CSR joins James Hardie in cutting deal over leaky NZ schools

Nikki Kaye
CSR 12-month price history (ASX.com)

CSR [ASX: CSR], the ASX-listed building products maker, has reached a confidential settlement with New Zealand's Ministry of Education over leaky schools, seeing off the need for legal action.

The ministry, which oversees education policy and spending, has discontinued its legal action against CSR Building Products, a local subsidiary of the Australian firm, after settling the claim, Associate Education Minister Nikki Kaye said in a statement. Details of the settlement will remain confidential.

The ministry filed the proceedings last year as it embarked on a remediation programme on 800 buildings across more than 300 schools, with an estimated cost of some $1.5 billion.

"While the CSR product is only on a small number of schools, I'm very pleased to see the industry responding sensibly and allowing settlement to be reached without the need for court action," Kaye said. "Effective legal action will continue as needed to protect Crown assets, but it is only part of a much wider strategy to ensure delivery of the best possible learning environments for students and teachers."

When CSR was named as a party in the suit, it talked down its role saying its low level of market share of the product meant "any potential financial impact related to this action would not be material to the financial results of the company."

CSR's shares were unchanged at A$2.90 on the ASX in early trading today.

The settlement is the second in as many months, after James Hardie cut a deal just before Christmas, having it faced potential costs of up to US$47.6 million related to a slew of leaky building claims, including provision of US$15.2 million for the ministry's NZ$1.5 billion suit against cladding manufacturers.

At the time, James Hardie said its settlement won't have a material adverse impact on its business result, which would see the company support the ministry's remediation programme and support future property development around New Zealand.

The ministry is continuing its legal action against Carter Holt Harvey.

(BusinessDesk)

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2 Comments & Questions

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The recent government "out of court" settlements for leaky schools has removed any legal precedent for leaky home owners pursuing the same large building product companies in court.

Ironically, the government continues to advise leaky home owners to actively pursue liable parties such as builders, developers and manufacturers of defective products.

Leaky home owners are forced to pursue legal action as they have to fund 75% or 50% of their repair cost if they opt into the government assistance package. The package is a failure as it has covered claims for only 2% of leaky homes.

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All the product of weak governance.

These liabilities are hidden everywhere, with the main benefactors being big business; with a large overseas interest.

These early settlements will have something to do with this years budget. You can guarantee that!

And they say government is for the people! What an ass!!!

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