Second judgment to favour Levitt

INLSA

Aziz Hartley

THE Western Cape High Court has turned down an application by the Estate Agency Affairs Board for a search-and seizure-warrant for the premises of Auction Alliance.

Earlier this year the board started an investigation into Auction Alliance’s affairs following reports of billionaire Wendy Appelbaum’s complaint about the use of a ghost bidder when the Quoin Rock wine estate was auctioned.

The board’s investigators arrived unannounced and without search warrants at Auction Alliance’s offices in Cape Town, Johannesburg and Durban. All they had was a certificate the board’s chief executive had signed authorising them to conduct the search under the Financial Intelligence Centre Act (Fica).

Auction Alliance refused them entry, launching a court application to stop the search-and-seizure operation. The board filed a counter application to obtain a search warrant. Its application was based on the board’s suspicion Auction Alliance or its employees might have violated Fica.

While the board and co-respondents, the ministers of finance and of trade and industry, contended that the court could issue a warrant, Auction Alliance argued there was no law allowing the court to do so.

In yesterday’s judgment Judge Willem Louw said that according to an affidavit forming part of the board’s application, e-mail exchanges between Action Alliance employees, and extracts from its books constituted prima facie evidence of wrongdoing on the part of some employees and former Auction Alliance chief executive Rael Levitt.

Despite this, the judge, after having heard argument from both sides, said: “In my view the board has not made out a case for the issue of a warrant on the basis that the High Court has the inherent jurisdiction to do so in a case like the present. The relief sought by the board can therefore not be granted by this court on the basis of this court’s inherent jurisdiction.”

Auction Alliance lawyer Alan Smidt said: “This is a major judgment. It states that the court… cannot issue a search warrant since they do not have the power to do so. The board tried to get the judge to issue a warrant without a statute existing. But the judge agreed with my argument.”

The judgment was the second this week to favour Levitt.

On Monday three summonses issued to Levitt and two employees were declared invalid and inconsistent with the constitution by the Western Cape High Court.

Levitt, chairman Sango Ntsaluba and Auction Alliance’s chief financial officer and acting CEO, Bruce Sneddon, had challenged the validity of the summonses, issued in April. The summonses called on them to appear before the National Consumer Commission (NCC) for questioning on May 4.

Handing down judgment, Judge Rob Stelzner had said that the grounds on which Levitt and his colleagues had challenged the summonses included that since the hearing into the Quoin Rock matter had been finalised, the NCC did not have the power to then issue the summons to them for that same matter, as it had already been wrapped up.

aziz.hartley@inl.co.za