Update due in costs battle

Hawke's Bay Regional Council's Dalton St office under repair in 2013. The council is still trying to recover the costs of remedial work. Photo / File

Hawke's Bay Regional Council is still battling to recover the more than $1 million cost of repairing its leaky office on Dalton St, Napier.

The council will this morning receive an update behind closed doors on attempts to win back the costs of repairing the $9.8 million building.

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

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

In 2012, 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 court. Councillors have requested an update from staff on negotiations to recover the reparation costs.

Council chairman Fenton Wilson said the public would be excluded from the section of this morning's meeting dealing with the building update.

He was not able to comment specifically on the ongoing mediation process.

However, he said: "We'd rather not have any negotiations around a building we've had to fix up."

The last update on the building's repair was in September 2013, with total costs at $1.3 million. Since then the repairs have been completed.