CONTEMPORARY AND EMERGING ISSUES IN GARNISHEE PROCEEDINGS IN NIGERIA

Abstract

Garnishee proceedings are sui generis and differ from other methods of enforcing judgments, such as the writ of execution.  By garnishee proceedings, the court is empowered to attach funds that a third party called the garnishee owes the judgment debtor in satisfaction of the judgment debt. The frontiers of garnishee proceedings continue to expand as the practice of law becomes more sophisticated with a plethora of questions that require judicial interpretation. In light of this, the paper seeks to explore the contemporary and emerging issues in garnishee proceedings in Nigeria. The paper adopts a doctrinal research methodology by consulting primary sources of law such as the Sheriff and Civil Process Act, Judgment Enforcement Rules, and secondary sources of law garnered from journal articles and newsprints that were subject to content analysis. The paper reveals that with the advent of the Bank Verification Number in Nigeria, it now becomes easy for the judgment creditor to garner information about all accounts that a company or individual holds in different banks, which is a threat to individual data privacy. In conclusion, the landscape of garnishee proceedings in Nigeria is changing in response to the emergence of contemporary issues that necessitate thoughtful consideration and legislative attention.  Stakeholders must engage in robust dialogue and advocacy for fair and equitable practices as the judiciary endeavours to balance creditor rights and debtor protection.

Keywords: Contemporary Issues, Garnishee Proceedings, Judgment Enforcement Rules, Recovery of Debt, Sheriffs Civil Processes Act.    

Introduction

Recovering debt from defaulting debtors often poses enormous technical, legal, and procedural challenges. In Nigeria, debt recovery through litigation has proven to be a herculean undertaking, and so has the enforcement of judgment arising from the cases.[1]  Although it is commonly believed that a creditor should receive the benefits of their legal decision, parties involved in business transactions with the government are consistently worried about the legal process and, more importantly, their ability to benefit from judgments made in their favor.[2] This has now left creditors with no other option than to involve law enforcement agencies to help enforce judgment, particularly monetary judgment.

However, it needs to be understood that the debtor/creditor matter falls within the scope of a civil suit, which ordinarily makes it impossible for the involvement of the police. A creditor may be able to establish fraud or criminal elements such as issuance of dud cheques, obtaining a loan or credit under pretenses, falsification of identity, or giving misleading and, or false information in the procurement of a loan.[3] If this happens, the police, anti-corruption agencies, or economic and financial crime institutions may be deployed by the creditor depending on the circumstances of the matter and the extent of criminal elements in the case.[4] What then happens if the creditor is not able to prove fraud? Will he forfeit his money? This may not be too good for the creditor. On the other hand, this may readily give debtors the defense of not paying their debt because debts are civil suits and not criminals.

It is on this basis that a special species of debt recovery is been introduced in order to help creditor recover their money, which is known as Garnishee proceedings. It is founded on an existing judgment that allows a judgment creditor to attach money in the hands of a third party that is owed to the judgment debtor without the judgment debtor being a necessary party. This method serves as an essential tool for ensuring that court judgments are effective and creditors can recover their debt.

Against this background, this study seeks to explore the emerging issues arising from the law and practice of garnishee proceeding in Nigeria.

Conceptual Clarification

It is pertinent to define key terms to establish agreement on the meaning of the words this study intends to use. 

Garnishee

It is a Norman-French word that means to “furnish.”[5] It refers to a third party who is either indebted to the judgment debtor or has custody of his money. The judgment creditor may request that the third party pay the judgment debt from either the judgment debtor’s account with the third party or from his indebtedness to the judgment debtor.[6] A garnishee is an individual or organisation, such as a bank, that is legally seizing the assets of another person that they owe money to or is holding on behalf of using garnishment.  It also refers to the act of informing or warning an individual that a garnishing proceeding has been initiated and that the individual receiving the notice may be held accountable as a stakeholder or custodian of the defendant’s property.[7]

The garnishee could be the bank, a customer to the judgment debtor, or an employer. However, in most cases, garnishees are financial institutions; commercial banks, central banks, microfinance banks, etc.[8] STB Ltd. v. Contract Resources (Nig.) Ltd.,[9] Olagunju, J.C.A. defined A garnishee as a third party who is either indebted to the judgment debtor or has custody of their money.  The garnishee is obligated to pay the judgment debt from the judgment debtor’s credit in his third-party account or from his indebtedness to the judgment debtor upon the judgment creditor’s request.  Simply put, a garnishee is a third party who is indebted to the judgment debtor.[10]

Garnishee Proceedings

Garnishee proceedings are a legal mechanism used to enforce judgments for the payment of a particular amount of money. A money judgment or award is a legally binding decision that can be enforced by garnishment procedures or other measures, such as a writ of fieri facias, a charging order, a writ of sequestration, or an order of committal on a judgment debtor’s summons.[11]

A garnishee proceeding is an investigative legal process that provides a severe and exceptional remedy. It is a unique and original creation, specifically designed by law that has no connection to any activity recognized under common law. It is a form of seizure, although it does not qualify as a levy in the typical sense of the term. It is a legal process that allows a diligent creditor to achieve priority over other creditors. It is similar to a creditor bill or the sequestration of a debtor’s assets by their debtor.[12]

Nature of Garnishee Proceedings

The process of garnishee proceedings involves the judgment creditor applying to the court for an Order Nisi, which, if approved, lawfully prevents the garnishee from releasing the funds to the judgment debtor. The garnishee is then required to justify why the order should not be made absolute.[13] If the garnishee does not provide a valid reason, the order becomes absolute. In these circumstances, the garnishee is required to satisfy the judgment debt by making payment to the judgment creditor by the absolute order. [14] The garnishee may be subject to the judgment creditor’s enforcement of the judgment by confiscating their property through a writ of sequestration if they fail to comply with the absolute order. Additionally, they may be imprisoned if found guilty of contempt after the issuing of Forms 48 and 49.[15]

For garnishee proceedings to be initiated, the garnishee must possess funds belonging to the debtor, which can be seized for the advantage of the creditor.[16] Therefore, the garnishee must either owe a debt to the judgment debtor or possess funds in their possession that are credited to the judgment debtor’s account. For a debt to be attachable, it must be both present and existing.[17] The true determinant of whether a debt can be seized is whether there is any outstanding debt at the time the order nisi is served on the garnishee, and if it is a debt that the judgment debtor can legally compel payment for if they choose to pursue it.

Legal Framework on Garnishee Proceedings in Nigeria

The Sheriffs and Civil Process Act (SCPA) and the Judgments (Enforcement) Rules (JER) implemented according to section 94 are the primary legislation in Nigeria that governs the enforcement of judgments. The Sheriff and Civil Process Act is a federal enactment and provides for the enforcement of judgments throughout the Federation of Nigeria, others include High Court (Civil Procedure) Rules of the Various State High Courts, Federal High Courts (Civil Procedure) Rules, and National Industrial Court (Civil Procedure) Rules.

Sheriff and Civil Process Act

This is an Act enacted to make provisions for the appointment of sheriffs, allocation of duties to sheriffs, the enforcement of judgments and orders, and the services and execution of civil processes of the courts throughout Nigeria.[18] The Sheriff and Civil Process Act [19] is divided into seven parts, each dealing with specific aspects of the enforcement of judgments and orders, and it is made up of one hundred and twelve sections in all. However, our focus for this research shall be hinged on Section 19, and Part V of the Sheriff and Civil Process Act which deals with the attachment of debts by garnishee order, Part V comprises sections 83 – 92. Some Forms in the First Schedule of the Sheriff and Civil Process Act apply to garnishee proceedings, namely: Form 25 which specifies the contents of the affidavit in support of the garnishee order; Form 26 which specifies the form of the garnishee order; and Form 27 which specifies the form of the writ of execution against the garnishee under section 86 of the Sheriff and Civil Process Act. [20]The Sheriff and Civil Process Act, in section 19 which is the interpretation section defines inter alia, words and phrases such as court, judge, judgment, judgment creditor, and the judgment debtor.

Judgments (Enforcement) Rules

An essential ally of the Sheriffs and Civil Process Act is the Judgments (Enforcement) Rules. It is meticulously crafted to facilitate the implementation of the provisions of the aforementioned Act.[21] The Judgments (Enforcement) Rules[22] differ from the Sheriffs and Civil Process Act in that they are divided into individual orders, rather than being divided into sections. The composition of this entity consists of twelve Orders, organized in Roman numerals, with Order 8 (VIII) specifically addressing the process of garnishee proceedings. Order 8 is subdivided into 12 Rules, specifically referred to as Order VIII, Rule 1 – Rule 12.

The provisions allow for the initiation of garnishee proceedings in a Magistrate’s Court, regardless of whether the debt owed or accruing from the judgment debtor exceeds the jurisdiction of said court. Magistrates have been granted financial jurisdictions of 10 million Naira or more in certain States of the Federation of Nigeria. In practical words, these courts have the authority to issue garnishee orders for the attachment of funds amounting to Fifty Million Naira, One Billion Naira, and higher, as stipulated by this Order. Regarding the enforcement of monetary judgments through garnishee proceedings, it is important to note that there are no budgetary constraints associated with the enforcement of such judgments in the Magistrate’s Court.[23]

Emerging issues in Garnishee Proceedings

As the practice of law becomes increasingly complex, the frontiers of garnishee proceedings’ jurisprudence continue to expand, necessitating judicial interpretation of a multitude of questions.   This section of the study is dedicated to the investigation of such insurmountable and daunting issues.

Data Privacy

It is trite that in garnishee proceedings, in order for the judgment creditor to reap the fruit of his judgment, he will have to garnishee funds in the hands of the third party that is owed to the judgment debtor. The question to ask now is how the judgment creditor gets to know about the funds in the hands of the third party, especially now that we have our Bank Verifications Number without infringing on the judgment debtor’s right to privacy. In 2014, the Central Bank of Nigeria implemented the BVN, a centralised biometric identification system. This system was designed to initially identify and verify all individuals who maintain accounts in any Nigerian bank, and subsequently to authenticate the identity of customers at the point of transaction.

With the implementation of this new policy, all signatories to businesses and company accounts are required to register their BVN. Upon registration, the business entity’s accounts are centralised and can be readily traced using the unique BVN. It now becomes easy for the judgment creditor to garner information about all accounts in which a company or individual holds in different banks, which is a threat to individual data privacy. Put differently, the judgment creditor who obtains the BVN of the judgment debtor need not embark on a wild goose chase of banks in the custody of the judgment debtor’s funds.[24]

Jurisdiction

The court must take into account the subject matter and all parties involved in the case while determining jurisdiction. The law governing garnishee proceedings addresses the issue of jurisdiction by stating that these proceedings can be initiated in the same court that issued the judgment being enforced, or in any court where the judgment debtor could have sued the garnishee to recover the debt.[25] The second aspect of this clause is challenging to comprehend due to the absence of any mention of a particular court. As a result, one must refer to the norms of the court and the provisions of the Constitution for guidance.

Service

Service is a fundamental tool to the commencement and hearing of a suit.[26] Failure or default of service of the order nisi is not a mere irregularity but a fundamental defect that renders the proceedings a nullity.[27] A party in garnishee proceedings, particularly the judgment creditor, must ensure that both the garnishee and the judgment debtor are served with the order nisi as provided in section 83 (2) of the Sheriff and Civil Process Act and Or. 8 r. 4 of the Judgment Enforcement Rules otherwise risk rendering the proceedings a nullity, as an order absolute obtained in default of service can be set aside on such grounds.

Non-Attachment of the Certified True Copy of the Judgment to the Application

A creditor who wants to initiate garnishee proceedings must submit an affidavit and, if the proceedings are filed in a different court from where the judgment was issued, a certified true copy of the judgment must be included with the application.[28] Hence, if the garnishee application is filed in a court different from the one that issued the judgment declaring the amount owed, a valid objection might be raised against the competency of the application if the certified copy of the judgment is not included. Failure to comply will constitute a procedural irregularity, which is both basic and fatal because of the inclusion of the term “shall” in section VIII (3) (1) (b) of the judgment (Enforcement) Rules. If the judgment creditor/applicant fails to meet the requirements, the garnishee application will be dismissed.

Conclusion

From the foregoing, it is crystal clear that the landscape of garnishee proceedings in Nigeria is evolving with the emergence of contemporary issues that demand careful consideration and legislative attention. As the judiciary strives to balance creditor rights and debtor protection, stakeholders must engage in robust dialogue and advocacy for fair and equitable practices. Addressing these issues effectively will not only enhance the efficiency of the legal system but also uphold the principles of justice and transparency crucial to a thriving economy and society.

Reference (S):

[1]  Opeyemi longe and Abayomi Okubote, ‘Nigeria’s Federation Account as Subject of Garnishee Order – A review of CBN v Obla Ubana and Ors (2016)’ (2021) <hhttps://papers.ssrn.cpm/sol3/papers.cfm?=3109060> accessed 5 March 2025.

[2] Damilola Odumosu, ‘Garnishee Proceedings and the Position of the Court in Nigeria: A Settled Law or Whirling Controversy?’ (2018) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3186411> accessed 5 March 2025.

[3] Criminal Code Act Cap C38 LFN 2004, s 419.

[4] Oladapo Olanipekun, Banking: Theory, Regulation, Law and Practice (Au Courant 2016) 430.

[5] Alexander Wodi, ‘Garnishee Proceedings: A Critical Analysis of the Law and Practice in Nigeria, UK, and U.S.A’ (2020) <https://www.academia.edu/43420959/Garnishee_Proceedings_A_Critical_Analysis_of_the_Practice_and_Procedure_in_Nigeria_UK_and_US> accessed 5 march 2025.

[6] Contract Resources v STB [2001] 6 NWLR (Pt 708) 115.

[7]J Amadi, Modern Civil Procedure Law and Practice in Nigeria (Pearl Publishers Porthacourt 2014) 222.

[8] E Udim, Principles of Garnishee Proceedings in Nigeria (Princeton and Associate Publishing Co. Ltd 2021) 8.

[9]  [2001] 6 NWLR (Pt. 708) 115.

[10] M Banire, ‘Emerging Issues in Garnishee Proceedings in Nigeria’ (2018) <https://mabandassociates.com/emerging-issues-in-garnishee-proceedings-in-nigeria/#_ftn18> accessed 6 March 2025

[11] Govt. of Gongola State v Tukur [1989] 4 NWLR (Pt 117) 592.

[12] B Momodu, Court Room Rapid Reference Handbank: Legal Practice at a Glance (Evergreen Overseas Publication Limited, 2014) 16.

[13] Sheriff and Civil Process Act, sections 83 and 85.

[14] Sheriff and Civil Process Act, section 86.

[15] Sheriff and Civil Process Act, sections 66 and 72. See also Judgment Enforcement Rules Order 9 rule 13.

[16] U.B.A. Ltd v S.G.B. Ltd [1996] 10 NWLR (Pt. 478) 381.

[17] F Nwadialo, Civil Procedure in Nigeria (2nd edn, University of Lagos Press 2000) 965- 967.

[18] The preamble to the Sheriffs and Civil Process Act Cap S6 Laws of the Federation of Nigeria 2004.

[19] Cap S6 LFN 2004.

[20] Alexander Wood, ‘Garnishee Proceedings: A Critical Analysis of the Law and Practice in Nigeria, UK, and U.S’ (2020) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4397453> accessed 8 March 2025.

[21] It was made pursuant to section 94 of the Sheriff and Civil Process Act.

[22]  Cap F6 Vol 14 Laws of the Federation 2004.

[23] Judgment Enforcement Rules, Order 8 rule 1.

[24] O Awe, ‘An Appraisal of the Role of Biometric Verification in Garnishee Proceedings in Nigeria’ (2022) <Nigeria – Financial Services – An Appraisal of the Role of Biometric Verification in Garnishee Proceedings in Nigeria (mondaq.com)> accessed 9 March 2025.

[25] Judgment Enforcement Rules, Order 8 rule 2 (a) and (b).

[26] Sken Consult v Ukey (1981) 1 SC 6.

[27] Drexel Energy and 2 Ors v Trans International Bank Ltd and 2 Ors [2008] 12 SC (Pt. II) 240.

[28] Judgment Enforcement Rules, Order VIII (3).