Malsham Group Inc. (Malsham), a subsidiary of the Molson Group of Companies, has successfully defended a claim by Murlee Holdings Inc. (Murlee) for inducing a breach of contract between Murlee (a subsidiary of Leon’s Furniture) and retailer B.B. Bargoon’s Inc.
Murlee had opened a new shopping centre in Winnipeg, in which B.B. Bargoon’s was the first tenant. After three years of the mall remaining unleased, B.B. Bargoon’s vacated the premises. At the time, Malsham held 50 per cent of the shares of B.B. Bargoon’s, and Murlee alleged that Malsham directed B.B. Bargoon’s to breach the lease.
The claim presented a novel issue of whether a significant shareholder can be held liable for inducing a corporation to breach a contract. Justice John Wilkins of the Superior Court of Justice dismissed the $3 million claim and held that there was no evidence of inducement, collusion, pressure or persuasion by any person at Malsham with respect to B.B. Bargoon’s decision to leave the Winnipeg centre.
Randy Pepper and Sonia Bjorkquist of Osler, Hoskin & Harcourt LLP acted on behalf of Malsham. Geoff Hall and Dean Novak of McCarthy Tétrault represented Murlee.