A developer sued a municipality alleging breach of a supplementary subdivision agreement governing allocation of sewage capacity for a commercial and residential development.
The agreement provided that additional sewer capacity in the municipal system was reserved for the developer’s subdivision and that the municipality would not allocate capacity to lands outside the subdivision until the development was fully built out.
The municipality nevertheless allocated capacity to an adjacent development and expropriated a one‑foot reserve to allow connection.
The court interpreted the contractual language in light of the factual matrix and held the agreement granted the developer priority to available capacity.
The municipality breached the agreement by allocating capacity to the neighbouring development before completion of the subdivision.
The plaintiff proved loss‑of‑chance damages for lost leasing opportunities and was awarded compensatory damages, but punitive damages were denied.
