Settlement over $2.2m repairs

Hawke's Bay Regional Council has reached a settlement in its battle to recover the more than $2.2 million costs for a leaky building.

Hawke's Bay Regional Council has reached a settlement in its battle to recover the more than $2.2 million cost of repairing its leaky office on Dalton St, Napier.

A report, which will be discussed by the council behind closed doors tomorrow, said the final cost of repairs for the building as of this month was more than $2.2 million.

The parties in the settlement, which were not specified, had agreed the terms of the agreement would remain confidential.

Finished in 2005 by Herbert Construction, the Dalton St office was soon discovered to be leaky.

Herbert Construction initially filed a claim against the council in 2010 over non-payment for construction work.

In 2012, the council became embroiled in a legal battle with the construction company to recover the costs of reparation. Herbert Construction was placed into liquidation the following year.

It had indicated there were as many as eight third parties who may have had some responsibility in the construction of the building.

The company was accused of "delaying the inevitable" when its lawyer Daniel Kerr said it was planning a compromise using funds from offshore interests in Fijian-based companies to pay back its indebted creditors.

The council agreed to award the remedial work contract to Mackersey Construction for $1.9 million and continued to pursue recovery of the cost from Herbert Construction through the courts.