By Canadian Press

New Brunswick can’t sue auditor after being left on hook for millions: top court

Jul 29, 2021 | 8:07 AM

OTTAWA — The Supreme Court of Canada says New Brunswick cannot sue accounting firm Grant Thornton over an allegedly flawed audit which led the province to backstop hefty loans to a company that soon ran into financial trouble.

In a 7-0 decision today, the high court rules the province did not file its claim against Grant Thornton within the allowable time limit.

Events in the case began when the Atcon group of companies secured $50 million in loan guarantees from the province after Grant Thornton carried out an audit of Atcon’s financial statements for the fiscal year ending Jan. 31, 2009. 

Atcon ran out of working capital four months later, prompting the bank that loaned the money to seek the total amount of the guarantees, which the province paid in early 2010.

A report commissioned by the province from a second auditor found Atcon had considerably overstated its financial position, and the province took court action against Grant Thornton for its alleged negligence on the first audit.

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A judge allowed Grant Thornton’s motion to halt the action on the basis that more than two years had passed since the province had discovered the relevant facts of its claim, but the decision was overturned by the province’s court of appeal.

This report by The Canadian Press was first published July 29, 2021.

The Canadian Press