I’ve slogged through the voluminous affidavits and exhibits generated by the legal action brought against former Health Minister David Cunliffe by the five councils of the region on behalf of the sacked HB District Health Board.

As you know, the new Minister, Tony Ryall, reinstated the “sacked seven,” adding them to a Governance Board chaired by Sir John Anderson, and including his original three fellow commissioners.

Why bother digging through this rapidly aging documentary history?

Two reasons …

First, the reputations of seven people, who had just been affirmed by Hawke’s Bay voters, were sullied. The lawsuit was intended in part to set the record straight. And, at least to my reading, the documents establish convincingly that Cunliffe’s action was indefensible.

Second, the entire episode raises fundamental questions of proper accountability for health care at the local level, as discussed in our page one article. What exactly is the mandate of elected health boards and to whom are they accountable?

He said, she said

In his affidavit, David Cunliffe claimed he dismissed the elected Health Board for three reasons:

1. A dysfunctional relationship had developed between the Board and DHB’s senior management, especially its CEO Chris Clarke. This relationship had soured to the point where, Cunliffe said, it threatened to undermine the delivery of health care to the people of the region.

2. The financial stewardship of the Board was failing. The DHB’s financial condition was worsening and the Board appeared unable to rectify the situation.

3. The Board offended Mr. Cunliffe by being publicly critical of the Government’s handling of health issues, including specific matters affecting the HBDHB, despite his admonitions against public displays of dissent. In effect, he considered the Board guilty of insubordination.

Mind you, Cunliffe reached these conclusions after (subtracting his holiday leave) serving in his health post for a scant seventy days, during which time he never met with any of the elected Board members. Instead, he reviewed written criticisms from a Government-appointed Board member, Peter Hausmann, himself under investigation for an alleged conflict of interest, who provided in turn a critique of the Board written by CEO Clarke … neither of whose charges were given at the time to the Board for refutation.

Nevertheless, taking these three reasons in order …

Dysfunctional relationship

What seems clear from the documents is that CEO Clarke (within a year of being hired in 2003, he says himself) was becoming steadily more uncomfortable with what he regarded as a meddlesome Board – too demanding, too intrusive, too critical. By 2006 he called the situation increasingly tense. By the second half of 2007, really bad.

In September 2007 Clarke retained a senior consultant, John Newland, to advise on the reporting and managerial issues he was facing. At one point, when Newland orally reported to Clarke critically about his operation, the CEO instructed him not to render his observations in a written report. Said Newland in his affidavit: “I was appalled with the performance and style of management at the HBDHB. There was no leadership from the Chief Executive and no control being exercised over the management.”

For its part, the Board was becoming dissatisfied with Clarke’s performance, raising issues in performance reviews, and seeking the counsel of an employment lawyer in August 2007. Additionally, by mid-2007 the issue of alleged conflicts of interest regarding two DHB contracts involving appointed Board member Peter Hausmann was in full bloom. Clarke’s handling of these contracts further eroded Board confidence. As did evidence of communications between the CEO and the health ministry seeking to counter Board decisions.

What emerges from the documents is the picture of a disgruntled CEO, facing a dubious future, deciding that the best defence was a counter-offence … actively undermining the Board.

Cunliffe asserts that, considering the Board/management situation, it was the dysfunctionality that mattered, and since by law he couldn’t have fired the CEO (only the Board can do that), the only option for eliminating the dysfunctionality was to fire the Board! How disingenuous?!

Standing against the actions and judgment of an experienced (and elected) Board were the actions and judgment of their hired CEO, someone with more experience as a staffer than as a line manager with bottom-line responsibility for a large enterprise. Reading the documentation of both sides, to me it should have been a no-brainer … back the Board.

But in fact, far from his feigned impartiality, Cunliffe had a rather derogatory opinion of the elected Board he had never met, terming them, under protection of Parliamentary privilege: “…. a nasty little nest of self-perpetuating, provincial elites who have been propping each other up, and, either through ignorance or malpractice, slipping each other cosy contracts without proper governance protections and doing it time and time again.”

Financial stewardship

Cunliffe asserted there were additional factors that dissuaded him from continuing the Board. He states: “While I had no reason to be concerned at the quality of clinical services delivery, it was clear that the deteriorating finances of the Board would impact upon the sustainability of those services in the relatively near future.”

In his affidavits and exhibits, Kevin Atkinson produces a robust counter to this charge, effectively reducing it to rubbish.

I don’t have the space here to detail the full picture, but the highlights include:

* approval of and complimentary comments on the DHB’s financial plans and management as late as July 2007 from Cunliffe’s immediate predecessor as Health Minister (Pete Hodgson);
* four prior years of budget performance within 1% of ministry targets;
* a deliberately conservative approach to revenue accrual and reporting;
* comparative fiscal performance easily on par with other DHBs;
* excellent service outcomes as measured quarterly against annual Statement of Intent benchmarks;
* one of only nine DHBs delivering surgical services at or greater than agreed levels; and so forth.

In fact, it should be noted that financial performance has not improved in the period of Commissioner Anderson’s oversight. The forces driving health expenditures turn out to be not so malleable after all.

Morover, having removed the Board, Cunliffe then proceeded to move (i.e., relax) the fiscal goalposts for the new Commissioner’s team – allocating more revenue to HBDHB and authorizing a $6.5 million deficit to be budgeted for the current 2008/09 financial year (he had insisted on the DHB budgeting for zero deficit in the year he was chastising the elected Board).

Perhaps today Cunliffe would agree with Kay McKelvie, who quit last month as chair of Waitemata DHB, the nation’s largest, saying: “Health boards are stuck between a rock and hard place. You have the choice of being fiscally responsible and disappointing people, or overspending and giving patients the kind of care they reasonably expect.”

One can only conclude that Cunliffe’s financial critique was an ungrounded smokescreen for a political act. What really bugged him?


Clearly, Cunliffe did not like his policies and decisions publicly criticised, especially by “provincial elites” (i.e. presumed National Party loyalists). He accused the Board – Kevin Atkinson in particular – of conducting PR efforts to discredit his (i.e. Labour’s) health policies, and of conspiring with National’s local MPs.

However, the evidence establishes that Cunliffe, for his part, would release his decisions to the media before his official communications reached the Board, with the result that Atkinson and others were approached on the blind by media for comment. On the other hand, if media attending open Health Board meetings reported comments made in the conduct of business, this was viewed as orchestrated efforts to embarrass the Government.

Sorry, even if the worst of Cunliffe’s complaints were true, elected health boards – in Hawke’s Bay or anywhere else in NZ – do not exist to be muzzled by the Health Minister. Their purpose is to provide a responsive vehicle for bringing local perspectives and concerns, including an on-the-ground reality check, to bear on the delivery of health services. Muzzle the health boards and you’ve eliminated any local accountability.

So, case closed. Cunliffe loses. As does Clarke. Hands down.

You’re invited to challenge my assessment … it’s just one man’s verdict after all. But I suggest you read the affidavits and legal briefs first! We have posted the key documents on the BayBuzz website at www.baybuzz.co.nz

Join the Conversation


  1. I couldn't understand why the Board (Employer) was sacked, when the CEO (Employee) did not perform well. If I don't perform in my job, I have to leave I can't just get new owners for the business I work for!

    The other thing, which really get's to me as a tax payer is (if I recall right) Mr Clark went to Cambridge – UK early this year or late last year (?) for some conference/training, which cost us tax payers a huge amount of money (probably enough for 2 – 3 hip replacements). And now he's left….do we get our money back. We won't be benefiting from this anymore.

  2. Hi Tom

    Whilst I applaud your efforts at encouraging public debate on our sorry saga ( I am one of the evil baddies supposedly!) I am disappointed at your obvious bias. For us to make a fully informed assessment we should see all of the affadavits. Having said that even a cursory glance at the summary of argument of the respondent's submissions should be enough to enlighten an open minded reader. I look forward to a considered debate over the local councils' decision to bring the proceeding – grounds for a judicial review of its own don't you think?!

  3. For the record, I read ALL of the material, from both sides of the argument, in forming my opinion — and my opinion is just my opinion — on the merits of this dispute. In other words, I looked at the evidence far more closely than the "cursory glance at the summary" that Dr Grayson thinks "should be enough." On that basis, my judgment is as presented in the article above — Minister Cunliffe proceeded unfairly and without merit. I've provided an ample selection of the court materials with which anyone can test my judgment, including all of the submissions of the major protagonists. If anyone would like to read more, they are welcome to contact the Court and request a CD.

  4. Tom, after reading your post and comment the only conclusion I can reach is that this is not about healthcare per se but politics ! Your point of view is anything but balanced – let me guess your are also a member of the Hawkes Bay old boys club ? After reading ALL the submissions (and David did not state he read only the the summary of arguement BTW) myself the only conclusion I can reach is that there are 2 sides to a story and having being involved myself and seeing the board operate I tend to sway towards the "other side" . Its quite clear that at least one of the affidavits is factually incorrect . This is disappointing in itself. It is unfortunate that provision of top quality healthcare took second spot on the list of priorities under the previous board. The damage has been done. Fortunately the comissioner allowed some sense of normality to be restored to governance in the DHB over the past 12 months. Hopefully this will continue in to the future and that healthcare will regain number one spot on the list of priorities in the future. Egos aside.

Leave a comment

Your email address will not be published.