Franz Josef floods: Hotel claim settled out of court

A $30 million claim against the West Coast Regional Council by insurers for Scenic Hotel Group following a flash flood that ruined its Franz Josef hotel has been settled out of court.

In April 2016, floodwater from the Waiho (Waiau) River poured through the Mueller Wing, the staff quarters of the former THC Hotel, via a stopbank immediately behind the site. 

Westland District Council was named as second defendant in the insurer's claim.

The regional council's 2021-22 annual report said the $30 million claim was denied and would be defended with the backing of its public liability insurer.

Chairman Peter Haddock on Wednesday confirmed that a settlement had been reached during mediation last week.

"It has been settled. It's a confidential settlement, but that's between Westland District Council, WCRC and Scenic Group."

Cr Haddock said he had not been made party to the amount, 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, saying 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.

"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 regarding Scenic Circle's refusal to give approval as an affected party for $12.5 million of rockwork on the north bank of the Waiho would also hopefully now move forward, Mrs 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 via a spokesman 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."

- By Brendon McMahon
Local democracy reporter

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