John Tamihere's Waipareira Trust has lost a court battle with the Crown over the cancellation of a $1.4 million "Family Start" child welfare contract.

Social Development Minister Paula Bennett said the High Court decision vindicated her department's decision to cancel the contract despite potential political opponent Mr Tamihere's attempt to turn the affair into a "personal attack" on her.

The West Auckland urban Maori authority's $1.42 million a year contract to teach and reinforce good parenting techniques in order to minimise the risk of child abuse was among five canned in March this year.

However, in May following mediation the ministry agreed to review its decision. In June, after a visit to the trust, the ministry said its original decision would stand.


The trust challenged that in the High Court, arguing the decision was not fair or reasonable and failed to take proper account of an additional external report.

But this week Justice John Priestly said there was no sound basis on which the ministry's decision could be challenged on those grounds or as a breach of contract.

Ms Bennett said the ruling clearly vindicated the way her department had dealt with Waipareira Trust.

"MSD worked with Waipareira over a long period of time to lift standards and to assist them to meet their contractual obligations, but in the end they still weren't delivering consistently to West Aucklanders."

Mr Tamihere said the trust's lawyers were digesting the judgment and whether an appeal was likely.