Former SAO accused of fraud files $2.57 million defamation lawsuit against Norman Wells

Catherine Mallon, the former senior administrative officer (SAO) of Norman Wells, N.W.T., has filed a defamation lawsuit against the town. Mallon worked for the town for about three years ending in October 2018. She is suing for $2.57 million.

Lawsuit names former and current senior administrators as well as mayor

A sign for the Town of Norman Wells, N.W.T., town office in October 2018. (Katie Toth/CBC)

A former senior administrative officer (SAO) for Norman Wells, N.W.T., who is being sued by the town for fraud has filed a multimillion-dollar defamation lawsuit against the town, its mayor and its former and current senior administrative officers.

Catherine Mallon worked as the town's SAO for about three years ending in October 2018. A year ago, a new mayor and council filed a lawsuit against her and the town's former mayor Nathan Watson, alleging they conspired to defraud the town of $1.26 million.

In her lawsuit filed this week, Mallon is seeking $2.57 million for harm to her reputation that she says has left her unemployable. Her suit names Mayor Frank Pope, its current SAO Cathy Clarke and former interim SAO Darren Flynn.

Outside the Yellowknife courthouse building in December 2019, former Norman Wells mayor Nathan Watson points to a ball cap he was wearing that says 'Read the Transcript.' Watson was referring to a transcript of the cross-examination of current town SAO Cathy Clarke. In it, Clarke backpedals on some of the allegations she made against Watson and former SAO Catherine Mallon, who is now suing the town for defamation. (Richard Gleeson/CBC)

In an email, Watson said he will also be filing a lawsuit against the town "sooner rather than later."

"I am a bit behind due mostly to financial issues stemming from the damage done to my ability to earn a living," the former mayor wrote in the email. 

Clarke swore an affidavit in support of the town's lawsuit against Mallon and Watson. In it, Clarke stated, among other things, that Mallon and Watson had conspired together to defraud the town when he secretly signed a new employment agreement with her.

"Mallon and Watson perpetuated a fraudulent scheme over the course of several years that involved numerous deceitful transactions," stated Clarke in her affidavit.

Mallon details claims

In her statement of claim, Mallon says Clarke did not have any basis for making the allegations she made in her affidavit.

"Clarke did not diligently review the town's records, and did not even attempt to interview several key individuals whose personal knowledge of Mallon's tenure as SAO contradicts the fraud narrative, despite the availability of such records and individuals," reads the statement of claim.

Mallon alleges that Pope defamed her at a public meeting days after the town filed its lawsuit against her. She claims that at that meeting Pope told people, among other things, that Mallon's T4 slip for 2016 showed she was paid more than $500,000, was improperly paid for vacation time she took and stated, "this goes on and on. I could write a book about this stuff. It's disgusting."

Mallon alleges that at the Norman Wells Royal Canadian Legion in the months before the town filed its lawsuit, Flynn showed a former mayor a copy of Mallon's T4 and told the individual she had defrauded the town. Mallon claimed Flynn failed to notify the former mayor that the T4 reflected earnings for two years.

Some allegations walked back

Clarke withdrew some of the allegations in her affidavit when she was questioned about it by Mallon's lawyer.

That came out during the last court appearance for the town's lawsuit in December, one that ended with the judge saying the town had deliberately misled the courts to get a judge to put a freeze on Mallon's and Watson's assets.

During the period Mallon was working for the town, the territorial government dissolved town council and took over its administration after hearing from a consultant it had hired to look into alleged dysfunction and mismanagement at the town office and on council.

In a written statement, that consultant described Mallon as a dedicated employee who was coping with a highly dysfunctional organization.

The consultant described the lack of respect and professionalism at the town office as "absolutely the worst I have ever seen."

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