The owner of Paramount Fine Foods is alleging the mayor and City of Mississauga have defamed him by claiming his company failed to make payments totalling $1.6 million for the naming rights of a public facility.
The city announced last month that it was renaming Paramount Fine Foods Centre after months of discussions over an alleged lack of payment, ending an eight-year naming rights deal with the restaurant chain. The city is pursuing legal action to recoup the costs.
A libel notice filed to the Ontario Superior Court of Justice Friday on behalf of Paramount owner Mohamad Fakih claims he was willing to make the payments, and that negotiations over how to settle the debt were ongoing when the city and Mayor Carolyn Parrish publicly announced the termination on May 26.
The lawsuit alleges the city and mayor defamed Fakih and related Paramount entities by “publicly portraying them as unwilling to pay debts owed to the City” in multiple social media posts.
“In good faith, Paramount offered to mediate the issues with the City of Mississauga and took tangible steps to address the alleged arrears owing,” Fakih’s lawyer Sam A. Presvelos said in an emailed statement. “Instead, the City and Mayor Parrish decided to litigate the issues.”
City spokesperson Irene McCutcheon said in an email Monday that the city is aware of Fakih’s claims and will respond through the courts. She said the city and mayor will not be commenting further as the matter is before the courts.
City alleging breach of contract, seeking $9M
The city filed its own lawsuit to Ontario’s Superior Court of Justice Monday against Fakih Group Inc. (FGI), formerly Paramount Franchise Inc., over the alleged non-payment. It’s seeking $9 million for breach of contract and conversion.
The city’s lawsuit claims FGI fell into default of its contractual obligations shortly after entering the agreement in 2018, and by July 2022, it owed just over $1.6 million.
The city and FGI entered an amended agreement in May 2023, the lawsuit alleges, extending it from 10 to 14 years, while waiving roughly $850,000 in outstanding sponsorship fees in recognition of COVID-related business disruptions.
According to the lawsuit, the company also quickly fell into default on the amended agreement, and FGI requested a revised payment plan to address fees in arrears. Between October 2023 and May 2026, FGI paid $393,000 of the required $1,780,100, plus taxes, owing under the new plan, according to the statement of claim.
The city notified FGI on May 20 the contract would be terminated, the lawsuit claims, six days before it was publicly announced. Since that time, the city has “incurred significant expense” to remove Paramount advertising from the facility, according to the statement of claim.
Other damages to the city allegedly include the loss of future income, the cost to re-tender and renegotiate new sponsorship agreements, and damages to the facility itself under Paramount’s possession, the lawsuit alleges.
In an emailed statement Monday, Fakih called the city’s legal actions “a political stunt against a man who has spent over a decade investing in, donating to, and serving this city.”
Reputational damage to Fakih, Paramount, libel lawsuit claims
In the libel lawsuit against the city, Fakih claims Paramount never refused to make payments, but consistently acknowledged its debt and sought to resolve it.
According to the lawsuit, Fakih is seeking $3 million in general damages for defamation, $500,000 for alleged breach of confidentiality obligations and $750,000 in aggravated and punitive damages.
The lawsuit alleges the city had proposed a discounted settlement of $1.1 million plus tax to be paid out over 36 months, approved in a private session by city council, and that Paramount delivered 36 post-dated cheques on May 27.
Despite these discussions, the city publicly said the restaurant chain owed $1.6 million, according to the lawsuit. The city allegedly breached confidentiality clauses in the naming rights agreement by disclosing specific terms, including amounts allegedly owed.
Paramount Fine Foods founder and president Mohamad Fakih alleges in the lawsuit that the company was ready and willing to pay the city back, and libelous allegations against the company have hurt his reputation. (Mehrdad Nazarahari/CBC)
The city also repeatedly changed what security it required from Paramount, the lawsuit alleges.
“In adopting this hostile approach, the city unilaterally changed the terms on which the matter would be resolved,” the lawsuit said.
The lawsuit alleges that Mayor Parrish’s May 26 statement on social media was defamatory in claiming Paramount refused to pay money owed, acted in bad faith, caused financial harm to taxpayers and could not be trusted to honour contractual obligations. Further, it alleges the mayor’s statement conveyed that Fakih lacked honesty and integrity.
Mayor Carolyn Parrish posted this statement to her X account on May 26, announcing publicly the City of Mississauga was ending its contract with Paramount. (Carolyn Parrish/X)
The lawsuit alleges the statements from the city and mayor on May 26 triggered calls for boycotts of Paramount, harmed business relationships, generated anti-Muslim and anti-Arab commentary online and led to attacks on Fakih’s reputation.
In an email sent to the city and Mayor Parrish on June 19, Fakih’s lawyer said his client is requesting that Parrish and the city remove the posts in question from their official social media accounts and publish a full retraction and apology within seven days.