University of Stellenbosch Legal Aid Clinic v Minister of Justice CCT 127/15 Date of hearing: 3 March 2016

See Garnishment order: Unlawful emolument attachment orders

Media Summary

The following explanatory note is provided to assist the media in reporting this case and not binding on the Constitutional Court or any member of the Court.

On Thursday 3 March 2016 at 10h00 the Constitutional Court will hear applications for the confirmation of a declaration of constitutional invalidity concerning certain provisions of section 65J of the Magistrate’s Court Act 32 of 1994 (the Act), and for leave to appeal against certain orders made by the Western Cape High Court (High Court).

The High Court declared certain provisions of the Act invalid on 8 July 2015.  Those provisions relate to debt collection procedures employed by the micro-lending industry.  The declaration of invalidity arose from emolument attachment orders obtained against several individuals (the second to sixteenth applicants) by Flemix & Associates Incorporated Attorneys (the seventeenth respondent, Flemix) for judgment debts in favour of several micro-lenders (the fourth to sixteenth respondents).  The provisions were declared constitutionally invalid, as they allowed for the issuing of an emolument attachment order without judicial oversight.

Further, the High Court declared that section 45 of the Act, a provision that authorises parties to consent to the jurisdiction of a particular magistrates’ court is limited to courts having jurisdiction over the area where the debtor resides or is employed in instances where the National Credit Act 34 of 2005 regulates the relevant credit agreement.   The High Court dismissed counter-applications by Flemix as well as the Association of Debt Recovery Agents (ADRA).

The applicants in the confirmation proceedings are the University of Stellenbosch Legal Aid Clinic and various individuals, represented by the former.  Both Flemix and ADRA oppose the application for confirmation.  They argue that the High Court erred in holding that the provisions declared invalid did not allow judicial oversight when emolument attachment orders were issued.  They submit that the oversight occurs when the judgment, on which such orders are based, is granted and that is a step preceding the issuing of the emolument attachment orders.

Both Flemix and ADRA also seek leave to appeal against the other orders granted by the High Court, including the declaration in regard to jurisdiction.  They contend that the declaration restricting the scope of jurisdiction is not in line with the litigants’ right of access to courts.   They argue that the relevant provision accords with the parties’ choice of forum and that choice is informed by principles such as convenience and cost effectiveness.

The applicants support the judgment of the High Court and in addition to requesting confirmation, they also oppose the applications for leave to appeal lodged by Flemix and ADRA.

The South African Human Rights Commission was admitted as amicus curiae.  It contends that the abuse of the emolument attachment orders impacts the rights of those affected, especially the poor and marginalised who would struggle to enforce their rights through the courts.   It argues that the emolument attachment order system established by the Act fails to comply with principles based on human rights as the amount that is deducted from a debtor’s wages may be determined without adequate judicial oversight.  More so, as debtors are not given an opportunity to make representations before the emolument attachment order is issued.