the bay yorkdale

Yorkdale's landlord is being sued for failing to run a first class mall

Things are looking pretty grim for one of Canada's oldest (and seemingly most frail) retail giants right now after eight months of losses that can be credited, at least in part, to the coronavirus pandemic.

Hudson's Bay Co. filed a lawsuit in Toronto on Tuesday alleging that several of its mall landlords breached their lease agreements by failing to operate "first class shopping centres."

Nine property management and holdings firms are named in the suit, including the owners of Scarborough Town Centre, Upper Canada Mall, Hillcrest Mall, Square One and Yorkdale Shopping Centre.

Almost all of the malls in question are operated by Oxford Properties, which itself is being sued twice by the Bay under the names "OXFORD PROPERTIES RETAIL HOLDINGS INC." and "OXFORD PROPERTIES RETAIL HOLDINGS II INC."

HBC's statement of claim, filed in the Ontario Superior Court of Justice on University Avenue yesterday, says that Oxford has refused to sufficiently adapt its properties to the realities of the pandemic, making stores seem less safe and thus less attractive to the public.

The 350-year-old brand is seeking a declaration from Oxford saying that it doesn't have to pay rent until these issues are fixed.

It also wants any rent paid to the owners of Oxford malls (Yorkdale Shopping Centre Holdings Inc., Square One Shopping Centre Holdings Inc., etc.) since April disgorged.

"Disgorgement," for the record, is a legal term defined as "the repayment of ill-gotten gains that is imposed on wrongdoers by the courts."

Here's the thing though: According to Oxford, HBC hasn't paid the rent at several of its anchor locations since April.

Oxford and Quebec's Cominar Real Estate Investment Trust in fact filed lawsuits of their own against HBC earlier this month over unpaid rent for at least five of the company's department stores.

"HBC has not paid rent since April 1 at most of our shopping centres across Canada, and seven months of recurring attempts to engage the company in a constructive dialogue were repeatedly ignored," wrote Oxford in an email to the Canadian Press when asked about HBC's new court filing.

"Recently, HBC has begun to raise frivolous and self-serving complaints concerning the operations of multiple shopping centres in a transparently disingenuous attempt to retroactively justify its decision to stop paying rent."

Oxford said that HBC's complaints, which have not yet been tested in court, are "without merit."

Many in Toronto seem to agree with Oxford that, despite any faults and missteps it may have taken since COVID-19 hit, Yorkdale Shopping Centre is undoubtedly "first class."

"I love how HBC gets to get out of paying rent since April but I can't get any sort of help with the rent period," wrote one. "Yorkdale is a first class mall, the problem is HBC hasn't been a first class store for over 10 years."

"This is a sad and laughable tactic from a desperate company," wrote another, referring to HBC's lawsuit. "The Bay should be ashamed."

HBC, founded in Canada but sold to an American for $1.1 billion in 2006, is said to owe Oxford $2.29 million in unpaid rents for two Quebec shopping centre locations alone.

Oxford alleges that the Bay has not paid rent at eight of its 11 malls containing HBC stores across Canada.

Lead photo by

Wikimedia Commons

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