Auction Alliance in court over failed property transaction

10-06-2013
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IOL Property
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Embattled auction house Auction Alliance is on the receiving end of another court action - instituted in the Western Cape High Court by a businessman who is also the chairman of golf course construction and design company Golf Data.

The case, which was settled before the court had an opportunity to decide the merits, centred on the auction of a 152-hectare piece of land in Bronkhorstspruit.

Somerset West businessman Robbie Marshall, 61, said the auction was conducted by Auction Alliance on behalf of the seller, Turquoise Moon Trading 262, in April 2011.

Marshall won with a bid of R3.9 million. He said he signed, paid a 5 percent deposit and a 7.5 percent auctioneer's commission - in total, just over R528 000 - in two instalments that month.

Simangele Thulo of Auction Alliance confirmed receipt of the payment the next month.

However, Marshall said the seller did not sign the conditions of sale, and his offer was rejected. So, in terms of the conditions, Auction Alliance should have repaid him the money, plus interest.

Auction Alliance filed a notice of intention to defend the action but, in March this year, Marshall applied for summary judgment, alleging the auction house did not have a bona fide defence.

Auction Alliance director Rael Levitt hit back, saying the seller did not have a representative present at the auction to give Auction Alliance the mandate to accept the highest bid.

"The mandate was given to Carroll Harrison telephonically," Levitt said.

"While it appears that the signing of the agreement by the defendant connoted only that the defendant was accepting only the rights conferred upon it by the agreement, it was (Auction Alliance's) intention, in signing as it did, to accept the offer on the seller's behalf." This did not affect Auction Alliance's right to retain the auctioneer's commission.

Levitt added the auction house also could not refund the 5 percent deposit without the "concurrence" of the seller. He took issue with the fact that Turquoise Moon Trading 262 had not been joined as a party to the proceedings.

Levitt said in terms of the sale agreement, disputes between parties should be dealt with through mediation and, if unsuccessful, arbitration.

Marshall's attorney, William Inglis, told Weekend Argus that the summary judgment application was removed from the court roll because the parties settled the case.

He would not give details of the settlement.