{"id":839,"date":"2016-06-30T09:08:58","date_gmt":"2016-06-30T07:08:58","guid":{"rendered":"http:\/\/anthonywhatmore.co.za\/?p=839"},"modified":"2018-08-17T16:50:16","modified_gmt":"2018-08-17T14:50:16","slug":"garnishee-orders-are-2-million-of-them-now-invalid-an-action-plan-for-employers-creditors-and-debtors","status":"publish","type":"post","link":"https:\/\/anthonywhatmore.co.za\/index.php\/2016\/06\/30\/garnishee-orders-are-2-million-of-them-now-invalid-an-action-plan-for-employers-creditors-and-debtors\/","title":{"rendered":"Garnishee orders – Are 2 million of them now invalid? An action plan for employers, creditors and debtors"},"content":{"rendered":"

\"garnishee\"<\/a><\/em><\/strong><\/p>\n

\u201cThe ability of people to earn an income and support themselves and their families is central to the right to human dignity\u201d (Extract from judgment below)<\/em><\/strong><\/p>\n

\u201cGarnishee\u201d orders (more properly \u201cEmoluments Attachment Orders\u201d or EAOs) are often used by creditors to attach a debtor\u2019s earnings. \u00a0The debtor\u2019s employer is served with a court order to deduct specified amounts from the debtor\u2019s salary or wages. \u00a0The employer pays those deductions over to the creditor until the debt and legal costs are settled in full.<\/p>\n

Misuse! \u00a0The facts that alarmed the High Court <\/em><\/strong> Supporters of this process argue that, fairly obtained and implemented, garnishee orders are not only an efficient and cost effective method of debt recovery, but less traumatic for debtors than executions against property. \u00a0\u00a0 The problem however lies in the potential for misuse, as shown in the recent high-profile High Court case brought on behalf of a group of low wage earners. \u00a0After defaulting on loan repayments, they had each been persuaded to sign consents to judgment with an undertaking to pay off the debt in instalments, consent to the issue of a garnishee order, and consent to the jurisdiction of a court in another district. \u00a0The debtors denied that the documents were properly explained to them or that they signed them voluntarily. Garnishee orders were duly issued, leaving the debtors in many cases with completely unaffordable deductions. \u00a0For example, over half of one employee\u2019s salary was attached. \u00a0Another employee had almost her whole salary attached in terms of three orders granted against her on the same day.\u00a0 Orders invalidated \u2013 the practical result <\/em><\/strong> The problem lies in the Magistrate\u2019s Court Act which governs the issue of garnishee orders. \u00a0It imposes no limit on the number of orders that may be granted against a debtor, nor any limit on the amount that may be deducted. \u00a0Moreover, these orders can be issued by clerks of court giving rise, in at least some district courts, \u00a0to a \u201crubber stamping\u201d exercise based solely on whether a debt judgment has been obtained or not. \u00a0Debtors can also consent to the jurisdiction of a court far away from where they live and work, effectively depriving them of their right of access to the courts. These provisions, held the Court, are unconstitutional, and the garnishee orders in question are therefore unlawful and invalid. \u00a0 The practical result (pending a likely appeal, subject to referral to the Constitutional Court for confirmation, and subject to amendments to the Act reportedly being prepared as a matter of urgency by the Department of Justice and Constitutional Development), is that, in the Western Cape at least \u2013<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0 Garnishee orders may no longer be issued by clerks of court. \u00a0They must be issued under \u201cjudicial oversight\u201d, in other words by a magistrate \u2013 no doubt after a full enquiry into the affordability to the debtor of the deductions sought.<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0 In cases where the National Credit Act applies (which will be most cases like this) only the court where the debtor lives or works will have jurisdiction \u2013 making it much easier for the debtor to appear in court and be heard.<\/p>\n

Employers, Creditors and Debtors: Your action plan\u00a0<\/em><\/strong> So what happens now? \u00a0Garnishee orders that comply with the above new criteria are still valid and enforceable. \u00a0But with media reports suggesting that as many as 2 million existing garnishee orders may now be invalid, all role players \u2013 including employers, creditors and debtors \u2013 need to check any existing orders urgently. \u00a0 What you don\u2019t want to do is risk breaching a valid court order, so unless and until a garnishee order is actually set aside by a court (or you have the creditor\u2019s written agreement to stop deductions as an interim measure), treat it as at least provisionally valid unless your lawyer gives you specific advice to the contrary. \u00a0 Don\u2019t rely on the various reports and opinions you will read in the media \u2013 a lot of them are confusing and some are completely misleading. \u00a0Take full advice in any doubt!<\/strong><\/p>\n

<\/p>","protected":false},"excerpt":{"rendered":"

\u201cThe ability of people to earn an income and support themselves and their families is central to the right to human dignity\u201d (Extract from judgment below) \u201cGarnishee\u201d orders (more properly \u201cEmoluments Attachment Orders\u201d or EAOs) are often used by creditors<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/posts\/839"}],"collection":[{"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/comments?post=839"}],"version-history":[{"count":2,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/posts\/839\/revisions"}],"predecessor-version":[{"id":1044,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/posts\/839\/revisions\/1044"}],"wp:attachment":[{"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/media?parent=839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/categories?post=839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anthonywhatmore.co.za\/index.php\/wp-json\/wp\/v2\/tags?post=839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}