Move to strengthen court oversight of garnishee orders

Stellenbosch University's Legal Aid Clinic does not want to stop unsecured lending - it wants more effective oversight of the granting of emolument attachment orders (EAOs), which are often issued to allow lenders to recover their debt.

Its court action is focused on changing the Magistrates' Court Act to ensure that only magistrates can grant judgments and issue EAOs. It also wants the orders issued only by courts located close to where the borrower either lives or works.

As things stand, any clerk in a magistrate's court can issue EAOs, without interrogating the circumstances of the loan or whether the repayment terms are reasonable. Issuing EAOs in far-flung courts makes it extremely difficult for an employee or employer to challenge the order.

An employer must dock an employee's salary on receipt of an EAO. Although an estimated 10% of South Africa's workforce is affected by EAOs, few employers have the resources to challenge them.

One who did was Anglo Platinum, which recently launched a court challenge against EAOs served against its employees in Marikana.

Law firm Flemix & Associates, acting for the lenders, says the challenge is unnecessary because the magistrates' courts rules were changed in July and now require a magistrate's consent to a judgment. The legal aid clinic counters that a rule change isn't binding in the way that a change in the actual law is and that a clerk of the court is not legally bound to enforce the act as a magistrate is.

The use of far-flung magistrate's courts is necessary, says Flemix, because for unspecified "exotic reasons" courts in some areas such as Stellenbosch will not grant EAOs to them. The legal aid clinic says this is because lenders abuse the system.