2. Al-Khalaf Group—Advice on Legal Threat from and Grievance Settlement ProcessJAMES SHAW (Co-Leader—Green) to the Minister of Foreign AffairsAl-Khalaf Group—Advice on Legal Threat from and Grievance Settlement Process2. JAMES SHAW (Co-Leader—Green) to the Minister of Foreign Affairs: Did he ask for or receive any advice or assessment from officials about the stated legal threat of up to $30 million from the Al-Khalaf group; if so what was the nature of that advice?Hon MURRAY McCULLY (Minister of Foreign Affairs): I received advice from ministry officials prior to meeting with Mr Al Khalaf in relation to both legal advice that Mr Al Khalaf was known to have taken regarding a compensation claim and the risks of a claim being in breach of New Zealand's World Trade Organization obligations. These formed part of an oral briefing.James Shaw: Does he stand by his statement to me in this House on 28 May 2015 that The Government took advice from very senior officials in the Ministry of Foreign Affairs and Trade including from the legal division."?Hon MURRAY McCULLY: I would want to see the full context of any statement but I would generally be happy to stand behind all of my statements in this regard.James Shaw: What then is his response to the Auditor-General's finding that "There was no assessment by ministry officials of the substance of that legal risk."?Hon MURRAY McCULLY: I agree with that assessment. I have always been clear in relation to the Cabinet paper that we made no such claim and I repeat what is in the introduction to this piece of the Cabinet paper where it says: "While the Saudi parties would have preferred to enter discussions on the basis of seeking compensation for commercial loss as a result of Government decisions it indicated that they had received legal advice suggesting they pursue a claim of between $20 million and $30 million." The Government has made it clear that we would not be a party to such negotiations. Those sentiments are reflected in the report of the Auditor-General.James Shaw: Now that the Auditor-General's inquiry is complete will he now give us his response to claims made by George Assaf on The Nation on 3 July that he had "no appetite or intention" of ever suing the Government of New Zealand?Hon MURRAY McCULLY: I am aware that the member and others wish to cast doubt on what has been said in that respect and I simply draw his attention to page 8 of the Auditor-General's report where as a matter of fact the Auditor-General found: "The Al-Khalaf group indicated that it considered it should be paid compensation of $24 million."James Shaw: I raise a point of order Mr Speaker. My question was whether Mr McCully would answer a claim by George Assaf on The Nation; it was not in relation to what he was quoting from the report.Mr SPEAKER: I think on this occasion I am going to give the member the benefit of the doubt. I think it has been addressed but I will allow the member to ask the question again so that we are absolutely sure that it has been addressed.James Shaw: Now that the Auditor-General's inquiry is complete will the Minister now give us his response to claims made by George Assaf on The Nation on 3 July that he had "no appetite or intention" of ever suing the Government of New Zealand?Hon MURRAY McCULLY: I am aware of many different claims that have been made in relation to the history of this matter. The Auditor-General had the opportunity to view all of the paperwork and talk to any parties that she felt she should talk to and she recorded her finding on page 8: "The Al-Khalaf group indicated that it considered it should be paid compensation of $24 million."James Shaw: I raise a point of order Mr Speaker. My question was in relation to a specific claim by Mr Al-Khalaf's business partner George Assaf.Mr SPEAKER: Order! I have heard quite enough. The essence of the question was "will the Minister now give his response to that statement" and the Minister has certainly given his response—clearly not to the satisfaction of the member but I think on this occasion when I hear the answer that has been given it was actually addressed on the first occasion. James Shaw: Was Mr Al-Khalaf's business partner George Assaf lying when he said that they had "no appetite or intention" of suing the New Zealand Government?Hon MURRAY McCULLY: I have no responsibility for what Mr Assaf or anyone else including various television programmes might have said about this matter. The member and others kicked up a large fuss used some very florid language and made some very strong accusations to provoke an Audit Office inquiry into this matter. The Auditor-General spoke to everyone she wanted to speak to looked at all of the paperwork that was available and made it very clear that the Al-Khalaf group indicated it considered it should be paid compensation of $24 million—that is the direct quote from the Auditor-General's report.James Shaw: Does he accept the finding in the Auditor-General's report that "settlement of a grievance was provided under the guise of a contract for services"?Hon MURRAY McCULLY: I have made it clear that I accept all of the conclusions of the Auditor-General's report including those referred to by the member and also in particular the statement made by the Auditor-General that the contract for services was a fully lawful contract for services and that all of the elements of the contract were discharged in relation to the appropriation granted by Parliament.James Shaw: Given that response—that he does accept that the deal was a settlement of a grievance—why was it not signed off by the Crown Law Office or by a court judgment as is required by Cabinet Office circular CO(15)4?Hon MURRAY McCULLY: The Auditor-General has made very clear her finding as to the legality of the arrangement. The report makes it very clear that the contract for services was a fully lawful contract for services and that it was undertaken in a manner that was consistent with the appropriation granted by Parliament.James Shaw: I raise a point of order Mr Speaker. My question was quite specific outlining a quote in the Auditor-General's report about the requirement for payments above $75000 to be signed off by the Crown Law Office or a court judgment. Mr McCully has not responded to that question.Mr SPEAKER: No no. Mr McCully in my opinion has responded and has addressed it clearly—not to your satisfaction but he has effectively said that it met the requirements. So that is his answer that has been given to the House today."