The health district’s case against Munters returns to court next week after Justice Stephen Campbell agreed that one of the world’s leading mould and fungi experts could give evidence about the impact on 30 staff of a mould infestation in more than a million medical files after a 2008 flood incident.

The case was launched after the health district engaged Swedish-based Munters to restore the files that were damaged after overhead sprinklers at a Cardiff storage facility flooded the archives and the paper files became mouldy.

Munters was engaged in a period when 30 health staff walked off the job in November, 2008 following attempts by Hunter New England Health to manually clean and preserve the files before they could be scanned and reduced to computerised form.

The Health Services Union supported staff in an Industrial Relations Commission case in 2009 after they reported skin rashes and breathing problems during the health district’s attempts to restore the files.

In January, 2010 staff refused to work at the Cardiff site after reports of continuing health problems while working at the facility. The then Health Services Union spokesman said testing at the facility showed mould spore levels 100-times higher than the previous year.

In its Supreme Court case Hunter New England Health alleges damages of nearly $12 million for the cost of remedial work linked to Munters’ involvement with the clean-up.

“The case, briefly, is that that work was done by the defendant (Munters) negligently, that the records became affected by mould and that the mould spread throughout the plaintiff’s archives and adversely affected the health of its employees such that further remediation was required,” Justice Campbell said.

“The records had to be moved and many if not all of them had to be reduced to computerised form.”

In a statement to the Newcastle Herald on Thursday Munters managing director for business area air treatment Won-Hee Lee said the company was involved in recovery proceedings brought by Hunter New England Health’s insurers and the matter was being “vigorously defended”.

Justice Campbell agreed that Manchester University medical mycologist (studying fungi and mould) Dr Malcolm Richardson could give evidence on the effect of the mould spores on human health, over objections by Munters.

Part of the case related to the mould spores adversely affecting health district employees “and this was an important factor in the need to undertake the remediation work”, Justice Campbell said.

Dr Richardson is director of the mycology reference centre attached to the University of Manchester, England. He is a consultant to the European Food Safety Authority, World Health Authority and is president of the International Society for Human and Animal Mycology.

The matter returns to court on Thursday for a directions hearing.