James Hardie sold Harditex cladding without testing if it was weathertight — leaky homes court hearing told

Monday, 17 May 2021

David Musgrave and about 1000 other homeowners are suing James Hardie at the High Court in Auckland for $220 million. It's one of the largest class action trials in New Zealand's history.

A $220 million class action claim by leaky homeowners has begun at the High Court in Auckland with allegations the James Hardie Harditex cladding system “did not work, and has never effectively worked”.

Simon Hughes, the lawyer for the homeowners told the court that “Harditex was intended to be a face-sealed system, which would not allow water to ingress at all. It failed in that. It’s very clear it failed in that”

Harditex, which was an exterior cladding system using cladding sheets made from untreated wood pulp, cement, sand and water, was sold throughout the 1990s and early 2000s, and was withdrawn from the market in 2005, Hughes said.

The homeowners, who together own nearly 400 properties, allege James Hardie owed them a duty of care, and knew, or should have known, its Harditex cladding system was not weathertight.

* Leaky house owners sue James Hardie because no other 'deep pockets': defence

The 15-week civil trial is expected to be a clash of expert witnesses brought by homeowners and James Hardie at the High Court in Auckland.

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The homeowners also allege James Hardie launched Harditex without proper testing, to replace earlier cladding systems, which used fire and water-resistant asbestos.

“There was never testing of any kind whatever on Harditex prior to its launch in relation to weathertightness,” Hughes said.

Hughes said James Hardie appeared to have “drifted into an assumption” that Harditex without asbestos, would perform as well.

James Hardie is defending the allegations, and will open its defence later this week.

The case, before Justice Christian Whata was first filed in 2015.

Hughes said James Hardie documents showed the company knew it had “real problems with Harditex” in the late 1980s and in the 1990s.

He said James Hardie would argue that faulty workmanship was behind weathertightness failures in homes clad with Harditex.

Lawyer Adina Thorn has organised the class action claim against James Hardie, and arranged litigation funding.

“James Hardie say that Harditex will work, and the problem here is bad builders, bad workmen,” Hughes said.

Hughes said earlier in pre-trail hearings, the judge had invited James Hardie to find homes in which Harditex was installed well, and which never leaked.

The invitation was never taken up, he said.

“It must be logically possible for James Hardie to find, one, or five, or 10 buildings that have been properly built,” Hughes said.

He said James Hardie could have run an advertisement in newspapers offering $50, or $2000, to owners of James Hardie Harditex-clad homes, where there had been no problems.

“James Hardie’s conspicuous inactivity in that regard give rise to an inference that if they had done that work, it would not have helped them,” Hughes said.

“The defendant’s own disclosure documents make it perfectly clear there were problems with Harditex that have nothing to do with the builders,” Hughes said.

“James Hardie is not pointing to one or a constituency of houses in New Zealand that have been built using Harditex correctly … and displayed none of the problems, the leaks, the degradation, the damp,” he said.

“That there was a pattern of failure all across New Zealand is very clear,” Hughes said.

“The proposition that the common denominator here is workmanship is improbable,” he said.

The homeowners ran weathertightness tests in Hamilton last year using James Hardie’s technical instructions for installing Harditex.

“Harditex failed. I hesitate to say spectacularly in this context, but that is the truth, and failed very early on,” Hughes said.

Hughes told the court the little testing James Hardie did in 1983 and 1985 on Hardiflex II showed “red flags”, including moss, lichen and fungal growth when exposed to the weather.

“The warnings were there from very early on,” Hughes said.

James Hardie never properly tested the Harditex system to see whether it would perform in New Zealand conditions, he said.

Some testing data from the 1990s in Queensland, which showed Harditex disintegrating over five years in very moist conditions, was not disclosed by James Hardie until March, Hughes said.

Hughes told the court of internal James Hardie memos from 1995 and 1997 and also a 1999 project to “improve” Harditex all showed the company was aware of the weathertightness problems occuring in the field.

In one 1995 memo, a James Hardie employee said he feared the company was being “exposed to potential rectification costs of a substantial nature”.

The Harditex improvement project was embarked upon due to a variety of field complaints experienced over the past five to six years, memos revealed, Hughes said.

Hughes said one of James Hardie’s own expert witnesses had once written a paper saying a “face-sealed” system was only suitable for hot, dry climates, where there was less than 20 inches of rainfall a year.

Figures provided by Hughes showed the annual rainfall was more than double that.

But the court would hear that James Hardie had run tests in Canada which showed Harditex could be weathertight, Hughes said.

But the court would hear they were not constructed in accordance with the instructions that had been issued to New Zealand builders by James Hardie.