KEY POINTS:
Housing New Zealand is suing six people convicted of making P in a state house for more than $180,000.
If it wins the case, it will open the way for other landlords to follow its action.
The corporation is seeking $184,766 in damages from the group of six after the Napier house in which they made the drug had to be demolished.
Chief executive Lesley McTurk described the test case as "an important stake in the ground" for Housing New Zealand.
"Where illegal activity occurs and damage is done to a state home, Housing New Zealand is determined to recover the costs of damage from those responsible," she said.
The civil suit will be heard in the Napier District Court this week.
Dr McTurk said that if it succeeds, it could set an important precedent.
Ten people were convicted in relation to manufacturing methamphetamine at the Robinson Cres property, which was demolished in 2004 because it was so badly contaminated. The money Housing NZ is seeking is to cover the costs of the clean-up and the loss of the house.
Dr McTurk said that because the damage to the property was so great, it was beyond the jurisdiction of the Tenancy Tribunal, and Housing NZ had to go to the district court.
"We have obtained an order for damages against the tenant, but we also believe there are legal grounds to find other people involved in the drug ring liable because their activities all contributed to the damage.
"The case this week will determine if the court agrees."
Sixteen P labs were found in Housing New Zealand properties between July 2002 and June last year. In two cases - one in Napier, the other in Hamilton - the properties had to be demolished.
When P labs are detected in Housing NZ properties, it seeks to terminate the tenancy and recover the cost of the damage through the Tenancy Tribunal.
But this can be done only if the tribunal agrees and has jurisdiction.
If the corporation - the country's largest residential landlord - wins this week's case, it will effectively allow it to recoup costs from a wider group than just tenants, which could also set a precedent for private landlords.
Police found 1000 P labs between 1996 and 2006, and the figure is now close to 1200.
Nick McLeay, former head of the police national clandestine laboratory response team in Auckland and now director of the NZ Drug Detection Agency, said total damage to the properties ran into the millions.
"And those are the ones the police have found. There's a lot more out there which are being used and damaged but it's kept all in-house and tidied up without any law enforcement involved."
