NBCC sues Nunavut MLA over $300,000 loan guarantee

South Baffin MLA speaks in the Legislative Assembly in a 2009 file photo. The Nunavut Business Credit Corporation is suing Schell, alleging the MLA agreed to post a guarantee for another person’s loan. (FILE PHOTO)

The Nunavut Business Credit Corporation is suing South Baffin MLA Fred Schell to recover someone else’s $300,000 debt.

In 2004, NBCC agreed to a $300,000 loan to someone named William Joseph Rowsell for a business called Qimatusaqviq.

In a statement of claim filed in November, 2008, NBCC says Schell mortgaged two properties to the agency as a guarantee for the loan on Rowsell’s behalf.

Rowsell has defaulted on the loan, and now owes almost $356,000 for principal, interest and fees, NBCC claims.

By the NBCC’s calculation, that amount continues to grow by $61 worth of interest per day.

“All regular automated mortgage payments since July 31, 2005 have been reversed due to insufficient funds,” the NBCC statement of claim reads.

In a statement of defence filed in January, 2009, Schell’s lawyer Michael Penner, wrote that Schell denies signing a guarantee for Roswell.

The statement goes on to say that even if Schell did provide the guarantee, the MLA now claims non est factum, which means the contract would have been signed by mistake.

“No legal advice as to the effect of the guarantee, if any, was sought or received and [Schell] was not aware of the potential liability…,” reads the statement of defence.

In an interview Tuesday, Schell said the guarantee he signed for Rowsell’s loan was limited and without giving details, he said he believes the matter would be dealt with soon.

Schell said he sold Rowsell Polar Supplies, a convenience store that was also the recipient of a separate $850,000 loan from NBCC approved in December of 2006.

“I tried to help the guy out,” Schell said. “He worked for me for six, eight years and I basically took a second mortgage [because] the guy didn’t have money. He was trying to make a go of it.”

A Google search for the business name Qimatusaqviq returned no results, and it’s not clear that the business ever operated.

An entry for Qimatusaqviq is found in a January, 2008 list of loans prepared for a probe into NBCC finances conducted by the standing committee on government operations and accountability.

The entry shows the loan was approved in January, 2005 and says Qimatusaqviq was “not operating.”

CBC reported this past week that one of Schell’s companies, Polar Supplies, owes NBCC around $1 million.

A spokesperson for bankruptcy trustees Myers Norris Penny, the Edmonton company that CBC reported is helping Schell make a proposal to creditors, didn’t return a phone call seeking comment.