NWT Small Claims Counterclaim and Third Party Notice Explained

Counterclaims: When the Defendant Claims Back

You filed a Statement of Claim (Form 1) in the Territorial Court of the Northwest Territories. The defendant filed a Statement of Defence (Form 2) — but instead of just defending, they checked the counterclaim box and claimed that you owe them money.

A counterclaim is a separate claim embedded in the defence. The defendant pays a $40 filing fee (the combined defence-and-counterclaim fee) and sets out the facts supporting their own claim against you. Both the original claim and the counterclaim are heard together at the same mandatory mediation session and, if necessary, the same trial.

As the plaintiff, you now have a decision. You can file a Statement of Defence to Counterclaim (Form 7) disputing the defendant's counterclaim, or you can admit it and let the judge sort out the net amount at the hearing.

If you do nothing — if you ignore the counterclaim entirely — the defendant can seek default judgment on the counterclaim against you.

What a Counterclaim Means for Your Case

A counterclaim changes the arithmetic. If you claimed $8,000 for an unpaid invoice and the defendant counterclaims $3,000 for defective work, the judge may award you $8,000 on the claim and the defendant $3,000 on the counterclaim. The net result is a $5,000 Payment Order in your favour.

Or the counterclaim might exceed your original claim. If the defendant proves damages of $10,000, you could end up owing money despite starting the lawsuit.

Prepare evidence for both sides — your claim and the defendant's counterclaim. Treat the counterclaim seriously even if you believe it has no merit.

Third Party Notices: Bringing Someone Else In

Sometimes the real dispute involves someone who is not yet part of the lawsuit. A defendant who believes a third party is responsible for the claim — or should share liability — can file a Third Party Notice (Form 8) to add that person to the proceedings. The filing fee is $25.

For example, if a homeowner sues a general contractor for defective renovations, the contractor might file Form 8 against the subcontractor who actually did the work. The third party then has the same 25-day response window (or 30 days if served outside the NWT) to file a defence.

The third party is bound by the eventual judgment. If the judge determines the subcontractor was at fault, the judgment can allocate liability between the defendant and the third party.

Adjournments

Either party may ask the judge to adjourn a settlement conference or trial. The judge may adjourn a settlement conference or hearing at any time, and may adjourn a trial if satisfied that doing so is just. Under subrule 22(5), a $25 fee applies to a granted trial adjournment when the party received at least 45 days' notice of the trial date and applies fewer than 30 days before trial; the fee does not apply if the claim settles within 14 days after the adjournment.

Adjournments are not automatic. The judge decides whether the reason is sufficient — illness, unavailability of a key witness, or new evidence that requires time to review. Convenience alone is rarely enough.

In communities served by circuit court, an adjournment can delay your case significantly. Circuit sittings happen periodically, so the next available date might be months away.

If You Are the Claimant Facing a Counterclaim

Respond to the counterclaim by filing Form 7. Gather evidence that addresses the defendant's allegations, not just your original claim. If the counterclaim raises facts you had not considered, the mandatory mediation session is an opportunity to negotiate a settlement that accounts for both sides.

The NWT Small Claims Filing Guide covers the full procedure for both claimants and defendants' counterclaims, including how to prepare for mediation when both a claim and a counterclaim are on the table.

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