[2023] KEHC 25387 (KLR)

Nelson Kaburu & Company Advocates v Mathews Kenyansa Kimaywa; Kenyan Alliance Insurance Co., Limited (Garnishee) (Miscellaneous Application E505 of 2021) [2023] KEHC 25387 (KLR) (Civ) (17 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25387 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application E505 of 2021

DAS Majanja, J

November 17, 2023

Between

Nelson Kaburu & Company Advocates

Applicant

and

Mathews Kenyansa Kimaywa

Respondent

and

Kenyan Alliance Insurance Co., Limited

Garnishee

Ruling

1. The Applicant has moved the court by the Notice of Motion dated 14. 11. 2022 made under Order 23 rules 1, 2, 3, 4, 9 and 10 of the Civil Procedure Rules seeking a garnishee order absolute compelling the Garnishee to pay the Applicant Kshs. 176,921. 00 or such other sum as may be due from the Garnishee to the Respondent/Judgment Debtor arising from Nairobi CMCC No. E136 of 2021. The application is supported by the Applicant’s affidavit and replying affidavit sworn on 14. 11. 2022 and 11. 04. 02023 respectively. It is opposed by the Garnishee through the replying affidavit of its officer, Linda Mukami, sworn on 17. 03. 2023. The parties filed written submissions supplemented by the oral arguments by their counsel.

2. According to the Applicant, the Respondent has a decree for Kshs. 1,501,050. 00 in his favour against the Garnishee as a result of the judgment in NAIROBI CMCC No. E136 of 2021. At the material time, the Garnishee was about to pay the judgment debt to the Respondent through his advocates Kojwando and Company Advocates.

3. The Garnishee does not deny the Respondent had a judgment against it which it satisfied in installments paid by the following cheques issued to the Respondent’s advocates, Kojwando and Company Advocates between November 2022 and December 2022; Cheques Nos. 171451 and 171452 for Kshs. 400,000 each, Cheque no. 171453 for Kshs. 404,583, Cheque No. 171450 for Kshs. 450,000. 00 and Cheque No. 173997 for Kshs. 175,270. 00. That when the order nisi was served on it on 24. 11. 2022, it had already released the post-dated cheques to the said advocates. It therefore urges that by the time the order nisi was served, the application had been overtaken by events and the order absolute cannot be granted. It urges that the court should not act in vain

4. The Applicant points out the order nisi was never overtaken by events as the Cheque no. 171453 dated 14. 12. 2022 for Kshs. 404,582. 00 and cheque no. 171452 dated 28. 11. 2022 for kshs. 400,000. 00 were all issued after the order nisi was issued and served on the Garnishee. The Respondent therefore argues that Kshs. 176,921. 00 was always available to satisfy the decree and that the act of paying the judgment debtor was illegal and the Garnishee liable.

5. Order 23 of the Civil Procedure Rules deals with attachment of debts commonly referred to as garnishee proceedings. The Nigerian Supreme Court in C.B.N. v Auto Import Export [2013] 2 NWLR (Pt. 1337) 80 p. 126 paras. E cited with approval in Nyandoro & Company Advocates v National Water Conservation & Pipeline Corporation; Kenya Commercial Bank Group Limited (Garnishee) [2021] eKLR gave a concise definition of garnishee proceedings as follows:Garnishee proceedings are special specie of process by which a judgment creditor may attach (or garnishee) debts due in satisfaction of the judgment debt. The debt owed by the third party to the judgment debtor, on being attached, shall ultimately be paid by him to the judgment creditor on the order of court. Thus, garnishee proceedings involve the attachment of debt due from a third party to the judgment debtor, and the use of the amount of that debt in liquidating the judgment debt. In garnishee proceedings, the third party indebted to the judgment debtor is called the garnishee. The judgment creditor, on the other hand, is referred to as the garnishor.”

6. In this case, the Garnishee does not deny that it owed the Respondent monies a result of a decree against it issued in favour of the Respondent. What is in issue is whether, by issuing the post-dated cheques to the Judgment Debtor’s advocate, the court cannot make the garnishee order nisi absolute.

7. The Garnishee admits that it was served with the garnishee order nisi on 24. 11. 2022. By this date, the Garnishee still owed the Judgment Debtor Kshs. 804,583. 00 on account of the two cheques that the Respondent had not been presented and which had not cleared when the order nisi was in force.

8. Order 22 rule 2 provides that upon service of a Garnishee order nisi upon the entity holding funds on behalf of a judgment debtor, the Garnishee order nisi binds such debts in his hands. In this case, the Kshs. 804,583. 00 could not be paid over or released to the Respondent. Order 22 rule 3 states that if the Garnishee does not dispute the debt due or claimed to be due from him to the judgment creditor or if he does not appear on the day of hearing named in an order nisi, then the court may order execution against the person and goods of the Garnishee to levy for the amount due from him or so much thereof as may be sufficient to satisfy the decree together with the costs of the Garnishee proceedings. The Court of Appeal in Odhiambo Owiti and Company Advocates v CFC Bank Limited [2015] eKLR, commented on the meaning and effect of these provisions as follows:[T]he issuance of the Garnishee order nisi had the effect of securing and binding the funds due to the judgment debtor into the hands of the respondent. By such securing and binding, we understand this to mean that the said funds were thus removed from the control of the judgment debtor into the hands and control of the respondent thus making the respondent fully accountable to whoever would be ultimately adjudged to be a rightfully entitled beneficiary to those funds at the conclusion of the Garnishee proceedings

9. From the facts I have outlined, I hold that once the order nisi was served upon the Garnishee, it is the judgment debtor’s debt due from the Garnishee that was attached meaning that the Garnishee could not pay any other amount to the Judgment Debtor’s advocates on that date. By paying the postdated cheques after 24. 11. 2022, the Garnishee violated the order nisi. It does not matter that the postdated cheques would be dishonoured. It is the debt due to the Respondent that was attached not the cheques. By proceeding to pay out or settle the debt which had been attached and secured by the order nisi, the Garnishee took the risk and consequence of its direct disobedience of the court order.

10. I reject the Garnishee’s argument that the payment is deemed to have been made at the point the postdated cheques were issued to the Respondent’s advocates on 15. 11. 2022. A debt is not settled by post-dated cheques, it is only settled by payment. The Garnishee cites Abdalla v Republic [1971] EA 657 where the court held that, “In our view the giving of a post dated cheque is not a representation that there are sufficient funds to meet the cheque. It is a representation that when the cheque is presented on the future date shown on the cheque there will be money.” This decision does not assist the Garnishee. It does in fact buttress the point that a postdated cheque is nothing more than a representation that there will be money to settle the debt in the future hence debt is still outstanding until the cheque clears. By the time the order nisi was served, the two cheques had not cleared and the Garnishee was still indebted to the Respondent. It is this debt that was attached upon service of the order nisi.

11. For the reasons I have set out, I find and hold that when the order nisi was served on the Garnishee, it was still indebted to the Judgment Debtor and could indeed satisfy the decretal sum. I therefore allow the Applicant’s application dated 14. 11. 2022 and order as follows:a.The order nisi issued on 14. 11. 2022 is made absolute and for the avoidance of doubt the Garnishee shall pay the Applicant Kshs. 176,921. 00. b.The Garnishee shall pay the costs of the application assessed at Kshs. 30,000. 00.

DATED AND DELIVERED AT NAIROBI THIS 17TH DAY OF NOVEMBER 2023. D. S. MAJANJAJUDGE