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$3.5m spent on legal battle

The former Wairarapa DHB and Te Whatu Ora has spent millions of dollars on legal advice and court costs in a dispute with Masterton District Council [MDC] about alleged seismic defects in Wairarapa Hospital.

Figures obtained from Te Whatu Ora – Health New Zealand under the Official Information Act [the OIA] showed the health organisations have so far spent a combined amount of almost $3.5 million taking the council to court.

The hospital was completed in 2006 and cost about $30 million to build at the time. Subsequently, in about 2018, Wairarapa DHB [now Te Whatu Ora – Health New Zealand] discovered a range of seismic defects in the hospital building and issued proceedings against MDC. The council has denied liability.

The OIA reply from Monique Fouwler, the Te Whatu Ora director – delivery, pou whakahaere infrastructure investment group, said the DHB had spent $1,670,163 on legal advice and Te Whatu Ora another $1,778,156 on legal fees and court costs since 1 July 2022. In all, the legal costs were $3,448,319.

The costs are for legal advice and assistance for the case. Te Whatu Ora has claimed damages for negligence from MDC of just under $90 million with gst, interest and costs on top.

MDC has robustly defended the claim and disputed the likely cost and scope of any potential remediation work.

The case was the subject of a hearing lasting more than four weeks in Wellington High Court in August this year.

Te Whatu Ora chief legal counsel Andrew Cordner provided additional comment.

“It was important for Te Whatu Ora to go through this litigation process to seek to rectify the defects of Wairarapa Hospital and provide an IL4 [Importance Level 4] hospital to meet the needs of the Wairarapa population,” he said.

“Given that we are awaiting a decision of the High Court, we cannot provide any further comment at this time.”

In addition to the legal costs, the DHB has spent hundreds of thousands of dollars on seismic strengthening work at the hospital.

Fouwler confirmed the DHB spent $293,279.77 plus gst on seismic securing remediating work in 2019-2020 to address defects in the hospital building.

Those repairs, which included work on the walkways, canopies, and the ambulance bay, were completed in June 2020.

Fouwler also confirmed the amount Te Whatu Ora estimated it would cost to remedy the hospital.

“The further amount to rectify the defects has been estimated at $89m plus gst. This estimate has been prepared by a quantity surveyor with experience in health projects. This cost is for a 4,100m2 IL4 [Importance Level 4] hospital to meet the health needs of the Wairarapa population,” she said.

Judgment in the case has been reserved. Typically, in cases of this length and complexity, judgments take some months.

A MDC spokesperson said the council would not comment at this stage, as the matter is before the court. MDC have been asked separately about what legal costs they have incurred in relation to the hospital dispute.

Public Interest Journalism funded through NZ On Air

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