Cloak of silence over Napier council's rusty buildings deal

Napier City Council could face a challenge over a confidential settlement in a rusty-building dispute related to the construction of the city's biggest apartment complex. Photo / Doug Laing

Napier City Council could face a challenge over a confidential settlement in a long-running legal rusty-building dispute related to the construction of the city's biggest apartment complex.

The council once budgeted $10 million to deal with leaky building issues in Ahuriri, but is not revealing the cost in the case of the West Quay apartments, subject of a trial which is set to start in the High Court at Wellington later this month and last up to 10 weeks.

While it has this week been revealed that the council's legal costs had come to more than $1.6 million, the council is honouring the settlement agreement.

A fortnight ago a council statement said: "The matter has been settled by negotiation between the parties in a manner which is satisfactory to all parties. The terms of settlement are confidential."

On Tuesday, responding to a Hawke's Bay Today request to Mayor Kirsten Wise seeking further information on whether it was staff or the council that agreed on the settlement and whether payments included council or insurance funds, a further statement said the "due to the confidentiality provisions in the settlement agreement, the council is not able to comment further".

Activist group the New Zealand Taxpayers Union says it is "willing" to complain to the Ombudsman in the first instance.

"But the council really ought to save everyone the time and expense of an investigation by fronting up with the figure," says NZTU campaigns manager Louis Houlbrooke.

This is ratepayers' money," said Houlbrooke. "When the council makes a screw-up, ratepayers need to be able to see the cost of that mistake in order to effectively hold the Council to account and ensure the mistake isn't repeated."

Public law specialist Associate Professor Dr Dean Knight, of the Faculty of Law and New Zealand Centre for Public Law at Victoria University, said it's not uncommon for local authorities to enter confidential settlement agreements about such building matters.

But he said it's up to the local authority to decide whether doing so is consistent with its idea of appropriate civic and governance culture, especially, and quoting the Local Government Act 2002, the statutory obligation to "conduct its business in an open, transparent, and democratically accountable manner."

"The answer to that might depend a bit on the size and significance of any settlement and associated public interest in what's gone on, especially if the problems were systemic" he said.

The settlement involves a complex of over 100 apartments which was completed in 2007. Legal action was begun by a Body Corporate in 2012.