Choice Investments Ltd v Jeromnimon
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE GRIFFITHS |
| Judgment Date | 06 November 1980 |
| Judgment citation (vLex) | [1980] EWCA Civ J1106-5 |
| Date | 06 November 1980 |
| Court | Court of Appeal (Civil Division) |
and
[1980] EWCA Civ J1106-5
The Master of the Rolls (Lord Denning)
Lord Justice Brightman and
Lord Justice Griffiths
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
On Appeal From The Bloomsbury and Marylebone County Court (His Honour Judge Curtis-Raleigh)
MR. G. NEWMAN (instructed by Messrs. Coward Chance) appeared on behalf of the Appellant.
MISS D. FABER (instructed by Messrs. Michael Votsis & Co.) appeared on behalf of the Respondent.
The facts in this case are simple but they raise an important point about foreign currencies.
A gentleman, Mr. Gregory Jeromnimon, who lives in a London suburb, owed a company called Choice Investments Limited the sum of £982.16 in pounds sterling. He did not pay. So the company sued him in the Clerkenwell County Court. On the 17th January, 1980 the company recovered judgment against him for £982.16 for debt and £52.00 for costs, making in all £1,034.16. Still he did not pay. The company discovered that he had a banking account at the Midland Bank in Wigmore Street in which sums were held to his credit. So on the 28th March, 1980 the company got a garnishee order nisi against the bank by which the sums to his credit were attached to answer the judgment. It then turned out that he had three accounts at the bank with credit balances as follows:
(i) Current account, £44.45.
(ii) Sterling 7-day notice deposit, £4.68 with accrued interest of £4.27.
(iii) United States dollars 7-day notice deposit, £2,358.55, together with £166.04 accrued interest.
No difficulty arose about the two small sterling accounts. But a difficulty arises about the sum in United States dollars. Under the rules and statutes which allow attachments, only "debts" can be attached. Until recently a debt owing in foreign currency was not regarded as a "debt" which could be attached. If it was not paid, it gave rise only to an action for "damages" for breach of contract: and that could not be attached, see Richardson v. Richardson (1927) Probate 228; United Railways of Havana (1961) Appeal Cases at page 1069.
The question is as to the effect of recent decisions. It is now settled that if a sum is payable in this country in a foreign currency, the courts here can give judgment for that sum in that foreign currency. Is that sum a "debt" which is capable of being attached? In order to understand the problem, I will first explain what is meant by "attaching" a debt. It is a mode of execution which was introduced by section 61 of the Common Law Procedure Act 1854. Since repealed under the Statute Law Revision Act 1885 and replaced by Order 49, rule 1. It always applied to money held by a bank for its customer on current account, see Joachimson v. Swiss Bank Corporation (1921) 3 King's Bench at pages 121.131. It has been extended now by statute to money held by a bank on deposit account. The relevant statutory provisions are in section 38 of the Administration of Justice Act 1956 and section 143 of the County Courts Act 1959, which are too long to set out here. Those who wish can refer to them.
GARNISHEE
The word "garnishee" is derived from the Norman French. It denotes one who is required to "garnish", that is to furnish a creditor with the money to pay off a debt. A single instance will suffice. A creditor is owed £100 by a debtor. The debtor does not pay. The creditor gets judgment against him for the £100. Still the debtor does not pay. The creditor then discovers that the debtor is a customer of a bank and has £150 at his bank. The creditor can get a "garnishes" order against the bank by which the bank is required to pay into court or direct to the creditor - out of its customer's £150 - the £100 which he owes to the creditor.
There are two steps in the process. The first is agarnishee order nisi. Nisi is Norman-French. It means "unless" It is an order upon the bank to pay the £100 to the judgment creditor or into court within a stated time, unless there is some sufficient reason why the bank should not do so. Such reason may exist if the bank disputes its indebtedness to the customer for one reason or other. Or if payment to this creditor might be unfair to prefer him to other creditors - see Pritchard v. West Bros. (1969) 1 Weekly Law Reports 547; Rainbow & anr v. Moor gate Properties Ltd. (1975) 1 Weekly Law Reports 788. If no sufficient reason appears, the garnishee order is made absolute- to pay to the judgment creditor - or into court: whichever is the more appropriate. On making the payment", the bank gets a good discharge from its indebtedness to its own customer - just as if he himself directed the bank to pay it. If it is a deposit on seven days' notice, the order nisi operates as the notice.
As soon as the garnishee order nisi is served on the bank, it operates as an injunction. It prevents the bank from paying the money to its customer until the garnishee order is made absolute, or is discharged, as the case may be. It binds the debt in the hands of the garnishee - that is, creates a charge in favour of the judgment creditor, see Joachimson v. Swiss Bank Corporation (1921) 3 King's Bench at page 131 by Lord Justice Atkin. The money at the bank is then said to be "attached" - again derived from Normal-French. But the "attachment" is not an order to pay. It only freezes the sum in the hands of the bank until the order is made absolute or is discharged. It is only when the order is made absolute that the bank is liable to pay.
THE APPLICATION OF THE STATUTES
Taking the words of the statutes, it seems to me that the sum of £2,358.55 was a "sum sterling" standing to the credit of Mr. Jeromnimon in a deposit account. True it was in U. S. dollars, hut it was still a "sum" standing to his credit. It was, I think, also a "dobt", because judgment could be given for it in U. S. dollars as a debt. No one was aware of this until the law was so declared by this court and the House of Lords in the line of cases culminating in the Miliangos (1976) Appeal Cases 443. But the decision in Miliangos was, I think, retrospective. Every decision of...
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...87); in other words, the order operates to freeze the sum to be paid to the judgment debtor in the hands of the third party ( Choice Investments Ltd v Jeromnimon [1981] QB 149, 153). When a final order is made, the right to payment of the debt no longer belongs to the judgment debtor, but ......