The goal of every litigant is to obtain judgment in their favour. Unfortunately, however, this is not always the case. There is usually the emergence of a victor and a vanquished. The interesting part is this; getting a judgment is just the first step of the hurdle as enforcement of the judgment obtained is another whole issue entirely.

There are several ways through which a judgment can be enforced. This would largely depend on several circumstances including the reliefs sought and obtained, whether the judgment is declaratory or executory, monetary judgment or otherwise amongst several other factors to be considered.

This article seeks to examine the garnishee proceedings in Nigeria as one of the ways by which a judgment of a court of competent jurisdiction can be enforced.

TERMS TO NOTE

Judgment Creditor is a person who was successful in a suit and the court has granted some monetary judgment in his favor.

A judgment debtor is a person in a suit whom the court has ordered to pay a sum of money as a judgment sum.

The judgment sum is the amount of money the court has ordered the judgment debtor to pay.

A monetary judgment is a judgment of the court directing that money be paid.

Meaning of Garnishee Proceeding

One of the ways of enforcing a judgment is the garnishee proceedings which are prescribed in Sections 83 to 92 of the Sheriffs and Civil Process Act[i]. Azubuike v. Diamond Bank[ii] 

Garnishee proceedings are a legal process by which a judgment creditor can recover a debt owed to them from a third party who holds assets belonging to the judgment debtor. Garnishee proceedings are “sui generis” (in a class of their own), and entirely different from other court proceedings, although it flows from the judgment that pronounced the debt.

For example, a creditor wins a ₦5 million judgment against a debtor who fails to pay. The creditor applies for garnishee proceedings and identifies a bank account belonging to the debtor with sufficient funds. The court issues a Garnishee Order Nisi to the bank. During the hearing, the bank has no valid defense, so the court issues a Garnishee Order Absolute. The bank is then legally bound to transfer ₦5 million to the creditor.

The court has an inherent power to order a third party to pay directly to the judgment creditor the debt due or accruing due by the judgment debtor, and as much as may be sufficient to satisfy the amount of the debt owed and the cost of the garnishee proceedings. 

Simply put, where a person obtains a judgment in a court of competent jurisdiction and the court orders some money to be paid to such person, the person may apply to the court to compel a third party who holds funds standing to the credit of the person supposed to pay the money directly to the person entitled to the payment ordered by the court.

Parties to Garnishee Proceedings in Nigeria

1. The Garnishor or Judgment Creditor

A Garnishor / Creditor is a successful litigant who initiates garnishment for the purpose of reaching property or credits of a debtor held by a third person who is the garnishee usually but not limited to banks.

2. The Judgment Debtor

A judgment debtor is a person who owes the judgment creditor against whom a judgment ordering him to pay up the sum of money owed or obtained and remains unsatisfied with the judgment creditor.

3. The Garnishee

A person, entity, or third party (banks, employer, employee, etc.) who, while not involved in a court case between a debtor and creditor or a defendant and a plaintiff (the garnishor), is required by a court order (garnishee order) to seize, in part or in full, the money (account balance, payment, wages) belonging to the debtor or defendant, and transfer it to the creditor or plaintiff until a debt or claim is satisfied.

Rights and Obligations of Parties to Garnishee Proceedings in Nigeria

Under this heading, we shall posit the rights and obligations of parties under garnishee proceedings as expected by the Law.

Rights of the Judgment Creditor

The judgment creditor has the right to initiate garnishee proceedings against any third party who holds money or assets on behalf of the judgment debtor. Once a Garnishee Order Nisi has been issued, the judgment creditor has the right to receive payment from the Garnishee up to the value of the assets held by them and no more.

Obligations of the Judgment Creditor

The judgment creditor has an obligation to follow due process when initiating garnishee proceedings. This includes obtaining a judgment against the judgment debtor and obtaining a Garnishee Order Nisi from the court. The judgment creditor must also serve the Garnishee Order Nisi on both the Garnishee and the judgment debtor.

Rights of the Judgment Debtor

The judgment debtor has the right to challenge the validity of the garnishee proceedings. They can do this by filing an application to set aside the Garnishee Order Nisi or by appealing the judgment that led to the Garnishee proceedings. The judgment debtor also has the right to be notified of the garnishee proceedings and to be given an opportunity to be heard.

Obligations of the Judgment Debtor

The judgment debtor has an obligation to pay the amount owed to the judgment creditor. If they are unable to do so, they must disclose any assets they hold or debts owed to them by third parties. Failure to comply with the Garnishee Order Nisi can result in contempt of court charges

Rights of the Garnishee

The garnishee has the right to challenge the validity of the Garnishee Order Nisi. They can do this by filing an application to set aside the order or by showing cause why they should not pay the amount owed to the judgment creditor. The garnishee also has a right to receive compensation for any expenses incurred in complying with the order.

Obligations of the Garnishee

The garnishee has an obligation to comply with the Garnishee Order Nisi. This includes filing an affidavit stating whether they hold any money or assets on behalf of the judgment debtor. If they admit to holding money or assets, they must pay the amount owed to the judgment creditor up to the value of the assets held by them.

Procedure for Garnishee Proceedings in Nigeria

1. Obtaining a Judgment: The first step in initiating garnishee proceedings is to obtain a judgment against the judgment debtor. This can be done through a court action or an arbitration proceeding. Without a valid judgment, it becomes impossible to enforce anything.
2. Application for a Garnishee Order Nisi: Once a judgment has been obtained, the judgment creditor must apply for a Garnishee Order Nisi from the court. This application is usually made ex parte to the court. Upon satisfaction, this order directs the garnishee to show cause why they should not pay the amount owed to the judgment creditor.
3. Serving the Garnishee Order Nisi: The Garnishee Order Nisi already obtained must be served on the Garnishee and the judgment debtor. The garnishee is required to file an affidavit stating whether they hold any money or any assets on behalf of the judgment debtor.
4. Obtaining a Garnishee Order Absolute: If the garnishee admits to owing money or holding assets on behalf of the judgment debtor, the court will issue a Garnishee Order Absolute. This order directs the garnishee to pay the amount owed to the judgment creditor.

Orders Obtainable Under Garnishee Proceedings in Nigeria

There are two orders that can be obtained in Garnishee proceedings in the Nigerian court today. The first stage is for the garnishee order nisi which is temporary, whilst the second stage is for the garnishee order absolute which is permanent and final. However, we shall briefly consider these orders in clear terms below.

1. Garnishee Order Nisi

Garnishee order nisi directs the Garnishee to appear in court on a specified date to show cause why an order should not be made upon him for the payment to the judgment creditor of the amount of debt owed by the judgment debtor. The extant laws regulating Garnishee proceedings are the Rules of Courts, case laws, and also the Sheriff and Civil Process Act (SCPA). Upon the grant of the order nisi, it is statutory that at least 14 days before the next date for the hearing, the Order nisi is to be served on the Garnishee, and the Judgment debtor is to appear in court and show cause[iii].

2. Garnishee Order Absolute

 This is the name given to a final and conclusive court order after the condition of an interim or intervening order (decree nisi) is met. In a garnishee proceeding, the order absolute is made at the second stage on the return date hitherto given at the first stage if the Garnishee fails to attend Court, or does not dispute the debt due or claimed to be due from him to the judgment debtor.

The Court may subject to certain limitations, make an order absolute under which the garnishee will be ordered to pay to the judgment creditor, the amount of debt due from him to the judgment debtor, or so much of it as is sufficient to satisfy the judgment debt together with the cost of the garnishee proceedings.

Important Considerations for Garnishee Proceedings

• Jurisdictional Limitations: Garnishee proceedings must be initiated in a court with jurisdiction over the garnishee, often limiting options when the debtor’s bank operates outside the court’s jurisdiction.
• Banking Confidentiality: Banks are obligated to maintain customer confidentiality, but garnishee orders, as court mandates, compel them to disclose information.
• Priority of Orders: If a garnishee order conflicts with other legal obligations, such as pre-existing charges on the debtor’s funds, courts may prioritize these over the garnishee order.

Challenges in Garnishee Proceedings

Despite their efficiency, garnishee proceedings face certain challenges in Nigeria:

• Jurisdictional Issues: Courts may lack jurisdiction to enforce garnishee orders over banks located outside their geographical area.
• Bank Defenses: Banks sometimes claim insufficient funds or prior encumbrances on the account as reasons to withhold funds.
• Interference with Business Operations: Garnishee proceedings may interrupt business for both the debtor and creditor, especially if the debtor’s funds are significant for their operations.

Frequently Asked Questions (FAQs) on Garnishee Proceedings in Nigeria

What are the types of garnishee orders?

• There are two main types of garnishee orders: Garnishee Order Nisi and Garnishee Order Absolute. The first order temporarily restricts the funds, while the second order mandates payment to the creditor.

Can garnishee proceedings be challenged?

• Yes, the debtor or garnishee can challenge garnishee proceedings during the hearing. Common defenses include prior encumbrances or claims of insufficient funds.

How long does a garnishee proceeding take in Nigeria?

• The duration depends on court schedules, but typically it may take several weeks to a few months from the application to the issuance of a Garnishee Order Absolute.

What happens if the debtor’s account has insufficient funds?

• If the debtor’s account has insufficient funds, the garnishee may disclose this at the hearing. The creditor may need to identify alternative accounts or explore other enforcement methods.

Are garnishee orders applicable to savings accounts only?

• Garnishee orders can apply to any bank account type held by the debtor, including savings, current, and corporate accounts, provided there are sufficient funds to satisfy the debt.

Conclusion

 

Garnishee proceedings are a useful tool for enforcing judgments in Nigeria. They allow judgment creditors to recover debts owed to them by third parties who hold assets belonging to the judgment debtor. However, it is important for all parties involved to follow due process and comply with their obligations under Nigerian law. Failure to do so can result in legal consequences such as contempt of court charges.

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The Nature and Principles Associated with Garnishee Proceedings in Nigeria

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[i]1 Sheriff and Civil Process Act

[ii] Azubike v. Diamond Bank Plc, (2014) 3 NWLR ( PT 1394)116@ 127 Para. C-e, Ratio 2.

[iii] Section 83(2) of the Sheriff and Civil Process Act.

Written by Oluwafemi Faniyi for The Trusted Advisors

Email us: info@trustedadvisorslaw.com

Telephone Number: +234 810 159 9159