L.G. Menezes & Company Advocates v African Merchant Assurance Company Limited; Diamond Trust Bank Limited (Garnishee) [2020] eKLR Case Summary

Court
High Court of Kenya at Kisumu
Category
Civil
Judge(s)
T.W. Cherere
Judgment Date
November 12, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the L.G. Menezes & Company Advocates v African Merchant Assurance Company Limited case summary. Discover insights on garnishee orders and legal implications in this 2020 eKLR judgment.

Case Brief: L.G. Menezes & Company Advocates v African Merchant Assurance Company Limited; Diamond Trust Bank Limited (Garnishee) [2020] eKLR

1. Case Information:
- Name of the Case: L.G. Menezes & Company Advocates v. African Merchant Assurance Company Limited & Diamond Trust Bank Limited
- Case Number: Misc. Civil Application No. 172 of 2018 (Consolidated with Nos. 173 and 174 of 2018)
- Court: High Court of Kenya at Kisumu
- Date Delivered: November 12, 2020
- Category of Law: Civil
- Judge(s): T.W. Cherere
- Country: Kenya

2. Questions Presented:
The central legal issues the court must resolve include:
- Whether the funds held by the Garnishee, Diamond Trust Bank, can be attached to satisfy the judgment debt owed by the Judgment Debtor, African Merchant Assurance Company Limited.
- The validity and enforceability of the lien claimed by the Garnishee over the funds in the fixed deposit account.

3. Facts of the Case:
The Decree Holder, L.G. Menezes & Company Advocates, sought to attach funds held by the Garnishee, Diamond Trust Bank, on behalf of the Judgment Debtor, African Merchant Assurance Company Limited. The Judgment Debtor had an outstanding balance of Kshs. 168,995/- after settling a portion of the decree issued on June 27, 2019, which included amounts of Kshs. 110,988/-, Kshs. 83,708/-, and Kshs. 119,095/-. The Garnishee opposed the application, asserting that it had a lien over Kshs. 10,338,494.23 in the account due to an Insurance Premium Financing Facility extended to the Judgment Debtor.

4. Procedural History:
The Applicant filed a notice of motion on July 14, 2020, seeking to attach the funds in the fixed deposit account. The Garnishee responded with a replying affidavit on July 24, 2020. The court directed that the matter be argued through written submissions, which the Applicant's counsel submitted on September 10, 2020. The court then analyzed the submissions and evidence presented by both parties.

5. Analysis:
- Rules: The court considered Sections 1A, 3A, and 38 (c) of the Civil Procedure Act, as well as Order 23 Rules 1 (1), 2, 9, and 10 of the Civil Procedure Rules. These provisions govern garnishee proceedings and the attachment of debts.
- Case Law: The court cited *Barclays Bank of Kenya Ltd v. Kepha Nyabera & 191 Others (2013) eKLR*, which established that a judgment creditor cannot have greater rights in the debtor's assets held by the garnishee than the debtor itself. Additionally, *Odhiambo Owiti & Company Advocates v. CFC Bank Limited (2015) eKLR* was referenced, emphasizing that a judgment creditor's claim crystallizes upon issuance of a garnishee order absolute.
- Application: The court found that the Garnishee did not provide sufficient evidence to support its claim of a lien over the funds. The court concluded that even if a lien existed, the Applicant would still have priority as a judgment creditor. The court ruled that the Applicant was entitled to recover the debt from the funds held by the Garnishee.

6. Conclusion:
The court ruled in favor of the Applicant, ordering the attachment of the funds held by the Garnishee to satisfy the judgment debt of Kshs. 168,995/-, along with accrued interest and costs of the garnishee proceedings. This decision underscores the rights of judgment creditors in garnishee proceedings and clarifies the limitations of a garnishee's claims over funds held on behalf of a judgment debtor.

7. Dissent:
There were no dissenting opinions noted in the case.

8. Summary:
The High Court of Kenya ruled that the funds held by Diamond Trust Bank on behalf of African Merchant Assurance Company Limited could be attached to satisfy the outstanding judgment debt owed to L.G. Menezes & Company Advocates. The ruling reinforces the principle that a garnishee cannot assert a greater claim over funds than the judgment debtor possesses, highlighting the rights of creditors in civil proceedings.

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