Kerbels Flooring and Carpeting (Pty) Ltd v Shrosbree and Another

• Jurisdiction: South Africa
• Judge: Mullins J
• Judgment Date: 25 August 1993
• Docket Number: 2179/92
• Court: South Eastern Cape Local Division
• Hearing Date: 13 August 1993
• Citation: 1994 (1) SA 655 (SE)

Mullins J:

This exception involves the liability of liquidators of a company for loss occasioned to a party who, at the instance of the liquidators, completed a contract entered into with the company prior to liquidation. For convenience the excipients will be referred to as the H defendants, and the respondent as the plaintiff.

The two defendants were appointed as liquidators of RDA Construction Co (Pty) Ltd ('RDA'). Prior to its liquidation, plaintiff had subcontracted with RDA to fit certain floor tiles and flooring at a school in Dordrecht on which RDA was doing building work in terms of an agreement with the I Department of Education and Training. The work which plaintiff had undertaken to do had only been partly completed when RDA was placed

Mullins J

A in liquidation. According to the particulars of claim:

'After their appointment as joint provisional liquidators of RDA, the first and second defendants, in their capacity as joint provisional liquidators, were afforded an election whether or not to continue with the aforesaid contract which had been entered into between RDA and the plaintiff.' B

The particulars of claim proceed to allege that defendants elected to continue with the contract that had been entered into between RDA and the plaintiff, and that plaintiff was accordingly obliged to fulfil its obligations in terms of its subcontract. Plaintiff alleges that it is entitled to payment of R45 061,60, being 'the sum due in terms of the C contract', which respondents have failed to pay, and for which, in their capacity as joint liquidators of RDA, they are liable.

The exception is not brought against the aforesaid allegations in the particulars of claim, but nevertheless it should be pointed out, if the sum of R45 061,60 was the total amount due in terms of the contract, only D that portion thereof earned by plaintiff after liquidation can be claimed from defendants as an administration expense. The balance constitutes a concurrent claim in the liquidation. This was made quite clear in a letter from defendants annexed to the particulars of claim.

In the alternative plaintiff alleges that defendants were under a duty of care to plaintiff to ensure that it was 'appropriate' to continue the E contract and that by so doing a financial benefit would accrue, with sufficient profit to enable payment to be made to plaintiff of the said sum of R45 061,60. Various grounds are alleged in respect of which defendants were in breach of such duty, in consequence of which plaintiff has suffered loss in the said amount. Plaintiff accordingly claims in the F alternative payment of the said amount against the defendants personally, ie not in their capacities as liquidators as is averred in the main claim.

It is against the alternative claim that...