The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

When a judgment debtor should be heard in a garnishee proceeding

Related

court

Bogoro LOCAL GOVT COUNCIL v. KYAUTA & ORS
CITATION: (2020) LPELR-49812 (CA)

In the Court of Appeal
In the Jos Judicial Division
Holden at Jos

ON THURSDAY, 4TH JUNE, 2020
Suit No: CA/J/34/2018

x

Before Their Lordships:
TANI YUSUF HASSAN, JCA
MUDASHIRU NASIRU ONIYANGI, JCA
BOLOUKUROMO MOSES UGO, JCA

Between

BOGORO LOCAL GOVERNMENT COUNCIL
– Appellant(s)

And

JAMES KYAUTA & 200 ORS
– Respondent(s)

x

LEAD JUDGMENT DELIVERED BY BOLOUKUROMO MOSES UGO, J.C.A.
FACTS

Sometime on May 18, 2017, the respondents filed an ex-parte application against the appellant before the National Industrial Court, Jos Division, for a garnishee order nisi attaching all the monies due or accruing in the Judgment Debtor’s Account(s) with some Garnishee Banks, including the 5th Garnishee, Fidelity Bank Plc, to satisfy its Judgment Debt against the appellant in suit No NICN/JOS/47/2014 of July 13, 2016, in the sum of N84, 350, 000 plus 10 percent per annum interest from August 14, 2016. ​The said ex-parte application was heard and granted on June 1, 2017. 

The appellant, on receipt of the order nisi which Section 83(2) of the Sheriffs and Civil Process Act requires that it be served on him not later than 14 days before the hearing of the application to make the garnishee order absolute, filed an application on 13/06/2017 for an order setting aside the said order nisi on the ground that it was obtained on the basis of misrepresentations by the respondents. It also alleged that the said funds that were attached by the garnishee order nisi belonged to all 20 Local Government Councils of Bauchi State.

The said 20 Local Government Councils of Bauchi State also filed a similar application on 16/6/2017 on the same grounds that the said account with Fidelity Bank Plc attached in satisfaction of respondents’ judgment against the appellant is a joint account maintained by all Local Government Councils of Bauchi State jointly and so it ought not to be attached pursuant to a judgment obtained only against the appellant by the respondents. The respondents as judgment creditors and applicants countered the said applications with counter-affidavits. Both applications came up for hearing on June 22, 2017, but the appellant, having been served the respondents’ counter-affidavit only on the same June 22, 2017, applied for a date to respond and the matter was adjourned to June 28, 2017, for hearing of its application.

x

However, the trial judge who had adjourned the same applications went ahead again on the same June 22, 2017 and made the garnishee order nisi absolute in favour of the respondents in spite of the applications challenging the order nisi and the funds of the appellant with 1st and 5th garnishees were attached without hearing its pending application or even that of the other Local Governments Councils to set aside the said interim order of attachment.
Dissatisfied, the Appellant appealed to the Court of Appeal.

ISSUES FOR DETERMINATION
Appellant formulated a sole issue viz: Whether the Trial Court NICN had jurisdiction to grant the garnishee order absolute in view of its pending application to set aside the order nisi, and whether it was given fair hearing after its application to set aside the order nisi was not heard and determined before the order absolute was granted by the trial Court.

APPELLANT’S SUBMISSIONS
On its sole issue, Counsel to the appellant argued that the National Industrial Court of Nigeria lacked jurisdiction to make the garnishee order absolute while its application for setting aside the order nisi was pending and had even been adjourned by the same Court to 28/6/2017. The application was never determined by the National Industrial Court before making the said final order attaching its funds. The order absolute was pre-emptive of its application and amounted to an infringement of its right to fair hearing as the Court is duty-bound to decide all issues submitted to it. Denial of right to fair hearing nullifies the proceeding and it is irrelevant that the same result would have been reached if there was no breach. Counsel urged the Court to allow the appeal, set aside the said garnishee order absolute and remit the case to the National Industrial Court for determination of all pending applications.

x

RESPONDENT’S SUBMISSIONS
Reacting to the appeal of the appellant, the respondents filed a preliminary objection to the competence of the appeal itself. The thrust of their argument in the objection, which they also repeated against the merits of the appeal, is that garnishee proceeding is a special proceeding and notwithstanding that the appellant as judgment debtor is mandatorily required by Section 83(1) of the Sheriffs and Civil Process Act to be made party to such proceeding, he is only a nominal party to it as a garnishee proceeding is in reality only between the judgment creditor/applicant and the garnishee who is indebted to the judgment debtor.

It is only the garnishee that is invited by the Court in garnishee proceeding to show the reason why the order nisi for attachment should not be made absolute. Even where the judgment debtor is in Court, he can only be seen and not heard. Therefore, the appellant being a judgment debtor cannot even validly file the motion is filed to set aside the order nisi of the National Industrial Court. For the same reasons, it was further submitted that the appellant cannot even validly exercise a right of appeal as it did. It can only appeal as an interested party to the proceeding under Section 243(1)(a) of the 1999 Constitution upon leave of the Court. Since leave was not obtained, this appeal is also incompetent.

On the merits of the appeal, the respondents argued that it is not in all situations that a breach of the right to a fair hearing will occur when a Court fails or refuses to hear an application. They submitted that the appellant, being only a judgment debtor and not a party to the application before the National Industrial Court, the failure to hear its pending application before making the garnishee order absolute cannot be said to have infringed its right to a fair hearing. This is because that application was, in reality, an ex-parte application as far as the Appellant was concerned and so could not have been granted even if a motion or stay of execution was pending. See Denton-West v. Chief Muoma (2008) 6 NWLR (PT. 1083) 418 @ 442 (CA); (2007) LPELR-8172 (CA).

x

RESOLUTION OF THE ISSUES
In resolving the preliminary objection, the Court stated the position of the law on the status of a judgment debtor in garnishee proceedings as resolved in the case of Nigerian Breweries Plc v. Dumuje (2016) 8 NWLR (pt. 1515) 534; (2015) LPELR-25583 (CA). In that case, like in the instant appeal, the learned trial judge in his ruling on the garnishee order absolute that was appealed by the judgment debtor did not consider the merit of the case put forward by the judgment debtor, he being of the opinion that a judgment debtor is an interloper in garnishee proceedings because such proceedings are not the same as the proceedings where the judgment debt emanated and the judgment debtor was not a party to it. On appeal to the Court of Appeal, the Court, per Ogunwumiju, J.C.A. held as follows:

“I am of the firm view that after the service of the order nisi on him, the judgment debtor may convince the Court by way of the affidavit to discharge the order nisi, for instance, where it is proved that the judgment leading to garnishee proceedings, was obtained by fraud, non-service of the originating process of the main suit or any other vitiating factor based on which the trial Court has the power to set aside its own judgment or even payment or liquidation of the judgment sum which is being sought to be realized by way of enforcement where the Court refuses to discharge the order nisi and make the order nisi absolute, the judgment debtor, being a necessary party, can appeal as of right since the order absolute is regarded as a final decision of the Court: See U.B.N Plc V. Boney Marcus Ind. Ltd. (2005) 13 NWLR (Pt. 943) 654 at 665 paras. A-C.”

x

Going further, Ogunwumiju, J.C.A. held
“The emphasis here is the fairness of the judicial process. The right to fair hearing enshrined in Section 36 of the 1999 Constitution only connotes that a party should be given the opportunity to be heard whether or not a party’s submission is accepted is entirely the Court’s prerogative. The service of the order nisi and all accompanying processes on the judgment debtor is not a matter justifying righteousness. In my humble but strong view, it is a mandatory provision without which any subsequent judicial action would be rendered a nullity. In my humble view, the judgment debtor who is the owner of the money in possession of the garnishee has a right to be heard if he wishes before the garnishee order is made absolute. I am also of the strong but humble view that his right to be heard should be at large. If not a Pandora’s box would be opened to enable the judgment debtor to engage in all manner of activities that can abort the process and or make nonsense of the raison d’etre of the provisions and rules of Court in garnishee proceedings enacted for the express purpose of oiling the wheels of execution of liquidated money judgment. Therefore, it is my own humble conclusion that a judgment debtor is free to challenge the order nisi before the Court that made the order and to urge the Court to set it aside…” See also Delta State Government v. Kay Que Investment Ltd & Anor (2018) LPELR- 45545 (CA).

In line with the above position of the law, the Court held that the respondents were misguided in their arguments that the judgment debtor is a mere nominal party in garnishee proceedings and cannot file applications or exercise a right of appeal. To hold such a view would be to give an absurd interpretation to Section 83(2) of the Sheriffs and Civil Process Act, which makes it mandatory to serve the judgment debtor at least 14 days before the hearing of an order nisi. Definitely the requirement of service is not to make the judgment debtor a mere spectator who is not supposed to speak, even if the judgment creditor is to his knowledge suppressing or misrepresenting facts in the proceeding and that that disability extends to even his right of appeal. Courts do not adopt an interpretation of a statute that is absurd, especially where there is another possible interpretation. The Court therefore resolved the preliminary objection against the Respondents and dismissed same.

x

On the merits of the appeal, the Court held that the resolution of the preliminary objection substantially resolved the merits of the appeal. In addition, on the issue of breach of fair hearing, the Court held that the appellant’s right to a fair hearing was breached by the National Industrial Court when it ignored the appellant’s application to set aside the garnishee order nisi which the same Court had even earlier adjourned. The Court stated the settled position of the law that except in exceptional situations like in Ogunseinde v. Societe Generale Bank Ltd (2018) 9 NWLR (PT. 1624) 230; (2018) LPELR-43710 (SC) where the application for leave to appeal to the Supreme Court was brought to the Court of Appeal when the period fixed by statute for appealing and asking for leave had lapsed and so the Court of Appeal did not even possess the jurisdiction to entertain the said application, every Court is duty-bound to hear and rule on every process or application brought before it no matters how frivolous, unmeritorious or even downright stupid such application may be. Refusal to do that amounts to a denial of fair hearing. See Mobil Producing Nig. Unlimited v. Monokpo (2004) ALL FWLR (PT 195) 575; (2003) LPELR-1886 (SC). The consequence of the breach of the right of fair hearing denies the Court of jurisdiction and nullifies any proceedings conducted subsequent to such breach. It is no answer that the same result would have been reached even in the absence of the breach. See Salu v. Egeibon (1994) 6 NWLR (PT 348) 23 @ 44 (SC); (1994) LPELR-2997 (SC), Citec International Estates Ltd v. Francis (2014) 8 NWLR (PT 1408) 139 @ 163 (SC); (2014) LPELR-22314 (SC), and Oyeyemi v. Commissioner for Local Govt., Kwara State & Ors (1992) 1 NSCC 371 @ 384 (SC); (1992) LPELR-2882 (SC).
HELD

In conclusion, the Court held that the appeal was meritorious and allowed the same. The decision of the National Industrial Court was set aside. In its stead, the Court ordered that the respondents’ garnishee application on notice together with all other pending applications before the National Industrial Court shall be heard afresh by another judge of the National Industrial Court of Nigeria.

Appearances:
J.T. Kuleve Esq. -For Appellant(s)
Chief G.M. Kuttu, with him,
B.N. Jattau Esq. and S.E. Dawam Esq. -For Respondent(s)

x

Receive News Alerts on Whatsapp: +2348136370421

No comments yet