James Hardie Leaky Homes - Class Actions

One of the major types of cladding used to construct monolithic homes was the Australian Companies Harditex System. The system comprised of a fibre cement sheet which is fixed to the exterior framing of a building. 

The joins between the sheets are sealed using tape and sealant. The finished effect is meant to hide all the joints so that a wall looks “seamless” or monolithic. 

Because of the many leaky buildings that have occurred in New Zealand monolithic has become something of a dirty word. Remember not all monolithic homes leak and not all homes that leak are monolithic. 

That said the monolithic Harditex cladding system has seen many of its users end up with leaky buildings. 

So many Harditex clad buildings have ended up as leaky homes that owners sued James Hardie in a class action started in 2015. 

Damages of $220 million was sought by 376 building owners. Because of the high costs of litigation and the time to prepare such a major case it took until this year (6 years) to get the case to the high court in Auckland. 

The litigation was funded by Harbour litigation Funding - a London based investor. The case stated in May 2021 and was scheduled to last 15 weeks.

The case ended at the beginning of August (halfway through) with an out of court settlement. As part of the settlement James Hardie would RECEIVE a payment of $1.25M from Harbour litigation Funding. The homeowners get nothing. 

The funders became more and more unsure of their chances of success as very bad building practices were showing in many of the properties concerned so they pulled the funding. 

So, the poor property owners without money to continue the case got nothing - except ownership of a leaky building. There were many factors that lead to the leaky building epidemic. A lot of this happened at the same time, they included:

• Monolithic style become popular
• Some deregulation of the building industry
• Use of untreated timber
• Use of direct fix (ie no cavity)
• End of the building apprenticeship scheme
• Architectural designs with high weathertightness risks such as no eaves, low pitch roofs, internal gutters, etc.

It is easy to see how hard it is to prove that among so many changes it was Harditex to blame. A second-class action against James Hardie by nearly 150 homeowners has just been dismissed in the Wellington high court. 

The trial lasted 16 weeks. In this case the homeowners funded the action and may have to pay James Hardie’s legal costs as well as their own. A third-class action called the Waitakere litigation is set to be heard in 2023. 

It is now unlikely to proceed. As a footnote James Hardie discontinued this product the Harditex system this month on the 01.08.2021.