A High Court judge says former Conservative Party leader Colin Craig sexually harassed his press secretary, while also ruling a controversial blogger defamed the ex-politician.
Last May, Craig and Whale Oil blogger Cameron Slater counter-sued each other for defamation over allegations involving Craig's press secretary Rachel MacGregor.
The high-profile case played out at a trial at the High Court in Auckland before Justice Kit Toogood, who today publicly released his findings.
Craig, who represented himself, claimed allegations written on Slater's blog were irresponsible, inaccurate and very damaging.
Slater claimed Craig sexually harassed MacGregor, had given her a "large sum of hush money", had lied to the Conservative Party and the public about the accusations, and called him a "sexual deviant" who was engaged in politically "devious conduct".
In response to the allegations, Craig published a booklet called Dirty Politics and Hidden Agendas which he distributed to 1.6 million Kiwi households and held a press conference.
Slater counter-sued Craig for what he said in the pamphlet and at the press conference.
Justice Toogood delivered his more than 200-page judgment last Friday, but it was only to be released to the public today.
He found Craig was defamed by Slater in two untrue statements - repeated five times - but declined to award Craig damages.
The judge said "it is not established that Mr Craig was guilty of sexual harassment" up to and including the incident on election night 2011 "when there was intimacy between them".
Craig had kissed MacGregor on the election night and touched her breasts.
"I am not satisfied that Craig's behaviour was unwanted by Ms MacGregor at that time," Justice Toogood said.
However, the judge said Craig "was guilty of moderately serious sexual harassment" against MacGregor "on multiple occasions from early 2012 to 2014".
Just two days before the 2014 election MacGregor spectacularly quit as press secretary and later filed a sexual harassment complaint against Craig.
A confidential settlement between Craig and MacGregor was reached in May 2015 - details of which were later leaked.
In 2016, Craig was ordered to pay MacGregor more than $120,000 by the Human Rights Review Tribunal after it ruled he breached the agreement in media interviews.
Justice Toogood said Craig sexually harassed the former TVNZ reporter "by telling her that he remained romantically inclined and sexually attracted to her".
"Those expressions of his views were not welcomed by Ms MacGregor at the time they were communicated to her," the decision reads.
"Ms MacGregor chose not to complain about the harassment because of her concern about the effect of a complaint on her employment."
Justice Toogood ruled Slater defamed Craig with the untrue statements Craig had placed MacGregor under financial pressure to sleep with him and had sexually harassed at least one victim other than MacGregor.
Other false allegations included the claims Craig had sent sexually explicit text messages, paid a six figure sum to settle a sexual harassment claim, and sexually harassed two or more women.
But, Justice Toogood said: "I have also held that the reputational damage which Mr Craig suffered throughout the events traversed at length in this judgment resulted almost entirely from his own actions.
"I conclude, therefore, that Mr Craig is not entitled to an award of general damages to compensate him further for such damage."
For Slater's counterclaim, Justice Toogood did not accept Slater spread lies about Craig, or made up allegations about him, or gathered information that he knew was fake or untrue, or published material on Whaleoil knowing it not to be true.
"I am satisfied Mr Slater is neither a compulsive nor a calculated liar," the judge said.
"I have held, therefore, that Mr Craig's defence of truth to Mr Slater's counterclaim fails. I find, however, that although Mr Craig countered the Whaleoil publications which he considered to have defamed him by asserting in the Dirty Politics and Hidden Agendas booklet that there was a conspiracy between Mr Slater, [New Zealand Taxpayers' Union founder] Jordan Williams and [Conservative Party board member] John Stringer to spread deliberate lies about him, his primary motive was to correct what he had maintained throughout were untrue statements.
"Because the core allegations about Mr Craig's relationship with Ms MacGregor and related matters had received widespread publication throughout New Zealand, I have found that Mr Craig's decision to distribute the booklet to every New Zealand household was a justifiable response.
"I find that the untrue statements in the Dirty Politics and Hidden Agendas booklet were made on an occasion of qualified privilege in reply to an attack on him by Mr Slater and that the privilege was not lost."
In a statement, Craig said he was "pleased but not surprised" by the court's decision.
But he also maintained he had not sexually harassed anyone.
"I was disappointed by a finding that I had done so on two occasions," he said.
Craig had written poems and letters to MacGregor, which he claimed were received with positive responses at the time.
"This is a perplexing outcome," Craig said.
"If someone tells you it's a great letter and they are re-reading and re-reading it, I think a normal person would consider the letter welcomed."
"Mr Slater and others made a number of false allegations and I expected to be successful in my claim," he said.
Craig said despite the win he is now considering an appeal and was concerned the law has been incorrectly applied and should have succeeded on some claims the judge dismissed.
Slater, meanwhile, wrote a blog post following the decision quoting Justice Toogood's remarks about him.
"His honour Justice Toogood also made some very important comments about, how I handled the story and my own personal ethics in covering stories," Slater wrote.
MacGregor was not a party to the trial but was subpoenaed to give evidence.
During the trial Craig questioned MacGregor for two full days.
MacGregor's testimony included the claim Craig had "set aside a million dollars and was going to destroy me".
She also she spoke of Craig's "dodgy poems", shoulder massages and "sleep trick".
In a statement today, the Rachel MacGregor Trust - which helped fundraise for her legal fees - welcomed Justice Toogood's decision.
The trust said Justice Toogood found Craig "overstepped any boundary which might have been appropriate for an employer in his communications to an employee".
"Mr Craig did not demonstrate, at any point in his evidence in this proceeding, any understanding of the difficulties created for an employee by an employer's expression of intense feelings of emotional engagement and sexual longing," the judge wrote.
"He never acknowledged the possibility that Ms MacGregor may have felt she could not protest about, and was obliged to tolerate, sexually charged language and conduct for fear of losing her employment or failing to meet her employer's expectations.'"
Earlier this month, Craig and MacGregor went to trial as they sued each other for defamation.
Craig withdrew his claim for damages against MacGregor on day one of the trial after he became aware she could not pay him if he won the case.
Justice Anne Hinton has reserved her decision on the Craig and MacGregor case.
Craig has had defamation proceedings against what he calls the trio of "schemers" who plotted against him. They are Williams, Stringer, and Slater.
Craig's case with Williams is now before the Supreme Court.