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Carter Holt Harvey draws councils into leaky school claim

Monday 27th February 2017

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Carter Holt Harvey has dragged 47 local body governments into its leaky schools court case after losing a bid to have the Ministry of Education's claim tossed out. 

Auckland Council is one of 47 local body agencies facing third-party claims from Carter Holt alleging a breach of duty in the building consent process, according to the city's first-half accounts. Carter Holt, owned by billionaire Graeme Hart, filed the proceedings in December, the council said in a note to its accounts acknowledging the proceedings as a contingent liability. 

The Ministry of Education is suing the building supplies company claiming it was negligent in the way it sold plywood cladding product, known as Shadowclad, which the ministry says caused weather-tightness problems at 880 school buildings. Carter Holt tried to have the claim tossed out before it reached a formal hearing, but lost in the Supreme Court last year, meaning the ministry can pursue the case. 

The Education Ministry launched a claim against cladding manufacturers Carter Holt, James Hardie and CSR in April 2013 to help cover a bill that was estimated to be as much as $1.5 billion. It has since reached confidential settlements with James Hardie and CSR, although there are some cross-claims against those parties as at least 73 school buildings used a mixture of cladding products. 

Auckland Council said of the 880 buildings subject to the ministry's claim, 50 are located within the country's biggest city. 

"At present there is insufficient information to conclude on potential liability and claim quantum, if any," the council said.

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