4/LAW REPORT
11.10.2016
Garnishee Proceedings: Judgment Debtor in Garnishee Proceedings Whether a Desirable Party
F
rom the classification of parties, it is effulgent that in garnishee proceedings, the judgment debtor who may be affected by the result of the proceedings is a desirable party. The wisdom of the law in stipulating that the order nisi be served on the judgment debtor is definitely not for idle purposes. It is not floccinaucinihilipilication. It is not worthless, neither is it valueless. It has to be emphasised that in the light of the clear provisions of Order VIII Rules 6 & 8 of the Judgment Enforcement Procedure Rules, which make provisions for “hearing the judgment creditor, the garnishee and the judgment debtor ...” in a situation where the garnishee either pays the judgment sum into court or disputes his liability; there is no justifiable legal basis for shutting out a judgment debtor from garnishee proceedings subsequent to service of order nisi or treating him as a stranger thereto, which evidently he is not; ...” Per Ogakwu JCA The above was the holding of the Court of Appeal, per Ogunwumiju, J.C.A in the judgment delivered on 15th July 2015. The 1st Respondent had sued the Appellant and two others jointly and severally, claiming that he consumed a bottle of Maltina Drink manufactured by the appellant, which contained a dead and slimy cockroach which resulted into the appellant suffering several ailments. The 1st respondent thus claimed damages in the sum of N3,000,000.00 (Three Million Naira) against the appellant. The trial court entered default judgment and awarded damages in favour of the 1st respondent. Dissatisfied, the appellant filed an application for an order setting aside the judgment. The said application was, however, refused. Thereafter, the appellant filed an appeal against the order of court refusing to set aside the judgment. The appellant also filed an application for stay of execution of the judgment pending the determination of the appeal. Subsequently, the 1st respondent instituted garnishee proceedings against the appellant and the 2nd respondent in which the appellant had accounts and a garnishee order nisi was made by the court. The appellant and 2nd respondent resisted the garnishee proceedings and filed affidavits to contest same. The appellant alleged that the 1st respondent had suppressed material facts such as the pendency of the appellant's appeal against the order refusing to set aside the judgment of the trial court, and the application for stay of execution. However, the trial court disregarded these depositions on the ground that the appellant was not a necessary party to the proceedings, and made the garnishee order absolute. Aggrieved, the appellant filed an appeal against the order absolute. Counsel for the parties filed their respective briefs, wherein they raised certain issues for determination, one of which was whether the appellant was a necessary party to the proceedings. After hearing arguments of parties and reserving judgment, the Court of Appeal called for submissions from Amici Curiae, owing to the contentious nature of contemporary issues raised in the appeal and also directed counsel for the parties to file supplementary briefs on the following issues it formulated: “(1) Whether the application for stay of execution cannot be predicated upon an appeal against an order refusing to set aside a default judgment. (2) Whether in the circumstance of this case, the appellant is a necessary party to garnishee proceedings and if so, has he suffered any miscarriage of justice. (3) Whether the learned judge was right in holding that the existence of an application for stay of execution does not preclude a judgment creditor from seeking to use garnishee proceedings to enforce the judgment. (4) Whether the learned trial judge was right in holding that the garnishee proceedings in this case, is an independent action from the judgment sought to be enforced and failure to name the other parties to the judgment, does not invalidate the proceedings. On the first issue, the appellant’s counsel argued that the judgment of the trial court was a default judgment in which the appellant was denied fair hearing. The 1st respondent, on the other hand, argued that an appeal against an order refusing to set aside a default judgment, not being one against the main judgment, was not competent for an application of stay of execution to be predicated upon.
H.M Ogunwumiju, JCA
In the Court of Appeal Benin Judicial Division Holden at Benin On Wednesday the 15th Day of july, 2016 Before Their Lordships Helen Moronkeji Ogunwumiju Hamma Akawu Barka Ugochukwu Anthony Ogakwu Justices, Court of Appeal CA/B/289/2009 Between Nigerian Breweries Plc .... Appellant And 1. Chief Worhi Dumuje 2. Zenith Bank Plc ....Respondents (Judgment Delivered by Helen Moronkeji Ogunwumiju, JCA)
On the second issue, it was argued by the appellant’s counsel that, the purpose of section 83(2) of the Sheriff and Civil Process Act (SCPA) which stipulates that an order nisi be served on the judgment debtor and garnishee, is to make both of them party to the garnishee proceedings, and the essence of a judgment creditor filing an affidavit against the grant of an order absolute, is to intimate the court on the true position of the matter in controversy. The appellant’s counsel submitted that, in the circumstance of this case, the appellant having filed an appeal as well as a motion for stay of execution, facts which the 1st respondent suppressed, is a necessary party to the proceedings. Counsel to the respondent in his reply argued that, by virtue of section 83(2) the SCPA, it is only the garnishee that is required to appear before the court to show cause why he should not pay to the judgment creditor the debt or part of the debt due to him. The judgment debtor is not required by law to appear before the court to show cause, or do anything and in the absence of such requirement, he is not a necessary party to garnishee proceedings. On the third issue, counsel for the appellant argued that a garnishee order absolute by the trial court, after a motion for stay of execution has been filed will foist a fait accompli on the court, which would over-reach the decision of the appellate court and render such decision nugatory. In response, counsel for the respondent
contended that an application for stay of execution does not preclude a judgment creditor from seeking to use garnishee proceedings to enforce the judgment. He argued that garnishee proceedings being a special specie of execution of money judgments (debts), no motion for stay of judgment can stop the proceedings. On the fourth issue, counsel for the appellant argued that the failure of the 1st respondent to include the name of the other judgment debtors, goes to the root of the case and affects the competence of the garnishee proceedings.Counsel for the 1st respondent argued that, the suit in which judgment sought to be enforced was delivered, is different from the garnishee proceedings from which the appeal emanated. He further argued that since a garnishee proceeding is an independent action between a judgment creditor and a third party called the garnishee, other parties to the judgment pronouncing the debt owed and due, which parties are not needed or relevant to the garnishee proceedings, need not be named in the garnishee proceedings. After hearing arguments of counsel to the parties and the amici curiae, the Court of Appeal, in resolving the first issue opined that the procedure of either appealing against a judgment or filing an application seeking an order to set same aside, have essentially the same objective and a party dissatisfied with such judgment, has the prerogative to choose between the two. The court relying on Order II rule 14 of the Judgments Enforcement Rules, held that garnishee proceedings is just one of the ways of executing judgment. Since the effect of the success of an appeal against a judgment and an application to set aside the judgment are the same, then the contingency for stay of execution can be predicated on a pending appeal just as an application to set aside the judgment of a court or an appeal therefrom. In its determination of the second issue, the Court of Appeal relied on the applicable Rules of court to hold that even in cases where the garnishee disputes liability, the court still has a duty to hear the judgment debtor, just like the judgment creditor before determining the liability of the garnishee to pay out the amount to the judgment creditor. The inclusion of the provision in the Rules for hearing the judgment debtor is contingent on the constitutional right of the judgment debtor to be heard in matters relating to determination of his rights. In resolving the third issue, the Court of Appeal held that it is the duty of courts to ensure that its orders are not nugatory. Relying on Vaswani Trading Co. v. Savalahk & Co. (1972) 12 SC 50, the Court held that where there is a notice of appeal and a motion for stay of execution in respect of the judgment sought to be enforced by garnishee proceedings, the court ought not to proceed with the garnishee proceedings. This is because where an application for stay of execution is pending and the judgment creditor by means of garnishee proceedings proceeds to enforce and recover the judgment sum, it definitely overreaches the pending application for stay of execution. On the fourth issue, the Court of Appeal held that by Sections 83, 109 of the SCPA and Orders VIII (4),(6) and (8) of the JER, the statutory parties to a garnishee proceedings, most importantly at the stage of making the order absolute, are the judgment creditor, the garnishee and the judgment debtor. The judgment creditor is only obliged to name the person he wishes to move against to recover the judgment debt, and in this case, the 1st respondent who is the judgment debtor in the original suit, decided to move against the manufacturer of the malt drink, who was the 1st Defendant and judgment debtor in the original suit and rightly so. Having resolved issues 1, 2 and 3 in favour of the appellant, the Court of Appeal allowed the appeal and discharged the garnishee order nisi and garnishee order absolute. Counsel: M. I. Osogbue (Mrs) with J. O. Ajah Esq. for the Appellant. I. Ovwighorienta Esq. for the 1st Respondent. Dr Alex Iziyon, SAN; Dr Onyechi Ikpeazu, SAN; P.I.N. Ikwueto, SAN; Ken Mozia, SAN; Aham Eke-Ejelam, SAN; Dr Muiz Banire, SAN; Dr Olumide Ayeni; Dr Dapo Olanipekin as Amici Curiae. Reported by Optimum Publishers Limited, Publishers of Nigerian Monthly Law Reports (NMLR)