Hotel sues eThekwini Municipality for R140m over flood damage
That was the claim made in the summons served on the municipality recently by law firm Norton Rose Fulbright, which represents insurers Santam.
The insurance company made a R14 million claim on behalf of its clients, the owners of Crimson Clover Trading 17 (Pty) Ltd, trading as Island Hotel in Isipingo, south of Durban.
After heavy rains lashed Durban in May 2016, 1m high water had covered the hotel and its buildings, which sits on an island surrounded by a lagoon.
Not only did the flooding hamper trade at the hotel, it damaged buildings, plumbing, electrical circuits, fixtures and stock at the site.
The owners were forced to conduct mop-up operations and hire specialists to repair structural and other damages so the hotel could trade again.
In the summons, Santam claimed that the municipality had failed to ensure that its stormwater management system functioned in a way that would prevent the flooding of the low-lying area where the hotel was located.
The stormwater system is expected to discharge large volumes of water into the Isipingo River that runs through the area and the nearby ocean.
Prior to serving the R14652790 claim, Santam served the municipality with a condonation application in July 2017. A condonation application was made because Santam were not able to sue the municipality in the required six month period.
This was rejected by the city in April 2018 and resulted in Santam making a high court application to secure their claim in condonation.
Jacques Du Plessis, who handles serious claims on behalf of Santam, deposed an affidavit in support of the condonation court application.
Du Plessis said the incident happened on May 6, 2016 and they were required to file their damages claim, with the municipality, within six months, but were hampered by various delays. To determine the extent of damage to the hotel, Du Plessis said Santam hired loss adjusters in the same month.
The loss adjuster’s main objective was to ensure the hotel was functional again in quick time, but reported that it was not able to establish the “potential defendant”.
Santam then advised its attorneys to pursue its claim for recovery and TCG Engineers were hired as the experts to establish which entity was responsible for the effects of the flood, Du Plessis said.
By December 2016, the experts were still unable to establish the responsible entity and the attorney’s responded by making a Promotion of Access to Information Act (Paia) application to gain the information they required.
Du Plessis said it received a response to its Paia application four months later.
The law firm forwarded a request for condonation to the municipality in April 2017.
Still with no conclusive information on which entity was responsible for the stormwater system, Santam’s attorneys (Norton Rose) wrote to various government entities in October 2017 to get clarity.
According to Du Plessis, the municipality’s head of legal services responded in October 2017 but denied responsibility and ignored the condonation request.
After sending further correspondence, the municipality eventually responded in April 2018 and stated that the condonation request was denied.
In its responding documents, the municipality’s legal representative, Samantha Mahadeo, asked why Santam’s condonation application was filed 22 months after the flood and 16 months after the Paia application response was received in April 2017. She accepted that the municipality was responsible for managing stormwater but not the berm (a raised bank) that was meant to prevent flooding of the affected area. “The applicant has not shown good cause for the application to be granted,” said Mahadeo.
In response, Du Plessis said according to legislation, it was not required to justify the delay that arose between filing and launching a condonation application.
A trial date for the condonation application is yet to be confirmed.