K&L Land Partnership paid $15 million for a 546-hectare parcel of land with views overlooking Kalamalka Lake near Vernon in order to subdivide it for eager home buyers in 2005.
But by 2011 the developments were put on hold after the company discovered the land could contain unexploded military ordnance.
Between 1939 and 1945 the Vernon Military Camp, which was located right next to the developer's land, trained soldiers how to use bombs, grenades and mortars before they were sent to war.
The lawsuit alleges that during those operations some of the explosives used ended up on the land that was eventually sold to the developer years later.
8 people killed since 1945
According to the lawsuit, since 1945 eight people have been killed and three wounded by explosives left at the camp and on nearby land, including two boys who died while trying to pry open a military shell near Vernon in 1963.
The government at the time swept the area looking for more shells. Then again in 2007, two years after developers bought the land, the government used a helicopter to scan the countryside around Vernon with a specialized metal detector looking for unexploded ordnance.
The developer's lawyer Howard Shapray said his clients never received any disclosure from the government before they bought the land that abandoned live ammunition could be buried at the site.
Then in 2011, the Department of Defence contacted the developers and told them the land may contain unexploded ordnance.
The following year the developers launched the lawsuit alleging the government violated the Explosives Act by abandoning the unexploded ordnance and not informing them.
"The government has a variety of legal duties to clean up the site, remove the dangerous and hazardous material," said Shapray.
In response to the lawsuit, the Department of National Defence "denies that it intentionally concealed facts relating to the possible existence of UXO [unexploded ordnance] in the lands."
The department also said the developer could have found out about the well-documented history of unexploded ordnance in the area if it had conducted reasonable due diligence, such as checking past newspaper stories and histories of the area.
National Defence said live-fire training exercises continued in the area until 1971 and the most commonly found ordnance was two- or three-inch mortar shells.
"While it is impossible to say exactly how many unexploded explosive ordnance (UXO) may remain in the ground at Vernon, assessment work has confirmed the presence of munitions or related components at various locations. Since 1960 DND has implemented several clearance operations, and have removed numerous UXO items," said the statement issued by public affairs officer Kathleen Guillot.
The case is expected to be heard in B.C. Supreme Court in the fall of 2014.