What Does the Landmark Garnishee Judgment Mean for Consumers?

A Constitutional Oversight 

You may have come across the Stellenbosch Legal Aid Clinic’s (LAC) landmark garnishee application and Judge Desai’s widely applauded ensuing judgement. Voraciously covered by the media, the high court case, relating to emolument attachment orders (EAOs), informally termed ‘garnishees’, dramatically unfolded in the Western Cape High Court on 8th July 2015, culminating in a resounding ‘victory for the poor’.

An EAO is a court order that compels your employer to make monthly deductions from your salary, and pay it directly to your credit providers. The pertinent garnishee application sought to declare particular EAOs as unlawful, owing to unconstitutionality.

Owing to the epidemic scale of garnishees in our country, this debt collection method has been widely criticised for filching the hard-earned salaries of susceptible low-income consumers. Garnishees are often granted by clerks of the court, which some feel represents a conflict of interest, as they do not have the best interests of the consumer at heart.

While the Cat is Away…

Without a Magistrate’s oversight, debt collection law firms and the credit providers who hire them come out to play, quickly converting the slapdash issuing of garnishees into a lucrative, duplicitous covert market.  Furthermore, Judge Desai ruled the deceptive tactic of obtaining these orders from courts, situated arbitrarily far away from where the consumers worked and lived, as unconstitutional.

Scarce resources and a lack of legal insight would prevent these impoverished consumers from travelling to the remote court, at which they could have challenged the order. Moreover, the Court concluded that the consumers had not voluntarily given their consent to the garnishees, as they were not made aware of the distant jurisdictions, nor fully informed of their rights.

In his compelling conclusion, Judge Desai declared that the

“…ability of people to earn an income and support themselves and their families is central to the right to human dignity. Any court order or legislation which deprives a person of their means of support or impairs the ability of people to access their socio-economic rights constitutes a limitation of their right to dignity.”

Subsequently, the Court ordered the relevant EAOs be declared unlawful and set aside.

Not A Class Action But Still a Breakthrough

Though touted as a class action by the mainstream media, bear in mind that this judgement was of a more singular than sweeping nature. Accordingly, the judgment of unlawfulness holds only for the EAOs contested by LAC and, thus, is not necessarily binding for all garnishees.

Mercifully, Judge Desai’s recognition of the unrelenting, undue suffering endured by vulnerable consumers, and condemnation of predatory lending and unscrupulous debt collection, impelled him to take matters further. As such, the Court went on to declare Section 65J(2)(b)(i) and Section 65J(2)(b)(ii) of the Magistrates’ Court Act (MCA) as unconstitutional in this case, as the EAOs were issued by a clerk of the court, without being overseen by a Magistrate.

Furthermore, Section 45 of the MCA does not allow a consumer to consent to attending a court appearance outside of their district.

How Can You Get Your Garnishee Rescinded? 

Consumers can now approach the Magistrates’ Court and request that they set aside the garnishee orders, if they were issued by a clerk with no judicial oversight. Simply put, only a Magistrate can issue a garnishee, following an assessment of your financial situation, to ensure the order is “just and equitable”.

On the other hand, if your garnishee was granted outside of your district, a cheaper recourse may be to approach the pertinent debt collection or law firm and demand they rescind it, out of their own pocket, based on the distant jurisdiction of the court.

Even better, contact us at National Debt Advisors (NDA), so that we may approach the court or firm on your behalf, and fight to have your garnishees rescinded. In addition, NDA will report the culpable firms and credit providers to the National Credit Regulator, and other appropriate legal bodies for further investigation.

As a High Court decision, this triumphant judgment is binding for all South African Magistrates’ Courts, and is certainly a giant leap for the poor and vulnerable.