Yesterday, the Western Cape High court handed down a judgement that ruled that National Consumer Commissioner, Mamodupi Mohlala-Mulaudzi, acted outside of her powers when she summoned three Auction Alliance executives, including Rael Levitt, to appear before the National Consumer Commission earlier this year. It’s a notable victory for Auction Alliance, but doesn’t rule out a criminal investigation into possible fraud.

Acting judge AJ Stelzner on Monday ruled that although the National Consumer Commission (NCC) had already found Auction Alliance and Rael Levitt guilty on charges of contravening the Consumer Protection Act, including the fact that Rael Levitt, in his capacity of CEO at the time, had used a ghost bidder during an auction, the NCC had acted out of its capacity when seeking to investigate other aspects of allegations against Auction Alliance, Levitt, and the two other executives accused, Darren Sneddon and Sango Ntsaluba.

The NCC issued summonses so that the Commissioner could continue with investigations into other parts of a controversial auction involving Wendy Appelbaum and the liquidated Quoin Rock Winery and Manor Estate in a December last year.

Lawyers for the NCC argued that this separate investigation was necessary to establish whether there were further contraventions of the Act.

Further to this they also argued that additional investigation was necessary to determine whether Appelbaum’s allegations of fraud had merit, and whether the matter should be referred to the National Prosecuting Authority for criminal prosecution.

Judge Stelzner agreed with Auction Alliance’s legal team in that the investigation into the contraventions of the Act had been concluded, and that an investigation into fraud falls outside of the scope of the NCC.

Alan Smiedt, senior counsel for Auction Alliance:

It was quite clear that the commissioner had exceeded her powers and now the court has confirmed that.

The National Consumer Commission will now have to foot the costs of the legal process.

But, the matter is far from over. In terms of the Compliance notice issued by the NCC in March, Auction Alliance must nullify the Quoin Rock Winery auction, and allow Appelbaum to acquire the farm at a reduced price of R35 million. That is said to be the last “legitimate” offer in the auction. The estate had been sold to Appelbaum for R55 million.

If Auction Alliance does not comply and allow Appelbaum to acquire the property at the R35 million price, the Commissioner can refer the matter to the National Consumer Tribunal in order for it to impose a fine.

Thus far Auction Alliance has not done so, and the matter has to be upheld or overturned at the tribunal.

An interesting comment appeared yesterday evening from an earlier 2oceansVibe report into the matter:

Yip Here we go – Mamodupi Mampara gets klap number 3 – first MTN then City of Joburg now Action Alliance – she’s wasted millions on rubbish litigation while us consumers with real cases sit waiting with a backlog of 30000 cases – she’s running after Mr Wendy RottenAppleBaume! What a discgrace – Action Alliance has lost their business – 200 employees are on the streets and Sellers of their property have to rely on the rest of the Palookas in this bad industry – If Mamodupi Mampara wasnt already fired she should of been fired for the way she has handled this case. Someone should look at her relationship with her legal team – they have racked up millions of rands on nonsense legal fees and now she has to pay Action ALliances fees plus 2 advocates – soounds fishy to me they will embark on senseless wasteful litigations. Good for you Raal – I hope you sue them all and win your business back!!!

What do you think about all of this, gang?

[Sources: Moneyweb, Western Cape High Court Judgement]