KNYSNA NEWS - The figure most often given for the total damage done by the Knysna fires last June is about R4.5-billion.
That’s total damage, not damages. Damages are what a court awards a winning plaintiff in a civil claim for the damage caused them by someone’s act, or in some cases, failure to act.
Until a recent *Noseweek article reporting on the competing theories of the origin of the Elandskraal fire, the question of claims for damages against Knysna municipality in connection with the June fires has attracted little attention in the press.
The article quotes Jean du Plessis, a Pretoria attorney representing a number of Elandskraal residents who lost their homes in the fire that swept through the area early in the morning of 7 June.
He says he is suing Knysna municipality for R21-million in damages for his clients.
A small amount, easily covered by the reported R100-million provided by the municipality’s public liability insurance policy.
But this planned lawsuit inevitably raises a more troubling question: what is the total amount of damages being claimed against Knysna municipality in connection with the June fires?
Is it more than R100-million, if that is indeed the limit of the municipality’s public liability insurance?
And if it is, and if the plaintiffs are awarded the amount of their claims (a big if!), what does it mean for Knysna and its ratepayers?
No one seems to know.
Potential liability
And yet, Knysna municipality should have a fairly good idea of the potential liability it is facing at this point.
Du Plessis says he has served **ILPOSA Section 3[2] notices on Knysna and Eden District municipalities, advising them that he intends to institute a R21-million damages claim against them.
ILPOSA Section 3(2) requires a creditor to notify an organ of state of intended legal proceedings within six months of the date a debt becomes due.
Section 3(3) provides that “a debt may not be regarded as being due until the creditor has knowledge (…) of the facts giving rise to the debt”.
The earliest the Elandskraal plaintiffs could have had knowledge of the facts giving rise to their claim was 7 June, the day three lives were lost there, and residents’ homes and other property burned to the ground.
To be safe then, an attorney who planned to claim damages from Knysna municipality in connection with the June fires would have to have served a Section 3 notice by 6 December 2017 – exactly six months after 7 June.
Answers needed
The 6 December deadline has now passed, which raises the following questions, at a minimum:
• How many Section 3 notices have been served on Knysna municipality in connection with the June fires, and what is the total amount of damages prospective plaintiffs have indicated they intend to claim?
• Will the municipality’s public liability insurance policy cover all those claims, and if not, what does this mean for Knysna’s financial health going forward?
• In a worst-case scenario, is it possible that Knysna municipality could be forced into bankruptcy by these claims, and if so, what would the impact of bankruptcy be on Knysna’s residents?
• Do insurers who have already paid out hundreds of millions of rands to their individual policyholders also have actionable claims against Knysna municipality?
If potential plaintiffs who considered instituting proceedings failed to serve a section 3 notice by 6 December as a result of the conclusions reached in the municipality’s report and those conclusions ultimately fail to withstand scrutiny, will the municipality condone the late service?
• How serious is the risk the municipality faces, based on the merits of the cases that the municipality already knows are going to be brought?
Knysna’s ratepayers would like to know.
The Committee
The Knysna Ratepayers' Association welcomes any and all comments, answers, corrections, or information of any kind that would be of interest to ratepayers.
Please send your email to admin@knysnaratepayers.co.za.
* “Knysna Fire: Secret CSIR Report Bombshell”, Noseweek, January 2018.
** The above citations are to the Institution of Legal Proceedings against certain Organs of State Act, 2002, abbreviated here as “ILPOSA”. – Supplied
On Tuesday 16 January the municipality issued the following response, with municipal manager Kam Chetty stating, "The Knysna municipality eagerly awaits the release of the report into the origin of the fire by the CSIR’s Meraka Institute.
Once we have received and studied the report we will issue our comments.
Discussing a report that we have not seen can only lead to confusion and further complicate a sensitive situation.
"With regards to the notices we have received, we have acknowledged receipt of these notices to the attorneys of record and advised that our detailed response will follow. At this stage we have no further comment."
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