At 3am on the morning of 7 March 2013, Morningside residents had a rude awakening when a burst water pipe in Outspan Road caused 10 houses in the Morningside Village Estate complex to flood. Perimeter walls were washed away and some parked cars were damag
Does this mean the municipality is liable for the 2013 flooding? Under which circumstances would a municipality be held liable, and how would this affect insurers?
John Melville, Santam’s executive head of risk services, says there are not that many legal precedents when it comes to municipal liability in similar situations and that these matters tend to be reviewed on a case-by-case basis. He believes this will be an area that will be increasingly tested, however.
The Municipality of Cape Town vs. Gladys Marjorie Bakkerud
The legal area is of course that of delictual liability and the case of the Municipality of Cape Town vs. Gladys Marjorie Bakkerud, heard before the Supreme Court of Appeal on 2 May 2000, is an interesting one because it indicates that a municipality can be found liable for omissions according to the law of delict.
In this case, the Respondent, Gladys Bakkerud, had previously sued the municipality when she fell after stumbling on a hole in a pavement on a Sea Point road. She was awarded damages because the court found the municipality’s failure to repair the hole “constitutes an unlawful act of omission”. At the same time, Bakkerud was found to be equally to blame because she stepped into the hole – but what about cases in which a citizen is merely sitting at home and his or her house floods because a water pipe in the vicinity bursts?
How is delictual liability established?
Maria Philippides, a director at Norton Rose, says that in a case like this the prospective plaintiff (the homeowner, for example) would have to prove normal elements of delictual liability in order to claim damages (the homeowner’s insurer could sue the municipality according to the rights of subrogation, which simply means that one person or party, the insurer, takes over the rights of another, the insured person, against a third party).
The court would have to establish whether the burst pipe resulted because of an act or omission. In either case, wrongfulness and negligence would have to be established. What does this mean?
“In terms of an omission, the municipality may have failed to maintain or properly repair its water pipes, which could have resulted in the pipe’s bursting,” says Philippides. “The question then arises – did the municipality have a duty to maintain the pipes? And if they did not do so, could this failure then be considered wrongful?”
In terms of wrongfulness – it would need to be established whether or not the municipality owed a legal duty to anyone, and that this had been breached. Considerations such as whether the municipality provides essential services and whether it has an operating budget, and this is sufficient to allow it to perform its legal duty, would be taken into account.
In terms of negligence, it would have to be established that either the municipality’s or its worker’s carelessness led to the water pipe’s bursting. “Negligence is tested on the basis of whether a municipality could reasonably foresee that its worker could cause the damage,” says Philippides. If a burst pipe was inadequately repaired in 2009, could a municipality not reasonably foresee that the same thing could happen again?
“If these pipes are 35 years old, or more, a municipality could foresee that they would not be in good enough condition to handle water capacity in a growing ward and would have to take steps to maintain or improve them,” says Philippides.
What recourse does a homeowner have?
Once it’s been established that the municipality has been at fault, for example, a reasonable case against the municipality could be made. The Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002 requires that if you bring an action against a municipality, you have to first give notice to the municipality and this has to be served within six months of the event (like a flood). This is because municipalities have so many duties that they would not necessarily be aware that someone had suffered damages and they would want to investigate and reserve evidence early. You would then have the normal service period of three years from the date of the event to issue summons.
If causation can be established, the municipality could be liable for any damages that could reasonably have been foreseen, such as water damage to the units in question, structural damage, the loss of personal effects and damage to cars, for example.
If a homeowner has a valid insurance policy, this would usually indemnify the insured and the insurer will pay out. However, the insurer could likely sue the municipality for the loss, including uninsured losses: say damages amounted to R10m, but the insured was only covered for R2m, for example. The insurer could then sue for the entire R10m in the name of the insured, says Philippides, and apportion what is recovered between the insurer and the insured.
The bigger picture
We all know that R827bn has been set aside in National Treasury’s budget to focus on building new and upgrading existing infrastructure. Municipal capacity in the built environment has been one of the issues under discussion because much of our infrastructure is creaky and old and needs servicing, if not replacing.
All three tiers of government play an important role in such planning and management, says Debbie Donaldson, South African Insurance Association (SAIA) General Manager: Strategy and Planning.
“We have established a strategic intent to work with municipalities when it comes to risk management,” she says. “We are looking at what mutual challenges municipalities and the industry will be facing over the next 10 to 15 years or so because these obviously affect us directly, for example fire and flash-flood risks. We have to engage across the financial sector value chain so we can put municipal capacity high up on the agenda, working closely with local authorities. Our members know what the risks are because they pay for them – but we can’t address some of the factors that increase the risks ourselves.”
Editor’s thoughts:
Unless our ageing infrastructure is upgraded to meet the needs of growing urban demand, we are likely to see more damage of this nature occurring. Do you think municipalities will be found liable? Comment below or email fiona@fanews.co.za.
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Added by Elton Dennis, 14 Jun 2022