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Ms Arnold, a first-time councillor elected in 2013, announced in June she was suing over the contents of four opinion columns Mr Shadbolt wrote for the paper. The columns talked about her stance on various council projects including proposed commercial transactions involving the council's trading company Holdco, and a proposed kakapo chick and tuatara display house.
Two of the columns were also published on Fairfax's Stuff website.
Mr Shadbolt has counterclaimed over a letter to the editor Ms Arnold had published in the Southland Times.
In February, the lawyers for the parties met in chambers before Justice Denis Clifford to discuss a series of preliminary applications from Ms Arnold, primarily whether Mr Shadbolt could argue a defence of honest genuine opinion, and whether Fairfax could argue it had reasonable cause to believe Mr Shadbolt's opinions were honest and genuine.
In his decision released earlier this month, Justice Clifford declined all but one of Ms Arnold's applications and ordered to her pay costs of $5908 to Fairfax and $5167.50 to Mr Shadbolt.
In his final comments, Justice Clifford said by his assessment, much of the material complained of ‘‘reflects the regular rough and tumble of local body politics'' and in that context, freedom of speech issues arose.
Ms Arnold said yesterday she had already paid the costs as directed but on Monday had filed a notice of appeal with the Court of Appeal seeking to have Justice Clifford's decision and order for costs overturned.
‘‘Now we have to wait for a fixture date, and I don't know when that will be,'' she said.
Once the preliminary matters are finalised, there may be a full court hearing before a jury.
Asked if she was intending to continue the full defamation action, Ms Arnold said: ‘‘Yes, definitely''.
Mr Shadbolt said yesterday he would apply to the Court of Appeal to have the appeal fast-tracked, something parties in civil actions had been able to do since new legislation was introduced last June.
If fast-tracked, the appeal could be heard within three months, he said.
He said he was confident he would be successful and wanted to get the appeal ‘‘over more quickly''.
‘‘I think anyone in a situation like this would prefer to have it dealt with as soon as possible, so people who want to get on with their lives can do so.''
Mr Shadbolt said he and Ms Arnold had been maintaining a professional relationship at council meetings and during other council business, although he said it was ‘‘awkward''.