Labour leader Andrew Little's apology for corruption claims against a Christchurch businessman and his wife was "too little, too late", according to the couple's lawyer.

Photo: RNZ

Mr Little is on trial in the High Court in Wellington accused of defamation.

Scenic Hotel Group founder Earl Hagaman and his wife, Lani, are suing Mr Little over media comments he made about them.

They are each seeking $500,000 and exemplary damages of $50,000 relating to a media statement. They are also each claiming $100,000 and exemplary damages of $20,000 for each of five media items about the statement, their lawyer says - bringing the total to more than $1 million each.

Mr Little called for the Auditor-General to investigate after Mr Hagaman donated about $100,000 to the National Party in September 2014.

Mr Little linked the donation to a contract awarded to the Scenic Hotel Group in October 2014 to run a resort in Niue.

The Hagamans' lawyer, Richard Fowler QC, said in April last year, an item ran on a radio news broadcast that reported the date of the awarding of the resort contract and the fact Mr Hagaman had made a substantial donation to the National Party.

Later that day Mr Little issued a media statement saying, "John Key must come clean on how a donor who gave more than $100,000 to his party during a tender process won a hotel management contract which led to a government-funded $7.5 million upgrade to a resort", Mr Fowler said.

He said Mr Little used phrases such as "today's revelations stink to high heaven" and "it was Murray McCully's personal appointees on the Niue tourism property trust [who] awarded this contract".

Other phrases included "this looks like the latest in a line of questionable deals from John Key's government which has seen New Zealand slide down the international corruption rankings".

Mr Fowler said those allegations were of particular significance to a business person.

Plaintiffs' lawyer opens case

Mr Fowler told the jury that, in 2009, Scenic Hotel Group was interested in expanding into the Pacific and an opportunity arose to run a resort in Niue.

He said shares in the resort were held by the Niue Tourism Trust, with trustees appointed by the New Zealand and Niue governments.

The resort management contract was awarded to Scenic Hotel Group and signed off by the Niue Premier in October 2014.

"In terms of how Scenic was awarded that, it went through a government tender process that is established and checked by independent consultants. It was a standard process for awarding government contracts."

Mr Fowler said the resort owners were paid $7.5m for an upgrade. The Hagamans received none of that.

Mr Hagaman was keen to make a donation to the National Party, he said.

In September 2014, the party's president, Peter Goodfellow, visited him at home and received a cheque for $100,000 for the party.

The news item was on the radio a year and a half later, he said.

Let my husband die with dignity - Lani Hagaman

Mrs Hagaman said Mr Little's allegations were devastating.

There was no discussion of business when Mr Goodfellow picked up the donation from her home, she told the jury.

She and her husband made donations to several political parties, including Labour, she said.

Mrs Hagaman said she sought public relations advice and issued a media statement of her own, because it seemed she and her husband were being linked to bribery and Mr Little showed no sign of backing down.

She and her husband valued their reputations and were devastated by Mr Little's suggestion, Mrs Hagaman said.

Her 91-year-old husband's health was declining and his name needed to be cleared so he could die with dignity, she said.

Case 'not about politics'

"The case is not about politics. It is not about how political parties are funded and it should not turn on whether you are a Labour or National supporter, or anything else," Mr Fowler said.

The apology and offer of costs by Mr Little about a week ago was "too little, too late".

"They say if you're [the] Leader of [the] Opposition people take notice of what you say, particularly media.

"This is not a situation where he is responding off-the-cuff to a real time question, but where he has prepared a media statement and initiated all this by taking it to the media himself," Mr Fowler said.

Mr Little's lawyer declined to make an opening statement to the jury.

The case is expected to run for a week. It is being heard before Justice Clark and a jury of nine men and three women.