Labat wins in fees dispute

Charges: Stem from a ruling after disagreement with company auditors

- Roy Cokayne

Labat Africa has successfully appealed a judgment against it related to a dispute over the "excessive fees" charged by its auditors. Ngubane Zeelie Inc sued Labat, South African Microelectronic Systems (Pty) Ltd and Sames Properties (Pty) Ltd in a lower court for more than R890 000.

It said this amount was due to it under an agreement, and alleged that Labat had not paid. Brian van Rooyen - CEO of JSE-listed Labat, and a former president of the South African Rugby Union - engaged the auditing firm on behalf of these companies in terms of which each company bound itself as co-principal debtors for any amount due to the auditors under the agreement.

Ngubane Zeelie Inc carried out its obligations under the agreement and billed Labat from time to time. However, Van Rooyen regarded the auditors' fees as excessive and a dispute arose in due course about the extent of Labat's liability for them.

This led to Ngubane Zeelie Inc suing Labat and its subsidiaries in a lower court, which ruled that Labat was liable to pay the firm R577 000.

Labat and Van Rooyen were granted leave by the Supreme Court of Appeal to appeal against the whole judgment.