A Garnishee Bank Has No Business Defending A Judgment Debtor

FIDELITY BANK v. ONWUKA (2017) LPELR-42839(CA) INTRODUCTION The garnishee proceeding is a judicial process available to a judgment creditor to enforce a monetary judgment. Succinctly put, it enables the judgment debtor to recover the judgment sum by attaching monies belonging to the judgment debtor in the coffer(s) of a third party (the garnishee). More often than not, the garnishee is a bank and it is sometimes the case that the bank (garnishee) will want to hide under the fiduciary relationship between a customer and a bank, to say that they cannot disclose the sum standing to the credit of the judgment creditor. Some banks see it as their duty to ‘protect’ their customers and as such, they go to lengths to defend their customers to ensure that the money is not attached. These issues, alongside other matters relating to the garnishee proceedings were discussed extensively in the appeal at hand. In delivering the leading government, Ogunwumiju, J.C.A said: “There is no doubt that a garnishee proceeding is a means of collecting a monetary judgment against a judgment debtor by ordering a third party (the garnishee) to pay money, otherwise owed to the judgment debtor, directly to the judgment creditor. In other words, a Garnishee  proceeding is a process of enforcing money judgment by the seizure or attachment of the debt due and accruing to the judgment debtor, which forms part of his property in the hands of a third party for attachment. By this process, the Court is competent to order a third party in whose hands the property of the judgment debtor is, to pay directly to the judgment creditor the debt due or accruing from him to the judgment debtor or as much as it as may be sufficient to satisfy the judgment and the costs of the proceedings.” She proceeded to explain the stages in the garnishee proceeding. In her words, “ A garnishee proceeding can be described in two stages; the first stage is the process of getting an order nisi. The order nisi directs the garnishee to appear in Court on a specified date to show cause why an order should not be made upon him for payment to the judgment creditor the amount of the debt owed the judgment debtor. This is usually done ex parte and limited to the judgment creditor and the Court. The second stage is where on the return date the garnishee does not attend, or does not dispute the debt claimed to be due from him to the judgment debtor, the Court may, subject to certain restrictions, make the garnishee order absolute under which the garnishee is ordered to pay to the judgment creditor the amount of debt due from him to the judgment debtor, or so much of it as is sufficient to satisfy the judgment debt together with the cost of the proceedings and cost of garnishee. This later proceeding is tripartite between the judgment debtor, judgment creditor and the Garnishee. This is because on the return date all parties must have been served and given an opportunity to dispute liability or pray that the order nisi be discharged for one cause or the other as shown by any of the parties, particularly the garnishee. This is because the garnishee may dispute his liability to pay the debt. He will appear in Court on the return date and dispute his liability by denying indebtedness to the judgment debtor.” On the fiduciary duty owed by a bank to its customer, she clarified that “the duty of confidentiality owed a customer is certainly subject to an order of Court. It is firmly settled that an order of Court must be obeyed until such a time that the order is set aside. In other words, one of the exceptions to the duty of confidentiality owed a customer by the bank is where there is a Court order compelling the disclosure of the account details or any other information of a customer. Such Court order obviates the liability that a bank would ordinarily incur in the event of a breach of the duty of confidentiality.” She then emphasized that “It has been reiterated by the Courts that it is not the duty or business of a garnishee to play the role of a defender or advocate for a judgment debtor by attempting to protect the money of the judgment debtor in its custody.” FACTS IN BRIEF The facts leading to this instant appeal are that the Respondent herein, having obtained a judgment of N23,936,100.25 at the Contracts Evaluation Debts and Property Recovery Tribunal of Anambra State of Nigeria against the Anambra State Government, filed a motion ex parte (as judgment creditor) and subsequently obtained a Garnishee Order Nisi at the High Court directing the Appellant (as 3^rd garnishee, there being three garnishees in all) to show cause why the Order Nisi should not be made absolute upon it for payment to the Respondent the amount of judgment debt due to the Respondent or so much as would satisfy the judgment debt and the costs entered on the summons. The Appellant filed an affidavit showing cause but did not furnish the Court with the amount belonging to the judgment debtor in its custody. The Appellant cited lack of specific account details as the reason for the non-disclosure. The learned trial judge consequently made an order on 15/7/13 directing the Appellant to furnish the Court with the amount in all the accounts maintained by the Anambra State Government with the Appellant within seven (7) days. Dissatisfied with the Ruling, the Appellant filed a Notice of Appeal leading to the appeal at hand. ISSUE(S) FOR DETERMINATION The sole issue distilled by the Court for the just determination of this Appeal is: Whether the order of the trial Court directing the Appellant to furnish the Court with the amount in all the accounts operated by the Anambra State Government with the Appellant was perverse with regard to garnishee proceedings. RATIO DECIDENDI

• BANKING LAW – DUTY OF A BANK: General rule as to the duty of confidentiality a bank owes its customers and its exceptions

“It is beyond controversy that one of the principal duties of a banker to its customer is to maintain a complete secrecy/confidentiality of the information about a customer’s account from the day the account is closed and is no longer operated. It is one of the implied terms of contract between the customer and the banker which is not restricted to the account alone but also to any other information which comes to the knowledge of the banker about the customer in the course of their contractual relationship. However, the duty of the banker to maintain secrecy/confidentiality of the status of the account and any other information relating thereto is not absolute. It is a qualified duty. In other words, it is subject to a number of exceptions which were established by the English case of TOURNIER V. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND (1924) 1 KB 461 AT 472 as follows: (a) “Where disclosure is under compulsion of law. (b) Where there is a duty to the public to disclose. (c) Where the interests of the bank requires disclosure. (d) Where the disclosure is made by express or implied consent of the customer” These exceptions which are referred to as Tournier’s principles still holds good today as they have been confirmed in several other cases. See TURNER V. ROYAL BANK OF SCOTLAND PLC (1999) LLOYD’S LAW REP. BANKING 231 AT 234, CHRISTOFI V. BARCLAYS BANK PLC (2000) 1 WLR 937 AT 946, OCEANIC BANK PLC VS. OLADAPO (2012) LPELR- 19670. We are concerned here with the first exception. The banker would be justified and is in fact under a duty to disclose information relating to a customer’s account where the law or Statute requires the banker to so do. Disclosure under compulsion of the law is not limited to a situation where a Statute requires the bank to disclose information about a customer’s account, it extends to an order of Court to disclose the state of a customer’s account, the banker is bound to disclose the state of the customer’s accounts. In BARCLAYS BANK PLC V. TAYLOR (1989) 3 ALL ER. 563, it was contended that a banker’s duty of secrecy/confidentiality included the duty to resist any order made by a lawful authority to look into the affairs of the customer and the bank was under a duty to inform the customer about the order. The English Court rejected that contention on the ground that such duty cannot be implied into the banker and customer relationship. See also ROBERTSON V. CANADIAN IMPERIAL BANK OF COMMERCE (1995) 1 ALL ER 824. The argument of the appellant’s counsel that a disclosure of all the account details of the judgment debtor would be a breach of its duty of secrecy/confidentiality must be rejected. A banker has no option than to disclose particulars of its customer’s accounts when it is compelled to do so by the Court. Reliance of the appellant on lack of specific account details must also be rejected because the nature, number and the amount of money standing to the credit of the judgment debtor in its account with the appellant are matters within the knowledge of the appellant which must be disclosed on the order of Court to enable the Court to determine whether or not the judgment debtor has money in the custody of the garnishee and whether such money is sufficient to satisfy the judgment debt. That was the position of this Court in OCEANIC BANK PLC VS. OLADAPO (SUPRA) and it remains unchanged.”Per BOLAJI-YUSUFF, J.C.A. (Pp. 48-51, Paras. E-E)

• BANKING LAW – BANKER-CUSTOMER RELATIONSHIP: Nature of a banker/customer relationship

“A bank is a debtor to its customer. In The Bankers’ Liability, Revised Edition, 2014 by Nkiru-Nzegwu Danjuma appears the following passage at pages 108 to 109: “As regards money deposited by the customer in an account with the banker, the nature of the banker and customer relationship is that of contract of debtor and creditor. The position becomes clearer when the customer asks for his money. As a result of an implied undertaking by the banker to repay the customer all or part of such deposit, the banker is a debtor for an amount deposited. If a valid repayment demand of the customer is not met by the banker, the customer may bring an action against it for breach of contract. The action will be against the bank and not against the bank manager. In Osawaye vs. National Bank of Nigeria Ltd. (1974) NCCR 474 the debtor and creditor relationship was restated thus: “The relationship between a banker and customer is one of debtor and creditor with the additional feature that the banker is only liable to repay the customer on payment being demanded. There is no obligation on the part of the banker or debtor to seek out his creditor, the customer and pay him: obligation is only to pay the customer or some person nominated by the customer, when the customer makes a demand or gives a direction for payment.” It is the receipt of money either from or on account of its customer that constitutes a banker into debtor of the customer. Thus, when a banker credits the account of a customer with a certain sum of money, the banker becomes a debtor to the customer to the extent of the credit. It is to be noted that the ordinary customer rank as an unsecured creditor in the liquidation of the bank. The concept of debtor and creditor in the banker and customer relationship are not static. The banker may in certain cases become the creditor, while the customer assumes the position of a debtor. For instance, where a banker grants overdrafts to its customer and debits the customer’s account with sum or value of the overdraft, the customer becomes a debtor to the banker to an amount equal to the credit. Accordingly, after the reconciliation of the banker and customer’s account, which party is the creditor, can sue if demand for payment is not complied with. The Supreme Court in Yesufu vs. African Continental Bank (supra) affirmed this legal position.” Per TUR, J.C.A. (Pp. 39-41, Paras. E-F)

• JUDGMENT AND ORDER – ORDER OF GARNISHEE: Implication of a garnishee order nisi

“With the greatest respect, it is clear that there is an abysmal lack of understanding of the garnishee proceedings by learned Appellant’s counsel. The order of Court was not an order absolute as counsel for the Appellant contends. While the other two garnishees (Access Bank Plc. and Diamond Bank Plc.) in obedience to the Court order, filed affidavits disclosing the accounts of the judgment debtor with them to show cause why they should not satisfy the judgment debt, the Appellant blatantly refused and resorted to legal games after the Order Nisi was served on it. In fact, the Appellant submitted at paragraph 5.11 of the Appellant’s Brief that Anambra State Government through its various Ministries and Departments keep several accounts with the banks and without specific account particulars, certain accounts ‘may be wrongly attached with the concomitant dangerous effect’. In one breath, the Appellant claims it could not conduct a search because there was not enough particulars, on another, the Appellant admits that the judgment debtor operates several accounts with the Appellant but the ‘dangerous effect’ of complying with the order of Court prevents the Appellant from so doing. That is absolutely unacceptable. It has been reiterated by the Courts that it is not the duty or business of a garnishee to play the role of a defender or advocate for a judgment debtor by attempting to protect the money of the judgment debtor in its custody. By refusing to disclose the accounts of the judgment debtor, it is clear to me that the Appellant is doing its best to disobey an order of Court. In sum, the order of Court appealed against is not an order absolute, it is an order mandating the Appellant to furnish the Court with the accounts operated by the judgment debtor with the Appellant. It does not automatically transmit to an order of Court attaching the funds for execution as it is under an order absolute. What it is, is an attempt by the Court to ascertain whether such funds at the disposal of the Appellant belonging to the judgment debtor can satisfy the judgment debt which is the essence of the order nisi for the Appellant to show cause.”Per OGUNWUMIJU, J.C.A. (Pp. 22-24, Paras. A-A)

• PRACTICE AND PROCEDURE – GARNISHEE PROCEEDINGS: Nature of garnishee proceedings

“It is beyond doubt that one of the methods by which liquidated money judgments can be enforced is by way of garnishee proceedings. Garnishee proceedings is defined in Black’s Law Dictionary as follows: A judicial proceeding in which a creditor (or potential creditor) asks the Court to order a third party who is indebted to or is bailee for the debtor to turn over to the creditor any of the debtor’s property (such as wages or bank accounts) held by that third party. Part V- Attachment of debts by Garnishee Order is the appropriate part of the Sheriffs and Civil Process Act which regulates this process. I will set out the relevant provisions necessary to determine the issue under consideration. S. 83 provides as follows: 83(1). The Court may, upon the ex parte application of any person who is entitled to the benefit of a judgment for the recovery or payment of money, either before or after any oral examination of the debtor liable under such judgment and upon affidavit by the applicant or his legal practitioner that judgment has been recovered and that it is still unsatisfied and to what amount and that any other person is indebted to such debtor and is within the State, order the debts owing from such third person, hereinafter called the garnishee, to such debtor shall be attached to satisfy the judgment or order, together with the costs of the garnishee proceedings and by the same or any subsequent order it may be ordered that the garnishee shall appear before the Court to show cause why he should not pay to the person who has obtained such judgment or order the debt due from him to such debtor or so much there of as may be sufficient to satisfy the judgment or order together with costs aforesaid. 83(2). At least fourteen days before the day of hearing, a copy of the order nisi shall be served upon the garnishee and on the judgment debtor. S.. 87 also provides as follows: If the garnishee appears and disputes his liability, the Court, instead of making an order that execution shall issue, may order that any issue or question necessary for determining his liability be tried or determined in any manner in which any issue or question in any proceedings may be tried or determined, or may refer the matter to a referee. A garnishee proceeding can be described in two stages; the first stage is the process of getting an order nisi. The order nisi directs the garnishee to appear in Court on a specified date to show cause why an order should not be made upon him for payment to the judgment creditor the amount of the debt owed the judgment debtor. This is usually done ex parte and limited to the judgment creditor and the Court. The second stage is where on the return date the garnishee does not attend, or does not dispute the debt claimed to be due from him to the judgment debtor, the Court may, subject to certain restrictions, make the garnishee order absolute under which the garnishee is ordered to pay to the judgment creditor the amount of debt due from him to the judgment debtor, or so much of it as is sufficient to satisfy the judgment debt together with the cost of the proceedings and cost of garnishee. This later proceeding is tripartite between the judgment debtor, judgment creditor and the Garnishee. This is because on the return date all parties must have been served and given an opportunity to dispute liability or pray that the order nisi be discharged for one cause or the other as shown by any of the parties, particularly the garnishee. This is because the garnishee may dispute his liability to pay the debt. He will appear in Court on the return date and dispute his liability by denying indebtedness to the judgment debtor. There is no doubt that a garnishee proceeding is a means of collecting a monetary judgment against a judgment debtor by ordering a third party (the garnishee) to pay money, otherwise owed to the judgment debtor, directly to the judgment creditor. In UBN Plc. V. Boney Marcus Industries Ltd. & Ors. (2005) All FWLR (Pt.278) 1037 at 1046, garnishee proceeding was defined as a process of enforcing a money judgment by the seizure or attachment of the debts due or accruing to the judgment debtor which form part of his property available in execution. It is in the hands of a third party whereby, the Court order is required to direct the third party to pay directly to the judgment creditor. By the Judgment Enforcement Rules, where any bank, in custody of the monies belonging to a customer who is a judgment debtor, is within the jurisdiction of the Court that has decided a debt as due to the judgment creditor against a judgment debtor (whom the bank is in custody of his monies), such monies or funds can be utilized in settlement of the judgment debt and enforced by such Court as immediately payable to the judgment debtor/customer. In other words, a Garnishee proceeding is a process of enforcing money judgment by the seizure or attachment of the debt due and accruing to the judgment debtor, which forms part of his property in the hands of a third party for attachment. By this process, the Court is competent to order a third party in whose hands the property of the judgment debtor is, to pay directly to the judgment creditor the debt due or accruing from him to the judgment debtor or as much as it as may be sufficient to satisfy the judgment and the costs of the proceedings. See Citizens Int’l Bank v. SCOA (Nig) Ltd (2006) 18 NWLR Pt.1011 Pg. 334. Thus, a garnishee proceeding is a process leading to the attachment of debt owed to a judgment debtor by a third party who is indebted to the judgment debtor. It is sui generis and is unlike other proceedings for enforcement of judgment.”Per OGUNWUMIJU, J.C.A. (Pp. 9-14, Paras. F-D) – PRACTICE AND PROCEDURE – GARNISHEE PROCEEDINGS: Principles governing garnishee proceedings “Section 3(1)-(3) of the Constitution of the Federal Republic of Nigeria, 1999 as altered provides as follows: “3(1) There shall be 36 States in Nigeria, that is to say, Abia, Adamawa, Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kogi, Kwara, Lagos, Nasarawa, Niger, Ogun, Ondo, Osun, Oyo, Plateau, Rivers, Sokoto, Taraba, Yobe and Zamfara. (2) Each State of Nigeria, named in the first column of Part I of the First Schedule to this Constitution, shall consist of the area shown opposite thereto in the second column of that Schedule. (3) The headquarters of the Government of each State shall be known as the Capital City of that State as shown in the third column of the said Part I of the First Schedule opposite the State named in the first column thereof.” Anambra State has a “Government”. A “Government” is defined in Section 318(1) of the Constitution to include “…the Government of the Federation or of any State, or of a local government council or any person who exercise power or authority on its behalf.” Authority is defined to include “Government.” A “function” includes “power and duty”. A “person” includes “anybody of persons corporate or unincorporate.” See Section 18(1) of the Interpretation Act Cap. 123, Laws of the Federation of Nigeria, 2004. Every State Government exercises powers and functions through persons, authorities or offices, etc. Moneys are held by such persons, authorities or bodies, for instance in banks, or by public officers for and on behalf of the Government. See Sections 316-317 of the Constitution. Section 83(1) of the Sheriffs and Civil Process Act Cap. S.6 does not lay any burden on a judgment creditor to establish how many accounts a judgment debtor has with a third party or as in this case, the appellant. All that the judgment creditor is to establish is that the appellant is a debtor to the Anambra State Government (the judgment debtor). Section 124(1)-(3) of the Evidence Act, 2011 provides as follows: “124(1) Proof shall not be required of a fact the knowledge of which is not reasonably open to question and which is:- (a) Common knowledge in the locality in which the proceeding is being held, or generally; or (b) Capable of verification by reference to a document the authority of which cannot reasonably be questioned. (2) The Court may acquire, in any manner it deems fit, knowledge of a fact to which Subsection (1) of this Section refers, and shall take such knowledge into account. (3) The Court shall give to a party to any proceeding such opportunity to make submission, and to refer to a relevant information, in relation to the acquiring or taking into account of such knowledge, as is necessary to ensure that the party is not unfairly prejudiced.” It is common knowledge that modernized banks conduct business through the use of computers. Section 258(1) of the Evidence Act, 2011 defines what is a “bank,” a “banker”; “banker’s books,” “banking business” and “computer” as follows: “258(1) In this Act:- “Bank” or “banker” means a bank licensed under the Banks and Other Financial Institutions Act Cap. B3, Laws of Federation of Nigeria, 2004 and includes anybody authorized under an enactment to carry on banking business. “Banker’s books” (and related expressions) includes ledger, day books, cash books, account books and all other books used in banking business. “Banking business” has the meaning assigned to it in the Banks and Other Financial Institutions Act, 1991. “Computer” means any device for storing and processing information, and any reference to information being derived from other information is a reference to its being derived from it by calculation, comparison or any other process.” Sections 51 and 52 of the Evidence Act, 2011 is couched as follows: “51. Entries in books of accounts or electronic records regularly kept in the course of business are admissible whenever they refer to a matter into which the Court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability. 52. An entry in any public or other official books, register or record, including electronic record stating a fact in issue or relevant fact and made by a public servant in the discharge of his official duty, by any other person in the performance of a duty specially enjoined by the law of the country in which such book, register or record is kept, is itself admissible.”Per TUR, J.C.A. (Pp. 42-46, Paras. A-B) Culled: lawpavilion.com]]>