$15m court case against MP deferred

Nick Smith. Photo / Mark Mitchell

A $15 million lawsuit hearing against Cabinet Minister Nick Smith has been put off for a day while lawyers try to reach an out of court settlement.

The six week hearing was due to start in the High Court at Auckland tomorrow, as timber preservatives producer Osmose New Zealand takes a defamation case against the Nelson MP and timber preservation scientist Robin Wakeling.

Osmose New Zealand, a division of a US-based wood preservation corporation, alleges that statements made in July 2005 about the company's surface-treated timber product, T1.2, destroyed the product's reputation and the company lost more than $14 million in projected profit.

Dr Smith said that following legal discussions over the weekend the start date had been put off for a day. If the parties could not reach an agreement the court case would start on Wednesday.

Dr Smith, who is Minister for ACC, Environment, and Climate Changes Issues, was then National's spokesman on building and construction issues.

Dr Wakeling published an article critical of the Building Industry Authority (BIA), now the Department of Building and Housing, for approving the use of the treatment in timber framing of houses in 2004.

Dr Smith issued a press release later the same day critical of the then-Government and BIA, along with a copy of Dr Wakeling's article. He was interviewed on the issue on radio and television.

As well as Dr Wakeling and Dr Smith, named as first and second defendants, six companies that provided the MP with information about timber products are also being sued, the Nelson Mail reported.

It was revealed in April that Parliamentary Services had contributed $122,000 towards the then total of $270,000 in costs faced by Dr Smith.

Prime Minister John Key said Dr Smith had acted in what he thought was the best interest of New Zealanders and the use of taxpayer funds was "totally legitimate".

Dr Smith has also received support from a trust set up in 2006 to help him and Dr Wakeling defend the lawsuit.

However, he is no longer a beneficiary of the trust and has met more than half of the cost himself. Since returning to Cabinet his salary has risen from $131,000 to $243,000.

- NZPA