Leaky home owners seek $220 million in damages from James Hardie

Thursday, 6 May 2021

The nightmare of leaky, rotting houses first emerged in the 1990s. It's cost homeowners billions of dollars. (First published September 2020)

A class action lawsuit by leaky home owners against Australian building materials group of companies James Hardie will begin on May 17.

Collectively the homeowners are seeking about $220 million of damages from James Hardie over leaks in 376 buildings.

They claim James Hardie’s Harditex cladding system is defective, which the group denies.

Lawyer Adina Thorn said the trial, which comes just over six years after homeowners filed their statement of claim, was expected to last about 15 weeks.

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Thorn, who has been managing the funded class action, said the High Court had split the action into two stages.

The first stage would be focussed on whether Harditex was defective, while the second stage would be to determine losses for homeowners, assuming they proved James Hardie’s product was defective.

The owners alleged James Hardie knew, or ought to have known, its system failed, but kept manufacturing and supplying it, said Thorn.

They would also argue that James Hardie had a legal duty to warn or inform homeowners about faults with its product, Thorn said.

James Hardie has been contacted for comment.

“The homeowners filed the claim in December 2015, and it has been a hard road,” Thorn said.

“There have been appeals and various arguments along the way. We’ve been dealing with a well-resourced set of defendants. It has not been easy,” she said.

The homeowners were funding their claim through Harbour Litigation Funding, a specialist legal lender based in London.

Peter Dyer, author of Rottenomics, estimated that the leaky building crisis may have cost the country a combined $47 billion in repairs, remediations and rebuilds.

Litigation lenders, including ones based in New Zealand, have played a big part in the rise of class action lawsuits.

“Without a litigation funder this claim would not have been possible,” Thorn said.

The case would involve a large number of international experts including building and cladding experts, architects, and mould experts, she said.

“We have served briefs of evidence for 40 witnesses, totalling over 1500 pages.”

Not all the leaky building owners involved with the case have lived to see their day in court, Thorn said.

“Since filing the claim, some have become very sick, some have passed away, and we are working with the estates,” she said.

The leaky building crisis may have cost the country a combined $47 billion in repairs, remediations and rebuilds, according to a 2019 book, Rottenomics, by journalist Peter Dyer, with major cities still containing leaky buildings.

“Some of our owners are still residing in leaky homes that they cannot afford to repair,” said Thorn.

Before Dyer’s estimate, the previous estimate of $11.2b to $22.9b to fix all leaky homes was made by PWC in 2009.

Dyer blamed both Labour and National for the debacle because both parties had governed from 1987 to the late 2000s, during which de-regulation resulted in untested building products and techniques flooding the market.