Invercargill Mayor Tim Shadbolt's reaction in March to a jury decision in the High Court at Invercargill, which found he and media company Stuff did not defame Invercargill City councillor Karen Arnold. (File video)

A jury has rejected claims by Invercargill City councillor Karen Arnold that she was defamed by the city's mayor, Tim Shadbolt, and media company Stuff in what the defendants have celebrated as a victory for "freedom of expression".

The 12-strong jury delivered its verdict about 3.30pm on Friday in the High Court at Invercargill after an almost three-week trial and more than eight hours of deliberations.

Invercargill City councillor Karen Arnold had sued Shadbolt and Stuff, formerly Fairfax Media, for defamation over comments made by Shadbolt in four columns published in The Southland Times in 2014 and 2015.

She claimed a number of defamatory meanings could be drawn from the columns, which discussed her position on council matters, including the council's trading company Holdco and a proposed kākāpō display.

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ROBYN EDIE/STUFF Invercargill City councillor Karen Arnold sued mayor Tim Shadbolt and Stuff over comments made by Shadbolt in columns published in 'The Southland Times'.

The meanings alleged by Arnold included that she was dishonest, had leaked confidential documents, had colluded with a defunct ratepayers group and had acted inappropriately by engaging in debate about the "kākāpōrium" after declaring a conflict of interest.

The jury found Arnold had proved some of the alleged meanings, but did not find any of these to be defamatory. However, after the verdict, the judge granted her lawyers' request to make a court application to determine whether the verdicts for the first three columns were legally sound.

The verdict brings to an end the first defamation trial set down before a jury in the southern city in 99 years. Costs will be awarded at a future date.

'A LANDMARK CASE'

Speaking outside the courthouse Shadbolt said he was "absolutely relieved" by the decision, which came three years after the statements in question.

ROBYN EDIE/STUFF Shadbolt, New Zealand's longest serving mayor, gives evidence in the High Court at Invercargill during the defamation trial.

During the trial his lawyer had warned a decision against his client could have a chilling effect on political speech, however Shadbolt said the jury had sided with "freedom of speech and freedom of expression".

"It's a landmark case and it's also a defence not just of sincere conversation, but of satire, humour, being able to enjoy politics, which I've always tried to do."

The case provided a basis for the Lange defence – a legal precedent that allowed news organisations to report harsh criticism of politicians, provided they were not reckless or motivated by malice – to apply not just to parliamentarians, but local body politicians.

Shadbolt said the decision had confirmed those in local government could "express ourselves", but rejected the working relationship between him and Arnold would be strained as a result: "I think both parties will be very keen to get back … to work"

ROBYN EDIE/STUFF Stuff chief executive officer Sinead Boucher gives evidence during the trial.

Stuff editorial director Mark Stevens said he was pleased with the jury's decision.

"We always felt that at the heart of this case was the very important editorial principle of freedom of expression and it's great for the industry and the craft of journalism to have this outcome".

Arnold declined to comment.

FREE SPEECH VS PERSONAL REPUTATION

In court Stuff contended reasonable readers would not be left with the "strained or forced" interpretations, but also sought a defence of honest opinion and qualified opinion, which Shadbolt also relied on.

ROBYN EDIE/STUFF Justice Jillian Mallon sums up for the jury in the High Court at Invercargill on Thursday.

In his closing address, Stuff's lawyer Robert Stewart asked the jury if the meanings alleged would be evident to a reasonable reader or to someone "who sees conspiracies that don't exist".

Arnold's lawyer Peter McKnight said the meanings were clear. He told the court Shadbolt "loathed" his client, that there was no factual basis for his statements and he was simply "out to give Karen Arnold some decent swipes".

The sentiment was denied by the Shadbolt camp. His lawyer Felix Geiringer said that while it was true the pair did not "get on", he was within his rights to criticise her and otherwise he was giving his opinion on local political matters.

The relationship between the two – New Zealand's longest serving mayor and Arnold, a former Southland Times journalist who joined the council she used to report on in 2013 – was put in the spotlight throughout the trial.

ROBYN EDIE/STUFF Stuff's lawyer Robert Stewart gives his closing address.

The trial also involved a revolving cast of prominent media figures, both past and present. They came to give their estimation on standards, specifically whether they were in decline due to cut-backs and a focus shift from print to digital.

Arnold alleged Stuff was irresponsible and reckless in the way it published the columns, in part because only one staff member – long-term Southland Times features editor Mike Fallow – checked them without referral to editor Natasha Holland or a lawyer.

This, in McKnight's reckoning, was "totally irresponsible". However, Stuff's chief executive Sinead Boucher said she would have personally published the columns and the checking process they went through was appropriate for a modern news organisation.

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* Councillor shared concerns about Holdco plan, court hears

* 'There was no conspiracy' against councillor, lawyer claims

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The trial was also about free speech and how to balance that with personal reputation. Justice Jillian Mallon reminded the jury during her summing up that freedom of expression was "a fundamental right in a free society".

ROBYN EDIE/STUFF Arnold's lawyer Peter McKnight said Shadbolt "loathed" his client, and he was out to give her a few "decent swipes".

"It is so important that it's affirmed in our bill of rights, along with other fundamental rights. It does, however, have limits. The law does recognise the importance to a person of their reputation and their rights to protect it."

Geiringer told the jury freedom of speech was particularly important in this case. He argued there would be a chilling effect on political speech and publishers' willingness to provide a platform if the jury found against his client.

Their decision would have, he said, a "substantial impact on the society we live in", whereas McKnight contended it was "very important that we as a society protect the reputations of politicians from unwarranted attack".

The kākāpōrium has yet to be built and both Shadbolt and Arnold remain on the council together.