Trust chief executive Garry Ware said the contract was terminated just as summer was starting, when the indications were it could have provided a good income. The trust was seeking to recoup its losses with legal action over unlawful termination of the contract.
Another resident raised concerns about Mr Ware's management style, claiming an atmosphere of intimidation at the hospital and that staff who asked questions were fired.
"Staff will vouch that you are a bully, that you rule by bullying," he said.
Mr Ware said he had to abide by the trust's legal obligations and that included employment law. Any staff member who felt bullied was entitled to lodge a personal grievance, and the board would then decide what action to take.
There had been issues but he had taken advice and worked with the union to resolve them.
There was considerable debate about the trust's legal standing and much re-litigating of events a decade or more earlier. Three versions of the trust deed exist but because most of the trust's records have been lost no one was certain which one applied.
A vote of no confidence in the board was lost 18-19, but it was not clear what would have happened if the motion was carried. Some residents were worried they could lose their free health care if the Northland DHB took over.
Kuia Elizabeth Peterson silenced the meeting when she voiced her disgust at those who had come "with the sole purpose of denigrating the trust.
"If you are so sure they're wrong, why aren't you up there? Why don't your people vote you in? It's very easy to throw stones," she said.
After almost three hours of debate, Mr Ware gave an undertaking to seek advice from the Charities Commission about which version of the deed was legally binding.
Chairman Jannye Freeman said once that was established, another meeting would be called so the community could decide a way forward.
Deputy chairman Helen Linssen said it was hard to find trustees but a pending election would give people the chance to get involved.
She conceded mistakes were made but said the people of Whangaroa had a good hospital with great staff