Building product company faces criminal charges over alleged product misrepresentations

New Zealand's consumer watchdog has criminally charged a building materials company and its director over alleged misrepresentations for a product which an expert says "poisoned" concrete.

Global Fibre8 Limited (GF8) and its sole director Tangi Tuake appeared briefly this morning in the Auckland District Court after the Commerce Commission filed eight representative charges against the building product company and its sole shareholder.

The charges were laid under the Fair Trading Act over various representations made between July 2015 and August 2018 about K3T, a wall panel system, the Commission said in a statement to the Herald.

The Commission alleges GF8 and Tuake claimed a CodeMark certificate issued for K3T in July 2015 certified the compliance of K3T with the New Zealand Building Code, when it did not.

The CodeMark certificate only certified the compliance of K3T with the Building Code of Australia, the Commission said.

The watchdog alleges at no time did GF8 have New Zealand CodeMark certification.

The CodeMark scheme is a voluntary product certification scheme under which products may be certified as meeting the requirements of the New Zealand Building Code or the Building Code of Australia.

It is further alleged GF8 and Tuake made representations on the company's website that the K3T product "has received certification under the CodeMark scheme" and that "means a guaranteed acceptance by the regulatory bodies".

GF8 and Tuake are also accused of orally making similar representations to licensed sellers and installers of K3T.

A July 2015 letter to K3T sellers allegedly stated: "You won't need to convince your clients with any technical reports."

And the Commission claimed Tuake also said in a series of 1 News stories in May 2018, "yes it does meet the New Zealand Building Code".

Both GF8, an Auckland-based company, and Tuake will appear in court again next month.

The criminal prosecution follows a High Court civil judgment last year which ordered Global Fibre8 to pay $84,464 in damages to a Northland couple building their "dream home".

In 2015, Randolph Urlich and his wife Karen were planning to build the house on the Karikari Peninsula when GF8 sold them a new pre-fabricated K3T wall panel system.

The company also designed plans and specifications for its installation.

However, the product, the plans and the specifications were defective, Justice Matthew Palmer's publicly available judgment reads.

The Urlichs brought court proceedings against several parties, including the Far North District Council and the home's builder, with all settling except GF8.

Tuake had taken the couple on a factory tour, promoting K3T, which was launched in August 2015, the judgment reads.

He told the Urlichs K3T had a Codemark Certificate of Conformity from the Joint Accredited System of Australia and New Zealand, which it did.

However, he also told them this meant K3T was a tested and approved building material in New Zealand, which it was not, the judgment said.

Tuake further told the Urlichs that K3T did not burn, did not absorb water and could hold a screw with a 50kg weight, the ruling read.

GF8's website was also quoted in the High Court documents and stated K3T's "key features" are that it is resistant to fire, moisture, earthquakes, termites, cyclone and harsh weather.

The Urlichs agreed to purchase K3T from GF8, while the Far North District Council granted a building consent.

But after work on the home began the Urlichs started to notice cracking in the K3T, the judgment reads.

An expert building surveyor also gave evidence for Justice Palmer and said the concrete structure had been "poisoned" by chlorides in the K3T panels.

In an interview with 1 News in May 2018, Tuake claimed K3T does not expand or contract and can hold the pressure of 95 tonnes, the judgment said.

The Urlichs obtained a new building consent and engaged another builder to rebuild the house, which they said had caused them "extreme financial and emotional stress".