Background:
Four Top Hospitality Group Ltd. (formerly CRAM Food Group Ltd.), Rajiv Khaneja, and Christopher Sparling, sued Olde Towne Developments Ltd. and its owner, Aaron Usatch, in the Supreme Court of British Columbia. The dispute arose from the termination of a commercial lease for premises located at 538 Yates Street in Victoria, British Columbia. CRAM alleged the termination was unlawful and claimed damages for breach of contract, economic torts, and defamation.

Legal Arguments/Issues:
The plaintiffs argued that Olde Towne failed to provide proper notice under the lease before termination and acted in bad faith. They also alleged Olde Towne induced Tiverton Holdings Ltd. to breach a partnership agreement with CRAM and used unlawful means to interfere with potential subleasing opportunities. In addition, the individual plaintiffs claimed defamation based on statements allegedly made by Usatch.

The defendants contended that CRAM breached its lease obligations, including failure to operate the business as required and to maintain the premises. Olde Towne sought damages for lost rent and re-leasing costs, as well as indemnification for litigation expenses.

Outcome:
The court awarded Four Top Hospitality Group Ltd. and the individual plaintiffs $600,000 in total damages, including $450,000 in expectation damages for lost subleasing opportunities, $100,000 in punitive damages, and $25,000 each to Khaneja and Sparling for defamation. The defendants’ counterclaims were dismissed.