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[2017] ZAKZPHC 14
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Smith NO v Clerk of the Court, Pietermaritzburg (AR153/2016) [2017] ZAKZPHC 14; 2017 (5) SA 289 (KZP) (31 March 2017)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
no: AR 153/2016
In
the matter between:
PEREGRINE
SAMUEL SMITH
NO APPELLANT
versus
THE
CLERK OF THE COURT,
PIETERMARITZBURG RESPONDENT
JUDGMENT
MADONDO
DJP:
(Ploos
van Amstel J concurring)
[1]
The appellant appeals against the judgment of the learned Magistrate,
Mrs P S Joubert, of Pietermaritzburg Magistrate’s
court dated
15 December 2015 in which she dismissed the applicant’s
application for an order reviewing and setting aside
the respondent’s
refusal to issue and sign the emoluments attachment order and to
direct the respondent forthwith to issue
and sign the emoluments
attachment order.
[2]
This appeal raises the main question whether an emolument attachment
order authorised under an administration order must be
issued by the
clerk of the court which authorised its issue or by the clerk of the
court which exercised jurisdiction over the
garnishee. The
appellant’s appeal is grounded, firstly, upon the appellants’
contention that the magistrate’s
court which acts as the
supervisor of the execution of the administration order has exclusive
jurisdiction to authorise, issue
and amend or vary an emoluments
attachment order. Secondly, the act of issuing the emoluments
attachment order which is
to be served
on the employer of the judgment debtor cannot be performed by any
clerk other than the clerk of the court which has
authorised the
issue of such order. According to the appellant it would lead to
absurd results if the administrative function mentioned
in section
74, especially in s 74A, 74D, 74I and 74Q of the Magistrate’s
Courts Act 32 of 1944 (the Act) would be performed
by any clerk other
than the clerk of the court supervising the execution of the
administration order. Thirdly, that s 74I (5) (b)
of the Act
restricts the application of s 65J in administrations where
emoluments attachment order are implemented, by specially
ousting the
general application of s 65J. The appellant contends that only
specified subsections of s 65J would apply in administrations,
namely
subsections (4) to (8) and (10). Further, that s 65J (1) was never
meant to apply to
the emoluments
attachment order as authorised in s 74 administrations, as it is
irreconcilable with the statutory remedy of s 74
administrations.
[3]
The appellant is an attorney and is also a director of the firm of
attorneys, Booysen & Co Inc., practising as such at 1A
Holwood
Park, corner Armstrong Avenue and Canegate Road, Umhlanga Rocks,
Durban. The respondent is the clerk of the Pietermaritzburg
Magistrates’ Court.
[4]
In addition to being an attorney, the appellant is the administrator
appointed in terms of s 74 of the Act, and in terms of
the
administration order granted on 26 May 2015, in the present matter.
[5]
The appellant brought the review application in his capacity as an
attorney and administrator in terms of s 13 (2) of the Act.
As an
administrator, his primary duty is to collect payments from debtors
made in terms of the administration order and distribute
such
payments pro-rata amongst their creditors. The collection of such
payments is made through emoluments attachment orders.
[6]
In terms of s 74 (1) of the Act should a debtor be unable forthwith
to pay the amount of any judgment against him or her or
to meet his
or her financial obligations and having no sufficient assets capable
of attachment to satisfy such judgment or meet
such
financial obligations, the court in which the debtor resides
or carries on business or is employed, may upon application by the
debtor make an order providing for the administration of his or her
estate and for the payment of his debts in instalments or otherwise.
[7]
Where the administration order provides for the payment of
instalments out of further emoluments or income, the court shall
in
terms of s 74D authorise the order in terms of s 65J so as to be able
to attach emoluments or the court shall authorise the
issue of a
garnishee order under s 72 to attach debt owing or accruing to the
debtor by or from any other person, excluding the
State, in so far as
either of the said sections is applicable.
[8]
The rationale behind an administration order is to supervise the
monthly payments of the debt under administration and to distribute
the monthly payments fairly amongst the creditors. The administrator
has a statutory duty to prepare an emoluments attachment order
against a debtor and his or her employer to ensure payment under the
administration order.
If
in addition to the administration order the court has authorised the
issue of the emoluments attachment order and the debtor
has failed to
pay the debt, the administrator may in terms of s 74I lodge a
certificate to this effect with the clerk of the court
and the clerk
of the court shall thereupon issue the emoluments attachment order.
[9]
On 26 May 2015 the Pietermaritzburg Magistrates’ Court granted
an administration order against the debtor. The debtor
under
administration resided in the district of Pietermaritzburg and was
employed by the True Blue Foods (Pty) Ltd, having its
head office and
paymasters’ office at 33 North Coast Road, Durban. The Court
appointed the appellant as the administrator
in the matter.
[10]
In terms of the administration order the same Court also authorised
the
emoluments attachment order to
attach the emoluments of the judgment debtor. In June 2015 the
appellant requested the respondent
to issue the authorised emoluments
attachment order. However, on 10 June 2015 the respondent refused to
issue the emoluments attachment
order on the ground that the
garnishee address fell outside the jurisdiction of the
Pietermaritzburg Magistrate’s Court.
The appellant then took
the refusal by the respondent on review at the court
a quo
,
and he also sought an order directing the respondent to issue and
sign the emoluments attachment order. At issue, at the court
a
quo,
was whether an emoluments order authorised under an
administration order must be issued by the clerk of the court having
jurisdiction
over the employer. The appellant’s review
application was dismissed with no order as to costs.
[11]
The first question for decision is whether an emoluments attachment
order, authorised under an administration order, must be
issued by
the clerk of the court having jurisdiction over the garnishee. The
answer to this question hinges on the interpretation
of the
provisions of the Act relating to the granting of the administration
order, authorisation and issue of the emoluments attachment
order and
a garnishee order in order to attach any emoluments of debt present
or in future, owing or accruing to the debtor, by
or from his or her
employer or any other person, excluding the State.
[12]
The administration order is made at the instance of the debtor by the
court in which the debtor resides or carries on business
or is
employed if the debtor concerned is unable forthwith to pay the
amount of any judgment against him or her and not having
sufficient
assets capable of attachment to satisfy such judgment. The
administration order provides for the administration of the
debtor’s
estate and for the payment of his debts in instalments or otherwise.
See s 74 (1).
[13]
The main purpose of s 74 is to protect the debtors with small
estates, usually those who are poor and either illiterate or
uninformed about the law or
both. See
Coetzee v Government of the Republic of South Africa; Matiso and
others v Commanding Officer, Port Elizabeth Prison and others
[1995] ZACC 7
;
1995 (4) SA 631
(CC).
[14]
In
Bafana Finance Mabopane v Makwakwa and another
2006 (4) SA
(SCA) par 14 the Supreme Court of Appeal held that an administration
order whether made in terms of s 74 or s 65 is
indeed a form of
protection for the debtor, designed to ward off legal action and
execution proceedings by eviction and serve the
public interest.
[15]
The immediate effect of an administration order is something akin to
the institution of a
Concursus Creditorum
. ‘The hand of
the law is laid upon the estate, and at once the rights of the
general body of creditors have to be taken into
consideration ….
The claims of each creditor must be dealt with as it existed at the
issue of the order.’
Walker v Syfret NO
1911 AD 141
at
146
.
The
conflicting interests of the creditors are thus managed by the
administrator for the benefit of the general body in a manner
that
seeks to achieve a fair distribution of the debtor’s income.
[16]
The Act makes a clear distinction between a garnishee order in terms
of which execution is levied against a ‘debt owing
to the
judgment debtor’, and emoluments attachment order in which
specific amounts of ‘emoluments’ of the judgment
debtors
are regularly paid to the judgment creditor by the judgment debtor’s
employer. See also
University of Natal, Pietermaritzburg v Ziqubu
1999 (2) SA 128
(N) at 130 A –B.
[17]
Section 61 of the Act which defines the terms ‘emoluments’
and ‘debts’ provides:
‘
In this chapter –
‘
emoluments’ includes –
(i)
salary, wages or any other form
of remuneration, and
(ii)
allowances, whether expressed
in money or not; and ‘debts’ includes any income from
whatever source other than emoluments’.
Garnishee
proceedings in order to attach a debt are dealt with under s 72 and
rule 47 (of the Magistrates’ Court Rules) whereas
emoluments
attachment proceedings under s 65J and rule 46. As a consequence, a
debtor’s emoluments cannot therefore be attached
under the
provisions of s 72.
[18]
In terms of s 74D where the administration order provides for the
payment of instalments out of future emoluments or income,
the court
shall authorise the issue of an emoluments attachment order in terms
of s 65J in order to attach emoluments at present
or in future owing
or accruing to the debtor by or from his or her employer. Section
74D, as the empowering provisions, is clear
and mandatory, ‘the
court shall authorise the issue of an emoluments attachment order in
terms of s 65J.’
[19]
Section 65J (1) (a) provides:
‘
(1) (a) subject to the
provisions of subsection (2), a judgment creditor may cause an …
emoluments attachment order to be
issued from the court of the
district in which the employer of the judgment debtor resides,
carries on business or is employed
or if the judgment debtor is
employed by the State; in which the judgment debtor is employed.’
The
emoluments attachment order can attach the emoluments at present or
in future owing or accruing to the judgment debtor by or
from his or
her employer, when the judgement was obtained from the court
concerned or in any other court. The emoluments attachment
order is
executed against the garnishee as if it was a court judgment and it
gives the judgment debtor, the garnishee or any interested
party an
opportunity to dispute the existence of validity of the order or
correctness of the balance claimed. See s 65J (5).
[20]
Section 74D makes the provisions of s 65J the only route through
which emoluments attachment orders against the debtor’s
employer can be issued, in the event of the administration providing
for the payment of instalments out of future emoluments or
income.
This is quite evident from the heading allocated to the section in
question, authorising the issue of emoluments attachment
or garnishee
orders.
[21]
This also holds true even with regard to s 65E which deals with the
proceedings initiated under s 65A. Section 65E (1) (c)
confers power
on the magistrate’s court to authorise the issue of an
emoluments order by virtue of s 65J (1) for the payment
of the
judgment debt and costs by the employer or the judgment debtor out of
the emoluments owing or accruing to the judgment debtor
concerned.
[22]
The learned Magistrate at the court
a quo
correctly found, in
my view, that the provisions of s 65J are clear. The section provides
that only the court of the district in
which the employer or the
judgment debtor resides, carries on business or is employed, or if
the judgment debtor is employed by
the State, in which the judgment
debtor is employed, has jurisdiction to issue an emoluments
attachment order. See also
MBD Securitisation v Booi
2015 (5)
SA 450
(FB) para 35.
[23]
It is the contention of the appellant that the issuing of the
emoluments attachment order from another court other than the
court
that authorised its issue, increases costs as a local attorney has
now to be instructed to issue the order. The provisions
of s 74 are
designed to obtain some form of
concursus creditorum
easily,
quickly and inexpensively. See
Fortuin v Various Creditors
2004 (2) SA 570
(C) para 7.
[24]
Administration is the form of protection which may, in certain
circumstances, be forced upon the debtor for his or her own
good. The
requirement that the emoluments attachment order be issued from the
court which has jurisdiction over the employer, in
my judgment, is
aimed at saving the judgment creditor from instituting proceedings of
the same nature in various forums. The reason
for this was stated in
S v Gwala and others
1969 (2) SA 227
(N) at 229 B – C as
follows:
‘
magistrates are appointed, in
terms of section 9 of the Magistrate’s Courts Act, 32 of 1944,
for particular districts and
sub-districts and that they exercise
their power, in terms of section 12, only in the district for which
they have been appointed.’
[25]
In terms of s 12 (1) (b) the magistrate exercises his or her power
only in the district for which he or she has been appointed.
The
appellant’s argument in this regard is that by necessary
implication, the power to authorise the issuing of an order
would
include the power to issue an order. It is trite that the order
issued by the magistrates’ court in respect of a person
not
residing or carrying on business or employed in an area falling
within its jurisdiction, will not be effective against such
person
for lack of jurisdiction to grant such relief. For s 28 (1) of the
Act grants jurisdiction to the magistrates’ court
only in
respect of a person who resides, carries on business or is employed
within the district.
[26]
The next question for decision is whether the emoluments attachment
order be issued by the clerk of the court that has authorised
it, the
appellant submits that the intention of the legislature is
to task a specific court with the duties of supervising an
administration order, and a requirement that an emoluments attachment
order be authorised under an administration order be issued out of a
different court would be dissonant with the principle. According
to
the appellant an emoluments attachment order that is to be served on
the judgment debtor’s employer, must, therefore be
issued out
by the clerk of the court that authorised the administration.
Ultimately, the appellant contends that the respondent
had no valid
ground to refuse to issue an order granted by its own district court.
Therefore, the refusal was irregular and it
should, accordingly be
set aside.
[27]
In terms of s 13 (1) of the Act the clerk of the court is appointed
by the magistrate of the district in which the court is
situated. A
clerk appointed in one district cannot, therefore, conduct the
administrative functions of a court from another district.
In the
present case, the respondent being the clerk of the court of
Pieter-maritzburg Magistrate’s Court was in law not authorised
to issue an emolument attachment order in respect of the judgments
debtor’s employer who was resident in the area falling
within
the jurisdiction of Durban Magistrate’s court; and its conduct
in refusing to issue such order was accordingly not
irregular and
reviewable in terms of s 13 (2) of the Act. This section provides for
the review of a refusal by the clerk of the
court to do any act which
he or she is by any law empowered to do.
[28]
However, the appellant in his capacity as an administrator has in
terms of s 74I (3) a statutory duty to pursue with the issue
and
service of an emoluments attachment order against a debtor and his or
her employee in order to enforce payment under the administration
order. In order to achieve this purpose the appellant is in terms of
rule 46 of the Magistrate’s Court Rules required to
obtain a
certified copy of the administration order and lodge this with the
clerk of the court of the district, where the debtor’s
employer
resides, carries on business or is employed, and obtain an emoluments
attachment order from such court under a new case
number. The clerk
which has jurisdiction to issue an emoluments attachment order is
that of the Durban Magistrate’s Court
as the debtor’s
employer has its registered office and paymaster’s office
there.
[29]
Rule 46 reads:
‘
When an emoluments attachment
order is issued by a judgment creditor out of any court other than
the court in which the judgment
or order was obtained, a certified
copy of the judgment or order against the judgment debtor or shall
accompany the affidavit or
affirmation or certificate referred to in
s 65J (2) (b) of the Act.’
[30]
In terms of s 65J (3) an emoluments attachment order must be prepared
and signed by the judgment creditor or his or her attorney,
signed by
the clerk of the court and served on the employer by the sheriff in
the manner prescribed by the rules for the service
of process.
[31]
In my opinion, the costs of the procedure contemplated in rule 46 (1)
would not be significantly more than if the order is
issued by the
court that authorised it.
[32]
Section 65J(1) (b) (ii) confers legal force on an emoluments
attachment order and obliges the employer as the garnishee to
make
payment to the judgment creditor or his or her attorney until the
relevant judgment debt and cost have been paid in full.
Without that
provision an emoluments attachment order would not create any legal
obligation upon the judgment debtor’s employer
to pay
emoluments over to the judgment creditor or his or her attorney.
[33]
I now turn to deal with the question whether the general application
of s 65J is outsted by s 74I of the Act. The appellant
contends that
in terms of s 74I the employer is obliged to pay emoluments over to
the administrator and the administrator is not
required in terms of s
65J (1) (b) (ii) to enforce an emoluments attachment order. According
to the appellant s 74I (5) (b) restricts
the application of s
65J in administrations where emoluments attachment orders are
implemented, by declaring that only specified
subsections of s 65J
would apply in administrations. On appellant’s submission s 74I
(5) (b) provides that only the previsions
of subsections 65J (4) to
(8) and (10) shall apply
mutatis mutandis
to this emoluments
attachment order under s 74 of the Act.
[34]
The appellant has further argued that the provisions of subsections
65J, 74I (2) and 74 (5) (b) were inserted by sections 6
of Act 63 of
1976, however s 74 (5) (b) was substituted a few years later by s 4
of Act 28 of 1981. According to the appellant
the maximum
lex
posterior priori derogate
meaning the later enactment revokes the
earlier one, should be applied. A statutory provision clearly
inconsistent and irreconcilable
with its preceding hierarchically
equal or subordinate counterparts revokes them to the extent of such
inconsistency and irreconcilability.
In the applicant’s
submission in reconciling the contradiction effect should be given to
the later provision, namely s 74I
(5) (b) and not the earlier
provision.
[35]
According to the appellant s 74 deals comprehensively with emoluments
attachment orders in administrations. Section 65J (1)
(a) has been
specifically excluded by s 74I (5) (b). Section 65J (3) is in
contradiction with s 74 (4) of the Act.
[36]
Section 74(5) provides:
‘
5 (a) When an emoluments
attachment order or garnishee order referred to in subsection (3) has
been served on the garnishee, he
shall be obliged to pay to the
administrator the amounts concerned as provided by the order ….
(b)
The provisions of section 65J (4) to (8) and (10) shall
mutatis
mutandis
apply to the
emoluments attachment order referred to in paragraph (a) in such
application any reference in the said provisions
to the judgment
creditor shall be construed as a reference to the administrator.’
[37]
Section 74I (3) deals with the scenario where the court has
authorised the issue of an emoluments attachment order or a garnishee
order and has suspended such authorisation conditionally and the
debtor fails to comply with the conditions of suspension. The
administrator may lodge a certificate to this effect with the clerk
of the court, and the clerk of the court shall thereupon issue
the
emoluments order or garnishee order, as the case may be.
[38]
Upon proper construction, s 74I (5) (a) only gives legal force to the
emoluments attachment order referred to in subsection
(3). These are
orders that have already been authorised, issued and or served and
suspended on certain conditions and the debtors
failed to comply with
the conditions of suspension. The subsection does not deal with the
authorisation and issue of an emoluments
attachment order
per se
.
The emoluments attachment order shall only have such legal force if
it has been served on the garnishee. Section 74I (5) (b) states
that
the provisions of s 65 (4) to (8) and (10) shall
mutatis mutandis
apply to such emoluments order. In my judgment such provisions
operate exclusively from all the provisions of s 65J only in that
limited scope where the issue of an emolument attachment order has
been authorised issued and served on the judgment debtor or
debtor’s
employer, whatever the case may be, and suspended before
implementation on certain conditions and the debtor failed
to comply
with such conditions.
Further,
the section does not relate to the emoluments attachment order
referred to in s 74D. In fact, s 74I relates to the payments
by the
debtor in terms of the administration order. This is evident from
subsection (1) of the section which provides:
‘
(1) The debtor shall, subject
to the provisions of this section, pay the administrator the amounts
weekly or monthly or other payments
that he is required to make in
terms of the administration order.’
[39]
In the premises, the learned magistrate could not be faulted in
finding that the entire provisions of s 65J apply in the present
case. The applicant is still battling to get the authorised
emoluments attachment order issued against the debtor’s
employer
which in terms of s 74D should go by the route of the
provisions of s 65J. The provisions of s 65J (4) to (8) and (10) do
not operate
in isolation or exclusively from the rest of the
provisions of s 65J.
[41]
It is also the contention of the appellant that the Constitutional
Court in
University of Stellenbosch Legal Clinic and others;
Association of Debt Recovery Agents NPC v University of Stellenbosch
Legal Aid
Clinic and others; Mavava Trading 279 (Pty) Ltd &
others v University of Stellenbosch Legal Clinic and others
2016
(6) SA 596
(CC), held the provisions of s 65 J (2) to be inconsistent
with the Constitution of the Republic of South Africa Act 108 of 1996
(the Constitution) and invalid to the extent that they allow for
emoluments attachment order to be issued by a clerk of the court
without judicial oversight. Section 65 J (2) provides;
‘
An emoluments attachment order
shall not be issued –
(a)
unless the judgment debtor has
consented thereto in writing or the court has so authorised whether
on application not the court
or otherwise and such authorisation has
not been suspended; or
(b)
unless the judgment creditor or
his or her attorney has first –
(i)
sent a registered letter to the
judgment debtor at his or her last known address advising him or her
of the amount of the judgment
debt and costs as yet unpaid and
warning him or her that an emoluments attachment order will be issued
if the said amount is not
paid within ten days of the date on which
that registered letter was posted; and
(ii)
filed with the clerk of the
court an affidavit or an affirmation by the judgment debtor or a
certificate by his or his attorney
setting forth the amount of the
judgment debt at the date of the order laying down the specific
instalments, the costs, if any,
which have accumulated since that
date, the payments received since the date and the balance owing and
declaring that the provisions
of subparagraph (1) have been complied
with on the date specified therein.
[42]
Only the provisions of s 65J (2) (a) and 2 (b) (i) were held to be in
consistent with the Constitution and invalid to the extent
that they
fail to provide for judicial oversight over the issuing of any
emoluments attachment order against a judgment debtor.
The
Constitutional Court held with regard to s 65J (2) (a) that where a
judgment debtor has consented thereto in writing and the
emoluments
attachment order is issued without any court intervention, there is
no judicial oversight.
[43]
The word “or” in s 65J (2) was severed and in its place
the word “and” was read in. This was done in
order to
ensure that under subsection (2) (a) an emoluments attachment order
will not be issued unless the judgment debtor has
not only consented
to it in writing but also the court has authorised its issue.
[44]
In s 65J (2) (b) (i) the word “will” was severed and the
word “may” was read in, in its place. The
court held that
this was necessary to acknowledge the fact that whether or not an
emoluments attachment order will be issued is
not certain as it will
depend upon the courts’ exercise of discretion.
[45]
Subsection (2) (a) should now read:
‘
an
emoluments attachment order shall not be issued –
(a)
unless the judgment debtor has
consented thereto in writing and the court has so authorised after
satisfying itself that it is just
and equitable that an emoluments
attachment order be issued and that the amount is appropriate,
whether on application to the court
or otherwise, and such
authorisation has not been suspended.’ or
[46]
(b) unless the judgment creditor or his or her attorney has first –
(
i)
sent a registered letter to the judgment debtor at his or her last
known address advising him or her of the amount of the judgment
debt
and costs as yet unpaid and warning him or her that an emoluments
attachment order may be issued if the said amount is not
paid within
ten days of the date on which that registered letter was posted.
[47]
Judicial oversight over the issue of an emoluments order is
mandatory. See
Gundwana v Steko Development CC and others
2011
(3) SA 608
(CC). In terms of s 74Q the court has judicial
oversight even after the issue and service of an emoluments
attachment order.
This section states that the court under whose
supervision any administration order is being executed has
jurisdiction to reopen
the proceedings at the instance of the debtor
or employer and suspend, amend or rescind the administration order
which includes
the emoluments attachment order. See s 74Q (1). If it
appears to the court that the debtor is unable to pay any instalment,
it
may on good cause shown suspend the order for such period and on
such conditions as it may deem necessary or amend the instalments
to
be paid in terms thereof.
[48]
This shows that the Act has granted the court under whose supervision
the administration order is being executed the power
to vary, suspend
and amend or rescind the terms of the administration order as it
deems reasonable and necessary. The provisions
which the
Constitutional Court held to be inconsistent with the
Constitution and invalid to the extent as they also not provide
for
judicial oversight, i.e. s 65J (c) (a) (b) (i) are not relevant for
decision in this matter since the
University of Stellenbosch
case is distinguishable from the present case. In such case, an
emoluments attachment order was authorised by the court and therefore
there was judicial intervention and hence oversight.
[49]
Further, even if the decision in the
University of Stellenbosch
case was to be relevant and applied in the present case the
Constitutional Court order regarding the inconsistency and invalidity
of the provisions in question was held to be prospective and not
retrospective. In the circumstances, I am not satisfied that the
appellant has made a case for the relief sought.
Order
[50]
In the result, the following order is made:
The appeal is dismissed
with costs.
____________________
MADONDO
DJP
I
agree
____________________
PLOOS
VAN AMSTEL J
Date
reserved:
6 March 2017
Date
delivered:
31 March 2017
For
Applicant:
Adv C J Mouton
Instructed
by:
Booysen and Co Inc.
Ref: P Smit/PC 9796
For
Respondent:
Adv N Matshotyana
Instructed
by:
State Attorney (KZN), Durban
Ref:
116/001403/16/S//P22hvl