Hoteliers Earl and Lani Hagaman are seeking up to $2 million in damages from Labour leader Andrew Little in a defamation suit against him.

The trial started today at the High Court in Wellington.

The Hagamans' lawyer Richard Fowler said Earl and Lani Hagaman claimed Little had repeatedly defamed them in a press release and six media interviews he did last year about a $100,000 donation from the Hagamans to the National Party in 2014 and a contract awarded to their hotel chain, Scenic Hotel, to manage the Matavai resort in Niue.

Fowler said the Hagamans claim was that the comments by Little amounted to an "inference of corruption".

The lawyer pointed to six examples, a press release and five media interviews, in which Little had questioned whether there was a link between the donation and the Matavai contract which was awarded to Scenic Hotel soon afterward.


He also queried a $7.5 million Government aid fund to upgrade the resort at a later date, money Fowler said went to the trust which owned the hotel rather than Scenic Hotel.

Fowler said Little's comments included phrases about the timing: "it looks murky from the outside, it looks shady," "stink to high heaven," "there's just something about this whole deal that really stinks" and reference to National Party's "dodgy deals" such as an agrihub in Saudi Arabia.

"The Hagamans say the fundamental theme is one of corruption," Fowler said.

The Hagamans were seeking an optimum award of $500,000 each for comments made in a press release by Little soon after a RNZ news story reported on the timing of the donation and the awarding of the Matavai contract.

The couple is also seeking $100,000 each for separate comments made in each of five interviews broadcast after that, a total of $2 million, with a further lower amount of exemplary damages.

Fowler also said Little had linked Scenic Hotel to the $7.5m upgrade to the Matavai resort, New Zealand aid money, although Scenic Hotel had not dealt with that.

The trust that owned the hotel had received the money and dealt with the contracts for the upgrade.

Lani Hagaman began her evidence today, saying Earl Hagaman was not at court because he was critically ill and doctors believed he only had weeks to live.

Lani Hagaman now had power of attorney along with the family's lawyer.

She had decided to continue to pursue the defamation suit to clear his name.

"We reached the decision Earl's name needs to be totally cleared from any [claim] of corruption and Earl needs to be able to die with dignity."

Fowler said the Hagamans had rejected a last-minute offer of $100,000 in costs and an apology from Little because it was "too little, too late" and by then the costs were far in excess of what Little was offering.

Fowler said the Hagamans were wealthy by comparison to many New Zealanders and were not trying to hide that. However, he urged the jury not to let that influence them.

"We only have one reputation and once it's lost, it's very, very difficult to recover and sometimes impossible."

Lani Hagaman read out a statement from her husband on the donation during the 2014 election campaign.

In that statement, Earl Hagaman said he had told his wife he wanted to make a donation to the National Party and asked her to arrange it. She contacted Ilam MP Gerry Brownlee's office and Brownlee's office arranged for National Party President Peter Goodfellow to visit the Hagamans on September 16, 2014.

"He met with us at our home. We had a general discussion about politics, and in particular the role Kim Dotcom was having and how destructive it would be if he ever got into a position of power.," Earl Hagaman's statement said. He said he told Goodfellow he thought former Prime Minister John Key was doing a good job.

Goodfellow had explained the donation had to be disclosed and the Hagamans said they were fine with that. Lani Hagaman had already donated to Act, so Earl Hagaman made the donation in his own name.

"That was all we discussed, not any Scenic Hotel matters or any business matters of aspirations. I would never have thought it appropriate to do so."

He said he did not recall ever meeting Foreign Minister Murray McCully and had no contact with National Party officials after that point other than a letter acknowledging the donation.

The trial is ongoing and expected to last all week.

Further witnesses include Goodfellow and the Hagaman's daughter, Toya, who will give evidence on a comment on her Facebook page which was meant for her mother.