The Town of Yarmouth is facing legal action over their property in Lake George.
Details of the action have not been released.
Town staff dumped tonnes of garbage-laden compost near the Lake George watershed in late 2015.
Residents were angered that the site had not been cleaned up, and claimed the material contaminated their wells.
The Department of Environment ordered the town to remove the material.
The town has repeatedly stated that expert tests showed there was no soil or water contamination from the material.
The property, a former sawmill, was purchased in 2005 by the town.
Mayor Pam Mood had no comment today but did confirm legal action has been filed against the town.
At Yarmouth Town Council last week, the Chair of the Yarmouth Water Utility Cliff Hood said the town has a viable defense.
He says not one thing contained in that 'compost' created a danger to the environment.