Leaky homes lawsuit: Top bosses in global company knew of NZ rotten homes problems, homeowners say

Bosses at global company James Hardie knew their products could face damaging public revelations in New Zealand, a leaky homeowners’ group lawyer says.

The James Hardie group of companies denies claims which hundreds of homeowners have advanced in a $220 million class action.

And today, the companies’ lawyer said James Hardie was being unfairly blamed for systemic failures and targeted for its deep pockets.

At the High Court in Auckland, James Hardie was also accused of disingenuously blaming Kiwi builders for problems with the Harditex cladding.

Stephen Hunter QC said James Hardie now wanted to suggest its global leadership had little or nothing to do with concerns about the cladding.

But Hunter, representing homeowners, said internal company documents from the early 2000s showed otherwise.

He said one document warned the first legal claim could lead to “highly damaging” public disclosure portraying the company as negligent.

Hunter said James Hardie was trying to compare itself to Facebook, suggesting the social media giant wouldn’t send chairman Mark Zuckerberg to investigate details of New Zealand operations.

The lawyer said James Hardie global bosses had basically argued: “Why would we concern ourselves with New Zealand? New Zealand is a little portion of our broader operation.”

But Hunter said the same executives had wanted to exercise de facto management over the developing weathertightness issues in New Zealand.

The people suing James Hardie are pursuing multiple entities including James Hardie Industries PLC, the group parent company, now domiciled in Ireland.

Hunter and his colleague Simon Hughes QC have told the court James Hardie had tried blaming New Zealand builders for the leaky homes crisis.

Hunter said the company had suggested the country was “rife with incompetent builders”.

But he said earlier company documents showed the company felt New Zealand could function as a test market, in part thanks to its high-quality builders.

The class action claims Harditex is to blame for expensive, unhealthy problems including damp, mould and rot.

For the James Hardie entities, Jack Hodder QC said the evidence showed only a dozen or so properties were badly built.

That was a tiny portion of the roughly 100,000 buildings using relevant James Hardie products, he said.

“It is understandable that people who have suffered from leaky buildings have suffered various kinds of distress and loss,” Hodder said.

But the case was about who or what was responsible for that loss, he said.

Hodder said Harditex was introduced after appropriately-designed and best practice testing.

“Properly installed, Harditex both drains and dries well.”

And he said independent research organisation Branz approved the use of Harditex.

Hodder told Justice Christian Whata the case was complicated and would involve 80 witnesses and tens of thousands of pages of documents.

The lawsuit traversed issues across the post-asbestos era into the epoch of fibre cement-based products.

He said in the 1980s and most of the 1990s, the general trend was for deregulation in building.

But as concern about the leaky building crisis developed in the late 1990s, a trend towards “re-regulation” gathered pace, he said.

He said the leaky building problem was not unique to New Zealand, and the court would hear of similar problems afflicting British Columbia.

He said the Canadian province rectified issues with leaky condominiums by mandating the use of cavities.

Hodder said James Hardie was targeted because nobody else had “deep pockets”, and was being blamed for systemic failures in New Zealand.

That campaign of blame would be resisted, he added.

Some people relevant to the lawsuit were now dead, and others would have trouble remembering details.

But Hodder added: “What there is, is sufficient to show that James Hardie New Zealand was at all times an engaged and responsible manufacturer.”

Harditex was withdrawn from the market in 2005.

The hearing continues and is expected to last until at least late September.

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