Understanding the Ghanaian Law on Garnishees (1)

Understanding the Ghanaian Law on Garnishees (1)

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


Parties go to court or resort to any other dispute resolution mechanism (arbitration, mediation etc.) with the hope of getting a favourable determination and enforcing same. When the dispute comes to an end, whether after a full-blown trial, summary, or default judgment, the court gives a decision which is either a Judgment or a Ruling. A Judgment is usually rendered at the end of the case and that brings the suit to finality. A Ruling is usually when a court is invited by either party through an application to make a decision (or the court on its own motion makes a decision) during the pendency of the case. Either way, the victorious party ultimately seeks to enforce the decision of the court or tribunal. The decision of the court is enforced through the several means of execution provided by law like the writ of fieri facias (fi.fa), charging orders, the appointment of a Receiver, and in some instances contempt proceedings. One other means of execution is what is termed ‘Garnishee Proceedings’. In this piece, the authors shall attempt to examine the law on Garnishees as a mode of execution with the view of providing some form of education thereon.

What is a Garnishee?

A ‘Garnishee’ is simply a third-party who holds money or property on behalf of another or is indebted to the other party, usually the person against whom the court has entered/delivered judgment. According to the Black’s Law dictionary, the 9th edition, a Garnishee is “A person or institution (such as a bank) that is indebted to or is bailee for another whose property has been subjected to garnishment”. The Black’s law dictionary further defines Garnishment as “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”.

From the above, it is seen that the Garnishee is a third-party, who is not actually a party to the case that was determined by the court. The Garnishee is only brought into the case after the end of the case and at the time of execution, because the person who was victorious in the suit believes that the Garnishee holds monies or property that belongs to the party who lost the case. Therefore, a person cannot be made a Garnishee unless there is a creditor-debtor relationship between the Garnishee and the Judgment Debtor. This was the position of the law in the case of State Construction Corporation v. Hasnaw Co. Ltd[1] which shall be the subject of discussion subsequently in this piece.

 Parties to the Garnishee Proceedings

The Garnishee proceedings usually involve at least three parties. It is therefore seen as a tripartite proceeding. The parties are; the Judgment Creditor, the Judgment Debtor and the Garnishee. The Judgment Creditor in simple terms is the party (whether Plaintiff or Defendant) who got a judgment in his or her favour. He or she is the person who ‘won the case’ and is therefore entitled to levy execution. The Judgment Debtor, on the other hand, is the party who ‘lost the case’, or against whom judgment was entered. He or she is the one the Judgment Creditor can proceed against by way of execution. The Garnishee is the non-party or third-party, who by virtue of owing or holding monies or property for the Judgment Debtor, is called upon to pay out the said monies held on behalf of the Judgment Debtor. Although Garnishee proceedings mostly involve banks, it must be noted, that it is not only limited to banks but can apply to any person, whether natural or artificial who holds money or property belonging to the Judgment Debtor. The Judgment Creditor is sometimes described as the ‘Garnisher’. According to the Black’s Law dictionary, a Garnisher is “A Creditor who initiates a garnishment action to reach the debtor’s property that is thought to be held or owed by a third party (the garnishee)” It is worthy of note, that it was also held in the case of State Construction Corporation v Hasnaw Co Ltd[2] that a person must not be a party to the suit before he or she is made a garnishee to the suit in the execution processes.

Garnishee Proceedings under Ghana Law

Under the 1992 Constitution in Article 11 in particular, the laws of Ghana shall comprise the Constitution, enactments made by or under the authority of Parliament established by the Constitution, any Orders, Rules and Regulations made by any person or authority under a power conferred by this Constitution, existing law and the common law. Garnishee Proceedings is provided specifically by the Civil Procedure Rules. The High Court Civil Procedure Rules 2004 (C.I 47) for instance, are the procedural rules that governs proceedings in the High Court and Circuit Court. Garnishee proceedings in the High Court and Circuit Court are governed by Order 47 of C.I 47. The authors shall discuss in detail what the law is regarding garnishee proceedings and what actually happens in practice during such proceedings.

Order 47 Rule 1 of CI 47 which is the starting point provides that:

Where a person in this Order referred to as the “judgment creditor” has obtained a judgment or order for the payment of money by some other person referred to as “the judgment debtor” and the judgment is not for payment of money into court, and another person within the jurisdiction, referred to as “the garnishee” is indebted to the judgment debtor, the Court may, subject to the provisions of this Order and of any other enactment, order the garnishee to pay the judgment creditor the amount of any debt due or accruing to the judgment debtor from the garnishee or as much of it as is sufficient to satisfy that judgment or order and the costs of the garnishee proceedings”.

According to the learned author, S. Kwami Tetteh, in his seminal book ‘Civil Procedure, A Practical Approach’ “A garnishee proceedings is a process whereby money due to a judgment debtor from a third party, the garnishee is seized and paid over to the judgment creditor in satisfaction of the judgment debt, costs and costs of the garnishee proceedings. “

This means that when a party say ‘A’ takes another party say ‘B’ to court and ‘A’ obtains judgment against ‘B’ and the judgment is for payment of money, other than payment of money into court after ‘A’ notifies B by way of serving a Notice of Entry of judgment on ‘B’, then, ‘A’ can, upon belief that ‘C’ has monies belonging to ‘B’, apply to the Court for a garnishee order to be issued against ‘C’ to come to court and show if there is any reason why such monies held by ‘C’ on behalf of ‘B’, should not be paid over to ‘A’ in satisfaction of the judgment debt.

A Judgment Creditor who wants to initiate the Garnishee Proceedings must make an application to the Court for the Garnishee Order to be issued. An application of this nature is by motion and supported by an affidavit. By law, the application for this order need not be on notice to the Judgment Debtor. The rules in Order 47 Rule 2 provides that:

An application for an order under rule 1 shall be made ex-parte supported by an affidavit that (a) identifies the judgment or order to be enforced and states the amount remaining unpaid under it at the time of the application; and (b) states that to the best of the information or belief of the deponent, the garnishee is within the jurisdiction and is indebted to the judgment debtor and states the sources of the deponent’s information or the grounds for the deponent’s belief”.

Ex parte proceedings mean that the application is made on the blind side of the Judgment Debtor. Under the rules of Court, specifically, Order 19, all applications are supposed to be on notice unless otherwise provided by law. Proceeding ex-parte is considered an anomaly and this is one of the few exceptions where the rules permit applications to be made ex-parte[3].

When the application is granted, the Court will make an initial Order which is termed Garnishee Order Nisi. The Garnishee Order Nisi is an order issued in the interim and its purpose is to invite the Garnishee to the court to testify whether he or she holds any money belonging to the Judgment Debtor. Order 47 Rule 1(2) provides that:

An order under this rule shall in the first instance be an order to show cause, and shall specify the time and place for further consideration of the matter, and in the meantime attach such debt as is mentioned in subrule (1), or as much of it as may be specified in the order, to satisfy the judgment or order mentioned in that sub-rule and costs of proceedings”.

This means that when the Court grants the application, the Order Nisi is drawn out by the Registry of the Court and is served on the Garnishee personally and also on the Judgment Debtor unless the court orders otherwise. As previously mentioned, Garnishees are usually banks or financial institutions but it may also be anyone who holds money for the Judgment Debtor. The moment the Order Nisi is served on the Garnishee, the Garnishee is precluded from paying out any monies to the Judgment debtor or any other person upon the instruction of the Judgment Debtor. The practice in the financial institutions has been that, once they are served with the Garnishee Order Nisi, the account of the Judgment Debtor is restricted so as to prevent the Judgment Debtor from withdrawing from the account. It is worth noting that an institution that allows the Judgment Debtor to still have access to the accounts after the service on them of the Garnishee Order Nisi is likely to be cited and held in contempt of the court.

When the Order is granted, the law says that the Garnishee and the Judgment Debtor must be served at least seven days before the hearing of the nisi proceedings. Service in law is so fundamental and basic that if it is not established that the party has been duly served, the proceedings cannot go on and will occasion an adjournment or even a subsequent application to set aside the proceedings.  Order 47 rule 3 (1) provides that “An order under rule 1 to show cause shall, at least seven days before the time appointed for the further consideration of the matter, be served on the (a) garnishee personally; and (b) judgment debtor unless the Court otherwise directs”. It could be a challenge if not fatal, if the Judgment Debtor or the garnishee is not served at all or short served i.e. any period lessor than the seven days required by the rules, in which cases the proceedings must be adjourned to ensure that the service requirement is complied with. Once the Garnishee is served, it/he/she is bound as at the date of the service. From Order 47 Rule 3(2) “Service of the order shall bind the garnishee as from the date of service on the garnishee of any debt specified in the order or as much of it as may be specified”.

When the Garnishee and Judgment Debtor have both been served in accordance with the rules, the Garnishee attends the Court on the hearing day for the nisi proceedings to commence. At the hearing, the Garnishee is basically examined or is made to testify, to ascertain whether it/he or she holds any monies belonging to the Judgment Debtor. If the answer is in the affirmative, the next stage is to find out if there is any encumbrance on the monies so held or if there is any reason why the Garnishee must not be ordered to make the payment to the Judgment Creditor. Some of such reasons will be that, although the funds being proceeded against has been pledged as a security, that the Garnishee is exercising a lien over the said funds etc. If there is no reason why said monies should not be paid, the Court then makes the Garnishee Order Absolute. Making the Garnishee Order Absolute implies that, the Garnishee is ordered to pay out the money to the Judgment Creditor. Such payment under the Order of the Court discharges the Garnishee from any liability to the Judgment Debtor.

What happens if the garnishee fails to attend?

It is the authors’ view that although the rules permit the court to make the Order absolute, this must be subject to order 47 rule 1, in relation to the amount held by the Garnishee for the Judgment Debtor without more. Such an order absolute (assuming the amount in the Order is above what the Garnishee holds) could be challenged once the Garnishee does not hold such sums on behalf of the Judgment Debtor. Doing so may mean that the Garnishee will be ordered to pay more than he or she holds for the Judgment Debtor, and that is not the intendment of garnishee proceedings from the authors’ reading of Order 47 Rule 1 of CI 47. The advice, therefore, is that, if for any reason the Garnishee was unable to attend upon the court, and the court makes the Order Absolute, but the Garnishee does not hold the said amount on behalf of the judgment debtor, the Garnishee should apply quickly to the court to either vary the Order or set same aside. In the absence of such an Order varying or setting aside the Garnishee Order Absolute, the Garnishee may be bound to pay the amount in the Garnishee Order Absolute since failing to do so would amount to disobeying a valid court order which is contemptuous.

Disputes of liability and Claims by third parties.

The Rules allow the Garnishee to dispute the liability. This means that a Garnishee can actually come to the court and deny that he or she holds monies belonging to the Judgment Debtor. The law is that:

In this regard, it is possible that the Judgment Debtor may have some monies with the Garnishee but same have been used as security for a loan, which the Garnishee in its capacity as a bank has granted to the Judgment Debtor, in which case a lien is held over those funds. The Garnishee must indicate to the court that it has a prior interest in the property sought to be

attached. When the Garnishee satisfies the court of its interest, the court will order that the funds cannot be attached because the Garnishee has a valid prior interest in the funds.

Persons, aside from the Garnishee, can also make a claim in the sums or property being sought to be attached in execution. The law allows such persons to state the nature of their claim for the court to determine same. Order 47 Rule 6(1) provides in that regard that:

At the hearing, the court will decide as to whose claim must be upheld by the Court. In that regards the CI 47 provides that: When the court determines the claimants’ interest in the negative or dismisses same, the Court will then make the Garnishee Order Absolute ordering the Garnishee to pay whatever sum is owed under the Judgment to the Judgment Creditor.

[1] [2001-2002] 1 GLR 141

[2] supra

[3] Barclays Bank  v Ghana Cables Co. Ltd [1998-99] SCGLR 1

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  • comment-avatar
    Nana Ama 4 years

    Thank you for this educative piece. I have a quick question: is there a public notice on the garnishee order nisi? I am wondering how persons with prior interest on monies held by the garnishee will get to know about the proceedings in order to make a claim on the monies sought to be attached.

    • comment-avatar

      Hello Nana Ama, an interesting question you pose.There is not really a public notice in a strict sense of the word (although court processes once filed subject to a few exceptions may be considered public documents). The order nisi is served on the Judgment debtor and the Garnishee. The práctice is for these persons served to alert any such person who has an interest or claim to make.

      I trust this helps. Good morning Ama

  • comment-avatar

    Hello Nana Ama, an interesting question you pose.There is not really a public notice in a strict sense of the word (although court processes once filed subject to a few exceptions may be considered public documents). The order nisi is served on the Judgment debtor and the Garnishee. The práctice is for these persons served to alert any such person who has an interest or claim to make.

    I trust this helps. Good morning Ama

  • comment-avatar
    Yaa 3 years

    What if the garnishee tells the court the judgment debtor has no money in the said account, then what happens? And will the garnishee order nisi still hold on the judgment debtor’s account?

  • comment-avatar

    Thanks Yaa, the law is that if the garnishee demonstrates to the court that the judgment debtor has no money in the account, the garnishee is discharged.

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    […] discussion on the subject of garnishee, see the previous article published by the authors; (https://ghanalawhub.com/understanding-the-ghanaian-law-on-garnishees/). An offshoot of that topic is, whether bank accounts that are held by persons jointly (Joint […]

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