Attack intensifies on Emolument Attachment Orders by microlenders
The University of Stellenbosch's Legal Aid Clinic is relying on the Constitution in its court bid to dramatically curtail automatic salary deductions by microlenders – the controversial emolument attachment orders . The only surprise is that the matter has even gotten this far – one would have thought the respondents, which include the Ministers of Justice and Trade & Industry, would have seen the obvious error in the existing system when a mere R50 bribe to a clerk at the court can lead to years of forced repayments through such emolument attachment orders. As you'll hear in this interview with lawyer Odette Geldenhuys, the Legal Aid Clinic may well apply to the new Mark Shuttleworth Trust for financial support. – AH
ALEC HOGG: Stellenbosch University's Legal Advice Centre has lodged papers with the Cape High Court regarding issuance of emolument attachment orders. Here to tell us why is Odette Geldenhuys, Senior Associate at Webber Wentzel. Hi there, Odette. It's nice to have you on the program today. These things were often referred to (incorrectly) as garnishee orders, but it's to do with deductions that come off people's salaries before they have any right to get the salary in their own bank accounts. Why is the Stellenbosch Legal Aid Clinic so strongly camped against this practice?
ODETTE GELDENHUYS: Hi, Alec. The reason why the Stellenbosch University's Legal Aid Clinic has brought this application is that it has been fielding requests from people with emoluments/attachment orders over a number of years. When it investigated the issue quite extensively, it realised that the problem lies within the law itself and that there are sections of the Magistrate's Court Act, which it believes, are unconstitutional and therefore, makes it possible for the salary-poor to become even poorer through the use of this particular legislation.
ALEC HOGG: And if they get it right…if they do win their challenge, what's likely to happen?
ODETTE GELDENHUYS: What is likely to happen Alec, is that the legislation will change and really, what it will do is it will bring the provisions of the Magistrate's Court Act, which deals with emoluments/attachment orders, which as you say relates specifically to attachment of salary for debt. It will bring it in line with the principals in our Constitution, which as you know, is the highest law in our country. The amendments, which are being sought, are really, quite simple. Firstly, it is to amend the law so that emoluments/attachment orders and the granting thereof become subject to judicial oversight. Currently, the law allows this to be issued by a Clerk of the Court. The second issue that will be clarified is around the jurisdiction. There is currently a section in the Magistrate's Court Act, which seems to suggest that parties can choose their own court where they would like matters to be heard.
When it comes to emoluments/attachment orders where the employer plays a vital role, because it is the party that administers these orders, it must have a say and it really makes sense for the orders be issue by a court that's close to the employer. Currently, that doesn't happen in very many cases.
ALEC HOGG: The way you've unpacked it, it appears as though… If I were a smart politician (and I guess that's an oxymoron), I would be supporting this, rather than defending it. Yet, we have the Minister of Justice, the Minister of Trade & Industry, and the bureaucrats at the National Credit Regulator who are on the other side of the fence. Everything that you've unpacked seems like it would make a lot of sense, particularly that it would protect the poor.
ODETTE GELDENHUYS: Alec, I cannot comment on our Respondents' cases, and what they will bring to court, but what I should mention is that the National Credit Regulator has advised the court that it will abide by the decision of the court. What would be a 'first prize' outcome of this matter is that the relief that the University of Stellenbosch's Legal Aid is seeking is one that the parties can really agree to. As you said, what is at stake here? Is the salary-poor their interest? They really make up the majority of the people in this country.
ALEC HOGG: But it makes sense. Why should a Clerk of the Court simply be able to stamp an emolument order? Surely, it should go through more of a process. We know that our courts, as much as we admire them sometimes, there is corruption. Sometimes Clerks of the Court are paid R50.00 to use their rubber stamps. I'm surprised that there is any resistance. Is it spirited or is it just going through the motions?
ODETTE GELDENHUYS: It's quite early in the process. The application was launched at the end of September and the Respondents have until either 16th of October or, if we agree, a later date to file the answering papers so it's quite early in the process. Maybe what I should also mention is that this application comes in the context or against the background, of very many initiatives that have unfolded over the last number of years. What's different about this initiative is that we are not looking at the practice of how emoluments/attachment orders are handled by the credit industry but really, by the law itself. I think that should make the parties quite interested in talking with the Applicants in this matter and saying 'let us look at the legislation together'.
ALEC HOGG: Just to close off with Odette, if this is going to be challenging via the Constitution, has the Mark Shuttleworth Trust come into play here? He has made lots of money available for Constitutional challenges. Are you using any of that?
ODETTE GELDENHUYS: Alec, what a great suggestion from your part. We haven't been in touch with Mr Shuttleworth, but that would always be an interesting option.