Commerce Commission to take three firms to court over steel mesh
The Commerce Commission has told three companies including Steel & Tube that it will prosecute them over allegedly sub-standarded steel mesh.
The commission said it planned to issue criminal proceedings early next year under the Fair Trading Act against three companies, which it would not name to give them a chance to seek name suppression.
But NZX-listed Steel & Tube has chosen to identify itself, saying the case against itself related to testing practices, not the mesh itself.
"The commission's decision in relation to Steel & Tube relates to the application of the testing methodologies, not the performance characteristics of our seismic mesh."
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The commission has been investigating claims since August last year that some steel mesh sold up to April this year was below the Australian/New Zealand building standard.
Several other companies are still under investigation.
Two other companies, were disciplined to a lesser degree. Fletcher Steel was issued with a warning for "engaging in conduct that was likely to breach the act" for re-testing its product in a non-standard manner.
However, the commission was satisfied that Fletcher's mesh met the standard.
Another firm, United Steel, has been issued with compliance advice, also for re-testing methods.
All of the commission's investigations relates to grade 500E seismic steel mesh, which is often used to strengthen concrete slabs like house foundation slabs and driveways.
Early testing results gave the commission concerns about the mesh's "ductility" or flexibility, but later it also became worried about testing procedures being used.
It will charge the companies concerned with not meeting the standard and making "unsubstantiated representations" that the mesh complied with the standard, when it did not.
Commission chairman Dr Mark Berry said the Ministry of Business, Innovation and Employment was the body that set and enforced the building code, but the commission could take legal action "where we see misleading or deceptive claims about compliance."
Last month MBIE clarified its standard and made changes to the testing requirements.
"This should give New Zealanders greater confidence that the steel mesh currently being sold in New Zealand meets the standard," Berry said.
Steel and Tube, which has called for a review of the testing standard to resolve ambiguities, said the mesh investigation was clearly an industry issue and it was glad the standard had been clarified.
"Ambiguities in the testing standard resulted in seismic mesh manufacturers and accredited testing laboratories applying different testing methodologies, and it has impacted everyone in the industry," chief executive Dave Taylor said.
He said the court case should not slow down any building project using its mesh, as it was externally tested by accredited laboratories.
"...Despite the Commerce Commission's decision, we stand by our products and have confidence in them."
Taylor said homeowners could take "significant reassurance" from MBIE, the Insurance Council and the Structural Engineering Society that they should not be unnecessarily concerned.
But Auckland lawyer Adina Thorn, whose firm is looking at taking class action against faulty mesh manufacturers, said the commission's move was "consistent with everything we're doing".
She urged people with new houses or commercial buildings, or who had had a recent alteration done, to consider signing up.
"I'm saying that anybody who had a house built in the last five years should just register, it costs absolutely nothing and let us work out whether you might have a claim."
She said the Commerce Commission could seek fines against companies but compensation usually had to be sought separately.