The Dunedin City Council concluded in 2019 Cr Lee Vandervis breached the council's code of conduct and it issued him a written censure.
His application to the High Court for a judicial review was rejected and he then took the matter to the Court of Appeal, which heard arguments today.
His counsel, Len Andersen, QC, said council chief executive at the time Dr Sue Bidrose acted as a facilitator for the staff member's complaint when the council's process had required her to be the complainant herself.
The investigator appointed by the council to look into the complaint, David Benham, quickly formed the view Cr Vandervis had breached the code, Mr Andersen argued.
The investigation was flawed and Cr Vandervis was denied a proper opportunity to be heard before judgement was arrived at, Mr Andersen said.
Counsel for both the council and Mr Benham, Michael Garbett, said the task required of Dr Bidrose was to engage an investigator.
Mr Benham decided at the preliminary stage that the complaint warranted a full investigation, Mr Garbett said.
The council was the ultimate decision-maker that both affirmed Mr Benham's findings and determined the penalty, Mr Garbett said.
The incident arose on September 13, 2019, when Cr Vandervis’ vehicle was ticketed.
He approached the council's reception counter, paid for another ticket and tried to complain about parking signage, but was told a complaint about a ticket had to be in writing, Mr Andersen said.
Cr Vandervis was of the view the staff member had not listened, his counsel said.
Mr Andersen said the incident happened close to the 2019 election and there was "concern by council staff this candidate might well win the mayoralty".
In the end, Cr Vandervis was a close second to Aaron Hawkins in the mayoralty race.
Cr Vandervis has always been clear in his argument the dispute was never about him trying to get out of paying the $12 fine.
He has argued he was making a complaint about defective signage, as he paid for an hour's parking and could not see from the footpath a 30-minute time limit applied.
Mr Andersen said the signage had since been remedied.
Mr Andersen said Cr Vandervis found out at a late stage the allegations were wider and different than he had been led to believe.
Mr Garbett said the key allegations were squarely put to Cr Vandervis.
They were focused on his behaviour.
The council and investigator's counsel argued there was no fundamental unreasonableness in the process that led to the censure of Cr Vandervis.
It also emerged in court he had still not paid for the ticket.
Mr Andersen said Cr Vandervis made his objection in writing and "nothing further happened" concerning its payment.
Justices David Collins, Jillian Mallon and Graham Lang reserved their decision.
