The owners of the Scenic Hotel Group have started defamation proceedings against Labour Party leader Andrew Little.
Earl and Lani Hagaman said they had taken the action because of Mr Little's continued failure to retract and apologise for allegations against Mr Hagaman.
Mr Little had asked the Auditor-General for an investigation after Mr Hagaman donated $101,000 to the National Party in September 2014.
The following month, the Scenic Hotel Group had been awarded a government contract to manage the Matavai Resort in Niue.
Mrs Hagaman said Mr Little's allegations were hurtful, offensive and false, and they would now clear their names in the High Court.
Mr Little had earlier said he had written to the Hagamans' lawyers saying he had a constitutional duty to challenge the actions of the government over the expenditure of public funds.
He said he would address the issues raised by the Hagamans once the Auditor-General had dealt with the matter.