Maori unhappiness has taken the shine off the Kermadec sanctuary project, which was announced by Prime Minister John Key at the United Nations.
The protected area will be twice the size of New Zealand's land mass and 50 times the size of the country's largest national park.
Two fisheries settlements in 1989 and 1992 granted Maori control over one-third of New Zealand's commercial fisheries.
However, the Government has reasoned that because there is little viable commercial fishing in the area, no compensation need be paid.
TOK chairman Jamie Tuuta said the legislation being considered to establish the sanctuary undermined the fisheries settlement, "and consequently undermines the integrity of Treaty settlements in general".
"It expropriates property rights and Maori fishing rights without consent...the 1992 fisheries settlement was full and final. Maori did not enter into that agreement lightly. And there is good reason for that - the Maori negotiators knew they were signing away all claims to their customary rights to fisheries, both commercial and non-commercial."
Mr Tuuta said the consultation from Government had been derisory, and had turned a "win, win" situation into one that had deeply disappointed many Maori.
Dr Smith said the fisheries settlement was "incredibly important", but it was always the Government's right to provide for no-take marine reserves.
"While I accept that the Kermadec's on a physical scale is very large, the amount of actual commercial fishing in that area is very, very small. And so I do not accept that the Kermadec ocean sanctuary is a breach of that settlement.
"I am wide open to discussion. I'm disappointed that these matters are appearing before the courts, and my door remains wide open to discussions."
Earlier during the committee hearings and in a heated exchange, Bronwen Golder of the Pew Charitable Trusts denied her organisation was advocating for the Government to override Maori rights.
Labour's fisheries spokesman Rino Tirikatene singled out Pew for criticism, when the charity made a joint submission in favour of the sanctuary with Forest and Bird and WWF.
"What gives your organisation the authority to paddle in to our EEZ [exclusive economic zone] and determine what Maori rights are to fish?" Mr Tirikatene asked Ms Golder.
Many Maori considered it disgraceful that a "foreign-funded NGO can come into our sovereign country of Aotearoa and dictate and lobby, with vast amounts of wealth," he said.
"Sir, with due respect, I am a New Zealander," Ms Golder said. "I'm also a Treaty partner. I do not come here as a foreign imperialist or any of the other names that certain people have cared to call [us]."