Deputy Prime Minister Winston Peters' attack on top civil servants is "scandalous and improper" and the allegations should never have been made, a court has heard.
The Crown's lawyer Victoria Casey QC made the comments at the High Court in Auckland where the Deputy Prime Minister is pursuing legal action over an alleged breach of privacy.
The case relates to a leak in 2017 revealing Mr Peters was overpaid his superannuation by nearly $18,000 dollars over seven years, and had paid it back.
State Services Commissioner Peter Hughes and Ministry of Social Development then-boss Brendan Boyle both informed their ministers of the situation under the "no surprises" convention.
Mr Peters is now suing them, saying it's "repugnant" they would inform his political opponents just weeks out from an election.
Ms Casey told the court it was "extraordinary" that the deputy prime minister would suggest the civil servants had been acting in bad faith.
She pointed out that Mr Hughes was charged with promoting public standards of integrity and Mr Boyle was "the longest serving chief executive in the public service".
"These are extremely serious allegations to be made by anyone, but for them to be made by the deputy prime minister acting in whatever capacity is extraordinary."
She told the court the claim was "entirely without foundation" and the NZ First leader had provided no evidence to back it up.
"The allegations are scandalous and improper and should never have been made."
Ms Casey told the court both men were acting according to "orthodox and long-established conventions" in informing the ministers about the over-payment.
"Information provided to ministers often includes matters that are sensitive, private or confidential and frequently relate to matters that are operational.
"A minister may be briefed because a decision is required of them or Cabinet. Or just to keep them informed."
That was simply how the "business of executive government" operated, Ms Casey said.
Both men decided to brief their ministers to ensure "public service integrity" and to demonstrate Mr Peters - "a powerful political figure" - was treated the same as anyone else, she said.
"His reputation as a personally powerful, at times aggressive, campaigner and crusader is well-known," Ms Casey said.
"Mr Peters' overpayment of superannuation had the clear potential to give rise to questions about how this came about and how it was handled by MSD.
"Was he given special treatment because of who he is? Would he permitted to get away with something that an ordinary beneficiary would not?"
Ms Casey said, at the same time, then-Green Party co-leader Metiria Turei was facing an MSD fraud investigation after she admitted to having previously lied to stop her benefit from being cut.
"Comparison would be inevitable. And the possibility of Mr Peters' over-payment coming out in the public domain had never been ruled out and could not be.
"It would be naive to say this could never happen."
The Crown is expected to call Mr Hughes and Mr Boyle to give evidence next week. Long-time diplomat and public servant Sir Maarten Wevers will also be called as an expert.