The Beaverbrook (U.K.) Foundation is taking Fredericton's Beaverbrook Art Gallery back to court over a ruling that awarded it a large collection of art. ((CBC))

The Beaverbrook (U.K.) Foundation is asking the Court of Queen's Bench to strike down the September ruling by an appeal panel that allowed more than 85 valuable works of art to stay in Fredericton's Beaverbrook Art Gallery.

The foundation filed documents on Wednesday at the Court of Queen's Bench in Saint John challenging the September decision by an appeal panel, composed of retired judges Edward Bayda, Coulter Osborne and Thomas Braidwood.

The appeal panel upheld former Supreme Court of Canada justice Peter Cory's 2007 ruling that gave the majority of the disputed art works to the Fredericton art gallery.

Kent Thomson, a lawyer for the Beaverbrook Foundation, said in court documents that the appeal panel ignored key precedents on what's called "fraudulent concealment."

The foundation's appeal is unexpected, as the arbitration panel's decision was supposed to be the final legal avenue for the parties who have been embroiled in a five-year courtroom battle.

Both sides in the dispute agreed in 2004 to live with the outcome of the arbitration process.

But New Brunswick's Arbitration Act states the panel's outcome can be reviewed by the Court of Queen's Bench if there was an error in law.

The foundation now believes it has room to appeal, even though it said last month it would abide by the ruling.

Cory had accepted the gallery's argument that Lord Beaverbrook gave the paintings as gifts, then covered that up and made them appear to be loans. And the appeal panel said Cory's decision was reasonable and he did not make any mistakes in his original judgment.

Thomson points out the gallery considered the paintings gifts when they were handed over leading up to the gallery's opening in 1959, but the gallery had also accepted that they were labelled as loans in 1960.

He said that means the gallery was required to challenge that contradiction within six years of 1960, the limitation period set out in Canadian law.

The foundation will be in court in December in Saint John trying to convince the Court of Queen's Bench to hear the case. Cory's original judgment awarded 85 out of the 133 paintings to the Beaverbrook Art Gallery.

Among the paintings that will be staying at the Fredericton art gallery are J.M.W. Turner's Fountain of Indolence, valued at $25 million, and Lucian Freud's Hotel Bedroom, valued at $5 million.

The U.K. foundation, which is controlled by descendants of the Canadian-born British politician and businessman who died in 1964, said the paintings were only on loan to the gallery and it wanted to take some of them back.

The gallery argued Lord Beaverbrook had given the works as gifts in the 1950s.

The appeal panel also upheld Cory's decision that the foundation pay $4.8 million in costs from the original hearing.

However, it didn't make a decision on awarding costs for the appeal. The judges instead asked for legal submissions by the lawyers involved in the cases on who should pay the cost of the appeal.