The Queenstown Lakes District Council has spent more than $120,000 in litigation costs to date over the controversial strategic alliance between the Queenstown Airport Corporation (QAC) and Auckland International Airport Ltd (AIAL).
When asked, QLDC regulatory and corporate services general manager, Roger Taylor, said there was no way of knowing how much more the council may spend on the litigation.
Legal action was taken by the Queenstown Community Strategic Asset Group and Air New Zealand Ltd against the council, QAC and AIAL in August.
The two parties lodged separate applications with the High Court at Invercargill over the alliance, seeking a judicial review and an injunction to stop Queenstown Airport issuing any further shares to Auckland.
The alliance saw Queenstown Airport create and sell 24.99% new shareholding to Auckland Airport for $27.7 million, which was announced on July 8.
Auckland is hoping to increase its shareholding to between 30% and 35% before June 30 next year.
Mr Taylor said since the legal action had been taken, the council had spent $120,136.89 in litigation, with Simpson Grierson, of Wellington, acting on behalf of the council in the matter.
At the moment the cost was being funded from a "contingency fund", he said.
Mr Taylor said the council would make a decision as part of the 2011-12 annual plan process where future funding for the litigation would come from.
Mayor Vanessa van Uden, when asked how the money spent on High Court proceedings fitted with the council's aim to bring debt under control, she replied: "It doesn't."
"What it does fit with, though, is being a response to a situation we found ourselves in, rather than something we could necessarily have planned [for].
"There are situations that require a response from council that are beyond our control, but we are obliged to make a response."
Ms van Uden said there was a "full discussion of the situation with the councillors" in August and the decision was made by the council at that time to defend the proceedings.
Approached for comment, former mayor Warren Cooper said the council was "displaying a level of incompetence no other local authority in New Zealand could fall to".
"This should never have happened in the first place. It's a huge folly and most of us ... are in despair with the dilemma they've got us all into as ratepayers.
"Quite clearly, this is just the tip of the iceberg in this whole matter ... the council could easily be up for ... $400,000.
"They'll try to [say] that if it hadn't been for this group of people that weren't prepared to back the sale, then we wouldn't be paying anything else.
At that stage it would mean that the foolish people had won and the sensible people had lost."
