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CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­press.co.za see box),

his week’s land­mark judg­ment against il­le­gally ob­tained emol­u­ment at­tach­ment or­ders (EAOs) from Stel­len­bosch is not the end of the bat­tle.

The debt-col­lect­ing law firm that was nailed says it will prob­a­bly ap­peal “cer­tain as­pects” of the judg­ment while the judg­ment it­self will only help peo­ple if em­ploy­ers come to the party and use the judg­ment to clear their pay­rolls of illegal de­duc­tions.

The case in­volved EAOs ( of­ten called gar­nishee or­ders, on the salaries of 12 peo­ple in and around Stel­len­bosch, largely farm work­ers who had de­faulted on loans.

All of these EAOs were the work of law firm Flemix and As­so­ci­ates on be­half of var­i­ous mi­crolen­ders.

All of them were found to be un­law­ful and in­valid af­ter the loans them­selves had been mas­sively usu­ri­ous. One ap­pli­cant had a net in­come of R2 260 a month but had been granted a loan re­quir­ing monthly re­pay­ments of R1 574. Af­ter al­most in­evitably de­fault­ing, the ap­pli­cants had been slapped with EAOs that some­times claimed their en­tire salaries.

Western Cape High Court Judge Si­raj De­sai’s judg­ment was scathing of the mi­crolen­ders and their lawyers.

He or­dered that Flemix’s con­duct be re­viewed by the Law So­ci­ety for eth­i­cal breaches and lam­basted the lenders for their clearly “per­func­tory or nonex­is­tent” af­ford­abil­ity checks on bor­row­ers.

Flemix di­rec­tor Alanza Flemix-Jor­daan told City Press in an emailed re­sponse to ques­tions: “We are con­sid­er­ing the writ­ten judg­ment in con­junc­tion with our le­gal team.”

The judg­ment “has far-reach­ing im­pli­ca­tions for the credit in­dus­try”, she said.

The case against Flemix and its mi­crolen­der clients was driven by mil­lion­aire busi­ness­woman Wendy Appelbaum, with Stel­len­bosch Univer­sity’s Le­gal Aid Clinic rep­re­sent­ing the ap­pli­cants and law firm Web­ber Wentzel’s pro bono of­fice in Cape Town pro­vid­ing in­struc­tion.

Appelbaum took up the cud­gels in 2013 af­ter dis­cov­er­ing that work­ers on her Stel­len­bosch wine es­tate DeMor­gen­zon were los­ing large chunks of their in­comes to EAOs.

This was a com­mon com­plaint dur­ing the wild­cat farm strikes that year, which saw many em­ploy­ers tak­ing note of the overindebt­ed­ness of their work­ers, with many ar­gu­ing that abu­sive credit prac­tices, not only low wages, had been at the heart of the upris­ing.

Odette Gelden­huys from Web­ber Wentzel, the in­struct­ing at­tor­ney on the ap­pli­cants’ side, said the ex­pec­ta­tion was that Flemix would not only scrap the EAOs but re­pay the money col­lected from the 15 ap­pli­cants us­ing the illegal EAOs.

“Since they were un­law­ful, they were un­law­ful from the be­gin­ning,” she told City Press.

The judg­ment im­plied that Flemix should scour the rest of their 150 000 cases, cov­er­ing the col­lec­tion of R1.6 bil­lion in debts for 45 dif­fer­ent mi­crolen­ders, and re­fund other un­law­ful ones, ar­gued Gelden­huys.

Ac­cord­ing to Judge De­sai, it “is safe to as­sume that thou­sands, if not tens of thou­sands, from Ms FlemixJor­daan’s 150 000 cases in­volv­ing or­di­nary work­ing peo­ple in debt are hav­ing sig­nif­i­cant por­tions of their salaries or wages de­ducted based on un­law­fully ob­tained EAOs”.

While the judg­ment should em­power peo­ple all over the coun­try to bat­tle other un­law­ful EAOs, there won’t be an au­to­matic wave of can­cel­la­tions. It is now up to em­ploy­ees, em­ploy­ers and in­ter­est groups to weed out the un­law­ful cases us­ing the De­sai judg­ment. The ef­fect could nonethe­less be dra­matic. Kem West­dyk, gen­eral man­ager of Sum­mit Gar­nishee

DEBT CRU­SADER Wendy Appelbaum

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