A snowstorm last September caused the roof of the $10 million stadium complex to collapse, raising questions over earlier attempts to remedy its visibly sagging trusses.
Council chief executive Richard King confirmed High Court proceedings were issued against the council on Wednesday, as well as consulting engineer Anthony Major.
NZI, as insurer for the Southland Indoor Leisure Centre Charitable Trust, filed an action to claim for damages of $27,580,000, excluding GST.
Mr King said he had been advised it was "highly likely" the council would not face any liability from the collapse of Stadium Southland, and he hoped to resolve the matter as soon as possible.
Mr Major declined to comment when contacted yesterday.
"I have only just heard about this."
The High Court action notes that during construction of the stadium, several steel trusses were visibly sagging, with Mr Major contracted to prepare a strengthening design, which was signed off by the council in 2000.
Thirteen defects relating to the court truss modification work meant it failed to comply with building codes and consent, the claim alleges.
After the snowstorm, the roof above the community courts collapsed, "causing extensive damage to Stadium Southland and creating a high risk of injury to people using the stadium".
No-one was injured.
"The collapse of the roof resulted from the failure of the community court trusses. The failure ... was caused or contributed to by the defects," the claim alleges.
The cost of repairing the damage was estimated at $25 million, excluding GST, with business interruption losses estimated at $2.58 million exclusive of GST.
Local government law specialist Associate Prof Ken Palmer, of Auckland University, said the issue was about who was liable and then apportioning that liability through the parties' insurance companies.
Trust chairman Acton Smith said he found out about the court proceedings only yesterday and "it is nothing to do with us".
He said NZI had agreed and settled the trust's insurance claim within seven days, but the insurance company reserved the right to use the trust's name to file the liability claim.
"It reads badly for us, but we aren't behind this."
NZI did not return calls yesterday.
Work has started on construction of a new stadium, which is expected to be completed next March, at an estimated cost of $30 million.
