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James Hardie leaking buildings case starts

NZ Newswire logoNZ Newswire 21/11/2016 Sean Martin

Building owners taking part in a $250 million cladding class action against James Hardie have packed the courtroom gallery for the start of interlocutory applications in the High Court at Auckland.

The action involves 1,100 Auckland leaky building owners, backed by litigation funders, who are making negligence claims against various James Hardie group companies for failure of fibre cement cladding products.

The case relates to buildings spanning the time period 1983 to 2010 and all but four of them are residential properties.

The plaintiffs allege they have suffered financial losses and significant health issues arising from the use of non-performing cladding materials marketed as Harditex, Monotek, and Titan board.

Last month the High Court ruled that 15 new plaintiffs could join the action, a decision opposed by James Hardie.

The three legs of the plaintiffs' claim are that there was negligence in the design, development, manufacture, and promotion of the cladding products, that they should have been withdrawn when the company realised there were problems, and that there were breaches of the Consumer Guarantees Act and the Fair Trading Act.

Lawyers representing the James Hardie group of companies are seeking to have two of the seven defendant companies removed from the claim under a summary judgment application because they were simply holding companies in New Zealand and Australia, with shares in the operational units.

Mark O'Brien QC, representing the plaintiffs, said the holding companies owed a "duty of care" to the plaintiffs because Harditex, which is the product involved in most of the claims, was designed and developed by the James Hardie group, not just the New Zealand subsidiaries. The New Zealand company shared common directors with the Australian parents, and still do.

"They owed a direct duty of care, they breached it, and should make good," he said.

Mr O'Brien told the High Court that the issues facing the leaky building owners were not isolated. In October, owners of leaky buildings in Wellington were given High Court permission to pursue a $25 million representative action against the building materials firm.

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