IN THE HIGH COURT OF MALAWI
CIVIL CAUSE NO. 847 OF 1999
JOSEPH MANYUNGWA ……………………….PLAINTIFF/JUDGEMENT CREDITOR
AFRICAN COMMODITY TRADERS…………DEFENDANT/JUDGMENT DEBTOR
FINANCE BANK MALAWI LIMTED
BRANCH MANAGER ………………………………………………………………….. GARNISHEE
Chirwa, Counsel for the garnishee.
This is the garnishee’s application to set aside the garnishee order absolute herein whereby the Finance Bank Malawi Limited, Blantyre Branch was ordered to pay to the plaintiff/judgment creditor a certain sum of money from the sums of money held by the garnishee on behalf of the defendant/Judgment debtor.
Mr Chirwa Counsel for the garnishee swore an affidavit in support of the instant application. The garnishee order absolute was sought to be set aside on two grounds:- namely that the defendant’s account with the garnishee does not have any money to be attached by the garnishee order absolute and that the Defendant herein is a company in receivership such that it has not capacity to pay on its own.
Mr Chirwa exhibited to his affidavit a statement of the judgment debtors’ account which shows a negative balance as at December, 2002 when the Garnishee order was made absolute herein. There was also filed simultaneously a similar application to set aside the garnishee order absolute by the receiver and Manager of the judgment debtor herein. That application was supported by an affidavit sworn by Mrs Kanyuka Counsel for the receiver and Manager of the judgment-debtor herein. She deponed that she appears herein as counsel for the 2nd defendant the receiver and manager of African Commodity Traders, Peter White.
The court notes that when an application for a garnishee order nisi was granted in favour of the judgment creditor herein there was only one defendant namely African Commodity Traders. And that at no time was the Receiver and Manager of the defendant herein made 2nd defendant or party at all in the present action.
The effect of the above state of affairs is that as far as this action is concerned the Receiver and manager of the defendant/Judgment debtor is not a party to this action. And as such Mrs Kanyuka could not swear an affidavit in the instant action on behalf of the Reciever and Manager where the said Receiver and manager was never joined as and party hereto.
The court therefore in the premises excludes the affidavit of Counsel for the receiver as well as her summons. If the Receiver and Manager wished to be heard then he should have proceeded as an interviewing party herein see Practice Note 15/6/7 and 15/6/7A to the Rules of Supreme Court. The Court shall therefore only deal with the contentions of the garnishee itself.
The court is satisfied upon a perusal of the affidavit in support of the garnishee’s application that at the date of the garnishee order absolute there was no money in the Judgment debtor account. And that the judgment debtor is in receivership and was in receivership at the time the garnishee order was made absolute herein. These facts have not been disputed by the judgment creditor herein who did not make an appearance at the hearing of the present application despite being served with notice of the same.
Mr Chirwa deponed in his affidavit that the garnishee did not show cause why the garnishee order nisi should not be made absolute because it thought that the Receiver of African Commodity Traders would instruct his lawyers to do so. The court notes that it has jurisdiction to set aside a garnishee order absolute even where the garnishee remained inert and the order nisi was made absolute. See O’brien vs. Killen (1914) 2 Ir. R 63 cited in Practice note 49/4/2 to the Rules of Supreme Court.
The court herein is therefore perfectly entitled to hear the garnishee’s application notwithstanding its failure to contest the garnishee order nisi due to the mistaken belief it held that the receiver manager would contest the garnishee order nisi. Although the court notes that the mistake was very unfortunate in the face of the clear wording of the order nisi that the garnishee herein show cause why it should not be made absolute.
The law is clear on the effect of a receiving order on a garnishee order.
Once a receiving order is made, a receiver for debenture holders, even though appointed subsequently to the garnishee order absolute, will obtain priority over the judgment creditor under a garnishee order. See Norton vs. Yates 1906 1 KB 112. Such that where company is in receivership the receiver shall have priority over the judgment creditor under a garnishee order absolute with regard to all the moneys due and owing to the company in receivership. The same is true in the instant case.
And on the facts herein the garnishee order nisi ought not to have been made absolute the judgment debtor herein having already been in receivership.
On that score alone the court sets aside the garnishee order absolute herein with costs to the garnishee.
The court shall not order any costs to the 2nd defendant who it does not recognize as having intervened herein or been joined as the 2nd defendant as such.
The court having set aside the garnishee order absolute herein for the reason stated shall not venture to deal with the other ground that the defendant had no money to be attached herein.
Made in Chambers at Blantyre this 25th February, 2003.