No decision on Ferguson's $2.5M legal costs

A Court of Queen's Bench judge has reserved decision on whether the Saint John pension board should pay former city councillor John Ferguson's estimated $2.5 million legal costs in the board's failed defamation suit against him.

Justice William Grant said he expects to make a decision within the next few days.

If he rules the pension board does not have to pay Ferguson's bills in full, the judge said another hearing will be scheduled to settle on a lesser amount.

Ferguson's lawyer, Rod Gillis, argued in the packed Charlotte Street courtroom that the board should be financially punished for putting his client througha failed five-year legal fight.

He described the suit as "frivolous" and "vexatious," and suggested it was aso-called SLAPP suit (strategic lawsuit against public participation), intended only to intimidate and silence Ferguson from criticizing the city's growing pension problems.

"In view of what was attempted here by some city officials to silence an elected official from doing his job, the costs should demonstrate that won't be tolerated,"Gillis told reporters outside the courthouse.

He said $2.5 million for solicitor and client costs might actually "be a little low."

But the board's lawyer argued Ferguson should not be compensated at all,despite winningthe board's defamation lawsuit against him.

Barry Morrison maintains Ferguson's criticisms were baseless and reckless, which entitles the board to pay little or nothing toward his defence, says Morrison.

Any money awarded would not go to Ferguson, but rather to the city's insurance company, which covered his legal costs. The city had insurance for council members for such situations.

So while many people in the city are sympathetic to Ferguson, it would be better for the cash-strapped city if Gillis loses his application.

Saint John's new Deputy Mayor Shelley Rinehart watched the court proceedings, but said she had no opinion on the matter.

'Solicitor and client costs are warranted whenever a proceeding is frivolous, vexatious, or is otherwise an abuse of process.'Rod Gillis

Newly-elected Mayor Mel Norton, who was opposed to the trial, is now chairman of the pension board.

The pension board sued Ferguson in 2007 over a series of statements he made as a city councillor about poor management of the city's $400-million pension fund.

At the time, the fund was running a deficit of about $45 million. The shortfall has since ballooned to more than $190 million and resulted in significant funding cuts to city services.

The board claimed on six separate occasions between 2005 and 2006 Ferguson maliciously defamed members of the board in a cynical attempt to gain attention for an eventual run for mayor.

But on May 1, following five years of preparation, an 11-week trial and millions spent on legal costs, a seven-person jury sided completely with Ferguson finding him well within his rights as an elected representative to express his opinions about the city's pension problems.

The jury went further and found that even if the pension board had been successful, it would have been entitled to only $100 in damages a direct rebuke of the pension board's conduct by the jury, according to Gillis.

Costs justified

In written submissions filed with thecourt in advance of the hearing, Gillis said the rarely-awarded "solicitor and client costs" are justified in this case because of the jury's decisive rejection of the pension board'scase against Ferguson.

"Solicitor and client costs are warranted whenever a proceeding is frivolous, vexatious, or is otherwise an abuse of process," Gillis argued in the submission.

"This action was brought for the improper purpose of harassing and oppressing the defendant, and was brought for the purpose of silencing the defendant rather than to assert any legitimate right."

"The action has affected the defendant not only in his professional career, but his personal life as well," he wrote.

"The defendant endured the stigma of enormous public scrutiny throughout the five year period was put to the expense of reviewing or producing in the range of 80,000 pages of documents, having counsel attend 33 days of discovery, having counsel prepare for in excess of a dozen pre-trial motions, several weeks of pre-trial preparation involving four lawyers, and the cost of conducting a 55-day trial, all of which results in the jury finding for the defendant and finding his comments to be made without malice," said Gillis.

Board unapologetic

Barry Morrison, the pension board lawyer, was unapologetic, however,in his written response. He argued Ferguson should be "deprived of his costs either totally or at least substantially.

"The defendant was not acting in good faith as a councilor during the years 2006 to 2008," Morrison wrote.

"That conduct is among the matters which justify either no costs or a significant reduction in costs awarded to the defendant."

Morrison had previously arguedFerguson was to blamefor the millions spent on the five-year lawsuit.

Ferguson fought back fiercely after being threatened with legal action by the board in January of 2007 instead of apologizing for things he had said and trying to find some way to work out a solution, Morrison had told the court.