Dawson City has dropped its lawsuit against former mayor Glen Everitt.

Yukon Supreme Court Justice Ron Veale agreed to discontinue the case earlier this week.

Court documents don't state the reason for the discontinuance, but simply note Dawson's lawyer, Dan Bennett, said the town was not planning to proceed in the case for more than $43,704 before Veale consented to the discontinuance.

Bennett could not be reached for comment this morning.

Everitt's counterclaim against the town for more than $59,000 was also cancelled.

Dawson filed its claim in 2009, arguing that Everitt, the mayor from 1997 to 2004, was given personal loans from the town beginning Dec. 31, 1997.

As of Dec. 31, 2003, the outstanding balance on the loans was $43,704.54.

Everitt provided a cheque for the full amount, which the town was not able to cash, states the town's original claim (which Everitt has denied in his response to the documents).

The town's court statement notes that it demanded repayment for the loans, but Everitt never paid up.

The town, therefore, filed the lawsuit for the full amount of the loans, interest, cost and anything else the court would deem just.

Everitt's statement of defence denies the claim fully, arguing he was never invoiced, as the town had stated.

In his counterclaim in the case, Everitt argued the town still owed him overtime pay he never received during his seven years as mayor.

Dawson never resolved the issue of pay past 37.5 hours each week and owed him for the extra hours he put in, his statement read. The town denied each of the allegations against it in its statement of defence.

The town violated labour laws, with negotiations never completed on work hours, Everitt continued in his statements, before seeking $59,000 along with interest and court costs.

The end of the civil case comes after Everitt was sentenced in criminal court last year to house arrest and community service, and ordered to repay $38,300 in public funds he admitted to taking taking during his time as mayor.

Everitt pleaded guilty in criminal court last April to one count of "breach of trust by a public official by misappropriating public funds.”

He moved to Ontario to serve his sentence, and was in touch with the court this week by phone.