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Home owners say their leaky home recently sold for $350,000 below market value because of problems with the plaster cladding, now the subject of an estimated $250 million class action against James Hardie.

The couple made the trip to Auckland today to be among several leaky home owners involved in the suit for the start of interlocutory applications at the High Court.

The action involves more than 1,000 owners of 365 buildings that are taking a litigation funding-backed case against the James Hardie group of companies for failure of fibre cement cladding products. The plaintiffs allege they have suffered financial losses and significant health issues arising from the use of the non-performing materials marketed as Harditex, Monotek, and Titan board.

All but four of the buildings involved in the class action are residential properties. The three legs of the plaintiffs' claim are that there was negligence in the design, development, manufacture, promotion and supply of the cladding products, that they should have been withdrawn when the company realised there were problems, and that there were breaches of the Consumer Guarantees Act and the Fair Trading Act.

The James Hardie companies being sued include the NZ manufacturers – James Hardie NZ (from 1998), Studrop Ltd (products spelt backwards) prior to 1998, the immediate parents of those companies James Hardie NZ Holdings and RCI Holdings Pty Limited, and the ultimate parent of the group, ASX-listed and Irish-registered James Hardie Industries PLC.

Lawyers representing the James Hardie group are seeking to have two of the seven defendant companies removed from the claim under a summary judgment application because they were simply holding companies in New Zealand and Australia, holding shares in the operational units.

The parent company has protested jurisdiction in New Zealand, a move being resisted by the plaintiffs.

O’Brien told the High Court that the issues facing the leaky building owners were not isolated. In October, owners of leaky buildings in Wellington, known as the Cridge claim, were given High Court permission to pursue a $25 million representative action against the building materials firm.

In July the Supreme Court dismissed building product manufacturer Carter Holt Harvey’s appeal over a Ministry of Education claim the company was liable for the cost of fixing about 890 leaky schools. The judgment found that claims in relation to the defective building products could be argued, and would not be subject to the 10-year limitation under the Building Act.

There have also been multiple other claims and proceedings arising from alleged cladding defects.


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