Ottawa

City loses $4.5M lawsuit over water main's presence near condo development

A developer has won a $4.5-million lawsuit against the City of Ottawa over a water main that led to a costly redesign of its project.

External lawyers say there are multiple grounds for appeal, city solicitor says

The city has 30 days to file its appeal of the court decision. (Jean-Sebastien Marier/CBC)

A developer has won a $4.5-million lawsuit against the City of Ottawa over a water main that led to a costly redesign of its project.

In a memo to council, the city's solicitor Rick O'Connor said they plan to appeal the decision in the suit Charlesfort Developments brought over its project on Richmond Road. 

O'Connor said the city's external lawyers believe there are multiple grounds for appeal. 

According to the court decision, the problem water main was discovered after the company applied for, and was granted, re-zoning in 2005 for a highrise tower called the Continental. The company wasn't told about the existence of the water main until 2007, but the city couldn't tell Charlesfort about its condition or exact location. 

Charlesfort researched the issue and found the water main was a key part of the city's infrastructure. It was four feet wide and under high pressure. If it was damaged, it would not only flood the site, but would also risk the water supply for nearly 500,000 people.

Instead of being in the middle of an adjacent right of way, it was actually just a metre from the property line and the company had to redesign the project rather than risk disturbing the water main.

Costly redesign

In her decision, Justice Sally Gomery said the city had the company take on an additional $25 million in liability insurance because of the water main, in addition to other financial impacts.  

"Completion of the Continental was delayed for two years and Charlesfort could not provide the parking and storage options it had marketed to condominium purchasers," she wrote.

Gomery said the city had the information that could have allowed the company to buy another site.

"The city had critical information about the size and condition of the water main and its role within the municipal water supply. The city did not provide this information to Charlesfort, and it was not otherwise readily available to Charlesfort."  

The city has 30 days to file its appeal.