A Yellowknife-based accounting firm has launched a lawsuit against the Town of Norman Wells alleging reputation harm.
EPR Yellowknife Accounting Professional Corporation and its president, Biswanath Chakrabarty, filed the lawsuit in NWT Supreme Court earlier this month against Norman Wells’ mayor and senior administrative officer as well as several of the town’s former and current councillors.
The lawsuit claims a complaint against EPR and Chakrabarty by the town and its officials to Chartered Professional Accountants NWT/Nunavut – or CPA NWT/NU, the regulatory body for professional accountants in the territories – is “malicious, unjustified, without merit and designed to cause representational harm” to EPR and its president.
The accounting firm is seeking $1.6 million in damages representing lost income and earning capacity due to reputational harm. Chakrabarty is seeking $25 million for the estimated loss of value to his other business interests as well as legal expenses from responding to the complaint.
Other ventures Chakrabarty has been involved with include the Polytechnic Institute of Northern Canada and Range Lake Developments Ltd, which owns a number of properties in Yellowknife, including the building leased by Cabin Radio.
Advertisement.
Advertisement.
Both Norman Wells’ complaint to CPA NWT/NU and EPR’s subsequent lawsuit are related to a review the accounting firm conducted of the town’s finances in 2018, on which the town relied in a since-abandoned lawsuit against its former senior administrative officer, Catherine Mallon.
According to EPR’s lawsuit, the NWT Department of Municipal and Community Affairs hired the accounting firm to conduct a review and investigation into the town’s payroll and corporate credit card use from November 1, 2015 to October 1, 2018.
EPR claimed it was unable to perform the investigation to an “audit” level as the department only gave it limited access to documents, information and witnesses. The accounting firm said the department accepted a draft report from an analysis it conducted at a lower “review” level in March 2019.
The Town of Norman Wells then launched its lawsuit against Mallon, alleging fraud. Both town and territorial officials publicly described EPR’s report as a forensic audit.
Advertisement.
Advertisement.
Mallon launched a defamation suit against the town in 2020, which was dismissed by the NWT Supreme Court the following year.
EPR’s lawsuit states Mallon then filed a complaint against the company and Chakrabarty to CPA NWT/NU in April 2022. Mallon alleged EPR had failed to explain its report was a review rather than an audit and failed to correct town officials who “misconstrued and misrepresented” the report as an audit.
EPR said the complaint was resolved through mediation and it issued a press release in November 2022 stating that its report was not an audit and apologized to Mallon.
The town subsequently dropped its suit against Mallon in early 2023.
In September that year, the town and its officials lodged their own complaint with CPA NWT/NU against EPR and Chakrabarty. That complaint alleged the town believed the report was an audit and only learned about it being a review from EPR’s press release, which devalued the report.
EPR and Chakrabarty claim the complaint is “frivolous, vexatious and an abuse of process designed to shift blame for the town’s misinterpretation and mischaracterization” of the report and failure to seek clarification before relying on the report in its suit against Mallon.
The town and its officials have not yet filed a defence to the lawsuit.
