INTERPRETATION OF THE CONSUMER PROTECTION ACT, NO. 68 OF 2008 WITH REGARD TO AUCTIONS PURPOSE OF THE CONSUMER PROTECTION ACT (CPA) The CPA purpose is as follows: promote a fair, accessible and sustainable marketplace for consumer products and services; Establish national norms and standards to ensure consumer protection; Make provision for improved standards of consumer information, to prohibit certain unfair marketing and business practices; Promote responsible consumer behaviour; Promote a consistent legislative and enforcement framework, related to consumer transactions and agreements; Establish the National Consumer Commission; and Replace, in a new and simplified manner, existing provisions from five acts, The Act protects all consumers but focuses on the previously disadvantaged, the poor, the poorly literate, the uninformed, and all S.M.M.E.’s, against the uneven balance of power when dealing with business. DEFINITIONS The CPA applied to the following: Every transaction occurring within the Republic of South Africa; Promotion or supply of any goods and services occurring within the Republic; and Goods or services that are supplied or performed, in the Republic, in terms of transactions mentioned in the Act The CPA is not applicable in respect of: Goods or services promoted or supplied to the state; Industry-wide exemption being granted to regulatory authorities; Credit agreements, in terms of the National Credit Act, but not goods or services; Services under employment contracts; Agreements giving effect to collective bargaining agreements; and Agreements giving effect to bargaining agreements (Section 213 of the Labour Relations Act). Who is a consumer? Consumers are persons to whom goods or services are marketed, who have entered into transactions with suppliers, users of particular goods or recipients / beneficiaries of services. What are Consumer Rights? The Bill of Rights enshrines the rights of all South Africans – including consumer rights. The Consumer Protection Act further outlines these key consumer rights, of which all South African consumers should be aware. These include the following: 1. Right to Equality in the Consumer Market and Protection Against Discriminatory Marketing Practices; 2. Right to Privacy; 3. Right to Choose; 4. Right to Disclosure of Information; 5. Right to Fair and Responsible Marketing; 6. Right to Fair and Honest Dealing; 7. Right to Fair, Just and Reasonable Terms and Conditions; 8. Right to Fair Value, Good Quality and Safety; and 9. Right to Accountability by Suppliers. HOW DOES THE CPA APPLY TO AUCTIONS? REGULATION 18 - DEFINITIONS INTERPRETATION AND APPLICATION Regulation 18 (1) provides the following relevant definitions: Auction house: Company or juristic person conducting auctions from time to time Auction without reserve: Auction at which: (a) Goods are sold to the highest bidder without reserve; (b) The auction does not require a minimum bid; (c) The auction does not allow competing bids of any type by the seller or the agent of the seller; and (d) The seller of the goods cannot withdraw the goods from auction after the auction has opened and there is public solicitation or calling for bids. Auctioneer: The person conducting the auction Bidders' record: The document contemplated in regulation 26 Closed Auctions: An auction where the auctioneer issues an invitation to take part in an auction only to a finite list of consumers Goods: Include where appropriate services Lot: Any group of goods sold or offered for sale as a unit and identified as such Vendor's roll: The document contemplated in regulation 28(4) URL: Operational Uniform Recourse locator providing access to information on the internet Regulation 18(2) provides that the regulations are to be read together with section 45 of the Act: Section 45 - Auctions 45(1) In this section, “auction” includes a sale in execution of or pursuant to a court order, to the extent that the order contemplates that the sale is to be conducted by an auction. 45(2) When goods are put up for sale by auction in lots, each lot is, unless there is evidence to the contrary, regarded to be the subject of a separate transaction. 45(3) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in any other customary manner, and until that announcement is made, a bid may be retracted. 45(4) Notice must be given in advance that a sale by auction is subject to - (a) a reserved or upset price; or (b) a right to bid by or on behalf of the owner or auctioneer, in which case the owner or auctioneer, or any one person on behalf of the owner or auctioneer, as the case may be, may bid at the auction. 45(5) Unless notice is given in advance that a sale by auction is subject to a right to bid by or on behalf of the owner or auctioneer - (a) the owner or auctioneer must not bid or employ any person to bid at the sale; (b) the auctioneer must not knowingly accept any bid from a person contemplated in paragraph (a); and (c) the consumer may approach a court to declare the transaction fraudulent, if this subsection has been violated. 45(6) The Minister may prescribe requirements to be complied with by an auctioneer, or different categories of auctioneer, in respect of - (a) the conduct of an auction; (b) the records to be maintained with respect to property placed for auction; and (c) the sale of any such property by auction. Regulation 18(3) states that the regulations apply to all auctions except auctions as listed in Regulation 18(4) being transactions of stock exchange or auction for goods declared to be donated and the proceeds are paid to a bond fides religious, educational, cultural, welfare, social or sports organisation. Regulation 18(5) states that any provisions in any agreement relating to goods sold or bought at an auction or advertised or offered for sale at an auction, or any agreement providing for conducting the auctions itself, in conflict with the regulations does not have any force or effect. Regulation 18(6) states that the regulations do not detract from any law relating to advertising, sale, purchase, delivery, rendering or financing of goods. Regulation 18(7) states that an auctioneer selling immovable property must comply with all other applicable laws in respect thereof including the legislation regulating the activities of estate agents Regulation 18(8) states that an auctioneer must comply with all general provisions of the regulations REGULATION 19 - MANDATORY ADVERTISING OF AUCTIONS Regulation 19(1) states that no goods under any circumstances whatsoever be sold by auction unless it has been advertised in compliance with the regulations so that the general public has had a reasonable opportunity to become aware of the auctions, the goods on offer and of the rules governing the auction. Regulation 19(2) states that the auctioneer must be able to prove that the auction was advertised. Regulation 19(3) states that the auctioneer must advertise the auction at least 24 hours prior to auction but (a) any goods may be withdrawn at any time prior to the auction but not after commencement and (b) immovable property auction must be advertised at least 5 business days prior to the auction Regulation 19(4) states that if any auction relates to sale in execution or by order of Court the advertisement must clearly state that fact. REGULATION 20 - GENERAL RULES ON ADVERTISING AUCTIONS Regulation 20(1) states that all advertising must be: (a) Accurate; and (b) Provide sufficient information for a reasonable consumer to - (i) understand that it relates to an auction; (ii) be able to find the place where the auction is to be held Regulation 19(2) state that advertising relating to an auction must be: (a) Be in a legible format and size (b) Contain reference to the Regulations together with a URL where a copy of these regulations be obtained (c) State the date, place and time of the auction (d) State the name of the auctioneer and the auction house and if registration or licensing of auctioneer or auction houses are mandatory then the registration or licensing number (e) State where the Rules of auction can be obtained (f) State the particulars of the goods offered on auction (g) If applicable, state the auction will be held over a number of days (h) State, if applicable that a sale by auction is subject to - (i) A reserved or upset price; or (ii) A right to bid by or on behalf of the owner or auctioneer, in which case the owner or auctioneer, or any other person on behalf of the owner or the auctioneer may bid at the auction; and (iii) Contain a reminder that all prospective bidders must register as such prior to making a bid during the auction and that such registration requires proof of identity and residence (i) Disclose as accurately as possible the total costs of advertising and conducting the auction Regulation 20(3) states that the requirements in regulation 20(2) above do not apply to roadside advertising or classified advertisements printed in the newspapers but such advertising must - (a) at the top prominently display the word "Auction" (b) Indicate where the full advertisement as contemplated in regulation 20(2) above can be obtained (c) State the date, time and place of auction. Regulation 20(4) states that a consumer may at any time during business hours request the auctioneer to provide him with access to the advertisement and the auctioneer must , without charging a fee, comply with such request but: (a) a consumer is only entitled to one free copy (b) The auctioneer may provide a URL with will provide a copy of the full advertisement Regulation 20(5) states that any material or advertisement which does not meet all the requirements above does not constitute advertising for the purposes of regulations 19 and 20. Regulation 20(6) states that an auction may not be advertised as a "sale in execution" or similar wording implying court action unless- (a) At least 75% of the items or lots in the auction are being offered pursuant to a Court order (b) The items or lots were clearly not purchased or attained for the purpose of resale at auction; and (c) The advertising contains an explanation of the court order including identification of the court Regulation 20(7) states that unless all items or lots offered at auction are pursuant to a court order, then the advertisement must indicate that the auctions is "with addictions", "supplemented" or similar wording Regulation 20(8) states that the sub regulation (6) and (7) above do not prohibit clear, non misleading advertising of the inclusions of specific goods being offered pursuant to a court order in an auction if such goods are offered pursuant to a court order and were clearly not purchased or attained for the purpose of resale at auction. Regulation 20(9) states that an auction may not be advertised as an "insolvency auction" or use similar wording implying insolvency unless - (a) At least 75% of the items or lots in the auction are being offered pursuant to an order of the Master of the High Court; (b) The items or lots were clearly not purchased or attained for the purpose of resale at auction; and (c) the advertising contains the order number of the Master of the High Court. Regulation 20(10) states that unless all items or lots being offered at the auction are pursuant to an order of the Master of the High Court, then the advertising must indicate that the auction is "with additions", "supplemented" or use similar wording. Regulation 20(11) states that sub regulations (9) and (10) do not prohibit clear, non-misleading advertising of the inclusion of specific goods being offered pursuant to an order of the Master of the High Court in an auction if such goods are offered pursuant to an order of the Master of the High Court and were clearly not purchased or attained for the purpose of resale at auction. Regulation 20(12) states that an auction may not be advertised as "deceased auction" or use similar wording implying insolvency unless - (a) At least 75% of the items or lots in the auction are being offered pursuant to an order of the Master of the High Court; (b) The items or lots were clearly not purchased or attained for the purpose of resale at auction; and (c) the advertising contains the order number of the Master of the High Court. Regulation 20(13) states that unless all items or lots being offered at the auction are pursuant to an order of the Master of the High Court, then the advertising must indicate that the auction is "with additions", "supplemented" or use similar wording. Regulation 20(14) states that sub regulations (12) and (13) do not prohibit clear, non-misleading advertising of the inclusion of specific goods being offered pursuant to an order of the Master of the High Court in an auction if such goods are offered pursuant to an order of the Master of the High Court and were clearly not purchased or attained for the purpose of resale at auction. Regulation 20(15) states that an auction shall not be advertised as "divorce auction" or use similar wording implying court action unless - (a) at least 75% of the items or lots in the auction are being offered pursuant to a court order; (b) the items or lots were clearly not purchased or attained for the purpose of resale at auction; and (c) the advertising contains an explanation of the court order including identification of the court. Regulation 20(16) states that unless all items or lots being offered at the auction are pursuant to a court order, then the advertising shall clearly indicate that the auction is "with additions", "supplemented" or use similar wording. Regulation 20(17) states that sub regulations (15) and (16) do not prohibit clear, non-misleading advertising of the inclusion of specific goods being offered pursuant to a court order in an auction if such goods are offered pursuant to a court order and were clearly not purchased or attained for the purpose of resale at auction. Regulation 20(18) states that no auction may be advertised as "absolute" or "without reserve", no advertising may contain the words "auction without reserve", "absolute auction" or "without reserve", or the word "absolute" or words with similar meaning and no auctioneer may offer or sell any goods at auction without reserve unless - (a) there are no liens or encumbrances on the goods, except property tax obligations, easements, or restrictions on record, in favour of any person other than the seller, or unless each and every holder of each and every lien and encumbrance has in writing agreed to the unqualified acceptance of the highest bid for the property, without regard to the amount of the highest bid or the identity of the high bidder, or that a financially responsible person in writing absolutely guarantees the immediate and complete discharge and satisfaction of any and all liens and encumbrances immediately after the sale or at the closing, without regard to the amount of the highest bid received, or the identity of the high bidder; and (b) there is the bona fide intention at the time of the advertising and at the time of the auction to transfer ownership of the goods, regardless of the amount of the highest and last bid, to the highest bidder, that intent existing without reliance on any agreement that any particular bid or bid level must be made or be reached, below which level the goods will not be transferred to the highest bidder; and (c) the rules of auction contain a binding requirement that the auction be conducted without reserve. Regulation 20(19) states that sub regulation (18) does not prohibit - (a) a secured party or other lien holder who is not the seller from bidding at an auction without reserve, but such bidding does not constitute, nor is it tantamount to the direct or indirect establishment or agreement to the establishment of a reserve price on the goods by the seller or by the auctioneer, or by anyone aiding or assisting, or acting upon behalf of, the seller or the auctioneer; (b) any individual party to the dissolution of any marriage, partnership, or corporation from bidding as an individual entity apart from the selling entity, on goods being sold at auction pursuant to that dissolution; (c) any individual party or heir of a deceased person's estate from bidding as an individual entity, apart from the selling entity, on goods being offered at auction pursuant to that estate being settled; or (d) the inclusion of non-misleading advertising of certain goods to be sold at "auction without reserve" and the non-misleading advertising of certain goods to be offered at auction with reserve, within the same advertisement, or for sale at the same date and place, but that advertisement must make clear, through appropriate emphasis, which goods are being offered by each method. REGULATION 21 - RULES OF AUCTION Regulation 21(1) states that an auctioneer must - (a) In writing compile the rules of auction; and (b) Except in the case of a livestock or game auction or a closed auction, make the document available to the general public at least 24 hours prior to the commencement of the auction. Regulation 21(2) states that the rules of auction must, as a minimum - (a) On the first page of the document in large letters display the words "rules of auction", and immediately beneath that the date, place and time of the auction; (b) Contain the full names, physical address and contact details of the auctioneer, and where applicable, of the auction house; (c) Contain all mandatory information required by these regulations, and if applicable, the information contemplated in section 45(4) or (5) of the Act; (d) Contain a statement to the effect that the rules of auction comply with section 45 of the Act and with these regulations; (e) Contain the text of subsection (2) of section 45 of the Act; (f) Provide that an auction will commence at the published time and that it will not be delayed to enable any specific person or more persons in general to take part in the auction; (g) Provide that a person who attends at the auction to bid on behalf of another person must produce a letter of authority meeting the requirements of regulation 26(3) in order to so bid on behalf of that person; (h) Unless the auctioneer is also the owner or rightful holder (who has the right to sell) of the goods to be auctioned, contain a statement to the effect that the auctioneer has a trust account into which all moneys will be paid for the benefit of the seller, minus the agreed commission; (i) Contain a statement to the effect that the auctioneer will during the auction announce the reason for the auction unless that reason is the normal and voluntary disposal of goods by the owner; (j) Provide that a person who intends to bid at the auction must register prior to the commencement as contemplated in regulation 26(2) together with a description of the requirements for registration; (k) Provide that the bidders' record contemplated in regulation 26 and the vendor roll contemplated in regulation 28(4) are available for inspection during normal hours without the charge of a fee; and (l) Contain a breakdown of the total cost of advertising and conducting an auction and a statement indicating whether additional costs may be added and if so, how such additional costs will be computed. Regulation 21(3) states that the rules of auction may not - (a) exclude liability in respect of inaccurate information provided in the advertising of the auction; (b) exclude liability in respect of the rules of auction not meeting the requirements of these regulations; or (c) contain any qualification, reservation or diminution of the requirements of these regulations unless expressly provided for. Regulation 21(4) states that in the event that the rules of auction are amended after their initial publication, the auctioneer must expressly indicate that the new version is an amended version. Regulation 21(5) states that the rules of auction must be signed by the auctioneer who is going to conduct the auction and he or she must certify that the rules of auction to the best of his or her knowledge meets the requirements of this regulation 21. Regulation 21(6) states that if on the day of the auction the auctioneer who signed the rules of auction as contemplated in sub regulation (5) is unavailable to conduct the auction, the auctioneer who then conducts the auction will be deemed to have so certified the rules of auction. Regulation 21(7) states that an auctioneer is personally accountable and liable for the contents of the rules of auction applicable to a specific auction. Regulation 21(8) states that the rules of auction need not be read out at an auction to be valid, but only if – (a) the rules of auction were, where applicable, available to the general public at least 24 hours prior to the commencement of the auction; (b) in the case of a livestock or game auction contemplated in regulation 33 are the same as for previous auctions and are generally available on the auction house or the auctioneer's website or at the auction house or the auctioneer's business premises during normal business hours; (c) in the case of a closed auction, were made available to all persons to whom an invitation to take part in that auction was issued; or (d) at an auction other than an internet auction, the auctioneer invites any person present to object to the rules of auction not being read upon, and nobody does. Regulation 21(9) states that the rules of auction may not exclude the right of inspection as contemplated in regulation 28(5). SECTION 22 - AUCTIONEER AND AUCTION HOUSE TO HOLD AND ACCOUNT FOR CONSUMER'S PROPERTY Regulation 22(1) states that an auctioneer and auction house must at all times strictly comply with section 65(2) of the Act. Section 65(2) states that when a supplier has possession of any prepayment, deposit, membership fee, or other money, or any other property belonging to or ordinarily under the control of a consumer, the supplier – (a) Must not treat that property as being the property of the supplier; (b) In the handling, safeguarding and utilisation of that property, must exercise the degree of care, diligence and skill that can reasonably be expected of a person responsible for managing any property belonging to another person; and (c) is liable to the owner of the property for any loss resulting from a failure to comply with paragraph (a) or (b). Regulation 22(2) states that unless the auctioneer is also the owner or rightful holder of the goods to be auctioned, no auctioneer may sell goods on auction until he or she has first entered into a written agreement with the owner or rightful holder (who has the right to sell) of such goods to be sold, whether for a specific auction or auctions on general, which agreement contains the terms and conditions upon which that auctioneer accepts the goods for sale. Regulation 22(3) states that an agreement contemplated in sub regulation (2) must as a minimum contain – (a) The name and physical address of owner of the goods to be sold or the owner's agent or the rightful holder (who has the right to sell) thereof; (b) if the goods are to be sold at a specific auction, the date of the auction or if the goods are to be sold at a number of auctions, a termination date of the agreement; (c) the address of the premises where the auction is to be held; (d) the rules of auction; (e) a description of all of the fees to be charged by the auctioneer or the auction house, which must include commissions, storage, advertising and labour, or a method by which such fees will be determined; (f) an explanation of the settlement of the auction that includes the disbursement of interest money, if applicable; (g) a statement indicating whether the auction is an auction without reserve or not; (h) a brief description of the goods to be sold; (i) if the sale is of goods at auction without reserve, a statement affirming that the seller of the goods has a bona fide intention to transfer ownership of the property to the highest bidder; (j) an exact copy of section 65(2) of the Act; (k) an exact copy of subsections (1) to (5) of section 45 of the Act. (4) An auctioneer must retain a copy of every agreement contemplated in sub regulation (2) signed by the owner or rightful holder of the goods to be auctioned for a period of at least three years from the date of the auction. Regulation 22(5) states that in performing the duties of an auctioneer, every auctioneer – (a) is the agent of the owner or rightful holder (who has the right to sell) of the goods for all aspects of an auction; (b) must follow all lawful and reasonable requests of the owner or rightful holder of the goods or immovable property sold at auction; (c) must perform his or her duties so that the highest or most favourable offer made by a bidder is accepted; and (d) must otherwise perform his or her duties in accordance with the highest standards applicable to auctions. Regulation 22(6) states that an auctioneer must keep abreast of current market conditions of goods at all times in order to be in a position to advise and perform services for his or her clients to the best of his or her ability. Regulation 22(7) states that an auctioneer - (a) owes a duty of care towards his or her client; (b) must protect and secure the goods whilst under his or her control or in his or her possession; (c) must at all times preserve a professional, confidential relationship with his or her client; (d) must timeously reveal estimated costs and services for conducting the auction; and (e) if he or she is aware or ought reasonably to be aware of any risks associated with the auction of particular goods, must forthwith disclose such risks to the client. Regulation 22(8) states that all unsold property must be returned to the owner or rightful holder immediately upon the completion of an auction unless otherwise agreed. Regulation 22(9) states that the owner or rightful holder (who has the right to sell) must be provided with an itemised account of all goods sold immediately upon completion of the auction unless otherwise agreed, which as a minimum must contain - (a) the item or lot sold, (b) amount received for the sold item or lot; and (c) the name of the buyers of every item or lot. REGULATION 23 – DISQUALIFICATION TO CONDUCT AUCTION Regulation 23(1) states that a person who - (a) has been found guilty by a court of law, whether in the Republic or elsewhere, of an offence of which fraud or dishonesty is an element, or of any other offence for which such person has been sentenced to imprisonment exceeding five years without the option of a fine; (b) is of unsound mind; or (c) is an unrehabilitated insolvent, may not conduct an auction or in any other way act as an auctioneer or hold him or herself out as an auctioneer. REGULATION 24 – PROHIBITED BEHAVIOUR Regulation 24(1) states that an auctioneer may not - (a) charge or receive any fee or commission in respect of the sale of movable goods unless such goods have been delivered to the purchaser; (b) charge or receive any fee or commission in respect of the sale of immovable property until the purchaser and the seller have signed a written agreement in respect of the sale of such immovable property; (c) charge or receive any fee or commission from the purchaser if the seller defaults or where such fee or commission has already been paid by the purchaser to the auctioneer, the auctioneer shall immediately refund the purchaser the amount paid, including deposit; (d) charge or receive any fee or commission from the purchaser, if the purchaser defaults, exceeding ten percent of the purchase price or the total cost of advertising and conducting an auction and such additional costs as may have been reasonably incurred in accordance with regulation 21(2)(1), whichever is the lesser; (e) charge or receive any fee or commission from the seller, unless agreed otherwise in writing, if the buyer defaults or where such fee or commission has already been paid by the seller to the auctioneer, the auctioneer shall immediately refund the seller the amount paid; (f) charge or receive any fee or commission from the seller if the seller defaults, unless agreed otherwise, exceeding ten percent of the purchase price or the total cost of advertising and conducting an auction and such additional costs as may have been reasonably incurred in accordance with regulation 21 (2)(1), whichever is the lesser; (g) enter into any agreement or arrangement with the seller to sell any goods unless the auctioneer has first provided the seller with an estimate of the total cost of the auction; (h) accept a bid from a person unless he or she is registered in the Bidders' Record as contemplated in regulation 26; (i) set a minimum or reserve price without the express written permission of the seller; (j) remove an item or lot from an auction without the express written permission of the seller; (k) allow bidding on an item or a lot if the auction thereof has not been advertised as contemplated in regulations 19 and 20; (l) during an auction deviate from the sequence of goods as advertised; (m) knowingly misrepresent, or cause or permit to be misrepresented the value, composition, structure, character or quality or manufacture of the goods put up for sale at an auction; (n) hinder the access of any person to any advertisement contemplated in these regulations, rules of auction or vendor's roll; or (o) pay any other person in order to be appointed as auctioneer, whether in general or for a particular auction or in respect of any specific goods. REGULATION 25 – FALSE ENTERY IN AUCTION RECORD Regulation 25(1) states that without detracting from any other applicable law, an auctioneer, including an employee of the auctioneer or the auction house, may not knowingly enter in any record kept or required to be kept by the auctioneer under or in terms of these regulations or any other applicable law, any name or other details other than the real name and details of the actual successful bidder. REGULATION 26 – BIDDER’S RECORD Regulation 26(1) states that An auctioneer must for every auction have a bidders' record to record the identity of all bidders at an auction. Regulation 26(2) states that Subject to regulation 30(2), the auctioneer must ensure that every prospective bidder must prior to the commencement of an auction register his or her identity in the bidder's record, and such registration must with the necessary changes meet the requirements of Chapter 1 of the regulations in terms of the Financial Intelligence Centre Act, 2001, published in Notice No. R.1595 in Gazette No. 24176 of 20 December 2002, in respect of establishment and verification of identity, and sign that entry. Regulation 26(3) states that The auctioneer must ensure that a person who intends to bid on behalf of another, produces a letter of authority expressly authorising him or her to bid on behalf of that person, and both that person and the person bidding on his or her behalf must meet the requirements of sub regulation (2) Regulation 26(4) states that the auctioneer must ensure that if a person will be bidding on behalf of a company, the letter of authority contemplated in sub regulation (3) must appear on the letterhead of the company and must be accompanied by a certified copy of the resolution authorising him or her to do so. Regulation 26(5) states that the bidders' record is available for public inspection in respect of the names of bidders and the bidders numbers referred to in sub regulation (6) only, at any time, free of charge - (a) during an auction, at the premises where the auction is being held; and (b) before or after an auction, at the auction house or auctioneer's place of business and during normal business hours. Regulation 26(5) states that an auctioneer must record the bidder number contemplated in regulation 28(1) in the bidders' record. REGULATION 27 – OWNERSHIP Regulation 27 states that the auctioneer must ensure that a person who wishes to dispose of his or her property by way of an auction signs a declaration stating that he or she is the owner or rightful holder of the goods (who has the right to sell) and submits that declaration to the auctioneer. REGULATION 28 - BIDDING Regulation 28(1) states that An auctioneer must provide a prospective bidder whose name appears in the bidders' record with a bidder number before he or she may bid, as well as a paddle or other device to which that number is attached in such a way that it is clearly visible to the persons present at the auction. Regulation 28(2) states that a bid taken from an unregistered person is invalid. Regulation 28(3) states that the place where an auction is held must be open and accessible to any member of the public, subject to the auctioneer's right to refuse a person the right to remain on the auction's premises in the event that that person repeatedly behaves in such a way so as to disrupt the auction. Regulation 28(4) states that an auctioneer must have a vendor's roll in which all details of the auction are recorded, which must, as a minimum, include - (a) the advertising of the auction; (b) the rules of auction; (c) the bidders' record; (d) the declarations contemplated in regulation 21 (2)(h) and 27; (e) a list of all goods on auction, including goods which were withdrawn from auction; (f) the names of the successful bidders, the goods or lots bought and the prices paid in respect thereof; (g) the details of any challenges to the validity of the auction or the conduct thereof, and the particulars of the persons making such challenges, if available; (h) any items or lots not sold; (i) the details of any reserved price or any matter contemplated in subsections (4) and (5) of section 45 of the Act. Regulation 28(5) states that the auctioneer must afford consumers a reasonable period of time and opportunity to inspect the goods on offer prior to the commencement of an auction, and no fee may be charged for such opportunity, but an auctioneer may - (a) refuse or restrict access to such goods if the consumer after gaining access in any way acts unlawful or in contravention of the applicable rules of auction; (b) require the consumer to adhere to or submit to any security measures reasonably applicable in the circumstances. Regulation 28(6) states that subject to any reserved price and acceptance of the highest bid by the seller, the highest bidder, when the auctioneer announces the completion of a sale by the fall of the hammer, or in any other customary manner, is the purchaser of the goods or lots on auction. Regulation 28(7) states that no fee may be charged for participation in an auction, but this does not apply to refundable deposits. Regulation 28(8) states that the auctioneer must upon concluding the proceedings of an auction - (a) announce that the auction has come to an end; (b) sign the vendor's roll; and (c) certify that the proceedings of the auction were to the best of his or her knowledge conducted in accordance with these regulations, any other applicable law and the rules of auction. REGULATION 29 – MOCK AUCTION Regulation 29(1) states that a mock auction is an auction in which - (a) goods are sold for less than the highest bid, or part of the purchase price is repaid or credited to the purchaser; (b) the right to bid for goods is restricted to persons who have bought or have agreed to buy other goods; or (c) any goods are given away as gifts. Regulation 29(2) states that no person may promote, facilitate, conduct or take part in a mock auction. Regulation 29(3) states that if it can be proved that the reduction in the purchase price or the repayment credit was due to a defect which the auctioneer only became aware of after the highest bid was made, or because of damage sustained after the highest bid was made, the auction will not be considered to be a mock auction. Regulation 29(4) states that no person may promote, organize, participate in or benefit from any kind of conspiracy between an auctioneer, any participants in an auction or any other persons who agree not to bid against each other at an auction or who otherwise conspire to decrease or increase the number or amounts of bids offered at auction. REGULATION 30 – INTERNET OR ELECTRONIC AUCTIONS Regulation 30(1) states that an auction may be conducted via the internet or other electronic medium or platform, irrespective of where the server or other electronic medium or platform is situated, only if - (a) it meets all requirements in respect of an auction provided for in these regulations or other applicable law, but with the necessary changes, if any, to suit an electronic medium or platform; (b) the relevant internet website or electronic medium or platform is generally available to anyone over the age of 18 years at any time of the day; (c) the relevant internet website or electronic medium or platform provides high standards of security for electronic transactions; (d) the relevant internet website or electronic medium or platform provides for easy access to all records prescribed in these regulations in a generally used or accepted medium or format; (e) the internet auction provider keeps the information contemplated in regulation 28(4). Regulation 30(2) states that for purposes of regulation 26(2), a prospective bidder in an auction to be held via the internet or other electronic medium or platform must register by providing - (a) his or her full names, identification or passport number, age, physical address, internet protocol address, and where applicable, login code or name, and password; and (b) the details of the means by which payment will be effected. Regulation 30(3) states that an auctioneer conducting an auction via the internet or other electronic medium or platform may not exclude liability if any goods purchased by auction are not delivered to the purchaser thereof. REGULATION 31 – RECORDS Regulation 31(1) states that 31 Irrespective of any other provision to the contrary in these regulations, all records prescribed in regulations 18 to 33 must be kept for a period of at least three years. Regulation 31(1)(a) states that any person in possession of any record contemplated in regulations 18 to 33 must forthwith upon receipt of a written request at his or her own cost provide the Commission or any forum empowered to administer the Act or an owner or rightful holder (whose goods were on auction at the auction in question) or a registered bidder (at the auction in question) with true copies of the record so requested or which may be relevant to any record so requested, but if the original record is expressly requested, that original record must be made available for inspection. Regulation 31(1)(b) states that the Commission may not provide copies of any documents which have come into its possession pursuant to paragraph (a) of this sub regulation to anyone, unless by order of court, or where it is the interests of justice to do so. REGULATION 32 DEALS WITH MOTOR VEHICEL AUCTIONS REGULATION 33 DEALS WITH LIVESTOCK, GAME AND CLOSED AUCTIONS

As from 1 April 2011, the Consumer Protection Act is applicable.  For more information about the Act itself visit the Department of Trade and Industry website:  www.thedti.gov.za.  Below is the rules of the Auction as from 1 April 2011.
 

GENERAL RULES OF THE AUCTION

AUCTION WITH RESERVE (SUBJECT TO SELLER’S CONFIRMATION)

1. Auction with Reserve means that the property will be sold to the highest bidder but subject to confirmation by the Seller who has 2 business’ days to accept or reject the offer.

2. The conduct of the auction is subject to the control of the Auctioneer of the day who has the sole right to regulate the bidding procedure.

3. Auctions commence at 10h00 unless otherwise advertised and will not be delayed to accommodate any persons who arrive late. The Rules of Aucion will be read out at 10h00.

4. A prospective bidder cannot participate in the bidding process if not registered as a bidder. The registration process includes (i) registration of the prospective bidder’s identity, (ii) residential address, (iii) contact details, and (iv) full signature on the bidder’s roll prior to the commencement of the auction. The bidder’s roll will be made available for inspection at the auction and at the Auctioneer’s offices during normal business hours without the charge of a fee.

5. All registered bidders must (i) thoroughly inspect the property and/or goods and (ii) read the offer to purchase (“the Sales Contract”)  before the bidding starts and must not bid unless he or she has done so.

6. We are selling per rising bid in South African Rand. 

7.  The Vat status of the Seller will be read out at the auction.

8. The auctioneer or his/her agent shall be entitled to bid up to the reserve price on behalf of the owner, but shall not be entitled to make a bid equal to or exceeding the reserve price.

9. Any error by the Auctioneer shall be entitled to be corrected by him/her.

10. A person who attends the auction to bid on behalf of another person, must produce a letter of authority that expressly authorises him/her to bid on behalf of that person. Where a person is bidding on behalf of a company, the letter of authority must appear on the letterhead of the company and must be accompanied by a certified copy of the resolution authorising him or her to bid on behalf of the company.

11. In the event of any dispute between the bidders, the decision of the Auctioneer shall be final and binding.

12. The Rules of the Auction are read out at the auction and a copy thereof will be available to all registered bidders and will be filed at the Auctioneer’s office for a period of 5 (five years).

13. At the auction, after reading of the Rules of the Auction and before the bidding starts, bidders will be able to ask questions regarding the auction procedure and/or the property for sale.

14. The Purchaser shall not be held liable for any arrears unless otherwise stipulated in the Sales Contract.

15. Every bid shall constitute an offer to purchase the property for the amount bid, which the Seller or the Auctioneer may accept or reject in their absolute discretion. The Seller and the Auctioneer are entitled to withdraw the property from sale prior to acceptance by the Seller.

16. The highest bidder ("the Purchaser") shall sign the Sales Contract immediately on the fall of the hammer at the Auctioneer Assistant’s desk.

17. If no bid equals or exceeds the reserve price, the property may be withdrawn from the auction. The Seller shall be entitled to instruct the auctioneer to accept any lower bid.

18. The Seller has 2 business’ days (“the Confirmation Period”) to accept or reject the offer. No bid may be withdrawn after the fall of the hammer until the expiry of the Confirmation Period. During this time the offer shall be open for acceptance by the Seller or his agent and if the offer is accepted, the sale shall be deemed to be a sale by auction for purposes of the Act.

19. The Purchaser’s offer shall remain open for acceptance by the Seller or by the Auctioneer on behalf of the seller, until expiry of the confirmation period.  The Purchaser and the Auctioneer acknowledge and agree that this provision is for the benefit of the Seller.

20. The Purchaser’s offer shall be deemed to have been accepted only when the Seller or the Auctioneer, whichever may be applicable, has signed the Sales Contract on behalf of the Seller and the Seller shall not be required to notify the Purchaser of the acceptance of its offer prior to expiry of the confirmation period.

21. Should the Seller reject the Purchaser’s offer, the Auctioneer will repay to the purchaser any deposit and commission paid to it in terms of the Sales Contract within a reasonable time.

22. In the event of the sale requiring the consent of any statutory authority or any court of law, then this auction sale is subject to the granting of such consent.

23. We have a 10% auctioneers’ fee. As soon as the Seller accepted the Purchaser’s offer, the Auctioneer’s attorneys will send a statement to the Purchaser who must pay the auctioneers’ commission plus VAT directly into the trust account of the Auctioneer’s Attorneys.

24. The rules of the auction meet the requirements of the Consumer Protection Act, Act 68 of 2008 (“the Act”)  to the best of the Auctioneer’s knowledge.

25. Section 45 (1) to (4) are brought to the registered bidders’ attention: “Auctions 45. (1) In this section, ‘‘auction’’ includes a sale in execution of or pursuant to a court order, to the extent that the order contemplates that the sale is to be conducted by an auction. (2) When goods are put up for sale by auction in lots, each lot is, unless there is evidence to the contrary, regarded to be the subject of a separate transaction. (3) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or in any other customary manner, and until that announcement is made, a bid may be retracted. (4) Notice must be given in advance that a sale by auction is subject to - (a) a reserved or upset price; or (b) a right to bid by or on behalf of the owner or auctioneer, in which case the owner or auctioneer, or any one person on behalf of the owner or auctioneer, as the case may be, may bid at the auction.”

26. Section  55 (1) expressly states that the cooling off period does not apply to goods bought on auction:

“Consumer’s rights to safe, good quality goods 55. (1) This section does not apply to goods bought at an auction, as contemplated in section 45.”