James Hardie Industries PLC v White - [2018] NZCA 580

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA563/2017
[2018] NZCA 580

BETWEEN	JAMES HARDIE INDUSTRIES PLC First Appellant JAMES HARDIE NZ HOLDINGS Second Appellant RCI HOLDINGS PTY LIMITED Third Appellant
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

Hearing:	13 and 14 June 2018
Court:	French, Cooper and Winkelmann JJ
Counsel:	J E Hodder QC, J A McKay and A J Wicks for Appellants B D Gray QC and J S Cooper QC for Respondents
Judgment:	13 December 2018 at 10 am

JUDGMENT OF THE COURT

AThe appeals are dismissed.
BThe cross-appeals are allowed and orders made as set out at [128].
CThe appellants are jointly and severally liable to pay the respondents one set of costs for a complex application for leave to appeal on a band B basis and usual disbursements. We certify for second counsel.
DCosts in the High Court are to be fixed in accordance with the outcome of this judgment.

____________________________________________________________________

REASONS OF THE COURT

(Given by Winkelmann J)

Table of Contents

Factual background The claims	Para No. [10]
JHI: Application to set aside protest to jurisdiction	[13]
High Court judgment	[14]
The procedural context of these appeals	[19]
JHI: duty of care causes of action
Arguments on appeal	[21]
Relevant principles	[27]
Separate legal personality and limited liability for incorporated bodies	[28]
The imposition of novel duties of care	[34]
Parent company liability	[39]
(a) Australian authority	[40]
(b) English authority	[46]
(c) Canadian authority	[60]
Principles to be applied	[62]
The evidence	[67]
Affidavit evidence	[69]
Documentary evidence	[81]
Our analysis of the evidence	[84]
Serious issue to be tried on duty of care causes of action?	[92]
JHI: Fair Trading Act appeal and cross-appeal	[99]
JHI: Consumer Guarantees Act cross-appeal	[104]
RCI and JHNZH: appeals on summary judgment	[117]
High Court judgment	[119]
Arguments on appeal	[120]
Analysis	[123]
Result	[127]

When may a parent company be liable for defective products made, marketed and sold by its subsidiary company? That is the principal issue on this appeal.
The claimants (because of the appeals and cross-appeals it is easiest to call them the claimants) are past or present owners of homes, commercial buildings and retirement villages clad with exterior cladding products manufactured and supplied by the James Hardie business in New Zealand.[1] In two sets of proceedings (the White proceeding[2] and the Waitakere proceeding[3]) the claimants allege that the James Hardie products (the products) were defective, not watertight, and failed to comply with prevailing building standards.
[1]Approximately 1132 homes, four commercial buildings and five retirement villages.
[2]CIV 2015-404-2981.
[3]CIV 2015-404-3080, the claim in respect of the five retirement villages.
The defendants are four operating companies and…

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: [2018] NZCA 580
Decision Date: 13 December 2018 at 10 am

CaseChat Overview and Summary

In James Hardie Industries PLC v White, the Court of Appeal of New Zealand was required to decide whether the holding companies in the James Hardie Group could be liable for the defective products manufactured and supplied by the Group's New Zealand subsidiaries. The Court of Appeal concluded that there was a serious issue to be tried on whether the holding companies owed a duty of care to the claimants for the defective products. The Court of Appeal also found that there was a serious issue to be tried on the holding companies' liability under the Fair Trading Act 1986 and the Consumer Guarantees Act 1993. The Court of Appeal dismissed the appeals brought by the holding companies and allowed the cross-appeals brought by the claimants. The holding companies were found to be jointly and severally liable for the costs of the appeals.

Orders