In our blogs from July 2015 and August 2015 we dealt with the High Court’s judgment declaring certain aspects of the long-established but often abused debt collecting process of emolument attachment orders unlawful.
On 13 September 2016, the Constitutional Court confirmed that changes must be effected to section 65J (2)(a) and (b) of the Magistrates Courts’ Act (MCA), so the court and not the clerk of the court can issue the order, ensure that it is just and equitable in each particular case to order the attachment and that the amount to be deducted from the employee’s salary is appropriate.
Consumers whose rights would have been infringed under the invalid provisions of section 65J will receive immediate protection from the date of the Constitutional Court order. From 13 September 2016, only court-authorised emolument attachment orders may be issued.
The door is not closed to any further challenge against the adequacy of judicial oversight.
The legislature is free to develop laws as to how the judicial oversight by the court must operate. We understand that the Bill aimed at amending the MCA is in its second draft. The Constitutional Court also mentioned that the door is not closed to any further challenge against the adequacy of judicial oversight.
Debts recovered under the prior emolument attachment orders will not be affected. The Constitutional Court issued a prospective order, meaning past emolument attachment orders, even those unscrupulously procured or issued, will continue to be operative, unless individually challenged. The developing process, according to the Constitutional Court, is best regulated by the legislature.
With regard to the consent to the jurisdiction of a specific Magistrates’ Court, the court found that the substance of the High Court’s order must be confirmed, subject only to a minor clarification. This means that the consumer under a credit agreement cannot consent to the jurisdiction of any named court except a court where the consumer resides or works or where any goods sold on credit are kept.
The practice of getting consumers to consent to the jurisdiction of any other court that suits the creditor and is deliberately remote for the consumer is not permitted. All proceedings that were brought in such a court will be void for want of jurisdiction.
The Constitutional Court dismissed the appeals with costs launched against the High Court order that s45 of the MCA does not permit a consumer to consent in writing to the jurisdiction of a court other than in which the consumer resides or works.
Past emolument attachment orders will continue to be operative, unless individually challenged.
The Constitutional Court did not confirm Judge Desai’s declaration that the words contained in s65J(2)(a) and s65J(2)(b)(i) and (ii) of the MCA (an emolument attachment order will not be issued unless (i) the consumer has consented to jurisdiction, (ii) a creditor or his/her attorney has sent a registered letter of demand or (iii) filed an affidavit with the clerk of the court) were inconsistent with the Constitution and invalid, to the extent that these sections failed to provide for judicial oversight over the issuing of emolument attachment orders. The Constitutional Court rather opted to change the wording of section 65J of the MCA to make it consistent with the Constitution.