An independent review finds nobody at the Herald on Sunday or its sister publications commissioned, suggested or condoned any recording in the teapot tapes saga. For the first time, Jonathan Milne can tell how the storm in the teacup was brewed and then stirred up.

Wednesday night, November 9, 2011, at Whenuapai School, north-west Auckland.
It's 2 and a 1/2 weeks from the election, and John Key is warm and friendly. He's just walked out of a debate with the other candidates for the Helensville electorate.

The engines of the two ministerial limos are idling, but first he takes a few minutes to chat about the rather one-sided battle for the Helensville electorate.

His handshake is firm. He is pleasant, engaged. How's the family, he asks. A few questions from me about the minimum wage, and carpet-bagging candidates who don't live in the electorate, then I ask him whether he's going to move from his large home in Parnell into the electorate.

"No," he says. Short and sweet, no equivocation. I can't help laughing, and he joins in.

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Sunday lunchtime, November 13, 2011, on the campaign trail in Hawke's Bay. Something has changed. The warmth has gone.

In that morning's paper, the Herald on Sunday revealed it had obtained a recording of a conversation between John Key and Act's Epsom candidate, John Banks, held under the gaze of invited media in a cafe in Newmarket.

Though the newspaper had backed off publishing the contents of the recording when the Prime Minister refused his consent, Key is not placated.

"It was a very bland conversation," Key tells a media scrum. But, he adds: "This was a deliberate action by the Herald's weekend paper and frankly I think there is no place for News of the World tactics here in New Zealand."

So, what went wrong? How did the Prime Minister reach the conclusion the Herald on Sunday had deliberately bugged his conversation? And how bland was that conversation, really?

Until now, the four-month police investigation and the possibility of a court trial has constrained us from giving a full account of what really happened with the recording and decision against publishing the conversation.

But in the days after the storm in the teacup broke, the newspaper's publishers, APN New Zealand, commissioned media consultant Gavin Ellis - an Auckland university lecturer and former editor-in-chief of the New Zealand Herald - to conduct an independent review of how we behaved, professionally and ethically.

Ellis reviewed published text and video, news transcripts, emails, audit trails and internal codes of practices, and conducted lengthy interviews with a number of the company's staff - anyone who had any material involvement in the coverage of the political meeting at Urban Cafe, obtaining the recording and deciding what to publish.

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This article is based on the detailed accounts of some of those staff, and the previously unpublished findings of the Ellis review.

His findings do not provide a triumphant vindication of the newspaper's actions - he highlights several areas in which we could have done better, or in which he believes APN News & Media procedures and guidelines need to change - but the findings do provide reassurance that there was no dishonesty or impropriety in the actions of Herald on Sunday staff. We sought legal advice. We closely observed the company's Code of Ethics, which had been recently updated in the wake of the News of the World phone-hacking scandal. There were no "News of the World tactics".

Friday afternoon, November 11, 2011. I headed to the Urban Cafe on Carlton Gore Rd, keen to see this "media opportunity" because it might inform my political column that week.

I arrived right on the dot of 2.30pm. John Banks had just arrived, alone and on foot. One of the bigger media contingents I had seen in this country had gathered, clustered on the cafe's balcony and out on the street. As well as a large number of reporters and photographers I knew, I spotted Bradley Ambrose, who had taken photos for our newspaper in the past. He was there with a TV camera on his shoulder so I assumed he was contracted to TV3 that day.

As the Prime Minister's limo pulled up and Key stepped out, Banks was waiting kerbside to greet him.

The two men chatted, idle banalities between "John" and "Banksie", as they walked into the cafe and ordered their cups of tea.

I was standing by a table at the front of the cafe, next to the wide ranch-slider door out on to the balcony, as the two men strolled through glad-handing other patrons. Then, as they neared where I was standing, Key turned to me and said "Excuse me".

I stepped back one or two paces into the doorway, and he took off his blue pinstripe suit jacket and slung it over the back of a chair where I'd been standing. He sat down.

As they chatted, dozens of media recorded each word. I stood there at Key's shoulder, taking notes from their conversation. I didn't know this at the time, but one of the many microphones on the table was that of Bradley Ambrose, encased in a black felt carry-bag.

After a few minutes of chat and banter, the Prime Minister's chief of staff hollered out that the media opportunity was over - could all media leave the cafe while the two politicians continued their conversation?

Though some journalists knew this was coming, others - like myself - were unaware that media would be asked to leave. Ambrose was in the same boat. He had already moved out on to the balcony to get a better camera angle and, as police protection officers started pushing the media horde out of the cafe, he was unable to get back in and retrieve his radio microphone.

Perhaps he could have loudly protested to the police that his radio microphone was still inside - but he was being paid to film the event and that was his priority, he said. He kept filming. He had left his headphones at home, and said it did not occur to him at that point that his microphone could be picking up the conversation inside the noisy cafe.

At least two other journalists remained inside the cafe and also continued filming. One was approached by the Prime Minister's press secretary and asked to leave - but he pointed out his coffee and that he was a paying customer. He was as entitled to be there as the politicians were.

For myself, I remained standing in exactly the same position, on the threshold of the open door, standing about 1m behind Key. He knew I was there.

Eventually, after hearing just scraps of conversation about what tea they were drinking and what a nice, friendly place Epsom was, I decided someone else could use my space better. I caught the eye of TVNZ political editor Guyon Espiner and indicated one of the cameramen could take my place, then I moved away to interview some other cafe patrons at the table behind the Prime Minister.

When the two men eventually emerged from the cafe to answer journalists' questions, they made no mention of having found a microphone and we were none the wiser.
But as I made my way out to the street a few minutes later, I ran into Ambrose, who it turned out was there recording video on behalf of our sister publication, nzherald.co.nz. Ambrose was furious. The police had, in his words, "stolen" a microphone he had inadvertently left behind on the table. He had gone up immediately afterwards, identified himself and asked for it back - but they had refused. Would the Herald on Sunday like to write a story about this seizure?

He didn't even mention any recording: it was I who pointed out to him that the microphone might well have picked up the conversation and transmitted it back to his camera. I suggested he go home and check his recording.

That evening, he brought the recording into the office. He wasn't asking for money - nzherald.co.nz was already paying him to videotape the meeting.

But he felt, and we felt, that we should listen to the tape and assess whether there was a public interest in reporting its contents.

That's a journalist's job: to assess the value and propriety of information for publication. And the decision to review this recording was based on one very simple premise: we felt there was no possible way that the men could argue they had a reasonable expectation of privacy, sitting in a noisy cafe surrounded by staff, members of the public and the media.

The Crimes Act states in section 216 that it is illegal to intentionally intercept any private communication by means of an interception device, unless that communication occurs in circumstances in which any party (Key or Banks) ought reasonably to expect that the communication may be intercepted by some other person.

Ambrose had not intercepted the conversation intentionally: he was happy to swear in an affidavit to this effect. We knew and trusted him, and any of us who had been there that day could bear witness to the way in which the media had been herded speedily from the cafe. And there was no way the two politicians could have a reasonable expectation of privacy.

There were three pertinent points in the APN Code of Ethics:

We respect people's right to privacy, but will not allow that right to interfere with the pursuit of information in the public interest.

We consider it is in the public interest to scrutinise and report on people who seek influence, power and attention.

We will not obtain or commission information through any illegal or deceitful access to the telephone conversations, messages or email communications of any person.

"Public interest" doesn't just mean the public might be curious to know something; it means it is in the interests of the wider public that the information be published.

We felt there could be a public interest in running the contents of the conversation
but could we be 100 per cent confident that we could prove the recording was inadvertent in court? And would readers even believe us when faced with the possibility the Prime Minister would accuse us of unethical behaviour?

The hurdles were too high - and so editor Bryce Johns decided against publishing the contents of the recording unless Key or Banks gave their permission. They refused.

They did not allege any wrongdoing. A spokesman for the Prime Minister simply emailed: "The Prime Minister's Office is not giving permission to the Herald on Sunday, because the conversation was recorded in a manner where neither party knew it was being taped."

Sunday morning, November 13, 2011. The news story, saying we had been refused permission to run the contents of the tape, and political column ran in the morning paper, and the storm broke.

National Party campaign boss Steven Joyce and the Prime Minister accused the newspaper of deliberately recording the conversation, in tactics they likened to the News of the World, Britain's biggest newspaper.

The 168-year-old paper had been shut down by owner Rupert Murdoch in July that year, after revelations that the tabloid had hired people to hack into the voicemails of numerous celebrities and, worse still, eavesdrop on the phone messages of murdered 13-year-old Milly Dowler.

Murdoch's publishing company News International paid 2 million compensation to Milly Dowler's family, and made a further 1m donation to charity on their behalf.

It is the abhorrence with which the world greeted the actions of News of the World staff and contractors that gave so much potency to Key's comparison.

Key went on, later in the week, to suggest if he were to turn a blind eye to the recording of his teapot conversation, it could lead to some hypothetical well-known married couple being taped talking about personal matters.

"What happens if a couple of high-profile New Zealanders that are married have a conversation about their son or their daughter being suicidal, a Sunday paper reports that, and that child takes their own life?"

Looking for similarities with the News of the World was ludicrous - the Herald on Sunday had never deliberately eavesdropped on anyone's private conversations.

Mark Lewis, the lawyer for Milly Dowler's family, said there was simply no comparison between the two papers' actions and that, indeed, there was a legitimate public interest in the publication of the teapot conversation.

The police never asked to interview the Herald on Sunday's editor, nor actively investigated Key's claim of a conspiracy spearheaded by the Herald on Sunday.

It appears they gave his claim no credence either.

In my political column that morning, I wrote: "The potential disclosure of the contents of that conversation - held only a metre away from the closest reporters - could yet throw a rocket into this election campaign. It is a game-changer."

In the Gavin Ellis review, he criticises my use of the phrases "game-changer" and "breathtaking". He says the use of the phrases was "a judgement call based on a robust and reasoned discussion of the public interest that concluded the public had a right to know at least the significance of the exchange". But he thought that alluding to its significance was inconsistent with our decision not to publish the recording. I accept his finding.

Readers should have confidence in the other key findings made by Ellis:

No APN staff commissioned, suggested or condoned covert activity in relation to the recording of proceedings at Cafe Urban.

The Herald on Sunday sought appropriate assurances from the videographer that the recording of the conversation was not illegally obtained.

The editor of the Herald on Sunday followed appropriate procedures in consulting the APN Code of Ethics, in upward referral and the seeking of legal advice.

The decision not to publish was consistent with the company's Code of Ethics.

When the police announced they would lay no charges against Bradley Ambrose this week, Assistant Commissioner Malcolm Burgess made the claim that Ambrose might well have acted deliberately and behaved "unlawfully" - but the police did not intend to test this belief in court.

Ambrose met his lawyer yesterday morning to consider what action he could take to clear his name - one option might be asking the High Court to again consider making a declaratory judgment that he had acted entirely within the law. Another might be defamation action. Already, senior journalists from around New Zealand have indicated their willingness to support Ambrose in his pursuit of legal clarity and vindication.

At the Herald on Sunday and its sister publications, we have accepted almost all of the recommendations of the Ellis review. Some have been actioned, others are underway.

For instance, the Herald group of newspapers is in talks to train more staff photographers to shoot video and to handle fast-moving "media scrums" like the one at Urban Cafe.

Also in accord with the Ellis recommendations, the different titles in the Herald group are tightening their relationships. This should avoid situations like that in November, where nzherald.co.nz had commissioned Ambrose to shoot video, and the Herald on Sunday had obtained his audio recording of the conversation, but one hand did not know what the other was doing. Indeed, this week the Herald on Sunday will move on to the same floor of the same building as the daily New Zealand Herald, the Herald online and the APNZ news agency, creating the biggest newsroom in the country.

John Key faces a decision, too. It is a simple one, but a challenging one for any public figure.

Will he admit that, this time, he got it wrong?