Auction Alliance summonses set aside

THE Western Cape High Court set aside summonses yesterday issued to Auction Alliance and its directors by the National Consumer Commission earlier this year.

The judge found the summonses to be inconsistent with the constitution and invalid. The high court held that once a compliance notice was issued in respect of a complaint and a sanction recommended, the commissioner had discharged her duties in respect of that complaint and could not investigate the matter further, nor issue further summonses about the matter.

The ruling is another damper on the National Consumer Commission, which has been under fire for not taking enough steps to ensure that it follows procedure when issuing compliance notices.

It also comes as National Consumer Commissioner Mamodupi Mohlala-Mulaudzi’s contract is due to end in September, despite a bitter battle with the Department of Trade and Industry that ensued after her position was advertised last month.

The summonses were issued after Ms Mohlala-Mulaudzi found Rael Levitt, former Auction Alliance head, and the company, to be guilty of breaching the act by using a “ghost bidder” to drive up the price of Quoin Rock estate at a December auction.

The commission had investigated the complaint by businesswoman Wendy Appelbaum and issued a compliance notice against the firm.

Mr Levitt’s lawyers said after the issuance of the summonses and subsequent efforts to obtain a warrant for the arrest of Mr Levitt and directors of Auction Alliance, that it was “inappropriate and unfair” to subject him to a hearing on matters on which the commission had already ruled.

“It would have been more appropriate, regular and lawful for the commission to wait until after it had interviewed Mr Levitt before giving its ruling in the matter.”

The commission had, even before issuing the summonses, issued the compliance notice against Auction Alliance, asking for an administrative penalty in the event that the company did not correct its action.

The commission was taken to task in April by the National Consumer Tribunal, which said that it did not follow proper procedures in issuing compliance notices. The tribunal will hear an application by Auction Alliance next week for the review of the compliance notice issued to it by the commission.

Ms Mohlala-Mulaudzi argued that there had been no ruling on the alleged bid-rigging and fraud, and that the commission needed to speak to Mr Levitt to determine whether there was enough evidence and whether he had acted intentionally, before the issue was referred to the National Prosecuting Authority.

Yet the commission had already issued compliance notices to the company and its directors indicating that it had concluded its investigation into the complaint it received from Ms Appelbaum.

The court held that the summonses were set aside on the ground that the commissioner had no power to conduct any investigation into fraud or in respect of any “remaining parts” of the complaint that was not mentioned in her findings.