A recent decision by the Ontario Superior Court of Justice has resulted in a significant financial judgment against a real estate developer in Stoney Creek following a dispute over the timing of construction payments1. In a ruling released on November 14, 2025, Justice S. Antoniani ordered Tobyn Park Homes Inc. to pay 2324780 Ontario Inc., operating as Losani Homes, more than $2 million in accrued interest. The decision centers on the interpretation of a Cost Sharing Agreement between the two developers and rejects the argument that payment obligations were tied to the City of Hamilton’s final acceptance of the infrastructure projects.
The legal conflict arose from a cooperative effort to develop residential lands in Stoney Creek where both Losani Homes and Tobyn Park Homes own adjacent properties. To proceed with their respective subdivisions, the City of Hamilton required the construction and urbanization of nearby roadways, including the installation of storm and sanitary sewers, water mains, and other essential infrastructure. To facilitate this, the two companies entered into a Construction and Cost Sharing Agreement. Under the terms of this contract, Losani Homes agreed to manage the design and construction of the required work, while Tobyn Park Homes agreed to share the costs associated with the development.
The infrastructure work was successfully completed, but a disagreement emerged regarding when Tobyn Park Homes was required to reimburse Losani Homes for its share of the expenses. Losani Homes argued that the agreement required Tobyn to make interim payments throughout the construction process. These payments were to be triggered when the project’s consulting engineers issued Progress Certificates detailing the work completed and the proportionate costs owed by each party. According to Losani, Tobyn failed to make these payments on time, leading to a substantial accumulation of interest under the terms of the contract.
Tobyn Park Homes presented a different interpretation of the contractual obligations during the one-day trial held in May 2025. The defendant argued that it had no obligation to make payments based on the engineers’ certificates. Instead, Tobyn contended that the payment timeline was governed by an External Works Agreement between Losani Homes and the City of Hamilton, which was annexed to the Cost Sharing Agreement. Tobyn’s position was that the funds were not due until the City of Hamilton formally approved and accepted the completed works. Since the City did not provide this confirmation until March 2023, Tobyn asserted that its subsequent payments were timely and that no interest was owed.
The court was tasked with interpreting the text of the Cost Sharing Agreement to determine the mutual objective intentions of the parties. Justice Antoniani cited established Supreme Court of Canada principles regarding contractual interpretation, noting that the analysis must be grounded in the actual words used by the parties. The court looked at the contract as a whole, giving words their ordinary grammatical meaning consistent with the surrounding circumstances known to the parties at the time the contract was formed.
The specific provisions of the Cost Sharing Agreement came under close scrutiny. Article 2.02(a) of the agreement stated that upon the completion of any portion of the works, the consulting engineers would provide a Progress Certificate specifying the costs and the proportionate liability of each party. The following section, Article 2.02(b), explicitly required that payment be made to the contractor no later than twenty days after the delivery of each Progress Certificate. The text emphasized that these payments were interim obligations tied to specific portions of the work rather than the final completion of the entire project.
Tobyn Park Homes based its defense on the fact that the Cost Sharing Agreement incorporated terms from the City’s standard External Works Agreement. Specifically, Tobyn pointed to sections of the City agreement stating that acceptance of the works and the commencement of maintenance periods would only occur once the City was satisfied that the project was substantially complete and free of major deficiencies. Tobyn argued that simply by annexing the City agreement to their private contract, the parties had created a condition precedent that overrode the interim payment schedule set out in the Cost Sharing Agreement.
Justice Antoniani rejected Tobyn’s interpretation. The ruling clarified that the External Works Agreement was annexed to define the scope and technical standards of the work required by the City, not to alter the payment terms negotiated between the two private developers. The court noted that the City agreement did not address payment obligations between Losani and Tobyn at all. It dealt solely with the technical acceptance of the infrastructure for the purpose of moving the project into a maintenance phase. The judge found that Tobyn was conflating the standard for City approval with the triggering event for payment under the private cost-sharing arrangement.
The court found that the Cost Sharing Agreement and the External Works Agreement were not in conflict. The private agreement clearly contemplated multiple payments based on the completion of portions of the work. The text of the agreement anticipated that interim payments would be required and even accounted for scenarios where Losani might pay the contractor before receiving funds from Tobyn. The judge reasoned that adopting Tobyn’s interpretation would render numerous specific terms of the negotiated contract meaningless, including the role of the consulting engineer in issuing certificates and the provisions for drawing on letters of credit in the event of default.
Commercial reasonableness also played a role in the decision. Justice Antoniani observed that an interpretation allowing Tobyn to withhold payment until the City’s final sign-off would lead to a commercially absurd result. Such an interpretation would have required Losani, a separate and unrelated business entity, to finance the entire cost and risk of the infrastructure project for years until the City granted final approval. The court noted that there was no evidence suggesting Losani had agreed to act as a financier for Tobyn, nor was there any fee structure in place to compensate Losani for carrying such a significant financial burden.
The conduct of the parties during the construction phase provided further support for Losani’s position. The court reviewed email communications exchanged between 2018 and 2019, in which Losani’s representatives requested payment to avoid interest charges. In response, representatives for Tobyn repeatedly indicated that they were arranging payments and that releasing funds to Losani was a priority. These communications included statements acknowledging that payments were being processed by lenders. The court viewed these exchanges as evidence that Tobyn understood its obligation to make interim payments long before the City offered final approval in 2023.
Tobyn’s partial performance also undermined its legal argument. In October 2019, roughly three and a half years before the City of Hamilton formally accepted the works, Tobyn made a payment of approximately $1.9 million. This sum represented nearly two-thirds of the total amount owed. Justice Antoniani rejected the suggestion that this was merely a good faith payment made years in advance of the due date. Instead, the payment was viewed as a partial fulfillment of the contractual obligation that had already arisen upon the issuance of the Progress Certificates.
In a secondary argument, Tobyn claimed that Losani had breached the contract by failing to complete the work according to the anticipated schedule. The Cost Sharing Agreement had projected a construction timeline beginning in November 2017 and ending in the spring of 2018, yet the work was not fully completed until 2023. Tobyn argued that this delay prevented Losani from enforcing the payment terms. However, the court found no evidence to support this claim. Tobyn did not present any witnesses or documentation to explain the cause of the delay or to show that it had raised concerns about the timeline while construction was ongoing. Consequently, the court dismissed the argument that the delay constituted a breach that would excuse Tobyn from paying interest.
The financial implications of the ruling are substantial. The Cost Sharing Agreement stipulated that late payments would attract interest at a rate of 15 percent per annum, compounded monthly. The court accepted the calculations provided by the plaintiff based on the delivery dates of five separate Progress Certificates issued between October 2018 and April 2022. While Tobyn eventually paid the principal principal amount of nearly $2.9 million through three installments ending in November 2023, the application of the compounded interest rate on the overdue amounts resulted in a significant outstanding balance.
The court accepted the agreed statement of facts regarding the amounts owed. As of the trial date in May 2025, the calculated interest on the late payments totaled $2,001,760.70. Justice Antoniani ordered Tobyn Park Homes to pay this sum to 2324780 Ontario Inc., along with additional interest continuing to accrue at the contract rate of 15 percent from the date of the trial until the judgment is satisfied.
Regarding legal costs, the judge urged the parties to come to a mutual agreement. If a settlement on costs cannot be reached, the court outlined a schedule for written submissions. The plaintiff has been granted fifteen days following the release of the reasons to file a bill of costs, with the defendant given twenty-five days to respond. The decision concludes a legal process that began with a statement of claim filed in 2020, highlighting the severe financial consequences of delaying payments defined in commercial construction contracts.
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