When a party receives a judgment in its favour, it will likely take steps to enforce the judgment if the other party fails to comply with its terms. The Sheriffs and Civil Processes Act(1) provides for the enforcement of judgments and orders. Under the rules made pursuant to the act,(2) a monetary judgment can be enforced by:
However, a key feature of post-judgment proceedings is the requirement for a judgment debtor that has appealed a judgment to file an application for a stay of execution to stop the enforcement and execution of the judgment pending the appeal.(6) While the filing or granting of a motion for a stay of execution will stop the enforcement of a judgment by writ of execution, some judicial authorities(7) have ruled that a motion or order for a stay of execution does not stop garnishee proceedings to attach funds belonging to the judgment debtor in a bank or held by third parties. In Nigerian Breweries Plc v Dumuje,(8) the Court of Appeal considered and departed from its earlier decisions on this matter.
Dumuje sued Nigerian Breweries and two other persons jointly and severally for damages after drinking a bottle of Maltina that contained a dead cockroach.(9) The drink had been manufactured by Nigerian Breweries and caused Dumuje to suffer several ailments. The trial court entered a judgment in default of appearance and pleadings against Nigerian Breweries for N2,006,000. An application to set aside the default judgment was dismissed, which Nigerian Breweries appealed. Nigerian Breweries also filed a stay of execution of the order refusing to set aside the default judgment pending determination of the appeal. Meanwhile, Dumuje commenced garnishee proceedings against Nigerian Breweries and Zenith Bank, where Nigerian Breweries had accounts, to attach Nigerian Breweries' funds in the bank to satisfy the judgment debt. The court made an order nisi ordering the bank to appear before it and show cause, and subsequently made an order absolute against the bank, which Dumuje and the bank appealed.
Among the issues that the Court of Appeal considered was whether the existence of an application for a stay of execution prevents a judgment creditor from seeking to use garnishee proceedings to enforce the judgment. On this point, Nigerian Breweries' counsel argued that a garnishee order absolute made after the filing of a motion for a stay of execution imposes a fait accompli on the appeal court and renders its decision ineffective if the appeal succeeds. However, Dumuje's counsel argued that an application for a stay of execution does not preclude a judgment creditor from seeking to use garnishee proceedings to enforce the judgment on the ground that garnishee proceedings are a special type of debt enforcement and cannot be stopped by a motion for a stay of execution.
The Court of Appeal unanimously held that garnishee proceedings cannot continue when a motion for a stay of execution has been filed by a judgment debtor. The court held that:
- the distinction drawn between the terms 'execution' and 'enforcement' in its earlier decisions(10) had led to the incorrect belief that garnishee proceedings can continue while a motion for a stay of proceedings is pending; and
- the distinction was unnecessary because both 'enforcement' and 'execution' are means of giving effect to a judgment.
The court held that it would be absurd to allow garnishee proceedings to proceed as a means of execution when a motion for a stay of proceedings is pending, as such will of necessity would impose a fait accompli on a superior court deciding the appeal – a situation that has long been disapproved of.
The Court of Appeal further stated that the pendency of an order for a stay of execution or a proceeding thereof is a special circumstance, in which the attached debt can be held in safe custody while the controversy between the parties continues. Therefore, an order absolute that the money be paid to the judgment creditor cannot be made in garnishee proceedings when it has been shown why such funds should be kept in abeyance until the merit of the appeal or application for a stay of execution has been determined. Further, the court stated that a judgment debtor is a necessary party in garnishee proceedings and, as such, can apply to the court before which the garnishee proceedings are pending to have them vacated on account of the pendency of the motion for a stay of execution. The Court of Appeal also stated that the reliance on its decision in Purification Techniques v AG Lagos State to grant the order nisi absolute was done without a proper evaluation of the act and the facts.
This judgment is groundbreaking for a number of reasons. First, it involved an in-depth consideration and review of all previous Court of Appeal decisions on the issues being considered. Second, the Court of Appeal invited amici curiae(11) to file briefs and submit arguments that assisted the court in making its decision, which was a departure from its former position in earlier cases, including Purification Techniques v AG Lagos State and Denton-West v Muoma. Third, and most notably, is the fact that – in reaching its decision – the Court of Appeal thoroughly reviewed all of its earlier decisions on the matter and concluded that they had been reached per incuriam (ie, through lack of care) and, as a result, departed from these decisions. To this extent, the earlier decisions can no longer be considered an authority on this matter. Instead, Nigerian Breweries is the single authority, as it involved a comprehensive review of existing case law.
The far-reaching effect of this judgment is that a party that has filed an appeal and a motion for a stay of execution need not worry that the judgment creditor could obtain a garnishee order to enforce the judgment when such garnishee proceedings should be in abeyance until the motion for a stay of execution has been heard and determined. It therefore aligns with the wording and intent of the law that garnishee proceedings should stop a motion for a stay of execution to ensure that the status quo is maintained pending the appeal and, as such, the eventual decision of the appellate court is not rendered ineffective.
All of the decisions considered in this case were Court of Appeal decisions; the Supreme Court is yet to make a decision on the issue.
For further information on this topic please contact Funke Agbor or Olugbenga Bello at ACAS - LAW by telephone (+234 1 462 2094) or email ([email protected] or [email protected]). The ACAS - LAW website can be accessed at www.acas-law.com.
(1) CAP S6, Vol 14, Laws of the Federation of Nigeria.
(2) The Judgments (Enforcement) Rules of Court is a subsidiary law made pursuant to the Sheriffs and Civil Processes Act that provides ancillary rules to guide the enforcement of judgments.
(3) By this method, immovable property and chattels of the judgment debtor can be attached by a writ and court order to sell the property and chattels for the purpose of recovering the judgment debt.
(4) Garnishee proceedings are the most common mode of enforcing monetary judgments, where the judgment creditor (as garnishor) applies to the court to summon third parties (garnishees) that have money standing to the credit of the judgment debtor to disclose such amounts in their custody for the purpose of satisfying the judgment debt.
(5) This is a committal to prison of a capable but unwilling judgment debtor for failure to pay the judgment debt.
(6) The filing of an appeal in itself does not operate as a stay of execution. Thus, the essence of a stay of execution is to maintain the status quo, so that the appellate court decision is not rendered ineffective at the end of the appeal. The grant of an order of a stay of execution is discretionary and decided on in light of the unique facts presented before the court.
(7) In Purification Techniques Nigeria Limited v Ag-Lagos State & Ors ((2004) 9 NWLR (PT 879) 665) and Hon Justice Sotonye Denton-West v Chief Chuks Muoma SAN ((2008) 6 NWLR (PT 1083) 418) the Court of Appeal decided that the existence of an application for a stay of execution precludes the judgment creditor from enforcing the judgment by other methods.
(8) Nigerian Breweries Plc and Another v Dumuje, (2016), 8 NWLR (Pt 1515) 536.
(9) (2016) 8 NWLR (Pt 1515) 536.
(10) Hon Justice Sotonye Denton-West v Chief Chuks Muoma SAN (supra).
(11) Amici curiae are lawyers (often senior and experienced litigators or law teachers) that are invited by an appellate court to assist it in reaching a decision on an appeal that involves complex or recondite matters or constitutional matters of national importance. They are expected to file a brief and render their opinion on all of the issues raised in the appeal.