H M Krige Le Roux v Standard General Versekeringsmaatskappy Bpk

The appellant was injured when a crane owned by Phoenix Cranes (Pty) Ltd fell on his leg. He obtained default judgment against Phoenix for damages. Phoenix was thereafter finally liquidated. Phoenix was insured by the respondent under a short-term insurance policy, which required Phoenix to notify the insurer of any claims or summons and entitled the insurer to conduct the defence. Phoenix failed to forward the summons to the insurer, which only became aware of the claim after default judgment and liquidation. Relying on this breach, the insurer elected to treat the relevant section of the policy as void. The appellant then sued the insurer directly under section 156 of the Insolvency Act, read with section 339 of the Companies Act.

The appeal was dismissed with costs.

The case authoritatively clarifies the interpretation of section 156 of the Insolvency Act, confirming that third-party claimants do not acquire greater rights against insurers than those held by insured insolvents. It affirms insurers’ entitlement to rely on contractual defences even in statutory direct claims following liquidation.