Executive Summary: Key Legal and Evidentiary Issues

• The Alberta Court of Appeal addressed a dismissed rule 4.33 long delay application and a cross-appeal on a default judgment.
   
• Kevin Lougheed challenged the chambers judge's finding that no three-year delay period had been established.
   
• Appellate review of the rule 4.33(2)(b) exception is limited to errors in principle or unreasonable exercises of discretion.
   
• Both 2114223 Alberta Ltd and McDonald & Bychowski Ltd cross-appealed the decision to set aside a default judgment.
   
• Residual discretion under rule 9.15(3) of the Rules of Court factored into the chambers judge's handling of the default judgment issue.
   
• Neither the appeal nor the cross-appeal succeeded, and each party was left to bear its own costs.
   

Facts of the case

This appeal arose from a chambers judge's decision reviewing an applications judge's order to set aside a default judgment and dismiss a long delay application. The underlying reasons were published as 2114223 Alberta Ltd v Lougheed, 2026 ABKB 78. Kevin Lougheed appealed the dismissal of his long delay application, while 2114223 Alberta Ltd and McDonald & Bychowski Ltd, operating as CMB Insurance Brokers (collectively referred to as 211), cross-appealed the decision to set aside the default judgment. The Court of Appeal panel, consisting of Justices Ho, Fagnan, and Shaner, heard the appeal on August 31, 2026, and delivered its memorandum of judgment from the bench.

Policy and legislative provisions at issue

Lougheed's appeal centred on rule 4.33 of the Alberta Rules of Court, Alta Reg 124/2010, which requires a court to dismiss an action on application if three or more years have passed without a significant advance, subject to certain exceptions. One such exception permits a court to decline dismissal where steps have been taken since the delay and the applicant has participated in a manner warranting the action's continuation. The cross-appeal engaged rule 9.15(3) of the Rules of Court, which affords a chambers judge residual discretion when addressing an application to set aside a default judgment.

Reasoning and analysis

On the long delay issue, the chambers judge had found that no three-year period of delay was established and that Lougheed had participated in the proceeding in a way that warranted allowing the action to continue. Drawing on CWC Well Services Corp v Option Industries Inc, 2019 ABCA 331, the panel confirmed that the exception under rule 4.33(2)(b) must be interpreted holistically, and that because the participation finding involves an element of discretion, appellate intervention is warranted only where there is an error in principle or an unreasonable exercise of that discretion. Finding no such reviewable error, the panel upheld the chambers judge's conclusion.

Turning to the cross-appeal, 211 argued that the chambers judge had identified the correct test for setting aside a default judgment, drawn from paragraph 23 of Liberty Mortgage Services Ltd v River Valley Development Corp, 2025 ABCA 346, but had erred in articulating and applying it. The panel disagreed, concluding that the chambers judge applied the correct legal test and committed no reviewable error, particularly in the exercise of residual discretion under rule 9.15(3).

Ruling and overall outcome

Because the panel found no reviewable error on either issue, Lougheed's appeal and 211's cross-appeal were both dismissed. As neither side succeeded, the court directed that each party bear its own costs of the respective appeals, meaning no monetary award was made in favour of either party.