Baffin Fisheries ex-CEO denies fraud accusations; countersues for $20M
The former CEO of the Baffin Fisheries Coalition (BFC) says he never defrauded the company, and is now countersuing the BFC for breach of contract and defamation.
Last month, BFC launched a $1.4 million lawsuit against Garth Reid, alleging he was building on his private land in Winterton, N.L., and invoicing the work to BFC, and its subsidiary Niqitaq Fisheries, claiming it was for a project in Pond Inlet, Nunavut.
The Baffin Fisheries Coalition is the largest harvester of shrimp in Canada's North. It's co-owned by hunters and trappers organizations in five Nunavut communities.
In a statement of defence filed in the Supreme Court of Newfoundland and Labrador, Reid denied the allegations against him and said if any payments were made by BFC for his own property, he didn't know about it and they were done out of negligence by the company.
Reid also says he and his wife Valerie — who's also named in the suit — are not the owners of the Winterton property, though they admit they had intended to build a home there using their own funds. Reid's lawyer clarified to CBC News that the property is owned by Reid's father.
The statement of defence says around the fall of 2016, Reid saw an invoice from the construction company for work at the Winterton property on the desk of BFC's then-chief financial officer, David Taylor.
"At that time, Garth specifically advised Taylor that the [construction] company that was performing construction work at the Winterton property and which was also performing work for [BFC] in Pond Inlet, had made a mistake in sending invoices for work at the Winterton property to [BFC]," the statement of defence reads.
"Garth specifically directed Taylor not to pay those invoices, and to advise Symphony Construction that any work on the Winterton property was to be billed to Garth personally."
Reid goes on to say that if Taylor authorized any payments for the Winterton property, Reid didn't know about it and it was "either Taylor's negligence or a scheme on his part to defraud [BFC], either alone or in conjunction with [others]," and that the Reids were ready, willing, and able to pay for the expenses with building the home in Winterton.
Reid also alleges Taylor resigned "abruptly" in March 2017, "after advising Garth that he did not want to be involved with an organization where executive members of the Board of Directors, specifically [BFC vice president] Methusalah Kunuk and [BFC corporate treasurer] Leo Maktar, gave themselves raises without board approval, among other things."
CBC News could not reach Maktar or Kunuk for comment.
None of the allegations have been proven in court.
'Subject of speculation and gossip'
Reid is also countersuing the BFC, Niqitaq Fisheries, Methusalah Kunuk, BFC spokesperson Chris Flanagan, and BFC interim CEO Patrick Martin, for nearly $20 million for breach of contract and defamation.
The counterclaim says Reid was suspended without pay during a Sept. 21 board meeting, though he couldn't attend because of a pre-existing family commitment, and he was not told about the vote to suspend him until afterwards.
In the ensuing days, the counterclaim alleges, Reid learned that he was was being accused of committing fraud. Three days after his lawyer emailed Martin to object to the suspension, the board voted to fire Reid.
"At no time was Garth ever provided with notice of the alleged [cause for termination] or particulars [of the cause], rendering it impossible for him to respond to the allegations against him," the countersuit alleges.
"Had Garth been provided with an opportunity to review the allegations against him, he would have responded to such allegations fully and completely, and with evidence that no cause for termination existed."
The countersuit goes on to claim that even though the BFC knew Reid had retained a lawyer, the company never sent Reid's lawyer a copy of the lawsuit against him.
Kunuk had previously told CBC News that BFC noticed financial irregularities as early as July. Reid said those statements are defamatory.
"Garth and Valerie and their respective family members have been the subject of speculation and gossip as a result of the defamatory statements and actions of the defendants," the countersuit reads.
"Their reputations have been harmed in the minds of reasonable members of the public, and they have been isolated from friends and neighbours as a result."
The Reids are seeking $870,000 for the breach of contract; $250,000 in moral damages; $50,000 from each of the five defendants for "intentional infliction of mental distress"; $500,000 from each of the five defendants for defamation; another $15 million for defamation; and $1 million for punitive damages.
Messages left with Kunuk, Flanagan and Martin by CBC News, were not returned by publication time.
