Commerce Commission get all clear to chase Hart's CHH

Friday 27th November 2009

A Supreme Court ruling has given the goahead for the Commerce Commission to proceed with a claim against Carter Holt Harvey Ltd. that could force the timber company owned by Graeme Hart’s Rank Group forced to refund as many as 60,000 households.

The regulator claims CHH is liable for consumers and competitors who suffered a loss due to the forest products company selling timber below the grade claimed on the packaging. The action pre-dates Rank's 2006 CHH purchase.

The country’s highest court overturned a previous Court of Appeal ruling that the Commission failed to file proceedings against CHH within the limitation period allowed by the Fair Trading Act.

“The Commission is pleased with the outcome of the Supreme Court hearing and will now focus upon progressing its proceedings on behalf of those who suffered loss arising from Carter Holt Harvey’s contraventions,” the regulator said in a statement.

“The Commission believes there could be up to 60,000 houses and other buildings involved.”

In October 2006, CHH pleaded guilty to 20 charges of breaching the Fair Trading Act for selling timber that didn’t meet the grade advertised. The company was fined $900,000 and an executive was also fined in connection with the case.

The Commerce Commission is calling for homeowners and buildings who may have bought or used the mis-graded timber to contact them and is claiming CHH pay refunds to end-users the difference between what they paid and the fair market value of the lesser grade timber.

It’s also pushing for CHH to compensate competitors that may have lost profit as a result of the sale. The timber in question was sold between May 1998 and October 2003.

The regulator said it’s “highly unlikely” that the use of the lesser grade timber would cause a “failure of any particular house component,” though it could result in performance defects such as squeaky floors or deflections in roofs.

Rank Group, the investment vehicle for Australasia’s richest man, bought Carter Holt Harvey in 2006 for some $3.3 billion, seven months after it put in its initial bid. The company declined to comment on the announcement, and Carter Holt Harvey didn’t immediately respond to inquiries.

Businesswire.co.nz

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