Garnishee Orders - are 2 million of them now invalid?

Published date: November 2015
Author: Staff
The ability of people to earn an income and support themselves and their families is central to the right to human dignity"

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. The problem however lies in the potential for misuse.

The problem lies in the Magistrate's Court Act, which governs the issue of garnishee orders. It 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.

Moreover, these orders can be issued by clerks of court giving rise, in at least some district courts, to a "rubber stamping" exercise based solely on whether a debt judgment has been obtained or not.

In a recent High Court case brought on behalf of a group of low wage earners. After defaulting on loan repayments, they had each been persuaded to sign consents to judgment and in many cases with completely unaffordable deductions – in one case over half of an employees salary had been attached.

These provisions, held the Court, are unconstitutional, and the garnishee orders in question are therefore unlawful and invalid.

The practical result (pending a likely appeal), is that, in the Western Cape at least:

1. Garnishee orders may no longer be issued by clerks of court.
2. In cases where the National Credit Act applies (only the court where the debtor lives or works will have jurisdiction)

So what happens now?

Garnishee orders that comply with the above new criteria are still valid and enforceable. But with media reports suggesting that as many as 2 million existing garnishee orders may now be invalid, all role players - including employers, creditors and debtors - need to check any existing orders urgently.