Advocis faces its fourth legal claim in just over a year, this one arising from a cybersecurity contract the association allegedly terminated after naming its new CEO last fall. A member of its executive management team is also named in the suit.
Burlington, Ont.–based Net-Patrol International Inc., a cybersecurity firm, is suing Advocis and Advocis Broker Services Inc. for $562,349.46, for breach of contract and breaching their duties to act honestly and in good faith, according to a claim filed on Friday with the Ontario Superior Court of Justice in Toronto.
Net-Patrol is also suing Geoff Le Quelenec, vice-president of technology and innovation with Advocis, and his corporation Jacobs L P Inc., for $562,349.46 for inducing breach of contract “and/or intentional interference with economic relations,” the claim states.
The claim also asks for damages of $200,000 from the defendants, and legal costs.
“We believe [the claim] is without merit and will respond accordingly,” Advocis said in an emailed statement. The claim “contains several factual inaccuracies, which we will address in our formal response, to be filed [with the court] in due course. Additionally, several parties have been unfairly and unnecessarily included in this action.”
Neither Net-Patrol nor its legal counsel responded to a request for comment ahead of publication time.
Net-Patrol’s claim follows the appointment in September of Kelly Gorman as CEO of Advocis, and the settlement in November of two claims of wrongful dismissal from former CEO Greg Pollock and former COO Julie Martini.
According to Net-Patrol’s claim, Advocis had originally hired the firm in September 2023 to provide “digital forensic and investigative services as part of its investigation into wrongdoing by various Advocis employees and executives.” The hiring was the same month interim CEO Harris Jones was appointed and tasked with addressing the association’s financial difficulties.
Advocis subsequently entered into a two-year contract with Net-Patrol on July 12, 2024, for cybersecurity services. That included auditing Advocis’ existing cybersecurity and developing and implementing a governance, risk management and compliance framework, the claim states.
Advocis then terminated the contract on Oct. 28, 2024, the claim states. The amount Net-Patrol seeks is the balance due under the contact, including 2% interest on unpaid invoices and fees for the agreement’s second year, the claim states.
The claim also states that, before Net-Patrol and Advocis entered into their agreement, Le Quelenec provided cybersecurity services to Advocis as an independent contractor through his corporation. When the agreement with Net-Patrol was established, “Le Quelenec’s role at Advocis was reduced, and the income generated by [his corporation] decreased,” the claim states.
After Advocis appointed Gorman as CEO, Le Quelenec was reinstated to provide cybersecurity services based on misrepresentations by Le Quelenec and his corporation that Net-Patrol’s services were “unnecessary and/or deficient” and its fees excessive, according to the claim.
“Net-Patrol pleads that Mr. Le Quelenec and [his corporation] are liable to Advocis for inducing Advocis to terminate the cybersecurity agreement and cause it not to pay the balance due,” the claim states.
Net-Patrol’s monthly fee was estimated in the agreement with Advocis to be $24,500 plus HST, according to the claim. It also says the firm had provided Advocis with a discounted hourly rate of $175 for the two-year contract.
Le Quelenec’s fees have been $16,650 monthly, according to the claim, for managing information technology and innovation, and $150 per hour for developing and implementing cybersecurity and system administration frameworks and providing technology support. He also charged Advocis for hosting and managing its website and web application platforms, the claim states.
Advocis’ financial troubles became evident when it published its 2022 financial statements in summer 2023. Its latest financial statements (2023) showed that expenses exceeded revenue by $766,426. That year, Advocis also received $2.7 million from its contingency fund, $2 million of which is payable with interest. The fund stood at $3.3 million at year-end 2023.
In 2024, Advocis settled with SeeWhy Financial Learning Inc. for nearly $100,000 for non-payment of SeeWhy’s learning materials.
At the association’s annual general meeting last July, John Hamilton, board vice-chairman, said the 2024 budget was planning for a small surplus.