Knoll v SA Flooring Industries Ltd 1951 (1) SA 404 (T)

Knoll v SA Flooring Industries Ltd 1951 (1) SA 404 (T)

Issue: Whether a company that has been enriched by the wrongful act of another person is liable to return the enrichment to the person who has been wronged.

Facts:

Knoll, a person who manufactured and sold flooring, contracted with SA Flooring Industries Ltd (SAFI), a company, to supply SAFI with flooring. SAFI was a subsidiary of a larger company, SA Board Mills Ltd (SABM).

Knoll supplied SAFI with flooring in accordance with the contract. However, SAFI did not pay Knoll for the flooring. Instead, SAFI transferred the flooring to SABM. SABM used the flooring to manufacture and sell products.

Knoll then sued SAFI and SABM for the price of the flooring. SAFI argued that it was not liable to pay Knoll because it had not used the flooring. SABM argued that it was not liable to pay Knoll because it had not been a party to the contract between Knoll and SAFI.

Held:

The Court held that both SAFI and SABM were liable to pay Knoll for the price of the flooring. The Court reasoned that SAFI and SABM had been enriched by the wrongful act of refusing to pay Knoll for the flooring and that they were therefore liable to return the enrichment to Knoll.

The court also found that SAFI and SABM had acted jointly and severally to enrich themselves at the expense of Knoll.

Key Facts:

• A person supplied flooring to a company in accordance with a contract.
• The company did not pay the person for the flooring. Instead, the company transferred the flooring to its parent company.
• The parent company used the flooring to manufacture and sell products.
• The person sued the company and its parent company for the price of the flooring.

Reasons:

• The Court held that both the company and its parent company were liable to pay the person for the price of the flooring because they had been enriched by the wrongful act of refusing to pay the person for the flooring and that they were therefore liable to return the enrichment to the person.
• The court also found that the company and its parent company had acted jointly and severally to enrich themselves at the expense of the person.

Conclusion:

The Court's decision in Knoll v SA Flooring Industries Ltd 1951 (1) SA 404 (T) is a significant case in South African law. The Court's decision clarified the law relating to the liability of companies that have been enriched by the wrongful act of another person.