James Hardie Industries Plc v White - [2019] NZSC 39

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 12/2019
[2019] NZSC 39

BETWEEN	JAMES HARDIE INDUSTRIES PLC First Applicant JAMES HARDIE NZ HOLDINGS Second Applicant RCI HOLDINGS PTY LIMITED Third Applicant
AND	KAREN LOUISE WHITE AND THE PERSONS LISTED IN SCHEDULE 1 First Respondents WAITAKERE GROUP LIMITED Second Respondent METLIFECARE PINESONG LIMITED Third Respondent FOREST LAKE GARDENS LIMITED Fourth Respondent VISION (DANNEMORA) LIMITED (NAME CHANGED TO METLIFECARE DANNEMORA GARDENS LIMITED) Fifth Respondent METLIFECARE COAST VILLAS LIMITED Sixth Respondent

Court:	William Young, Glazebrook and O’Regan JJ
Counsel:	J E Hodder QC, P G Watts QC, J A McKay and A J Wicks for Applicants B D Gray QC and J S Cooper QC for First Respondents J K Stewart and S M Sharma for Second to Sixth Respondents
Judgment:	16 April 2019

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.
BThe applicants are to pay to the respondents costs of $2,500.

____________________________________________________________________

REASONS

The respondents (the claimants) are the past or present owners of buildings which were constructed using exterior cladding products produced and sold by the James Hardie group. They allege that the products were defective and seek damages over associated weathertightness problems against seven companies in the James Hardie group, those being: (a) four operating companies (Studorp Ltd, James Hardie New Zealand, James Hardie Australia Pty Ltd and James Hardie Research Pty Ltd); and (b) three holding companies – James Hardie Industries Plc (JHI) (the ultimate parent company of the group), RCI Holdings Pty Ltd (RCI) (the immediate parent company of Studorp), and James Hardie New Zealand Holdings (JHNZH) (the immediate parent company of James Hardie New Zealand).
Currently in issue are the claims against the holding companies.
The claimants allege that the development, manufacture, marketing and sale of the cladding products was, in effect, a joint effort in which all the James Hardie companies, including the holding companies, were engaged. The claimants say that this resulted in the holding companies incurring liability in the following respects:
(a)In negligence – pleaded separately as: (i) negligence in terms of the manufacture, marketing and sale of the defective profits; (ii) negligent misstatement in respect of the promotion of the products; and (iii) a breach of a duty to warn, inform and/or take reasonable steps to withdraw the products. The liability of the holding companies is said to arise because of their direct involvement in the development, manufacture, marketing and sale of the cladding products and their superior knowledge (as compared to that of the operating companies) of the products.
(b)Under the Consumer Guarantees Act 1993, on the basis that all James Hardie companies, and thus the holding companies, are within the definition in that Act of “manufacturer”.
(c)Under the Fair Trading Act 1986; this in terms of misleading and deceptive conduct in respect of the marketing of the cladding products which resulted in the respondents believing that the products were fit for purpose.
JHI is an Irish company and was served…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZSC 39
Decision Date: 16 April 2019

CaseChat Overview and Summary

In the Supreme Court of New Zealand, James Hardie Industries Plc, James Hardie NZ Holdings, and RCI Holdings Pty Limited sought leave to appeal from a Court of Appeal decision which held that the claimants' claims against the holding companies were arguable. The claimants are owners of buildings constructed using cladding products produced by the James Hardie group and allege that the products were defective and caused weathertightness problems. The claimants seek damages against the operating companies and holding companies within the James Hardie group. The holding companies sought to have the claims against them dismissed on the basis that they were not involved in the manufacture, marketing, or sale of the cladding products. The High Court allowed the holding companies' applications in part, but the Court of Appeal dismissed the applications in full. The holding companies sought leave to appeal to the Supreme Court, which held that it was not in the interests of justice for the proposed appeals to be heard before the determination of the substantive proceedings. The application for leave to appeal was dismissed, and the holding companies were ordered to pay costs of $2,500 to the claimants.

Orders