ARTICLE · 01 JUNE 2026

Equity And Commercial Leases: Equity Cannot Rewrite A Lease

Pallett Valo LLP

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When COVID-19 forced retail closures across Canada, Hudson's Bay Company strategically withheld over $1.3 million in rent from its landlord at Richmond Hill's Hillcrest Mall, seeking pandemic-driven rent reductions through litigation.

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Background

COVID-19 devastated Canadian retail. Forced closures and lockdowns reduced sales for many retailers to a fraction of pre-pandemic levels. Hudson’s Bay Company ULC (“HBC”), once Canada’s oldest company and anchor tenant at Hillcrest Mall in Richmond Hill, Ontario, had paid rent in full and on time since 1978. Beginning in April 2020, HBC unilaterally withheld rent from its landlord, Oxford Properties Retail Holdings II Inc. (“Oxford”), accumulating arrears exceeding $1.3 million. Critically, there was no evidence HBC was financially unable to pay; it withheld rent deliberately as a negotiating strategy to obtain a pandemic-driven rent reduction. Oxford responded by serving HBC with a Notice of Intention to forfeit the lease.

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