Business high-flyers Eric Watson and Mark Hotchin have accepted a substantial payout and called off their defamation case against Bruce Sheppard.
The men sued Sheppard, an advocate for shareholders and now an associate member of the Financial Markets Authority, for $7 million for defamatory statements made on TV and radio at the height of anti-Hanover Finance sentiment in late 2009.
About 16,000 people with investments totalling more than $500 million lost most of their money following the failure of Hanover and related companies and the sale of assets to Allied Farmers.
NZ Warriors co-owner Watson and former Hanover director Hotchin have accepted a retraction and apology in what is believed to be a six-figure settlement, which would make it among the highest against an individual in NZ legal history.
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The parties agreed on a joint statement in which Sheppard acknowledged the statements he made in interviews in 2009 "may wrongly have implied that the plaintiffs were involved in transactions that were criminal or fraudulent".
"Mr Sheppard acknowledges that any such inference, which was not intended, was incorrect and remains incorrect at the date of this statement and he retracts any such inference and regrets it." The statement said Hotchin and Watson accepted the comments were not motivated by ill will. The judge-alone trial, originally due to start next week and since put back to October, had been keenly anticipated.
Victoria University law professor Bill Atkin said Sheppard would almost certainly have footed the plaintiffs' legal bills and might also have paid out general damages after conceding he had defamed them.
Atkin said: "The statement also shows some give and take because the plaintiffs have withdrawn the suggestion that the defendant was motivated by ill will, which used to be called malice. Such ill will can negate a privilege defence that a defendant might mount."
Last March, Watson and Hotchin accepted a six-figure settlement from the Shareholders' Association over Sheppard's comments. A spokeswoman said they would not say any more about this month's settlement. Sheppard did not return calls yesterday.
The highest known defamation payout is the $900,000 website publisher Vince Seimer was ordered to give Michael Stiassny and his insolvency firm KordaMentha in 2008.