White v James Hardie New Zealand (No 2)
[2018] NZHC 2812
•31 October 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2015-404-2981 (WHITE)
[2018] NZHC 2812
BETWEEN KAREN LOUISE WHITE AND THE PERSONS LISTED IN SCHEDULE 1
Plaintiffs
AND
JAMES HARDIE NEW ZEALAND
First Defendant
Continued next page
Hearing: 19 October 2018 Counsel:
B Gray QC, A Thorn, R Dellow and V Cole for Plaintiffs J McKay and C Coates for Defendants
Judgment:
31 October 2018
JUDGMENT (NO 2) OF WHATA J
This judgment was delivered by me on 31 October 2018 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors: Adina Thorn Layers, Auckland
Chapman Tripp, Auckland
WHITE v JAMES HARDIE NEW ZEALAND [2018] NZHC 2812 [31 October 2018]
AND STUDORP LIMITED
Second Defendant
AND
JAMES HARDIE NZ HOLDINGS
Third Defendant
AND
RCI HOLDINGS PTY LIMITED
Fourth Defendant
AND
JAMES HARDIE AUSTRALIA PTY LIMITED
Fifth Defendant
AND
JAMES HARDIE RESEARCH PTY LIMITED
Sixth Defendant
AND
JAMES HARDIE INDUSTRIES PLC
Seventh Defendant
CIV-2015-404-3080 (WAITAKERE GROUP LIMITED)
BETWEEN WAITAKERE GROUP LIMITED & ORS
Plaintiffs
AND JAMES HARDIE NEW ZEALAND
First Defendant
STUDORP LIMITED
Second DefendantJAMES HARDIE NZ HOLDINGS
Third DefendantRCI HOLDINGS PTY LIMITED
Fourth DefendantJAMES HARDIE AUSTRALIA PTY LIMITED
Fifth DefendantJAMES HARDIE RESEARCH PTY LIMITED
Six DefendantJAMES HARDIE INDUSTRICES PLC
Seventh Defendant
[1] 1,246 property owners claim that the James Hardie exterior cladding products are defective. I ordered a split trial on specified issues (See schedule 1). I now have applications by the parties for tailored discovery for stage one. The parties have reached agreement on the categories of discovery for the plaintiffs and some of the categories for the defendants (see schedules 2 and 3).
The plaintiffs’ application
[2] The plaintiffs seek discovery by the defendants of the following additional categories of document:
(a)Category D - Copies of customer complaints the defendants have received about the James Hardie Products, together with any responses to such complaints.
(b)Category L - Records of site visits.
(c)Category M - Any advice given to customers about the weathertightness, installation and maintenance of the James Hardie Products.
(d)Category J - Insurance documents that are likely to show what activities, business types or types of risks the defendants insured themselves which are said to provide evidence of the defendants’ knowledge of risk of product failure. Two broad types of insurance documents are envisaged:
(i)Any claims made about the James Hardie Products; and
(ii)James Hardie Industries Plc promotes that it holds a captive insurer for the Group - James Hardie Insurance Limited - the first to sixth defendants are members of that group and, accordingly, must hold cover from that insurer. A captive must receive information from its insured as to risks. The extent and level of insurance (and the alleged “activities” of each of the
defendant companies) notified to the captive insurer is said to be highly relevant, as is the nature and level of risk and the timing of that risk.
(e)Categories P, U - Any agency, representation or joint venture agreements entered into by the defendants which relate to the James Hardie Products, as well as any licensing agreements.
The defendants’ application
[3] The defendants seek discovery in relation to the agreed categories (see schedule 2) against all plaintiffs.
The background
[4] The central claim in the proceedings is that the defendants manufactured, supplied and/or promoted defective exterior cladding products sold under the brand names “Harditex”, “Monotek” or “Titan” (the James Hardie Products). Approximately 1,246 properties are claimed to be clad with defective James Hardie Products and, of those properties, 1,236 are residential homes, five are commercial buildings and five are retirement villages. The five retirement villages are the plaintiffs in the Waitakere proceedings.
[5] In my judgement of 3 July 2018, I directed that there should be a staged trial, with stage one directed to the issues set out in schedule 1. In summary, stage one will address the following issues:
(a)Who is responsible for the design/manufacture/sale of the James Hardie Products and related Product information;
(b)Whether the James Hardie Products are defective;
(c)Whether the defendants knew/ought to have known about any defects;
(d)Whether the defendants breached any common law and or statutory duties in respect of the James Hardie Products or James Hardie Product Information.
[6] After receiving input from the parties, I also made directions about tailored discovery involving three steps:
(a)The parties should attempt to agree on the scope of tailored discovery for the stage one trial;
(b)Failing that, they were to file interlocutory applications for orders for tailored discovery; and
(c)There was to be expert caucusing on the scale of discovery (including about the number, location, and type of properties which might be subject to discovery and inspection).
[7] As noted, the parties have broadly agreed the categories of discovery for the plaintiffs and some categories for the defendants as per schedules 2 and 3. Regrettably expert caucusing did not go well and, following an impasse which largely concerned which experts should be present, the meeting was abandoned. Both the defendants and the plaintiffs have filed memoranda stressing the cancellation was not their fault. The plaintiffs advise that their experts remained in the meeting and produced a document outlining their views. They suggest Ms Johnson, the defendants’ expert, respond to this report noting where she agrees and disagrees with the plaintiffs’ experts.
[8] I did not review of the conduct of the parties about caucusing. The simple fact is that it has not occurred. For reasons that I will shortly explain this inevitably means any final orders as to discovery must be deferred pending that caucusing.
The evidence
[9] The plaintiffs produced affidavit evidence from Ms Mary-Claire Heasley (business manager for Adina Thorn), Ms Goodwin (a litigation support consultant),
Mr Dalton (an expert building surveyor), and Mr Lalas (an expert on exterior cladding) who in combination, describe the basis for the plaintiffs’ proposed discovery and the requirements for the defendants’ discovery. In short, they say that full discovery of a sample of 20 properties, based on a broad brush statistical representation of property types, is sufficient for resolving the key issues at the stage one trial. Ms Heasley also describes discoveries made by James Hardie in other proceedings, and reviews already available information, to support the discovery sought in respect of the defendants. Ms Goodwin responds to the defendants’ request for effectively full discovery by all plaintiffs, noting that the cost could reach as much as $1.25m.
[10] The defendants produced affidavit evidence from Bruce Potts (company secretary for James Hardie) and Ms Johnson (expert building surveyor) in support of their application and opposition to the plaintiffs’ application. Mr Potts describes the difficulties posed by the breadth of the plaintiffs’ application and comments on specific aspects of their proposed categories. Ms Johnston examines, at some length, the requirements for discovery, noting that she wishes to undertake the following process:
(a)Undertake a desk top review of information about all plaintiff properties;
(b)Based on that, establish a shorter list of properties which warrant an initial site visit;
(c)Select from that which properties to investigate more fully, including investigation from the interior and exterior using destructive testing techniques and possibly laboratory analysis; and
(d)From that testing, select which properties should form the basis for the evidence for the stage one trial.
The approach
[11]I agree with the plaintiffs that the four-stage process identified in Assa Abloy
provides a useful guide for assessing the proper scope of discovery, namely:1
(a) Are the documents sought relevant, and if so how important will they be?
(b) Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?
(c) Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the High Court Rules?
(d) Weighing and balancing these matters, in the Court's discretion applying r 8.19, is an order appropriate?
[12] I turn now to examine the applications, dealing first with the plaintiffs’ application. I preface this assessment by reproducing here Category I, namely:
Documents identifying risks or defects or liability relating to James Hardie Products
Identification or discussion of any risks, defects, or liability from 1987 onwards relating to the James Hardie Products, in particular relating to:
a.Whether the Products were weathertight in New Zealand conditions;
b.Whether the Products complied with Applicable Legal and Building Standards (as defined in paragraph 39 of the Third Amended Statement of Claim);
c.Whether the Products had or might cause damage to the health and safety of occupants or to other parts of buildings in which they were installed; and
d.Reporting and dissemination of information within the James Hardie Group about these matters.
No discovery is required in relation to manufacturing batch defects (such as product being outside stated dimensions, or other quality issues relating to a specific batch/es).
[13] It will be seen that the defendants have already committed themselves to discover documents that will be central to the plaintiffs’ defects claim.
1 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760 at [14].
Category D - Customer complaints
[14] The plaintiffs submit the customer complaints, and responses to them, are relevant to the nature and scope of the duty of care owed by James Hardie to all customers and to whether promotional material was deceptive or misleading under the FTA. It is said that they will show that relevant products were not performing.
[15] The plaintiffs have identified four sub-categories in relation to this class of document, namely:
(a)Complaints or claims which relate to the defects and risk category set out in Schedule 4 and 5 of the third amended statement of claim and any supporting documents that accompany the complaint;
(b)Internal documents prepared for and by senior management or board members of any defendant in respect of those claims or complaints at (a);
(c)Internal documents detailing or investigating the failures of the cladding related to any of the complaints at (a); and
(d)Documents which detail any remedial work taken or remedy provided in response to the complaints (which may include settlements) at (a).
[16] The defendants agree to produce their complaint files and any related pleadings, but do not want to discover evidence or similar documents from litigation about the complaints or information about settlements.
Assessment
[17] I accept that the information about complaints may be relevant to the defendants’ knowledge of defect risk and any corresponding duty to warn. But I am not satisfied that discovery of evidence in litigation about, or settlement of such complaints is sufficiently relevant or probative in respect of a trial issue to require discovery. Therefore, I approve Category D as sought by the plaintiffs, but exclude
evidence (including supporting reports and related information) or settlement information incidental to the customer complaints.
Category L -Site visits
[18]The plaintiffs seek information in relation to site visits, namely:
(a)Any diaries, notes or other records of site visits to inspect the properties identified in the complaint discovery category;
(b)Any diaries, notes or other records of site visits to inspect installation of James Hardie Products.
[19]This includes:
(a)Documents prepared for or by senior management or board members of any defendants reporting or summarising findings from site visits.
(b)Documents which discuss installation of the product and the technical details of how the product should be installed.
(c)Documents which discuss how to maintain the James Hardie Products;
(d)Documents that point out any correctly or incorrectly installed James Hardie Products.
[20] The plaintiffs submit that, like the previous category, these documents are relevant to notice and to the nature and scope of the duty of care owed by James Hardie to warn customers, and to whether promotional material was deceptive or misleading under the FTA.
[21] The defendants complain this category of discovery is both unnecessary and disproportionate.
Assessment
[22] In oral argument, Mr Gray QC suggested this part of the application might properly be put on hold, pending the outcome of discovery in relation to Category D. I agree. In this regard, I am doubtful that the site visit information in respect of complaints not subject to the present proceedings is sufficiently probative of a stage one trial issue to warrant discovery. Moreover, I am satisfied that the discovery of the defendants’ complaints files, together with the discovery categories already agreed, is likely to provide the requisite information on the issues of notice and corresponding duties to warn and under the FTA. I therefore adjourn consideration of this part of the application and reserve leave to the plaintiffs to retrigger this part of their application once they have had an opportunity to review the Category D and I information.
Category M - Customer advice
[23]The plaintiffs seek the following information:
(a)Any advice given to customers, their agents or given at trade shows from the time the James Hardie Products were on sale:
(i)Regarding the weathertightness and/or fitness for purpose of the James Hardie Products for the use in the New Zealand market;
(ii)Any customer advice varying the technical literature;
(iii)Customer advice on how to install and maintain the James Hardie Products relating to flashings, overhands, H-moulds, joints, PVC corner trim or joint compounds as particularised at Item 2 of Schedule 4 of the Third Amended Statement of Claim (defects).
(b)Queries from builders; and
(c)Instructions from the defendants on specific details and drawings or details from the defendants to individual builders.
Assessment
[24] As with Category M, Mr Gray suggests this part of the application be placed on hold. I agree for the reasons noted at [22].
Other categories
[25]The plaintiffs also seek discovery in relation to:
(a)All insurance documents between the defendants and their insurers or reinsurers (including captive insurers) from 1 January 1990, relating to any risk arising from James Hardie Products (category J). The plaintiffs say this will show what activities or types of risk the defendants insured themselves for and provide evidence of the defendants’ knowledge of the risk of product failure; and
(b)All agency, representation, joint venture, licensing or similar agreements between any of the defendants and any of the companies in the James Hardie Group relating to or affecting the James Hardie Products from 1 January 1990 (categories U and P). The plaintiffs say these documents will show the defendants’ entities’ knowledge of the defects or risks of defects in the James Hardie Products, and the extent to which the defendants had control or assumed liability for their respective subsidiaries.
[26] It is unnecessary to address the potential relevance of these documents at this stage. The actionability of the claims against the third, fourth, and seventh defendants is currently before the Court of Appeal.2 I accept the submissions from the defendants that it is premature to order discovery in relation to these categories until the Court of Appeal has determined whether the third, fourth, and seventh defendants will continue as parties to this proceeding. This part of the application is also adjourned.
2CA 563/2017. Appeals and cross appeals relating to the third and fourth defendants’ summary judgment applications and the seventh defendants protest to jurisdiction.
James Hardie’s application
[27] The plaintiffs propose to discover all agreed categories of documents in relation to a sample of 20 properties. They say, supported by their experts Mr Lalas and Mr Dalton, that this sample is fairly representative on the key issue of product defect. James Hardie, however, submits that it should have the agreed categories of documents in relation to all plaintiffs for several reasons, including:
(a)It is entirely orthodox and in the interests of justice to avoid:
(i)Informational asymmetry as between opposing parties in selecting and preparing evidence for a stage one trial; and
(ii)Preparation for the stage one trial and the trial itself proceeding in circumstances where plaintiffs may have adverse documents in their control which have not been discovered.
(b)The defendants wish to follow the process recommended by Ms Johnson at [10]; namely, undertake a “desk top” review of information for all properties to ascertain which properties experts should visit, then from that smaller sample, select a sample size to subject to more intensive investigation (including destructive testing).
(c)The discovery sought is proportionate to the very significant size of the proceedings and will not cause unnecessary delays. The defendants note that it is consistent with the approach taken in Cridge, a similar claim against James Hardie – the 147 plaintiffs in Cridge were required to provide similar discovery (and completed most of it within a couple of months).
(d)The information is likely to be in the possession of the plaintiffs, noting that Ms Heasley stated in her affidavit:
Plaintiff information is stored in a data management solution that holds information provided to Adina Thorn Lawyers by
the plaintiffs; including answers to questionnaires, photographs and reports.
(e)The defendants must be entitled to all non-privileged information referred to by the plaintiffs’ witnesses.
(f)Discovery will assist the refinement of the common issues following discovery.3
(g)The plaintiffs’ claim is fully funded by a large litigation funder.
[28] Other concerns relate to the relatively small sample of properties proposed by the plaintiffs, including the limited representation of some plaintiff types and in relation to some of the plaintiff claims. Notably, the defendants claim, the limited scope of the discovery does not adequately address factors such as:
(a)The material differences between the Harditex, Monotek and/or Titan cladding products which are not captured by the relatively small sample of properties proposed by the plaintiffs to be subject to discovery;
(b)For each product, the extent to which there are material differences between the various versions of the technical literature published from time to time for that product;
(c)The relationship between the respective merits of the façade performance testing and performance in the field;
(d)The relationship between the performance in the field and the quality of the cladding and installation and overall building design and construction; and
(e)How long the cladding on each building had to perform for and whether it performed for the appropriate period.
3 Referring to my judgment (White v James Hardie [2018] NZHC 1627) at [22].
[29] Mr Gray responds, in short, that the defendants have fundamentally mischaracterised the primary object of the stage one trial when framing their discovery application. He submits, in relation to the scope of the plaintiffs’ discovery, the stage one trial is crucially about whether the James Hardie Products are systemically defective. Unlike the defendants, the plaintiffs and their experts have specifically tailored the plaintiffs’ proposed discovery to this specific overarching issue. They have reached the view that full discovery in relation to a robust, representative sample of properties is sufficient. Furthermore, because Ms Johnson did not participate in caucusing, we do not have the benefit of her view as to what is required to address this central stage one issue.
[30] Mr Gray thus maintains that on the available expert evidence, discovery by the plaintiffs in accordance with the approved categories in respect of 20 identified properties is sufficient. He accepts however that it may be useful to invite the experts to properly caucus on what is required to address the claim of systemic defects.
Assessment
[31] Procedural fairness strongly supports the basic proposition that the defendants should have access to information in the hands of the plaintiffs that may logically and reasonably bear on the merits of the plaintiffs’ claims. It is not sufficient in my view to simply assert that, based on the plaintiffs’ expert evidence, a sample of 20 properties, chosen by the plaintiffs, meets their discovery obligations. The defendants must have reasonable confidence that the sample chosen for full discovery on all plaintiff categories is, in fact, fair to them.
[32] I also consider that expanded discovery is necessary to secure the integrity and likely value of any stage one decision. The defendants have shown that in terms of the proposed sample, there is an apparent under representation of properties in specific categories (for example there is only one Titan property and no properties prior to 1995) which may in turn leave open debate about the efficacy of any the stage one decision on the issue of product defects.
[33] However, I do not accept that discovery by all plaintiffs of all agreed categories is necessary for the stage one trial. As Mr Gray submits, the central issue at the stage
one trial, insofar as it concerns information in the plaintiffs’ possession, will be whether the James Hardie Products are systemically defective. I also agree with the plaintiffs’ expert assessment that only a sample of properties is necessary to fairly resolve this issue. Moreover, it is not necessary to discover the full gamut of information held by all the plaintiffs to fully address this issue, just as it is not necessary for the parties to review all information about all properties that have used James Hardie Products to address it. Some common sense, assisted by expert evidence, is needed here.
[34] I have come therefore to the view therefore that to ensure fairness and robustness, I should make three directions:
(a)Each of the plaintiffs must discover documents in agreed categories 5 (any Weathertight Homes Assessors’ Reports), 8 (any documents relating to participation in the Financial Assistance Package) and 6 (any other expert reports). This information was identified by Mr McKay as the most valuable information for discovery purposes. It basically includes all expert assessments or reports that have been obtained in respect of the plaintiffs’ properties. This should fairly address all of defendants’ informational requirements in terms of the process for fixing the sample of properties to then be subject to full discovery on all categories. It may also provide the reasonable basis for an additional request for further discovery if needed.
(b)Once that information has been discovered, the experts should caucus and seek to agree the sample of properties that should be subject to full discovery (in terms of the agreed categories) and will be the focal point for the stage one trial. Reasons for disagreement (if any) will need to be clearly stated.
(c)At the completion of the caucusing process, leave is granted to all parties to seek the further assistance of the Court.
[35] I wish to record that failure to caucus may sound in costs. I have not examined the background of the previous failure to caucus. I will not be so sanguine about it if it happens again.
Dates of documents
[36]The defendants propose date ranges for the following agreed categories:
(a)Product development;
(b)Testing;
(c)Promotional material
(d)Technical literature;
(e)Training documents;
(f)Correspondence with industry and regulatory bodies.
[37] They also complain as to the broad temporal breadth of the discovery required, noting a lack of realistic engagement by the plaintiffs on the scale of the litigation they have chosen to bring with a 30-year period.
[38] Mr Gray was happy with the commencement of the date ranges, but concerned with the end dates, as this might exclude relevant material, for example results from testing that post-dated the end dates. However, as I noted to him, discovery of category I should cover this concern. The defendants’ date ranges are approved, provided that this limitation shall not affect the defendants’ duty to discover per category I.
Timetable
[39] I further direct the parties to reach agreement as to a timetable for this stage of the discovery process. In this regard, the parties should also agree a process of discovery that responds to the impending decision of the Court of Appeal dealing with
the actionability of the claims against certain defendants. That timetable is to be filed within five working days for approval of the Court.
Outcome
[40]In respect of the plaintiffs’ application:
(a)Information sought regarding customer complaints is discoverable, but excludes evidence given in litigation or settlement documentation incidental to those customer complaints;
(b)The application for discovery of site visit and customer advice documents is adjourned until the plaintiffs have reviewed the discovery already ordered;
(c)The dates ranges sought by the defendants are approved, provided that this limitation shall not affect the defendants’ duty to discover per category I; and
(d)The other aspects of the application are adjourned pending the outcome of the appeal in relation to the third, fourth, and seventh defendants.
[41]In respect of the defendants’ application:
(a)Each of the plaintiffs must discover documents in agreed categories 5 (any Weathertight Homes Assessors’ Reports), 8 (any documents relating to participation in the Financial Assistance Package) and 6 (any other expert reports);
(b)Once that information has been discovered, the experts should caucus and seek to agree the sample of properties that should be subject to full discovery (in terms of the agreed categories) and will be the focal point for the stage one trial; and
(c)After caucusing, leave is granted to any party to seek further assistance of the Court.
Costs on the applications
[42] Success on the applications has been evenly shared. Costs on these applications will lie where they fall.
SCHEDULE 1
The allegations which the plaintiffs seek to have determined as part of a Stage 1 trial are set out here in summary form only. The full pleadings are relied on, as set out in the referenced paragraphs of the Third Amended Statement of Claim (3ASOC).
Conduct by defendants in relation to James Hardie Products
1.Which of the defendants were responsible for the design, development, manufacture, promotion and sale of Hardidex, Titan, and Monotek (the James Hardie Products), and during which periods. [3ASOC paras 2- 33]
Product Information
2.Which of the defendants were responsible for writing, authorising and publishing specifications, instructions and other information for use in conjunction with the James Hardie Products (the James Hardie Product Information). [3ASOC para 34]
Defects in James Hardie Products
3.Whether the James Hardie Products have the Defects and Risk Characteristics set out in Schedule 4 and 5 of the Third Amended Statement of Claim and whether, as result of the Defects and Risk Characteristics or otherwise the James Hardie Products:
a.are not weathertight in New Zealand conditions;
b.do not comply with Applicable Legal and Building Standards;
c.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. [3ASOC para 35]
4.Whether each of the defendants knew or ought to have known from the early 1990s onwards that the James Hardie Products would or might not be weathertight, or would or might cause damage, and would nor might not comply with Applicable Legal and Building Standards. [3ASOC para 36]
Duty of care
5.Whether each of the 1st-3rd, 5th and 6th defendants 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 property or to the health and safety of occupants or visitors to buildings in which the James Hardie Products were installed. [3ASOC paras 38-40]
Breach of duty of care – defects, lack of testing
6.Whether each of the 1st-3rd, 5th and 6th defendants breached their duties of care by:
a.Designing and developing the James Hardie Products with the Defects. [3ASOC para 41(a)]
b.Failing to carry out adequate or reliable testing, trials or research (including “Sirowet” or other façade performance testing) in order to:
i.Verify that the James Hardie Products would comply with applicable Legal and Building Standards, be
weathertight in New Zealand conditions, and not cause injury to property or persons;
ii.Identify any or all of the Defects and Risk Characteristics which the James Hardie Products had or were likely to have; or
iii.Eliminate any and all such Defects and Risk Characteristics. [3ASOC para 41(b)-(d)]
c.Failing to modify or withdraw the James Hardie Products after they failed tests conducted by James Hardie in around May 2000 and by BRANZ in approximately January 2003. [3ASOC para 41(e)]
7.Whether each of the 1st, 2nd and 5th defendants breached their duties of care by manufacturing the James Hardie Products with the Defects and promoting and supplying or permitting to be supplied the James Hardie Products with the Defects. [3ASOC para 42]
Knowledge/failure to warn
8.Whether, once each of the defendants knew or ought to have known 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 or visitors to buildings in which the James Hardie Products were installed, and would or might not comply with Applicable Legal and Building Standards, they had a duty to warn and/or inform the plaintiffs and/or recall or withdraw the James Hardie Products. [3ASOC para 45-47]
9.Whether the defendants breached their duties to warn by failing to inform/warn the plaintiffs and/or recall or withdraw the James Hardie Products. [3ASOC para 48]
Negligent misstatement – expertise, untrue statements
10.Whether the 1st-3rd, 5th and 6th defendants owed a duty of care to the plaintiffs to ensure that any statements they made or caused to be made about the James Hardie Products were true, accurate and complete and/or remained true, accurate and complete. [3ASOC para 51-52]
11.Whether the 1st-3rd, 5th and 6th defendants made and/or authorised the James Hardie Product Statements. [3ASOC para 53]
12.Whether the 1st-3rd, 5th and 6th defendants failed to take reasonable care to ensure the James Hardie Product Statements were true, accurate and complete. [3ASOC para 54]
13.Whether the James Hardie Product Statements would lead a reasonable person to believe that the James Hardie Products when installed would:
a.Be weathertight in New Zealand conditions;
b.Comply with Applicable Legal and Building Standards; and
c.Not cause damage or harm to buildings or to the health and safety of occupants or visitors to the buildings in which they were installed. [3ASOC para 55].
14.Whether the James Hardie Product Statements would lead a reasonable person to believe that the 1st-3rd, 5th and 6th defendants had not received any information or advice concerning the unsuitability of the James Hardie Products or the use of James Hardie Products in conjunction with other components as exterior weathertight cladding. [3ASOC para 56]
15.Whether the James Hardie Product Statements were not true, correct or complete in that:
a.The James Hardie Products:
i.do not comply with Applicable Legal and Building Standards;
ii.are not weathertight in New Zealand conditions; and
iii.have caused or will cause damage to buildings and to the health and safety of the occupants;
b.The 1st-3rd, 5th and 6th defendants had received information and/or advice concerning the unsuitability of the James Hardie Products or the unsuitability of their use in conjunction with other components as exterior weathertight cladding. [3ASOC para 57]
Consumer Guarantees Act 1993
16.Whether the 1st-3rd and/or 5th defendants manufactured the James Hardie Products, being goods for the purposes of the Consumer Guarantees Act 1993. [3ASOC para 61]
17.Whether, at all material times, the James Hardie brand was attached to the James Hardie Products. [3ASOC para 62]
18.Whether, as manufacturers of the James Hardie Products, the 1st-3rd and/or 5th defendants provided statutory guarantees in favour of the plaintiffs under the Consumer Guarantees Act 1993. [3ASOC para 64]
19.Whether the James Hardie Products failed to comply with the statutory guarantees of acceptable quality and correspondence with description. [3ASOC para 65]
Fair Trading Act 1986
20.Whether, at all material times, the defendants were in trade. [3ASOC para 69]
21.Whether the James Hardie Products were goods for the purpose of the Fair Trading Act 1986. [3ASOC para 70]
22.Whether the defendants engaged in conduct as follows:
a.Making the James Hardie Product Statements and/or authorising them to be made;
b.Endorsing the James Hardie Product Statements by causing or permitted the James Hardie name and brand to be used in connection with the James Hardie Products and the James Hardie Product Statements;
c.Failing one they knew or ought to have known the Facts as to Defects to inform and/or warn the plaintiffs and/or take reasonable steps to issue recalls and/or withdraw the James Hardie Products from the market. [3ASOC para 71]
23.Whether the defendants’ conduct was misleading and deceptive or likely to mislead or deceive. [3ASOC paras 72-73]
24.Whether in making and/or authorising the James Hardie Product Statements, the 1st-3rd, 5th and 6th defendants made representations to the effect that the James Hardie Products were of a particular kind, standard, quality or grade in that when installed they would:
a.Comply with Applicable Legal and Building Standards;
b.Be weathertight in New Zealand conditions; and
c.Not cause damage or harm to buildings or to the health and safety of occupants or visitors to the buildings in which they were installed. [3ASOC para 75]
25.Whether the representations were false or misleading in breach of s 13(a) of the Fair Trading Act 1986. [3ASOC para 76-77]
SCHEDULE 2
| Categories of Discovery Plaintiffs will provide | |
| Class | Description of Discovery Class |
| 1 | All pre-purchase inspection reports and records regarding the condition of the Properties at the time they were purchased (and where relevant, put on the market and/or sold, regardless of whether the sale went unconditional); |
| 2 | Documents relating to when the Properties were purchased (or, where relevant, sold) and on what terms and conditions (including such documents on the plaintiffs’ lawyer’s conveyancing files); |
| 3 | Documents (including plans) in relation to the original design and construction of the Properties, including (where relevant) any design and construction of any renovations which used any of the defendants’ cladding products; |
| 4 | Documents, including any photographs which the plaintiffs have in their custody, relating to when any actual or potential weathertightness issues were initially discovered (regardless of cause or potential cause) and any subsequent documents regarding actual or potential weathertightness issues (including documents relating to the existence, extent and timing of damage); |
| 5 | All Weathertight Homes Assessors’ Reports (including eligibility reports and all supplementary reports); |
| 6 | Any other expert reports or other documents received from experts (including photographs and emails) regarding weathertightness issues; |
| 7 | All documents relating to remedial works which have been suggested, planned and/or carried out or which may be carried out, including documents relating to the pre-remediation design and condition of the relevant property, the scope and cost of the remedial works and documents relating to the cost of those works; |
| 8 | All documents relating to any participation (including applications, successful or otherwise) in the Financial Assistance Package; |
| 9 | All documents relating to any claims against any other party which relate, wholly or partly, to weathertightness defects or issues, including in relation to any compensation received in response to any such claims; |
| 10 | All documents relating to any direct or indirect reliance by any of the plaintiffs on the James Hardie Product Statements; |
SCHEDULE 3
| Categories of Discovery Defendants will provide4 | |
| Class5 | Description of Discovery Class |
| A | Product Development Product development and design of the Harditex and/or, Monotek and/or Titan Board systems (“the James Hardie Products”) relating to: a. the development and design of the features of the James Hardie Products and the reasons they were designed in this way; b. any updates to the development and design of the James Hardie Products following introduction to the market, and the reasons for any updates; and c. the development and/or modification of the design of the James Hardie Products for use in the New Zealand market and the reasons they were developed/modified in this way. The documents should include documents relating to design, components, materials that form the system, technical drawings, formation of technical drawings and internal communication in relation to these design decisions being made. |
| B | Testing All documents relating to: a. the testing of the James Hardie Products or parts of the James Hardie Products (including, but not limited to, testing of parts of the components of the system); and b. any modifications made as a consequence of any testing whether in New Zealand or overseas. The documents should include testing carried out by internal and external parties (such as BRANZ). The documents should also include the testing protocols or instructions provided in respect of each test, the results, the full report, and details of who received these reports. |
4 Discovery class date ranges are not yet agreed.
5 Missing class letters are assigned to categories not agreed by the parties.
| C | Promotional Material All documents relating to: a. internal communications in relation to the accuracy of the sales and/or promotional material for the James Hardie Products. A reasonable selection of the following material which shows all of the various claims made about the products (we do not require every single sales and marketing material over the last 30 years): b. final versions of sales and marketing material provided to builders (including videos and guides); and c. final versions of sales and marketing materials provided to industry- bodies (such as Masterbuild and design bodies); and d. final versions of sales and marketing materials provided to customers or media to be published. |
| E | Harditex Improvement Project The “Harditex Improvement Project” established in around September 1999, including any documents showing the purpose of the project, who was involved, and all reports and decisions resulting from the project. |
| F | Decision to Withdraw Old Product and Introduce New Product All documents relating to the decision to withdraw the Harditex system from the New Zealand market, including who was involved in recommending the decision, and who authorised the decision. |
| G | Industry Study Tour of USA and Canada In approximately November 2000, a representative(s) of James Hardie attended the Building Weathertightness “New Zealand Industry Tour of USA and Canada”. We seek all documents showing the reasons for the tour, information supplied and obtained and conclusions drawn by the participants. |
| H | Technical Literature Drafting and updating of the Technical Literature relating to the James Hardie Products. |
| I | Documents Identifying Risks or defects or liability relating to James Hardie Products Identification or discussion of any risks, defects or liability from 1987 onwards relating to the James Hardie Products, in particular relating to: a. whether the Products were weathertight in New Zealand conditions; b. whether the Products complied with Applicable Legal and Building Standards (as defined in paragraph 39 of the Third Amended Statement of Claim); c. whether the Products had or might cause damage to the health and safety of occupants or to other parts of buildings in which they were installed; and d. reporting and dissemination of information within the James Hardie Group about these matters. No discovery is required in relation to manufacturing batch defects (such as product being outside stated dimensions, or other quality issues relating to a specific batch/es). |
| K | Training documents All internal policies and technical training materials in relation to the installation of the James Hardie Products. Training documents in relation to manufacturing processes are irrelevant. |
| N | Correspondence with Industry and Regulatory Bodies Correspondence with industry and regulatory bodies: All correspondence between any of the defendants and the Cladding Institute of New Zealand (also known as the New Zealand Cladding Institute), BRANZ, Standards New Zealand, Master Builders Association, government ministries, councils, the Commerce Commission, or other industry or regulatory bodies regarding the James Hardie Products. |
| Q | Sales figures Annual sales figures and annual figures covering the volume of products sold. (In relation to the income distribution within the James Hardie Group, the Plaintiffs accept that this category of documents should be “parked” pending the outcome of the appeal but, depending on the outcome, it is agreed this category will be provided if the third, fourth and seventh defendants remain in this proceeding.) |
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