Penny Bright has been diagnosed with stage 3 ovarian cancer.
The Auckland activist says she received the news on Wednesday and that the disease is "incurable and inoperable".
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"The fighter in me says - we shall see about THAT!" she said in a statement.
She was hospitalised with stomach pain in April.
Ms Bright claims her diagnosis is the result of her years-long stand-off with Auckland Council over her unpaid rates. In January, the council announced that it had asked the High Court to start the process of selling her Kingsland house.
"The massive stress I have been subjected to over the forced sale of my freehold home has gone straight to my gut," Ms Bright said.
In 2016, she appealed the decision of the Auckland District Court which said she had to pay $34,182.15 in penalties and rates to Auckland Council, which she has not paid since 2007.
Her appeal was unsuccessful.
She has applied for an interim injunction to stop the sale of her home, and a hearing will take place at the High Court on May 14.