Executive Summary: Key Legal and Evidentiary Issues

• Scope of the tenant’s right of first refusal in Article 18 of the commercial lease, including whether the landlord’s public announcements “crystallized” that right before any third-party offer was received.
• Alleged impact of the landlord’s non-renewal notice and publicity about selling the Domaine on Villa Maria’s peaceful enjoyment of the leased premises and on student enrolment and revenues.
• Extent of pre-trial disclosure in examinations, balancing broad relevance against proportionality, litigation privilege, professional secrecy and confidentiality over financial analyses, partner negotiations, and valuation reports.
• Treatment of sensitive financial information for both Villa Maria and the Congregation, including capacity to finance a purchase, Deloitte’s mandate and reports, and the Congregation’s overall financial situation.
• Access to documents concerning other schools and transactions (e.g., Marianopolis and other institutions) to support a theory of differential treatment, weighed against third-party confidentiality and the limited relevance to the present lease.
• Protection of the Congregation’s strategic information regarding future sale of the Domaine (Colliers’ mandate, valuation reports, third-party offers, and Vatican communications) to avoid distorting the eventual marketing process and competitive bidding.

Factual background and parties

Villa Maria is a long-established private educational institution that operates a college on a site known as the Domaine Villa Maria in Montréal. For more than a century, the Soeurs de la Congrégation de Notre-Dame (CND) both owned and operated the educational institutions on this land. In recent years, the CND initiated a process of “institutional succession,” encouraging its colleges, including Villa Maria, to become progressively autonomous and, where financially feasible, to purchase the buildings and land they occupy. Within this context, the parties concluded a commercial lease in 2011 (retroactive to 2010), later renewed in 2020 until July 2030. The lease governs Villa Maria’s occupation of the premises owned by the CND and introduces a key contractual mechanism: Article 18, titled “Droit de premier refus” (right of first refusal), which is at the heart of the dispute. The CND also retained an “option de retrait” in the 2020 lease, allowing it to remove certain areas from the leased premises for other uses, reflecting the Congregation’s intention to redevelop parts of the Domaine for, among other things, a private long-term care facility (CHSLD) for its aging members. Parallel to the lease relationship, the CND dealt with municipal authorities about potential subdivision and development of the Domaine. Municipal refusals to authorize lot splitting or large-scale redevelopment complicated these plans and later became part of the factual matrix surrounding the parties’ disagreements.

The right of first refusal and the emerging conflict

Villa Maria regards Article 18 as more than a standard right of first refusal; it argues that, in light of the historical relationship and the succession process, the CND had a duty to offer to sell the College property to Villa Maria as soon as it decided to dispose of it. The CND, conversely, maintains that Article 18 is a classic right of first refusal that is only triggered by the receipt of an acceptable third-party offer. No such concrete third-party offer for the College premises has yet been accepted; the one significant external offer in the record, for the broader Domaine in April 2024, was rejected. Against this contractual backdrop, consultations occurred in 2016 and 2019, during which the CND asked its colleges to prepare strategic plans for autonomy and potential acquisition of their sites, provided they had the capacity to do so. Villa Maria worked on financial projections and investment plans, including an analysis by Deloitte, but the Deloitte work suggested that Villa Maria had serious constraints and might not be able to finance the acquisition and renewal of aging buildings and infrastructure on the Domaine. Tensions escalated in 2022–2023, when the CND informed Villa Maria that its own financial capacity was limited and that it could no longer support the College as before, while at the same time querying Villa Maria’s real ability to acquire the property. From Villa Maria’s perspective, this represented a “volte-face” in the institutional succession project and a breach of expectations that the College would eventually be able to buy the premises.

Announcements about sale of the Domaine and non-renewal of the lease

In June 2023, after a relatively short notice to Villa Maria, the CND publicly announced its intention to sell the entire Domaine by the end of 2030. For Villa Maria, this announcement “crystallized” its right of first refusal under Article 18, on the theory that the CND had made a firm decision to dispose of the property used by the College and had effectively set a sale process in motion. Villa Maria engaged in efforts, including with potential partners such as Pomerleau and Prével, to explore purchase options for either the entire Domaine or the portion forming its campus. In August 2023, the CND confirmed in writing that the lease would not be renewed beyond 2030 and that it would repossess the premises at the end of the term. Villa Maria asserts that these announcements, widely known to parents and the public, undermined its enrolment and financial stability, thereby interfering with its peaceful enjoyment of the leased premises and threatening its very survival. In March 2024, the CND sold the buildings of another educational institution it founded, Collège Marianopolis, and announced that Colliers International had been retained to manage and launch the marketing of the Domaine. Villa Maria points to this Marianopolis transaction as evidence that other institutions under the CND’s umbrella were able to purchase their buildings, while Villa Maria was allegedly blocked from doing so. In February 2025, however, the CND publicly stated that the marketing of the Domaine would be postponed until 2031, one year after the lease expiry. The Congregation justified this change by its members’ needs: it could not relocate them before 2030 and therefore had to continue using the Domaine in the interim. It also indicated it would respect the existing lease with Villa Maria. This postponement deepened the dispute about whether and when Article 18 could be activated.

The March 2025 letter of intent and Villa Maria’s injunction proceedings

In March 2025, after placing the CND in default, Villa Maria sent a letter of intent containing a unilateral offer to purchase the part of the Domaine corresponding to its campus for 5 million dollars. The CND rejected this unsolicited offer, reiterating that it did not intend to sell before 2031 and disputing both the timing and the terms of the proposal. From the CND’s viewpoint, the offer did not create any legal obligation because Article 18 presupposed an acceptable third-party offer, which had not occurred with respect to the College parcel. Villa Maria responded by filing a lengthy application for injunction in April 2025. It alleged that the CND acted contrary to its contractual obligations and in bad faith by refusing the March 2025 offer and by suspending the sales process until 2031. The pleading framed the CND’s conduct as an abuse of rights that jeopardized Villa Maria’s continued existence, citing falling enrolment numbers and financial insecurity as direct consequences of the sales announcements and non-renewal notice. In terms of relief, Villa Maria asked the Superior Court to enforce the right of first refusal by ordering the CND to accept its 5-million-dollar offer for the leased premises. In the alternative, it sought orders compelling the CND to proceed with a sale process for the Domaine and to cease any interference with the College’s enjoyment of the leased premises. Villa Maria also reserved its right to claim damages, but those claims have not yet been adjudicated.

CND’s defence and competing theories

In its summary defence filed in November 2025, the CND contends that, as owner of the Domaine, it remains free to dispose of the property as it sees fit, subject only to the specific contractual limitation of Article 18. Under its reading, Article 18 can be triggered only when the CND receives a trustworthy, acceptable third-party offer to purchase; it does not oblige the Congregation to initiate or complete a sale within any particular time frame, nor to entertain a unilateral offer from the tenant. On that basis, the CND argues that Villa Maria’s March 2025 letter of intent, being unsolicited and self-generated, is not a legally operative event under the lease and cannot serve as a foundation for forcing a transaction. The CND further asserts that it has acted reasonably and transparently, noting that it informed Villa Maria of its intention to sell the premises a full seven years before lease expiry, thus giving the College ample time to plan a possible relocation. It denies having interfered with the peaceful enjoyment of the leased premises and characterizes the lawsuit as an attempt by Villa Maria to exert pressure to secure a transaction that does not meet the CND’s requirements, including its financial responsibility to its members and its desire to realize appropriate value for the Domaine.

Nature and scope of the objections judgment

The judgment provided is not a decision on the merits of Villa Maria’s injunction but a procedural ruling on 75 objections raised during examinations of four representatives: two for Villa Maria (Marie Anna Bacchi and Catherine Maheu) and two for the CND (Suzie Prince and Sister Ona Bessette). The Court observes that, despite the importance of the case, both sides have adopted an approach that is disproportionate and risks delaying resolution. The objective of this objections judgment is to streamline the pre-trial process so that the permanent injunction application can be ready for hearing by the end of May 2026. The Court briefly summarizes the governing civil-procedure rules for examinations, including the broad test of relevance, the enumerated grounds of objection under the Code of Civil Procedure, and recognized exceptions such as litigation privilege, solicitor-client privilege, professional secrecy of certain experts, and the notion of “intérêt légitime important” (significant legitimate interest) justifying limits on disclosure. Applying these principles, the judge evaluates each category of contested question, often contrasting the need for the parties to know each other’s factual positions with the dangers of abusive “fishing expeditions,” undue burdens, or premature exposure of sensitive strategic information.

Key rulings on Villa Maria’s objections

On matters where Villa Maria sought to block questions from the CND, the Court mostly rejected objections that attempted to characterize the questions as impermissible questions of law or as purely hypothetical. For example, Villa Maria’s attempt to prevent questioning about what it understood by the “crystallization” of the right of first refusal and when it believed this had occurred was dismissed; the Court held that these questions legitimately probed the factual underpinnings of Villa Maria’s theory, even if they touched on legal concepts. Similarly, inquiries about the parties’ expectations when signing the first lease in 2010—such as whether Villa Maria could assume that an acceptable third-party offer would arise before 2030—were allowed because they helped illuminate the parties’ shared intentions regarding Article 18. On the other hand, the Court sustained objections where the questioning became argumentative or asked witnesses to pronounce on what legal consequences would follow from certain scenarios, emphasizing that such evaluations belong to the trial judge and counsel, not to lay fact witnesses. With respect to Villa Maria’s relationships with potential development partners (including Pomerleau and Prével), the Court protected the confidentiality of specific partnership terms and negotiations to avoid undermining Villa Maria’s future bargaining position, but allowed the CND to ask who the partners were and how they related to the 5-million-dollar offer. To manage the resulting sensitivity, it ordered that answers and documents concerning certain partner-related questions be shared only with counsel or on a strict “need-to-know” basis pursuant to written confidentiality undertakings. The Court also rejected Villa Maria’s attempts to invoke litigation privilege to shield information about its current financial capacity and its analyses supporting the March 2025 offer, reasoning that this offer lies at the very core of the relief claimed; Villa Maria cannot rely on the offer as a remedy while refusing to disclose whether it is financially able to perform. However, the Court ordered that such financial information be treated confidentially and, if used in court, only after appropriate confidentiality orders are considered.

Key rulings on CND’s objections

On the CND’s side, several objections aimed to restrict access to its internal documents, financial records, and communications with third parties. The Court adopted a differentiated approach. It required the CND to disclose certain additional material where such information bore directly on central issues in the litigation, while protecting other categories where confidentiality and proportionality concerns predominated. Regarding strategic planning documents, the Court directed the CND to provide uncensored portions of specific tables from 2023 and 2024 minutes that refer explicitly to “Collège Villa Maria” and “Domaine Villa Maria,” on the basis that these entries might shed light on the evolution of the CND’s thinking about the College and the property. But it refused to order production of full minutes or wide-ranging strategic documentation where Villa Maria’s request amounted to a broad “fishing expedition” detached from the core lease dispute. On financial information, Villa Maria argued that the CND had invoked its limited financial capacity as a reason to step back from institutional succession commitments. To test this assertion and alleged differential treatment between schools, Villa Maria requested audited financial statements and granular information about the CND’s assets and investments. The Court held that the CND must disclose its audited financial statements from 2022 to 2025, subject to confidentiality safeguards, because these documents directly relate to reasons the CND itself advanced for postponing the Domaine sale and re-evaluating its commitments. However, it rejected broader questions about the exact value of all investments and tangible and intangible assets as overly expansive and insufficiently tied to the issues in dispute. A particularly significant aspect of the ruling concerns comparisons with other schools, especially Marianopolis. Villa Maria contended that all other institutions managed by the CND outside the Domaine had been able to purchase their properties, whereas Villa Maria alone faced a threatened future. The Court refused to open large-scale inquiries into transactions involving schools outside the Domaine, such as Regina Assumpta and Les Mélèzes, citing the disproportionate scope, third-party interests, and tenuous relevance. Yet, because Marianopolis is also linked to the Domaine and was explicitly invoked in the pleadings, the Court ordered disclosure of certain documents about that sale: the lease and offer to purchase, payment schedules, and related financial information, again subject to confidentiality obligations and notice to the third party before any court filing. This limited comparative approach allows Villa Maria some evidentiary basis for its alleged differential treatment argument without turning the proceedings into an audit of all CND educational transactions worldwide. Finally, the Court gave strong protection to the CND’s strategic preparations for the eventual sale of the Domaine. It upheld objections to requests for Colliers’ valuation reports, the underlying property appraisals, prior evaluation studies (including a 2020 heritage-interest study), and all correspondence between the CND and Colliers. The judge accepted that evaluators’ professional secrecy and the CND’s “important legitimate interest” in confidentiality justified non-disclosure, especially since releasing detailed valuations and marketing strategies to a potential bidder (Villa Maria and its partners) could distort future bidding and undermine the CND’s ability to obtain the best price. For similar reasons, the Court denied access to the identity of a third-party bidder and its development plans in a rejected 2024 offer, as well as to communications with the Vatican regarding authorization to sell, concluding that these requests sought highly sensitive strategic information that would not meaningfully advance the dispute over Article 18.

Procedural directions and next steps

In its conclusion, the Court lists, article by article, which objections are maintained and which are rejected. Importantly, to prevent further procedural escalation and to respect proportionality, the judge orders that answers to all questions for which objections have been rejected must be provided by way of sworn written declarations, including any associated documents, within 20 days of the judgment. This approach aims to avoid the risks of further “runaway” oral examinations and to keep the schedule for bringing the permanent injunction application to readiness by the end of May 2026. The Court also lays down detailed confidentiality measures: certain sets of answers and documents are restricted to counsel or to parties on a “need-to-know” basis, and the parties must give prior notice before filing specified confidential materials in the court record so that appropriate sealing or confidentiality orders can be issued. Ultimately, the judgment underscores that the merits of the underlying lease and sale dispute remain to be determined by the trial judge. It does not rule on whether Article 18 was triggered, whether the CND acted in bad faith or abused its rights, or whether Villa Maria is entitled to force acceptance of its 5-million-dollar offer or to recover damages.

Outcome, successful party and monetary consequences

This objections decision produces a nuanced, mixed outcome. Both Villa Maria and the CND succeed on some objections and fail on others, reflecting the Court’s effort to calibrate disclosure and confidentiality rather than to endorse one party’s theory at the interlocutory stage. The judge expressly states that costs (“frais de justice”) are left to follow the ultimate result of the case, meaning there is no immediate award of costs, damages or other monetary relief in favour of either side. Because this judgment addresses only procedural objections and not the substantive merits of the injunction or any damages claim, there is, at this stage, no clearly identified “successful party” and no monetary amount ordered or granted; any eventual financial recovery, including costs, remains undetermined and will depend on the outcome of the main action.