The residents of Takhini North subdivision are taking the city of Whitehorse to court over an ailing water and sewer system.
The 22-page statement of claim was delivered to the Yukon’s Supreme Court on Friday.
In the statement, the residents are claiming damages that arose from the city’s negligence and breach of duty when it allowed the subdivision to be developed and sold without upgrades to the Second World War plumbing.
The residents also claim that there was a conflict of interest since three of the developers were partners and associates at the firm that was offering the city legal advice at the time.
Takhini North was originally constructed by the Department of National Defence for military housing.
It was historically known as Camp Takhini and included Valleyview, Takhini East and Takhini West.
Takhini North is the only subdivision that is still using the original water supply and sewer systems.
The single serial or house-to-house water system serves all of the duplexes on the same block in such a way that if a pipe bursts anywhere in the series, the whole block loses water.
In or around 1989, Public Works Canada provided the city with a utility assessment report stating that the water and sewer infrastructure serving Camp Takhini was in serious disrepair and non-compliant with municipal regulations.
In the early ‘90s, Public Works Canada began to subdivide Camp Takhini for sale, upgrading the infrastructure to municipal standards along the way.
The Takhini North parcel was left undeveloped.
In 1998, the land was sold to a development firm called 18001 Yukon Inc. for more than $2 million.
Prior to the sale, Public Works Canada reminded the city that the land was still undeveloped and suggested it require the developer to upgrade the water and sewer system.
The city of Whitehorse dismissed the advice and didn’t ask the developer to upgrade the system.
At the time, three of the principal officers of the development firm that bought Takhini North were also working partners or associates at a law firm working for the city called Preston, Willis and Lackowicz.
In 1999, the developer subdivided Takhini North into 85 separately titled lots.
The infrastructure had still not been upgraded, although it was required under the Municipal Act and the subdivision control bylaw.
Instead, the city exempted the developer of these obligations and authorized a transfer of easement agreement on the title of each lot.
The developer created this easement agreement.
“It is a misleading document that does not create a true easement known to law,” the residents claim.
“But rather creates an obscure and not easily identified future liability or covenant charging the subject properties in favour of the (developer).”
This “obscure covenant” obliges future owners to upgrade the water system when and if the city decides the services need to be corrected, the statement continues.
“The easement agreement was designed in such a way as to conceal or render particularly ambiguous the inherent liabilities, defects and deficiencies of the water supply system and sewer systems.”
The lots were then sold off to individual purchasers at a price comparable to those paid for similar houses in Whitehorse with fully upgraded water-system infrastructure.
The Takhini North residents claim that they were misled by the “ambiguous and deceptive” easement agreement and were completely unaware of the disrepair of their homes’ water system.
Last year, the city cited this easement agreement when it informed the Takhini North residents that they would need to pay approximately $1.8 million to replace their water and sewer systems.
That works out to $24,350 per individual property.
On top of this amount, the residents claim they suffered additional damages and losses, including the reduced value of their properties.
They are asking the court to declare the city responsible for the cost of upgrading the water and sewer system and are also requesting an injunction restraining the city from collecting money from them for this upgrade.
Additionally, they are asking for general and special damages, interest and costs.
Both the city of Whitehorse and the Takhini North Residents Association have declined to comment while the matter is before the courts.