A local authority accused its former managing director of fraudulent behaviour and deceit yesterday, claiming that she withheld her history of depressive illness when applying for the job.

In what is thought to be the first case of its kind, Cheltenham Borough Council accused Christine Laird, 52, of “fraudulent or negligent misrepresentation” at the High Court.

The authority claims that she concealed her medical history, including that she had been taking antidepressants for several years, before she was appointed in February 2002 after a council vote went narrowly in her favour. She held the post, which had been advertised at a salary of between £63,000 and £79,000, until 2005 but from June 2004 she was absent on full pay.

The council is now suing her for £982,000 plus interest, bringing the total to more than £1million. It includes the projected £450,000 cost of Mrs Laird's ill-health pension entitlement as well as the £175,000 expense of covering for her while she was off sick and £96,000 in legal costs.

Mrs Laird, of Tewkesbury, Gloucestershire, denies the allegations and contests the council's claim. She says that she has insufficient assets to pay. The council does not accept that she is “impoverished”.

Her time at Cheltenham was marked by a series of disputes with the authority and Andrew McKinlay, its Liberal Democrat leader, with allegation and counter-allegation of inappropriate, obstructive and bullying conduct. Mrs Laird filed 25 official complaints to the Standards Board for England, of which one was upheld. She also filed an application for a restraining order banning Mr McKinlay from entering the first floor of the council headquarters, where she had an office, but this was withdrawn later.

Mrs Laird pursued separate legal claims against the council and Mr McKinlay, but failed and incurred costs of more than £90,000.

In its statement of claim, the authority said that in her pre-employment questionnaire she had replied “no” when asked: “Do you see yourself as disabled?” Asked whether she enjoyed good health, she had replied, “yes.”

The council said that she had failed to disclose three bouts of moderate depressive illness since May 1997 and had taken time off work. “As a result, the council was wrongly advised that she was medically fit for the job and it proceeded to implement its decision - reached by a narrow 18 to 17 majority - to employ her,” Tim Kerr, QC, told Mr Justice Hamblen. “In consequence, the authority sustained loss and damage of just over £982,000.”

The hearing continues.

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