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Pinheiro Calls for Legislative Review of Garnishee Rules in Judgement Debts

It must be noted that, it is not the business of a Garnishee (banks) to undertake to play the role of an advocate for a judgement debtor, by trying to shield and protect the money of the judgement debtor.

A Lagos-based Senior Advocate of Nigeria, Mr. Kemi Pinheiro, SAN, has called for a legislative review of all laws relating to garnishee banks, including the Sheriffs and Civil Process Act, Laws of the Federation 2004 (SCPA), to accommodate the effects and benefits of fast growing technology.

Pinheiro said the legislative review of the laws would eliminate the rigorous procedures of serving garnishee proceedings on several banks, in the course of enforcing monetary judgements in business related cases.

The Senior Advocate made these suggestions last Tuesday, in a paper titled “Effective Utilisation of Garnishee Proceedings in Recovery of Debt and Effective Defence thereto: Prospects, Challenges and Avoidable Pitfalls”, which he delivered at the Continuing Legal Education (CLE) programme organised by the Nigerian Bar Association (NBA), Ikeja Branch.

According to him, rather than rely on the rigorous procedure of having several garnishees file papers to show cause, the account balances of such judgment debtor can be accessed from a central system through the Bank Verification Number (BVN) technology.

Pinheiro advised Nigerian banks who are mostly the Garnishee in debt recovery proceedings, to stop shielding judgement debtors, by attempting to lie to the court on the true position of their account statements, saying they could end up on the wrong side of the law, and incur the wrath of the court.

According to Pinheiro, failure to disclose account details of a judgement debtor by a garnishee, readily raises a presumption that the garnishee has something to hide, and that that may be presumed against the garnishee.

“It must be noted that, it is not the business of a Garnishee (banks) to undertake to play the role of an advocate for a judgement debtor, by trying to shield and protect the money of the judgement debtor. Of course, by playing games of hide and seek with the court, by failing or refusing to depose to an affidavit to show cause, disclosing the true account status of the judgement debtor, the Garnishee only exposes itself to trouble, daring the court to do its worst!, It can therefore, be made to pay the debt of the judgement debtor, 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 judgement debtor in its custody. In that situation, the Court will have no other option, than to order the Garnishee to settle the judgement debt, believing that the failure or refusal of the Garnishee to show cause, is an implied admission of the claim of the judgement Creditor/Applicant, that the Garnishee holds the judgement debtor’s money sufficient to satisfy the judgement debt”, he explained.

He said litigants must realise that, getting favourable monetary judgements is not enough in litigation involving monetary issues, until enforcement takes place.

“The focal point of every litigation involving sums of money, is the beneficial outcome of the litigation process to the claimant or counter-claimant, as the case may be, which in essence, is for the amount claimed to be granted by the court. The litigation process may take some years, but the claimant having hopes of deriving benefit from the litigation, will wait patiently for the final outcome. However, upon delivery of judgement in his/her favour granting the sums claimed, the litigant soon realises that the fact that a judgement has been awarded in his/her favour, does not mean that there is automatic enforcement; no enforcement proceeding will take place, unless the judgement creditor applies to enforce it”, he added.

Pinheiro stated that, one of the methods by which liquidated money judgements can be enforced, is by way of garnishee proceedings. He quoted Black’s Law Dictionary definition of Garnishee proceeding as a “judicial process of execution or enforcement of monetary judgement, whereby money belonging to a judgement debtor, in the hands or possession of a third party known as the ‘Garnishee’ (usually a bank), is attached or seized by a judgement creditor, the ‘Garnisher’ or ‘Garnishor’, in satisfaction of a judgement sum or debt”.

Garnishee proceedings, according to him, is one of the most effective means for enforcing monetary judgements in Nigeria. “By its nature, Garnishee proceeding is ‘sui generis’, and different from other court proceedings, although it flows from the judgement that pronounced the debt”.

“However, as simple as garnishee proceedings may seem to be by its definition, in practice, there are a myriad of challenges for all concerned with the process. Some of these challenges include: Who are the actual parties to the garnishee proceedings?, how can a judgement creditor possibly meet/fulfill the requirement of the law in satisfying the court, that the judgement debtor has funds in custody of the third party (garnishee) as to require the grant of an order nisi to show cause?, Can a garnishee protect the funds of the judgement debtor in its custody, and make a case for same not to be attached? Is the consent of the Attorney-General still required, before funds in the custody of a public officer will be attached by an order nisi? Who is a public officer within the meaning of Section 84 of the Sheriffs and Civil Process Act (SCPA)?, what are the possible defences available to the judgement debtor in a garnishee proceedings? Similarly, are there any defences available to a garnishee, in such proceedings?

“Unfortunately, in practice generally, garnishee proceedings as a means of execution or enforcement of judgements has suffered a lot of setbacks, due to the divergent views of the Nigerian Courts on the process. These views, according to him, are classified into two different schools of thought”, the Senor Advocate said.

Also speaking at the event on “Appeals: Dissatisfaction With Decisions of Court, Exercising and Fast Tracking Right of Appeal, Avoiding Fatal Slips”, Mr. Adeyinka Olumide-Fusika, SAN, urged appellants who desire to pursue their right of appeal to do so timeously and diligently, or stand the risk of being struck out or dismissed.

On his part, Mr., Victor Okpara, Chairman, Continuous Legal Education and Practice Development Committee, explained that, the theme of the interactive session and topics of the papers delivered by the senior Lawyers, were informed by the clamour for continuous legal education as a result of the fallen standard of legal practice.

According to Okpara, the fallen standard of legal practice, can be attributed to a lack of systematic and institutionalised way, of following up with continuous legal education.

“Now, Continuous Legal Education Committee is a statutory committee, and it is a rule of our profession that Lawyers should continue to get themselves continuously educated and upgraded intellectually”, he said.

Earlier, the Chief Judge of Lagos State, Hon. Justice Kazeem Alogba, who was represented by Justice Oke Lawal, commended NBA Ikeja, for very well reasoned topics.

“I have found that, most of the time in my court, I had to educate Lawyers on garnishee proceedings. Sometimes, the applications are not brought in conformity with proper court processes of contracting a garnishee proceedings. So, I had to strike out the application, and then educate them as to what must be contained and what cannot not be contained in application for garnishee proceedings”, she said.

“Judges would be very glad to see changes, in the way Lawyers apply for this particular proceedings. I must say that, every file I have seen from this distinguished speaker, Kemi Pinheiro, SAN, have always been very detailed”, she noted.

The Chairman of NBA, Ikeja Branch, Prince Dele Oloke, remarked that the programme is one of the cardinal points of his administration of Ikeja Branch.

Oloke expressed confidence that, the “continuous legal education programme, will not be a mere talk shop. It will be a talk shop with a difference. It will be a talk shop where eminent Lawyers will share with us the secrets of a successful legal practitioner”.

He said the senior Lawyers who delivered papers were chosen, because “they have become repositories of legal knowledge, and that is why we have invited them to share with us from their wealth of experience”.