North Shore City Council is considering whether to continue a court battle to recover $1.4 million from a failed company that made and distributed its rubbish bags.
Chequer Packaging was placed in receivership in January last year.
It had a contract with North Shore and Dunedin City Councilsand some other local authorities to manufacture and distribute rubbish bags to stores for on-sale to residents.
Council finance manager John McLaren said the deal was that the company would receive payments from the shops it supplied and pay the council that amount less a few cents.
"We had a strong case that the moneys collected were held on trust for us."
The council also argued that company receiver Ferrier Hodgson had collected money from retailers while it was in control of the company.
In November, the council lost its case against the company in receivership and last week Dunedin City failed with its claim for $400,000.
Both councils have written off the debt on their books, though North Shore is considering going on to the Court of Appeal. Mr McLaren said North Shore's contract differed from that of Dunedin City.
North Shore had separate contracts for making and distributing bags and it collected the money from shops.
Chequer's tender sum of $1.4 million for a period of three years was accepted by North Shore in April 2006.
Earlier, Chequer had lost out on the Waitakere City contract to Elldex Packaging.
The Otago Daily Times reported Dunedin's waste services manager, John Mackie, as saying the trust account had been in place until the company was sold in 2004 to a private equity consortium which included ANZ Private Equity. When the sale occurred, the trust account was discontinued.
