Pension board's legal fees approach $2M in defamation case

The Saint John pension boards legal fees in its defamation action against a former city councillor are approaching $2 million, not including the past 15 months, the Court of Queens Bench heard on Thursday.

The board has been paying those legal fees using the pension fund, which has a $193-million deficit, the court heard.

The pension board is suing John Ferguson for allegedly defamatory comments he made in 2005 and onward about the board's handling of the pension fund, which had a $47-million deficit at the time.

The case has become a source of concern to plan members, a trustee testified on Thursday.

Bill Buckley, who has represented the city's inside workers on the pension board since 2003, said he supports the lawsuit, but acknowledged most union members do not.

"They think its a waste of money," Buckley told Fergusons defence lawyer Rod Gillis, who produced copies of the pension boards financial statements.

The documents show the boards legal fees jumped to an average of $442,500 a year once the lawsuit against Ferguson commenced, up from $30,000 in 2006, prior to the action.

Between 2007 and 2010 the board was charged a total of $1.77 million in legal fees according to the financial statements, although Buckley was unsure how much of that was due to the Ferguson case.

"I'm not saying a lot of it isn't the lawsuit, but not all of it," Buckley said.

The figures do not include any billings from 2011 or 2012, which will be recorded and disclosed by the board later, the court heard.

The financial statements show the pension board has been paying its legal fees out of operating funds that otherwise would have been applied to its deficit, although the board is hoping to recoup all of the money from Ferguson if it wins its case.

"The board will be asking for an award of substantial damages plus costs of this lawsuit made against Mr. Ferguson," the board says in its statement of claim.

The trial, now into its fifth week, is expected to last nine weeks.