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THE GOLD COAST INDUSTRIAL CORPORATION LIMITED
V.
SALAWU LAGOS
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT ACCRA, GOLD COAST
13TH DAY OF MARCH, 1953
W.A.C.A. NO. 18/52
2PLR/1955/60 (WACA)
OTHER CITATION(S)
2PLR/1955/60 (WACA)
(1953) XIV WACA PP. 284-286
LEX (1953) – XIV WACA 284-286
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BEFORE THEIR LORDSHIPS:
FOSTER-SUTTON, P.
COUSSEY, J.A.
KORSAH, J.
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BETWEEN:
THE GOLD COAST INDUSTRIAL CORPORATION LIMITED – Appellants
AND
SALAWU LAGOS
IN THE SUIT BETWEEN – Respondent
SALAWU LAGOS, HOUSE No D.775/3, STATION ROAD, ACCRA AND
FRARY INDUSTRIES (GOLD COAST) LIMITED, PER THEIR MANAGING DIRECTOR, FRANK RYSDYK OF KIMBERLEY AVENUE, ACCRA
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ORIGINATING COURT(S)
Appeal by the garnishees:
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REPRESENTATION
N. A. Ollennu — for Appellants
C. C. Lokko — for Respondent, the Judgment-Creditor
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
DEBTOR AND CREDITOR LAW:- Execution – Garnishee Proceedings – What may be garnished – Civil Procedure Rules, Order 44, rules 16 and 17.
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CASE SUMMARY
The above rules read as follows:-
“16. If the garnishee does not forthwith pay into Court the amount due from him to the judgment debtor or an amount equal to the judgment debt, and does not dispute the debt due or claimed to be due from him to the judgment debtor, or if he does not appear upon summons, and proof of service be made, then the Court may order execution to issue and it may issue accordingly without any previous writ or process to levy the amount due from such garnishee, or so much thereof as may be sufficient to satisfy the judgment debt.
“17. If the garnishee 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 the same manner in which any issue or question in a suit may be tried or determined.”
The appellants were the garnishees and the respondent was the judgment creditor in the suit. The judgment-creditor obtained a garnishee order nisi on an affidavit that the judgment-debtor had authorised the garnishees to pay him the amount due under the judgment, and a copy of the letter of authority, which read:
“I hereby authorise you in the event of any decision in my favour in respect of the claim which I have recently made on you for work extra to our contract, to make the following payment to people who have supplied materials used in the contract and its extensions”.
The order nisi was made absolute in the absence of the garnishees and apparently without notice. The order absolute was not drawn up and the amount of the garnishees’ assumed debt to the judgment-debtor remained unascertained. Under execution they paid in the judgment debt and applied for review on an affidavit that they owed no money to the judgment-debtor. The judgment-debtor said he was suing the garnishees at once and the Court stayed proceedings on the garnishee order; but he did not sue. The judgment-creditor applied for the money in Court and was allowed to have it; and the garnishees appealed.
For the respondent, the judgment-creditor, it was argued that it was a payment under a mistake of law which could not be re-opened.
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DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (allowing the appeal) that:
From the letter of authority it was plain that there was no attachable debt but a claim which had not been adjudicated upon; consequently the garnishee order was irregular and of no effect and the payment was under an order which could not be supported; the order must be set aside and the issue raised of the garnishees’ liability to the judgment-debtor should be tried.
Cases cited:-
(1) Webb v. Stenton, 11 Q.B.D. 518 (C.A.)
(2) In re Greenwood (1901) 1 Ch. 887
(3) Johnson v. Diamond, (1855) 24 L.J., Exch. 217; per Parke, B. at p. 219
(4) Marshall v. James, (1905) 1 Ch. 432
(5) Marriott v. Hampton, 7 Term R., 209
(6) Moore v. Peaching, 66 L.T.R. 199
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MAIN JUDGMENT
The following Judgment was delivered:
COUSSEY, J. A.
This case illustrates how a false step may set in train a tragedy of errors.
The plaintiff (judgment-creditor) garnishor-respondent, who will hereafter be referred to as the respondent, obtained judgment in the Divisional Court, Accra, on the 29th January, 1951, against the defendant, the judgment-debtor, for £428 and £25 costs.
On the 12th February the respondent obtained a garnishee order nisi returnable on the 19th February, 1951, for attachment of moneys in the hands of the garnishee-appellant, on the representation that the judgment-debtor had authorised the garnishee-appellant to pay him £428. Exhibited to his affidavit supporting the application for the order nisi was a copy of the authority referred to.
It is dated 30th November, 1950, and addressed to the garnishee-appellant and it reads:-
“I hereby authorise you in the event of any decision in my favour in respect of the claim which I have recently made on you for work extra to our contract, to make the following payment to people who have supplied materials used in the contract and its extensions.”
There is no record of the proceedings in Court on the 19th February to evidence that the garnishee-appellant attended to show cause on the return day or that they had notice that the matter would be called on on the 20th February.
On the 20th February, however, the garnishee-appellant failed to appear to show cause and the Court ordered execution to issue and that a formal order be drawn up by the Registrar. No formal order was drawn up and therefore the debt which was in fact attached in the hands of the garnishee-appellant cannot readily be ascertained.
On the 15th March, 1951, after execution had been levied, the garnishee-appellant paid £453 to the Sheri1f and on the same day applied by motion for an order for special leave to review the garnishee order and that the £453 be not paid out to the respondent. In the affidavit in support of this application the garnishee-appellant’s solicitor alleged that no monies were due by the garnishee appellant to the judgment-debtor.
When this application was considered by the Court the true situation was obscured by a statement by the judgment-debtor’s solicitor that he was starting a claim, i.e. instituting proceedings at once (against the garnishee-appellant).
It is as well to pause here to consider the true position as I conceive it. It is true that the garnishee-appellant did not appear upon the summons to dispute the debt claimed to be due as provided by rule 16 of Order 44, Schedule 3, but it was apparent from the letter of authority exhibited by the respondent himself that in fact there was no attachable debt, but a claim which had not been adjudicated upon. There was in fact no debt due and there was therefore nothing to attach; Webb v. Stenton (1); In re Greenwood (2). Although the question was not raised under rule 16 or 17 of Order 44 by reason of the non-appearance of the garnishee, to avoid injustice, once it was apparent on the face of the application that there was no attachable debt, the Court should have declined under the circumstances, to make the order absolute. It was not the intention of the legislature to attach causes of action – Johnson v. Diamond (3).
Clearly nothing was attached in this case. There had been no adjudication of any claim between the debtor and the garnishee-appellant; the garnishee order itself could not accelerate or transform a claim into a debt and it was· irregular and of no effect.
Now when the judgment-debtor’s counsel stated on the 9th April, 1951, that his client was commencing proceedings against the garnishee-appellant, the Court was led to deviate from the order it should have made. The garnishee order absolute was made by mistake and it should have been set aside. I think authority for this is found in Marshall v. James (4).
The learned Judge thought, however, in reviewing the order for garnishee absolute, that the parties would be protected if the money were ordered to remain in Court while proceedings on the garnishee order were stayed pending decision of the action which the judgment-debtor undertook to bring against the garnishee. The importance of this decision, however, is that the Court recognised that no debt had at that stage been proved to be attachable and it virtually set aside its previous order and directed an issue to be tried under rule 17 of Order 44. But the Court granted the parties liberty to apply to the Court on the determination of that suit, thereby further confusing the matter.
At that stage the garnishee-appellant had set up a prima facie case that an issue should be tried as to whether there was a debt due and attachable. In my opinion the Court, having re-opened the matter, should itself there and then or at some later stage acting under rule 17, Order 44, have called upon the respondent to establish that there was an attachable debt. Unfortunately the Court accepted the judgment-debtor’s undertaking to sue and gave liberty to apply if there were no decision in that suit within a reasonable time.
On the 25th June, 1951, on the respondent’s plea that a reasonable time had elapsed and no action had been taken by the judgment-debtor, the Court discharged the above order staying proceedings and directed payment to the respondent of the money paid into Court by the garnishee-appellant in satisfaction of execution levied on the garnishee order.
This order was manifestly wrong. That there was an attachable debt had still not been established. If the judgment-debtor was not prepared in pursuance of the doubtful order to take action against the garnishee-appellant, the Court should have directed that the respondent, standing for and in the shoes of the judgment-debtor, should contest the issue with the garnishee-appellant by calling the debtor as his witness to prove that there was a debt due and attachable. This issue could have been determined summarily with the consent of the parties.
In my opinion this was not a payment by the garnishee-appellant under a mistake of law which cannot be re-opened as Mr. Lokko for the respondent bas submitted on the authority of Marriott v. Hampton (5).
This is payment under an order of the Court erroneous and unfounded in law and which cannot be supported and must be set aside, Marshall v. James (4), by the Court in its inherent jurisdiction, Moore v. Peaching (6).
The appeal is allowed, the order of the 25th June, 1951, is set aside and it is ordered that the issue raised by the garnishee-appellant be tried by the Court under rule 17 of Order 44, Schedule 3, of the Courts Ordinance.
The money paid out to the Judgment-creditor-respondent shall be paid back into Court to the credit of this suit within one month of this judgment.
In default execution may issue to enforce payment and on payment the issue shall be determined.
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FOSTER-SUTTON. P.
I concur.
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KORSAH, J.
I concur.
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Appeal allowed.
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