In a landmark judgment on September 13 this year, the Constitutional Court engaged in some nimble judicial crafting to cure impugned parts of section 65J (2) of the Magistrates’ Court Act 32 of 1944.
The case stemmed from an application brought by Stellenbosch University’s Legal Aid Clinic in 2015 to the Western Cape high court on behalf of 15 low-income consumers, who were struggling under the burden of garnishee orders that had been issued against them.
A garnishee order, correctly known as a garnishee order, is a court order that allows debts to be deducted from debtors’ wages in execution of a debt judgment.
The cardinal question that the Constitutional Court had to grapple with was whether the Magistrates’ Court Act provided for judicial oversight when a garnishee order was issued against a debtor.
Penning for the majority, Justice Raymond Zondo held that a reading of the Act makes it plain that it permits garnishee orders to be issued without the authorisation of the court. Thus it fell foul of section 34 of the Constitution.
Section 34, in guaranteeing and protecting the right to access to justice, states that: “Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.”
The argument put to the Constitutional Court was that the issuing of garnishee orders without judicial oversight contravened this section.
The best way to cure the defect, according to Zondo, was to adopt a two-pronged remedy – to delete some words from and add others to the impugned parts of section 65J(2) (a) and (b) of the Magistrates’ Court Act.
Zondo did not confirm the order of constitutional invalidity made by the high court and held that his order was prospective and not retrospective.
In essence, it means, as from September 13, no garnishee order may be issued unless the court, after satisfying itself that it is just and equitable and that the amount is appropriate, has authorised it. The court in this case means a magistrate and not just a clerk of the court.
The reasons the Constitutional Court decided against a retrospective order are captured in Justice Edwin Cameron’s separate majority judgment. He held that a retrospective order in these circumstances was “one of considerable complexity”, which the court was not best placed to deal with.
Thus, the court had to revert to the inured practice and principle that an order of legislative invalidity operates from the time of the order only. But Cameron did not close the door for aggrieved judgment debtors to individually approach a court to challenge past garnishee orders that might have been unscrupulously procured or issued.
The net effect of the court’s ruling is that judicially unsanctioned enforcement of judgment debts is now a thing of the past. This means a garnishee order can no longer be granted without judicial oversight; it can no longer be issued by anyone other than a judicial officer, in this case a magistrate.
Furthermore, there is now a jurisdictional link attached to the garnishee orders – proceedings brought by a creditor for the enforcement of any credit agreement can only be brought to a court in the area in which the debtor lives or is employed.
The commercial credit industry has burgeoned. Court papers filed before the Constitutional Court revealed that, as of June 2013, the total debtors’ book of Flemix and Associates, a legal firm specialising in debt collection and recovery, was estimated at R1.47-trillion, of which R168-billion comprised unsecured debts.
The National Credit Regulator (NCR) reports that, of the 19-million credit-active consumers, 50% have impaired credit records, and are three months-plus in arrears.
The garnishee order system has been fraught with irregularities, which has resulted in the exploitation of debtors. Therefore, in light of the Constitutional Court’s prospective order, stakeholders such as the department of justice and constitutional development, the Law Society of South Africa and community advice offices, working in conjunction with each other and on a pro-bono basis, should run justice weeks to allow anyone who is bound by a garnishee order to have it scrutinised.
Employers, too, are duty bound to train their payroll staff to help them to better administer garnishee orders to avoid irregularities that might negatively affect their employees beholden to a garnishee order.
The department of trade and industry, working with institutions such as the NCR, should augment consumer literacy and run programmes to teach consumers about their rights. Trade unions ought to do their bit as well by being more actively involved in empowering workers regarding debt-related matters and financial management.
The law societies ought to join in the fray, too, by being proactive and punishing their members who abuse the garnishee order debt recovery mechanism.
The South African Human Rights Commission remains committed to work with like-minded organisations in this arduous but important quest.
This mammoth task requires a collective effort to mitigate the further marginalisation of significant parts of our people, who end up in tremendous poverty as a result of the egregious abuses attached to the garnishee order system.