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Auction Alliance wins legal challenge on estate agency inspections

Auction Alliance has won a constitutional challenge against laws that allow for targeted, non-routine inspections of estate agencies without a warrant.

Judge Willem Louw declared a section of the Estate Agency Affairs Act (EAAA), as well as the Financial Intelligence Centre Act (Fica), inconsistent with the constitution and invalid in a ruling in the Western Cape High Court on Friday.

Auction Alliance took the matter to court after the Estate Agency Affairs Board conducted search-and-seizure operations at its premises in March last year.

While the board's inspectors did not have search-andseizure warrants to inspect Auction Alliance's offices, it relied on the impugned pieces of legislation - section 32A of the EAAA and section 45B of Fica.

The board argued that the legislation gave it the power to conduct non-routine, targeted inspections - where there was already suspicion of wrongdoing - without warrants.

This enabled it to regulate the estate agency industry effectively.

First obtaining a warrant, it contended, might allow time for those being inspected to destroy vital records.

Auction Alliance contended that the legislation infringed on its right to privacy.

Although there was a reduced expectation of privacy in the industry, the targeted, warrantless searches could eventually lead to the laying of criminal charges.

Judge Louw found that the respondents in the case - the board, the minister of trade and industry and the minister of finance - had not shown that requiring a warrant for targeted, non-routine inspections would defeat the purpose of the inspection.

"The need for surprise, which will often be crucial, can be preserved by allowing warrants to be obtained on an ex parte (one-sided) basis and to provide for limited circumstances under which a targeted search may proceed without a warrant," he wrote in his judgment.

Judge Louw declared both sections invalid to the extent that they permitted any inspections other than routine or random inspections without a warrant.

He noted that section 45B of Fica involved "immense public interest considerations" and, therefore, suspended the effect of his order for 18 months to give the legislature time to amend the provisions "so as to make them constitutionally valid".

(The Star)


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