For a Proper Garnishee Proceeding, the Garnishee Must be Resident within the Jurisdiction of the Court Making the Order

 

DARSEY DIGITAL PRESS LTD & ANOR v. AYO & ANOR (2018) LPELR-44488(CA)

PRACTICE AREA: COMMERCIAL LAW

INTRODUCTION

Garnishee proceeding is the process of Court requiring a third party who has the funds of a judgment debtor in its coffers, to pay the sum of the judgment debt to the judgment creditor.

Since it is not in all instances that you will find a garnishee (the third party who has the funds of a judgment debtor in its coffers) within jurisdiction, will it be out of place to look for garnishees outside jurisdiction? And where garnishees are found outside jurisdiction, can the judgment creditor institute a garnishee proceeding in the place where the actual debt arose?

UGO, J.C.A. in delivering the leading judgment in this case said “the provisions of Section 83 of the Sheriffs and Civil Process Act Laws of Federation of Nigeria 2004 are relevant. The words of that provision are: “….any other person is indebted to such debtor and is within the state, order that debts owing from such third person, hereinafter called the garnishee, to such debtor shall be attached to satisfy the judgment ……” In other words, it is a precondition to a proper garnishee proceeding that the garnishee be resident in the very State where the order is sought”.

BRIEF FACTS OF THE CASE

In the year 2014, 1st respondent, Demola Akintunde Ayo, representing 355 other persons, commenced proceedings under the Undefended List Procedure against one Geldaps Investment Nig. Ltd and Skywards Technologies as defendants in the High Court of Kwara State. His case was that he and those he represented invested the total sum of ₦345,600,000.00 with the said defendants’ fund management scheme on agreement that the said monies will be paid back to them with fabulous interest within three months. As is common with such schemes, the defendants did not keep their promise, hence their action.

The defendants (Geldaps Investment Nig. Ltd and Skywards Technologies) failed to file any defence to the suit, consequently, the trial Judge entered judgment against them for the sum claimed.

First respondent as judgment creditor subsequently commenced a Garnishee proceeding against Zenith Bank (the subject of this appeal) and appellants herein as 1st, 2nd and 3rd Garnishees. The two judgment debtors were also joined.

There was however a twist to the garnishee proceeding in that it was the accounts of appellants, who were not themselves judgment debtors nor parties to first respondent’s action, that were sought to be attached. This was the case because 1st respondent/judgment creditor claimed appellants were indebted to the judgment debtors or were in custody of their funds. The 2nd garnishee is outside the jurisdiction of the Honourable Court and the 3rd Garnishee is a sister company to the 2nd garnishee and is also connected to the same address out of jurisdiction (Oyo state). Leave of the Court to serve the garnishee order nisi was therefore sought and granted. The garnishees were also to Show Cause why the Order Nisi granted should not be made absolute.

Only Zenith Bank responded by deposing to an affidavit in which it disclosed that the two appellants were its customers and, combined, had about ₦33,000,000.00 (Thirty-Three Million Naira) in their accounts with it; the appellants failed to respond.

On the basis of the affidavit deposed to by Zenith Bank, the trial Court made the Garnishee Order Absolute attaching appellant’s funds of about ₦33,000,000.00 (Thirty-three Million Naira) with Zenith Bank in satisfaction of the judgment debtors’ debt to 1st respondent.

It is consequent upon that order that appellants filed the present appeal contesting inter alia that the provisions of Section 83 of the Sheriffs and Civil Process Act make it mandatory that only a debtor liable to the original debtor and who is within the State and jurisdiction of the Court making the order shall have his funds attached to satisfy a judgment debt. Appellants who were 2nd and 3rd Garnishees/1st and 2nd appellants, besides the fact that they were not indebted to 1st respondent, were not also within Kwara State and therefore not within the jurisdiction of the lower Court so it could not have legally ordered their funds or accounts to be garnisheed.

ISSUE(S) FOR DETERMINATION

Eight major issues were formulated by the appellant for the determination of this appeal. However, the Court dwelt only on issues 1 and 6 which bothers on jurisdiction.

The eight issues as formulated by the appellants are:

1. Whether the lower Court erred in granting a Garnishee Order Absolute against the Appellants who were not served with the Garnishee Order Nisi and other Court processes.

2. Whether non-service of the Court processes on the Appellants and failure of the lower Court in giving a ruling one way or the other on Appellants’ Motion on Notice dated 7th April, 2015, did not breach the Appellants’ Constitutional right to fair hearing thereby leading to a miscarriage of Justice.

3. Whether the lower Court was right in making Garnishee Orders Nisi and Absolute against the Appellants without any proof of any link or business relationship between Appellants and the 1st Respondents or the judgment Debtors.

4. Whether the lower Court had jurisdiction to attach the Appellants’ Account kept with the 2nd Respondent, having not been joined as parties and adjudged to be judgment Debtors in the original suit by the lower Court.

5. Whether the failure to obtain a certificate of the Garnishee Order Absolute made by the lower Court and to register same in the Nigerian Register of Judgments as required under Section 104 and 105 of the Sheriff and Civil Process Act CAP 407 Laws of Federation of Nigeria does not render the Garnishee Order Absolute a nullity.

6. Whether the lower Court had jurisdiction to grant a Garnishee Order Absolute attaching the funds of the appellants who are not in Kwara State, the jurisdiction of the lower Court, to satisfy the Judgment debt.

7. Whether the Garnishee Order Nisi and by extension the Order Absolute are perverse and not supported by the 1st Respondent’s pleadings and hearsay evidence on record, contained in paragraph 8, of his affidavit of urgency and affidavit in support of motion ex-parte, dated 20th February, 2015.

8. Whether from the totality of the evidence presented before the lower Court, the Order Absolute made by the lower Court on the 17th Day of March 2015 was not obtained by fraud.

HELD

Both issues 1 and 6 were resolved in favour of the appellant and against the respondent and since 1st respondent may wish to recommence his garnishee proceedings against appellants in the proper manner and forum, the Court did not delve into the other areas of the appeal.

The appeal was consequently allowed and the garnishee order absolute of the High Court of Kwara State attaching the funds of appellants with 2nd respondent (Zenith Bank Plc) was vacated, the said order being a nullity.

Parties are to bear their respective costs.

RATIO DECIDENDI

APPEAL – PARTICULARS OF GROUND OF APPEAL: Effect of particulars of a ground of appeal that is inconsistent with the main complaint in a ground of appeal
“…I am not unmindful of the fact that the said issue is Particular 3 of Ground 5. But particulars on their own are not grounds of appeal.

Particulars, as their name suggest, only further highlight the complaint in the ground of appeal. So if a particular is unrelated to the ground, as particular 3 of ground 5 is, it is useless. That being the case, Issue 5 is also struck off.” Per UGO, J.C.A. (P. 25, Paras. A-C)

PRACTICE AND PROCEDURE – GARNISHEE PROCEEDINGS: Whether a garnishee proceeding shall be instituted where the defendant resides or carry out business
“On Issue 6 of appellant, which is whether the lower Court had jurisdiction to grant Garnishee Order Absolute attaching the funds of appellants who are not resident in Kwara State, again the provisions of Section 83 of the Sheriffs and Civil Process Act Laws of Federation of Nigeria 2004 are relevant. The words of that provisions are: “….any other person is indebted to such debtor and is within the state, order that debts owing from such third person, hereinafter called the garnishee, to such debtor shall be attached to satisfy the judgment ……” In other words, it is a precondition to a proper garnishee proceeding that the garnishee be resident in the very State where the order is sought: see Central Bank of Nigeria v. Auto Import Export (2013) 2 NWLR (PT 1337) 80 @ 128. In this case, by first respondent’s own showing in his application of 20/2/2015, appellants were resident in Oyo State, outside the jurisdiction of the lower Court, hence his application for them to be served there. They were thus beyond the reach of a garnishee proceedings from the High Court of Kwara State. Issue 6 is also accordingly resolved in favour of appellants.”Per UGO, J.C.A. (Pp. 28-29, Paras. C-B)

 

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