A defamation lawsuit against the Town of Norman Wells and senior officials, launched by the town’s former senior administrator, has been dismissed by a judge.
In the latest twist of a long-running legal drama, Supreme Court Justice Karan Shaner issued a summary judgment dismissing Catherine Mallon’s claim made last year for defamation damages totalling $2.57 million.
The town, interim SAO Darren Flynn, current SAO Cathy Clarke, and Mayor Frank Pope argued the defamation claims against them “could not be sustained in the face of absolute and qualified privilege,” stated Shaner in a 37-page decision issued on Monday.
“There is no shortage of law on absolute and qualified privilege in Canada,” stated Shaner. “The principles are well-known and understood, and there seems to be no dispute amongst the parties in this case as to what those principles are.”
Absolute privilege applies to communications like proceedings in Parliament, provincial and territorial legislative assemblies, and surrounding judicial and quasi-judicial proceedings.
“A person who makes a defamatory comment on such an occasion is shielded from liability absolutely, regardless of whether they know the statement is false or they have made it maliciously,” stated Shaner, referring to legal precedents.
Qualified privilege can be argued when a person who makes the defamatory statement has a legal, social, or moral duty to make it and is reasonably appropriate in the circumstances.
“On an occasion of qualified privilege, defamatory or untrue words may be communicated with impunity,” stated Shaner, cautioning that the dominant motive can’t be malicious.
Mallon, who now lives in Edmonton, was Norman Wells’ SAO from 2015 until November 2018.
In November 2016, Mallon entered into a new employment contract with the town, authorized by then-mayor Nathan Watson. That contract included a retroactive raise and compensation for overtime.
In 2017, at Mallon’s request, the territorial government’s Department of Municipal and Community Affairs dissolved the town council and placed the town under administration.
“She alleges that the relationship amongst town councillors and between herself and some councillors was fraught with antagonism and dysfunction,” said Shaner of Mallon.
In September 2018, Mallon’s duties were assumed by the Maca-appointed Flynn. Mallon remained on the payroll until her contract officially ended in November 2018. Pope was elected mayor in October 2018, after which Maca withdrew its administrator.
“Shortly after he started as interim SAO, Mr Flynn noticed what he considered irregularities in Ms Mallon’s pay and benefits and her use of the town’s corporate credit card,” stated Shaner. “He requested Maca conduct an audit. It was conducted and ultimately resulted in a report [that] contains information suggesting there were significant irregularities relating to Ms Mallon’s pay and benefits, her payouts for vacation time and her use of the Town’s corporate credit card.”
That’s when Mallon alleged Flynn made defamatory remarks about her to a potential employer and to a recruiter. She also alleged Flynn defamed her by showing a copy of her T4 to a local business owner in Norman Wells.
The Town filed a lawsuit against Mallon, Watson, and a numbered company on May 3, 2019, alleging fraud. That claim remains before the NWT Supreme Court and no determinations have been made regarding liability.
Mallon also objected to the legal issues being discussed publicly through the media.
“[Mayor] Pope participated in media interviews with CBC North, Cabin Radio, and Northern News Services. He made statements similar to what he said at [a public] meeting,” stated Shaner, adding copies of the town’s fraud claim were made available to residents at the town ofice.
“Announcements were posted on the town’s Facebook page and website stating the documents were available for pick up at the town office. Ms Mallon says that in making the court documents in the fraud action available at the town office [that the] town defamed her.
“If the media can access and publish information from documents on a court file to the world at large, surely a litigant can make them available to the general public as well, without exceeding the privilege.”
As for a town hall meeting held by officials. Shaner stated that given the relatively small population of the Northwest Territories, “it may be safely assumed the fact of the lawsuit would become known in short order, in all likelihood, through media and ‘through the grapevine.’
“It makes sense that the mayor and town councillors would want to ensure the reasons for the decision to launch the lawsuit were explained to the citizens they represent proactively, with consistent messaging, rather than in reaction to media reports or rumours, without the benefit of background information.”
Shaner concluded the meeting on May 8, 2019, and subsequent media interviews were “occasions of qualified privilege.”
“As the claims in defamation against Messrs Pope and Flynn and Ms Clarke are dismissed, those against the town, which are based on vicarious liability, are dismissed as well,” stated Shaner, adding costs will need to be decided.
Last April, former mayor Watson filed a lawsuit against the town claiming more than $1.5 million in damages. In a statement of claim, Watson stated the town, Mayor Pope and SAO Clarke damaged his reputation by alleging he conspired with Mallon to defraud the Sahtu community.