Two former board members of the Otago Rugby Union are suing Dunedin's mayor Dave Cull for defamation.
Wayne Graham and Laurie Mains began the action on Tuesday in response to comments made six weeks ago at the time the union was rescued from liquidation.
In comments aired on Radio New Zealand National, Dave Cull questioned the board members' ability and appeared to echo criticism by councillors of the board's past actions.
Mr Graham, the board's former chairman and a prominent Dunedin real estate agent, said he is taking the legal action against Mr Cull in a private capacity and would not discuss it further.
On Monday, former vice-chairperson Laurie Mains said he was not involved, and on Wednesday said he would not answer questions about the action.
The mayor has confirmed he knows about the action, but would not comment further.
Radio New Zealand understands if the action is successful, the Dunedin City Council would pay the first $50,000 on Mr Cull's behalf and the council's insurer would pay the rest.
The Ratepayers and Householders Association believes the defamation claim should be withdrawn.
President Lyndon Weggery says that is strange thanks for the council bending over backwards to save Otago rugby.
Mr Weggery says the defamation action should be withdrawn in the spirit of goodwill after all the city has done and ratepayers must pay the mayor's legal fees, because he was only doing his job.
The case is expected to be heard in June.