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THEBACHA/FORT SMITH
A Fort Smith couple is moving closer to losing their home following a judge's ruling.

Clayton Burke stands in front of his Fort Smith home, which he and his family may soon have to vacate because of an unpaid loan from the NWT Business Development and Investment Corporation. - NNSL file photo

In a Sept. 27 written decision, an NWT Supreme Court judge ruled NWT Business Development and Investment Corporation (BDIC) can sell the house of Clayton and Annie Burke, along with a land lease at Large Pike Lake, to help pay off a business loan.

The properties were used as collateral for the loan.

"I'm ashamed of the territorial government for doing this to a family who's been in their home and built it themselves," Clayton Burke said.

Along with Burke and his wife, son and grandchildren live in the rustic log frame house – eight people in all.

Burke noted the situation is causing mental and economic hardship for him and his family.

"It's put us behind the eight ball to the point that we're even considering selling everything and relocating," he said, explaining that may mean leaving the NWT, where his wife was born and he has lived for 40 years.

In 2002, the couple's company – 892622 NWT Ltd. – borrowed $200,000 from BDIC to invest in their tourism business, Taiga Tour Company. The security was their house, a bed and breakfast, and two leases on land for wilderness camps.

The company defaulted on the loan two years ago and the matter first went to court.

BDIC seized and sold the bed and breakfast for $130,000 last year.

According to court documents, there was $217,365.13 due and owing under the mortgage as of Aug. 24, including legal costs by BDIC.

Burke said until this past summer, he had been making monthly payments of between $500 and $1,200.

BDIC recently went to court to seek an order confirming the sale of the house and the land lease at Large Pike Lake, east of Fort Smith. Hearings on the application were held July 28 and Aug. 31.

In her decision, Justice Louise Charbonneau wrote the Burkes agreed to use the properties as security for the loan.

"There are legal rights and obligations arising from that contract," she stated. "I do have a lot of sympathy for the situation that Mr. and Mrs. Burke and their family now find themselves in, but BDIC is acting within its legal rights."

The judge noted BDIC advertised the house for sale in May and received an offer of $125,050. It has also received a purchase offer of $30,000 for the lease at Large Pike Lake.

The judge approved the sales and ruled all interests of the Burkes in the house and land lease are extinguished.

"Mr. Burke's submissions raise a lot of moral and social considerations about this whole matter," the judge wrote, referring to his arguments in court. "But those considerations simply do not give the court a legal basis for refusing BDIC's application to have the sale of the property approved."

Burke's arguments included criticism of how BDIC operates and an explanation of how the decline in the number of Americans visiting the NWT following the 9-11 terrorist attacks has negatively impacted the tourism industry.

In addition, he argued BDIC didn't get true value for the bed and breakfast, which he noted was appraised at $299,000.

Charbonneau stated the Burkes should be given reasonable time to give up possession of their house, noting Burke said during the court hearings that he would need four weeks to pack and find alternative housing.

"Under the circumstances, and considering that I accept that he and Ms. Burke have been under considerable stress over this matter, I am going to extend this timeframe to two months," the judge wrote.

Despite the judge's ruling, Burke is hopeful of saving his house.

"I'm hoping and praying that we can work something out," he said.

Burke said he plans to contact Industry, Tourism and Investment Minister Bob McLeod to see if some arrangement can be made.

The minister does not have to follow the court ruling, but has discretion to find another way to resolve things, Burke said.

"I think the way to go is to explore the possibilities of putting in place a mortgage to pay down the loan," he added, noting commercial banks won't loan him money since the matter went to court.

In addition, Burke has contacted Thebacha MLA and cabinet minister Michael Miltenberger.

"I can tell you that Mr. Burke and I have been in discussions, but I'm not in a position to talk about the details of his circumstance," Miltenberger said. "I'm trying to carry out my role as MLA to be as helpful as possible in this issue."

A spokesperson for BDIC said its policy is not to comment on individual clients.

During court proceedings, Smith's Landing First Nation also expressed concern about a lack of consultation over the sale of the Large Pike Lake lease.

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