3 years later, Norman Wells yet to submit affidavit in alleged fraud lawsuit against former SAO

The Town of Norman Wells has yet to submit an affidavit that includes documents which allege the former SAO and mayor defrauded the town. The town launched the lawsuit in 2019.   (Natalie Pressman/CBC - image credit)
The Town of Norman Wells has yet to submit an affidavit that includes documents which allege the former SAO and mayor defrauded the town. The town launched the lawsuit in 2019. (Natalie Pressman/CBC - image credit)

It's been three years, and yet no documents or affidavits have been submitted by the Town of Norman Wells, N.W.T., in a civil court case it launched against its former SAO Catherine Mallon for fraud.

The town was supposed to provide the documents before a hearing, to be heard this year on June 28 and 29, but that date was pushed to Oct. 27.

However, the date was delayed further at a case management meeting, essentially a discussion involving the judge and all parties, at the Yellowknife courthouse on Tuesday.

Matthew Woodley, who was Mallon's lawyer for this meeting but will not represent her for the actual hearing, requested that the town not be allowed to submit an affidavit as the deadline has passed.

Judge Karan Shaner didn't grant Woodley's request, but said the affidavits must be provided to Mallon and the court before the legal counsel will reconvene for another meeting on Oct. 27. Shaner set Oct. 24 as the deadline to give the plaintiffs time to read through the documents before the next meeting.

She said "the town's delay is inordinate" and that the set date is a "drop dead" or a "firm deadline."

The date for the actual hearing will be set at the Oct. 27 meeting.

Lawyer, not town, responsible for delay

Michael Penner, Norman Wells' lawyer, said he is responsible for the delays, not the town.

He said there are "half a million documents and counting."

The size of the documents resulted in Penner using a third party data management firm and another company in Edmonton that has been converting the information to electronic documents. He explained there were some issues with labelling the documents and sorting through relevant material which has caused delays.

He said there have been further delays caused by a combination of him catching COVID in the summer and an associate who worked on the case resigning.

Lawsuit based on an audit

In 2019, the town announced it would be suing Mallon after a forensic audit, alleging she "converted" more than $1.2 million of town assets for personal use.

Mallon sent CBC News a copy of her affidavit, which Judge Shaner said on Tuesday she still hasn't seen.

She argued in the affidavit that the audit was flawed and missed key details surrounding her vacation time and work expenses.

In the affidavit, she discusses how she first accepted the job, discovering it on Indeed.ca and moving to the Sahtú community from her home in Ireland in 2015.

Mallon worked as the town's SAO for about three years until the fall of 2018.

The affidavit discussed how she came into a dysfunctional work environment that resulted in council being completely disbanded and taken over by the territorial Department of Municipal and Community Affairs (MACA) in 2017.

The affidavit said she worked an average of 12 hours a day throughout the week and often on weekends.

The affidavit said the workload was not what was described in the job position. She raised the point of needing to negotiate a new contract or that she would pursue constructive dismissal, where she would leave her position and sue the town for $500,000 in damages.

Retroactive overtime pay 

The original lawsuit alleges Mallon was paid $527,905 in overtime.

But in Mallon's affidavit she said she retained legal counsel, which was approved, and discussed with employees within MACA rates to renegotiate her employment contract. She learned the going rate for a contracted project coordinator was $125 an hour and $135 for overtime.

As part of the negotiation she requested retroactive pay for overtime she had already worked "particularly as a result of the intolerable work situation."

The contract was then signed by Watson and witnessed by the towns' finance officer on Nov. 1, 2016.

"I believe that Mr. Watson signed the agreement as the authorized representative of Town Council, and I was not aware (nor am I aware today) of any circumstance which caused me to suspect that Mayor Watson was not authorized to execute the Amended Employment Agreement," she wrote in the affidavit.

"From my perspective, the process for negotiating and executing the Amended Employment Agreement was no different from the process used for the negotiating and executing the First Employment Agreement."