The long-standing court case against a former Saint John councillor being sued by the city's pension board is dragging on after more than three years.

Justice William Grant heard a motion to have the case dismissed in the Court of Queen's Bench on Monday.

The insurance company that's paying the legal bills for John Ferguson, the former city councillor, said the defamation lawsuit against him should be dismissed.

Roger Horst, the Toronto-based lawyer representing the insurance company, argued in court Monday that the board of trustees of the city's employee pension plan didn't even have the authority to file the lawsuit.

Horst said it's nothing more than an "improper attempt by the pension board to stifle freedom of expression" on an important issue that affects taxpayers.

The case revolves around allegedly defamatory comments Ferguson made in 2005 about the board's handling of the pension fund, which had a $47-million deficit.

Horst said the board doesn't have the authority to file such a lawsuit or spend money on it.

Under the Pension Act, the board can only spend money as necessary for the proper administration of the fund.

Horst also questioned whether the board, which is a 13-member unincorporated association, can be defamed.

But Barry Morrison, the lawyer representing the pension board, argued that the lawsuit is necessary to protect the board's reputation.

He said if people lose faith in the board, it could have a detrimental effect on the plan.

Morrison also noted that the board has launched and defended other legal actions in the past.

Grant has reserved his decision until May 18.