Executive Summary: Key Legal and Evidentiary Issues

• Cartesian Theatre Corp. sought leave under Rule 120 of the Federal Courts Rules for its founder, Kip Warner, to represent the corporation in a judicial review application against the Attorney General of Canada.

• The corporation did not allege impecuniosity, instead arguing that the traditional Rule 120 test is outdated and should be reformed to reflect contemporary realities for small businesses.

• Stare decisis prevented the Federal Court from departing from the Federal Court of Appeal's established four-part test in SAR Group, as no new legal issue or significant change in circumstances was demonstrated.

• No financial statements or documentary evidence were submitted to establish the corporation's inability to afford legal counsel, which is the most important factor under the Rule 120 test.

• Mr. Warner's likely dual role as both advocate and affiant raised concerns about him acting as counsel and witness simultaneously, potentially complicating the proceedings.

• Complex and novel underlying issues — including the justiciability of BDC's commercial financing decisions — weighed against permitting a non-lawyer to represent the corporation.

The underlying dispute and the parties involved

Cartesian Theatre Corp., a computer software development company founded and controlled by Kip Warner, filed a Notice of Application on February 29, 2024, seeking judicial review of a decision by the Business Development Bank of Canada (BDC). The BDC had rejected the corporation's application for financing under its Seed Venture Fund program on January 30, 2024. The Attorney General of Canada was named as the Respondent. Initially, the corporation was represented by Mr. Umar A. Sheikh of Sheikh Law, who became the solicitor of record and represented the corporation through various interlocutory motions and an appeal before the Federal Court of Appeal.

Cartesian Theatre Corp.'s attempt to proceed without a lawyer

Beginning in September 2025, the corporation attempted to have Mr. Warner act on its behalf without formal leave from the Court. On September 1, 2025, the corporation tendered various documents for filing, including a Notice of Limited-Scope Representation and a motion record signed by Mr. Warner. The Court's Registry referred the documents for directions, and on September 3, 2025, all submitted documents were rejected for filing because they contravened Rule 120. A subsequent letter submitted by Mr. Warner on September 12, 2025, was similarly rejected by the Court on September 29, 2025. It was not until January 23, 2026, that the corporation tendered for filing a motion record on the present Rule 120 motion, which was accepted for filing on January 30, 2026, with the understanding that the corporation could only act without a solicitor if the Court granted the Rule 120 motion.

The corporation's arguments for reforming Rule 120

Rather than claiming it could not afford a lawyer, Cartesian Theatre Corp. took the position that the traditional Rule 120 test — which requires a corporation to demonstrate impecuniosity as the most important factor — was "anachronistic, archaic, wasteful and prejudicial." The corporation argued that Rule 120 undermines the interests of small businesses in Canada, many of whom it alleged are run by small business owners who are sophisticated and capable of protecting their investments and interests. Mr. Warner expressed concern that disclosing the corporation's financial records to satisfy the impecuniosity requirement could signal to one of its industry competitors or another interested person an opportunity to gain advantage. The corporation contended that the default rule should allow corporations full access to the courts, just as it does for natural persons, and urged the Court to interpret Rule 120 in light of Rule 3's principle of proportionality.

The Court's analysis of stare decisis and the established Rule 120 test

Case Management Judge Kathleen Ring concluded that the Federal Court was bound by the doctrine of stare decisis to follow the Federal Court of Appeal's established test from SAR Group Relocation Inc. v Canada (Attorney General), 2002 FCA 99. That test requires a moving party to demonstrate, by admissible evidence, that it cannot afford a lawyer, that the proposed representative will not be required to act as both advocate and witness, that the issues are not so complex to be beyond the proposed representative's capabilities, and that the proceeding can proceed in an expeditious manner. The Court found that the corporation had not met the high threshold set out in Canada (Attorney General) v Bedford, 2013 SCC 72, for departing from established precedent, as it had not raised a new legal issue nor established a significant change in the circumstances or evidence. The Court also rejected the argument that Rule 3 or Rule 55 could be used to sidestep the doctrine of stare decisis and ignore the established legal test on a Rule 120 motion.

Application of the four-part test

On the impecuniosity factor — recognized as the most important consideration — the Court found that the corporation provided no financial statements or other documentary evidence to the Court regarding its financial status to establish the corporation's impecuniosity. The corporation expressly stated that it "does not allege impecuniosity in this motion" and had in fact had a lawyer formally on the record in the proceeding for approximately two years. The Court held this failure alone was sufficient to dismiss the motion. Turning to the dual-role concern, the Court disagreed with the corporation's narrow argument that the advocate-witness rule applies only in circumstances where the witness will give viva voce evidence. Given that Mr. Warner is the founder, director, officer and majority shareholder with a controlling interest in the corporation, the Court found it very likely that he would participate as an affiant on behalf of the corporation, thereby appearing both as advocate and as witness during the course of the proceeding. On the complexity of the issues, the Court found that the underlying application raised complex and novel issues — including the jurisdiction of the Court to evaluate the reasonableness of BDC's financing decision, the reasonableness of the financing decision, whether the decision was reached in a procedurally fair manner, and whether an order of mandamus requiring the BDC to correct publicly disseminated materials is an appropriate remedy — which may go beyond the reasonable capabilities of the proposed representative.

The ruling and its consequences

The motion for leave to allow Mr. Warner to represent Cartesian Theatre Corp. was dismissed. The Court awarded costs of $1,000.00, inclusive of disbursements and taxes, to the Respondent, the Attorney General of Canada, payable by the Corporate Applicant in any event of the cause. The Court ordered the corporation to serve and file a Notice of Appointment of Solicitor by no later than May 20, 2026, and directed that it shall not take any further steps in the judicial review application, including the bringing of any motions, until a solicitor was appointed — with the exception of bringing an appeal from this Order. The Court warned that failure to comply with the deadline would lead the Court to conclude that the Corporate Applicant has abandoned its intention to proceed with the matter, and the proceeding would be dismissed for delay without further notice.