Landmark judgment on garnishee orders

[Albert Broco]

http://www.fin24.com/Money/Debt/landmark-judgment-on-garnishee-orders-20160913

Johannesburg - The Constitutional Court handed down judgment on Tuesday that sees Emolument Attachment Orders (EOAs) requiring judicial oversight to determine if such an order is just and equitable and that the amount is appropriate.

An Emolument Attachment Order is commonly known as a garnishee order, a court order that compels a debtor's employer to pay his/her debt from their salary.

The judgment confirmed an order made by the Western Cape division of the High Court, that certain words in section 65J(2) of the Magistrates' Court Act was inconsistent with the Constitution. The act failed to provide judicial oversight over the issuing of EOAs or garnishee orders.

This judgment follows a ruling in the Western Cape by High Court by Judge Siraj Desai last year that employers in the Western Cape are exempt from enforcing garnishee orders against their employees which were obtained in another jurisdiction, or outside the province.

The University of Stellenbosch Legal Aid Clinic had first brought the case forward to the Cape Town High Court, to fight EOAs issued to applicants by clerks of the court. Fin24 reported that the individuals who brought the application forward were impoverished and employed as farmworkers, cleaners and general workers at the university and the Stellenbosch area.

READ: Garnishee order relief for W Cape workers

The garnishee orders led to an "overwhelming majority or portion" of workers' salaries being taken to pay off debts, said Osmond Mngomezulu, senior legal officer at the SAHRC.

"The judgment is a victory for the poor, who previously did not have access to justice," said Gail Smith, spokesperson of the South African Human Rights Commission (SAHRC). The judgment, although prospective, sets a precedence going forward, she added. An order cannot be made without a presiding officer such as a magistrate or judge, explained Mngomezulu.

"Everyone has a constitutional right to have access to the courts," he said.

It's about time....

 

[Neoprod]

All this time I thought you needed a magistrate to get a garnishee in the first place...it even says in the second sentence it's a court order. So who at the court was granting these up to now? The janitor?

 

[Albert Broco]

All this time I thought you needed a magistrate to get a garnishee in the first place...it even says in the second sentence it's a court order. So who at the court was granting these up to now? The janitor?

I think the process, this far, has gone flying through courts. No hearing was needed. I saw magistrates getting 20-50 of these files a day and they just signed them off after the clerk of the court ensured that all documents were included.

Now, there will probably need to be a hearing of some sort. The magistrate will need to ensure the debt is valid, all legal processes were followed to the T and most importantly, what the income of the debtor is and whether the debtor can afford the repayments.

No more surprises for a person earning R8k and having garnishee orders taking R5k of the salary...

 

[Neoprod]

^, aah, so basically someone had to take this case to the Constitutional Court to get a ruling that makes magistrates do the job they should have been doing in the first place?

All caught up now, thanks.

 

[msquared]

It was actually being abused unashamedly. Most of the emolument cases were being heard in courts in a different jurisdiction to where the companies were based. Default judgments were being handed down as there is no one to oppose the ruling.

It's a good ruling so that abuse stops.

The new act also sets a limit on how much can be garnished in a month. I forget the percentage now...

 

[yebocan]

It was actually being abused unashamedly. Most of the emolument cases were being heard in courts in a different jurisdiction to where the companies were based. Default judgments were being handed down as there is no one to oppose the ruling.

It's a good ruling so that abuse stops.

The new act also sets a limit on how much can be garnished in a month. I forget the percentage now...

http://www.fin24.com/Money/Debt/how-the-new-garnishee-ruling-will-impact-lenders-debtors-20160914

 

[Tacet]

While this is a good thing, the root of the problem remains that people are incurring debt that they cannot afford to repay. If garnishees becomes a bit more difficult to obtain, it might make unscruptulous lenders think twice before offering a loan to someone whom they know cannot really afford the monthly payments.

 

[cr@zydude]

While this is a good thing, the root of the problem remains that people are incurring debt that they cannot afford to repay. If garnishees becomes a bit more difficult to obtain, it might make unscruptulous lenders think twice before offering a loan to someone whom they know cannot really afford the monthly payments.

There are some arsehole lenders out there but people need to be better financially educated. Way too many people get themselves into too much debt.

 

[Albert Broco]

There are some arsehole lenders out there but people need to be better financially educated. Way too many people get themselves into too much debt.

All education and reasoning flies out of the window when money has ran dry and there are no more food on the table. If a person can get a loan somewhere, irrelevant of being able to repay it, they will take it. This is human nature. Cut the problems at the root. Ensure the organizations will take the beating. If loans are no longer easily accessible then people will not find themselves in these positions.

 

[The_Assimilator]

All education and reasoning flies out of the window when money has ran dry and there are no more food on the table. If a person can get a loan somewhere, irrelevant of being able to repay it, they will take it. This is human nature. Cut the problems at the root. Ensure the organizations will take the beating. If loans are no longer easily accessible then people will not find themselves in these positions.

So personal responsibility is irrelevant now? Good thing you don't make the rules of law.

 

[Albert Broco]

So personal responsibility is irrelevant now? Good thing you don't make the rules of law.

The problem this country faces, is that more than 80% of its citizens are illiterate. Personal responsibility cannot be forced on them. They need protection. Hence the reason you see so many statutory bodies come into effect since 1994. So, I am not needed, the current government, as corrupt and useless as they are, have at least done this thing right.

 

[pinball wizard]

While this is a good thing, the root of the problem remains that people are incurring debt that they cannot afford to repay. If garnishees becomes a bit more difficult to obtain, it might make unscruptulous lenders think twice before offering a loan to someone whom they know cannot really afford the monthly payments.

That's a bit unfair and not a real reflection of what the root problem is.

With real food inflation running at close to 20%, rental prices climbing, and the economy stagnating to the point that honest hardworking citizens are either losing their jobs or not getting an increase that enables them to keep pace with inflation, many people that could meet their obligations in terms of servicing their debt are no longer in a position to do so.

 

[Emjay]

So personal responsibility is irrelevant now? Good thing you don't make the rules of law.

This is a very naive view. These unscrupulous lenders were taking advantage of and targeting people who are down and out. You should take some time to speak to the people who these garnishees impact, and I suspect your view will change. The fact is that the majority of people live meal to meal. When there is no food on the table, or kids are starving, parents would go to any lengths to feed their kids. You will only ever understand this mindset if you have experienced it and it is a reason why many people cannot break out of the poverty cycle.

 

[The_Assimilator]

This is a very naive view. These unscrupulous lenders were taking advantage of and targeting people who are down and out. You should take some time to speak to the people who these garnishees impact, and I suspect your view will change. The fact is that the majority of people live meal to meal. When there is no food on the table, or kids are starving, parents would go to any lengths to feed their kids. You will only ever understand this mindset if you have experienced it and it is a reason why many people cannot break out of the poverty cycle.

NOBODY is FORCED to take on debt. EVERYBODY has a CHOICE. If you CHOOSE to get a contract for a cellphone that's worth more than your annual earnings, then you don't get to complain when the provider demands their legally mandated monthly payment.

And the argument about "unscrupulous lenders" is ridiculous. What lender would offer a loan to somebody they KNOW isn't going to be able to pay it back?

The fact that a court is enforcing a judgement that makes people LESS responsible for their choices is just idiotic. Why don't we just mandate that everything must be free and see how that works out?

 

[Albert Broco]

NOBODY is FORCED to take on debt. EVERYBODY has a CHOICE. If you CHOOSE to get a contract for a cellphone that's worth more than your annual earnings, then you don't get to complain when the provider demands their legally mandated monthly payment.

And the argument about "unscrupulous lenders" is ridiculous. What lender would offer a loan to somebody they KNOW isn't going to be able to pay it back?

The fact that a court is enforcing a judgement that makes people LESS responsible for their choices is just idiotic. Why don't we just mandate that everything must be free and see how that works out?

Bulls**t!

 

[The_Assimilator]

Bulls**t!

Great argument there chief. You're really making your point.

 

[FrankieK]

NOBODY is FORCED to take on debt. EVERYBODY has a CHOICE. If you CHOOSE to get a contract for a cellphone that's worth more than your annual earnings, then you don't get to complain when the provider demands their legally mandated monthly payment.

And the argument about "unscrupulous lenders" is ridiculous. What lender would offer a loan to somebody they KNOW isn't going to be able to pay it back?

The fact that a court is enforcing a judgement that makes people LESS responsible for their choices is just idiotic. Why don't we just mandate that everything must be free and see how that works out?

Get fired from your job, can't get work. Only one salary left. Take on debt or let your children starve?

 

[The_Ogre]

And the argument about "unscrupulous lenders" is ridiculous. What lender would offer a loan to somebody they KNOW isn't going to be able to pay it back?

Precisely the lenders which were abusing the system?

"All we need to know is that he's employed fulltime then we'll lend him R1 000 and go to our corrupt official at the court for a garnishee order for R200 a month for the next two years".

I think you've missed the point here.

 

[Albert Broco]

Great argument there chief. You're really making your point.

Sorry, but I am not here to argue. Facing reality and facts only. Anything else is BS. The Concourt just confirmed it too.

 

[thehuman]

If a telemarketer call a uneducated person and tell them they won a phone and halfway down call they ask for banking details (new contract ).
Nearly happened to a friends son and he nearly fell for it if it was not for his mom telling him not to .