NWLR This Week: Garnishee Proceedings – Principles, Mode of Commencement, Requirement of A.G’s Consent

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Parties: Central Bank of Nigeria v Interstella Communications Ltd & 3Ors

Appeal No: SC/500/2014

Court: Supreme Court

Justices: OLABODE RHODES-VIVOUR, J.S.C. (Presided)
MARY UKAEGO PETER-ODILI, J.S.C
CLARA BATA OGUNIYI, J.S.C (Read the Leading Ruling)
AMIRU SANUSI, J.S.C.
SIDI DAUDA BAGE, J.S.C

Citation: (2018) 7 NWLR (Pt. 1618) P.294

Facts:

In 2004, the 1st and 2nd Respondents filed suit No. FHC/UM/CS/95/04 against Nigerian Telecommunications Lid. (NITEL) at the Federal High Court, Umuahia for breach of contract, and the trial court entered judgment in their favour.

As at October 2008, the judgment debt was over N23billion and $48million. Consequently, the Federal Government of Nigeria set up an inter-ministerial committee to negotiate an amicable settlement of the judgment debt with the 1st and 2nd Respondents. So, the 3rd and 4th Respondents wrote letters to the 1st and 2nd Respondents offering and undertaking to pay N12 billion in full and final settlement of the N23 billion. The 1st and 2nd Respondents against NITEL in Suit No. FHC/UM/CS/95/04.

Eventually, and with the consent of the 3rd and 4th Respondents, the agreed sum of N12 billion was entered as consent judgment of the Federal High Court, Umuahia in favour of the 1st and 2nd Respondents against NITEL in Suit No FHC/UM/SC/95/04.

Later, the 3rd and 4th Respondents wrote a letter to the Federal Ministry of Finance to include the judgment debt of N12 billion in the year 2009 budget to enable the Federal Government pay it during that fiscal year.

The 3rd and 4th Respondents paid N2.7billion of the judgment debt through the garnishee/appellant, and then reneged on paying the full sum N2billion.

Because of the 3rd and 4th Respondents’ delay in fully paying the judgment debt, the 1st and 2nd Respondents commenced garnishee proceedings against them by a motion ex parte under Suit No. Suit No FHC/UM/SC/95/04 at the Federal High Court­ Umuahia. The 1st and 2nd Respondents endorsed, on the motion ex parte, the notice in section 97 of the Sheriffs and Civil Process Act, but they did not endorse the same notice on the garnishee order nisi served together with the motion ex parte on the garnishee/appellant.

The garnishee/appellant entered a conditional appearance but it did not file a counter-affidavit to the affidavit deposed to by the 2nd Respondent in support of the ex-parte application for the garnishee order nisi. Thus, the garnishee/appellant did not state that it had no money or account owned by the 3rd and 4th Respondents, or that any such money it had in its custody was insufficient to satisfy the judgment debt. Instead, both the garnishee/appellant and the 3rd and 4th Respondents raised a preliminary objection to the procedure adopted by the 1st and 2nd Respondents in commencing the garnishee proceedings. The 3rd and 4th Respondents, however, confirmed in their affidavit that N2.7billion had been paid to the 1st and 2nd Respondents in part-fulfillment of the agreement between the Respondent.

After hearing the objection, the Trial Court dismissed it and immediately went on to make the garnishee order nisi absolute.

The Appellant was aggrieved, and appealed to the Court of Appeal, which dismissed the appeal and affirmed the trial court’s ruling. Still dissatisfied with the concurring findings of facts and law by the Trial Court and the Court of Appeal, the Appellant appealed to the Supreme Court. The 3rd and 4th Respondents also filed a cross-appeal against the judgment of the Court of Appeal.

In determining the appeal, the Supreme Court considered the following statutory provisions and Rules of court:

Sections 84(1) and 97 of the Sheriffs and Civil Process Act, which provide thus –

“84(1) Where money liable to be attached by garnishee proceedings is in the custody or under the control of a public officer in his official capacity or in custodia legis, the order nisi shall not be made under the provisions of the last preceding section unless consent to such attachment is first obtained from the appropriate officer in the case of money in the custody or control of a public officers or the court in the case of money in custodia legis, as the case may be.”

“97 Every Writ of Summons for service under this Act out of the State or the Capital Territory in which it was issued shall, in addition to any other endorsement or notice required by the law of such state or the Capital Territory, have endorsed thereon a notice to the following effect (that is to say) – ‘This summons (or as the case may be)… and in the … State (for as the ease may be).’

Order 37 rule 2(c) of the Federal High Court (Civil Procedure) Rules, 2009, which reads-

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“(2) An application for an order under rule 1 of this Order shall be made ex-parte supported by an affidavit:

  1. stating the name and last known address of the judgment debtor;
  2. identifying the judgment or order to be enforced and stating the amount of the judgment or order and the amount remaining unpaid under it as (at) the time of the application;
  3. stating that to the best of the information or belief of the deponent the garnishee (naming him) is within the jurisdiction and is indebted to the judgment debtor and stating the sources of the deponent’s information or the grounds for his belief…”

Order rule 11 rule 16 of the Judgment Enforcement Rules, which states –

“16 Where a person not being a party in a proceeding obtains an order or has an order made in his favour, he shall be entitled to enforce obedience to such order by the same process as if he were a party in the proceeding; and any person not being a party in a proceeding against whom obedience to any judgment may be enforced, shall be liable to the same process for enforcing obedience to such judgment as if he were a party to the proceeding.”

Principle

On Parties to garnishee proceedings – 

A garnishee proceeding is strictly between the judgment creditor anti the garnishee who is indebted to the judgment debtor.

On Nature of and procedure forgarnishee proceedings –

Garnishee proceeding is a separate and distinct action between the judgment creditor and the person or body holding in custody the assets of the judgment debtor, although it follows from the judgment that pronounced the debt owing. Thus, a successful party in his quest to move fast against the assets of the judgment debtor usually makes an application ex-parte for a garnishee order nisi attaching the debt due or accruing to the judgment debtor from such person or body that from the moment of making the order is called the garnishee.

On Mode of commencing garnishee proceeding-

The mode of commencing a garnishee proceeding as provided by Order 37 rule 2 of the Federal High Court (Civil Procedure) Rules 2009 is by tiling an ex-parte application supported by an affidavit.

On Mode of commencing garnishee proceedings and duty on Applicant for garnishee order –

By virtue of Order 37 rule 2(c) of the Federal High Court (Civil Procedure) Rules, 2009, an application for a garnishee order under rule 1 of the Order shall be made ex-parte supported by an affidavit stating that to the best of the information or belief of the deponent, the garnishee (naming him) is within the jurisdiction and is indebted to the judgment debtor and stating the sources of the deponent’s information or the grounds for his belief. In this case, Order 37 rule 2(c) of the Federal High Court (Civil Procedure) Rules, 2009 imposed on the 1st and 2nd Respondents the obligation to show that the garnishee was within jurisdiction of the Federal High Court, which is uniform across the country.

On why garnishee proceedings should be commenced in court having territorial jurisdiction over where the garnishee resides –

The purport of section 83 of the Sheriffs and Civil Process Act revolves around the essence of commencing a garnishee proceeding in the High Court of the State where the garnishee resides. The rationale for the provision in the section with regard to a debtor residing within the Stale is basically for convenience and effective enforcement by the court because where the action is not commenced in the jurisdiction where the garnishee resides, it would be difficult to enforce the judgment of court obtained from another jurisdiction on the garnishee. However, since the Federal High Court has one territorial jurisdiction across the entire country, its jurisdiction is not restricted to any particular judicial division of the court and it can sit in any city of Nigeria. Accordingly, the court’s judgment can be enforced in any judicial division of the court. Thus, in this case, the Trial Court rightly entertained the garnishee proceedings because the Appellant was within the jurisdiction of the court in the context of section 83 of the Sheriffs and Civil Process Act.

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On Duty on registrar of court where court where court grants garnishee order nisi–

Where a court grants a garnishee order nisi, the Registrar of the court through the Sheriff, must serve the order nisi on the garnishee, the judgment creditor, and the judgment debtor. Thus creditors or their counsel are precluded from any opportunity to tamper with the court’s orders. And it is only the failure to serve the order that is fatal to the success of the judgment creditor in the proceedings.

On whether duty of garnishee to shield and protect the money of the judgment debtor –

The role of a garnishee in any garnishee proceeding is delimited. And it is not envisaged that after a judgment creditor had gone through the rigours of establishing his rights through the legal system, the garnishee, who is asked to surrender the judgment debtor’s money in its possession should engage the judgment creditor in another bout of legal battle. In this case, the garnishee/appellant took so much interest and appeared to have forgotten its role as a banker to the Federal Government.

On duty of garnishee and whether can shield and protect the money of the judgment debtor –

Basically, the restrictive role and legal duty of a garnishee in a judgment enforcement proceeding is to conscientiously and truthfully appear before the court in order to disclose the Judgment debtor’s state of account in its custody. So it is not the garnishee’s business to play the role of an advocate for a judgment debtor by trying to shield and protect the money of the judgment debtor. (Oceanic Bank Plc v. Oladipo (2012) LPELR -19670 referred to.) (P 350, paras. D-E; G-H).

Per OGUNBIYI, J.S.C. at page 350, paras. F-G.:

“By the rule of jurisprudence, no injustice will be done to a garnishee; neither will it be denied any legal right when made to give up the judgment debtor’s money in its custody. It is also inequitable for a garnishee to continue to latch on to the money that does not belong to it when the judgment debtor has conceded the judgment.”

On Effect of garnishee’s refusal to file affidavit to show cause after being served order nisi –

A garnishee who chooses to play a game of hide and seek with the court by failing or refusing to depose to affidavit to show cause; that is, to disclose the true account status of the judgment debtor only exposes itself to trouble, daring the court to do its worst. It can therefore be made to pay the judgment debt, if the court has cause to believe that the failure or refusal to show cause is a deliberate attempt to evade a legal duty under the law to disclose the true state of account of the judgment debtor in its custody.

On Basis of requirement of Attorney General’s consent under section 84 Sheriffs and Civil Process Act before execution of judgment against the State –

The rationale for the consent of the Attorney-General of the Federation as prescribed in section 84 Sheriffs and Civil Process Act is to avoid embarrassment to him of not having the prior knowledge that funds earmarked for some purposes have been diverted in satisfaction of a judgment debt, which the government may not know anything about. However, this case did not fall under the purview of the section because by virtue of the letters the 4th Respondent wrote to the 1st and 2nd Respondents, the consent of the 4th Respondent had already been obtained; and the Appellant was acting only as a banker to the 3rd Respondent.

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On Condition precedent for requirement of Attorney-General’s consent under section 84 of the Sheriffs and Civil Process Act before execution of judgment against the State –

Certain qualifying conditions must be met for a case to come under the purview of Section 84 of the Sheriffs and Civil Process Act. In other words, justice demands that the Attorney-General of the Federation must be a neutral/nominal party in the transactions and proceedings giving rise to the application for the garnishee order nisi and not him being the debtor. In this case, the Attorney-General of the Federation held out himself to be an active participant in the several stages of negotiations, transactions, and even part-payment of the debt owed to the 1st and 2nd Respondents. In the circumstance, the Attorney General of the Federation cannot be a neutral/nominal party.

On When unnecessary to seek Attorney-General’s consent before execution of judgment against the State –

Section 84(1) of the Sheriffs and Civil Process Act states that where money liable to be attached by garnishee proceedings

is in the custody or under the control of a public officer in his official capacity or in custodia legis, the order nisi shall not be made under the provisions of the immediate preceding section of the Act unless consent to such attachment is first obtained from the appropriate officer in the case of money in the custody or control of a public officer or of the court in the case of money in custodia legis, as the case may be. In this case, by implication, section 84 of the Sheriffs and Civil Process Act, which stipulate the Attorney-General’s consent was fully complied with because the government itself negotiated the judgment terms and took steps to settle the debts before it reneged on full payment of the judgment debt.

On functions of Central Bank of Nigeria and relationship between it and Federal Government of Nigeria in respect of garnishee proceedings –

By virtue of section 2 (e) of the Central Bank of Nigeria Act, the Central Bank of Nigeria acts as a banker and provides economic and financial advice to the Federal Government of Nigeria. Further, by section 36 of the Act, the Bank receives and disburses Federal Government moneys and keeps accounts thereof. In this case, the relationship between the Appellant and 3rd and 4th Respondents was that of a banker and customer relationship. In other words, the Appellant was not a public officer in the context of the provision of section 84 of the Sheriffs and Civil Process Act. So the need to seek the consent of the Attorney-General did not arise.

On whether judgment creditor must obtain consent of debtor before recovery of debt –

A judgment creditor needs not first obtain the consent of the debtor before proceeding against the debtor to recover his money.

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