An Auckland urban authority has failed to convince the courts that the Crown was wrong to axe a valuable welfare contract.
Funding for Te Whanau O Waipareira Trust to run a programme for at-risk families was taken away by the Ministry of Social Development.
The case went to the High Court, where a judge has ruled the ministry was right to pull the $1.5 million contract.
The trust was told it ran the worst Family Start scheme in the country - and that it had to make improvements or lose the contract.
The ministry said Waipareira Trust under-delivered - and the Crown was paying for services that weren't being delivered - and it noted there was a lack of staff and supervision
The court heard some families had not had the required number of visits from social workers.
The court rejected the trust's suggestion that a Crown agent assessing the contract only chose to review case files that would reflect badly on the trust
The court found no evidence to suggest the ministry acted in bad faith by axing the contract.
The lost funding was equivalent to a third of the total amount of money that the trust received from the ministry each year to deliver services.