The Court of Appeal has found that a Wellington property developer was within his rights not to settle on the purchase of the former Napier hospital site from the Crown Health Financing Agency.
In August 2006, Eyal Aharoni's company, Napier Heights Holdings, agreed to pay $20 million for the hospital buildings and land.
When it failed to make a final settlement by May last year, the Financing Agency filed court proceedings.
The company responded by cancelling the purchase agreement, arguing that documents from the Office of Treaty Settlements showed the property was valued at well under $20 million.
The court said on the basis of that evidence, it would be difficult for the Crown to resist a claim of misrepresentation.
It ordered the Crown to pay the appeal costs.