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A hearing into the unethical practices around emolument attachment orders, otherwise known as garnishee orders, started this week before the Constitutional Court.
The University of Stellenbosch Legal Aid Clinic will be arguing that most garnishee orders are invalid because they did not go before a magistrate and were signed off by a clerk of the court. There will be far-reaching implications for the industry if the Constitutional Court rules in favour of the legal aid clinic.
The Constitutional Court hearing comes after a court ruling in July last year, when the clinic took 13 credit providers, as well as regulators, to court over unethical practices. Judge Siraj Desai upheld the National Credit Act’s requirement that a garnishee order can only be granted by a court close to where the consumer works or lives. Many garnishee orders were issued in other provinces, inhibiting the consumer’s right to go to court to contest the order itself or the amount being deducted.
Desai also agreed with the argument by the legal aid clinic that all garnishee orders should be subject to a careful inspection by a magistrate. Currently, garnishee orders are issued by clerks of the court and have no judicial oversight, which is open to abuse by credit providers because a magistrate is not confirming if the order meets the legal requirements.
Desai, however, referred the matter to the Constitutional Court for clarification.
Even if changes are made to the Magistrates’ Courts Act to require garnishee orders to be granted by a magistrate, legal opinion is that it is unlikely that these will be applied retrospectively. – Maya Fisher-French
