Town of Norman Wells abandons fraud suit against ex-SAO

The Norman Wells town office. Sarah Pruys/Cabin Radio
The Norman Wells town office. Sarah Pruys/Cabin Radio

In a remarkable climbdown, the Town of Norman Wells says it is conceding its years-long fraud lawsuit against a former senior administrator.

Since 2019, the town has pursued a civil claim against Catherine Mallon that alleged fraud worth more than a million dollars. “I could write a book on this stuff. It’s disgusting,” the town’s mayor said at the time.

But the town’s claim took a significant hit when the company that conducted a supposed forensic audit – on which much of the case against Mallon was built – said its work was actually nothing of the sort.

EPR Accounting said its analysis of town payroll and expenditures was not a forensic audit and did not at any point use the word “fraud,” despite the town and the territory’s Department of Municipal and Community Affairs appearing to represent the document as a forensic audit on multiple occasions. (Eleanor Young, then the deputy minister of Maca, told Cabin Radio in 2019 that a forensic audit had demonstrated fraud of a “shocking” extent at the town.)



“Our contract did not require that we identify fraudulent activity on the part of Ms Mallon and we did not do so,” EPR stated in a press release issued more than three years after the town first cited the company’s report as grounds for legal action. “We apologize for any confusion that may have been caused, and specifically to Ms Catherine Mallon.”

In a Wednesday Facebook post, the town said the GNWT had “promised the town it would commission a forensic audit,” adding that – “in light of EPR’s public apology” – pursuing the lawsuit was no longer prudent.

“This is a time for conciliation. We have chosen to take the moral high ground. We concede the fraud lawsuit by consenting to Ms Mallon’s application for summary dismissal,” the town wrote in a message attributed to its mayor and council.

“We didn’t realize they were going to publicly apologize to Catherine Mallon,” said Dave Wever, a Norman Wells town councillor, of EPR’s press release. “When they did, it just wasn’t viable to keep pursuing it.”



Neither Mallon nor the town’s mayor, Frank Pope, could be reached for comment. The Department of Municipal and Community Affairs said it had no comment other than to recognize the case had been “a difficult process for all parties involved.”

‘I debunked the numbers’

Mallon is a co-defendant alongside Nathan Watson, the town’s former mayor, who was accused by the town of complicity in the alleged fraud.

Watson said he, unlike Mallon, has not applied for summary dismissal of the case and would prefer that it goes to trial. He told Cabin Radio he will consult his lawyers about his options.

“They still believe in what they did, despite the fact that they’ve yet to produce a shred of evidence to support it. That’s really disappointing,” Watson said.

“That’s what makes this so permanently and indelibly damaging. I’ve said this from the start: neither one of us did a single thing that they claimed we did. We did nothing wrong. I would not change a thing that we did, not a thing.”

The town had claimed Mallon inappropriately received thousands of hours of overtime pay with Watson’s knowledge, among other allegations. At the time, Pope characterized their alleged actions as evidence of “a toxic, toxic regime.”

Lorraine Tremblay has spent years working with Watson and Mallon to clear their names.

A chartered professional accountant with business interests in the community, Tremblay says she began looking at the claim and realized Mallon’s reported overtime was not that far off her own overtime over the same period.



“That’s when I started having doubts,” Tremblay told Cabin Radio on Wednesday.

She encouraged Watson and Mallon to assemble paperwork proving their actions had been above board. “By July 2020, I had debunked all the numbers,” she said.

Asked why proceedings have continued until now if she was confident there was no case to answer almost three years ago, Tremblay said: “I think they knew they didn’t have a case and their strategy was to drag it on, and try to destroy the defendants financially and morally.”

Both Tremblay and Watson said recent cross-examinations of two people who worked for the town during the period in question – cross-examinations carried out before the town dropped the case – demonstrated that the town’s council knew some time ago that the alleged fraud was not borne out by evidence. Transcripts of those cross-examinations have yet to be made public and the contents cannot be independently verified.

“They knew, and that was very hard to take for both defendants,” Tremblay said of the town’s council. “It’s an awful, awful case of injustice.”

“It’s had a tremendous effect on my life,” said Watson. “It has affected my school-aged children and their education. It’s had a profound effect on poor Ms Mallon, an innocent woman.”

‘Not prudent’ to continue case

Tremblay said she had inspected EPR’s report and warned the company several years ago that she felt its work was being misrepresented.

A forensic audit “means who did it, how they did it, they know the whole thing, and they’re ready to present it in court,” she said.



“To have EPR finally come out and say it was not a forensic audit … I read the report and it didn’t even conclude there was any fraud.

“They should have never put these people through three and a half years of this.”

Wever, by contrast, said the town still had “quite a bit of evidence” to support its claim of fraud but could not continue spending the municipality’s money.

“it just isn’t very prudent for us to continue with the public dollars on this case,” he said, declining to provide a figure for the town’s legal costs to date. (The town says its total costs for all legal work appear in its annual reports.)

Mallon and Watson each counter-sued the town in the ensuing years. The town won a defamation suit against Mallon in 2021, a verdict reached not on the strength of any fraud evidence but on the basis that town representatives had qualified privilege, a form of legal defence against defamation, when they spoke at the time.

In the same year, an NWT Supreme Court justice said some of the town’s legal filings had been “sloppy,” “egregious” and “downright misleading.”

“This is a very negative thing, and it’s disappointing and anti-climactic that it had to end this way,” said Wever, the current town councillor. “We’re just going to have to get on and heal from here.”

Watson said he contested the town’s assertion in its Facebook post that he had written a recent “letter of apology” to councillors.



“I suggested that we come together, sit down together, and work out a reasonable and rational resolution to this,” he said.

“They seem to have twisted that into a letter of apology to town council, suggesting that somehow I’m apologizing for being wrongfully sued. I can assure you that is not at all what I meant.

“They have a lot to say about Maca and EPR. It seems to me that it’s everyone’s fault but theirs. No accountability, no responsibility. And this is supposed to be conciliatory and healing. Maybe for them, but I don’t think it is for anyone else.”