The NWT Supreme Court has dismissed a Yellowknife accounting firm’s $26.6-million lawsuit against the Town of Norman Wells.
EPR Yellowknife Accounting Professional Corporation and its president, Biswanath Chakrabarty, filed the lawsuit in January against Norman Wells, its mayor and senior administrator as well as several former and current councillors.
The lawsuit claimed a complaint the town filed with Chartered Professional Accountants NWT/Nunavut – or CPA NWT/NU, the regulatory body for professional accountants in the territories – was “malicious, unjustified, without merit and designed to cause representational harm” to EPR and Chakrabarty.
The firm sought $1.6 million in damages, while Chakrabarty sought $25 million.
The town alleged the suit was an abuse of process and an attempt at intimidation. It argued the regulatory body’s complaints process should be allowed to run its course before EPR can bring a claim to court.
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In a ruling on Monday, NWT Supreme Court Justice Karin Taylor threw out the suit, agreeing with the defendants that the regulatory process is the proper avenue to address EPR’s allegations.
“A party to a complaint should not be permitted to circumvent the CPA process by initiating a parallel lawsuit in this court,” Taylor wrote.
“At the very least, EPR should be waiting until the conclusion of the complaint process to determine if there are any residual issues that can or should be put before the court.”
Taylor pointed out that the Chartered Professional Accountants Act includes up to a $50,000 fine or jail time as punishment for providing false or misleading information in a complaint.
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Norman Wells’ complaint to CPA NWT/NU is related to an investigation the territorial government hired EPR to conduct into the town’s payroll and corporate credit card use in 2018.
The town relied on EPR’s investigation report in a since-abandoned lawsuit against its former senior administrative officer, Catherine Mallon.
While town and territorial officials had publicly described the investigation as a forensic audit, following a complaint by Mallon against EPR, the accounting firm issued a press release clarifying it was a review-level report.
The town then filed its complaint against EPR, claiming the firm’s press release was the first time the municipality became aware that EPR’s investigation had not been a forensic audit. The town accused the firm of violating the CPA code of conduct by providing false or misleading information.
EPR has denied those allegations.
CPA NWT/NU referred the complaint to a disciplinary hearing, which has yet to occur.
Chakrabarty has separately asked the NWT Supreme Court to overturn the regulatory body’s decision to hold a disciplinary hearing. That case is set for a court hearing on October 28.
