The Yukon Supreme Court has made a decision in a suit against the territorial government over an agreement on residential development by Tahkini Hot Springs Ltd.

Justice Miriam Maisonville concluded Tuesday that until community consultation and rezoning conditions are met, further development is prohibited.

“At this point, I’m quite pleased with the decision, although I say that with caution,” Brian Farrell, president of the Hot Springs Road Development Area Residents Association, told the Star.

“I feel positive, and I look forward to dealing with the powers that be as it goes forward.”

The association, comprised of approximately 25 members, filed a statement of claim in June 2016. It asked that the development agreement be found void, as it did not comply with the local area plan that was approved in 2002.

“It was a very local, public planning process by local community with heavy representation by the Hot Springs,” said Stephen Walsh, the association’s lawyer.

They argued that the plan clearly states only two residences are allowed per lot.

And policy within the plan states, “any additional residential units beyond what is permitted in this designation would be subject to community consultation, rezoning and site plan approvals.”

But Jarome McIntyre, the government’s assistant deputy minister of sustainable resources, explained that a special provision in the plan allowed the developer to “transfer development potential.”

This means certain lots could have their residential development potential restricted and transferred to another lot.

“There’s always been a disagreement in the community and with the property owner and others on the legal interpretation of the provisions in the plan,” McIntyre said.

In 2012, Takhini Hot Springs Ltd. was given permission to subdivide the property into smaller lots.

In 2015, the government amended this agreement and three lots were given an expanded capacity of nine, three and five residences per lot. These agreements were not subject to either consultation nor rezoning.

The government, represented by Michael Winstanley, argued that consultation was not triggered because Takhini Hot Springs Ltd. was not planning to develop more than 20 total residences, the number of residences allowed at two per each lot.

Walsh noted residents aren’t against development of the hot springs; they are just concerned with “large-scale commercial real estate development.

“You do not want two or three residences on one lot next to you when you’re in a single-family dwelling,” explained Farrell.

“Certainly there is concern for neighbours in terms of encroachment on their properties, in terms of quality of life, and an increase in noise and traffic right out your back door when these are rural residences.”

Justice Maisonville decided the residents’ association was correct in its interpretation of plan policy that re-zoning and public consultation are required before more than two residences are allowed per lot.

However, she concluded the development plan should not be void, noting the impact it would have on the third party, Tahkini Hot Springs Ltd.

“The judge was really clear on this; she wasn’t about to quash any agreement and call it null and void when a third party is affected,” said Garry Umbrich, president of Takhini Hot Springs Ltd.

“I guess when you look at this lawsuit, the residents won on one key point; consultation. And the government won on; yes the development agreement was a good approach.”

McIntyre said the decision is positive in that it brings clarity to the local area plan.

“It’s a lesson learned that whenever you do a plan, it’s important that the provisions of the plan be really clear and not ambiguous and open to interpretation,” he said.

He added the government is taking time to review the court order and how to implement the decisions. But he expects the developers will apply for rezoning, which would then trigger public consultation.

Umbrich said the decision has little effect on the new hot spring facility, but plans to begin development on residences this summer will likely be delayed.

“We’re going to be asking YG to give us some clarity on the process,” he said.