Continuing legal fight, Norman Wells ex-SAO sues Town for $2.6M

Norman Wells’ former senior administrative officer (SAO) has filed a $2.57-million lawsuit against the Town of Norman Wells and current and former officials.

Catherine Mallon was earlier sued by the Town for fraud – along with former mayor Nathan Watson – but has now countered with her own action claiming general damages of $1 million, special damages for lost wages of $1.5 million, and damages for breach of contract of $70,814.

Mallon’s statement of claim lists current Mayor Frank Pope, current SAO Cathy Clarke, and former interim SAO Darren Flynn, who now lives in Newfoundland.

“Defamatory statements were made by each of Clarke, Flynn, and Pope, knowing and intending that such statements would be republished or rebroadcast by others including mainstream media, and are therefore liable for such republications or rebroadcasts,” states the lawsuit.

In her statement of claim, Mallon states she was appointed as SAO in November 2015.

During her tenure, she says, she was forced to contend with “a fractious and sometimes antagonistic relationship among town council, management, and administration, as well as intense opposition from certain members of town council,” which included threats to have her fired.

Mallon, who now lives in Edmonton, claims to have been forced to work most evenings and weekends, as well as during scheduled vacation and other leaves.

“As a result of the extraordinary and ongoing dysfunction among town council and the administration,” Mallon openly demanded a new employment contract that would take into account the challenges she faced, states the claim.

On November 1, 2016, Mallon and then-mayor Nathan Watson executed a negotiated amendment to her employment contract that provided a retroactive pay increase and compensation for overtime, states the claim, adding town council approved it.

In 2017, “in response to concerns raised by Mallon and others,” the Department of Municipal and Community Affairs (Maca) was brought in and conducted an inspection of the Town’s books.

It then placed Norman Wells into Maca administration, dissolved the council, and appointed an administrator.

Mallon remained SAO and was on the payroll until November 2018.

‘Judged harshly and wrongly’

In May 2019 the Town of Norman Wells named Mallon, Watson, and Watson’s company as defendants in a $1.25-million lawsuit.

“Despite their intense scrutiny of the Town’s finances and administration, neither the inspector nor the administrator implicated Mallon in the Town’s dysfunction or accused her of any wrongdoing,” states the claim, filed by an Edmonton law firm and first reported by the CBC.

“On the contrary, Mallon was publicly commended for improving the Town’s financial management and sourcing additional benefits for the Town during her tenure as SAO, despite ongoing staffing issues and dysfunction.”

Mallon claims the Town falsely alleges that during her tenure as SAO, “she and Watson were in a personal or business relationship together and conspired to abuse their respective offices to perpetrate a large-scale fraud against the Town.”

States Mallon’s claim: “In or around July or August of 2019, Clarke met with an individual [and asked] whether Mallon and Watson were ‘lovers,’ suggesting Mallon and Watson were in a personal relationship as alleged in the Town’s action.”

Mallon states her dealings with Watson were at all times part of “a professional workplace relationship.”

“Mallon has been judged harshly and wrongly in the court of public opinion … Mallon has suffered and will continue to suffer damage to her reputation, her feelings, and her livelihood,” reads the claim.

Mallon claims statements made by Pope were intended to “lower her reputation in the estimation of the general public and contribute to the destruction” of her professional career as a public administrator.

Town criticized in December

Mallon’s suit goes on to claim statements made by Flynn, the former interim SAO, “have caused immense harm” to her.

Flynn met with an individual at the the Royal Canadian Legion in Norman Wells, states Mallon’s claim, and showed him an electronic copy of a T4 document for Mallon, “stating words indicating … that Mallon had engaged in wrongful or fraudulent conduct against the Town.”

However, the suit alleges Flynn failed to notify the person that the T4 reflected earnings relating to two calendar years, “leaving him with the mistaken impression that Mallon had earned all of the amounts set out in the T4 for one calendar year.”

Mallon alleges Clarke’s May 2019 affidavit in the Town’s lawsuit contains baseless allegations against her. Clarke subsequently changed her story.

In December, Supreme Court Justice Karan Shaner slammed the municipality for convincing a judge to impose a rare freeze on the separate assets of Mallon and Watson, resulted in financial hardship.

Using the terms “sloppy,” “egregious,” and “downright misleading,” Shaner said the judge hearing the case in May appeared to have been misled.

A visibly emotional Mallon sat quietly in the row behind Watson and kept her head slightly down during the court proceeding.

The Town agreed to drop the freeze on the assets, but argued any financial settlements should be held back until the entire lawsuit is tried and concluded – a process that could take years.

The Town and those named in Mallon’s suit have not yet filed statements of defence.

Watson earlier told CBC North he will also file a lawsuit against the Town.

No date has been set for the first court appearance for Mallon’s lawsuit.