In the most recent instalment of litigation by building owners against James Hardie, the Court of Appeal has confirmed James Hardie had not breached its duty of care.

The Cridge High Court decision 

In 2021, after a four-month hearing with over 10,000 pages of written evidence, the High Court concluded that James Hardie owed a duty of care to the building owners. This was the first time a New Zealand court confirmed that the manufacturer of a building product intended to be a key component in a building owes a duty of care to the building’s owner.

However, in all other respects the Court rejected the owners’ claim. It found they had failed to prove Harditex was an inherently flawed product unable to deliver a watertight and durable house. On the contrary, it accepted James Hardie’s argument that while Harditex was “capable of improvements”, the evidence indicated that it worked and was fit for purpose.

While it was accepted the test properties selected for the case (ie the plaintiffs selected a sample of properties to represent all the buildings in the class) were water damaged and should not be, the Court concluded the cause of the damage was more likely to be incompetent building and poor texture coating rather than inherent defects associated with Harditex.

The Cridge Court of Appeal decision

The Court noted that the homeowners “left no stone unturned” on appeal, “challenging almost all of the High Court’s findings on multiple grounds, so that to a significant extent the appeal has involved a complete re-litigation of most trial issues.” Despite this, the Court dismissed the appeal. 

The Court upheld the existence of a duty of care by manufacturers to homeowners “to exercise reasonable care and skill in the design, manufacture and supply of the product so as to prevent loss from damage to the building caused by water ingress”. The Court said that duty had not been breached and determined:

• Criticism of the Judge’s evaluation of the expert evidence was not justified. Rather, the Court of Appeal found that James Hardie’s experts generally had more expertise and presented their evidence in a more balanced and less partisan manner.
• Evidence tended to show Harditex was fit for purpose when the house was properly constructed and maintained. The test properties had not been built in accordance with James Hardie’s installation instructions; on the contrary they all contained significant building defects and did not offer a meaningful test.
• James Hardie’s technical instructions were adequate and, save for one possible exception, did not contain misleading statements.

For more information on class actions and product liability, please contact one of our experts.

Special thanks to Claudia Paterson and Taumata Toki for their assistance in writing this article.