Supreme Court judge Bill Wilson's first offer to resign to halt misconduct proceedings against him was rejected by the Government because the terms he wanted were too great.

Acting Attorney-General Judith Collins accepted Justice Wilson's revised offer of resignation yesterday at a cost of more than $1 million to the taxpayer. The judge will leave on November 5 with a year's salary - $410,000 - as well as significant leave entitlements and almost $500,000 to cover his legal costs.

Ms Collins said Justice Wilson had first tendered his resignation some weeks ago but it was rejected because "it was on terms not acceptable to me".

She would not say whether it was unacceptable for financial reasons or other matters.

His resignation will halt an investigation by the Judicial Conduct Commissioner into complaints he did not properly disclose his business relationship with Alan Galbraith, QC, when sitting on a 2007 case.

Justice Wilson's lawyer relayed a new offer to the Solicitor-General yesterday and Ms Collins accepted.

She said the resignation avoided the likely "horrendous" future costs of continuing to pay Justice Wilson's salary as well as both his and the Crown's costs during protracted legal action.

The Crown is required by law to cover his reasonable legal costs.

Ms Collins believed it was the best decision in the case, which she was concerned was damaging the judiciary at a time when the Supreme Court was still very young.

She did not believe the terms of his resignation were unreasonable.

"He is forfeiting all the rank and privilege of the Supreme Court, all the trappings of a Supreme Court judge, and he has actually lost his career."

It would be hard for Justice Wilson to return to his old career as a civil litigator because judges undertook not to appear in court again.

Ms Collins dealt with the case because Attorney-General Chris Finlayson knew Justice Wilson well.

The judge's lawyer, Colin Carruthers, QC, did not return calls yesterday.

In the 2007 case, the Supreme Court found in favour of the Wool Board and overturned a High Court judgment which awarded millions of dollars in levy payments to fine merino wool growers Saxmere.

Yesterday, Sue Grey, the Saxmere lawyer, said it was unfortunate the case had gone on for so long and tested public faith in the judiciary.

"The Government now has an excellent opportunity to review what went wrong, compensate those who have suffered injustice, including my client, and to review the adequacy of checks and balances on the judiciary."

Auckland University associate professor Bill Hodge said the resignation stopped ongoing "immeasurable damage and harm to the courts of New Zealand at the highest level".

"Someone's said, 'Stop the bleeding', and he has been given a very sweet package."

Professor Hodge said the situation was unique at the highest level in NZ courts and he expected other judges would be very careful about potential conflicts.

The proceedings against Justice Wilson followed complaints by three people - including retired judge Sir Edmund Thomas - to the Judicial Conduct Commissioner.

They claimed the judge had not revealed that he allegedly owed $228,804 to Mr Galbraith when he was deciding on the appeal by the Wool Board. The judge had made an informal disclosure about their joint ownership of a land-owning company, Rich Hill, which rented land to the Rich Hill stud owned by Mr Galbraith.

Last month, Justice Wilson successfully challenged the establishment of a special panel to hear the allegations of misconduct. The Judicial Conduct Commissioner had not included specifics of the allegations against him when recommending the panel to the Acting Attorney-General.

The High Court invited the commissioner to review the case and seek to re-establish the panel if desirable.


Bill Wilson

* $410,000 one year's salary, which is taxable.

* $475,000 Solicitor-client costs calculated to date.