Bad building, not James Hardie's Harditex caused leak, High Court finds

Wednesday, 11 August 2021

James Hardie has now come out as victor in two High Court class action leaky building lawsuits, one in Auckland and one in Wellington.

A group of 144 owners of leaky buildings have failed to prove their claim that James Hardie's Harditex fibre cement cladding boards were the cause of leaks and rot in their homes.

The homeowners sued James Hardie claiming Harditex was a defective product, but the High Court in Wellington has ruled bad building was the cause of the leaks, after a case involving more than five months of hearings, and more than 10,000 pages of written expert evidence.

Justice Simon France said the evidence showed fundamental building errors, and failures by builders to follow installation instructions, were so significant it was not possible for homeowners to prove a flaw in Harditex was the cause of their weathertightness problems.

The judge said Harditex was not flawed in its design, had been adequately tested before being sold, and could be installed to provide a weathertight house.

* James Hardie blames 'atrocious' workmanship for failure of its Harditex cladding

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

* Bad building, not Harditex cladding, responsible for leaking homes, James Hardie tells court

The legal victory for James Hardie followed the collapse of a class action leaky homes lawsuit at the High Court in Auckland last week.

The 144 plaintiffs were among the victims of what France called New Zealand’s leaky building crisis.

The period of 1987 to 2005 through which Harditex was on the market coincided with that crisis, the judge said.

“The plaintiffs allege the composition of the cladding is inherently flawed, the system of installation was inherently flawed and, anyway, too difficult for builders to get right, and the information provided by James Hardie to assist with using its product was misleading and inadequate,” the judge said in his 274-page judgment.

Their case focused on detailed analysis of eight of leaky homes from the 155 owned by the plaintiffs.

The homes were built between 1992 and 1997, and were spread between Wellington, Auckland and Tauranga.

They also presented evidence from a “test wall” built by the plaintiffs’ experts.

“When subjected to water pressures, the test wall failed spectacularly, leaking as it were at every pore,” the judge said.

Three of the eight leaky homes in the case were in Auckland, which was the country’s capital for weathertightness failures.

“The plaintiffs say this proves the correctness of their building science evidence, as do the houses which indisputably are suffering from moisture damage.”

But the judge said the wall test was not done well enough to make it reliable evidence for proving Harditex was defective.

If the necessary assessment is whether the plaintiffs have proved Harditex was too hard a product to build with, the answer can only be no, and by a margin so.

“Their witnesses lacked direct experience in building with Harditex on residential houses. That is not to say some are not experienced and respected in the industry, but from their evidence I took a message of poor building standards rather than a product that could not be built with,' he said.

“By contrast, the defendant’s witnesses established that a competent builder could build a sound Harditex house.”

The homeowners claimed James Hardie executives knew Harditex was flawed, and had a duty to warn them about the problems in homes built using Harditex.

“Overall the witnesses left me in no doubt that there was no corporate belief within James Hardie that Harditex was a defective product,” the judge said.

“I accept there are internal documents which suggest that some staff members, af at least reasonable seniority, had concerns about aspects of the Harditex system. This was not surprising in a way given that there was by now national concern over leaky homes and James Hardie was a major industry player.

“Since the conclusion of the judgment is that Harditex is not a fundamentally flawed product in terms of weathertightness, it is unlikely that James Hardie breached its duty of care by not alerting the consumer or community or users to weathertightness deficits,” the judge said.

“Basically, if the Court’s conclusions are correct, it follows James Hardie could not have known of deficits that did not exist.”

The judge expressed sympathy for the homeowners.

“Anyone with exposure to the emotional and financial impact a leaky home can have on the people involved can only have the greatest sympathy for those caught up in such a situation. It is undoubtedly a miserable and stressful experience,” he said.

But “the homeowners’ case fails in its entirety.

“On the evidence in this case it has not been shown that Harditex was a flawed product unable to deliver a watertight house.

“Witnesses of international standing have established that the product was not conceptually flawed and could work.

“Analysis of the plaintiffs’ houses, including six houses from the wider claim group, has revealed a disturbing pattern of incompetent building and poor texture coating that is more likely, in my view, to be the cause of the damage suffered by these properties,” the judge said.