Why your garnishee order is still valid

A landmark ruling by the Constitutional Court on garnishee orders will not be applied retrospectively.

eaoLast month, the Constitutional Court issued its ruling relating to emolument attachment orders (known as garnishee orders) in a case that had been brought before it by the University of Stellenbosch Legal Aid Clinic.

The legal aid clinic represented 15 farmworkers with garnishee orders and had already won a court case in the High Court in July last year, but the case had been taken to the Constitutional Court on appeal.

The main issue faced by the Constitutional Court judges was around who, within the court, could actually issue an emolument attachment order (EAO). The crux of the matter was the interpretation of section 65J(2) of the Magistrates’ Courts Act.

In many cases the clerk of the court would issue the EAO by effectively rubber-stamping the order provided by the debt collector, which meant that the magistrate had not checked the order to ensure that it was legal, and more importantly, that it was actually affordable for the consumer. This resulted in cases, such as these 15 farmworkers, where up to 80% of their salaries were deducted through garnishee orders each month, leaving them with virtually no money for their day-to-day basis.

There were allegations within the industry that clerks were being bribed by debt collectors to push through illegal EAOs.

The Constitutional Court judges confirmed that EAOs can only be issued by a magistrate. The remedy is to amend the wording of section 65J(2) to ensure that there is no mis-interpretation in the future. This means that from now on, only a magistrate can issue an EAO after being satisfied that the order is just and equitable and that the amount to be deducted from the customer’s salary is appropriate. This however, will only apply to EAOs issued from now on and cannot be used to retrospectively declare existing garnishee orders as illegal.

Although none of these rulings will apply retrospectively, due to the ongoing court case and the highlighting of these practices, many of these questionable practices have already stopped and EAOs have become more difficult to obtain.

Another important issue that was ruled on by the High Court in July 2015 related to jurisdiction, ie where the EAO could be obtained. The legal aid clinic argued that credit providers were purposefully approaching courts hundreds of kilometres from the customer’s residence, making it impossible for the customer to get to the court to redress the issue. This practice also appeared to be related to corrupt clerks, with debt collectors using courts where they knew the clerk would push through the EAOs or avoiding courts where magistrates were not inclined to issue EAOs.

This practice involved the credit provider or debt collector getting the customer to consent to issuing an EAO in another jurisdiction, however the ruling now is that an EAO can only be granted by a court close to where the consumer works or lives, irrespective of what the consumer has signed.

Although none of these rulings will apply retrospectively, due to the ongoing court case and the highlighting of these practices, many of these questionable practices have already stopped and EAOs have become more difficult to obtain.

When to dispute

You could, however, still dispute your garnishee order if the amount deducted from your salary does not provide enough to meet your basic living expenses, or if the original loan was deemed to be reckless. You cannot just arbitrarily stop the deduction from your salary but you can consider the validity of that order and contact the Credit Ombud on 0861 66 28 37, or via email at ombud@creditombud.org.za.