Katie Pentney

The plaintiff, a unit-holder in a real estate investment trust (REIT), brought a proposed class action alleging that the REIT's former CEO and trustees breached their fiduciary duties and duties of trust by entering into an undisclosed related-party transaction.

On a bifurcated certification motion to determine if the pleadings disclosed a reasonable cause of action under s. 5(1)(a) of the Class Proceedings Act, the court struck the breach of fiduciary duty claims, finding that the defendants owed duties to the REIT but not to the unit-holders.

However, the court allowed the breach of trust claims against the trustees and the knowing assistance claim against the former CEO to proceed, while striking the knowing assistance claims against the vendor and the vendor's solicitors.

The respondent franchisor brought a motion to stay an application commenced by franchisees and a related property owner, arguing that disputes concerning a licence agreement and a right of first purchase should be determined by arbitration pursuant to an arbitration clause.

The court considered the competence‑competence principle and whether the dispute fell within the scope of the arbitration clause.

Because the property owner was not a party to the licence agreement or arbitration clause, the issue of whether the right of first purchase extended to the property could not be arbitrated.

The court also noted that another dispute regarding licence fees was expressly excluded from arbitration and that bifurcating the issues would be inefficient given a pending transaction deadline.

The motion to stay the proceeding in favour of arbitration was dismissed.