The Far North District Council has withdrawn the application lodged by a staff member for a restraining order against arch critic Des Mahoney.
The application was to have been heard in the Kaitaia District Court on Monday.
However, the council issued a brief statement on Monday, saying that its in-house lawyer John Verry and advisory services manager Richard Palmer had met with Mr Mahoney last week and agreed there was a better way to resolve the issues that had led to the application.
That agreement had made it possible for the council to discontinue proceedings.
The outspoken critic of council activities had been served with an application for a restraining order issued under the Harassment Act 1997, seeking restrictions on his comments about the council.
The application was supported by an affidavit from a senior council manager.
Last week the council offered to pay Mr Mahoney's legal and court filing costs, totalling $2218.50.
Mr Mahoney said he had declined all offers to discuss an agreement, and he still didn't know who had actually filed the application.
There was no evidence he was aware of that the council was actually a party to the proceedings.
He believed the application had been designed to intimidate him into silence, but it had only made him angry that "once again" ratepayers' funds were being used in a very questionable manner.
"As far as silencing me goes, they have again failed dismally," he said.
"This exercise of preparing court documents, filing them, serving them, refiling revised affidavits, then the meetings and phone discussions that led to the out-of-court resolution is a great cost to the ratepayer and should never have happened."
A number of councillors had confirmed that the matter had never gone before the full council, he said.
"I'm disappointed that I won't get my day in court and the ratepayers won't get to hear the truth, but I was very heartened by the support I received from throughout the district," Mr Mahoney added.
"Offers of additional evidence, koha and prayers poured in, from the elderly to the young, people I know and some I have never met, including past and present staff.
"I was always confident that my legal advisers were going to achieve a victory and they did. I thank them for doing a great job, but sadly this has been at a cost to the ratepayers.
"A simple discussion could have resolved this, at no cost."