Defination of Garnishee Order
To put it simply, a garnishee order is a legal notice that allows a creditor or third party to recoup or retrieve funds from a debtor by means of a deduction from their salary or other sources of income. This means that your employer will pay your credit providers before your salary is paid to you. This also means that the creditors can retrieve their money from those who owe their debtors, as legally those finances are due to them. In this case it is a court order to the debtor directly, with no specified source, which is different to the emolument attachment order.
This order is issued in two parts. First the court directs the banker to stop payment out of the account of the called as ORDER NISI. On receipt of the confirmation of the banker court issued another order known as order absolute whereby the entire balance in the account or a specified amount is attached.
GARNISHI ORDER IS APPLICABLE
a. Where there is a credit balance
b. Attaches the amount drawn by a cheque but payment not yet effected.
c. All bank branches of a bank are treated as one entity.
d. Attaches future maturing term deposits also.
e. attaches joint account if issued so
f. Attaches personal account of partners if an order is served on a partnership account.
WHERE THE ORDER IS NOT APPLICABLE
a. Where a cheque has been marked for good payment.
b. Attaches the amount specified only
c. Not applicable to sanctioned limit.
d. Where any assignment of balance has been made and acknowledged
e. Not applicable to deceased and insolvents
f. Salary is not attached.
g. Bank can exercise the right of set off before complying with Garnishee Order.
The new law on garnishee order
In 2016, the Constitutional Court declared that the management of the garnishee order and that decisions of whether a salary should be attached by a garnishee order cannot be made by a clerk of the court, instead that decision is now put to the magistrate who should firstly look at whether it would be just and equitable to grant the EAO and whether the debtor would be able to afford it.
Basic questions based on Garnishee order
1) What are the legal implications of a garnishee order?
As a court judgment, the garnishee order may be enforced accordingly as a warrant of execution – this warrant means a bailiff of the court or in simple terms, a legal officer has the power to go to the debtor’s address and recoup goods to the value of the needed amount. The debtor can dispute the liability, however, this would require them to appear in court and show cause as to why the debt should not be paid.
2) Can the order be halted?
The court has the power to not only rescind (or cancel) the order, but also to amend and suspend the judgment of the order. However, the court is forced to cancel or amend the order if the debtor does not have the means to support themselves and their dependents and pay their debt as well.
Whether creditor or debtor, there are implications for both sides which allows the debt to be resolved as soon as possible.
3) How to cancel a garnishee order
A garnishee order can be rescinded (or cancelled) based on these grounds:
Lack of jurisdiction;
The judgement debtor did not consent to the issuing of the EAO or garnishee order and the court did not authorize the order;
The judgement debtor was not duly notified.
4)How long is a garnishee order valid for?
Before an emolument attachment order can be granted, a judgement would have been issued, which is valid for 30 years
5)Can a garnishee order be stopped?
A garnishee order can only be stopped by an application at the court to have the order stopped. It can also be stopped if the judgement creditor informs the employer or garnishee that they no longer need the money to be deducted from your salary.