Is a shareholder of a Real Estate Investment Trust entitled to a claim of diminution in the value of the trust's assets?

British Columbia, Canada


The following excerpt is from Everest Canadian Properties Ltd. et al. v. Mallmann et al., 2006 BCSC 270 (CanLII):

Everest next submits that the rule in Foss v. Harbottle does not apply to claims brought by beneficiaries of a trust because the shareholders of a REIT, unlike the shareholders of a company, are the beneficiaries of a trust and have a beneficial interest in the assets of the trust. Accordingly, Everest submits, when the assets of the trust are damaged, as in an improvident sale, it is the beneficiaries who suffer the loss, not the trust and not the trustees who only hold legal title. Therefore, Everest claims that, in the case of a trust, a claim of diminution in the value of the trust assets is not a consequential loss, but rather a direct and personal claim of the beneficiaries for which each beneficiary can maintain a personal action. CONCLUSION

I have come to the conclusion that it is not “plain and obvious” that the rule in Foss v. Harbottle applies to the REIT in this action in the present motion in particular, in the absence of evidence with respect to the nature and characteristics of the REIT. That is sufficient to dispose of this application.

Other Questions


Is a beneficial interest held by shareholders in Del Cano Real Estate Trust a "beneficial interest" in the real estate REIT? (British Columbia, Canada)
When a spouse's assets are not family assets, is one of the spouses entitled to an equal division of assets? (British Columbia, Canada)
Is resolution of an important part of a claim against a party in a personal injury claim against the other party to the claim substantially less impact on the balance of the claim? (British Columbia, Canada)
On a value survived approach, is a party entitled to claim the value of services and other benefits received by the enriched party? (British Columbia, Canada)
How has the value of a parcel of land been determined in real estate law in the context of real estate transactions? (British Columbia, Canada)
Does the operation of the title to defeat the claim of a resulting trust or constructive trust as against a third party? (British Columbia, Canada)
What are the requirements for a constructive trust and a claim for the constructive trust? (British Columbia, Canada)
Can a personal representative of the deceased's estate make a claim under s. 151(3) of the BC Supreme Court of Justice for personal representative leave to continue to pursue his claim? (British Columbia, Canada)
What is the test for quantifying the value of a family member’s services in the context of an in-trust claim? (British Columbia, Canada)
What is the test for a claim for a constructive trust interest in a deceased's estate? (British Columbia, Canada)
X



Alexi white


"The most advanced legal research software ever built."

Trusted by top litigators from across North America.