Judge Desai’s findings
EAOs are often misunderstood. They involve two separate legal processes. First, there is a judgment against a debtor who defaults. That judgment is then executed through a court order, the EAO, against the debtor’s employer. The employer is technically called the “garnishee” in this arrangement, leading to the colloquial term “garnishee order”.
The judgment in the high court does not ban EAOs altogether, but will almost certainly lead to a dramatic decrease in the use of this method of debt collection after two abusive short cuts that had been used by Flemix were declared unlawful.
By law, orders have to be obtained against employers at the magistrates’ court closest to them. Instead, Flemix “forum-shopped” for courts where it was easiest to get them, often using courts as far afield as Kimberley to effect debt judgments in Stellenbosch, making any real access to the courts for the debtors and their employers unlikely.
The orders were obtained off the back of judgments against debtors, which were in turn obtained using consent forms rather than any actual judicial process. This time-saving device is theoretically useful to spare people the cost and bother of court, but the applicants were all deceived or cajoled into signing such consents, ruled Judge Desai. The fact that the applicants had apparently “consented” to incredibly unaffordable repayment terms made it clear that there was no real free and informed consent, he found.