Obtaining a monetary judgment against a debtor is an important step, but the judgment creditor may still face difficulties if the judgment debtor refuses to pay.
Where the judgment debtor has money in the hands of a third party, garnishee proceedings in Nigeria may provide a means of enforcing the judgment.
Garnishee proceedings are commonly associated with bank accounts because banks may hold funds belonging to judgment debtors. However, the procedure is not limited to banks. It can apply where a third party is indebted to the judgment debtor and the relevant legal requirements are satisfied.
What Are Garnishee Proceedings?
Garnishee proceedings are a method of enforcing a monetary judgment by seeking to attach money owed to the judgment debtor by a third party.
The parties are generally described as:
- Judgment creditor – the person who obtained the judgment.
- Judgment debtor – the person against whom the judgment was given.
- Garnishee – the third party who holds money belonging to, or is indebted to, the judgment debtor.
For example, if a court orders a company to pay ₦20 million to a judgment creditor and the company has funds in a bank account, the judgment creditor may, where appropriate, seek to recover the judgment debt through garnishee proceedings against the bank.
What Is a Garnishee Order?
A garnishee order is an order made by a court directing a garnishee to pay money that is due or payable to the judgment debtor towards satisfaction of the judgment debt, subject to the applicable law and procedure.
The order is not simply an instruction from the judgment creditor to the bank or other third party.
The judgment creditor must follow the prescribed court process.
Who Is the Garnishee?
The garnishee is the third party who holds money belonging to, or owes money to, the judgment debtor.
A bank is a common example because it may hold funds in an account belonging to the judgment debtor.
However, depending on the circumstances, other persons or entities may potentially be garnishees where they owe money to the judgment debtor.
How Do Garnishee Proceedings Work?
The procedure is governed by the Sheriffs and Civil Process Act and the rules of the relevant court.
Broadly, the process involves the judgment creditor applying to the court for an order attaching money in the hands of the garnishee.
The court first makes an order nisi requiring the garnishee to show cause why the debt or funds should not be used to satisfy the judgment.
The garnishee then respond to the order.
Where the requirements for enforcement are satisfied, the court makes an order directing payment to the judgment creditor.
What Is a Garnishee Order Nisi?
A garnishee order nisi is generally an initial order attaching the debt or funds in the hands of the garnishee and calling upon the garnishee to show cause why the order should not be made absolute.
The order is therefore not necessarily the final stage of the garnishee process.
The garnishee may have an opportunity to raise objections or explain why the funds should not be paid to the judgment creditor.
What Is a Garnishee Order Absolute?
Where the court is satisfied that there’s actually money belonging to the judgment debtor in the custody of the garnishee, it makes the garnishee order absolute in respect of the judgment sum; where the outstanding balance is less than the judgment sum, in respect of the outstanding balance.
This generally directs the garnishee to pay the relevant amount towards satisfaction of the judgment debt.
The effect and procedure depend on the applicable law and the order made by the court.
Can a Bank Refuse to Pay a Garnishee Order?
A bank or other garnishee cannot simply disregard a valid court order.
However, the garnishee may have legitimate grounds for objecting to the attachment or explaining why the relevant funds cannot be paid.
For example, issues may arise concerning:
- Whether the judgment debtor actually has funds with the garnishee.
- The amount available.
- Whether the funds are subject to a legal restriction.
- Whether the order was properly served.
- Whether the garnishee is in fact indebted to the judgment debtor.
The garnishee should therefore comply with the court process and raise any legitimate objection through the appropriate procedure.
Can Garnishee Proceedings Recover the Entire Judgment Debt?
They can, where sufficient attachable funds or debts are available and the applicable legal requirements are satisfied.
If the judgment debtor has only part of the judgment sum available through the garnishee, the proceedings may recover only the amount that can lawfully be attached.
The judgment creditor may need to consider other enforcement mechanisms for any remaining balance.
What If the Judgment Debtor Has Several Bank Accounts?
A judgment creditor may consider garnishee proceedings against relevant banks where there is a lawful basis to do so.
However, the judgment creditor should not simply assume that every account or every fund held by a bank belongs to the judgment debtor or is available for attachment.
The particular circumstances and applicable legal restrictions must be considered.
Can Garnishee Proceedings Be Used Before Obtaining Judgment?
Garnishee proceedings are generally associated with the enforcement of a monetary judgment.
A person who merely believes that another person owes them money cannot ordinarily use garnishee proceedings as a substitute for obtaining judgment.
The existence and nature of the judgment are therefore important.
There may be other forms of interim relief available in appropriate circumstances, but these should not be confused with ordinary judgment-enforcement garnishee proceedings.
Can Garnishee Proceedings Be Used Against Government Funds?
The enforcement of judgments against public bodies and government-related funds may be subject to special statutory and procedural requirements.
A judgment creditor should not assume that the ordinary procedure applicable to a private bank account will automatically apply to funds belonging to a government body or public authority.
Special rules may apply depending on the identity of the judgment debtor and the nature of the funds involved.
What If the Garnishee Says There Is No Money?
If the garnishee states that it does not hold funds belonging to, or owe money to, the judgment debtor, the court may consider the evidence and circumstances before determining the appropriate next step.
The judgment creditor should not assume that the garnishee’s response is automatically conclusive in every case.
The court may determine disputed issues in accordance with the applicable procedure.
What If the Judgment Debtor Tries to Withdraw the Money?
Once appropriate garnishee proceedings have been initiated and the relevant order has been served, the legal effect of the order must be considered carefully.
A judgment debtor should not attempt to frustrate a valid court process.
Similarly, a judgment creditor should not attempt to bypass the court or use self-help.
A garnishee must not also allow such fund to be withdrawn.
All parties should comply with the applicable court orders and procedures.
Common Mistakes in Garnishee Proceedings
Judgment creditors sometimes make mistakes such as:
- Failing to obtain a valid monetary judgment.
- Using the wrong procedure.
- Naming the wrong garnishee.
- Failing to properly serve the relevant processes.
- Assuming that every account held by a judgment debtor is attachable.
- Ignoring special rules applicable to particular judgment debtors.
- Failing to account for payments already made.
- Assuming that obtaining an initial garnishee order automatically concludes the enforcement process.
Because garnishee proceedings are procedural, errors can delay recovery.
What Should a Judgment Creditor Do Before Commencing Garnishee Proceedings?
A judgment creditor should:
- Confirm the terms and amount of the judgment.
- Determine the amount already paid, if any.
- Identify potential garnishees where possible.
- Obtain appropriate legal advice.
- Prepare the necessary court processes.
- Ensure proper service.
- Follow the proceedings through to their conclusion.
The judgment creditor should also consider whether another enforcement method may be more effective depending on the debtor’s assets.
What If Garnishee Proceedings Do Not Recover the Full Debt?
Garnishee proceedings are only one method of enforcing a judgment.
If the money available through the garnishee is insufficient to satisfy the entire judgment debt, the judgment creditor may consider other lawful enforcement mechanisms for the outstanding balance.
These may include execution against eligible assets or other procedures permitted by law.
The appropriate strategy depends on the circumstances.
Why Legal Advice Is Important
Garnishee proceedings involve procedural requirements that should be carefully followed.
A lawyer can assist by:
- Reviewing the judgment.
- Determining whether garnishee proceedings are appropriate.
- Identifying potential garnishees.
- Preparing the necessary court processes.
- Advising on service.
- Responding to objections by the garnishee.
- Pursuing the proceedings to their conclusion.
- Considering alternative enforcement methods where necessary.
Professional advice can help prevent procedural mistakes and unnecessary delays.
How Lexforte Attorneys Can Help
At Lexforte Attorneys, we assist individuals, businesses and organisations with judgment enforcement and related litigation.
Our services include:
- Garnishee proceedings.
- Judgment debt recovery.
- Execution of judgments.
- Recovery of possession.
- Civil litigation.
- Commercial litigation.
- Appeals.
- Post-judgment applications.
We help judgment creditors pursue lawful and practical methods of obtaining the benefit of judgments already obtained.
Conclusion
Garnishee proceedings in Nigeria provide an important mechanism for enforcing monetary judgments where a third party holds money belonging to, or owes money to, the judgment debtor.
Banks are common garnishees because they may hold funds belonging to judgment debtors, but garnishee proceedings can potentially extend to other third parties in appropriate circumstances.
The process is governed by applicable laws and procedural rules, and obtaining an initial garnishee order does not necessarily mean that the entire enforcement process is complete.
If you have obtained a monetary judgment and the judgment debtor has refused to pay, garnishee proceedings may be one of the enforcement options available to you.
Contact Lexforte Attorneys for professional advice and representation in garnishee proceedings, judgment enforcement, and debt recovery matters.