Hudson’s Bay Co. ULC has staved off eviction in one of its legal fights with its landlords, and has been ordered to pay 50 per cent of the rent it had been withholding since April.
The dispute between Hudson’s Bay and Oxford Properties relates to the Bay store in Hillcrest Mall in Richmond Hill, Ont. Oxford and landlords in Quebec, B.C. and Florida have taken the retailer to court recently for not paying rent during the novel coronavirus pandemic.
While the case is not yet settled, the Hillcrest order is a noteworthy example of a court determining how much rent should be paid during the pandemic. After weeks of store shutdowns in some provinces earlier this year – and lower store traffic as people stay home to prevent the spread of COVID-19 – landlords and retailers across the industry have been in negotiations to determine how to share the pain of sales declines.
Late last month, after the landlords launched their cases, Hudson’s Bay filed its own lawsuit against Oxford and its affiliates, claiming they had breached their lease agreements at seven shopping malls that Oxford owns, co-owns or manages – including Hillcrest, which it co-owns with Montez Corp.
In an interim court order filed in Ontario Superior Court on Oct. 29, the landlords were prevented from terminating the lease on the Hudson’s Bay store at Hillcrest and evicting the retailer. The order also stipulated that Hudson’s Bay must pay half the rent it had been withholding from April 1 to Oct. 1, totalling $659,394.83. Hudson’s Bay will have to continue paying half the rent when it comes due on the first of every month until there has been a final determination in the case.
The order noted that this arrangement does not prevent the landlord from arguing that the rest of the back payments are still due, or Hudson’s Bay from arguing that it should have to pay no rent at all. The case is continuing.
In a statement, HBC Properties and Investments president and CEO Ian Putnam said the retailer has reached “mutually acceptable” arrangements with other landlords, and welcomed the ruling.
“HBC believes the courts will continue to provide a common sense approach that is fair to landlords and retailers,” Mr. Putnam wrote. “We accept the Court’s Order and will continue to ask for a fair sharing of the burden of the pandemic.”
“We welcome the judge’s ruling which demonstrates that HBC cannot use leased premises and not pay rent, which is what it had done for the seven months prior to the interim order,” Oxford spokesperson Daniel O’Donnell said in a statement. “This is an interim order only and fully preserves all of our rights to seek the appropriate payment of rent.”
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Susan Krashinsky Robertson
Rachelle Younglai