Picture: THINKSTOCK
Picture: THINKSTOCK

THOUSANDS of state employees and mine workers who have had their salaries docked because of debt repayments are sighing in relief after the Constitutional Court on Tuesday delivered a judgment that will stem the free-for-all on attachment orders.

Businesswoman and philanthropist Wendy Appelbaum, a key supporter of the case, said it was a great victory for the poor but much work remained to be done.

Q Link, which is auditing 530,000 current and paid-up emolument attachment orders effected on government employees, will use the judgment to challenge deductions that were effected unlawfully. It will also assist private clients including mining companies, to have invalid attachment orders rescinded.

The company was roped in by the Treasury to clean up the mess created by unlawful attachment orders on government employees’ salaries following appeals from trade unions. In one month, the company stopped and challenged R30m worth of attachment orders on behalf of the Treasury.

Clark Gardner, CEO of Summit Financial Partners, which audits attachment orders on behalf of Q Link, said: "We hope to stop R200m worth of illegal deductions in the next nine months."

The Constitutional Court has changed the wording of section 65J of the Magistrates’ Court Act to make it clear there must be judicial oversight when an attachment order is granted.

This confirmed the substance of a high court order in a case brought by the University of Stellenbosch’s Legal Aid Clinic against 13 credit providers and law firm Flemix & Associates, which administered attachment orders on their behalf. Unsecured lenders use attachment orders to collect unpaid debt through salary deductions.

The court found that attachment orders were abused by credit providers and caused enormous hardship to indigent debtors, thus judicial oversight was "constitutionally indispensable" to ensuring that attachment orders were just and equitable, and that the amount to be deducted was appropriate.

The Constitutional Court upheld the high court ruling with regard to jurisdiction. The lower court had ordered that existing laws allowed for attachment orders to be granted only in courts in the same jurisdiction as a debtor’s place of residence or employment. Cases brought before the high court showed that attachment orders were obtained in courts far away from debtors, effectively denying their right to approach courts for relief.