The High Court has declared aspects of a long-established but often abused debt collection process unlawful, with potentially wide ranging consequences, as it could render hundreds of thousands of salary attachment orders unenforceable.

Aspects of a salary attachment process, known as an emoluments attachment order (EAO), was declared unconstitutional in The University of Stellenbosch Legal Aid Clinic v The Minister of Justice and Correctional Services on 8 July 2015.

In summary, the court found that:

  • The MCA is unconstitutional to the extent that it does not provide for judicial oversight in issuing EAOs, to ensure affordability and informed consent, amongst other things.
  • A judgment debtor cannot consent in writing to the jurisdiction of a court other than one in which the judgment debtor resides or is employed.

The application was brought by the University of Stellenbosch’s Legal Aid Clinic on behalf of some of its clients, who were the perpetual victims of a vicious cycle of debt and crippling EAOs. The judgment protects the most vulnerable people in our society from the consequences of reckless credit, because EAOs are often taken against the lowest income earners. It will affect most credit providers utilising EAO’s as a form of collecting debts owing to them.

The Magistrates Court Act 1944 (MCA) permits a judgment creditor to attach a judgment debtor’s wages and obliges the judgment debtor’s employer to pay out instalments from those wages until the debt is paid in full. Currently under the MCA, EAOs may be issued by the clerk of the court without any judicial supervision of a magistrate and without affording the judgment debtor an opportunity of making representations.

There is no statutory limitation on the amount of an instalment or on the number of EAOs which can be issued against an individual debtor.

The lack of judicial oversight meant that EAOs were often issued against the major part of a judgment debtor’s salary, denying the judgment debtor his or her source of income. This practice violates fundamental rights protected by the Constitution, including the rights of access to a court of law and to human dignity.

The judgment condemned the practice of some debt collectors, in which they obtain written consents from judgment debtors agreeing to the jurisdiction of a court which is often a great distance away from the debtor’s place of residence or employment. The court found that this practice amounted to forum shopping, which denied the judgment debtors the right of access to justice, including the right to have the EAOs reviewed. This was contradictory to the MCA which requires EAO proceedings to be brought in the court where the debtor resides or is employed. These “consents” were also often not given freely or voluntarily.