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The Bay ordered to pay Cherry Lane Mall its overdue rent to avoid eviction in Penticton

The Bay has to pay to stay

The ongoing fight between Penticton's Cherry Lane Mall and its tenant, the Hudson's Bay Company, is slowly drawing to a conclusion, as a BC Supreme Court judge ruled the mall cannot evict The Bay for not paying its rent. But The Bay has to pay.

The companies filed lawsuits against each other in November of 2020. Cherry Lane alleged in its suit that HBC had not paid its roughly $78,000 per month rent since April 2020, resulting in over $620,000 owed, plus more than $85,000 in taxes and lease costs reconciliation.

HBC filed a suit the same day in November, claiming Cherry Lane was a contributing factor for their loss of revenue during the pandemic that left them unable to pay their rent, upset over lack of upgrades for public safety.

B.C. Supreme Court Justice Christopher Giaschi ruled in a judgment published June 17 that the mall cannot go through with eviction actions if The Bay pays all its outstanding rent.

“Cherry Lane was justified in terminating the lease due to non-payment of rent. However, this is an appropriate case in which relief from forfeiture should be granted, but on terms that HBC pay the full amount of the rent,” Giaschi wrote in his decision.

He added that HBC would suffer irreparable harm if it was forced out of the premises, with a lack of locations in the area where it can relocate its store, along with reputational damage.

On January 5, 2021 a consent order was entered into by the parties, outlining that HBC was to pay to Cherry Lane 50 per cent of the ongoing rental amounts for the year 2021, that amount being $38,489.

The balance of the rent amounts were to be deposited into the trust account of HBC’s counsel and were to be held subject to any further agreement of the parties or an order of the court.

“There is no irreparable harm to HBC in requiring that it pay full rent,” Giaschi wrote.

Giaschi ruled that along with HBC’s obligation to pay rent pursuant to the terms of the lease, they must pay all amounts held by them in trust or otherwise held by them on account of rent owing.

In regards to HBC's allegation that Cherry Lane failed to provide a high quality shopping centre, the decision will be determined at a future hearing. If HBC’s action against Cherry Lane is successful, their company will be entitled to damages, which will provide it with full compensation.

“Both parties have retained experts to provide their opinions on the issue of whether the shopping centre was a “high quality” shopping centre at the relevant times and the reports of these experts are in evidence before me. The experts have different opinions on the matter. However, I do not intend to review the evidence of the experts in any detail as, in my view, it does not matter whether Cherry Lane was in breach of this contractual obligation.”



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