Adjudication determination Lund vs Clutha District Council- please note this version contains redactions made by Lund South Ltd.
Media statement from Mayor Bryan Cadogan:
Council acknowledges the adjudicator’s decision has now been released by Mr Lund.
Council always intended to be transparent about this process when legal circumstances allowed.
The legal advice we were receiving at the time portrayed a strong position for Council, and it should also be remembered that Lund South Ltd’s claim was for more than $7million dollars.
It would have been irresponsible to our ratepayers for Council not to proceed to adjudication, rather than simply accepting the claim.
As a consequence, the case went to adjudication and Council ended up paying Lund South Ltd $1.9million. Even taking into account our legal costs, this is significantly less than $7million.
Based on legal advice again, Council elected to spend no further money disputing this decision. With a decision such as this, your options to dispute it are limited and can be fraught with danger, such as further additional payments to Lund South Ltd up to the claimed $7million.
The adjudicator’s decision was clear cut and Council had a considerable amount to lose with an unknown chance of success, if we had continued to pursue any action.
It was the responsible stance to take considering the circumstances and throughout it all, Council was acutely aware of trying to do the best for the ratepayers.
Council said the swimming pool project dates back a number of years and in previous statements we have acknowledged the project should never have happened this way.
I reiterate my frustration that a project from so many years ago now comes back to haunt us and is rightfully a concern for all ratepayers.
The determination highlighted deficiencies that needed to be addressed and all possible measures are now in place, such as an audit and risk committee with an independent chair and major project supervisory groups, to ensure this can't happen again.