The Bay won’t get evicted from Penticton mall if it pays its overdue rent: judge

Efforts by Cherry Lane Shopping Centre in Penticton to evict The Bay for not paying its rent have failed, as long as the Bay pays up.

The two parties filed competing court actions last fall after The Bay stopped paying rent in April 2020 when it closed due to the COVID-19 pandemic.

Cherry Lane insisted it had the right to evict for non-payment while The Bay filed suit saying the mall failed to provide a high quality shopping centre.

READ MORE: The Bay suing Penticton's Cherry Lane Shopping Centre as mall tries to evict

In an order issued yesterday, June 17, B.C. Supreme Court Justice Christopher Giaschi ruled the mall cannot go through with eviction actions if The Bay pays all its outstanding rent.

“I am satisfied that HBC (Hudson’s Bay Company) would suffer irreparable harm if it was forced out of the premises,” he wrote. “As indicated, the evidence before me is that there are no other locations in the area where it can relocate its store. It could also suffer reputational damage.”

However, no irreparable harm would fall to The Bay if it paid all its outstanding rent, plus interest and continued to pay rent going forward, Giaschi said. Currently it’s paying 50 per cent of its rent into a trust account. The order is for The Bay to have the money in trust paid to Cherry Lane as well.

The matter of whether Cherry Lane failed to provide a high quality shopping centre still has to be determined at a future hearing.

“There are conflicting expert opinions as to what constitutes a high quality shopping centre and as to whether Cherry Lane breached its obligation to continuously operate a high quality shopping centre as required by clauses 7.00 and 7.01 of the lease,” Giaschi wrote. “If HBC’s action against Cherry Lane is successful, it will be entitled to damages, which will provide it with full compensation.”

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