12 Aug 2021

Leaky home owners lose case against James Hardie

11:54 am on 12 August 2021

Another group of leaky home owners have failed in their bid to sue the cladding giant James Hardie.

18072016 Photo: Rebekah Parsons-King. Wellington High Court.

Photo: RNZ / Rebekah Parsons-King

In a 275-page written judgment released this morning, the High Court ruled the plaintiffs failed to prove the company's product Harditex had caused their properties' weathertightness problems, which included rotting frames, widespread mould and stained and lumpy walls.

The judge said bad building practices were more likely to blame.

The first Harditex claim was brought in 2016 by Wellingtonians Tracey Cridge and Mark Unwin, who were horrified to learn what appeared to be a small leak at their Island Bay home had caused more than $300,000 worth of water damage.

The other two "lead" plaintiffs were Katrina Fowler and Scott Woodhead, who owned adjacent units in a Karori duplex.

In total, 144 owners of 151 properties joined the case, alleging the fibre cement wall cladding Harditex was poorly designed and susceptible to rot.

Furthermore, they claimed James Hardie gave misleading or inadequate instructions in how to use the product, which in any event they said was too difficult for the average builder to properly install.

Harditex, which was manufactured and sold between 1987 and 2005, was used in thousands of properties throughout New Zealand.

It was also contended that by the year 2000 James Hardie knew or ought to have known the product had flaws, but failed to warn the public.

The plaintiff's lawyers produced internal James Hardie documents collated in 1996 concerning tests at a site in Queensland, which showed an uncoated Harditex sheet lost half its cellulose content in seven years.

They also cited patents held in the United States by James Hardie, which outlined the product's vulnerability to water damage, contradicting James Hardie's case position.

James Hardie denied the plaintiff's claims, saying the cladding was "a relatively minor development" in a decades-long system of sheet cladding generally, and fibre-cement cladding particularly, with which competent builders were very familiar.

After considering more than 10,000 pages of written briefs and more than 600 notes of the oral evidence, Justice Simon France sided with the company and found the homeowners case had "failed in its entirety".

"Witnesses of international standing" had established Harditex was not an innovative (and largely untested) product - but "just another example of sheet cladding" and "in general a reasonably competent builder could and did use Harditex to build a sound waterproof house".

Fundamental building errors and non-compliance with James Hardie's instructions were more likely to have caused the weathertightness problems, the judge concluded.

"Analysis of the plaintiffs' houses, including six houses from the wider claim group, has revealed a disturbing pattern of incompetent building and poor texture coating that is more likely, in my view, to be the cause of the damage suffered by these properties."

Justice France said while James Hardie's statements in the patents were "at odds" with its present case, they were just statements not evidence - and he was convinced by the evidence presented.

On the matter of the Queensland test results, he noted the test involving leaving an uncoated sheet of Harditex exposed in "one of the hottest, wettest places" in Australia for seven years.

"But the question remains - of what relevance is that outcome to the use of a coated Harditex sheet on a house in New Zealand?"

This question needed evidence from an expert witness able to explain its significance "but none was proferred".

The judge also criticised some of the expert witnesses for the homeowners.

"Some of the plaintiff expert witnesses were not , in my view, reliable, and others strayed outside their area of expertise.

"This significantly reduced the weight that could be given to their evidence, and weakened the plaintiffs' case."

However, the expert evidence provided by James Hardie "from a collection of witnesses of clear standing in their field" was sufficiently strong to disprove the claims, he said.

He left it to the parties to file for costs.

James Hardie ANZ country manager John Arneil said the company is happy with the outcome and "believe the result supports our continued belief that the allegations lacked merit and we behaved as a responsible manufacturer".

He said the company remains "very sympathetic" to homeowners negatively impacted by weathertightness issues.

Earlier this month another class action against James Hardie involving more than 1000 homeowners was settled half-way through the trial after the London-based litigation company pulled its funding.

The plaintiffs in the case known as the White Litigation had been seeking $220 million in damages but walked away with nothing.

James Hardie was paid $1.25 million dollars by Harbour Litigation Funding "in full and final settlement of all claims arising directly or indirectly out of the White litigation in relation to the Harditex cladding product".

A third class action (known as the Waitākere litigation) is due to be heard in May 2023.

A separate class action by homeowners against Carter Holt Harvey for allegedly defective cladding products, which was also funded by Harbour, has also been aborted.

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