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Monday, 22 January 2018
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Seperating the Baby and the bathwater - Garnishee Orders

The original version of Brett Bentley cover article appearing in the March 2013 De Rebus, the official SA Attorneys journal.


The term "garnishee order" is commonly but mistakenly applied to an emoluments attachment order ("EAO").

An EAO is granted in terms of Section 65J of the Magistrates' Courts Act ("MCA"), ordering an employer (referred to as a garnishee, hence the confusion) to make deductions from a debtor's salary or wages and pay this across to the creditor or it's attorneys. A Garnishee order is in terms of Section 72 of the MCA, and authorises a creditor to attach any debt owed, or which will become due, to the debtor.

On 1 November 2012 a joint statement was released by the Minister of Finance and the Banking Association of South Africa's (BASA's) chairperson, which stated that as a result of, amongst other things, "Abuse of debt and garnishee orders, and of direct pay roll deductions" the parties had agreed to (amongst other things) :

"- BASA members commit not to use garnishee orders against credit defaulters, as they believe the use of such orders for credit is inappropriate.

- BASA and the National Treasury will promote and support enforcement initiatives against credit providers that issue pre-signed garnishee orders. The National Treasury will also engage with the Department of Justice about the abuse of garnishee orders and suggest that their use be restricted to maintenance orders."

(The full statement is at

Obviously the statement means to refer to EAOs, but it is concerning that the Treasury is proposing the virtual abolition of a lawful debt collection process without apparently so much as having read the relevant provisions of the MCA or sought legal advice on the issue and the implications of the proposal.

Notwithstanding this, the concerns surrounding the abuses in the debt collection process, particularly relating to unsecured loans, are real and need to be addressed.

Debt counselling: Challenge and proposed solution

This is an article by Brett Bentley , which appeared in the August 2012 edition of the SA Attorneys Journal - De Rebus.

It has been over five years since the full implementation of the well-intentioned National Credit Act 34 of 2005 (NCA). However, despite its good intentions, some debtors may feel frustrated by the outcome after pursuing debt relief in terms of the provisions of ss 86 to 88 of the Act.

For the past five years the National Credit Regulator (NCR) has tried - to borrow from an old proverb - to ‘make a silk purse out of a pig's ear' by pursuing a course of court declaratory orders in terms of the provisions of s 16(1)(b)(ii) of the NCA and other litigation. The fact that this piece of legislation is itself a ‘pig's ear' in terms of its drafting has been diplomatically stated by the courts, as illustrated by Malan JA's statement in Nedbank Ltd and Others v The National Credit Regulator and Another 2011 (3) SA 581 (SCA) at para 2:

‘Unfortunately, the NCA cannot be described as the "best drafted Act of parliament which was ever passed," nor can the draftsman be said to have been blessed with the "draftsmanship of a Chalmers".'

Different Forms of Companies In Terms of the New Companies Act

The new Companies Act is due to be introduced on the 1st April 2011, its introduction having been delayed because of the Act having had the dubious honour of being the first piece of legislation that the writer knows of that had to be amended after it had been passed but before it come into operation.

The reality is that we have to practically deal with piece of law and the 1st April 2011 is not an April fool's day joke but has serious consequences to those transacting with other businesses.

NCR Declaratory Judgment

The long-awaited High Court declaratory Order sought by the National Credit Regulator, attempting to resolve numerous problems arising from the vagueness of the National Credit Act, particularly relating to the process of debt counselling applications and debt relief, was handed down on 21st August 2009.

A copy of the judgment can be found at the Southern African Legal Information Institute website.

The Court granted 11 Orders regarding the interpretation of the National Credit Act, 10 relating to over indebtedness and debt review practical procedures and one relating to the charging of interest on credit agreements that are in default.

Credit Fraud Warning!

One of our clients found out today that they are the victim of a fraud involving credit, for almost half a million rand.

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