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L OCAL A UTHORITY L IABILITY FOR

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More recently, the 2011 Canterbury earthquakes caused rivers to become shallower and wider, making them more prone to flooding.7 Thus, many areas in Christchurch experienced regular flooding as many as nine times in just three years.8 As recently as July 2014, torrential rain that fell for more than two weeks in Northland caused widespread flooding, affecting businesses and residents.9 Costs of storms (including flooding). ods) in the insurance industry in 2014 exceeded USD 142 million by October. 10. This article concludes that while local authorities may be liable for flooding in some circumstances, it is better for homeowners to purchase private insurance than to extend local authority liability beyond the current state of the law. There has been academic criticism of the blurring of intellectual distinctions between the rule in Rylands v Fletcher (which usually concerns isolated escapes) and nuisance.71 However, several nuisance cases have been successful on this basis,72 and the doctrine appears to be well established in New Zealand.

Liability was appropriate because it was a direct result of the obstruction created by the defendants. Durie J held that in each of the cases referred to above, a particular feature of the works resulted in the water escaping. That is, it can be said that a claimant will not succeed in nuisance unless also able to prove negligence on the part of the defendant (although this is clearly not always true, as illustrated by the examples above, which only succeed in nuisance).

As a result, policy issues relevant to the construction of a duty of care in negligence (such as the importance of the availability of private homeowner's insurance)101 find their way into nuisance debates. This hybridisation is reinforced by the importation of the remoteness of negligence test in The Wagon Mound (No 1)102 into the law of nuisance in The Wagon Mound (No 2).103 This is particularly established in Cambridge Water Co Ltd v Eastern Counties Leather plc (Cambridge)104 in the context of the Rylands v Fletcher rule. There are two New Zealand cases that illustrate the courts' approach to this type of flood duty.113 In Easton Agriculture Ltd v Manawatu-Wanganui Regional Council (Easton Agriculture), the Council charged high rates to fund a flood control program, carrying out monitoring and maintenance works.114 Kós J found that the parties were sufficiently close.

There, Durie J stated that the council was presumed to have had regard to "the suitability of the land. 113 See also Brown v Heathcote County Council [1987] 1 NZLR 720 (PC), where the defendant council and drainage board owed a duty of care to a purchaser of land to warn the purchaser of the risk of flooding. The duty was formulated under the doctrine of negligent mistake and in particular Hedley Byrne &

Building permits were subsequently issued on the land, again requiring the Council to satisfy itself that the land was safe from flooding. However, it is less clear whether local authorities owe a so-called "non-delegating duty of care", which is an evolving area of ​​the law. Lord Sumption, delivering a majority judgment in favor of the appellant,131 drew attention to two categories of non-delegable duties.

In reaching this conclusion, the Court in Burnie drew on an older New Zealand case, Black v Christchurch Finance.137 There, a contractor negligently lit a fire to burn bushes on the defendant's land, contrary to the terms of the contract. However, they do not appear to be sufficient to bring the council within the ambit of the doctrine for the purpose of protecting the community as a whole from flooding. However, this can be different when a council has condemned a property until a problem (such as flooding) has been remedied, creating a pseudo-physical custody of the property.

Although personal injury may not be an impossible outcome, property is in focus in New Zealand due to the accident compensation scheme.

IV SHOULD COUNCILS BE LIABLE?

In conclusion, the differences between the line of cases under this category of non-delegable duty and the nature of flood damage (in particular, the focus on the person rather than the property) may be an insurmountable obstacle despite legislative indications to the contrary. Liability insurance can be purchased for damage caused by the council to private individuals. While most homeowners have home insurance that covers flood damage (further protected by EQCover) and can therefore pass that loss on to insurance companies, those without insurance can be heavily burdened.

Renovating the average homeowner's most valuable assets, their home and land, can be prohibitively expensive. In addition, if municipalities have never been responsible for damage, they may be less motivated to take care of flood protection. A general fund may be created into which these rates are paid and from which money may be drawn to settle claims against the council.

Nevertheless, if councils were liable, the price of home insurance in respect of flooding should fall as insurance companies would be able to make claims against councils more easily. Finally, the individual liability model would be economically efficient, but could be excessively harsh on those who cannot afford to insure their homes. However, in some circumstances (for example an authority falling within s 148(1) of the SACRA) an authority may only be liable to pay damages in respect of its negligence.

The ground-breaking Woodhouse Report165 paved the way for the no-fault ACC scheme for personal injuries: "The problem is the injury, not the cause".166 The government would cover the costs of personal injuries, and personal injury proceedings were banned.167 The report set out five fundamental principles on which the scheme would operate:168 community responsibility;. While limited coverage will be sufficient in some circumstances, it may be grossly inadequate in others. In relation to floods, this model should be implemented by legislation, as the current system already excludes objective liability in certain circumstances,174 and the courts have limited possibilities to extend liability.

The authorities would be essentially immune from actions in respect of flood damage under damages for nuisance and Rylands v Fletcher. While that may be true in terms of building inspection, there is no separate source of income available to councils in terms of flood protection. Chambers J also stated that councils will often share the bill for remedying defects with those involved in the construction process, while recognizing that in "some cases" the other parties may be bankrupt or in liquidation.181 Whether this applies in relation to flood works depends on whether a council subcontracts work to contractors (who assume responsibility themselves) or assumes responsibility themselves).

A purely culpa-based liability model would have the disadvantage that claims in the absence of any negligence which would have succeeded under strict liability would not be available because they are brought against a local authority. In conclusion, the individual responsibility model, while more economically efficient, can be unreasonably harsh on those who cannot afford to insure.

V CONCLUSION

The preferred approach is an amalgam of both the individual and council liability models: homeowners and businesses, where possible, should have insurance, but councils should remain liable, at least where they have been negligent.

References

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