A High Court judge has ruled Colin Craig can use truth as a defence in his defamation case against his former press secretary Rachel MacGregor.
Craig had failed to properly file the defence of truth in his pleadings and was relying on arguments of defence against attack and public interest.
The former Conservative Party leader and MacGregor are suing each other over several defamation claims. The case is once again dredging up the nature of their personal and professional relationship.
However, yesterday Craig said not filing truth as a defence was a mistake and asked Justice Anne Hinton for leave to amend his pleadings.
"Your main defence is truth, your main defence is just not pleaded," Justice Hinton laughed when addressing the issue this morning.
MacGregor's lawyers, Hayden Wilson and Linda Clark, opposed Craig's application to amend his pleading.
Wilson said Craig defamed MacGregor, a former TVNZ journalist, by alleging she made false claims of sexual harassment.
MacGregor acted as Craig's press secretary from 2011 to 2014, and was hired just three months prior to the 2011 general election.
She later resigned and filed a sexual harassment complaint.
A confidential settlement was reached in May 2015, but rumours quickly surfaced and were made public.
In 2016, Craig was ordered to pay MacGregor more than $120,000 by the Human Rights Review Tribunal after it ruled he breached the confidentiality agreement in interviews with the press.
Wilson said a truth defence would require Craig, an accountant by trade, to prove MacGregor was not sexually harassed and was also making the claims for "some ulterior motive".
"I am going to allow you to amend and plead truth," Justice Hinton ruled.
"Then I am going to allow Miss MacGregor to give further evidence ... to address that further pleading."
In a surprise move yesterday, Craig also withdrew his claim for damages, after he became aware MacGregor could not pay him if he won the case following a newspaper story.
Craig argues he was defamed on three occasions by what MacGregor told New Zealand Taxpayers' Union founder Jordan Williams, in a media release by MacGregor in June 2015, and in a tweet on the same day.
MacGregor's lawyers argue she was defamed in four instances. Twice in two press conferences held by Craig, in a booklet titled Dirty Politics and Hidden Agendas which was delivered to 1.6 million Kiwi households, and in a letter to Conservative Party members.
MacGregor's defence to Craig's claims will draw upon honest opinion, qualified common law privilege, truth and defence against attack.
Today, Craig spoke of the interview with Mr X in his booklet, which he said was made with his wife Helen.
It purported to be an interview with a confidential source detailing at length the allegations against Craig.
However, it later emerged Craig was Mr X and was talking about himself in the third person.
Craig said today it was a "literary tactic" and was confident the assertions made by Mr X were accurate to conversations he had with others.
"I don't understand why Miss MacGregor is suing me for what I published in the booklet," he said.
Craig explained the booklet was intended to address the allegations made by Williams, former Conservative Party board member John Stringer, and Whale Oil blogger Cameron Slater.
He called the trio, all of whom Craig has been engaged in defamation proceedings with, as "schemers" in a plot against him.
Stringer was in court today and asked Justice Hinton if he could take notes.
"As long as they are for his personal use, your honour. If he does intend to publish I would have an objection," Craig said.
The judge allowed Stringer to make his notes on that condition.
Craig concluded his evidence-in-chief by saying he did not consider the proceeding was in the interests of either himself nor MacGregor.
He said he offered to mutually discontinue the court process six times and on five occassions offered to contribute to costs MacGregor had incured.
Wilson then began his cross-examination of Craig and asked: "You're not unfamiliar with defamation proceedings are you?"
"I've become fairly familiar with defamation proceedings over the past three years, yes," Craig replied.
Wilson asked why the former politician didn't serve MacGregor soon after filing defamation proceedings against her in November 2016.
He also asked Craig why he'd failed to mention his potential civil suit to her or then-presiding judge Justice Kit Toogood during his defamation trial with Slater last May.
"You personally cross-examined Rachel for two days [during the Slater trial].
"You didn't think to mention you'd filed defamation proceedings against her?" Wilson asked.
Craig felt because he had yet to serve MacGregor he was not obliged to mention it and said he intended at the time to discontinue the proceedings against his former press secretary.
MacGregor, sitting at her counsel's bench, laughed in seeming disbelief at Craig's reply.
Craig will have another opportunity to cross-examine MacGregor in the current proceedings, which includes evidence of nearly 250 pages of text messages between the pair.
Justice Toogood is yet to release his decision on the Craig and Slater proceeding, while Craig's court matters with Williams are now before the Supreme Court.
The Craig and MacGregor trial, which is due to last two weeks, continues.