29 Mar 2018

DHB unable to take legal action over rotting buildings

9:00 pm on 29 March 2018

Counties-Manukau District Health Board has been unable to take legal action to get money back in the case of three out of four of its rotting buildings.

Middlemore Hospital

Photo: RNZ / Claire Eastham-Farrelly

In 2012, A 2m-by-1m cladding panel fell off Middlemore Hospital's Scott building near the entrance to its dialysis treatment centre, alerting the board to leaky building problems that had until then remained hidden.

The DHB then asked the building's original builder, Hawkins, to urgently check and fix the building's panels. Checks also revealed a litany of failures in three other buildings which at that stage were only 10 to 12 years old.

Many other Middlemore buildings were also badly compromised.

The board said "shortfalls in build methods" were partly to blame for leaks that, among other things, had rotted the walls in up to 90 percent of places in the children's hospital.

It took five years before the DHB reached a confidential out-of-court settlement with Hawkins over the Scott building in 2017. This was also done through the Building Disputes Tribunal, which negated the need to activate the High Court claim and - unlike the courts - would not be publicly accessible even under the Official Information Act.

The board is bound by confidentiality to not reveal how much it settled for. RNZ understands it was for only $3m, but repairing the Scott building alone is estimated to cost at least $27.5m.

"Comment has been made that the settlement was low compared to cost of remediation. The settlement took into account that the new cladding would improve the building, extending its life and adding value," Dr Johnson said.

However, by the time the DHB lodged its High Court claim against Hawkins in 2012, it was too late to do similar for the other three buildings Hawkins had built between 1999 to 2001.

"This is because by the time the issues with the other three buildings, which are older than the Scott building, came to light, it was outside the 10-year limitation period in which claims could be made against the builder," acting DHB chief executive Gloria Johnson said.

At the nearby 1960s-era Galbraith building, asbestos is a risk and it rates as earthquake-prone, and estimated repairs costs range wildly from more than $20m to almost $80m.

The board had meanwhile also budgeted $200,000 to turn the building's fifth-floor offices into a ward, set to open by June to cope with a winter rush after the hospital was overwhelmed the previous year.

It is unclear how renovations could proceed without disturbing the asbestos.

RNZ has requested the asbestos test results from regular air monitoring but the board has so far not released them.

Airborne asbestos has been adjudged a risk in three areas, all of them not where patients are, though a small number of staff may be exposed in an area that covers IT support, phelbotomy and clinical records. There are plans to move them.

Hawkins, now owned by Downer in Australia, is understood to have not yet signed the contract to fix Scott.

Building company and new owner refuse to comment

Australian construction company Downer, which bought Hawkins' projects and staff in April 2017, said today in a statement it "did not purchase the full trading operations and associated liability so cannot comment on anything prior to this period".

It also said it was unable to comment on the quality of building work and unable to provide someone for a direct interview.

It hoped to settle the repair contract for the Scott building "in the coming weeks".

"Hawkins 2017 Limited has been negotiating with CMDHB in good faith to finalise the construction contract for the Scott Building. This process is confidential," it said.

Downer referred RNZ for comment on build quality to Geoff Hunt, who led Hawkins at the time it was sold to Downer. However, Mr Hunt is a lead player in the Construction Strategy Group that advises the government, and joined Hawkins only in 2013.

Mr Hunt told RNZ it would take time to answer questions about the original constuction back in 1999-2001.

He now heads research company The McConnell Group, which said in a statement Hawkins had built all four buildings and had design accountability for the Scott building.

"The compressed fibre cladding system specified by many architects at the time and used on these buildings has not proven to be reliably weathertight and is no longer used," the statement said.

"These buildings were designed and built to the then current building code."

Get the RNZ app

for ad-free news and current affairs