A childbirth expert said two ruptures at a hospital within months was "unfortunate" but having a caesarean was not without risk.
Mrs Smith, 26, chose to have her second child by natural means with a midwife, and went into labour on her due date.
Middlemore Hospital's clinical director of women's health, Sarah Tout - who Mrs Smith permitted to discuss her file - said a Botany antenatal clinic had supported her decision to have a natural birth.
The mother was told this was a suitable choice and that she faced a 0.5 per cent risk of rupture.
She was referred to Middlemore for a caesarean because the baby had failed to progress.
Dr Tout said that while Mrs Smith was waiting for her operation, the baby's heart rate deteriorated and she turned into a breach position. The caesarean was upgraded to an urgent case.
Ms Smith said that at this point she begun to experience severe pain.
"I blacked out a little bit because it was so unbearable. When she turned herself into breach [position], I had this feeling of excruciating pain, and I just remember screaming my head off."
Dr Tout said it became clear to the obstetrician that a scar had ruptured.
Ms Smith: "I went under general anaesthetic. They opened me up and they told me Bella wasn't in my uterus, she had come out. They tried for 20 minutes to resuscitate her but to no avail."
A full clinical investigation is now being made.
"We are now looking into our systems and processes to see if any improvements can be made for similar cases in the future," Dr Tout said.
The family would be told the result of the investigation once it was completed.
Mrs Smith was eventually satisfied with the doctors' explanation of the death, but she was upset that another mother, Ms Rapana, also lost her child so soon after Bella died.
Auckland Hospital obstetrician and gynaecologist Michelle Wise said she could not comment on the individual cases, but two scar ruptures at a hospital within four months was "unfortunate".
She said three to eight of every 1000 women who elected to try for a natural birth after previously having had a caesarean suffered a scar rupture.
"It is a terrible outcome but it is going to happen. The way we counsel women at our clinic, we provide them with the risks of having a caesarean or a trial of labour, and then we support their choice."
She said 6 per cent of women who had a scar rupture lost their baby.
A rupture could lead to the baby being starved of oxygen.
This week, an international study led by the University of Adelaide showed that women who have had a caesarean could reduce the risk of complications in their next birth by having another caesarean.
A separate study from 2010 found that the risk of rupture was increased if the interval between pregnancies was less than 18 months. In Mrs Smith's case, her first and second child were delivered nearly three years apart.
Mrs Smith said she was determined to have a second child, and was investigating the possibility of using a surrogate mother.
