive on Regulation rendered Rule 120 invalid or reviewable, an argument rejected because the directive binds only "departments and agencies," not the Federal Courts.
   
• The doctrine of stare decisis, as articulated in Canada (Attorney General) v Bedford, was found not to permit departure from binding Court of Appeal precedent absent a genuinely new legal issue or fundamentally changed circumstances.
   
• Both the original motion and the subsequent appeal were dismissed, with costs awarded against Cartesian Theatre in each instance.

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Facts of the case

Cartesian Theatre Corp, an independent software vendor engaged in research and development of artificial intelligence-powered music discovery technology, filed a Notice of Application in February 2024 seeking judicial review of a decision by the Business Development Bank of Canada (BDC) dated January 30, 2024. The decision at issue rejected Cartesian Theatre's application for financing under BDC's Seed Venture Fund program. The Attorney General of Canada was later substituted as respondent in place of BDC. Kip Warner is the founder, director, and majority shareholder of Cartesian Theatre. Although solicitor Umar A. Sheikh was originally counsel of record, Cartesian Theatre sought, through a series of filings beginning in September 2025, to have Mr. Warner represent the corporation directly. The Court's registry repeatedly rejected these filings for non-compliance with Rule 120. On January 23, 2026, Cartesian Theatre formally brought a motion for leave under Rule 120 to permit Mr. Warner to act as its representative, expressly stating that it did not allege impecuniosity. Case Management Judge Kathleen Ring dismissed that motion on April 20, 2026 (2026 FC 527), and Cartesian Theatre subsequently appealed her order. Mr. Justice McHaffie dismissed the appeal on July 27, 2026 (2026 FC 1009).

Policy and legislative provisions at issue

Rule 120 of the Federal Courts Rules provides that "a corporation, partnership or unincorporated association shall be represented by a solicitor in all proceedings, unless the Court in special circumstances grants leave to it to be represented by an officer, partner or member." The governing four-part test, drawn from SAR Group Relocation Inc v Canada (Attorney General), 2002 FCA 99, and restated in Macciacchera (Smoothstreams.tv) v Bell Media Inc, 2024 FCA 30, requires the moving party to show: (a) it cannot afford a lawyer; (b) the proposed representative will not be required to act as both advocate and witness; (c) the issues are not so complex as to be beyond the representative's capabilities; and (d) the proceeding can proceed expeditiously. Cartesian Theatre also invoked Rule 3 (the interpretive rule directing the "just, most expeditious and least expensive" determination of proceedings) and Rule 55 (permitting the Court to dispense with compliance with a rule in special circumstances), arguing these provisions should override the impecuniosity requirement. On appeal, Cartesian Theatre additionally relied on the Cabinet Directive on Regulation, which sets out the federal government's expectations for the development and review of regulations by "departments and agencies," arguing that non-compliance with the directive in the making of Rule 120 undermined the rule's validity or the binding force of its jurisprudence.

Reasoning and analysis

Case Management Judge Ring found that Cartesian Theatre had not discharged its burden of demonstrating impecuniosity, noting that the corporation had expressly disclaimed any allegation of inability to pay and had been represented by counsel for approximately two years. She held that the doctrine of stare decisis bound her to apply the Federal Court of Appeal's established test, and that neither Rule 3 nor Rule 55 could be used to circumvent that binding precedent. She further found, as additional grounds, that Mr. Warner was likely to serve as both affiant and advocate, and that the underlying application raised complex and novel issues concerning the reviewability of BDC's financing decisions that could exceed his reasonable capabilities. On appeal, Justice McHaffie reviewed questions of law on the correctness standard and questions of fact or mixed fact and law on the palpable-and-overriding-error standard, per Housen v Nikolaisen, 2002 SCC 33. He concluded that Cartesian Theatre's Cabinet Directive on Regulation arguments were not "central" to its original written motion and therefore did not need to be addressed by the Case Management Judge. On the merits, he held that the directive applies only to "departments and agencies," not the Federal Courts or their Rules Committee, and that it is not a "statutory instrument" capable of affecting the validity of Rule 120, citing Syncrude Canada Ltd v Canada (Attorney General), 2014 FC 776. He also found that Cartesian Theatre had not demonstrated actual non-compliance with the directive's consultation requirements. Justice McHaffie further rejected Cartesian Theatre's remaining grounds of appeal, including alleged errors in the complexity/capability analysis, the advocate-witness analysis, and the Court's equitable jurisdiction, finding no legal error or palpable and overriding error in the Case Management Judge's reasoning.

Ruling and overall outcome

The Attorney General of Canada was the successful party in both proceedings. Case Management Judge Ring dismissed Cartesian Theatre's motion for leave to have Kip Warner represent it under Rule 120, ordered Cartesian Theatre to appoint a solicitor by May 20, 2026, and fixed costs of the motion at $1,000.00, inclusive of disbursements and taxes, payable by Cartesian Theatre to the Attorney General. On appeal, Justice McHaffie dismissed Cartesian Theatre's appeal of that order in its entirety and fixed costs of the appeal at $500.00, payable by Cartesian Theatre to the Attorney General.