Taxpayers in St. John's are on the hook for up to $50,000 because of a defamation case involving Mayor Andy Wells and former councillor Paul Sears.

In March, Sears won a Newfoundland Supreme Court of Appeal decision on whether he had defamed Wells.

The appeals court ruled that Sears had qualified privilege when, during a December 2003 council meeting, he said a supermarket developer had "bought" Wells.

Wells supported what became a successful bid to convert Memorial Stadium into a Loblaws supermarket.

The appeals court dismissed the $40,000 judgment that the trial division ordered Sears to pay last year and also awarded Sears costs in the case.

Ron Penney, city solicitor with St. John's, said insurance is covering most of Sears's legal costs, except for a $50,000 deductible that the city must pay.

Penney said the city is not paying Wells's legal bills.

Sears, who frequently sparred with Wells at council meetings, was defeated in the 2005 municipal election.