This really isn’t my area, so I’m not going to opine on it personally. The whole storm in the proverbial has, however, generated a bunch of legal comment from those concerned with media and/or privacy law.
First and one of the best is from Dean Knight, a lecturer at Victoria University in his blog Elephants & the Law. Dean argues convincingly in his post Reading the tea leaves: the declaratory judgment application that the courts should really issue a declaratory judgement on the matter to help everyone know just what the position is.
Next is Andrew Geddis at Pundit in his post Time for a cup of tea, perhaps, with his usual amusing-in-style roundup of the issues, including his thoughts on why the idea that the Herald deliberately set out to record the conversation is laughable.
Stephen Price has made a number of posts on the topic, including Of sneaky devices, Of sneaky devices 2 and, in a break from tradition, Sneaky devices 3. His most recent effort is Hosking lays down the law, a critical analysis of Mike Hoskings attempted (and basically failed) summary of the affair.
All worth a read if you are wondering just what all the fuss is about.