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Brendon McMahon/LDR
The Scenic Hotel Group’s Mueller Wing surrounded by floodwaters after the Waiho River broke through a stopbank immediately behind the site in April 2016.
A $30 million claim against the West Coast Regional Council by the insurers for the Scenic Hotel Group following a flash flood that ruined its former Franz Josef hotel, has been settled out of court.
It followed flooding down the Waiho (Waiau) River in April 2016 which poured through the Mueller Wing, staff quarters, of the former THC Hotel.
Westland District Council was named as second defendant in the insurer’s claim.
The regional council’s 2021-22 annual report said the $30m claim was denied and would be defended with the backing of its public liability insurer.
Chairperson Peter Haddock on Wednesday confirmed that settlement had been reached during mediation last week.
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“It has been settled. It’s a confidential settlement, but that’s between Westland District Council, WCRC and Scenic Group.”
Haddock said he had not been made party to the figures of the settlement but it was possible the sum the council’s insurers had agreed would eventually be disclosed on the balance sheet.
The fact the case was settled was positive for everyone, and particularly for the Franz Josef community, which needed to move ahead in securing its future with flood protection, he said.
Westland mayor Helen Lash also welcomed the settlement and said that hopefully the aspirations and hopes for Franz could now confidently move ahead.
“It’s been a very long road, very trying,” she said of the dispute.
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The Mueller Wing has been left boarded up since the 2016 flood although Scenic Group announced in March it was committed to plans for a $50m rebuild.
“It means hopefully we can now move forward. This will hopefully enable both the regional council and ourselves to continue to do what we can to develop and protect what we can for Franz Josef.”
A separate issue around Scenic Circle’s refusal to give approval as an affected party, for the $12.5m of rockwork on the north bank of the Waiho, would also hopefully now move forward, Lash said.
“I frankly believe the reason for (Scenic Circle) not granting approval as an affected party was to do with the court action.
“It’s been bloody tough on the people in Franz because they have been stuck between a rock and a hard place. What’s been has been. Let’s move on collaboratively and do some good stuff.”
Scenic Group has been approached about the settlement but indicated through a spokesperson that it “has no comment at this time”.
West Coast Regional Council chief executive Heather Mabin said the terms of the settlement were bound by a confidentiality agreement: “I don’t think the detail of the agreement will be ever disclosed as to what the insurer agreed on.”
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