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Mark Hotchin and Eric Watson's defamation claim against former New Zealand Shareholders Association chairman Bruce Sheppard is too complex for a jury to digest, their Queen's counsel says.
Julian Miles says the upcoming high court defamation trial is a major commercial litigation and he is opposing Mr Sheppard's application for it to be heard before a jury.
Mr Sheppard is being sued by Messrs Hotchin and Watson over his allegations they behaved criminally and fraudulently as Hanover Finance's shareholding frontmen and deserved to be imprisoned.
About 36,500 investors were affected when Hanvover Finance froze $550 million of assets in July 2008.
When the trial starts in August, Mr Sheppard will be relying on honest opinion and qualified privilege to defend his statements about the pair – some broadcast in a November 2009 television interview with Mark Sainsbury, the presenter of TVNZ's former weeknight current affairs programme Close Up.
These include allegations each man was a "crook" and misled Hanover investors by falsely stating $10 million of their own money would be put into a debt restructure programme.
At Auckland High Court this morning, leading defamation lawyer Mr Miles argued the complexity of commercial arguments to be made at the trial makes it inappropriate for the trial to be heard before a jury.
Mr Miles told the court independent advice to Hanover at the time was in support of the moratorium on all levels.
And the backdrop to the moratorium involved a "unique-in-our-lifetime set of circumstances that we described as the GFC".
"The trial is going to involve complex and sophisticated investigation into the facts, documents and judgments, and expert evidence dealing with all those issues.
"There is every possibliity of a confused outcome if a jury was involved."
Mr Miles says he had appeared in many defamation cases and they are not easy.
"When you get into the defences of honest opinion as qualified privilege, there are layers of awkwardness behind all this."
He was also concerned about the extent "raw prejudice" would be used by Mr Sheppard's lawyer before the jury.
Messrs Hotchin and Watson's action against the shareholders association, which was also a party the action, was settled this month.
Mr Miles says he expected a jury trial would extend the trial by at least a week.
The application is proceeding before Justice Mark Cooper this morning.
Read more about the upcoming trial and the comments Mr Sheppard is defending here.
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Hanover 'crooks' defamation trial too complex for jury – QC
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