Understanding the Ghanaian Law on Garnishees (2)

Understanding the Ghanaian Law on Garnishees (2)

By: Frederick Gurah Sampson (Legal Department, Zenith Bank Ghana Limited)  & Roselyne Kaledzi (A-Partners@Law)

What happens when the Garnishee pays out the money to the Judgment Creditor pursuant to the Garnishee Order Absolute of the Court?

When the Garnishee pays out the money under the Court Order, the Garnishee is discharged from any obligation he or she has towards the Judgment Debtor. So assuming, the Garnishee, a bank (which is usually the case) that holds money belonging to its customer (the Judgment Debtor) is ordered to pay out the monies, the customer cannot subsequently lay claim to that money from the bank. This is the case even if the garnishee proceedings are set aside in the future. Order 47 rule 8(1) provides clearly, that:

“Any payment made by a garnishee in compliance with an order absolute under this order and any execution levied against the garnishee under the order shall be a valid discharge of the liability of the garnishee to the judgment debtor to the extent of the amount paid or levied, notwithstanding that the garnishee proceedings are subsequently set aside or the judgment or order from which they arose reversed”

Additionally, when the Garnishee pays out the money as ordered by the court, it discharges the Judgment Debtor from any obligation to the Judgment Creditor to the extent of the amount paid. This means that when the third-party (Garnishee) pays, the Judgment creditor cannot lay any further claim on the amount against the Judgment Debtor simply because the money was paid by the Garnishee and not the Judgment Debtor. The rules are clear on this under Order 47 rules 8 (2) which succinctly provides that:

“Any payment by a garnishee in compliance with an order absolute under this Order and any execution levied against the garnishee in pursuance of the order shall also be a valid discharge of the liability of the judgment debtor to the judgment creditor to the extent of the amount paid or levied notwithstanding that the garnishee proceedings are subsequently set aside or the judgment or order from which arose are reversed.”

The import is that, once the payment is done, it is deemed that the Judgment Debtor has made the payment to the Judgment Creditor hence the discharge.

Does Garnishee Proceedings apply to Monies paid into the Court?

The answer is an emphatic No. Garnishee proceedings are undertaken for Judgments in respect of payments of money, other than orders for payment of monies into court. Indeed, the foundation rule in Order 47 rule1 quoted supra is explicit on the fact that Garnishee proceedings cannot be taken over/in respect of monies paid into court. Indeed, Order 47 rule 9 is clear on this. Subrule 1 provides that:

“Where money stands to the credit of a judgment debtor in court, the judgment creditor is not entitled to take garnishee proceedings in respect of that money but may apply to the court for an order that the money or so much of it as is sufficient to satisfy the judgment or order sought to be enforced and the costs of the application be paid to the judgment creditor.”

To this end, in instances where the monies sought to be recovered, have been paid into court, an application must be made to the court to recover same. Such an application is required by the rules, particularly Order 47 rule 9(2) to be served on the Judgment Debtor at least seven (7) days before the date named for the hearing of the application. If the period is shorter than seven (7) days it amounts to short service and may hinder the progress of the application.

Does the Garnishee Order attach/affect monies received by the Garnishee for the Judgment Debtor after the service of the order?

It is important that this issue is addressed. There appears to be some uncertainties or controversy as to whether monies that come to the custody of the Garnishee after the service of the order nisi is attachable. It is the view of the authors, respectfully, that any monies that come to the Garnishee after the service of the Order Nisi is not caught by the order nisi. Since bank accounts are and remain the main subject of garnishee proceedings in Ghana as confirmed by the learned author S. Kwami Tetteh in his seminal book ‘Civil Procedure, A Practical Approach, the authors shall use an analogy from the bank’s perspective.

When the Garnishee Order Nisi is served on the bank as a Garnishee, the practice is that the bank will usually restrict the Judgment Debtor’s/customer’s account in order to prevent the Judgment Debtor from further operating the account and dissipating same. The bank will then print the bank statements of the Judgment Debtor and make same available to the court on the return date which may usually be about seven (7) days from the time of service or more. The issue is, must the balances on the account presented by the bank to the court be the balances as at the time of appearing in the court or the balances as at the time the Garnishee Order Nisi was served. It is argued, that the better approach is to present the balances at the time the Garnishee Order Nisi was served on the bank. This implies, that monies that came into the account after the Garnishee Order Nisi was served cannot be attached unless otherwise ordered by the court. The authors find authority for this position in the seminal book by the learned S. Kwami Tetteh at page 1029 thus:

Under Order 47 r 3(2), CI 47, only the amount specified in the order would be attached; the balance may be withdrawn. However, money paid in after service of the order nisi would not be caught  by the order, and a fresh application would be required to attach the payment.

The learned author continues thus: “in practice the bank would open a fresh account for the judgment debtor, leaving the attached account to remain as it were”.

There have been attempts by some courts to depart from this position of the law but same have failed. In the case of Heppenstal v Jackson and Barclays Bank Ltd[1], Barclays Bank had a garnishee order served on them attaching any debt owing by the bank on the date of service of the order to the judgment debtor. On receipt of said Garnishee Order, the bank in accordance with usual practice opened a new account for the customer, and new credits due to payments appeared in their books in that new account. It was contended that the money in that new account was a debt due or accruing to the Judgment Debtor. The trial Judge His Honour Hargreaves, sitting at St Albans County Court, held that the Judgment Creditor was entitled to receive, not only the amount standing to the credit of the Judgment Debtor at the date of the service of the garnishee order but also monies paid into the account between that date and the date of the hearing of the summons. On appeal, their Lordships in the Court of Appeals unanimously held that the Garnishee Order Nisi affected only (emphasis ours) debts in existence at the date of the service of the order, and monies subsequently paid in could not be subject of the order. This means that the money attachable by the Order Nisi is what is in the custody of the Garnishee at the time of being served, and not what comes in after the service of the order.

Judicial Interventions and Principles in Garnishee Proceedings

The Courts in several cases have had the opportunity to say what the law is in some Garnishee Proceedings. The authors shall discuss some cases and the principles enunciated therein like State Construction Corporation v Hasnaw Co Ltd[2], Republic v High Court, Ex Parte State Housing Corporation[3], ESM Company Limited v. Eximguarantee and Big Aidoo (Best Point Savings and Loans as Claimants)[4] among others.

The first case the authors propose to discuss is the case of State Construction Corporation v Hasnaw Co Ltd and Another[5]. The Respondent (Hasnaw Co. Ltd) obtained Judgment against the State Construction Corporation (SCC). Before the Respondent could commence execution, the SCC was divested, under the Divestiture of State Interests (Implementation) Law, 1993 (PNDCL 326).  The Divestiture Implementation Committee (DIC) was charged with the duty of managing the assets and liabilities of the SCC. On the basis that the DIC had sold the assets of the SCC and paid the proceeds of the sale into an account at the Bank of Ghana (BOG), the Respondent took Garnishee Proceedings against the BOG to explain why funds the BOG held on behalf of the DIC should not be attached to pay the Judgment debt. The DIC applied to the court to strike out the Garnishee proceedings on the basis, inter alia, that it was not a party to the case and had not been given a hearing before the order seeking to attach its money at the BOG. This application was dismissed, whereupon the DIC appealed to the Court of Appeal.

Their Lordships at the Court of Appeal held among others that “Order 45 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) that regulated garnishee proceedings did not require that a person had to be a party to the case before a garnishee order could be made against him. Accordingly a person against whom a garnishee order was sought did not need to be a party to the original case whose judgment was sought to be executed.” This clearly supports the position that Garnishee must not be a Party to the original case commenced in the court. The Court of Appeal also established that before a Garnishee Order is made, there ought to be a debtor-creditor relationship between the Garnishee and Judgment Debtor. Their Lordships held thus “Money in the hands of a third person, where the relation of debtor and creditor did not exist between him and the judgment-debtor could not be attached….

In the case of Essilfie v. Ghana Ports Authority[6], a garnishee order absolute was issued against the judgment debtor, whereupon the judgment debtors filed an application to stay execution and to set aside the garnishee order absolute against them. In the affidavit in support, the judgment debtor inter alia contended that no service was made on them of the garnishee order nisi. In effect the contention was that the garnishee order nisi was not served on the judgment debtor as required by the rules. The Court held that, “the non-service of the motion on the judgment-debtors was not by itself an irregularity of such a fundamental nature as to avoid the garnishee order absolute. If the service of the garnishee nisi on the debtors were a condition sine qua non to the making of the order absolute, the court would not have been given a discretion under Order 45 r. 1 of L.N 140A in the matter to dispense with the service of such notice.

In the case of the Republic v. High Court (Fast Track Division) Accra, ex parte State Housing Co Ltd[7]however, the Supreme Court speaking through Atuguba JSC construed the rules and stressed the importance of service. His Lordship had this to say “We are unable to accept the interested party’s contention, which is in effect, that the judgment debtor can only be served with the garnishee proceedings if the court orders that they be served on him. That is stating the rule conversely. Rather Order 47 rule 3(1) (b) of the High Court (Civil Procedure) Rules, 2004 (CI 47) requires the service of such proceedings on the judgment debtor unless the court otherwise orders…. Since exhibit M is positive that no direction was given by the court that the applicant, i.e. the judgment debtor should not be served with the garnishee proceedings and yet the applicant was not served with them, it follows that an essential prerequisite to the entertainment of those proceedings had not been complied with and the same was not only an error of law but one of jurisdictional character.

The case of ESM Company Limited v. Eximguarantee and Big Aidoo (Best Point Savings and Loans as Claimants)[8], dealt with an instance wherein a Garnishee Proceedings, the Garnishee made a claim to the funds or proceeds sought to be attached. In this case, the Plaintiff/Judgment Creditor/Respondent (ESM) sold a Quarry Plant on credit to the 2nd Defendant (Big Aidoo). The 1st Defendant (Exim Guarantee) issued a Bank Guarantee for the outstanding purchase price. ESM obtained Judgment against the Defendants for the unpaid amount and then took Garnishee Proceedings against the Ministry of Finance, the Ghana Highways Authority and Best Point Savings and Loans Bank, the Garnishee/Appellant herein. At the hearing, it came out that Best Point (the Garnishee) was not indebted to Big Aidoo, but rather Best Point has given two separate credit facilities to Big Aidoo, and the proceeds of an Interim Payment Certificate 11 issued by the Ghana Highway Authority in favour of Big Aidoo for work done was assigned to Best Point. Best Point, therefore, made a claim to the IPC 11 funds sought to be attached but the trial court dismissed the claim of Best Point as Garnishee and made the order absolute. An appeal by Best Point to the Court of Appeal also failed. It was clear that although the said IPC 11 was assigned to Best Point, the failure to register the charge over the IPC 11 under the Borrowers and Lenders Act 2008 (Act 773) made the assignment legally defective and detrimental to Best Point (the Garnishee).

The import is that whoever raises a claim to the funds being sought to be attached must fulfil all legal requirements to make a valid claim. In this case, if Best Point had registered the charge under Act 773, they would have succeeded in their claim. In addition to Act 773, if there is any other requirement for validation of the charge same must be complied with before one can succeed in the claim.[9]


In sum, Garnishee Proceedings is a tripartite post-judgment proceeding in which a third-party (Garnishee) is invited to come and tell the court whether he or she has money belonging to the losing party (Judgment debtor). If a said third party has any money belonging to the losing party (Judgment Debtor) and there is no encumbrance on the monies, the court will order the Garnishee, to pay such monies to the victorious party (Judgment Creditor). Upon payment pursuant to the order of the court, the Garnishee is discharged from any liability owed the Judgment Debtor and Judgment Creditor, regardless of whether the Garnishee proceedings is nullified or set aside or not.

[1] [1939] 2 All ER 10, CA

[2] [2001-2002] 2 GLR 141

[3] [2009] SCGLR

[4] Civil Appeal H1/169/17

[5] supra

[6] [1980] GLR 469

[7] [2009] SCGLR 177

[8] supra

[9] https://ghanalawhub.com/security-without-security-lessons-for-banks-and-similar-institutions-1/)


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