The Federal Court has found the Northern Territory's largest Indigenous legal organisation unlawfully sacked its former chief executive after she had raised allegations of misconduct amongst senior members of staff.

On Thursday, Justice Natalie Charlesworth ruled that the board of the North Australian Aboriginal Justice Agency (NAAJA) acted unfairly when instigating an audit of Priscilla Atkins in the wake of Ms Atkins levelling corruption allegations at finance chief Madhur Evans.

Justice Charlesworth also found then-chair of NAAJA, Colleen Rosas, deliberately withheld information from the audit, which was "not consistent" with any genuine desire for the audit to be fair and to make factual findings.

"The court is satisfied that each of the actions taken against Ms Atkins meets the description of adverse actions as defined in the Fair Work Act," Justice Charlesworth said.

It was accepted that the resolution for Ms Atkins' termination was not made in compliance with the legal organisation's constitution, as per the claims of Ms Atkins.

"NAAJA's argument that the resolution was valid, notwithstanding that noncompliance, is rejected," Justice Charlesworth said.

NAAJA has faced a series of public controversies over the last 18 months, with the Federal Court last year putting an injunction on the board, preventing it recruiting or advertising for Ms Atkins' position.

It has seen four chief executives since Ms Atkins left, with acting deputy chief executive Leeanne Caton leaving the position this week after only five months at the helm.

NAAJA have also been criticised for appointing Arrernte man Hugh Woodbury as chairperson earlier this year - despite being aware of his previous domestic violence charge - as well as revelations the NT government was attempting to recoup almost $2.7 million in unspent funds for the 2022-23 financial year.

The court had previously heard Ms Atkins argue she was terminated from NAAJA after accusing Evans of making discrete payments to Ms Rosas, as well as bullying employees, recording conversations with employees non-consensually, and disclosing confidential company information.

NT Police concluded an investigation into Madhur Evans last year with no adverse findings.

When Ms Rosas heard these accusations, the court was told she accused Ms Atkins of securing her long-standing chief executive position for another five years by forging her signature on the extension document.

The chief executive salary is understood to be in excess of $350,000.

Ms Atkins was suspended from her role in November 2022 after the allegations by Ms Rosas and NAAJA employed BDO - an external auditor - to oversee the conclusion of the investigation.

The report was critical of Ms Atkins, who has always denied the contents of BDO's findings.

They include that she charged personal expenses to her corporate card, including a four iPad's and $1300 artwork; purchased nine vehicles in a four-year period by using a "novated lease" arrangement not approved by the NAAJA board; and attempted to cash out her annual leave to pay back the cars, in doing so, cashing out more leave than she had.

However, Justice Charlesworth criticised the constrained nature of the audit, arguing Ms Rosas withheld information from BDO which resulted in their investigation being deliberately confined.

She noted it was a "curious feature of the case" that it was only after she was fired, did the board ask Ms Atkins for a response to the BDO findings.

Justice Charlesworth said the letter to Ms Atkins, advising her of her dismissal in February 2023, was "purporting to afford her procedural fairness in connection with a decision that had in fact already been made".

"The evidence does not support a conclusion that the few directors involved in that activity had a genuine desire to afford Ms Atkins procedural fairness," Justice Charlesworth said.

Justice Charlesworth was also critical of the fact directors who joined in the decision to terminate Ms Atkins' employment at NAAJA, and when they failed to pass on Ms Atkins' response to the BDO findings to the board, despite promising to do so, they denied her procedural fairness.

"The evidence does not demonstrate that they, in fact, gave any meaningful consideration to the response that Ms Atkins gave to the allegations against her," she said.

"They determined not to provide Ms Atkins' response to the board for its consideration, notwithstanding that in the letter to Ms Atkins they assured her that that would be done."

In response, NAAJA said they were reviewing the findings.

"NAAJA maintains a strong view that the board was justified in its decision to seek to terminate the employment of the former CEO and, as a result, we are surprised and disappointed by today's decision," spokesperson for the NAAJA board said in a statement.

"We will review today's judgement and seek legal advice regarding our next steps."

Earlier this week, Indigenous Affairs Minister, Linda Burney said she had met with Attorney-General Mark Dreyfus and NT Attorney-General Chansey Paech concerning NAAJA.

Ms Burney called on the NAAJA board to "show leadership when it comes to family violence," noting her concern at the way it was being governed.

NAAJA have faced regular calls by conservative politicians to be audited and shut down, arguing vulnerable Aboriginal children have been forced to represent themselves in court due to staffing issues, which they argue is the result of mismanagement.

They were forced to stop taking on any new clients for several months before reopening their Youth Court practice in Mparntwe/Alice Springs in March, with their adult practice reopening a month later.

The court has made no rulings on damages, with parties ordered to make submissions by July 3. Justice Charlesworth will publish her findings on Friday.