TWEED Greens Councillor Katie Milne says she will continue to vote on Leda Developments issues despite a Sydney court ruling that she defamed the company's executive chairman Bob Ell and ordered her to pay him $15,000.

It comes on top of costs of $50,000 previously awarded in the same case to Mr Ell whose company is behind the mega-residential estates Kings Forest and Cobaki.

But Cr Milne said she would continue to vote on matters related to Leda under previous advice from the Division of Local Government (DLG).

"They did not advise their position may change after the court's determination," she said.

She said she would not comment further on her future until after legal costs had been determined.

A DLG spokesman who was asked if councillors should be allowed to continue to vote on matters related to people they have been found to have defamed, quoted the council code of conduct.

Council GM Troy Green said: "It is the responsibility of each individual councillor... to identify and manage conflict of interest matters."

Cr Warren Polglase said she should recuse herself from Leda matters because, "it's not a good look".

A legal opinion provided to the Daily News stated that Cr Milne should recuse herself as owing money to Leda is a pecuniary interest. The defamation action stemmed from a letter to the editor written by Cr Milne in which she unfairly linked Mr Ell to murdered Sydney businessman Michael McGurk and made references to Mr Ell's political donations.

It was distributed via email to 70 addresses including various media outlets, in March 2010.

Judge McCallum ruled that: "None of the documents in evidence... reasonably sustains a finding that Mr Ell attempted to buy the favours of the NSW State Government and the Tweed Shire Council."

A hearing to determine costs from the latest proceedings will be held next month. It has the potential to bankrupt Cr Milne rendering her ineligible to remain a councillor and sparking a by-election.

It's not the first time Katie Milne has landed in hot water:

• Oct 2009: A Federal Court judge chastised Cr Milne for her failed legal bid to stop a world championship car rally and ordered her to pay the rally organisers' $26,000 legal costs. There had been rumours a loss would bankrupt Cr Milne and cost her seat on the council but she was not pursued for the money.

• Jan 2010: Action to pursue a $351.40 debt owed by Cr Milne to council for three years is quietly ditched to keep the embarrassing situation out of court.

• Dec 2012: Crs Milne and Gary Bagnall are charged with trespassing on council land and breaching council's secretive code of conduct policy.

• Jan 2012: Milne voted off the councillor selection panel choosing a new council general manager after making public comments that she wanted a female in the job.