Mrs Holmstrom said while getting pregnant had been a struggle, the pregnancy had been healthy.
In March 2013, at 40 weeks and four days overdue, she was admitted to Wairarapa Hospital at 11.15pm, after starting contractions.
Ms Johnson had noted the baby's heart rate was abnormal at 165bpm but there were no other abnormal features. After 12am the baby's heart rate decreased but rose again.
She told the commissioner: "My interpretation was the trace was abnormal, but there was reassuring variability ..."
At 12.45, Ms Johnson had given Mrs Holmstrom drugs to help her sleep. Shortly after, the baby's heart rate was 60bpm.
Minutes later, there was no heart beat and she called an obstetrician, who arrived at 1.15am and performed a Caesarean at 1.55am. The baby was born floppy, not breathing and couldn't be resuscitated after 45 minutes of CPR.
A post-mortem report said thick meconium - a baby's first faeces - had been present for at least a few hours and her oxygen supply had decreased.
Mrs Holmstrom believed Ms Johnson should have spotted her baby's distress through the CTG. "Her lungs were full of it [meconium]. She couldn't really breathe," she said.
Mr Hill's expert adviser, midwife Mary Wood, said the trace suggested "severe fetal compromise" and the midwife should have called the obstetrician no later than midnight. She said it was unusual and difficult to interpret but Ms Johnson should have identified other abnormal features such as "lack of accelerations, shallow decelerations, and a persistent high baseline".
She couldn't say whether the outcome would have been different if the baby was delivered earlier, as there was no way to know how long she had been compromised. "The CTG and the autopsy result would both suggest that the baby had been compromised for a considerable length of time." She said a delay in delivery was also inevitable because staff were on call.
Mr Hill recommended the midwife apologise and get further CTG interpretation training.
Ms Johnson declined to comment, but her lawyer, Carla Humphrey, said she had completed more training before the recommendation was made.
"This has been devastating for everybody, including Ms Johnson."
Ms Johnson was still a registered midwife, with a condition to practise under supervision.
Midwifery Council CEO and registrar Sharron Cole said the council carried out its own disciplinary process, "a long time" before an HDC decision was released. "Our first and foremost role is to protect the public if there is a competence issue."
She said a formal review could result in suspension, more training or to practise under supervision - this was not "a wet bus ticket".
"It's actually very serious. The midwife has to take all her case files and meet regularly with her supervisor."
Mrs Holmstrom went to Wellington Hospital for the birth of her second child.
"We now have a healthy little boy, Archie, who is a year old. He's a blessing."