3PLR – PURIFICATION TECHNIQUES (NIG.) LTD. V. ATTORNEY GENERAL OF LAGOS STATE

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

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PURIFICATION TECHNIQUES (NIG.) LTD.

V.

ATTORNEY GENERAL OF LAGOS STATE

IN THE COURT OF APPEAL OF NIGERIA

ON TUESDAY, THE 20TH DAY OF JANUARY, 2004

CA/L/470/2001

3PLR/2002/86 (CA)

 

OTHER CITATIONS

 

BEFORE THEIR LORDSHIPS

SULEIMAN GALADIMA, JCA

PIUS OLAYIWOLA ADEREMI, JCA

ABUBAKAR ABDULKADIR JEGA, JCA

 

BETWEEN

PURIFICATION TECHNIQUES (NIG.) LTD. Appellants

 

AND

ATTORNEY GENERAL OF LAGOS STATE

1. EKO INTERNATIONAL BANK PLC
2. OCEANIC BANK INTERNATIONAL (NIG.) LTD.
3. GULF BANK OF NIGERIA PLC
4. CHARTERED BANK PLC
5. GUARANTY TRUST BANK PLC
6. FIRST BANK OF NIGERIA PLC
7. UNITED BANK FOR AFRICA PLC
8. AFRIBANK NIGERIA PLC
9. UNION BANK OF NIGERIA PLC
10. SOCIETE GENERALE BANKNIGERIA PLC
11. MAGNUM TRUST BANK PLC
12. ECOBANK NIGERIA PLC
13. SOCIETE BANCAIRE NIGERIA LTD.
14. TRANS INTERNATIONAL BANK PLC
15. HALLMARK BANK NIGERIA PLC
16. FSB INTERNATIONAL BANK PLC
17. EQUITORIAL TRUST BANK LTD.
18. DIAMOND BANK LTD.
19. BROAD BANK NIGERIA LTD.
20. TRADE BANK NIGERIA PLC
21. STANDARD TRUST BANK LTD.
22. EQUITY BANK OF NIGERIA LTD.
23. ACCESS BANK NIGERIA PLC
24. GAMJI BANK LTD.
25. STANDARD CHARTERED BANK NIGERIA LTD.
26. WEMA BANK PLC
27. CITIBANK NIGERIA LTD.
28. CITIZENS INTERNATIONAL BANK LTD.
29. FIRST ATLANTIC BANK LTD.
30. NIGERIA DEPOSIT INSURANCE CORPORATION
31. CENTRAL BANK OF NIGERIA Respondents

 

REPRESENTATION

Babajide O. Ogundipe, Esq. (with him, O. U. Akpata, Esq.) For Appellant

 

AND

Lawal Pedro, Esq., Director of Civil Litigation, Lagos State For Respondent

 

OTHER CITATIONS

Purification Tech. (Nig.) Ltd. v. A.-G., Lagos State [2004] 9 NWLR (Pt.879)665

 

MAIN ISSUES

1. PRACTICE AND PROCEDURE – APPLICATION TO SET ASIDE GARNISHEE ORDER NISI: Ground upon which a court can entertain the application of the judgment debtor to set aside a garnishee order nisi

“I am of the opinion that the only possible ground upon which the lower court could have entertained the application of the judgment debtor, and set aside the garnishee order nisi was that there had been some procedural irregularity in the proceedings of such serious nature that the order ought to be treated as a nullity. The factual basis of any such contention on the part of the appellant could only be the pendency of an application for stay of execution of the judgment. The complaint of about the breach of provisions of section 84 of the Sheriffs and Civil Process Act, Cap. 407, Laws of the Federation, 1990 can only be addressed by way of appeal.” Per GALADIMA, J.C.A (Pp. 18-19, paras. F-B)

 

2. BANKING LAW – BANKER/CUSTOMER RELATIONSHIP: The nature of the relationship between banker and customer

“The relationship of a banker to customer is contractual. It is essentially that of a debtor to a creditor, in the case of credit balances. The classic description of the contractual relationship that exists between banker and customer is aptly given by Atkin L.J. in Joachimson v. Swiss Bank Corp. (1921) 3 K.B. 110 at 127 which was in the following terms: “The bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them. The promise to repay is to repay at the branch of the bank where the account is kept, and during banking hours. It includes a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch, and as such written orders may be outstanding in the ordinary course of business for two or three days, it is a term of the contract that the bank will not cease to do business with the customer except upon reasonable notice. The customer on his part undertakes to exercise reasonable care in executing his written orders so as not to mislead the bank or to facilitate forgery. I think it is necessarily a term of such a contract that the bank is not liable to pay the customer the full amount of his balance until he demands payment from the bank at the branch at which the current account is kept.” Per GALADIMA, J.C.A (Pp. 23-24, paras. F-F)

 

3. BANKING LAW – BANKER/CUSTOMER RELATIONSHIP: Whether a customer has custody or control of monies standing to his credit in an account with a banker

“The decisions in Joachimson v. Swiss Bank Corp. (supra), as well as that in the leading case of Foey v. Hill (1882) 2 HL Cas. 28, have been cited and followed by the apex court of this country in Yesufu v. A.C.B. (1981) 1 SC 74, (1981) 12 NSCC 36 and Balogun v. N.B.N. (1978) 3 SC 155, (1978) 12 NSCC 36. Therefore, given the nature of the relationship between banker and customer and of the contract that exists between them. The customer has neither the ‘custody’ nor ‘the control’ of monies standing in his credit in an account with the banker. What the customer possesses is a contractual right to demand repayment of such monies. In the case of Hirschhorn v. Evans (1938) 3 All E.R. 491 cited with approval by the Supreme Court in Yusufu v. A.C.B. (supra) Mackinnon U. had this to say: “There is, of course never any question of property in the credit balance of a bank account. The relation of banker and customer is simply that of debtor and creditor.” In my respectful view, I can say that monies in the hands of garnishee banker are not ‘in custody or under the control’ of the judgment debtor customer. Such monies remain the property in the custody and control of the banker; and payable to the judgment debtor until a demand is made. Hence, Order VIII rule 2(b) of the Judgments (Enforcement) Rules takes care of this by providing that ‘garnishee proceedings may be taken where the debt is not yet payable in any court in which the judgment debtor could have sued the garnishee as aforesaid if the debt had been immediately payable.” Per GALADIMA, J.C.A (Pp. 24-25, paras. F-G)

 

4. PRACTICE AND PROCEDURE – COURT – COMPETENCE OF COURT: Whether a court has legal competence to reverse or set aside its previous order or judgment

“As a general principle of law, a court has no legal competence to reverse itself or set aside its previous order or judgment except where such order or judgment is a nullity.” Per GALADIMA, J.C.A (P. 16, paras. F-G)

 

5. PRACTICE AND PROCEDURE – JUDGMENT AND ORDER – COURT ORDER: When can a court order be regarded as a nullity

“A court order can be regarded as a nullity where, for instance, the court has acted without jurisdiction or the judgment or order was obtained by fraud or where there has been non-compliance with a fundamental procedural rule and this has led to breach of fundamental right to fair hearing. See Okafor v. Attorney-General, Anambra State (1991) 6 NWLR (Pt. 200) 659; Sanusi v. Ayoola (1992) 9 NWLR (Pt.265) 275. In the instant case, the respondent has contended that as at 18/1/2001 when the lower court made the order of garnishee nisi against it for the sum of US$166,353,090.19, it lacked the jurisdiction to make such order because there was an application for stay of execution of the judgment filed on 12/1/2001 and the consent of the State Attorney-General was not obtained, contrary to the provision of sections 83 and 84 of the Sheriffs and Civil Process Act. And therefore that the learned trial Judge was right to have set aside the garnishee order nisi.” Per GALADIMA, J.C.A (P. 17, paras. A-E)

 

6. PRACTICE AND PROCEDURE – JUDGMENT AND ORDER – EXECUTION/ENFORCEMENT OF JUDGMENT: Distinction between execution of judgments and other methods of enforcing judgments, such as garnishee proceedings

“There is clear distinction between execution of judgments and other methods of enforcing judgments, such as garnishee proceedings. The distinction is brought out by the definition of ‘writ of execution’ in section 19 of the Sheriffs and Civil Process Act, Cap. 407, Laws of Federation, 1990. Writ of execution includes writ of attachment and sale, writ of delivery, writ of possession and writ of sequestration. It excludes a garnishee proceeding. The distinction is further made clear by the learned authors of Atkin’s Court Forms Volume 19, 2nd edition paragraph 21 on page 47 thus: “Garnishee proceedings or attachment of debts is a method auxiliary to that of execution for the enforcement of a judgment or order for the payment of money which is not for payment of money into court enabling the judgment creditor to attach money due to the judgment debtor from a third person called the garnishee, who must be within jurisdiction.” In the respondent’s brief reference is made to Order VIII rule 7(1) of the Judgments (Enforcement) Rules. The rule demonstrates the clear difference and distinction between the two modes of enforcement. This rule clearly provides for garnishee proceedings. Rule 7 of the order makes specific provisions for writs of execution to issue against the garnishee. It makes it clear that in the scheme of enforcement of judgments established under the Judgments (Enforcement) Rules of the Sheriffs and Civil Process Act, enforcement by execution is not the same thing as enforcement by garnishee proceedings. Where that to be the position, then there would be no need for express provision that execution could issue against garnishee. If the submission of the learned counsel for the respondent were correct, the provision enabling execution to issue against a garnishee would be superfluous. It means that once a garnishee order is made absolute then execution would follow automatically, if the respondent were correct. The provision therefore not being superfluous, there is need for enforcement by writ of execution against the garnishee. Execution of a judgment entails the seizure and sale of chattels of the judgment debtor under warrant of court. This is different from attachment of debt owed to a judgment debtor by a third party, who is indebted to the judgment debtor and not proceedings against the judgment debtor directly.” Per GALADIMA, J.C.A (Pp. 21-22, paras. A-E)

 

7. PRACTICE AND PROCEDURE – COURT – JURISDICTION: Whether a court has inherent jurisdiction to set aside its own order, order of garnishee nisi, simply because a judgment creditor has the knowledge of pending application to stay execution of the judgment, yet proceeded to execute the judgment

“I must say that the basis for the exercise by the court of its inherent jurisdiction to set aside its own order in the circumstances of this case, is that the appellant has with the knowledge the pendency of the respondent’s application to stay execution of judgment, yet proceeded to execute the judgment. It is clear that the basis for the exercise of the lower court’s jurisdiction is the fact of the knowledge on the part of the respondent. It is my respectful view that in this case, there was no evidence, other than of the fact that notice of the pending application had been served on the office of the judgment creditor’s counsel. Curiously enough, the lower court was not aware of the pending application. In I.B.W.A. Ltd. v. Pavex Int. Co. (Nig.) Ltd. (2000) 7 NWLR (Pt. 663) p. 105, a case cited by the learned counsel for the appellant, the Supreme Court in a unanimous decision upheld the decision of the Court of Appeal that in a similar circumstances such as in the instant case, that there had been no abuse of court process and therefore, there was no basis for the exercise of the lower court inherent jurisdiction to set aside the execution that had taken place in that case. It is my respectful view that the learned trial Judge lacked the jurisdiction and power to set aside the garnishee order nisi previously made on 18/1/2001.” Per GALADIMA, J.C.A (P. 20, paras. A-F)

 

8. PRACTICE AND PROCEDURE – JUDGMENT AND ORDER – SETTING ASIDE OF COURT ORDER: Instances where a court will be competent to set aside or reverse itself or set aside its previous order or judgment

“With due respect to the learned trial judge, upon the evidence before him, I do not think he has jurisdiction to set aside the garnishee order nisi. The general principle of law I have earlier set out above as to when a court has legal competence to reverse itself or set aside its previous order or judgment finds support in the statement of learned authors of Volume 26 of the 4th edition of Halsbury’s Laws of England at paragraph 556 on page 279 thus: “As a general rule, except by way of appeal, no court, Judge or master has power to rehear, review, alter or vary any judgment or order after it has been entered either in an application made in the original action or matter or in a fresh action brought to review the judgment or order. The object of the rule is to bring litigation to finality, but it is subject to a number of exceptions. For example, a clerical error or an error arising from an accidental slip or omission may be corrected under rules of court or the court’s inherent jurisdiction. The court has inherent jurisdiction to vary or clarify an order so as to carry out the court’s meaning or make the language plain, or to amend it where a party has been wrongly named or described unless this would change the substance of the judgment. The court will treat as a nullity and set aside, of its own motion if necessary, a judgment entered against a person who was in fact dead or a non-existent company or, in certain circumstances, a judgment in default, or a consent judgment. Where there has been some procedural irregularity in the proceedings leading up to the judgment or order which is so serious that the judgment or order ought to be treated as a nullity, the court will set it aside.” Per GALADIMA, J.C.A (Pp. 17-18, paras. E-F)

 

GALADIMA, J.C.A. (Delivering the Leading Judgment): The appeal made herein by the judgment creditor is against the ruling of the Lagos State High Court delivered by Ade-Alabi (J) on 31st day of January, 2001, wherein a garnishee order nisi made on the 18th of January, 2001 was set aside upon an application made by the judgment debtor, the Lagos State Government. The garnishee order nisi was sought by the said judgment creditor as part of efforts to enforce the judgment it had obtained in this matter on the 2nd June, 1999 in suit No. LD/835/99 in which the Lagos State Government was adjudged liable to pay the judgment creditor the sum of US$166,353,090.19.

By motion on notice dated 26/1/2001 and heard by the lower court on 31/1/2001, the Lagos State Government sought to set aside the order nisi. After hearing detailed argument from respective counsel for the parties, the learned trial Judge in his ruling set aside the garnishee order nisi. Being dissatisfied with the decision, the judgment creditor has appealed therefrom to this court. The notice of appeal filed on 1/2/2001 carried two grounds of appeal. Distilled from the said two grounds for determination of this court are these two issues set out in the appellant’s brief of argument in the following terms:

“1(a) Did the learned Judge of the High Court, upon the evidence before him possess the jurisdiction and power to set aside the garnishee order nisi?

(b)     What effect, if any, does the fact that a judgment debtor has sought to stay the execution of a judgment have upon the judgment creditors right under the Sheriffs and Civil Process Act, Cap. 407, Laws of Federation of Nigeria, 1990, to seek a garnishee order?

2. What is the true nature of monies held by a judgment debtor in a bank, and does the judgment debtor have the ‘custody’ or the ‘control’ of such monies, within the meaning of section 84 (1) of the Sheriffs and Civil Process Act?”

For their part, the respondent also identified two issues contained in their brief of argument as follows:

“(i)     Whether the learned trial Judge has the power and was right to have set aside the garnishee order nisi made on the 18th of January, 2001?.

(ii)     Whether the monies held by a State Government/judgment debtor in a bank is in custody or under the control of a public officer and therefore subject to the provisions of S.84 of the Sheriffs and Civil Process Act, Cap. 407, Laws of Federation, 1990.”

After a careful study of the issues formulated by the parties, I find that issues Nos. 1 (a) and (b) on the appellant’s brief can be subsumed into issue No. 1 on the respondent’s brief of argument whilst issue No.2 on the appellant’s brief is substantially the same as issue No.2 formulated by the respondent in their brief. It is my considered view that the two issues formulated by the respondent will adequately determine this appeal.

On 3/11/2003, this appeal came before us for argument. Mr. B.O. Ogundipe, leading Mrs. O.U. Akpata adopted the brief of the appellant filed on 15/7/2002 and the reply brief filed on 11/11/2002.

On issue No.1, learned counsel for the appellant’s counsel submitted that the learned trial Judge lacked jurisdiction and power to set aside the garnishee order nisi previously made on January 18th, 2001. It is also contended that given the distinction that exists between execution and garnishee proceedings for the enforcement of a judgment, the existence of an order (or of an application seeking an order) staying execution of a judgment does not preclude a judgment creditor from seeking to use some other legal means of enforcing the judgment. It is also further submitted that the monies held by a garnishee banker are neither in the custody nor under the control of the judgment debtor. Consequently, the provisions of section 84(1) of the Sheriffs and Civil Process Act do not apply to the garnishee bankers. Mr. Lawal Pedro, Director of Civil Litigation, Lagos State Ministry of Justice, adopted the brief of the respondent filed on 1/11/2002. He submitted that the appeal lacks any merit and should be dismissed on the grounds that the learned trial Judge has the power and was right to have set aside the garnishee order nisi made on 18/1/2001 being a nullity. It was also further submitted that monies held by a State Government judgment debtor in a bank is in custody or under the control of a public officer and therefore subject to the provisions of section 84 of the Sheriffs and Civil Process Act which requires the consent of the Attorney-General before they can be attached in satisfaction of a judgment debt.

I shall now consider this appeal by taking the two issues separately. The first issue is whether the learned trial Judge has the power and was right to have set aside the garnishee order nisi made on the 18th of January, 2001. As a general principle of law, a court has no legal competence to reverse itself or set aside its previous order or judgment except where such order or judgment is a nullity.

A court order can be regarded as a nullity where, for instance, the court has acted without jurisdiction or the judgment or order was obtained by fraud or where there has been non-compliance with a fundamental procedural rule and this has led to breach of fundamental right to fair hearing. See Okafor v. Attorney-General, Anambra State (1991) 6 NWLR (Pt. 200) 659; Sanusi v. Ayoola (1992) 9 NWLR (Pt.265) 275. In the instant case, the respondent has contended that as at 18/1/2001 when the lower court made the order of garnishee nisi against it for the sum of US$166,353,090.19, it lacked the jurisdiction to make such order because there was an application for stay of execution of the judgment filed on 12/1/2001 and the consent of the State Attorney-General was not obtained, contrary to the provision of sections 83 and 84 of the Sheriffs and Civil Process Act. And therefore that the learned trial Judge was right to have set aside the garnishee order nisi.

With due respect to the learned trial judge, upon the evidence before him, I do not think he has jurisdiction to set aside the garnishee order nisi. The general principle of law I have earlier set out above as to when a court has legal competence to reverse itself or set aside its previous order or judgment finds support in the statement of learned authors of Volume 26 of the 4th edition of Halsbury’s Laws of England at paragraph 556 on page 279 thus:

“As a general rule, except by way of appeal, no court, Judge or master has power to rehear, review, alter or vary any judgment or order after it has been entered either in an application made in the original action or matter or in a fresh action brought to review the judgment or order. The object of the rule is to bring litigation to finality, but it is subject to a number of exceptions. For example, a clerical error or an error arising from an accidental slip or omission may be corrected under rules of court or the court’s inherent jurisdiction. The court has inherent jurisdiction to vary or clarify an order so as to carry out the court’s meaning or make the language plain, or to amend it where a party has been wrongly named or described unless this would change the substance of the judgment. The court will treat as a nullity and set aside, of its own motion if necessary, a judgment entered against a person who was in fact dead or a non-existent company or, in certain circumstances, a judgment in default, or a consent judgment. Where there has been some procedural irregularity in the proceedings leading up to the judgment or order which is so serious that the judgment or order ought to be treated as a nullity, the court will set it aside.”

 

I am of the opinion that the only possible ground upon which the lower court could have entertained the application of the judgment debtor, and set aside the garnishee order nisi was that there had been some procedural irregularity in the proceedings of such serious nature that the order ought to be treated as a nullity. The factual basis of any such contention on the part of the appellant could only be the pendency of an application for stay of execution of the judgment. The complaint of about the breach of provisions of section 84 of the Sheriffs and Civil Process Act, Cap. 407, Laws of the Federation, 1990 can only be addressed by way of appeal.

Could it be said that upon the material before the learned trial Judge there had been some procedural irregularity so serious that the order of garnishee nisi ought to be treated as a nullity and be set aside? It has been observed that the premise upon which the judgment debtor approached the court for an order setting aside the garnishee order nisi was two-fold: Firstly, it was contended that an application for stay of execution of the judgment of the lower court was pending at the time the garnishee order nisi was granted. This being so, and based on a number of reported cases starting with the classicus case of Vaswani Trading Co. v. Savalakh & Company (1972) 12 SC 77; the judgment creditor ought not to have proceeded to seek and obtain the garnishee order nisi with the express knowledge of the pendency of the application for stay of execution. Secondly, that under the provisions of section 84(1) of the Sheriffs and Civil Process Act, monies in accounts in the name of the Lagos State Government were under the control of the Accountant-General of Lagos State, a public officer and therefore such monies cannot be attached under a garnishee.

I must say that the basis for the exercise by the court of its inherent jurisdiction to set aside its own order in the circumstances of this case, is that the appellant has with the knowledge the pendency of the respondent’s application to stay execution of judgment, yet proceeded to execute the judgment. It is clear that the basis for the exercise of the lower court’s jurisdiction is the fact of the knowledge on the part of the respondent. It is my respectful view that in this case, there was no evidence, other than of the fact that notice of the pending application had been served on the office of the judgment creditor’s counsel. Curiously enough, the lower court was not aware of the pending application. In I.B.W.A. Ltd. v. Pavex Int. Co. (Nig.) Ltd. (2000) 7 NWLR (Pt. 663) p. 105, a case cited by the learned counsel for the appellant, the Supreme Court in a unanimous decision upheld the decision of the Court of Appeal that in a similar circumstances such as in the instant case, that there had been no abuse of court process and therefore, there was no basis for the exercise of the lower court inherent jurisdiction to set aside the execution that had taken place in that case.
It is my respectful view that the learned trial Judge lacked the jurisdiction and power to set aside the garnishee order nisi previously made on 18/1/2001.
Again, given the distinction that exists between execution and garnishee proceedings for the enforcement of a judgment, I do not think the existence of an application seeking for an order staying execution of a judgment does preclude a judgment creditor from seeking to use some other legal method to enforce judgment.

There is clear distinction between execution of judgments and other methods of enforcing judgments, such as garnishee proceedings. The distinction is brought out by the definition of ‘writ of execution’ in section 19 of the Sheriffs and Civil Process Act, Cap. 407, Laws of Federation, 1990. Writ of execution includes writ of attachment and sale, writ of delivery, writ of possession and writ of sequestration. It excludes a garnishee proceeding.

The distinction is further made clear by the learned authors of Atkin’s Court Forms Volume 19, 2nd edition paragraph 21 on page 47 thus:

“Garnishee proceedings or attachment of debts is a method auxiliary to that of execution for the enforcement of a judgment or order for the payment of money which is not for payment of money into court enabling the judgment creditor to attach money due to the judgment debtor from a third person called the garnishee, who must be within jurisdiction.”

In the respondent’s brief reference is made to Order VIII rule 7(1) of the Judgments (Enforcement) Rules. The rule demonstrates the clear difference and distinction between the two modes of enforcement. This rule clearly provides for garnishee proceedings.

Rule 7 of the order makes specific provisions for writs of execution to issue against the garnishee. It makes it clear that in the scheme of enforcement of judgments established under the Judgments (Enforcement) Rules of the Sheriffs and Civil Process Act, enforcement by execution is not the same thing as enforcement by garnishee proceedings. Where that to be the position, then there would be no need for express provision that execution could issue against garnishee. If the submission of the learned counsel for the respondent were correct, the provision enabling execution to issue against a garnishee would be superfluous. It means that once a garnishee order is made absolute then execution would follow automatically, if the respondent were correct. The provision therefore not being superfluous, there is need for enforcement by writ of execution against the garnishee. Execution of a judgment entails the seizure and sale of chattels of the judgment debtor under warrant of court. This is different from attachment of debt owed to a judgment debtor by a third party, who is indebted to the judgment debtor and not proceedings against the judgment debtor directly. It is my view therefore that the arguments proffered by the learned counsel for the respondent on this issue lack merit.

The second issue is whether monies held by a State Government/judgment debtor in a bank is in custody or under the control of a public officer and therefore subject to the provisions of S.84 of the Sheriffs and Civil Process Act, Cap. 407, Laws of Federation, 1990.

In his ruling on the motion for stay of execution, learned trial Judge held that the monies in the hands of the garnishees were ‘in the custody or under the control’ of the Lagos State Government through the Accountant-General of the State, who is the, learned counsel has submitted that before a party can be entitled to attach by garnishee proceeding money of the Government in any bank, the provision of section 84 of the Sheriffs and Civil Process Act must be complied with because such money is part of public funds of the State under the control of public officer in the State. Reference was further made to section 120 of the 1999 Constitution of the Federation by the learned counsel for the appellant who then submitted that only the Accountant-General of the State being a signatory to government bank account could have power to issue cheques drawn on any public fund of the State kept with a commercial bank on such authorization or approval.

I must say, with due respect to the learned counsel for the appellant, that he has made a simplistic approach to the issue at stake by submitting that monies held in bank accounts in the name of Lagos State Government are ‘in the custody or under the control of a public officer’ or are otherwise ‘in Custodia Legis’. There is absolutely no basis for treating government bank accounts any differently from bank accounts of every other juristic personality or customers. The relationship of a banker to customer is contractual. It is essentially that of a debtor to a creditor, in the case of credit balances. The classic description of the contractual relationship that exists between banker and customer is aptly given by Atkin L.J. in Joachimson v. Swiss Bank Corp. (1921) 3 K.B. 110 at 127 which was in the following terms:

“The bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them. The promise to repay is to repay at the branch of the bank where the account is kept, and during banking hours. It includes a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch, and as such written orders may be outstanding in the ordinary course of business for two or three days, it is a term of the contract that the bank will not cease to do business with the customer except upon reasonable notice. The customer on his part undertakes to exercise reasonable care in executing his written orders so as not to mislead the bank or to facilitate forgery. I think it is necessarily a term of such a contract that the bank is not liable to pay the customer the full amount of his balance until he demands payment from the bank at the branch at which the current account is kept.”

 

The decisions in Joachimson v. Swiss Bank Corp. (supra), as well as that in the leading case of Foey v. Hill (1882) 2 HL Cas. 28, have been cited and followed by the apex court of this country in Yesufu v. A.C.B. (1981) 1 SC 74, (1981) 12 NSCC 36 and Balogun v. N.B.N. (1978) 3 SC 155, (1978) 12 NSCC 36. Therefore, given the nature of the relationship between banker and customer and of the contract that exists between them. The customer has neither the ‘custody’ nor ‘the control’ of monies standing in his credit in an account with the banker. What the customer possesses is a contractual right to demand repayment of such monies. In the case of Hirschhorn v. Evans (1938) 3 All E.R. 491 cited with approval by the Supreme Court in Yusufu v. A.C.B. (supra) Mackinnon U. had this to say:

“There is, of course never any question of property in the credit balance of a bank account. The relation of banker and customer is simply that of debtor and creditor.”

In my respectful view, I can say that monies in the hands of garnishee banker are not ‘in custody or under the control’ of the judgment debtor customer. Such monies remain the property in the custody and control of the banker; and payable to the judgment debtor until a demand is made. Hence, Order VIII rule 2(b) of the Judgments (Enforcement) Rules takes care of this by providing that ‘garnishee proceedings may be taken where the debt is not yet payable in any court in which the judgment debtor could have sued the garnishee as aforesaid if the debt had been immediately payable.”

In conclusion, I find merit in this appeal. It is allowed. The decision of Adelabi (J) contained in the ruling delivered on 31/1/2001 is hereby set aside. Consequently, I make an order dismissing the respondent’s application dated 26/1/2001. I award no costs.

ADEREMI, J.C.A.: I agree.

JEGA, J.C.A.: I agree.

Appeal allowed.