Judgement was handed down yesterday afternoon in the Cape High Court that means that the application for a warrant sought by the Estate Agency Affairs Board to search the offices of Auction Alliance in Cape Town, Durban, and Johannesburg, was temporarily rejected. The auction house won’t be counting its chicken before they hatch, though.

The victory is the second this week for Auction Alliance after a judgement was handed down on Monday 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.

Yesterday, the Western Cape High Court refused to issue the Estate Agency Affairs Board (EAAB) with a warrant to search the offices of Auction Alliance in Cape Town, Durban, and Johannesburg.

Notably, the application wasn’t refused because there is no merit in the argument that certain Auction Alliance employees may have violated the FICA Act and the Estate Agency Affairs Act (EAAA).

Judge Louw made it clear that although there was no reason not to suspect wrongdoing in email evidence submitted by the EAAB (which they acquired from Carte Blanche), there was evidence of serious breaches by the EAAB of FICA and the EAAA and,

… is sufficient to justify a reasonable suspicion of wrongdoing on the part of the applicant.

The email evidence alleges wrongdoing between Auction Alliance executives and employees.

The EAAB attempted to conduct an unwarranted search under the Estate Agency Affairs Board Act, as well as FICA, which they are allowed to do. This is normal, and the board conducts on average 2 000 of these searches a year. However, in this case, it was prevented from doing so by Auction Alliance employees.

Auction Alliance then lodged two applications with the court: the first was to prevent the EAAB from conducting a warrantless search, and the second was a constitutional challenge to the legislation that enables these searches – something SARS will have the power to conduct in the near future too.

The EAAB launched a counter-application, requesting that the court issue it with the necessary warrant, but that was refused today.

Essentially, the privacy interests of Auction Alliance have outweighed the public necessity of effective law enforcement at this stage because Judge Louw felt that the High Court did not yet have the jurisdiction to issue the warrant in this case.

He postponed the decision on issuing the warrant based on the reasoning that judgement [for the warrant] “should be heard with” the main constitutional challenge brought before him.

But, it’s not over yet, because no evidence that may or may not exist can be destroyed, and at the time of the search, both parties agreed that KPMG should make a copy of Auction Alliance’s data. A third party currently holds this evidence.

Watch this space.

[Sources: 2oceansVibe, Cape High Court Judgement]