EXCLUSIVE: THE resignation of Chick Olsson from the Australian Wool Innovation board was triggered by the board's rejection of a legal bill.
AWI chairman Wal Merriman said "it was not in AWI's charter" to pay for private legal bills.
Mr Olsson's legal bill related to litigation against Senator Julian McGauran, who was critical of Mr Olsson's involvement in a AWI meeting last year with Italian processors.
That litigation was settled in February, with a public apology from Mr McGauran and a confidential settlement.
Mr Olsson said the settlement did not include any "exchange of money".
Mr Olsson did not deny he "sounded out the possibility" of AWI paying his legal bills, but was unsure whether he lodged a formal request.
"He will remember in a few weeks' time," Mr Merriman said.
AWI's rejection of Mr Olsson's legal costs followed a precedent in 2008 when the AWI board rejected a similar legal bill lodged by former chairman Ian McLachlan over litigation against the then Australian Wool Growers Association's Martin Oppenheimer.
Mr Oppenheimer alleged in an ABC interview that Mr McLachlan retained a vested interest in the anti-flystrike or mulesing clips.
Reports indicate Mr Merriman and Mr Olsson have had a strained relationship, particularly over AWI's marketing directions.
Mr Merriman was a staunch supporter of former chief executive Brenda McGahan, who resigned in February last year, while Mr Olsson was a strong ally of UK exporter and processor Laurence Modiano, who resigned from the board last June.
At the time, Mr Merriman told The Weekly Times he wished some other directors would resign, but failed to give names.
This week, Mr Merriman declined to discuss Mr Olsson's legal bills or the latest stoush.
"They are confidential board matters," he said.
Mr Olsson said he resigned not because of the legal bill issue but because he thought his time was up. "Four to five years is long enough" he said.
Despite the spats, Mr Olsson said Mr Merriman was "still a dear old friend".
In last week's AWI press release, Mr Merriman described Mr Olsson's resignation as a "noble decision".
This week, Mr Merriman said the board had yet to decide whether to make a casual appointment to replace Mr Olsson on a board that had been reduced to six directors.
