Court of Appeal rules that leaky building claims against James Hardie can proceed

The Court of Appeal has released its long-awaited decision, confirming that claims brought against four operating companies and three holding companies in the James Hardie group may proceed.

Background to the claim

The claimants are past or present owners of homes, commercial buildings and retirement villages which have all been clad with exterior cladding products manufactured and supplied by James Hardie. The claimants allege that the James Hardie products were defective, not watertight, and failed to comply with the prevailing building standards.

Proceedings have been brought against a range of companies, including the ultimate parent company, James Hardie Industries Plc (JHI). The holding company defendants, including JHI, challenged the claim on the basis that "since they did not manufacture, market or supply the allegedly defective products, the claimants cannot succeed against them."

Negligence

First, the Court of Appeal considered whether a holding company can owe a duty of care to those who have used a product manufactured by the holding company's subsidiaries. The Court noted that:

"The application of principles emerging from three separate lines of authority are at issue on this appeal. The first is to do with the...