MP faces financial ruin over fight with timber firm

NATIONAL MP Nick Smith says he is facing financial ruin as a result of a long-running defamation case against him by the local subsidiary of an American multinational timber company.

Osmose New Zealand is seeking $14.7 million each from Smith and scientist Dr Robin Wakeling, claiming comments the two men made damaged its business.

Smith and Wakeling commented publicly in 2005 about Osmose's TimberSaver timber preservative treatments, used in timber framing in houses.

"The financial cost is so crippling that we are doing everything we can to try and settle it simply because we don't have the finances to be able to fund a defence," said Smith.

Smith said costs so far had reached $300,000, with a bill of at least $200,000 if the case reaches trial in 2009. He said government MPs had taunted him in parliament about his situation.

"I find it offensive that the government repeatedly goads me in parliament as if they would take joy in a member of parliament exercising his rights of free speech being bankrupted for trying to do his work," he said.

"I would have thought they would have taken a more defensive view of the role of MPs in society and [that it would] be of concern that a foreign multinational would try and ruin a scientist and member of parliament in this way," he said.

Asked if he faced bankruptcy, Smith said, "I don't have $15 million.

"Both of our financial positions have become very weak as a consequence of the cost of legal expenses. Both of us have been under extreme financial pressure that has adversely affected our families," Smith said.

His declaration in the January 2007 MPs' register of assets shows he had a directorship in commercial property, Cynick Properties Limited, a beneficial interest in the Freedom of Speech Trust, and has residential property in Nelson. The register also showed he was facing creditors in relation to a property settlement.

Smith announced in early 2006 that he and his wife Cyndy had separated.

Wakeling, an expert in fungi in wood, has his own consultancy firm. He said he had put his Rotorua home on the market to try and raise some money.

"It could be financial ruin for both of us, not because we have a fear of award of damages, but more because you go bankrupt long before that point. The costs of defending yourself are astronomical, it's just frightening,"

Osmose New Zealand is a subsidiary of New York-based Osmose Holdings. In 2006, Osmose New Zealand and Osmose Australia were fined a total of $1.8m by the Auckland High Court for participating in a cartel in New Zealand's wood preservatives chemicals industry. The fines were for price-fixing, bid-rigging and attempts to exclude a competitor.

It is the fifth time Smith has faced a defamation suit. In 1993, he was sued for defamation by the Exclusive Brethren for $4m, in a case that was settled out of court without Smith having to pay the church money.

Disgraced Wellington lawyer Bruce Carran sued him in the 1990s for defamation, in a case that never went to court. In 2001, Smith said he had to take a second mortgage out on his house to defend himself against a $75,000 suit by Inland Revenue critic Dave Henderson.

And in 2004, Smith made an out of court settlement with West Coast conservationist Bruce Stuart-Menteath over a defamation action.

In 2004 Smith was convicted of contempt of court after publicising details of a Family Court case, and fined $5000.

- © Fairfax NZ News