IN THE HIGH COURT OF THE REPUBLIC OF FIJI
WESTERN DIVISION
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 296 of 2005

BETWEEN:

VISHNU DEO SWARUP of Varadoli, Ba, Fiji, Businessman
PLAINTIFF/JUDGMENT CREDITOR/APPLICANT

AND:

AIRPORT LAND DEVELOPMENT COMPANY LIMITED a limited liability company having its registered office at Nadi, Fiji.
DEFENDANT/JUDGMENT DEBTOR

TO:

ERONI MAOPA Legal Practitioner, practicing in Nadi, Fiji and Trustee of Babu Singh & Associates, Trust Account.
FIRST GARNISHEE

TO:

RUSTAM ALI of Ba, Fiji, Businessman
SECOND GARNISHEE

TO :

AUSTRALIA AND NEW ZEALAND BANKIN GROUP LIMITED having its registered office at Level 2, 100 Queen Street, Melbourne Victoria, Australia.
THIRD GARNISHEE

Before : A/ Master M H Mohamed Ajmeer
Counsels :
Mr S Titoko for the plaintiff
Mr R P S Chaudhary for the Third Garnishee
Date of Hearing : 26 March 2014
Date of Ruling : 21 May 2014

RULING

Introduction
[1] This ruling relates to Third Garnishee, Australia and New Zealand Banking Group Limited ("the Bank"). On 18 November 2013 the bank filed a summons ("the application") accompanied by an Affidavit of Nilesh Prasad sworn on 15 November 2013 and filed on 18 November 2013 ("the affidavit") seeking the following orders:

A.	That the order herein entered by this court on 24 September 2013 in relation to the Third Garnishee be discharged and/or set aside.

B.	That the execution of the order herein entered by this court on 24 September 2013 be stayed against the Third Garnishee until the determination of this application.

C.	That such further or other orders the Honourable Court deems just and equitable.

D.	That costs of this application be paid by the plaintiff.

[2] The application is made pursuant to Order 49 Rule 5 and Order 45 Rule 10 of the High Court Rules 1988 and the inherent jurisdiction of the court. 

[3] By an ex-parte notice of motion filed together with a supporting affidavit on 23 July 2013 by the plaintiff/judgment creditor/applicant (the applicant) sought an order that a Garnishee Order Nisi to be issued and is hereby made against the Garnishees within-named and that all debts accruing due or monies outstanding from the Garnishees either jointly or severally to the defendant be attached to answer a judgment recovered by the applicant against the defendant in this action on 7 September 2012.

[4] Upon hearing the application, Master Anare Tuilevuka (as he then was) on 26 July 2013 made a Garnishee Order Nisi against the Garnishees within-named and adjourned the matter to 21 August 2013. 

[5] On 24 September 2013 the applicant applied for and obtained a Garnishee Order Absolute against the garnishees herein.

[6] The application filed by the Bank was set down for hearing on 15 April 2014. On that day counsel for the plaintiff/applicant sought vacation of the hearing so that they can file their written submissions. But, nonetheless Mr Chaudhary counsel for the Bank opposed this application stating that last time Mr Mishra Prakash consented to this matter to be determined by written submissions. The plaintiff did not file affidavit in opposition and written submission and the plaintiff has failed to comply with any of the orders of the court. I refused to adjourn the hearing on the ground that the application for adjournment was made without sufficient reasons. However, I granted final 14 days for the plaintiff to file and serve written submission. Even though the plaintiff was given final 14 days to tender his written submission, he did not file any written submission within the time permitted for that purpose.

Background
[7] The applicant obtained judgment in the High Court at Lautoka against the defendant, AIRPORT LAND DEVELOPMENT COMPANY LIMITED (which is now wound up) on 7 September 2012 in the sum of $162,349.42 with cost in the sum of $7,000.00. As the defendant company was wound up, the applicant is unable to recover the judgment sum from the defendant. As a result the applicant seeks to execute the judgment by way of garnishee proceedings against the bank.

The Law
[8] Relevant rule in the High Court Rules 1988 (as amended) ("the HCR") which relates to garnishee proceedings is O.49, r.1, which provides:

"(1) Where a person (in this Order referred to as "the judgment creditor") has obtained a judgment or order for the payment by some other person (in this Order referred to as "the judgment debtor") of money, not being a judgment or order for the payment of money into court, and any other person within the jurisdiction (in this Order referred to as "the garnishee ") is indebted to the judgment debtor, the Court may, subject to the provisions of this Order and of any 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 so much thereof as is sufficient to satisfy that judgment or order and the costs of the garnishee  proceedings."

"(2) An order under this rule shall in the first instance be an order to show cause, specifying the time and place for further consideration of the matter, and in the meantime attaching such debt as is mentioned in paragraph (1), or so much thereof as may be specified in the order, to answer the judgment or order mentioned in that paragraph and the costs of the garnishee proceedings (Emphasis added)"

[9] Pursuant to Ord. 49, r.4, the court may make garnishee order absolute, if on the further consideration of the matter the garnishee does not attend or does not dispute the debt or claimed to be due to from him to the judgment debtor. That rule provides as follows:

 "No appearance or dispute of liability by garnishee (O.49, r.4)

 4.-(1) Where on the further consideration of the matter the garnishee does not attend or does not dispute the debt due or claimed to be due from him to the judgment debtor, the Court may make an order absolute under rule 1 against the garnishee.

 (2) An order absolute under rule 1 against the garnishee may be enforced in the same manner as any other order for the payment of money".

[10] Order 49, r.5 states as follows:

 Dispute of liability by garnishee (O.49, r.5)

 "5. Where on the further consideration of the matter the garnishee disputes liability to pay the debt due or claimed to be due from him to the judgment debtor, the Court may summarily determine the question at issue or order that any question necessary for determining the liability of the garnishee be tried in any manner in which any question or issue in an action may be tried, without, if it orders trial before a master, the need for any consent by the parties".

[11] Order 45, r. 10 states as follows:

 Matters occurring after judgment: stay of execution, etc. (O.45, r.10)

 "10. Without prejudice to Order 47, rule 1, a party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief on the ground of matters which have occurred since the date of the judgment or order, and the Court may by order grant such relief, and on such terms, as it thinks just".

[12] Halsbury Volume 17 at para 527 states as follows:

"To be capable of attachment there must be in existence, at the date the attachment becomes operative, something which the law recognizes as a debt, and not merely something which may or may not become a debt. Thus where the existence of a debt depends upon the performance of a condition, there is no attachable debt until the condition has been performed. (My emphasis)"

The issue
[13] The issue that arises in these proceedings is that whether the court is empowered to set aside a garnishee order absolute made under Ord. 49, r.4.(1).

Analysis and determination

[14] The plaintiff/applicant being a judgment-creditor obtained a garnishee absolute order against the bank. A garnishee order may be obtained where the garnishee is indebted to the judgment-debtor.

[15] The court in the first instance, pursuant to Order 49, r.1, made a garnishee nisi order against the bank attaching the account held by the judgment-debtor. Upon the nisi order being served, it is the duty of the bank (garnishee) to show cause why the court should not make an order absolute. Where on the further consideration of the matter the garnishee does not attend or does not dispute the debt due or claimed to be due from him to the judgment-debtor, the court may make an order absolute, see Ord. 49, r.4. 

[16] On the day set down for further consideration of the matter, i.e. 24 September 2013, the bank neither attended nor disputed the debt due or claimed to be due from it to the judgment-debtor. Which resulted the court enter garnishee order absolute. The bank is now contesting that order in these proceedings. 

[17] In the supporting affidavit, the applicant-bank states that:

a.	The Bank does not hold any monies to the credit of the defendant.

b.	He had made phone calls and sent email to the plaintiff's solicitors to inform them that the Bank does not hold any monies to the defendant's credit.

c.	The plaintiff's solicitors had confirmed the discussion by phone and responded by saying that the making of phone calls to the plaintiff's solicitor's office saying that the Bank does not have any monies to the defendant's credit is not going to do the Bank any good.

d.	Due to miscommunication there was no representation on behalf of the Bank when the garnishee proceedings were called in court.

[18] It is to be noted that the plaintiff-applicant did not file any affidavit in response to the affidavit in support filed on behalf of the Bank.

[19] The plaintiff-applicant in this case obtained a judgment which is not a judgment or order for the payment of money into court but for payment by the judgment debtor. If any other person (the garnishee) within the jurisdiction is indebted to the judgment debtor (in this case the defendant), the court may make order the garnishee to pay the judgment creditor (here the plaintiff-applicant) the amount of any debt due or accruing to the judgment debtor from the garnishee up to the amount to satisfy the judgment (see O.49, r. 1 of the HCR). To be caught under O. 49, r. 1 of the HCR, the garnishee that is within the jurisdiction must be indebted to the judgment debtor and there must be any debt due or accruingto the judgment debtor from the garnishee.

[20] Pursuant to O.49, r.2 of the HCR, application for a garnishee order must state, inter alia, the name and last known address of the judgment debtoridentifying the judgment or order to be enforced and stating amount of such judgment or order and the amount unpaid under it at the time of the application. The plaintiff's application that was filed in court does not contain any of these details namely the summons fails to indicate the judgment amount and the amount unpaid under it at the time of the application. The applicant-bank did not raise any objection in relation to non-compliance with the Rules of the HCR namely O.49. r. 2. However, the non-compliance with the requirements of these Rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any steps taken in the proceedings, or any document, judgment or order therein, see O.2, r. 1 of the HCR. I therefore treat the omission to state the name and last known address of the judgment debtor and the amount of judgment as an irregularity pursuant to O.2, r.1 of the HCR.

[21] It will be noted that the amount to be attached by the garnishee order was not mention either in the garnishee order nisi or garnishee order absolute obtained against the Bank.

[22] I now endeavour to answer the issue that whether the court is empowered to set aside a garnishee order absolute.

[23] There was no appearance by or on behalf of the Bank, the third garnishee upon the return of the garnishee order nisi. in the affidavit in support filed on behalf of the Bank Mr Nilesh Prasad, Manager and Compliance states that, he made phone calls and sent email to the plaintiff's solicitors to inform them that the Bank does not hold any monies to the defendant's (judgment-debtor's) credit and the plaintiff's solicitors responded that, "by saying that the Bank does not have any monies to the defendant's credit is not going to do the Bank any good. He further stated that it was due to miscommunication there was no representation on behalf of the Bank when the garnishee proceedings were called in court. At this point, it is pertinent to note that the plaintiff did not file any affidavit in reply to the affidavit in support filed on behalf of the Bank.

[24] The Bank Manager and solicitors for the plaintiff were in telephonic conversations with each other after the garnishee order nisi was made. There has been certain misunderstanding on the conversations between the Bank and the solicitors for the plaintiff. It is clear that the Bank indicated that there were no monies standing to the credit of the judgment-debtor. The judgment debtor was a Company that was subsequently wound up before the garnishee proceedings were brought up by the plaintiff (judgment-creditor).

[25] The garnishee order absolute has been obtained against the Bank in default of appearance by or on behalf of the Bank or without formal resistance. In other words, the garnishee order absolute was obtained without disputing the liability of the Bank, the third garnishee to pay debt due to the judgment-debtor. On the garnishee order nisi returnable day, the Bank would have had opportunity to dispute its liability to pay the debt due or claimed to be due from it to the judgment-debtor. This course was available to the Bank under Ord. 49, r.4 of the HCR.

[26] It will be noted that the court had made the garnishee order absolute pursuant to Ord. 49, r.4 of the HCR. That rule provides that where on the further consideration of the matter the garnishee does not attend or does not dispute the debt due or claimed to be due from him to the judgment  debtor, the  Court  may  make an order  absolute  against  the garnishee. The garnishee order absolute was made without considering the merits of the application for garnishee order.

[27] On the garnishee order nisi returnable day the Bank did not appear to show cause why the garnishee order nisi should not be made absolute. If the Bank had appeared, the bank would have had an opportunity under Ord.49, r.5 of the HCR to dispute its liability to pay debt due or claimed to be due from it to the judgment-debtor. There has been failure on the part of the Bank to contest the making of the garnishee order absolute, which was, it says, due to a misunderstanding. The Bank would have reasonably believed that the information given to the plaintiff's solicitors that the Bank did not have any monies standing to the credit of the defendant/judgment-debtor would suffice. Another interesting question arises here that whether a non-existent entity can operate a bank account or can the bank operate an account for a non-existent entity, namely a wound-up company. The judgment-debtor company in this case has been wound up before initiation of the garnishee proceedings.

[28] I have to make it clear that the garnishee order absolute had been obtained against the third garnishee (the Bank) without dispute of liability to pay debt due or claimed to be due from the Bank to the judgment-debtor. In other words, the garnishee order nisi was made in default of appearance on the garnishee order nisi returnable day and failed to contest the garnishee proceedings.

[29] After giving the background under which the garnishee order absolute against the Bank was obtained, I now return to the issue of the court's jurisdiction to discharge or set aside a garnishee order absolute. One may argue that the court has no jurisdiction to set aside a garnishee order absolute and it must be challenged on appeal.

[30] Mr Chaudhary on behalf of the Bank argued that this court has jurisdiction to set aside the garnishee order absolute made against the Bank. He cited the case authority of The Tile Centre v Symons; Ex Parte Kyritsis [1972] VicRp 111; [1972] VR 965 (9 June 1972) decided by Supreme Court of Victoria Full Court.

[31] The case cited above is an Australian authority. That was full court decision. The court in that case decided a similar issue like the one before me in these proceedings. The court holding that a garnishee order absolute can be set aside by the court which made that order stated as follows:- 

"If indeed the garnishee order absolute is of the nature of a judgment or order which once recorded may not thereafter in any way be interfered with by the court making the order, it is curious that for so long the principles enunciated in these two lines of decision have not earlier come into conflict. It is true that in O'Brien v Killeen, [1914] 2 IR 63, Kenny, J, mentioned his earlier but discarded view that the only remedy was by appeal, and that in Henderson v Johnson and Henderson, [1969] WAR 3, at p.11, there was a suggestion by counsel that an order absolute could only be set aside on appeal. The cases referred to, however, make it clear that a garnishee order absolute is an order which the court making it has consistently claimed and exercised jurisdiction to set aside. We think that the explanation for the absence of any authoritative statement to the effect that a garnishee order absolute is one which may not be so set aside derives from the nature of the order absolute itself. The order absolute, so called, is the order, so far as the present case is concerned, which the County Court judge makes under O.29, r36, of the County Court Rules. That rule provides that upon the return of the garnishee order nisi, if the garnishee does not dispute his debt to the judgment debtor or if the garnishee does not appear to show cause, the judge may order execution to issue to levy the amount due from the garnishee or so much as may be sufficient to satisfy the judgment creditor's judgment or order. Order 29 of the County Court Rules is the order dealing with execution of judgments and orders, and it is in that context that r36 authorizes the issue of execution. It is in the context of "execution" that garnishee proceedings are generally discussed in the law books. In the 1945 Annul Practice (as well as the other editions) the note to O.45, r1, is, we think, of significance. That note reads: "Object of the Process. It should always be borne in mind that the object and intention of the process is to render 'debts' as a form of property available in execution. This marks both the nature of the process and its limitations." What the process is designed to do is to levy execution upon what in reality is the property of the judgment debtor, namely, the debt owing by the garnishee to the judgment debtor, which is to be taken to satisfy the judgment debt. The order is not one made in a "cause or action" (Mason v Wirral Highway Board (1879) 4 QBD 458) though it is, as its name indicates, a "proceeding" (Llewellyn v Carrickford, [1970] 2 All ER 24); it is not a "judgment or order for the recovery or payment of money" (McKenzie and Co v Walker [1891] VicLawRp 55; (1891) 17 VLR 221); it does not operate to transfer the debt or make the garnishee the debtor of the judgment creditor (Re Combined Weighing and Advertising Machine Co (1889) 43 Ch D 99; [1886 -90] All ER Rep 1044). (Emphasis added).

[32] The above statement clearly explains the nature of the garnishee order absolute. So far as the present case is concerned, the garnishee order absolute does not indicate the amount to be attached, it has been made without deciding the Bank's liability to pay debt due or claimed to be due to the judgment-debtor. There was no judgment-debtor in existence, before or at the time the garnishee order absolute was made the judgment-debtor company was wound-up. Indeed, at the time when the garnishee order was obtained there were no monies held by the Bank on behalf of the judgment-debtor. In the circumstances, I will say that the garnishee order was obtained improperly on the mistaken belief that the Bank is indebted to the judgment-debtor. The court must have power to control any proceedings before it.

[33] The garnishee order absolute does not carry the characteristics of a judgment or order which once recorded may not thereafter in any way be interfered with by the court making the order. 

[34] Ord. 49, r.7 of the HCR makes provisions for discharge of garnishee. But this is under different situation. That rule provides that:

 "7. Any payment made by a garnishee in compliance with an order absolute under this Order, and any execution levied against him in pursuance of such an order, shall be a valid discharge of his liability 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"

[35] The above rule has no application in this case, for the Bank did not make payment in compliance with the garnishee order absolute. That rule also does not provide answer to the issue that whether a garnishee order nisi can be set aside by the court which made the order absolute. 

[36] I am of opinion that the court is empowered under its inherent jurisdiction, if justice so demands, to set aside or recall a garnishee order absolute obtained without deciding the issue of liability to pay debt due or claimed to be due to the judgment debtor from the garnishee.

[37] I now return to the issue of whether the Bank is indebted and any debt due or accruing to the judgment debtor (the defendant) from the Bank.

[38] There must be a debt in existence to be attachable under garnishee proceedings. This position was explained by Banks L. J in O'Driscoll v. Manchester InsuranceCommittee (1913) 3 K.B. 499, at page 516 & 517 as follows:

"It is well established that 'debts owing or accruing' include debts debita in praesenti solvenda in futuro. The matter is well put in the Annual Practice 1915 p. 808. 'But the distinction must be borne in mind between the case where there is an existing debt, payment whereof is deferred, and the case where both the debt and its payment rest in the future. In the former case there is an attachable debt, in the latter case there is not'. If, for instance, a sum of money is payable on the happening of a contingency, there is no debt owing or accruing. But the mere fact that the amount is not ascertained does not show that there is no debt."

[39] To be capable of attachment there must be in existence, on the date the attachment becomes operative, something which the law recognizes as a debt. In these proceedings the plaintiff/applicant has failed to show that a debt is existing payable to the defendant/judgment debtor by the third garnishee (the Bank) at the time when he filed the application for garnishee order.

[40] In this case, the wound-up judgment-debtor company had no longer any powers exercisable otherwise than by the liquidator, and all its property was subject to his powers. Therefore, the plaintiff/judgment creditor ought to have brought garnishee proceedings against the liquidator of the judgment-debtor company.

[41] In Lal v Land Transport Authority [2009] FJHC 157; HBC213.1994 (31 July 2009) it was held that:

 "The monies held by the ANZ Bank cannot be the subject of garnishee proceedings because it is not a debt within the meaning of Order 49 rule 1(1) of the High Court Rules 1988".

[42] Prima facie there were no monies standing to the credit of the judgment-debtor at the time when the garnishee proceedings were initiated. Even if there was money standing to the credit of the judgment-debtor, that money could not be subject of garnishee proceedings as stated in Lal's case (supra).

[43] For these reasons, I should grant the relief sought by the applicant/Bank. I accordingly set aside the Garnishee Order absolute made against the third garnishee (the Bank) on 24 September 2013.

Cost
[44] As a winning party the third garnishee would be entitled to costs of these proceedings. Mr Chaudhary submitted that the plaintiff's solicitors at the very least owed a duty to the court to inform the court officers from the Bank had been in contact with the plaintiff's solicitors to inform them that the Bank did not hold monies to the defendant's credit. He also submitted that the plaintiff has also wasted time by opposing this application by the Bank and seeking directions to file an affidavit in opposition but failed to do so on two occasions. At the outset, the Bank failed to contest the garnishee proceedings. The Bank did not attend the court and dispute its liability to pay debt due to the judgment-debtor. As a result of this garnishee order absolute was made against the Bank. The Bank is to be blamed for this. In all the circumstances I make no order as to costs.

Final Outcome
1)	The Garnishee Order Absolute made on 24 September 2013 against the third garnishee (the Bank) is vacated and set aside;

2)	There will be no order as to costs;

3)	Orders accordingly.

M H Mohamed Ajmeer
A/Master of the High Court

At Lautoka
21/05/2014

Solicitors:
Messrs Parshotam Lawyers, Barristers & Solicitors for the third garnishee
Messrs Mishra Prakash Associates, Barristers & Solicitors for the plaintiff.