J. Brennan

The applicants, purchasers of pre-construction residential units, sought a Certificate of Pending Litigation (CPL) after the respondent vendors terminated the agreements of purchase and sale, relying on an early termination condition, and subsequently offered the units at a 25% price increase.

The respondents argued the court lacked jurisdiction due to a mandatory arbitration clause in the Tarion Warranty.

The court held it retained jurisdiction to issue a CPL under the Courts of Justice Act despite the arbitration clause.

The court granted the CPL, finding a triable issue regarding the respondents' reliance on the early termination condition and concluding that damages might not be an adequate remedy given the unique location and advantageous pricing of the units in a rapidly rising real estate market.

In a derivative action, the defendants brought a motion seeking repayment of legal fees paid by the plaintiffs' representative, John Drake, and the establishment of a protocol for assessing future legal accounts.

The court dismissed the requests for repayment and the imposition of a trust, but established a detailed payment protocol requiring court approval for all future legal invoices rendered to the plaintiffs to ensure they are reasonably incurred.