The Government of the Northwest Territories is taking the Sport North Federation to court over the planned sale of a downtown Yellowknife building.
The territorial government is accusing the organization of backing out of an agreement the two parties made in 2005 and potentially leaving the rest of the territory's sports organizations homeless.
None of the allegations has been proven in court.
According to a statement of claim, the territorial government and Sport North made an agreement in 2005 that the sports organization would buy the three-storey Cooper Building on 49th Street in Yellowknife, the building in which it operated.
The mortgage payments for the building would come out of money Sport North received from selling lottery tickets. At the time, the organization held the licence to sell Western Canada Lottery products and use the profits for its programs.
In October 2005, Sport North took out a $840,000 mortgage. The territorial government says both parties agreed that once the mortgage was paid off, Sport North would give the property to the Northwest Territories Sport and Recreation Council, a non-profit organization that also operates in the Cooper Building.
The Council acts as an umbrella organization for all sports groups in the N.W.T.
In 2009, Sport North lost the licence to sell lottery tickets to the Sport and Recreation Council. The territorial government says the council was authorized to give Sport North the funds from the lottery profits to continue paying its mortgage.
But in August 2014, the territorial government says it was told by Sport North that the organization planned to sell the Cooper Building and use the proceeds for a project of its own. The territorial government says by doing so, Sport North would be going against its promise to hand the building over to the Sport and Recreation Council.
The government is asking a judge to order Sport North to transfer ownership of the building to the government.
Sport North has not yet submitted a statement of defence to the court.