n Tydskrif vir die Suid-Afrikaanse Reg - Brandversekering en lakse plaaslike owerhede - rus die skade waar dit val?

Volume 2013, Issue 1
  • ISSN : 0257-7747
  • E-ISSN: 1996-2207



Some of the fundamental principles of a developed legal system that apply to a society governed by the rule of law are self-determination or private autonomy and the minimum of governmental intervention into the private sphere. As a consequence of these principles a loss suffered is in principle carried by the holder of the patrimonial right where the loss materialised - damage rests where it falls. Courts do not interfere with this principle and leave a loss where it is unless they find a good reason to shift it. Some of the exceptions where a good reason exists to shift the loss are if a contractual agreement such as an insurance contract is in place or where the principles of the law of delict apply and the tortfeasor is burdened with the obligation to repair the damage caused by his/her blameworthy conduct.
An indemnity insurance contract as an example of an agreement founded on the of the insured and the insurer provides for the eventuality that should the insured uncertain future risk materialise, the insured will then be indemnified by the insurer. The loss is thus shifted from the insured to the insurer and spread effectively amongst a community of exposed persons as fellow insured and the indemnification is effectively paid from the pools of premiums contributed to by the body of insured policy holders mutually. In order to allow for a realistic calculation of the risk the underwriter needs to base the calculation on a realistic evaluation of all applicable facts. A fire insurer, for example, needs to know the type of construction to be insured and the location of the construction in order to determine the possibility of it catching fire, and, if it does, the realistic possibility of effectively fighting and containing an eventual fire to prevent it from getting out of control leading to a total loss and consequently enormous damage. It is thus common to ask whether the construction is thatch-roofed or not, because a fire spreads more rapidly in such a construction than with another roof construction, and thus with a limited window of opportunity to effectively contain the fire before it gets out of control.
One of the assumptions seldom articulated but nevertheless fundamental to fire insurance is that if the insured property is located within a regulated municipal area it may be assumed that the local authority will have the prescribed effective professional fire brigade and equipment available to timeously reach the fire and commence with effective fire fighting. Because it is assumed that all local authorities abide by the applicable laws and regulations, no insured is asked by his insurer before conclusion of the agreement whether the street where the property is situated in the town or city is properly serviced with fire hydrants carrying the requisite water volume and pressure and whether the local fire brigade is properly serviced with adequately trained firemen. These are assumed to be in place. If the building is located on a faraway farm or in the mountains where no fire brigade will be able to reach the fire timeously, the potential insurer may decline to accept the risk and no insurance contract will ensue.
Insurers accept a contractual duty to indemnify only for the benefit of the insured. No third party can claim immunity from a duty to compensate the insured for the loss caused by his delictual and blameworthy conduct because the prudent plaintiff has an insurance policy to cover such eventualities. Consequently the insurer is generally subrogated to the claims of the insured against the tortfeasor. This conforms to the premise that the tortfeasor's penance should be effected by rectifying the loss caused and in this way redeeming his inadequate conduct.
It is submitted that where a local authority neglects its statutory duties and does not provide for an effective professional fire brigade, the underlying assumption on which the fire insurance policy is founded is absent. If the proposer for insurance was aware of the problem he would have been under a duty to communicate this to the insurer and neglecting to provide this information will be judged a serious misrepresentation. In the absence of such a fundamental aspect on which all risk calculation is premised, the presumed agreement does not exist. It is submitted that even where both the insured and the insurer were unaware of the fact that the local authority was neglecting its duty, this assumption is so fundamental to the agreement that it negates any insurance agreement along the same lines as that which is known in German law as a serious "Störung der Geschäftsgrundlage" or even a "Wegfall der Geschäftsgrundlage". This is not a principle foreign to South African law but it is a logical development of the fundamental principles of assumptions explicitly recognised already by Windscheid. Should a fire occur that causes a devastating loss due to the absence of a functional fire brigade, the assumed insured property owners will have no contractual claim against their presumed fire insurers and will be left with a delictual claim against the local authority that neglected to fulfil its duty of care binding it statutorily to provide this service to its rate payers.
Rate payers may compel their local authority to provide for a special rating area if the local authority shields itself for its laxness behind the excuse that it is politically compelled by the majority of potential voters not living in the affluent area to provide basic services (water, sanitary and electricity) to the less privileged areas within its jurisdiction and does not for that reason have the capacity to provide the necessary emergency services to the more affluent areas, notwithstanding the fact that the bulk of the rates generated as income is coming from the latter areas. The fact that the possibility of a special rating area had not been utilised does not exonerate the lax authority from delictual liability in the same manner that a lax municipality is delictually liable for the loss caused by its non-replacement of stolen manhole covers or unrepaired potholes in the public roads. Elected leaders make deliberate choices between a magnitude of pressing duties but the flip side of the coin of this competence is acceptance of full liability for the consequences of their decisions - if any loss is caused as a result, the victim should be indemnified.

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