Masterton District Council [MDC] and Te Whatu Ora — Health New Zealand have refused to disclose the settlement amount that ended a lengthy legal dispute over Wairarapa’s defective hospital.
A request for the settlement amount and details was made to both organisations under the Official Information Act, but was refused by Health New Zealand to “maintain legal professional privilege”.
MDC refused the request on the basis that withholding of the information was “necessary to enable the council to carry on, without prejudice or disadvantage, negotiations [including commercial and industrial negotiations]”.
“In this case, if the information is released, it is likely to prejudice our ability to negotiate future insurance arrangements which would not be in the public interest,” the spokesperson said.
“Whilst we recognise that there is a public interest in releasing the information as indicated in your request, we consider that this public interest is outweighed by the potential damage to the public interest in releasing the information.”
MDC confirmed it had insurance for the claim and that it paid an insurance excess of $10,000 that was funded from operational budgets.
The High Court claim, worth tens of millions of dollars, was brought by Health New Zealand – Te Whatu Ora against MDC and was heard in court last year.
The claim related to defects in the construction of Wairarapa Hospital, with the dispute dating back more than 12 years.
During the court hearing, HNZ claimed the building had widespread structural defects, including a risk of failure in a large earthquake.
HNZ had claimed damages for negligence of just under $90 million, with GST, interest, and costs on top.
This amount would have covered the cost of a new stand-alone hospital building adjacent to the current hospital structure, the solution proposed by HNZ.
In contrast, MDC’s remediation proposal involved fixing the defective parts of the current hospital building at an estimated cost of $4m.
MDC denied liability and defended the claims.
The terms of the settlement and remediation option were not disclosed to Local Democracy Reporting.
Health New Zealand said it would consider and communicate any future decisions on facility remediation.
Other parties, Aecom New Zealand Ltd [formerly Maunsell Ltd] and Rigg-Zschokke Ltd, are named as the first and second third parties respectively in relation to a separate claim brought by the Masterton District Council for those parties to contribute to any liability it was found to have to Health New Zealand.
The claim against Aecom and Rigg-Zschokke is currently stayed.
An Official Information Act request last September revealed that the former Wairarapa District Health Board had spent $1.67m on legal advice regarding the case and Health New Zealand another $1.78m since July 1, 2022. – NZLDR
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Great OPEN COUNCIL LOVE IT. Rate payers of Masterton do have RIGHTS AND A CLOSED COUNCIL THAT HIDES INFORMATION SHOULD BE DISBANDED AND ANOTHER VOTED ON. SO ONCE AGAIN CEOS MANAGERS PROTECT THEMSELVES?? 🙄 VOTED COUNCILORS 🗳 🙌 JUST MAKE TEA 🍵 AND COFFEE ☕ 😋 FOR THE CEOS AND MANAGERS NO ACCOUNTABILITY. CHANGE THE THREE COUNCILS TO ONE FOR RATE PAYERS PROTECTION.