Colin Craig arrives at the Auckland High Court for his defamation case against his former press secretary, Rachel MacGregor.

Former Conservative Party leader Colin Craig has again given details about the relationship he formed with former press secretary Rachel MacGregor.

Craig told a court the relationship was "inappropriate" but did not constitute sexual harassment.

Craig and MacGregor are going head-to-head, with both suing each other for defamation due to the fall out of the 2014 general election.

DAVID WHITE/STUFF Colin Craig arrives at the High Court in Auckland for the beginning of his defamation case against his former Press Secretary Rachel MacGregor.

Earlier on Monday, in a surprising move, Craig dropped his claim for damages against MacGregor, noting a Stuff article in which MacGregor outlined she could not afford to pay damages.

He said he would continue with his claim that she defamed him.

This trial is the latest stage in the ongoing saga of the pair's work relationship which deteriorated during the 2014 general election.

The case is in court after Craig filed defamation proceedings against MacGregor in November 2016.

Craig's case is based on what he alleges are three separate incidences of defamation against him.

MacGregor has responded with a counterclaim alleging Craig defamed her in four separate incidents.

David White Colin Craig arrives at court on Monday with wife Helen Craig.

The trial, in front of Justice Anne Hinton, has already shed light on the pair's relationship during the time they were working together.

Details of their relationship have previously been aired during Craig's previous defamation proceedings.

In his opening address to the court, Craig claimed MacGregor had a very different view of their relationship which had fuelled her allegations he had sexually harassed her.

DAVID WHITE/STUFF Rachel MacGregor - former press secretary to Colin Craig.

Craig told the court he hired MacGregor in the lead up to the 2011 election to help with public and media relations.

"At the heart of this is the nature of the professional and personal relationship between myself and Ms MacGregor," Craig said.

"She has made various embellishments about that to others who have then used that to attack me - both my personal and political reputation."

Abigail Dougherty Justice Anne Hinton is the presiding judge in the trial.

Craig told the court that during the 2011 election campaign the pair were working long hours together and became close.

Craig talked about how MacGregor would massage his back from time to time, which he "welcomed".

"We developed a close and affectionate working relationship and close friendship. We shared similar interests and values, including a Christian faith.

"It is pretty obvious people working together become quite close," he said.

It was on the evening of election day 2011 that he and MacGregor had a "consensual" moment where they kissed, he told the court.

MacGregor took off her top, Craig said, before the pair stopped and went their separate ways.

"We did kiss, things did progress slightly further than that. It will be my evidence I stopped that, and I went home.

"It was common ground that incident was consensual ... it was a consensual, and regretted, incident."

Following on from that incident Craig claimed various "boundaries" were put in place to make sure a similar incident did not occur.

During this time he did not use the kissing incident in any way against MacGregor, Craig claimed.

He continued to work with MacGregor, employing her to help him mount his 2014 run for parliament.

It was during this period MacGregor began to show "erratic" behaviour and her personal appearance slipped, Craig claimed.

On a flight from Napier to Auckland in the week leading up to the election, Craig told the court MacGregor had said she wanted to have more than a personal relationship.

"... it was like someone dumped a bucket of cold water over me.

"I told her, that is not going to happen in this lifetime, which in hindsight was quite harsh," Craig said.

The public first learned of the fall out of their working relationship two days before the 2014 election when she resigned as his press secretary.

Following the resignation, MacGregor defamed him on three occasions, Craig claimed, including in a press release, in a tweet and in comments to Tax Payer's Union member Jordan Williams.

Those three occasions had "lowered" the opinion of him in the minds of the right-thinking public, he said.

Hayden Wilson, MacGregor's lawyer, said the facts in the case were clear.

"[Craig] sent her a series of letters, cards and poems. He gave her gifts of jewellery and sought out her company in irregular and inappropriate ways," he said.



"Ms McGregor came to the view that was sexual harassment and left her job."

The first instance of defamation is alleged to have occurred when Craig held a press conference with the nation's media about McGregor on June 22.

"What he actually did was introduce an entirely new set of information into the public arena," Wilson said.

"A set of information which was carefully curated by him to place himself in the best possible light and to damage Ms MacGregor."

MacGregor's response was to try and defend herself by publishing two short statements the same day - a press statement by her lawyer and issuing a tweet, Wilson said.

Wilson pointed out to the court that Craig had not engaged the defence of truth for the allegations levelled against him, but was relying on other defences.

Craig later said it was a mistake to have not engaged the truth defence and asked if it could be reintroduced.

Wilson argued it was too late for Craig to change tack - something Justice Hinton would rule on Tuesday.

When MacGregor resigned, she filed a claim of sexual harassment against him with the Human Rights Commission.

At mediation, they settled the sexual harassment claim and a financial dispute, and signed a confidentiality agreement.

MacGregor subsequently complained to the Human Rights Review Tribunal that Craig had breached the confidentiality agreement by doing media interviews and holding two press conferences.

The tribunal found in her favour and ordered Craig to pay MacGregor $128,000.

This is the third time Craig has appeared in court relating to the fallout from the 2014 election.

In 2016, Craig went to court defending himself after it was alleged he had defamed Jordan Williams.

The court ruled in Williams' favour, with the jury deciding he should pay $1.3 million in damages.

That amount was later appealed and is currently before the Supreme Court.

In 2017, Craig and blogger Cameron Slater sued each other for defamation.