Beer Store parent company ordered to pay $15.3 million for real estate sabotage
An Ontario court found Brewers Retail deliberately derailed a 2015 sales agreement with Block Developments, costing the builder millions in lost development profits.
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The parent company of the Beer Store has been ordered to pay $15.3 million after an Ontario court found it deliberately sabotaged a real estate deal with developer Block Developments, steering two prime properties toward a rival instead.
The Court of Appeal for Ontario ruled Tuesday that Brewers Retail Inc. breached its 2015 agreement to sell the Dundas West and River Street properties to Block. The developer had planned to redevelop the sites into condos with Beer Store retail space below.
The court found that Tom Lucas, Brewers Retail's then-director of real estate and construction, covertly worked to steer the properties toward Rosewater Developments while Block believed its deal was proceeding. Lucas even omitted an agreed-upon clause from the sales agreement — a "misrepresentation" that ultimately sank the transaction. The court described his conduct as "egregious."
The trial judge also noted that Rosewater's principal was Lucas's "business associate and friend." Lucas has since resigned from his position.
Brewers Retail eventually sold both properties to Rosewater at a discount — less than the $10.3 million Block had already agreed to pay. Block sued, arguing it had lost the profits the completed development would have generated.
The court agreed, upholding the $15.5 million damages award and affirming that "due to Brewers' breach, Block lost a development opportunity that had a degree of specificity known to the parties at the time of contracting."
