A garnishee order can be defined as a court order obtained by a judgement creditor requesting that a debt currently owned to the judgement debtor by a third party be paid the judgement creditor through the court as a means of settling the debt owed to the judgment creditor by the judgment debtor.

This simply means, an injunction from the court of law or statute baring the operation of a particular customer’s account or even freezing the account.In a situation like this, the banker is discharged from his duty to pay. To further explain this term, consider this example:
If Mr Alfred is owing Mr. Donald a certain amount and Mr Donald himself is owing Mr Tom a certain amount of money also, Mr Tom can sue Mr Donald to court and obtain an order that the money that Mr Alfred is owing Mr Donald be paid to him (Mr Tom).

In this case, the creditor (Mr Tom) who sued the debtor Mr Donald is the judgment debtor while Mr Alfred is the garnishee, in essence, the service of garnishee order is issued by the third party.

Garnishee order

Parties to a garnishee order

There are types of garnishee order, however, there are only three parties to a garnishee order, these parties includes;

  1. The judgment creditor
  2. The judgement debtor
  3. The garnishee

If a bank customer who has some credit balance in his account is owing another person (a third party), the third party may decide to sue the bank customer and demand that debt (deposit) owed to the customer by the bank at the time of the order be paid to that third party.

That third party is the judgement creditor, the bank customer is the judgment debtor while the bank is the garnishee. Meanwhile, the debt owed is called the judgement debt. A garnishee order normally comes in two stages. At the first stage, a garnishee order nisi issued, the later is followed by a garnishee order absolute.

Types Of Garnishee Order On Service Of Garnishee Order

  • Garnishee order nisi
  • Garnishee order absolute

Garnishee Order Nisi
This type of garnishee order occurs when a judgement creditor applies to the court to obtain a garnishee order, the first thing the court will do is to issue an interim order to the garnishee to stop him from paying out any money due to the debtor until the case against him is decided.

This temporary or interim order is called garnishee order nisi. The service of garnishee order revolves around an “order to show cause”, served on the bank to show reasons, if any. A garnishee order is therefore an interim injunction restricting a garnishee (a bank) from paying out any money due to the judgment debtor until further instruction is received.

The order may also restrict the bank from paying out all the fund or from paying out part of the funds plus costs. This order serves only a notice that there is a case involving the customer’s account.
When a bank receives a garnishee order nisi, the first thing it should do is to notify that branch where the account is kept. This is because in most case, the order is served upon the bank at its head office.

Also, the bank customer should also be notified of the order, and should also be made to admit the debt. This will make him to know what has happened so as avoid issuing cheques that will eventually bounce.
Also, the bank account should be stopped.

A copy of the order should be attached to the customer’s ledge or a mark be made on it to indicate that the account has been barred by the court order. In conclusion, any cheque received after the order has been received should be returned with the answer “refer to drawer” or “account attached”.

No money should be released from the account until a garnishee order absolute is received unless the order attaches only part of the account, this is where setting aside garnishee order absolute comes into place. Where the order covers only a part, the amount involved should be transferred to a separate account. In the case the amount can still be allowed to operate.

Garnishee Order Absolute
This is another garnishee order example and type. Now after garnishee order nisi has been issued by the court to the bank (garnishee) the court will summon the judgement debtor to defend himself. He will be asked to show reason why his fund will not be attached to pay for his debts.

The service of garnishee order becomes apparent as it is also expected (garnishee) to appear in court to admit that it owes debt to the judgement debtor that can be attached. For example, a garnishee order is serviced when the customer’s account is in debt, the order is not effective, because the bank is not a debtor to the judgment debtor.

A garnishee order absolute therefore is an order from a court of law that a debt owed to a judgment debtor by a third party called a garnishee, be paid over a judgement creditor through the court. It is a confirmed garnishee obtained after the court has decided to grant the request of a judgement creditor that a debt owed to the judgement debtor be attached.

On the receipt of the garnishee order absolute, the bank has to pay over the credit balance outstanding on the customer’s account to the judgement creditor through the court if the order covers only a part of the account the amount attached by the order is paid over to the judgement creditor through the court.

In conclusion, in the service of garnishee order, information about an account must be accurate, however, if a garnishee order fails to give the correct designation of an account, the bank can refuse to recognise the order.