The country's top military officer, Air Marshal Bruce Ferguson, says he is "deeply upset" letters sent to court witnesses were intimidatory.
He last night apologised for the letters, and will escape being prosecuted for contempt of court despite Solicitor-General Terence Arnold deciding there was a case to answer.
Mr Arnold said a prima facie case of contempt of court had been established, but the Defence Force head hadn't intended to intimidate or influence witnesses in an employment dispute with archivist Dolores Ho.
He said the Defence Force had withdrawn the letters as soon as Ms Ho's lawyers asked the Employment Court if they were intimidatory.
The court last month awarded Ms Ho $20,000 damages from the Defence Force for the intimidation, and that included a punitive sum after Judge Tom Goddard said Air Marshal Ferguson had tried to intimidate a witness.
Judge Goddard asked the Solicitor-General to decide if Air Marshal Ferguson and another officer were in contempt.
Mr Arnold said he did not think there was a "need" to bring a prosecution.
"The Defence Force has, in my view, sufficiently purged the contempt already."
However, the National Party last night questioned Mr Arnold's decision, and asked if the Solicitor-General should have considered the contempt case at all.
The Herald understands the two letters, sent by Air Marshal Ferguson and another officer, Colonel Kevin Burnett, were checked by Crown Law Office lawyers.
Crown Law last night refused to say if it had vetted the letters.
But National MP Murray McCully said if lawyers working in the Solicitor-General's office had checked the letters, it was a clear conflict for that same office to consider contempt issues because it meant the Solicitor-General was effectively deciding not to charge his own client.
Attorney-General Michael Cullen would not comment. He has previously said he has confidence in Mr Arnold.
The letters were sent to the Defence Force principal chaplain Julian Wagg and Waiouru Army museum curator Windsor Jones, who were to be called to give evidence on behalf of Ms Ho in her dispute with the Defence Force, which stemmed from an ongoing work problem with a librarian.
While not ordered to not give evidence, Mr Wagg and Mr Jones were told there would be meetings with senior Defence Force officers after the case.
Judge Goddard said Air Marshal Ferguson's actions were "reprehensible" and clearly intimidatory.
Air Marshal Ferguson said in a statement yesterday he accepted responsibility for the letters.
"I am deeply upset that the letters were seen to be intimidatory, which had not been my intention; however, I reiterate my apology for what has happened."
Ms Ho said through her lawyer, Peter Cullen, that she was happy the issue of intimidation had been considered.
The dispute
* Dolores Ho, who worked as an archivist at the Waiouru Army Museum, had a continuing dispute about work duties with a librarian.
* Last year she received a disciplinary warning and responded by filing a personal grievance claim for distress and humiliation.
* Ms Ho said two of her Defence Force witnesses had been intimidated because senior officers, including Bruce Ferguson, had asked them not to give evidence.
* The Employment Court said Ms Ho's reprimand was justified but letters sent to her witnesses were "intimidatory".
Defence chief escapes prosecution
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