Colin Craig's former press secretary Rachel MacGregor has said in court the former Conservative Party leader's behaviour towards her was "dodgy". RNZ reporter Sarah Robson joins Checkpoint.

Colin Craig's former press secretary Rachel MacGregor has labelled the former Conservative Party leader a "dodgy" liar who lacked integrity.

She says she resigned from her job because Craig allegedly sexually harassed her and "repeatedly refused" to discuss her pay rate.

MacGregor was speaking in the High Court at Auckland on Tuesday, where she is the final witness to give evidence in the defamation case Taxpayers Union founder Jordan Williams has taken against Craig.

DAVID WHITE/FAIRFAX NZ Conservative Party leader Colin Craig is defending a defamation claim.

MacGregor was being cross-examined by Craig's lawyer Stephen Mills QC, who asked her if she was surprised that Williams felt Craig wasn't fit to be a leader of the party.

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She wasn't surprised, she said.

PETER MEECHAM/stuff.co.nz Rachel MacGregor arrives at the Auckland High Court.

"(Craig) was dodgy."

Asked what she meant by that, she continued: "Well, I mean, dodgy to be fair. He was sexually harassing me. Do you want me to use another word other than dodgy? Do you know what dodgy means?"

Her evidence prompted laughs from people sitting in the public gallery.

PETER MEECHAM/STUFF Rachel MacGregor arrives at the Auckland High Court to give evidence in the Colin Craig defamation trial.

"He was disgusting towards me," MacGregor continued.

"He keeps going on about how (the party wasn't about) moral values (but) it clearly was. He just sort of surreptitiously and sneakily... he was just dodgy, and I see why Jordan thought that.

"He was a liar. He was dodgy in that he wasn't trustworthy. He lacked integrity. When I say dodgy, I don't just mean how he sexually harassed me, I just mean how he treated others. It was just becoming clearer, and clearer, and clearer - he's lying to all sorts of other people and trying to manipulate the truth.

SIMON MAUDE/FAIRFAX NZ Jordan Williams testifies at Colin Craig defamation trial, Auckland High Court.

"I didn't want to stand by this man who was not who he purported to be."

Earlier she rejected suggestions that they had a consensual sexual or romantic relationship and said she "couldn't stand" Craig.

"The thought (of an affair) disgusts me," she said.

WHAT RANKIN SAID

MacGregor broke down in tears and had to take a break after talking about her last conversation with former Conservative Party chief executive Christine Rankin.

MacGregor said after she resigned Rankin called her to try and convince her to come back to the party.

"She was like, 'Rachel, you know, don't resign, come back,' and I was like, well no I'm not going back, I've resigned, (Craig) is dodgy as hell," MacGregor said.

Afterward, Rankin didn't realise she hadn't hung up properly and MacGregor heard her complaining to others, "We're f----, we're f-----."

The courtroom broke into laughter, as did MacGregor.

She then started crying, after describing Rankin as a "really good lady" who had been "completely stuffed over by this dude (Craig)."

The conversation was the last time she spoke to Rankin.

Rankin previously told the court she believed Craig and MacGregor were having an affair.

"On my part I knew that something was very wrong. It's the kind of behaviour people display all the time when people are having an affair, and they think no-one knows," Rankin said last week.

ALLEGED HARASSMENT

MacGregor said that from June 2014, Craig stopped paying her because they had failed to agree on how much she should be paid, and when the new pay rate would begin.

The morning of her resignation, two days before the general election, she said he had told her he slept well because he dreamed he was lying on her legs.

"I felt angry when he said this. It made me feel uncomfortable and upset," she said.

"It was not the first time. I had told him only two days earlier to stop saying this to me as it made me feel uncomfortable."

She said the alleged sexual harassment had continued over a long period of time and started off with "shoulder touches" and "comments".

She confirmed she had outlined a series of allegations to Williams including that Craig had asked her to move into a Conservative Party apartment above their offices, that he entered her hotel rooms without knocking, that he told her what he wanted her to wear, that Craig changed in front of her in the office, found excuses for her to work late under the guise of needing to "debrief", and had kissed her and touched her breast on the 2011 election night.

She told Williams she felt "trapped" because she needed the money and didn't want to resign before the issue of the hourly rate was resolved.

"I agree that, at least early on, there was affection and we had a fun relationship," she said.

"However this mutual affection certainly did not amount to a sexual relationship or something that was romantic in any way."

'SLEEP TECHNIQUE'

She agreed with Craig that after the alleged 2011 election night incident they had put into place "boundaries" but she said she was the instigator of those boundaries, and she had it written into her contract that while away on business they would sleep in different hotels.

For a while, she said, their relationship improved but prior to the 2014 election she said Craig's behaviour changed and he began asking her to do "menial tasks".

"He also would discuss things with me that I thought were inappropriate," she said.

That included another incident prior to the 2014 election when they were travelling to the airport.

Craig had described to her his new "sleeping technique", she said.

"He explained to me that his technique was to imagine himself falling asleep while lying on my legs. This greatly annoyed me.

"I said words to the effect of, 'Colin, what do you think your wife would think if she knew you were saying this to me?'"

She said he downplayed the incident.

The trial so far has heard that MacGregor confided in Williams that she had been allegedly sexually harassed by Craig.

A dossier of poems, letters, cards and texts Craig sent her during her employment has been produced to the court as evidence.

Williams approached Conservative board members with his concerns about Craig's alleged harassment of MacGregor.

Williams says his reputation was damaged when Craig then held a press conference and delivered leaflets to 1.6 million homes to publicly call Williams a liar.

Craig has consistently denied the harassment allegations, and claimed he was the victim of a concerted campaign to oust him as leader, which he said was part of the Dirty Politics scandal.

Evidence has been heard that his letters and texts to MacGregor were reciprocated, and the former Conservative chief executive Christine Rankin told the court she believed the pair were having an affair.

The court heard that others would give evidence in support of Craig, alleging that MacGregor had confessed to propositioning Craig and that she was "possessive" of him.

When that was put to MacGregor, she described that evidence as an "utter fabrication".

She admitted calling Craig's wife Helen Craig to tell her that she thought her husband was having an "emotional affair".

"She said something to the effect of, 'well what's been your part in this?'" MacGregor recounted.

THE RESIGNATION

On Tuesday morning MacGregor told the court that she and Craig had agreed that he would pay her a higher rate during the election period due to the work load and number of hours she was doing.

However the pair failed to agree on what that rate was, or what period it would cover.

As a result she stopped billing Craig and began falling into debt, she said.

He "repeatedly refused" to discuss the pay rate, and instead gave her two advances worth $10,000 each instead of paying her, she said.

"I tried to bring the matter up with Mr Craig on a number of occasions but Mr Craig repeatedly refused to talk about my pay rate," she told the court.

The matter came to a head on September 18, 2014, two days before the election, when he picked her up to take her to a radio interview.

She had become "increasingly anxious" about the pay issue, aware that the election would be over in two days.

"I feared that if the election result was not as good as Mr Craig had hoped for he may use this as a reason why he should pay me less."

After he allegedly told her he had slept well because he had dreamed of her, she decided she would bring up the pay rate again.

"He told me, now is not the time to discuss my pay," she said.

She told him she would resign, and left the car.

Lawyers later drafted up letters to Craig, attaching his cards and letters to her, alleging that she found the communication "extremely unwelcome and offensive".

"I found these letters and cards odd, upsetting and inappropriate," she said.

She took a complaint to the Human Rights Review Tribunal and the matter was settled confidentially.

"I was embarrassed to be in this position and I did not want people to talk about me," she said.

She was then "so gutted" when he gave an interview to TV3 journalist David Farrier in a sauna, she said.

His claims in that interview that she had resigned because she was "stressed" were untrue, she said.

"We agreed not to talk about each other and I immediately felt that if Mr Craig was going to say this then what else was he going to say?"

The situation had affected "almost every part of my well being," she said.

"It was an intense and deeply unsettling invasion of my privacy."