Waitakere Group Limited v James Hardie New Zealand Limited
[2021] NZHC 1052
•12 May 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2015-404-3080
[2021] NZHC 1052
BETWEEN WAITAKERE GROUP LIMITED
First Plaintiff
METLIFECARE PINESONG LIMITED
Second PlaintiffFOREST LAKE GARDENS LIMITED
Third PlaintiffVISION (DANNEMORA) LIMITED
Fourth Plaintiff
METLIFECARE COASTAL VILLAS LIMITED
Fifth Plaintiff
AND
JAMES HARDIE NEW ZEALAND LIMITED
First Defendant
Continued next page
Hearing: 29 April 2021 Counsel:
C M McMeechan QC, C L Gordon and C F Marsh for Plaintiffs J Hodder QC and T F Cleary for Defendants
Judgment:
12 May 2021
JUDGMENT (NO 10) OF WHATA J
This judgment was delivered by me on 12 May 2021 at 3.00 pm,
pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors: Minter Ellison Rudd Watts, Auckland
Chapman Tripp, Auckland
WAITAKERE GROUP LTD v JAMES HARDIE NEW ZEALAND LTD [2021] NZHC 1052 [12 May 2021]
STUDORP LIMITED
Second Defendant
JAMES HARDIE NZ HOLDINGS LIMITED
Third Defendant
RCI HOLDINGS PTY LIMITED
Fourth Defendant
JAMES HARDIE AUSTRALIA PTY LIMITED
Fifth Defendant
JAMES HARDIE RESEARCH PTY LIMITED
Sixth Defendant
JAMES HARDIE INDUSTRIES PLC
Seventh Defendant
[1] I have applications for leave to amend specified interrogatories (filed two days before the hearing) and for the answers to same and other interrogatories (filed in September 2020). Both applications are opposed.
Leave
[2] At the hearing, I granted leave to hear argument in respect of interrogatory 188 but I refused leave in respect of interrogatory 247. Interrogatory 188 contains a slip relating to a date which was plainly wrong. It refers to the introduction date for Monotek in 1986, when that product was not introduced until 2001. That mistake was obvious to James Hardie. Determining now whether interrogatory 188 should be answered causes no prejudice to them. The second amendment, however, involves a substantial modification to the scope of the interrogatory 247. It previously referred to all “public statements”. It now refers to “the James Hardie Product Statements listed in schedule 6 to the [plaintiff’s fourth amended statement of claim]”. While narrower in compass, James Hardie have not had enough time to adduce evidence in respect of it. I make timetabling orders in respect of that aspect of the application below at [27].
The substantive application
[3] As to the substantive application, the plaintiffs seek answers to interrogatories in relation to:
(a)testing of the Harditex and Monotek products; and
(b)statements made by James Hardie.
[4] Both sets of interrogatories are opposed on the basis that they are unduly burdensome and unnecessary. I am, however, satisfied that, save as noted at [20]-[24], the Harditex and Monotek interrogatories are both necessary and not unduly burdensome. I have excluded interrogatories that are simply too open-ended and are better addressed via the promised exchange of evidence.
[5]My reasons follow.
Background
[6]As set out in my Judgment (No 9):1
[3]The plaintiffs claim that the James Hardie Business (or companies within it) were responsible for producing exterior cladding products and systems, comprising fibre cement cladding sheets or boards, flashings, joint systems, accessories and specifications, describing the features of the cladding system and the installation process. These are referred to as “the James Hardie Products”. They included Harditex and Monotek cladding systems. The plaintiffs claim that the James Hardie Business has, among other things, published information about the use of the James Hardie Products and that each of the James Hardie Products had, at material times, defects and risk characteristics. They also say, as a result of the defects and risk characteristics, the cladding systems were not weathertight in New Zealand conditions, did not comply with applicable legal and building standards, and caused damage to the health and safety of occupants of buildings or to other parts of buildings in which the James Hardie Products were installed.
[4]The plaintiffs also say that the defendants knew or ought to have known from the early 1990s onwards or from a date of its incorporation and/or involvement in the James Hardie Business, that the James Hardie Products would or might not be weathertight, would or might cause damage to property or to the health and safety of occupants of buildings in which the James Hardie Products were installed and/or would or might not comply with applicable legal and building standards.
[5]Given this, the plaintiffs submit the defendants breached:
(a)A general duty of care, alleging:
36The James Hardie Business, in designing, developing and promoting the James Hardie Products, and, in the case of Studorp and JHNZ, in manufacturing, promoting (including supporting the installation of) and selling the James Hardie Products, JHNZ, Studorp, JHNZH, JHA, JH Research and/or JHI owed a duty of care to the plaintiffs to take all reasonable steps to ensure that the James Hardie Products would:
(a)Be weathertight in New Zealand conditions;
(b)Comply with Applicable Legal and Building Standards; and
(c)Not cause damage to the health and safety of occupants of buildings, or to other parts of buildings, in which the James Hardie Products were installed.
1 Waitakere Group Limited v James Hardie New Zealand Limited [2021] NZHC 722.
(b) A duty to warn, alleging:
43Once each defendant knew or ought to have known the Facts as to Defects or any material part of them, it owed duties of care to the plaintiffs to:
(a)Warn and/or inform the plaintiffs of the Facts as to Defects or the part of the Facts as to Defects of which they had or should have become aware, so that the plaintiffs could have avoided loss or have taken steps to prevent further loss;
(b)Warn and/or inform the plaintiffs of the Defects and Risk Characteristics of the James Hardie Products (as set out in Schedule 4 and Schedule 5), so that the plaintiffs could have avoided loss or have taken steps to prevent further loss; and
(c)Take reasonable steps to issue public recalls of the James Hardie Products and/or withdraw the James Hardie Products from the market, so that the plaintiffs could have avoided loss or have taken steps to prevent further loss.
(c)A duty to make true and accurate statements, alleging;
47 In promoting the James Hardie Products for use in residential and commercial and other construction, JHNZ, Studorp, JHNZH, JHA, JH Research and/or JHI owed a duty of care to the plaintiffs to ensure that any statements they made or caused to be made concerning the nature, characteristics and suitability of the James Hardie Products were true, accurate and complete and/or remained true, accurate and complete.
(d)Obligations under the Consumer Guarantees Act 1993 and Fair Trading Act 1986.
[7] Most relevantly for present purposes, the Waitakere plaintiffs plead:2
39.In breach of the duty of care pleaded in paragraph 36, each of JHNZ, Studorp, JHNZH, JHA, JH Research and/or JHI failed to take all reasonable care to ensure that the James Hardie Products would be weathertight in New Zealand conditions, would not cause damage to property to the health and safety of occupants of buildings in which the James Hardie Products were installed and would comply with Applicable Legal and Building Standards. In particular, each of the first to third and fifth to seventh defendants:
(a)Designed and developed the James Hardie Products with the Defects, which occurred regardless of whether or not the
2 Fourth amended statement of claim, dated 17 March 2021.
James Hardie Products were installed in complete compliance with the relevant James Hardie Product Information;
(b)Failed to carry out or require to be carried out, either before the introduction of the James Hardie Products to the market, or before their installation in the plaintiffs’ buildings, or at any other time, any adequate or reliable testing, trials or research in relation to the James Hardie Products in order to:
(i)Verify that the James Hardie Products would comply with the Applicable Legal and Building Standards, were weathertight in New Zealand conditions, and would not cause injury to property or persons; or
(ii)Identify any or all of the Defects and the Risk Characteristics which the James Hardie Products had or were likely to have; or
(iiiEliminate any and all such Defects and the Risk Characteristics.
(c)Failed to comply with AS/NZS 2908.2:1992 by reason of its failure to meet the sheet thickness requirements and dimension tolerance and by reason of the fact that it did not meet the requirement of the relevant method of testing as set out in AS3991.1-7.1992. Specifically, the test frame did not include all waterproofing and other attachments normally specified or overlapping joints, that were recommended;
(d)Failed to carry out or require to be carried out, either before the introduction of the James Hardie Products to the market, or before their incorporation into the buildings owned by the plaintiffs, or at any other time Sirowet testing (AS/NZS 4284:1995) or any similar testing. This is a façade performance testing technique that simulates wind driven weather conditions likely to be experienced over the life of a building. It is an appropriate verification method of establishing that a cladding system meets the durability requirement (B2) and the External Moisture (E2) standards in the Building Code;
(e)Failed to carry out or require to be carried out, either before the introduction of the James Hardie Products to the market, or before their incorporation into the buildings owned by the plaintiffs, or at any other time, any testing of the James Hardie Products, in accordance with VM1 (E2/AS1) or otherwise, as part of a completed wall and/or completed building with windows, doors and the numerous other junctions of materials with different characteristics;
(The allegations in (b), (c), (e) and (e) above are collectively referred to as the Lack of Testing);
(f)Failed to modify or withdraw the James Hardie Products from sale after they became aware of the Facts as to Defects and/or after the James Hardie Products failed the following tests:
(i)In May 2000, JHNZ, JHA and/or JH Research tested a range of sill flashing junctions in the Harditex system. Moisture ingress initially occurred when the flashings were installed in accordance with the technical literature;
(ii)In January 2003, BRANZ tested a range of fibre- cement sheet junctions. The findings included:
(aa) The “h” moulds (horizontal joints) and other vertical joints for fibre-cement claddings, will fail if installed in accordance with the Harditex literature;
(bb) There was absorption of moisture into the edges of the fibre-cement sheets and consequent wicking of moisture through the boards;
(cc) The unpainted edges of the boards absorbed moisture which would wick up to 50mm through the board within 30-60 minutes of test time; and
(dd) The front face of fibre-cement sheets, the rear face within 50mm of an edge and edges themselves had to be sealed prior to their completion.
Legal principles
[8] Rule 8.34 of the High Court Rules 2016 (the Rules) provides:
8.34 Interrogatories by notice
(1)After a statement of defence has been filed, a party who has filed a pleading may file and serve on another party who has filed a pleading a notice requiring that party to answer specified interrogatories relating to any matter in question in the proceeding between the interrogating party and the party served.
(2)The notice may require that the answers be verified even if the interrogating party has not previously required any answers to interrogatories to be verified.
(3)The notice must be in form G 35.
[9] Rule 8.38 also states:
8.38 Order to answer
(1)A Judge may, at any stage of any proceeding, order any party to file and serve on any other party (whether the interrogating party or not) a statement prepared in accordance with rule 8.39 in answer to interrogatories specified or referred to in the order.
(2)The interrogatories must relate to matters in question in the proceeding.
(3)The order may require the statement to be verified by affidavit.
(4)The Judge must not make an order under subclause (1) unless satisfied that the order is necessary at the time when it is made. (4) The Judge must not make an order under subclause (1) unless satisfied that the order is necessary at the time when it is made.
[10] As stated by the Court of Appeal in Todd Pohokura Ltd v Shell Exploration NZ Ltd:3
[14] …. An interrogatory is a question asked before trial for the purpose of eliciting an answer on oath or affirmation which is admissible in evidence at trial. Like all questions, must be directed towards advancing one side’s case or damaging the other’s case. It must accordingly be relevant to an issue raised on the pleadings or a fact in dispute for determination.
[15] An interrogatory must also, like a question in cross-examination, be precise and unequivocal, and amenable to a direct and meaningful answer from information within the knowledge of or reasonably available to the person required to answer. It must not place unnecessary or burdensome obligations on the interrogated party, or be prolix. And its purpose must not be to search or probe on a speculative basis that an answer may prove relevant (colloquially known as fishing). A question which offends these elements will fall within the general category of oppressiveness.
[16] An interrogatory is an exception to the settled manner of adducing evidence and in particular to a defendant’s right not to call evidence at trial. Accordingly a Court must be satisfied the interrogatory is necessary where an application to issue interrogatories is opposed: r 8.5 High Court Rules. A material consideration is whether briefs of evidence will be given by the party to be interrogated. Moreover, an interrogatory is not to be confused with a request for further particulars.
[11] Further, as Asher J explained in Commerce Commission v Air New Zealand Ltd:4
[18] It is … a legitimate purpose of interrogatories such as these that they are designed to obtain admissions of facts which will support the case of the
3 Todd Pohokura Ltd v Shell Exploration NZ Ltd [2009] NZCA 561 [Todd].
4 Commerce Commission v Air New Zealand (No 6) [2012] NZHC 2113 citing W A Pines Pty Ltd v Bannerman (1980) 30 ALR 559 (FCA) at 574 and Shore v Thomas [1949] NZLR 690 (SC) at 695.
interrogating party… or damage the case of the parties interrogated… “Necessary” does not mean … that the questions relate to facts crucial to the interrogating party proving its case. The threshold is not that high. Rather, necessary questions can include questions that may indirectly prove the key facts relied on. They may establish or form a step in establishing the allegations made.
Harditex and Monotek interrogatories
[12] The Harditex and Monotek interrogatories ask the same questions5 in the following respects:
(a)did James Hardie (including any third party on their behalf) carry out testing of the products ability to perform as a cladding system prior to its introduction;
(b)did that testing include assessment of ability to resist external moisture, durability and suitability; and
(c)if so, provide details as to date of the testing, who conducted the testing and the results;
(d)did James Hardie (including any third party on their behalf) carry out testing on the products ability to comply with specified clauses of the Building Code 1992; and
(e)if so, provide details as to date of the testing, who conducted the testing and the results;
(f)did James Hardie (including any third party on their behalf) carry out testing of new or amended details introduced to the technical literature prior to issuing each version of the literature;
(g)did that testing include assessment in respect of specified details; and
5 Interrogatories numbered 145 to 163 (James Hardie Testing Methods—Harditex) and 188 to 206 (James Hardie Testing—Monotek).
(i) in respect of the Harditex product, if so, provide details as to date of the testing, who conducted the testing and the results;
(h)did James Hardie (including any third party on their behalf) carry out any field testing in respect of the products and if so provide details as to the date of the field trial, who conducted the field, where it was conducted and the results.
[13] A further group of interrogatories are sought in relation to the Harditex product, namely:6
(a)did James Hardie (including any third party on their behalf) carry out any testing in relation to the serviceable life of the Harditex product prior to June 1998; and if so
(b)what documents are the testing methodology and results recorded;
(c)did James Hardie receive advice or other information in relation to the serviceable life of the Harditex Product prior to June 1988; and if so
(d)in what documents is this recorded;
(e)did James Hardie undertake any testing to support the statement in the Harditex Technical Information (June 1998) that: “The Harditex cladding sheet is a lightweight fibre cement substrate which is resistant to permanent moisture damage, and which will not rot or burn”; and
(f)if so, in what documents are the testing methodology and results recorded.
The objection
[14]James Hardie’s primary objections to the interrogatories are:
6 Interrogatories numbered 164 to 169.
(a) The interrogatories are not necessary because:
(i)much of the information sought has been disclosed through discovery; and
(ii)in addition to the evidence that will be provided in these proceedings, they will shortly be providing evidence from the Cridge and White proceedings directly on the testing of the products, which should obviate the need for the interrogatories in their current form.
(b)The interrogatories are oppressive because:
(i)they are not precise and unequivocal but rather they are wide- ranging as to date ranges and subject matter; and
(ii)the requests for details are open-ended.
Assessment
Relevance, necessity
[15] The Harditex and Monotek interrogatories plainly relate to a core matter in issue, namely whether James Hardie failed to carry out adequate and reliable testing: see [39](b)-(e) of the plaintiffs’ fourth amended statement of claim, above at [7]. I also consider that the interrogatories are necessary in so far as they enable the plaintiffs to obtain clear admission of facts on this key issue. The interrogatories in this case, therefore, are not like the interrogatories in Todd where they were “only of marginal relevance to an issue raised” in the pleadings.7 On the contrary, admissions of primary fact about whether testing was undertaken prior to introduction of the products to the market by reference to specific threshold standards pleaded at paragraph [39](b)-(e), are directly and materially relevant to the causes of action.
7 Above n 2, at [18].
[16] I do not accept that the likely release of the corresponding evidence in Cridge and White obviates the need for the interrogatories in this case. The plaintiffs know their case best. They know what answers are needed to respond directly to their claim. While the defendants are confident that this evidence will answer the interrogatories, subject to issues of relevance and oppressiveness (including precision), the plaintiffs are entitled to seek to have answers to interrogatories they consider best address their pleaded claims and ought not be forced to wait for evidence in other proceedings that might or might not answer them. The point made in Todd, namely that the impending exchange of evidence in the proceedings is a relevant consideration, has less gravitas in this case, where the trial is set down for May 2023 and there is no timetable for exchange of evidence as yet. The plaintiffs are also, appropriately, seeking clarity on key issues and in relation to key, primary facts which ought not to be in dispute. In this regard, I am told, discovery has proved to be unhelpful, with little clear documented information about testing. That may be revealing in itself, but I accept the plaintiffs’ basic contention that clarity as to the primary facts about testing is properly amenable to the interrogatory process.8
Oppressiveness, precision
[17] I consider the following questions are sufficiently precise in that they demand categorical “yes” or “no” answers about whether certain events occurred:
(a) Harditex: 145-150, 152-155, 157-162, 164, 168; and
(b) Monotek: 188-193, 195-198, 200-205.
[18] In this regard, these questions carry the same basic litany:
8 As noted in AC Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HR 8.34]
James Hardie Testing Methods - Harditex 145 (u) State whether any of the defendants, or any other entity within the James Hardie Group or any third party on James Hardie’s behalf, carried out any testing on Harditex’s ability to perform as an external cladding system prior
to its introduction to the New Zealand market in 1986, specifically:
146 (i) Its ability when used as a cladding system to resist external moisture penetration; 147 (ii) Its durability as a cladding system in New Zealand conditions; 148 (iii) Its suitability to be used with framing in accordance with NZS 3604: 1984; 149 (iv) Its suitability to be used with kiln dried and untreated timber framing; 150 (v) The suitability of the technical specifications and details set out in the initial Product Information published by James Hardie for Harditex.
[19] These questions require no quantitative or qualitative elaboration as to sufficiency of the testing or the outputs of the testing. They are simply directed to whether the testing occurred.
[20] But, aspects of the following questions are not sufficiently precise in that they are open-ended and in part ambiguous as to the answer, as well as relating to evidence of facts, rather than relating to primary facts:
(a) Harditex: 151, 156, 163, 165-167,169.
(b)Monotek: 194 and 199
(c)Both Harditex and Monotek: 206
[21] The questions at 151, 156, 163, 194, 199 and part of 206 carry the same basic question:
If any such testing was carried out, provide details including the date of testing, who conducted the testing and the results.
[22] But details relating to who conducted the tests and the results, may require answers that are multi-layered or nuanced and are not amenable to the interrogatory process. As discussed with Ms McMeechan QC, I am not clear what “results” the plaintiffs seek and, in any event, the “results” may depend largely on expert interpretation. It is not properly a matter amenable to an interrogatory. Similarly, the question of “who” is open ended: for example, does it refer to a lead expert, a manager, a director, or a lab assistant? It is also not clear to me that the question of who (other
than perhaps confirmation the testing was done on behalf of one, some or all of the defendants) is a primary fact issue.
[23]The questions at 165 to 167, and 169 are:
MLC31 – If the answer in MLC30 is yes, in what document(s) are the testing methodology and results recorded.
MLC32 – Did any of the defendants, or any other entity within the James Hardie Group receive any other advice, analysis and/or information in relation to serviceable life of Harditex prior to June 1998.
MLC33 – If the answer in MLC32 is yes, in what document(s) is this information recorded.
…
MLC35 – If the answer in MLC34 is yes, in what document(s) are the testing methodology and results recorded.
[24] These questions are problematic insofar as they involve a de-facto discovery exercise and are open-ended. They are not about primary fact-gathering. They are not, therefore, properly amenable to the interrogatory process.
[25] Finally, on the issue of whether the interrogatories are unduly burdensome, I consider the interrogatories that I have identified as otherwise suitable are proportionate to the nature and scale of the pleaded issues. I also note that James Hardie has signalled it has already addressed the testing issue in evidence in other proceedings. It is fair to assume, therefore, that the answer to the interrogatories will not be particularly onerous for them.
Result
[26]I order James Hardie to answer the following interrogatories:
(a) Harditex: 145-150, 152-155, 157-162, 164, 168;
(b) Monotek: 188-193, 195-198, 200-205; and
(c) in respect of both Harditex and Monotek: 151, 156, 163, 194, 199 and 206, but excluding interrogatories relating to “who conducted the testing and the results”.
[27] The application for interrogatory in respect of question 247 is adjourned. James Hardie will have one month to provide evidence. A fixture will be allocated as soon as is convenient to counsel and the Court.
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