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[2022] ZALMPPHC 27
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Auditor-General of South Africa v Accounting Officer of Gateway Airports Authority (Ltd) and Another (124/2022) [2022] ZALMPPHC 27 (26 May 2022)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(LIMPOPO DIVISION,
POLOKWANE)
Case no: 124/2022
REPORTABLE: YES
OF INTEREST TO THE
JUDGES: YES
REVISED.
In the matter between:
AUDITOR-GENERAL OF SOUTH
AFRICA
PLANTIFF
And
THE ACCOUNTING OFFICER OF
GATEWAY
AIRPORTS AUTHORITY
(LTD)
FIRST DEFENDANT
GATEWAY AIRPORTS
AUTHORITY (LTD)
SECOND DEFENDANT
JUDGMENT
MULLER J:
[1] The plaintiff is the
Auditor-General of South Africa. The defendants are the accounting
officer of the Gateways Airports Authority
(Ltd) as the first
defendant and Gateways Airports Authority (Ltd) as the second
defendant. The summons was served on 14 January
2022. No notice of
intention to defendant was filed by the defendants.
[2] The plaintiff applied
for default judgment. When the application was called counsel for the
applicant was asked if the application
should not have been referred
to the Registrar to consider the application. Applicant’s
counsel informed the court that it
was not, because the claim is for
audit fees which is not a debt or liquidated demand as required by
Rule 31(5)(a). Judgment was
reserved.
[3] Rule 31(5)(a)
provides that:
“
Whenever
a defendant is in default of delivery of notice of intention to
defend or of a plea, the plaintiff, if he or she wishes
to obtain
judgment by default, shall where each of the claims is for a debt or
liquidated demand, file with the registrar a written
application for
judgment against such defendant…”
[4]
The question to be determined is whether the claim is “a debt”
or a “liquidated demand.” The term can
be equated with a
claim for a fixed, certain or ascertained amount.
[1]
[5] The plaintiff, in the
particulars of claim, states that it conducted an audit at the second
defendant and rendered invoices
for the work performed. No payment
was forthcoming with the result that the plaintiff instituted action
for the recovery of R1062
192-65 together with interest.
[6]
The Public Audit Act
[2]
gives effect to the provisions of the Constitution establishing and
assigning functions to the Auditor-General and to provide
for
auditing institutions in the public sector. Section 23 of the Act,
makes provision for audit fees which the plaintiff may charge.
In
terms of section 23(1) the plaintiff determines the basis for the
calculations of audit fees to be recovered from auditees referred
to
in section 1,
[3]
after having
consulted the “Oversight Mechanism”
[4]
and the National Treasury. Section 23(2) provides that an auditee
shall settle the account for audit fees within 30 days, failing
which
the plaintiff must promptly take legal steps to recover the amount.
Interest may be charged in terms of section 23(3) on
any audit
account at the prescribed rate in terms of section 1(2) of the
Prescribed Rate of Interest Act.
[5]
[7]
The plaintiff, in accordance with the provisions of section 23 (1),
determined its fees and rendered invoices.
[8] In
Consolidated
Fish Distributors (Pty) Ltd v Sergeant Jones Valentine & Co
[6]
the
claim was for the balance due for reasonable remuneration for audit
services based on an implied term that defendant would
pay for such
services. The court held that the amount was not a debt or liquidated
amount. In coming to this conclusion the court
referred to Wessels
Law
of Contract
2
nd
ed, par 3498, who stated:
”
If
a person is employed to do work for another, there may be either an
express contract as regards the remuneration as regards the
remuneration or there may be a tacit understanding to pay the current
wage or the work may be done without any agreement or understanding
in respect of the remuneration. In the latter case, however, the law
imposes on the employer a liability to pay the value of the
work
done, called a
quantum
meruit
.
The employer in such a case is not entitled to recover on any fixed
scale, but only such remuneration as the Court deems reasonable.”
[7]
[9] The court held:
“
The
question is whether the rule of practice as laid down in
Fatti’s
case
should
be followed in the Division. According to
Hickman’s
case
the practice in this Division is to regard only claims so expressed
that ascertainment of the amount is a mere matter of calculation
as
being “liquidated demands”. This seems to me to exclude
claims for payment in respect of services, whether professional
or
otherwise, where there is an implied term that a reasonable
remuneration, viz, a reasonable remuneration to be determined by
the
Court, will be paid.”
[8]
[10] In the present case
the basis for the calculation of the audit fee is determined by the
plaintiff in terms of section 23(1)
after consultation with the
oversight mechanism and the National treasury. Thus, the amount
claimed is to be ascertained by mere
calculation and is not based on
an implied term that the fee should be reasonable.
[11]
The court in
Consolidated
Fish Distributors
followed
the practice in that Division, despite after being made aware of the
decision the Full Bench in
Fatti’s
Engineering Co (Pty) v Vendick Spares (Pty) Ltd
[9]
which held that in matters which can be ascertained speedily and
promptly, the court may regard such claims as a debt or liquidated
demand unless there are features which preclude the court from
regarding it as a debt or liquidated demand.
[12]
The decision in
Consolidated
Fish Distributors
must be distinguished from the facts in the present case. There is no
magic to the term “audit fees” regardless of
the
particular facts. The facts must be examined. As this case has
demonstrated the money claim is based on a calculation in terms
of
the provisions of the Act. The amount which can be promptly and
speedily be determined is not premised on a
quantum
meruit
and is not be determined by the court on what the court may be
regarded as reasonable.
[10]
[13] It follows that the
amount claimed is “a debt” or “liquidated demand.”
The application for default
judgment, therefore, should have been
referred to the Registrar in terms of Rule 31(5) (a).
Order
The application is
struck from the roll
_________________
GC MULLER
JUDGE OF THE HIGH
COURT LIMPOPO
DIVISION: POLOKWANE
APPERANCES
1. For the
plaintiff
: Adv Westhuizen
[1]
Van
Loggerenberg DE
Erasmus
Superior Court Practice
Vol 2 (2016) D1-371.
[2]
Act
25 of 2004. Hereinafter called “the Act”.
[3]
Audits
of auditees which the Auditor-General must perform in terms of
section 4(1), 4(2) or 4(3).
[4]
The
National Assembly in terms of section 10(3).
[5]
Act
55 of 1975.
[6]
1966
(4) SA 427 (C).
[7]
429A.
[8]
430F.
[9]
1962
(1) SA 736
(T) 739E-G .
[10]
Middleton v Carr
1949 (2) SA 374
(A) 386.