A garnishee order is an enforcement option open to a judgement creditor who has successfully won their case in the Small Claims Tribunal (SCT), the Magistrates’ Court, the District Court, or the High Court.
A garnishee order is a way for a judgment creditor to obtain money owed from a debtor who won’t pay.
To obtain a garnishee order, an applicant must apply for garnishee proceedings. This is when a court directs money owed by a judgment debtor to be paid to the judgment creditor (applicant) by a third party.
If a third party owes money to the judgment debtor, the court can order that person or organisation to pay the money directly to the judgment creditor to satisfy the debt. The third party is the garnishee, and the court order is called a garnishee order.
How to start garnishee proceedings
A judgment creditor will need an exp parte summons for a garnishee order to show cause. The purpose of this is to explain the applicant’s status and why they are applying.
The judgment creditor will also need to submit an affidavit in line with Form 102 of the Rules of Court containing the following information:
- The order requires enforcement with proof of the court judgement.
- The outstanding sum of money owed by the judgment debtor.
- Information about the garnishee.
- Evidence that demonstrates the garnishee is located within the jurisdiction.
- Details and proof that the garnishee has a link of indebtedness to the judgment debtor. It could be a loan agreement or even bank account details. The burden of proof to show a debt due to the judgment debtor from the garnishee is placed on the judgment creditor.
The documents are filed via eLitigation at the LawNet and CrimsonLogic Service Bureau. The garnishee order to show cause application is assessed, and the outcome is communicated via a registrar’s direction.
If the application is successful, the applicant is given a garnishee order to show cause, which must be served on both the judgment debtor and the garnishee at least seven days before the court proceedings date.
This provisional garnishee order effectively freezes the judgment debt until the final order is made.
Show cause proceedings
There is a court hearing known as ‘show cause proceedings’ which the garnishee and the judgement debtor must attend. The date for this is stated on the garnishee order to show cause.
The proceedings establish the financial link between the judgment debtor and the garnishee. If the link is established to the court’s satisfaction, the court will make the final garnishee order. This means the garnishee must pay the money to the judgment creditor instead of the debtor.
The garnishee has the opportunity to dispute the debt to the judgment debtor, and if this is the case, the judge will conduct a hearing and make a final order after they have listened to both sides.
Factors to consider before taking out a garnishee order
A judgment creditor has several options open to them to recover the debt owed, of which a garnishee order is just one.
The best route for the judgment creditor to take depends on several different factors. These include whether the debtor can pay and is willing to pay, and whether it is beneficial to give the judgment debtor time to pay, or if prompt action is more effective because there is a fear that they will dissipate the assets.
Where the judgment debtor’s assets are physically located is also relevant.
A judgment creditor can consider garnishee proceedings if they know a third party owes money to or is holding funds on behalf of the judgment debtor. An easy example includes an employer or the debtor’s bank account if it’s in credit. The judgment creditor will need documentary proof of the third party’s financial standing in relation to the judgment debtor.
The court may issue an order requiring the judgment debtor to attend a hearing where they are orally examined on the status and location of any property.
The debtor must produce physical evidence, such as documentation, to help the court establish their assets, plus complete a questionnaire before the hearing. The court will also want sight of bank statements for the last six to twelve months.
Garnishee proceedings against banks
Unsurprisingly, garnishee proceedings against banks are common as this is a simple way to access an account with funds when the judgment debtor is refusing to pay.
Order 49 Rule 1(3) of the Rules of Court permits a current or savings account with a bank or other type of financial institution to be attached to satisfy a judgment debt. It sounds odd, but when an account is in credit, the bank is considered a debtor who owes that money to the account holder.
It’s not possible to garnish an account in overdraft; it must be in credit.
A garnishee order means the bank is compelled to pay money in the account to the judgment creditor rather than the account holder or debtor.
Final thoughts on Garnishee orders
A garnishee order is a beneficial way for a judgment creditor to get hold of money owed to them when the debtor still refuses to pay despite the success of a court case.
The costs of applying and the proceedings are wrapped up in the final garnishee order alongside the monies owed, so it’s worth considering if the creditor is sure the debtor has funds available to access.
It would be nice to think that success in court means the debt will finally be repaid, but often, the fight doesn’t end there for the judgment creditor. How to enforce a judgment debt requires the input of an experienced litigation lawyer, as there is more than one option open to a creditor.
Frequently asked questions
Why is a garnishee order necessary if the court has confirmed the validity of the debt owed?
Once a person has achieved success in the courts, they must take action to enforce that; otherwise, the court order or judgement will not take effect. A garnishee order is one option open to the judgment creditor.
Are garnishee orders the most common enforcement method for a judgment debt?
The most common method is an enforcement order for the seizure and sale of property, which used to be known as a writ of seizure and sale. This order allows a bailiff, who is an officer of the court, to seize and sell moveable property belonging to the judgment debtor with certain listed exceptions. The money raised is used to clear the debt.
How does a judgment creditor know the best enforcement order to take out to recover their money?
The route to recover monies owed is usually determined by the lawyer acting for the judgment creditor and, in some instances, the court, who may order an examination of the judgment debtor.
What is an enforcement order for the attachment of a debt?
This is the new name for a garnishee order, which means a third party, like an employer or a bank who owes money to the debtor, pays that money to the judgment creditor instead of the judgment debtor.
What happens if a garnishee does not attend the show cause proceedings?
The court can still make a final order even if the garnishee is absent at the hearing. If the garnishee does not cooperate, the final garnishee order can be enforced in the same way as any other court order for the payment of money. A garnishee can be held in contempt of court if they fail to comply with the garnishee order.
Who pays for the cost of the garnishee proceedings?
Typically, the judgment creditor will bear the cost upfront, but the garnishee order, when made, will usually cover these costs and the original sum of money owed by the judgment debtor.
What happens if the judgment creditor wants to garnish a bank and the judgment debtor’s account is in joint names?
The court must decide the apportionment of money between the judgment debtor and the other person named on the account. To successfully obtain a garnishee order, the court must be satisfied that all the money in the account belongs to the judgment debtor. This can be established by looking at the origin of payments into the account.
It will only be possible to obtain a garnishee order against the bank if the court is satisfied that none of the money in the account belongs to the other named account holder; effectively, they are dormant.