Cladding manufacturer James Hardie is facing a leaky building lawsuit that could balloon into class action.
Leaky building law firm Parker & Associates announced today they have lodged High Court proceedings against the Australian-stock exchange listed cladding firm on behalf of Wellington leaky home owners Tracey Cridge and Mark Unwin.
"We called in experts to look at what we first thought was a little leak and then discovered widespread internal water damage in our home and now we are looking at repair costs of over $200,000," Cridge said.
The couple's Island Bay home used James Hardie's Harditex cladding and the lawsuit alleges the firm was negligent in designing, manufacturing and supplying that particular product.
A statement from Parker & Associates said a group is now being formed to bring a class action or a test case.
"Anyone whose property was built after 1990 using Harditex cladding and has suffered damage as a result of the alleged system defects, may be eligible to join the claim," says lawyer Dan Parker.
"Many homeowners will have no idea of potential problems with their properties and hidden damage without expert investigation," he said.
Leaky home owners have until December to join the claim.
James Hardie has been approached for comment and is understood to have previously denied any fault with the product, which was used in thousands of homes built in this country.
The law firm said since 2001 it had got recovery for hundreds of owners of houses, apartments and commercial building owners in leaky building cases.
The potential 'leaky home' class suit would be the second this year after Adina Thorn Lawyers launched one against plaster cladding manufacturers, and follows from a Court of Appeal ruling on the Ministry of Education's claim against Carter Holt Harvey that claims against cladding manufacturers wasn't subject to a 10-year limitation under the Building Act.
James Hardie has been involved in a number of leaky building cases in New Zealand, and as at March 31, held a US$2 million provision, net of third-party recoveries, against potential weather-tightness claims, and flagged it could face an extra US$500,000 of losses due to the uncertainties over the claims.
It reported a US$4.3 million income benefit on its weather-tightness claims in the 2015 financial year due to a lower provision, increased rate of claim resolution, fewer claims at the end of the period, and a reduction in the number of claims received.
The building materials maker was initially named as a defendant by the education ministry in its suit against cladding manufacturers, and later reached a deal with the government agency, which the parties said would support the remediation of weather-tightness issues in existing school property and support future developments across the country.
- Additional reporting: BusinessDesk