Media release from Healthscope Limited

Healthscope Limited owned Labtests has won its appeal to overturn a High Court
ruling invalidating its $560 million eight-year contract to provide community pathology
services to Auckland.
In April 2007, Labtests lodged the appeal seeking to have the decision overturned
and the $560 million Labtests contract reinstated citing 'serious errors' in the High
Court judgment.
In a decision just released, the Court of Appeal has quashed the findings of Justice
Raynor Asher and ruled in favour of Labtests on all counts finding that:
• The Labtests contract should be reinstated
• There was no improper use of inside information by Dr Bierre, nor was DML
at an informational disadvantage when compared to Dr Bierre
• Dr Tony Bierre acted appropriately once his conflict of interest in respect of
the DHB's Request for Proposal (RFP577) arose
• The consultation undertaken by the DHB's was adequate
Healthscope Managing Director, Bruce Dixon welcomed the Appeal Court decision
saying Healthscope was selected to provide Auckland's community pathology
services based on its significant international experience and commitment to invest in
a world-class service that would be more responsive, transparent and accountable to
the region it serves.
Mr Dixon said Healthscope remained strongly committed to the contract and made a
significant investment in the infrastructure required to meet its obligations under that
contract. "We are ready to serve the users of this vital service in Auckland and look
forward to entering into the transition arrangements with DML as soon as
practicable."
"We have a world-class facility at Mt Wellington and can also draw on the significant
resources and expertise of our Southern Community Laboratories staff and
operations."
He said following today's decision Healthscope has started discussions with the
DHB's on the transition arrangements for the implementation of the contract.
Healthscope is the 100% owner of Labtests. Healthscope is now New Zealand's
second largest private pathology provider following its successful acquisition in
December of New Zealand Diagnostics Group Limited (NZDG).
The Groups' 11 Southern Community Laboratories around the country have longterm
contracts to provide community and hospital pathology to the Otago-
Southland, Canterbury, Hawke's Bay and Lakes District Health Boards.
Healthscope also runs Northland Pathology Laboratory Limited providing
community pathology services to the Northland region.