The Beer Store just got slapped with a $15-million penalty
A former Brewers Retail manager killed a development deal in order to ”benefit a business associate and friend”
The parent company of the Beer Store has been ordered to cough up more than $15 million after an Ontario court found that it had deliberately derailed a sales agreement. The ruling stems from two Beer Store properties—one at 1200 Dundas West and the other at 28 River Street. In 2015, Brewers Retail Inc. agreed to sell the lots to Block Developments. The builder had plans to redevelop the sites into condos, with the Beer Store occupying retail below.
But it wasn’t to be. The Court of Appeal for Ontario found that the Beer Store’s then director of real estate and construction, Tom Lucas, covertly worked to steer the properties toward Rosewater Developments even while Block believed that its deal was moving forward. The court says that Lucas went as far as to leave an agreed-upon clause out of the sales agreement, a “misrepresentation” that ultimately sank the transaction.
The trial judge also described Rosewater’s principal as Lucas’s “business associate and friend.” Lucas has since resigned from his position.
Brewers Retail ended up selling the two properties to Rosewater at a discount: less than the $10.3 million Block had already agreed to pay. Block then sued, arguing that it had lost out on profits that the projects would have generated. The court agreed, upholding an award of $15.5 million in damages and calling Lucas’s conduct “egregious.”
“Due to Brewers’ breach, Block lost a development opportunity that had a degree of specificity known to the parties at the time of contracting,” the court filings say.
Zakiya Kassam is a writer and fact checker whose work has appeared in Post City Magazines, This Magazine and Now Toronto. She was previously the associate editor at Storeys.
