Colin Craig has given details in court about a kiss he had with then-press secretary Rachel MacGregor on election night in 2011.
The former Conservative Party leader has been giving evidence in his own defence in a defamation action taken by Taxpayers' Union executive director Jordan Williams.
Mr Craig said he has accepted they were lying down but "no one on either side objected at the time".
He says suggestions he had taken off his pants in front of her are not true, but claims she took her shirt off.
Neither of the two were naked, the court heard.
He claims both of them were embarrassed about the incident the following day.
"Something had happened that shouldn't have happened. We both knew that."
Later in the day, wife Helen Craig took the stand, telling the jury the pair have had a wonderful marriage for 25 years. She says the issues since the election were challenging and "a shock".
She says she first became aware of an issue when Ms MacGregor had refused to go to interviews after making a pay demand Mr Craig had not agreed to.
In her evidence, she said Ms MacGregor had been having "an emotional affair" with Mr Craig, and that she had kissed him.
She said Ms MacGregor had agreed to go and meet Ms Craig but never did. In Ms MacGregor's view, Ms Craig had agreed to get in touch with her.
Earlier in the day Mr Craig denied a poem he wrote entitled 'You are Wonderful and Beautiful' was in fact a poem.
Mr Williams' lawyer had made him go through the poem line by line, explaining its meaning, on Monday.
But today Mr Craig described the words as "a list of encouragements" for Ms MacGregor.
They included "you are wonderful because you think like me", which Mr Craig said meant he and Ms MacGregor had a similar outlook on life; and "you are wonderful because you don't think like me", which meant she "wasn't backwards about coming forward".
Other lines read out included "your lips are so amazing to kiss", "you look unbelievable in your new dress" and "you are beautiful because you have the most perfectâ€¦"
"I just leave them to fill in the gaps or fill in the blanks," Mr Craig said on Monday. "They were to say, 'Look, write the rest, fill in the rest.'"
Mr Craig acknowledged that it was his own work and not copied.
He has taken a separate case against Mr Williams for breaching copyright by republishing the work.
When asked whether he would issue them with a breach of copyright order, Craig replied: "If someone republished it and it was confidential information and I needed to do something about it, I would. You're aware that I have done that."