KZN Transport Department, Transnet, and eThekwini Municipality face R339 million flood damage lawsuit
Several areas especially in south Durban were flooded during the April 2022 heavy rains.
Image: Independent Newspapers Archives
The KwaZulu-Natal Transport Department, Transnet, and the eThekwini Municipality are being sued for more than R339 million due to the deadly floods in 2022 that caused extensive destruction to a business premises in Durban.
The three entities have been named as defendants in a lawsuit filed by the insurer of Caxton and CTP Publishers and Printers Limited (Caxton), which suffered significant damage at its Prospecton premises during the floods.
The lawsuit, a subrogated recovery action, where the insurer steps into the shoes of the insured and directs the litigation, has been filed in the Durban High Court under the name of Caxton on behalf of the insurer.
Several companies in the southern part of Durban experienced extensive damage during the floods, prompting their insurers to take legal action to recover losses incurred as a result of the flooding. This lawsuit follows a separate R6.5 billion claim filed by Tokio Marine and Nichido Fire Insurance Co. Ltd, the insurers of Toyota South Africa Motors, against the same three entities.
Craig Woolley, a director at law firm Norton Rose Fulbright, representing the plaintiff, stated, “It is correct that there is a summons on behalf of the publishing company, a subrogated recovery action.” A representative of Caxton confirmed that they are aware of the subrogated recovery action being instituted by the insurer. He stated that the lead insurer is Chubb and said Caxton had no further comment on the matter.
At the heart of the claim is the assertion that the three government entities failed to act appropriately to maintain and service their infrastructure, which caused it to fail at a critical moment. This negligence allegedly led to the flooding of Caxton’s Prospecton premises, resulting in millions of rand in damages.
The claim specifies that three structures failed: the Umlaas Canal, the diversion berm, and the stormwater management system. According to the court papers, the claim states that the three parties should have been aware that the failure of their infrastructure and the lack of maintenance of their flood control systems would result in flooding of the business premises.
Consequently, damages amounting to R339.5 million are being claimed, which include R284.2m for the fair and reasonable costs incurred in the repair and reinstatement of the plaintiff's premises and property, and R55.3m for business interruption.
The court papers detail that the plaintiff operated a printing business from its premises in the Prospecton Industrial Area. “The first defendant (Transnet) owned and was responsible for the management and maintenance of the Umlaas Canal. The Department of Transport was responsible for the management and maintenance of the diversion berm, as well as the flood risk associated with it.
“The third defendant (eThekwini Municipality) owned, managed, and was responsible for the maintenance and control of the stormwater management system for the Prospecton Industrial Area, including the flood risk associated with this system,” stated the court papers.
The papers state that Transnet and the Department of Transport failed to ensure that the Umlaas Canal and diversion berm were functioning as designed, and the municipality failed to ensure the proper functioning of the stormwater management system in the area.
The court documents state that on or about 12 April 2022, the structural integrity of both the diversion berm and the Umlaas Canal was compromised, resulting in “stormwater flowing uncontrollably into the Prospecton Industrial Area and onto the plaintiff’s premises, causing extensive flooding and resultant damage to the plaintiff’s property.”
It is further stated that as a result of the flooding, Caxton had to engage various third parties to perform cleaning and drying of the premises and property, was compelled to hire contractors to effect repairs to the damage caused by the flooding, and engaged specialist engineers to address the repair of structural damage to the premises, as well as damage to electrical installations, plumbing, air conditioning, manufacturing, and assembly equipment.
They also had to replace printing and ancillary equipment that was damaged beyond economical repair and suffered losses of raw materials, fixtures and fittings, office contents, and electronic equipment. Furthermore, the plaintiff was unable to conduct its business activities during the repairs and consequently sustained damages due to this business interruption.
Transnet said it has filed a notice of its intention to defend the summons. “The matter is receiving priority and will be dealt with through the appropriate platforms,” said the company in a statement.
The Transport Department said that it was not in a position to comment and the eThekwini Municipality said it was gathering information on the claim.