Harditex manufacturer James Hardie is back in court, now tussling with insurer Zurich Australia over recovery of its $32.5 million costs after successfully facing down a $300 million class action claim that its Harditex product was inherently unsuitable for use as exterior cladding.
In dispute, is the ambit of two insurance policies covering years 1998-2004 providing insurance cover for James Hardie’s defence costs in ‘property damage’ litigation, together with application of a 2007 Protocol agreed between James Hardie and Zurich designed to administer the then ongoing litigation.
Zurich says wording of the insurance contracts require their dispute be heard in Australia.
Justice Blanchard ruled the wording gives James Hardie the right to force Zurich into the Australian courts, but does not stop it suing in New Zealand.
A New Zealand court would be required to apply Australian law in hearing their dispute. This is not insurmountable; in many respects, insurance law in New Zealand and Australia is similar. Where it differs, expert evidence will assist the judge.
The High Court was told the main dispute is factual; whether claimed weathertightness issues arose during periods covered by Zurich’s insurance. This could require detailed factual evidence covering over one thousand properties subject of the unsuccessful class action.
Practical difficulties in dealing with the volume of evidence anticipated meant the insurance dispute was better heard in New Zealand, Justice Blanchard ruled.
James Hardie New Zealand Ltd v. Zurich Australian Insurance Ltd – High Court (25.10.24)
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