In a recent decision, the Alberta Court of King’s Bench, for the first time, dismissed an application under Rule 4.33 (colloquially known as the “drop dead rule”) without reliance on the exception contained in Rule 4.33(2)(b), notwithstanding that there was an undisputed period of more than three years without any advance in the action. Will this decision create a race to the courthouse steps? This insight examines the Alberta Court of King’s Bench decision in 2114223 Alberta Ltd v. Lougheed, 2026 ABKB 78 (Lougheed) and its implications on the interpretation of the drop dead rule.
Rule 4.33
Rule 4.33 deals with the dismissal of an action for long delay. Under the Rule, if three or more years have passed without a significant advance in an action, the court must, on application, dismiss the action.[1] An exception to the mandatory dismissal is found in Rule 4.33(2)(b), which provides that, notwithstanding a period of three or more years of inactivity, if an applicant participates in a step following the period of inactivity, the Court may allow the action to continue.[2]
The ABKB’s decision in Lougheed
In Lougheed, Justice Mah held that a plaintiff’s unilateral step, after more than three years of inactivity, which significantly advanced the action, was sufficient to defeat a Rule 4.33 application.[3]
In Lougheed, the plaintiff successfully applied to strike out the defendant’s statement of defence in March 2021, but following the striking of the statement of defence, no steps were taken in the action until October 2024, when the plaintiff obtained default judgment, without notice.
In 2025, when the defendant became aware of the default judgment, he applied simultaneously to the Court to set aside the default judgment and to dismiss the plaintiff’s action for long delay. Applications Judge Birkett granted the defendant’s application on both fronts, setting aside the default judgment, and dismissing the action under Rule 4.33. The plaintiff then appealed to a Justice of the Court of King’s Bench.
Justice Mah allowed the appeal in respect of the Rule 4.33 application. Justice Mah recognized that more than three years had elapsed between the striking of the statement of defence and the default judgment award.[4] However, he concluded that, because three years had not elapsed between the default judgment and the application under Rule 4.33, the Rule 4.33 application must be dismissed.[5]
Justice Mah’s interpretation of the Rule relies on the Court of Appeal decision in Rahmani v. 959630 Alberta Ltd., 2021 ABCA 110 (Rahmani). On the basis of his interpretation of the Rule and the Court of Appeal’s decision in Rahmani, Justice Mah held that an applicant under Rule 4.33 may not invoke any period of three-year inactivity, but instead must identify a three-year period of inactivity which ends in the filing of the Rule 4.33 application.[6]
Conflicts with existing authorities
Justice Mah’s interpretation of Rule 4.33, particularly his finding that an applicant cannot rely on any period of three-year inactivity and must instead point to a period of three or more years that ends with the filing of the Rule 4.33 application, appears to conflict with other, relatively recent Court of Appeal authorities. In both Ro-Dar Contracting Ltd. v. Verbeek Sand & Gravel Inc., 2016 ABCA 123 (Ro-Dar) and Flock v. Flock Estate, 2017 ABCA 67 (Flock) the Court of Appeal held that “any 3 year period of inactivity will require dismissal of the action, subject only to [the exception found in Rule 4.33(2)(b)].”[7] These authorities were not discussed in Justice Mah’s decision.
Furthermore, even in Rahmani, the Court of Appeal held that the relevant window of time to examine in a Rule 4.33 application is the time between the last date on which the parties agreed that there was a significant advance (i.e. the last uncontroversial significant advance), and the filing of the Rule 4.33 application.[8] In Rahmani, that period spanned roughly four years, but the Court identified two significant advances within that four-year period such that no unbroken three-year period of no advance existed.[9] The Court of Appeal in Rahmani did not restrict its analysis to the period between the date of the Rule 4.33 application, and the most recent date of significant advance, as determined by the Court.[10]
Key takeaways
The result in Lougheed appears to create a race to the courthouse steps. Given the ruling in Lougheed, an applicant under Rule 4.33 must thread a delicate needle: they cannot file too early, before an unbroken period of three years passes, nor can they file too late, risking the possibility that the plaintiff might beat them in the race by unilaterally taking a step that significantly advances the action. The outcome in Lougheed incentivizes defence counsel to pre-emptively prepare Rule 4.33 materials in anticipation of the expiry of a three-year period of stagnation, and to immediately file, upon that expiry.
It will be important to see if the Court of Appeal subsequently affirms Justice Mah’s approach to Rule 4.33, or if they will revert to their earlier guidance in Ro-Dar and Flock.
For further questions or discussion on the implications of Lougheed on Rule 4.33, please contact the authors, Changhai Zhu and Nick Welch, articling student.
Acknowledgements: The authors would like to thank their colleague, Kelly Osaka, for her helpful academic insights into this issue.
[1] Alberta Rules of Court, Alta Reg 124/2010, R 4.33(2).
[2] Ibid, R 4.33(2)(b).
[4] Ibid at para 8.
[5] Ibid at para 16. Furthermore, at paragraph 14, Justice Mah found that the defendant’s application to set aside the default judgment engaged the Rule 4.33(2)(b) exception, although this finding does not appear to influence his main finding regarding the application of Rule 4.33.
[6] Ibid at para 13.
[7] Ro-Dar at para 17; Flock at para 17.
[9] Ibid at para 21.
[10] Ibid at para 21.
