Judge sees need for pleadings and discoveries to resolve factual issue on legal fee invoices
In a governance dispute involving the Gwich’in Tribal Council (GTC), the Northwest Territories Supreme Court allowed the conversion of an oppression application into an action upon determining that pleadings and discoveries would be necessary to complete the evidentiary record.
In Nihtat Gwich’in Council et al v Blake et al, 2026 NWTSC 48, the applicants were two of four designated Gwich’in organizations and two of the nine GTC directors.
The respondents, who were also GTC directors, held most of the board seats. One respondent was Mr. Blake Jr., the GTC’s recently elected grand chief.
Oppression claim
In an originating notice filed in February 2025, the applicants requested relief from oppression under s. 253 of the Canada Not-for-Profit Corporations Act, 2009. They alleged that the respondents had engaged in oppressive conduct since Blake took office.
In August 2025, the applicants sought to convert the oppression application into an action, which would mean that the court would resolve the matter via a full trial instead of through a summary process.
Conversion application deemed premature
Justice Annie Piché of the Supreme Court of the Northwest Territories dismissed the conversion application as premature, without prejudice to the applicants’ right to renew it.
The judge determined that the proposed statement of claim expanded the scope of the proceeding and thus substantially amended the originating document.
Application to amend
With supporting evidence, the applicants applied to amend the originating notice. The respondents argued that some proposed amendments were hopeless or moot.
Regarding proposed amendments asserting that Blake had misappropriated GTC funds, Blake said the applicants failed to satisfy the high threshold for amendments with new causes of action based on fraud, high-handedness, or malicious conduct.
Conversion application renewed
Renewing their conversion application, the applicants alleged that conversion would be the most efficient and fair way of determining the matter.
The applicants added that conversion was justified due to disputed material facts, credibility issues resolvable via discoveries, and asymmetrical access to important information.
The respondents opposed the conversion application.
NWT Supreme Court allows amendments
Justice Piché of the NWT Supreme Court granted leave for the applicants to amend their originating notice and to file their draft statement of claim. Thus, the judge granted the conversion application. She ordered a trial of the issues pleaded in the fresh originating notice.
The judge referred the matter to case management under r. 283 of the Rules of the Supreme Court of the Northwest Territories. Lastly, she awarded costs.
Oppression application converted into an action
Justice Piché issued a decision determining that converting the oppression application into an action was necessary to determine the issues fairly and properly.
The judge held that the applicants’ proposed amendments were not hopeless or moot and would not cause prejudice or injustice to the other parties. The judge ruled that the applicants met the threshold to allege the unauthorized use of funds.
The judge found a trial necessary, given:
- an informational imbalance
- disputed material facts
- significant evidence supporting the amendments alleging the unauthorized use of GTC funds
- evidentiary gaps concerning such unauthorized use and the suspension process for the applicant Mr. McLeod
- a need for pleadings and discoveries to help resolve factual issues regarding legal fee invoices and McLeod’s suspension process
The judge added that Blake had information and documents about disputed material issues that were unavailable to the applicants. The judge concluded that a limited document production order or an in-court cross-examination on a discrete issue would be insufficient.
More cases on discovery
Here are some other recent Canadian decisions that touched upon discovery.
In affirming an interim confidentiality order issued in a tax proceeding, the Federal Court of Appeal issued an Aug. 12 decision finding the Tax Court entitled to decide that the respondent’s identified risks justified additional protection during the discovery process.
In a case in which the insureds admitted to providing fabricated evidence during discovery examinations, the Ontario Court of Appeal made a June 30 decision upholding the denial of permission for two insurers to include civil fraud in their defence against an injured party’s lawsuit.
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