Hamilton has dropped its plan to appeal a court ruling in favour of the Christian Heritage Party over bus shelter ads aimed at transgender rights.

A judge ruled in October that the city didn't follow its own process when it took down the party's ads two years ago. The city also has to pay the party $44,000, plus its own legal costs.

The city originally planned to appeal. But on Wednesday, city councillors went behind closed doors and voted to drop the appeal.

The ads coincided with city council implementing a new transgender and gender non-conforming policy. The policy confirmed that, among other things, people who are transgender have the right to use public washrooms and change rooms that align with the gender identity.

The ads appeared to show a man entering a door marked "Ladies Showers." "Competing human rights," it read. "Where is the justice?"

It coincided with a large mail-out on the Mountain encouraging residents to contact city councillors.

The city cautioned Outfront Media, the third-party company that handles HSR ads.

The ruling said the city didn't follow a process when it removed the ads, thus infringing the party's right to political speech.