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Wairarapa Hospital settlement: What aren’t we being told – and why?

A “confidential settlement” has brought an end to a lengthy legal dispute over Wairarapa’s defective hospital.

What this means for Wairarapa patients – or Masterton ratepayers – remains to be seen.

The High Court claim, worth tens of millions of dollars, was brought by Health New Zealand–Te Whatu Ora against Masterton District Council [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, Health NZ claimed the building has widespread structural defects, including a risk of failure in a large earthquake.

Both parties confirmed on Thursday that the claim had “settled satisfactorily” and that “the terms of the settlement are confidential”.

In court last year, Health NZ 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 Health NZ.

In contrast, MDC’s remediation proposal involved fixing the defective parts of the current hospital building at an estimated cost of $4m.

Health NZ told Local Democracy Reporting that no decisions on any facility remediation at Wairarapa Hospital have been made.

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

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

Health NZ had to do seismic strengthening work to the entrance canopy, glazed walkways, cafeteria, and ambulance bay of the hospital in 2019 and 2020, costing $293,280 plus GST.

The claim alleged that if the code compliance certificate had been refused by MDC in 2011, Health NZ would have been able to take steps to identify and remedy the defects at that stage.

The hospital was built between 2005 and 2006.

MDC denied liability and defended the claims.

The court was told MDC’s proposed solution was estimated to cost $4m.

Local Democracy Reporting has asked both MDC and HNZ to respond to the following questions, citing public interest in the disclosure of information:

  1. What are the total legal fees MDC spent on this case?
  2. What are the total legal fees Te Whatu Ora/Wairarapa DHB spent on this case?
  3. What is the settlement amount?
  4. What are the other grounds of the settlement?
  5. How much of the legal fees and settlement amount will be covered by MDC insurance?
  6. How will the remainder be funded [if any]?
  7. How will the legal fees incurred by Te Whatu Ora be funded?
  8. What is the remedial scheme that will go ahead for Wairarapa Hospital?

-NZLDR

Public Interest Journalism funded through NZ On Air

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Emily Ireland
Emily Ireland
Emily Ireland is Wairarapa’s Local Democracy Reporter, a Public Interest Journalism role funded through NZ On Air. Emily has worked at the Wairarapa Times-Age for seven years and has a keen interest in council decision-making and transparency.

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