Legal Complexities Of Third-Party Claims In Garnishee Proceedings In Nigeria

The enforcement of monetary judgments is one of the most common areas of dispute in legal practice. Even after a judgment creditor obtains a favourable decision from the court, it is not unusual to face a judgment debtor who is unwilling or unable to pay. In some cases, the debtor may deliberately hide funds or assets to avoid payment. To address this, the law provides different methods of enforcement. One of the most effective is garnishee proceedings. This process allows a judgment creditor to recover money by attaching funds that a third party owes to the judgment debtor, often through a bank.

The process itself is straightforward. The court first makes a garnishee order nisi, directing the third party to appear and explain why the money in its possession should not be used to settle the debt. If the third party does not give a good reason, the court makes the order absolute and the money is paid to the judgment creditor. However, the process becomes more complicated when a party other than the judgment debtor asserts a legal or equitable interest in the funds sought to be attached. These third-party claims raise important legal issues, particularly because the third party, i.e. the Garnishee holding the money, may be unaware of any ownership disputes. This article examines the issues that arise in such situations, particularly the difficulty of determining ownership within a process that is meant to be quick and straightforward.

Legal Framework of Garnishee Proceedings

Garnishee proceedings are one of the most effective mechanisms for the enforcement of monetary judgments under Section 83 of the Sheriffs and Civil Process Act. The procedure enables a judgment creditor to attach and recover monies belonging to a judgment debtor which are in the custody or control of a third party, most commonly a bank. The process typically commences with the issuance of a Garnishee Order Nisi directing the garnishee to appear before the court and show cause why the funds standing to the credit of the judgment debtor should not be applied towards satisfaction of the judgment debt. Where the garnishee fails to show enough cause, the court subsequently makes a Garnishee Order Absolute, directing the release of the attached funds to the judgment creditor.

In practice, garnishee proceedings have become one of the fastest and most efficient methods of debt recovery, particularly where the judgment debtor’s funds are identifiable and traceable. However, the effectiveness of the process often depends on speed and strategic timing, as judgment debtors may dissipate or transfer funds once they become aware of impending enforcement proceedings.

Nature of Third-Party Claim

Third-party claims in garnishee proceedings arise where a person other than the judgment debtor asserts a legal or equitable interest in the funds sought to be attached. The claim may relate to the whole sum or only a specified portion of the funds. In determining such claims, the court is required to balance two competing interests: the judgment creditor’s right to enforce the judgment and the need to protect the rights of third parties.

Sections 88, 89 and 90 of the Sheriffs and other Process Act (SCPA) deal specifically with a situation where a third party has an interest in an account that is subject to attachment by a judgment creditor.

Section 88 of the SCPA provides thus:

Whenever in any proceedings to obtain an attachment of a debt it is suggested by the garnishee that the debt sought to be attached belongs to some third person or that any third person has a lien or charge upon it, the court may order such third person to appear and state the nature and particulars of his claim upon such debt.

Going by the above provision, courts in Nigeria have held in a plethora of cases that, where a third party interest is disclosed in garnishee proceedings, the court has a duty to inquire into the said interest once it has been brought to its knowledge by any means or at any stage of the proceedings.¹ Under Section 89 and 90 of the SCPA, the court may bar the third party’s claim if they fail to appear, or it may direct that a trial be held to determine the exact rights and liabilities of all involved parties.

These claims often arise in different factual settings, each presenting its own legal difficulty.

A third-party claim may arise in the following situations:

1. Jointly Held Account: The most frequently encountered category of third-party claim in garnishee proceedings arises in connection with jointly held bank accounts. Where funds are held in a joint account, the law generally treats the account holders as jointly entitled to the funds, at least on the face of it. It follows, therefore, that a third party has the right to address a court on their interests in a joint account if they so choose and if the court permits them. If they are successful in convincing the court as to the legitimacy of their claims, then the court will bar the execution of judgment on that account.² The difficulty, however, lies in determining the true extent of the judgment debtor’s interest. For this reason, courts are generally cautious in dealing with joint accounts and often insist on clear evidence showing the specific share of the judgment debtor before making an order absolute. Where such clarity is lacking, the court may refuse the attachment or require the issue to be resolved by a separate proceeding, such as an interpleader proceeding.
2. Trust Relationships: A clearer, though still evidentially demanding, situation arises in the context of trust relationships. Where a judgment debtor holds funds as a trustee, he has legal title only, while the beneficial interest belongs to another person. In such circumstances, the funds cannot properly be regarded as a debt due to the judgment debtor for his personal use and therefore fall outside the scope of garnishee proceedings. However, the party laying claims to the trust must provide clear and credible evidence of its existence. In the absence of such proof, courts are likely to presume that the account holder is the true owner of the funds.
3. Secured Transactions: Another layer of complexity is introduced by secured transactions. In this context, a third party, such as a debenture holder or chargee, may claim a prior interest in the funds by virtue of a security arrangement. The key question is whether the security interest has attached to the specific funds in question and whether it has been properly perfected in accordance with the law. Where a valid and perfected security exists, it may give the secured creditor a proprietary interest that takes priority over the claims of the judgment creditor. This, in turn, limits or even eliminates the portion of the funds that can be said to be due to the judgment debtor. However, the position is not always straightforward. The court may need to determine whether the security is fixed or floating, whether it has crystallised, and whether the particular funds fall within its scope. These are complex commercial and factual issues that are not easily resolved within the summary framework of garnishee proceedings, thereby placing strain on the process.
4. Contractual Lien and Equitable Interests: Finally, claims based on contractual liens and other equitable interests present a more uncertain category. A contractual lien typically gives the holder a right to retain possession of funds until a debt is satisfied, but it does not necessarily confer ownership. As such, while it may justify the garnishee’s refusal to release the funds, it does not always negate the existence of a debt due to the judgment debtor. Equitable interests, such as constructive trusts or equitable assignments, are even more difficult to assess. They often arise from informal arrangements and depend heavily on the specific facts of each case. Determining their validity usually requires a detailed examination of the parties’ intentions and conduct, which goes beyond the limited scope of garnishee proceedings. Consequently, courts are often reluctant to make definitive findings on such claims within the garnishee process and may instead direct the parties to pursue a substantive action where the issues can be fully ventilated.

Critical Evaluation of the Issues or Challenges That May Arise in Third-Party Claims in Garnishee Proceedings

1. The Summary Nature of Garnishee Proceedings and Its Procedural Limitations: Garnishee proceedings by their nature are enforcement tools, not adjudicatory platforms for complex ownership disputes. The legal issues arising from third-party claims in garnishee proceedings are rooted in the tension between the summary nature of the procedure and the need to properly determine competing rights over the funds attached. Garnishee proceedings are designed to be quick and efficient. However, once a third party asserts an interest in the funds, the court is faced with questions that go beyond simple debt recovery. The first major difficulty is whether such disputes can be properly resolved within garnishee proceedings at all. Since the process is summary in nature, it is not designed for a full trial involving oral evidence, cross-examination, and detailed examination of competing ownership claims. This creates a practical and legal limitation because issues of ownership usually require a deeper inquiry than the procedure allows.
2. The Scope of “Debt Due or Accruing Due” A Jurisdictional Question: A related issue is the meaning of the phrase “debt due or accruing due” under a garnishee proceeding. The court can only attach a debt that is clearly owed to the judgment debtor. Where a third party claims a legal or equitable interest in the funds, the court must first determine whether the debt is truly due to the judgment debtor alone. If the funds are subject to competing interests, it becomes difficult to say that the judgment debtor has an unrestricted right to them. This raises a jurisdictional concern because the court may end up attaching funds that do not fully belong to the judgment debtor. In such cases, the basis for making a garnishee order becomes uncertain.
3. The Burden of Proof in Third-Party Claims: Another complexity relates to the burden of proof. The third party who claims an interest in the funds carries the burden of proving that interest. However, the standard of proof is not clearly defined in practice. Since garnishee proceedings are summary in nature, courts often expect strong documentary evidence. This can create difficulty where legitimate claims cannot be fully presented within the limited structure of the proceedings. On the other hand, if courts accept weak claims too easily, it may encourage abuse and frustrate judgment enforcement. This creates a constant tension between preventing fraud and protecting genuine proprietary rights.
4. The Legal Exposure of the Garnishee: The role of the garnishee, usually a bank or financial institution, adds further complexity. The garnishee is not a party to the original dispute and is often unaware of ownership issues relating to the account. Its duty is simply to comply with court orders. However, once third-party claims arise, the garnishee is placed in a difficult position. If it pays out funds in compliance with a garnishee order, it risks liability to the true owner. If it refuses to comply, it may be in contempt of court. This creates a legal dilemma that the current framework does not clearly resolve.
5. Conflict Between Legal and Equitable Ownership: There is also a deeper issue involving the difference between legal and equitable ownership. Garnishee proceedings are based on the existence of a legal debt owed to the judgment debtor. However, third-party claims often rely on equitable interests such as trusts, beneficial ownership, or contractual arrangements that may not appear on the face of the account. This creates a mismatch between the legal structure of garnishee proceedings and the nature of interests asserted by third parties.

In some cases, courts adopt a cautious approach and avoid determining complex ownership disputes within garnishee proceedings. In such situations, courts direct parties to pursue separate proceedings, i.e. an interpleader proceeding, where full evidence can be presented. This approach is based on the view that garnishee proceedings are not suitable for resolving complicated factual disputes. The nature of garnishee proceedings and whether a garnishee can claim a right over judgment debt in its custody was the central issue in Access Bank Plc v. Ikpon,³ where the court held that: –

In garnishee proceedings, the issue of lien or locus standi of a garnishee has no place at all, since that is not the arena for the garnishee to seek his right or locus standi. He is completely without the right to seek his right to be heard on whether he has a set-off, counter-claim, lien or any dispute with the judgment debtor. If he has a diverse claim, it has to be in a different arena and not that of the garnishee proceedings. He has no space in the garnishee proceedings. In garnishee proceedings, the fight is between the judgment creditor and the judgment debtor and does not admit of any other. It is usually a contest between two, the judgment creditor and the judgment debtor, and no third party can be allowed in to assist the other.

In other cases, courts adopt a more enforcement-driven approach. Here, courts proceed on the assumption that funds in a bank account belong to the judgment debtor unless clear and convincing evidence is provided to the contrary. This approach prioritises the right of the judgment creditor to enjoy the benefit of the judgment and discourages attempts to frustrate enforcement through weak or unproven claims.

The result is that judicial decisions in this area are not always consistent. Outcomes vary depending on the strength of the evidence presented and the court’s preferred approach to balancing enforcement with fairness. This lack of uniformity creates uncertainty for judgment creditors, third-party claimants, and garnishees.

Overall, the legal complexities and judicial responses in garnishee proceedings show that while the procedure is designed for efficiency, it often struggles when confronted with disputes involving competing proprietary interests. The courts are therefore required to constantly balance speed of enforcement with the need to ensure that third-party rights are not unjustly affected.

Garnishee proceedings remain a vital tool for the enforcement of monetary judgments in Nigeria. However, as this article has shown, the involvement of third-party claims introduces significant legal and procedural challenges. These claims raise difficult questions about ownership, especially within a process that is designed to be quick and straightforward. The core problem lies in the tension between efficient enforcement and the protection of third-party rights. While the law allows attachment of debts due to the judgment debtor, it becomes uncertain where competing interests exist. This has led to inconsistent judicial approaches, with courts sometimes prioritising enforcement and at other times focusing on fairness.

Overall, the current framework is not fully equipped to handle complex ownership disputes within garnishee proceedings. There is therefore a need for clearer rules, more consistent judicial application, and better protection for third parties and garnishees. Addressing these issues will improve both fairness and certainty in the enforcement of judgments in Nigeria.

Footnotes

1 Skye Bank Plc V Haruna & Ors (2014) LPELR 41078 (CA)

2 Joshua Idoku, The Right of Creditors to Attach Account Where Only One Party is Indebted <https://www.mondaq.com/nigeria/financial-services/1067034/the-right-of-creditors-to-attach-a-joint-account-where-only-one-party-is-indebted> (accessed on the 20th May 2026)

3 (2025) 18 NWLR (Pt. 2017) 249 SC