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Hospital in $90 million legal dispute with MDC

A claim against Masterton District Council [MDC] that’s worth tens of millions of dollars is heading to the High Court in Wellington this month.

The litigation has been brought by Te Whatu Ora – Health New Zealand [formerly Wairarapa DHB] in relation to alleged defects in the construction of Wairarapa Hospital. The dispute dates back more than 12 years.

Te Whatu Ora claims damages for negligence of just under $90 million – plus GST, interest and costs on top.

The four-week hearing is scheduled to start on July 31 in the Wellington High Court.

MDC is defending the claim.

Other parties are Aecom New Zealand Ltd (formerly Maunsell Ltd) and Rigg-Zschokke Ltd, 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 is found to have to Te Whatu Ora.

However, that claim is stayed and not proceeding at present.”

Te Whatu Ora says in its Statement of Claim that the structural design and construction of the hospital is defective in a number of respects and, as a result, does not comply with the Building Code.

The claim alleges MDC was negligent and failed in its duty to exercise reasonable care and skill in issuing a code of compliance certificate for the hospital.

In particular, MDC is alleged to have issued a compliance certificate for the hospital building even though it had defects, and without having reasonable grounds to be satisfied the structural design and building work complied with the Building Code.

Te Whatu Ora had to do seismic strengthening work to the entrance canopy, glazed walkways, cafeteria, and ambulance bay of the hospital in 2019 and 2020 ‘to address the life safety risk’ it claimed was created by the defects in those areas.

That seismic work cost $293,279.77 plus GST.

Full details of the claim were set out in Te Whatu Ora’s fourth amended Statement of Claim dated 13 June this year.

The alleged defects are set out in a 16-page schedule to the document. Areas listed include the hospital entrance area, the emergency department, the ambulance bay, the lab, the outpatients’ area, pharmacy, the maternity wing, paediatrics, and the day procedures unit.

Many areas are stated not to require remediation, while others are said to need work ranging from relocation to retrofitting and demolition.

The claim alleges if the code of compliance certificate had been refused by MDC in 2011, Te Whatu Ora would have been able to take steps to identify and remedy the defects at that stage.

The hospital was built between 2005 and 2006, with Maunsell Ltd providing the architectural, engineering, and project management services for its construction, and Rigg-Zschokke Ltd as the head contractor. The building consent application was made in late 2004.

The claim alleges MDC did not engage, or require Te Whatu Ora to engage, an independent engineer to conduct a peer review of the structural plans, calculations, and specifications for the building.

Te Whatu Ora alleges a raft of deficiencies in the way MDC managed the consent process, including that it:

“Failed to implement an inspection regime designed to ensure compliance with the Building Code and/or the building consent and/or which would identify the defects […] and,

“Failed to adequately and competently inspect the structural building work including because in its inspections it failed to identify the Defects.”

Further allegations list deficiencies in documents required to be produced as part of the consenting process.

In the event, a code of compliance certificate was issued in late January 2011.

However, Te Whatu Ora claims MDC did not do any further inspections of the hospital between November 2007 and issuing the code of compliance certificate on 25 January 2011. – NZLDR

Public Interest Journalism funded through NZ On Air

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