The Garnishee Law has been in existence in Nigeria since 1945, when the number of banks in the country was just about three. However, the multiplicity of banks in the country has called into question the garnishee law; raising several questions around the need to reform the process, especially in relation to the ‘casting the net’ approach.
The Association of Banks’ Legal Advisers and Company Secretaries in Nigeria (ABLACS) and the Justice in Commerce Network (JiCN) converged this week on Lagos Island with some in-person and virtual stakeholders to chart a more workable solution to the problems and challenges bedevilling garnishee proceedings in Nigeria.
Garnishee is a legal process under the Sheriff and Civil Proceedings Act for collecting a monetary judgment on behalf of a plaintiff from a defender (third party). Garnishment allows the plaintiff to take the money or property of the debtor from the person or institution that holds that property.
The Garnishee Law Reform Project (GLRP) initiated by the ABLACS in collaboration with the JiCN was aimed at identify problems with the garnishee process as a mechanism for enforcing courts judgments; identify optimal solutions for rectifying problems with the garnishee process, and preparing draft legislation, practice directions, guidance notes and/or such other documents as may be required to achieve reform of the law and practices relating to garnishee in Nigeria.
Accordingly, the sectoral focus group discussion deliberated on the need for judgment creditors to do their due diligence in identifying the specific banks where judgment debtors have their money as a means of limiting the problematic nature of the ‘scatter-gun’ or ‘fishing expedition’ approach.
This they say would help judgment creditors seeking to enforce money judgments through the garnishee mechanism against the strategy of joining all the banks in Nigeria in their garnishee application, which is considered not financially healthy for the banks and its stakeholders.
Sesan Sobowale, chairman, ABLACS, said Nigerian banks spend about N145 million every year managing proceedings in cases where they didn’t have interest. In most cases, the banks don’t have accounts of the judgment debtor and find it inappropriate spending such a huge amount of money yearly managing garnishee proceedings.
“First, it has implications for the efficiency of the judiciary prior to having 28 banks when the parties are represented by at least one lawyer inside the courtroom to determine a very simple issue. Whereas, if you had done your own work, you probably would have brought just one bank, at most two or three.
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“Secondly, in that scenario that I painted; 25 banks do not have any accounts of this person who is seeking to enforce judgment with them at all. Those 25 banks have to hire lawyers, they have to pay the lawyers, they have to file processes and generally just be involved in a proceeding that really doesn’t concern them now,” Sobowale said.
On his part, Wale Olawoyin, managing partner, Olawoyin and Olawoyin, noted there is a need to address the mechanism of wasted cost against frivolous appeal by judgment debtors. According to Olawoyin, Section 83 of the Sheriff and Civil Proceedings Act needs to reflect the reality of today. “Clearly, the law is outdated,” hence “there must be practice directed by the CJN.” Olawoyin however is of the view that cost must be borne by the judgment creditor.
Fernandez Marcus-Obiene, member, strategy operation and management, JiCN, said there is a need to encourage commerce in Nigeria., noting, “To encourage commerce means that we have to find a way to balance more in the middle and not in favour of one party.” To him, both judgment creditor and debtor must be considered in an attempt to strike a balance under the garnishee proceedings.
Furthermore, Marcus-Obiene said the essence of striking a balance tends more to accommodate smaller judgment creditors with the perception that duty of care should lie on the hands of the judgment creditor against the fishing expedition.
“For the bigger judgment creditors, they don’t have a problem because they can go and investigate. They can hire an investigative company; but look at the common man on the streets who doesn’t have a lot,” he said.
The point for middle ground is to ensure that people are able to do transactions (small, medium and large) and that they all have access, hence the need for the courts to take a middle ground, according to him.
Meanwhile, Sunday Ozuluonye Monye, director of civil litigation, Delta State, said the Delta State government had been at the receiving end of the garnishee proceedings because people believed that the state government is rich, being an oil producing state.
“Contractors that we have awarded jobs to, for one reason or the other; I do not perform the function of the contracts. They go to court. They are lucky, they get judgment; they want to enforce it. Even the persons that may not have anything to do with the government, they may decide to sue an agency of the government.
“They get judgment against that agency, and because they cannot get the money from that agency, the next thing is to ensure that they proceed against the state government because they believe that the money is there by way of Garnishee proceedings. So, we are really involved in garnishee proceedings within the past six months now, not less than 10 garnishee proceedings not only within Delta, I said there are other states of the Federation. We are responding, as we try as much as possible to file our papers,” Monye stated.
Aliu, a social commentator, writes from Lagos
