Sir Tim's quest for legal costs suffers setback

Sir Tim Shadbolt. Photo: Stephen Jaquiery
Sir Tim Shadbolt. Photo: Stephen Jaquiery
Invercargill Mayor Sir Tim Shadbolt has suffered a setback in his legal fight against his council.

Sir Tim has been fighting a legal battle against the Invercargill City Council and a separate case against its insurer to recover more than $440,000 in costs related to a defamation case.

He had made a request to merge the two cases, but this has now been declined by a High Court judge.

In February last year, Sir Tim filed legal proceedings against the council to recover $448,000 in costs in relation to a defamation case brought against him by former councillor Karen Arnold in 2018.

She was subsequently adjudicated bankrupt.

In February of this year, Sir Tim filed a second proceeding against the Local Government Mutual Funds Trustee Ltd, known as Riskpool, after the council’s insurer also declined to cover his costs.

At the time, Riskpool said Sir Tim could not be indemnified or compensated because the Riskpool scheme did not cover liability of any claim brought by a member — and both Sir Tim and Ms Arnold were considered members.

In a High Court judgement, Associate Judge Dale Lester stated that would be a key issue in the proceedings.

Barrister Phillip Cornege submitted Sir Tim should be indemnified by the council as he was a member of a local authority covered by the Local Government Act.

He also said the council was negligent and has failed to pursue and challenge Riskpool’s decision.

The two proceedings should be heard together to remove the risk of overlap and inconsistency in legal issues, Mr Cornege said.

‘‘If the proceedings are not consolidated Sir Tim would potentially be exposed to the costs of two proceedings, while the two defendants would still each incur substantially the same costs as they would for a consolidated hearing.’’

Barrister Paul Radich QC, who represents the council, sought an order for the proceedings to be stayed pending the determination of the Riskpool case.

Mr Radich said Sir Tim would not be able to recover the legal expenses twice.

Judge Lester said he was not persuaded the overlap between the two claims was substantial.

He declined the application and scheduled a hearing for February 8 next year.

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