18 Apr 2013

James Hardie to fight leaky school building case

9:49 pm on 18 April 2013

Building supply company James Hardie plans to vigourously defend itself against High Court action by the Education Ministry.

The ministry is seeking compensation over a huge repair bill it is facing for leaky school buildings.

On Wednesday, it announced it had lodged a claim in the High Court against manufacturers of wall claddings used in buildings that have since leaked.

It did not name the companies involved, but Australian firm James Hardie has confirmed it is one of them.

The ministry says it is having to repair more than 800 buildings at about 300 schools and wants to recover some of the estimated $1.5 billion cost.

James Hardie vice-president Sean O'Sullivan says it is too early to tell what proportion of that is being sought from his company as the amounts involved have not been specified but he is adamant the legal battle will be a long one.

In February, James Hardie increased product liability expenses in New Zealand by about half to $US13.2 million.

At the time, the company said the increase recognised the difficulty in getting compensation from third parties to cover a portion of costs to resolve their claims relating to buildings mainly constructed between 1998 and 2004.

A lawyer who specialises in leaky home cases, Paul Grimshaw, says the court battle will be a significant test case and he expects James Hardie to fight the case all the way to the Supreme Court.

Meanwhile, Australian building products company CSR said on Thursday it has been named in the law suit, but is playing down its potential liability.

In an announcement to the Australian stock exchange, CSR said the Education Ministry has also commenced action against its subsidiary, CSR Building Products (NZ) Limited.

However, the company said based on its low level of market share in New Zealand, it believes any financial impact from the law suit would be minor.

The principal of a Papamoa primary school that has endured five years of leaky classrooms being rebuilt says he's thrilled the Ministry of Education is taking cladding manufacturers to court.

Ian Leckie says he wants to see others in the building industry, such as architects, also held to account for the cost and stress of buildings that have leaked.