Andrew Little will pay any defamation costs from his own pocket

The wife of Scenic Hotel founder Earl Hagaman says Labour leader Andrew Little could have avoided a multimillion-dollar defamation suit by making one phone call.

Mr Little says he's taking personal responsibility and will pick up the bill should damages be awarded to complainants in a defamation case.

"I am meeting my costs. The offers I have made to settle, had they been accepted, would have been fully funded by me personally," he said on Tuesday.

No taxpayer or Labour Party funds will be used to cover the legal fees or potential damages.

"I have a personal view about taking personal responsibility if you're found to have done something wrong."

Scenic Hotel founder Earl Hagaman and his wife Lani are seeking a maximum of $2.3 million between them from Mr Little after suing him for defamation.

Mr Little earns $288,900 per year as leader of the Opposition, and declined to comment on how this could impact him financially.

The trial is being heard by a jury at the Wellington High Court; it began on Monday and is due to run until Friday.

He is set to give evidence in person on Thursday.

The Hagamans brought the action after Mr Little questioned the nature and timing of a $100,000 donation the couple made to the National Party in 2014 just months before the election.

Around a month after the donation was made, the Hagaman's Scenic Hotels group won a tender to manage the Matavai resort in Niue.

The resort receives funding from the New Zealand government via international development assistance funds.

Months later the hotel's owners were awarded a $7.5 million grant to upgrade the resort.

Last April, Mr Little first criticised the deal in a written statement distributed to media.

The statement from April 18, 2016 read: "This looks like the latest in a line of questionable deals from John Key's Government which has seen New Zealand slide down international corruption rankings, says Little".

In the following days Mr Little echoed those comments in five subsequent media appearances.

Mr Little's lawyer John Tizard probed Ms Hagaman in the Wellington High Court on Tuesday as to where her husband first heard the allegations.

Mr Tizard suggested it would have been in the first report on Radio New Zealand, which did not include comment from Mr Little.

However Ms Hagaman rejected the idea the allegations were driven by the news media.

"We are linked to corruption thanks to what Mr Little put in the media," said Ms Hagaman. "Andrew Little led the charge well and truly."

Ms Hagaman told the court her husband became "angry" when Mr Little continued to repeat and discuss the corruption allegations with various media outlets.

"I have no idea how he linked us to that - I just don't understand," Ms Hagaman said. "There were just no facts supporting that.

"One telephone call to Scenic Hotel group would have given him the facts," Ms Hagaman added.

Mr Little does not deny making the statements; instead he is arguing he had qualified privilege when making them.

The Hagamans gave Mr Little a deadline to apologise, but he failed to meet it.

Mr Little referred the deal to Auditor-General Lyn Provost, who later found no problem with it.

Following that the Mr Little did apologise and offer to pay $26,000 towards the Hagamans legal costs.

That apology was rejected.

Mr Little then upped his offer to $100,000 on March 24 this year, but that was again rejected.

The Hagamans said the apologies were "inadequate" and "very late", and that they'd spent around $215,000 on legal fees preparing the case.

The Hagamans are seeking $550,000 each in damages for the initial written statement, as well as $120,000 each for the five subsequent statements Mr Little made in the media.

Scenic Hotels Limited employs around 1000 staff and runs 18 hotels, 16 of which are in New Zealand.

Mr Hagaman, 91, is housebound due to poor health, but his business partner and wife of 25 years Lani Hagaman told the court on Monday her husband was "furious" and "upset" about Mr Little's statements.

In his opening statements, the Hagamans lawyer Richard Fowler QC said the Hagamans were "very wealthy by New Zealand standards", but asked the jury, "why should they be out of pocket, even if they are wealthy, for Mr Little's wrongdoing?"

Mr Fowler told the court the saga could have been resolved "a long time ago" if Mr Little just "faced the truth" and apologised.

On Monday, Ms Hagaman said their reputation "was everything" and that linking Scenic Hotels to allegations of corruption were highly damaging.

She also dismissed allegations that the donation was made to curry commercial and political favours.

Ms Hagaman told the court she and her husband had donated to a wide range of political parties including ACT, New Zealand First and Labour.

The $100,000 donation to National was the biggest political donation Earl Hagaman had ever made, Ms Hagaman said.

The trial continues.