Litigation has partially succeeded against building materials manufacturer and supplier James Hardie over allegations of weathertightness issues with its products.
Justice Mary Peters in the High Court at Auckland released a decision yesterday in the case heard last November for interlocutory or interim applications.
The case was brought by 365 plaintiffs with 1075 residential dwellings, units or buildings worth more than $200 million and five retirement village businesses of NZX-listed Metlifecare with properties at Te Rapa, Waitakere, Dannemora, Green Bay in west Auckland and Paraparaumu north of Wellington.
James Hardie's Harditex, Monotek and Titan were installed at the properties, built between 1983 and 2010, although the vast majority of the claims are between 1994 and 2003, the judge said. Harditex was withdrawn from the New Zealand market on July 1, 2005, she said.
The seven defendants are James Hardie New Zealand, Studorp, James Hardie NZ Holdings, RCI Holdings, James Hardie Australia, James Hardie Research and James Hardie Industries.
Three of the seven defendants argued there was no case against them but the judge ruled that two - RCI and James Hardie NZ Holdings - must remain in the action. ASX-listed James Hardie Industries also remains if the plaintiffs amend their claim, the judge decided.
Of the various causes of action, the judge said two could go ahead if they were amended by the plaintiffs and Adina Thorn, a lawyer acting for the owners, said that decision was "an encouraging first step".
The judge outlined the case.
"The proceedings concern products and cladding systems manufactured and supplied by a company or companies within the group. The products are James Hardie Harditex, James Hardie Monotek and James Hardie Titan board. All are or were made of fibre cement and are or were used for exterior cladding," the judge said.
"The plaintiffs allege that they are the present or prior owners of houses or buildings clad with one or other of the products and that the products were defective, not weathertight and failed to comply with prevailing building standards. They allege that resulting moisture ingress has caused damage and loss and that as a result they have incurred various losses including costs of repair, replacement, diminution in value and loss of amenity, as well as emotional harm and distress," she wrote.
James Hardie started in New Zealand in 1937 and Studorp sold its fibre cement business and manufacturing operations to James Hardie in 1998, she said.
The actions brought against the defendants were a breach of duty of care, breach of duty to warn or inform or withdraw the products, negligent misstatement and actions brought under the Consumer Guarantees Act and Fair Trading Act.
"The plaintiffs allege that the defendants knew, or ought to have known, from the early 1990s onwards that the products would be deficient and that on learning of these matters the defendants owed and breached a duty to warn, inform and/or to take reasonable steps to withdraw the products," the decision said.
"The plaintiffs allege that in promoting the products, the defendants owed a duty of care to ensure that statements they made or caused to be made concerning the products were true and complete. The plaintiffs allege the defendants breached this duty by making or authorising the JH statements, which the plaintiffs contend were inaccurate," she wrote.
The judge said the defence from James Hardie NZ and RCI was that "they did not manufacture or supply or promote the products, they did not make or authorise the James Hardie statements, and the companies that did - Studorp and JHNZ - were not their agents".
"JHNZH and RCIH submitted that they are not manufacturers for the purposes of the Consumer Guarantees Act and did not engage in the misleading or deceptive conduct alleged or make any representation falling within the Fair Trading Act," the judge wrote.
She ruled that the second and fifth causes of action could proceed if they were amended.
Read the full decision here: