The Hagamans confirmed in a statement they had now commenced defamation proceedings against Mr Little in the High Court and they had been served on Mr Little.
The defamation suit relates to comments Mr Little made about a management contract Mr Hagaman's company, Scenic Hotel, was awarded to manage the Matavai Resort on Niue. That was awarded a few weeks after Mr Hagaman donated $101,000 to the National Party during the 2014 campaign.
The Hagamans gave Mr Little a deadline to retract his comments and apologise last month, but Mr Little refused.
"As we said earlier, the reasons we're taking defamation action have been widely reported in the media and I won't be repeating his allegations that Earl and I find hurtful, highly offensive and totally false. We will now clear our names in court", Lani Hagaman said.
The statement said they would not comment further because the case was before the High Court.
On April 18, Labour had called for the Auditor General to look into Scenic Hotels Group's contract to manage the Matavai resort and questioned the timing of the donation. At the time, Lani Hagaman strongly denied any link between the two.
"If Mr Little had taken the time to get to know us he would have found out that neither Earl nor I come from power or privilege, nor upbringings that cultivated expectation of favours."
Foreign Minister Murray McCully also dismissed any suggestion of a link as "utterly baseless".
A spokesman for Mr Little confirmed Mr Little had been advised the Hagamans had filed proceedings and had agreed to service via his solicitor. He said Mr Little has not used any Parliamentary funding to cover his legal costs.
MPs can get their costs reimbursed for legal proceedings taken against them in their capacity as an MP. The approval of the party leader and the Speaker is required. That does not have to be disclosed, because only ministers are subject to the Official Information Act. The money comes out of a party's leader's fund - a sum given to party leaders to run their Parliamentary units which is based on the number of MPs the party has.
