Council and Health NZ are remaining tight-lipped about the Wairarapa Hospital settlement

Wairarapa Hospital in Masterton.
Photo: Wairarapa Times age

Masterton District Council and Te Whatu Ora – Health New Zealand have refused to reveal the settlement amount that ended a long-running legal dispute over Wairarapa’s flawed hospital.

A request for the settlement amount and details was made to both organizations under the Official Information Act, but was refused by Health New Zealand to “preserve legal professional privilege”.

Masterton District Council (MDC) refused the request, arguing that withholding the information was “necessary to enable the council to proceed, without prejudice or prejudice, with negotiations (including commercial and industrial negotiations)”.

“In this case, releasing the information is likely to affect our ability to negotiate future insurance arrangements that would not be in the public interest,” the spokesperson said.

“While we recognize that there is a public interest in releasing the information as indicated in your request, we believe that this public interest outweighs the potential harm to the public interest in releasing the information.”

MDC confirmed it was insured for the claim and paid a $10,000 deductible funded from operating 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 the Wairarapa Hospital, with the dispute dating back more than 12 years.

During the hearing, Health NZ claimed the building had widespread structural defects, including a risk of failure in a major earthquake.

Health NZ had sought damages of just under $90 million for negligence, plus GST, interest and costs.

This amount would have covered the cost of a new, standalone hospital building adjacent to the current hospital structure and this was the solution proposed by Health NZ.

In contrast, MDC’s rehabilitation proposal included repairing the defective portions of the current hospital building at an estimated cost of $4 million.

MDC denied liability and defended the claims.

The terms of the settlement and recovery option were not disclosed to Local Democracy Reporting.

Health New Zealand said it would consider and communicate future decisions on facility remediation.

Other parties, Aecom New Zealand Ltd (formerly Maunsell Ltd) and Rigg-Zschokke Ltd, were named as the first and second third parties respectively in relation to a separate claim brought by the MDC seeking these parties to contribute to any liability which it is determined that they must Health New Zealand.

The claim against Aecom and Rigg-Zschokke has been provisionally stayed.

An official Information Act request last September revealed the former Wairarapa District Health Board had spent $1.67 million on legal advice since July 1, 2022, and Health New Zealand had spent another $1.78 million.

LDR is local journalism, co-funded by RNZ and NZ On Air.