The defamation case against Andrew Little did not result in his having to pay any damages. All in all, I think that is a good thing for the country as a whole.

Despite a degree of ambiguity over the outcome, Andrew Little appears to have come out ahead in the defamation action brought against him by Earl and Lani Hagaman. 

Insofar as anyone really can be said to have emerged as a "winner", that is. Asher Emanuel has written a great piece over on The Spinoff about the trial and its ultimate futility, so I won't try to comment on that aspect of proceedings. Rather, I want to say why I'm pretty happy that no legal liability was attached to Little for his statements about the Hagamans, their donation to the National Party, and their company's subsequent tendering success.

Let's take a moment to remember the bare bones of the background to Little's allegedly defamatory statements, as was reported in the media:

During the 2014 election, Scenic Hotel Group founder Earl Hagaman donated $101,000 to the National Party.

A month later, the company won a contract to manage the Niuean Matavai Resort, heavily funded by the New Zealand government. Last year, $7.5 million in aid funding was announced to expand the resort.

Now, as we know from a subsequent Auditor General's report, there wasn't actually anything untoward about the awarding of the management contract or extra increase in aid funding. Let's clarify that straight away, least anyone harbour any doubts.

But when the story first emerged, it looked like it could be the sort of cash-for-policy exchange that we shake our heads at in other countries that do not enjoy our low-corruption reputation. The sort of arrangement that we take great pains to ensure cannot happen in our governing practices.  

And so we require that large donors to political parties (those who give more than $15,000 in a year) publicly disclose their identity precisely so that any potential links between donations and favourable policy outcomes for the donor can be spotted and closely questioned. The mere fact that such donations become public is then thought to deter any temptation to engage in quid-pro-quo deals: "sunshine is the best disinfectant", as the aphorism goes.

(Actually, the full quote from Justice Louis Brandeis reads: "Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.")

But the sought after deterrence will only work if initially suspicious looking coincidences - such as a $101,000 donation being followed by the grant of a government contract - get lots and lots of public attention. It's not enough that a donation-reward relationship is visible in theory; it must be actively and energetically policed in practice

So Andrew Little is absolutely right when he says he had a "constitutional obligation" to make a song and dance about the issue. As leader of the opposition, it is his job to "speak out fearlessly" on matters like this - not simply because he wants to take the PM's job for himself, but rather because the whole system of governing accountability and clean public processes depends upon him (and other opposition MPs) doing so.  

There's then two problems. First, it's very, very difficult to raise questions about the propriety of some donor-government relationship without implying that the individual donor may have acted corruptly. 

And second, you can't know what is an innocent relationship (such as the Hagamans' company had with the Government) and what is not an innocent relationship until after its been scrutinised. You can't then gee up the public interest in such matters necessary to attract such scrutiny without using language that involves some rhetorical flourishes and breathless excitement.

 Hence such public statements on the matter from Andrew Little:

Today’s revelations about the Scenic Hotel Group and its resort contract in Niue stink to high heaven following its dodgy deals with SkyCity and the Saudi sheep deal.

Of course, when it turns out that the claim is wrong and that actually there was no untoward relationship between the donation and the subsequent contracting decisions, the use of this sort of language leaves egg on their maker's face. His (or her) political judgment can and should be questioned. And the maker really ought to put their hand up, say they got it wrong, and apologise for any wrong imputations (as Andrew Little eventually did - a bit too late, in my opinion, but there you are.)

But to attach potentially bankrupting legal liability to such (in hindsight overblown) statements seems to me to be an undesirable public policy move. It would demand a sort of careful parsing and trimming that would undermine the important function of speaking out on possibly corrupt public dealings.

Does that then mean that individuals like the Hagamans who choose to shower a political party with their largesse may end up as collateral damage in our war on bad government? Well, sort of. I actually doubt that by the end of the saga many people in New Zealand really did think any the worse of the Hagamans. And if there was anyone who did so, they most probably were Labour Party tribalists who were more affronted at the fact of the gift to National than anything else. 

But saying all thay ... yes, the bullet must be bitten. Insofar as there is any tradeoff between public accountability and private reputational interests, my sympathies lie with the former. And so I'm happy that Andrew Little walked out of court without any liability for his statements on this matter.

 (Having read all of this, can I now suggest you have a listen to Ursula Cheer's discussion of the legal issues in the case on Morning Report?

Update: Or, even better, Marcelo Rodriguez-Ferrere on The Panel)

Comments (16)

by Marcelo Rodriguez Ferrere on April 11, 2017
Marcelo Rodriguez Ferrere

In qualified praise of this post, Andrew, I think you're right to a point. But it's important to note that Andrew Little did have other options. When you say: 

So Andrew Little is absolutely right when he says he had a "constitutional obligation" to make a song and dance about the issue. As leader of the opposition, it is his job to "speak out fearlessly" on matters like this - not simply because he wants to take the PM's job for himself, but rather because the whole system of governing accountability and clean public processes depends upon him (and other opposition MPs) doing so.  

This constitutional obligation did not demand a shoot-from-the-hip press release 24 hours after the story broke. Instead, he could have availed himself of the absolute privilege by making a song and dance about the issue in Parliament. That would have insulated himself from these proceedings, whilst at the same time ensuring that the transparency of political donations wasn't for nought.

Now, is that hair-splitting? Probably. A press release likely does the same damage as an insinuation or accusation during question time. But I think the difference is important, since I'm slightly concerned that the extension of qualified privilege in this case (and it is a significant extension) seems to undermine the point of the absolute privilege being a narrow, but constitutionally important, exception. Whilst we surely want the Leader of the Opposition to have the right to "speak out fearlessly", we would as equally surely want limits upon that right?

by Graeme Edgeler on April 11, 2017
Graeme Edgeler

Whilst we surely want the Leader of the Opposition to have the right to "speak out fearlessly", we would as equally surely want limits upon that right?

He should not be permitted to act maliciously, or otherwise take improper advantage of the privilege he has to speak out on important issues relating to the Government?

by Andrew Geddis on April 11, 2017
Andrew Geddis

He should not be permitted to act maliciously, or otherwise take improper advantage of the privilege he has to speak out on important issues relating to the Government?

I'd accept that - just with a fairly high threshold for what "acting maliciously" or "improper advantage" means in this context. Which I'm guessing more than 3 members of the jury also thought.
by Chuck Bird on April 11, 2017
Chuck Bird

There are tribal people with all parties in Parliament and some even outside Parliament so Little will still have some supporters   Colin Craig had his supports until the jury decided in favour of Jordan Williams.  Clearly, Andrew Little was wrong in making an his accusation and not accepting he got it wrong after the Auditor General's report.   This shows that he is a very poor negotiator.  He should have sought specialist legal advice very early on.  If he did I cannot imagine he would have been following advice from a competent defamation lawyer. 

A head of state is not expected to be an expert on everything but should know when to seek advice and know when to heed it.  Winston Peters is known for pushing the limits but also knows when to back off. 

There are still a lot of undecided voters.  It will be interesting to see how both Labour and Little are polling on the average of polls at the end of April.  The preferred PM does not usually mean much but if the gap increases between and Ardern we could see a coup before September.  

 

by Graeme Edgeler on April 11, 2017
Graeme Edgeler

Clearly, Andrew Little was wrong in making an his accusation...

That is not clear. The Jury could not agree that the initial statement made by Little was even defamatory of Mr Hagerman.

by Ross on April 11, 2017
Ross

...actually there was no untoward relationship between the donation and the subsequent contracting decisions.

Andrew Little asked the Auditor-General the following:

"Who knew about links between political donations and the tenderer, and what influence, if any, the donations may have had over the tendering decisions."

Her response: I do not have the mandate to inquire into political donations in these circumstances.


by Peter Green on April 11, 2017
Peter Green

I think that anyone who can afford to give a political party $100,000 is probably in a position to check that such a donation isn't going to create this sort of awkward situation.

 

Based on this snippet from the OAG report, it looks like any damage to the Hagamans' reputation was their own damn fault:

 

1. Whether the tender for a hotel operation to brand and operate the resort followed due process and whether all potential and actual conflicts of interest were declared.

...

The procurement process required potential hotel operators not to “approach, directly or indirectly lobby or attempt to influence or provide any form of incentive to” any of the parties involved, including the New Zealand and Niue Governments. It also required potential hotel operators to “disclose any real or potential conflicts of interest”. We found no evidence in the available information of conflicts of interest being disclosed during the procurement process. But that information may exist.

by Andrew Geddis on April 12, 2017
Andrew Geddis

@Ross,

Reading the totality of the AG's report, I'm quite happy that there was nothing untoward about the granting of the contract/extra funding for the project. I'd note that Andrew Little also accepts this. 

@Peter,

I think it is fair to say that when individuals/companies whose business stand to benefit from government decisions choose to give large amounts of money to political parties, they ought to expect some degree of scrutiny of their motives for doing so. 

by Chuck Bird on April 12, 2017
Chuck Bird

I lost about $50k because of a judge who I believe knew the other party a former lawyer.  I won my case in the end but it could have been settled quickly if it was not for the judge. If I named the judge publicly I could be done for contempt.  Even if I could demonstrate that the judge and former lawyer were drinking buddies years ago at law school that would not prove a connection.  My only recourse is to make a complaint to the JCC. 

My point that is that it is almost impossible to prove a connection in my case or in the case of Hagaman v Little.  A second issue is only the super-rich can defend themselves against defamation.  Ordinary man have been accused sexual offences but cannot get compensated even if the accusers admits lying.

 

by Chuck Bird on April 12, 2017
Chuck Bird

I am losing sympathy for the Hagamans after their latest move.  I am not a mindreader and have a few clues more than Little so I will not speculate on their motives.  However, I would not be upset if anyother jury decides completely in Little's favour.

by Ross on April 12, 2017
Ross

Out of interest, if there is a new trial, will Lani Hagaman be permited to testify given the result of the earlier trial, and will Earl Hagaman essentially be required to testify? Or could a trial proceed with neither testifying?

by Chuck Bird on April 12, 2017
Chuck Bird

I am no expert Ross, but one thing that is very unlikely is that Earl Hagaman will be required to testify due to his poor health.  He wasn't at the last trial.

by Fentex on April 14, 2017
Fentex

Isn't our system suppossed to handle this issue by protecting the speaker when they, as an elected representative, make their point within parliaments protected space?

by Fentex on April 14, 2017
Fentex

Isn't our system supposed to handle this issue by protecting the speaker when they, as an elected representative, make their point within parliaments protected space?

I meant - wasn't Little supposed to do this constiututionally important work with the protections he could enjoy within parliament? And the real issue is his personal error in not showing the care Winston manages when rasing, er, issues?

by KJT on April 14, 2017
KJT

He purpose of the case has been served now. Everyone is now too scared to state the bloody obvious for fear of getting sued.

National can continue with corporate welfare in return for "donations".

by KJT on April 14, 2017
KJT

He purpose of the case has been served now. Everyone is now too scared to state the bloody obvious for fear of getting sued.

National can continue with corporate welfare in return for "donations".

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