The Present Bank Account Provisions
1. The provisions in the Supreme Court Rules, District Court Act 1973 and the Local Courts (Civil Claims) Act, 1970 which permit the attachment of an amount standing to the credit of a judgment debtor in a bank account should be repealed. The existing provisions should be replaced by a single provision (the new account provision) which applies to all bank accounts and which specifies, in the manner of the existing provision applying to deposit accounts, the types of conditions applicable to accounts which are to be disregarded for the purpose of attachment. The conditions to be disregarded under the new account provision should include a condition that a demand of payment is to be made and a condition as to the manner in which or place at which the demand is to be made.
2. The new account provision should. in its application to banks, be limited to apply to
(a) a bank within the meaning of the Banking Act 1959 (Cth); and
(b) a person who carries on State banking within the meaning of section 51(xiii) of the Constitution of the Commonwealth.
3. The provisions for attaching moneys in accounts should make it clear that where withdrawal of an amount attached is subject to a period of notice, the garnishee is not required to make payment in compliance with the garnishee order until the notice period has expired.
4. The conditions applicable to accounts which are to be disregarded for the purpose of attachment should include any condition prescribed by regulation.
5. The new account provision should not apply to any account exempted by regulation.
Principal Recommendations for Reform
6. The new account provision should not apply to withdrawable shares in co-operative housing societies.
7. The new account provision should apply to withdrawable share accounts with Starr-Bowkett building societies.
8. The new account provision should apply to deposit and withdrawable share accounts with permanent building societies [ie building societies registered under the Building and Co-operative Societies Act, 1901, non-terminating building societies registered under the Co-operation Act, 1923 and building societies registered under the Permanent Building Societies Act, 1967].
9. The new account provision should apply to withdrawable share accounts with credit unions.
10. The new account provision should apply to deposit accounts with credit unions.
Consequential Recommendations for Reform
11. Except in the case of an account with a Starr-Bowkett building society, a condition that moneys or shares shall not be withdrawn for a specified period should be included as a condition to be disregarded for the purpose of determining whether an amount in an account is attachable.
12. When an amount in an account is attached. the garnishee order should be deemed to operate as a notice of withdrawal or demand of payment under the contract in respect of the account which the garnishee should be deemed to have received
(a) on the date of service of the order, or
(b) where the judgment debtor is not entitled under the contract to give notice of withdrawal or demand payment on that date, on the date on which the judgment debtor would have become entitled to do so.
A deemed notice of withdrawal or demand of payment should be irrevocable while the garnishee order remains in force.
13. The conditions applicable to accounts which are to be disregarded for the purpose of attachment should include a condition that any withdrawal from an account is to be for a minimum amount and a condition that a minimum balance is to be retained in the account.
14. The provision in the District Court Act, 1973 and the Local Courts (Civil Claims) Act 1970 under which a garnishee bank may apply for an order to reduce the attached debt in cases of unavoidable payment after attachment should be extended to apply to building societies and credit unions. This recommendation will only be necessary if our recommendation to extend the protection of this provision to all garnishees (Recommendation 29) is not adopted.
15. The provisions which apply to deposit accounts in banks which are subject to a condition that a “deposit book” must be produced before money is withdrawn should be extended to apply to deposit and withdrawable share accounts with building societies and credit unions which are subject to the same condition and the term “passbook” should be substituted for the term deposit book.
16. So much of the amount standing to the credit of a judgment debtor in a withdrawable share account in a building society or credit union as is the minimum amount that must be maintained in the account in order that the judgment debtor retains membership of the building society or credit union should not be attachable.
17. Any charge upon an amount standing to the credit of a judgment debtor in an account in a building society or credit union, being a charge that is created by an Act under which the building society or credit union is registered or regulated or by the rules of the building society or credit union, should be disregarded for the purposes of a garnishee order, but the building society or credit union should continue to have its right to set off or appropriate all or any part of that amount.
18. In the case of a District Court or Local Court garnishee order that is not expressed to be for the attachment of any wage or salary, the garnishee should be required to make payment in accordance with the order
(a) within 21 days after service of the order, or
(b) in the case of any attached debt which is due for payment to the judgment debtor after the 21 day period, not later than the date on which the debt is due for payment.
19. In the case of a District Court or Local Court garnishee order expressed to be for the attachment of any wage or salary. the garnishee should be required to make payment in accordance with the order within 14 days after the wage or salary is due for payment to the judgment debtor.
20. Where an attached debt is due for payment to the judgment debtor after the initial 21 day compliance period, the garnishee should be required to serve on the judgment creditor, before the 21 day period expires, a notice which sets out
(a) the date on which the attached debt is, or is likely to be, due; and
(b) where the amount of the attached debt is less than the unpaid amount of the judgment debt specified in the garnishee order, the amount of the attached debt.
21. It should be an offence for a person to make a false statement in a notice, knowing it to be false.
22. Under the District Court and Local Courts (Civil Claims) Rules a garnishee should be required to serve a notice at an address for service to be stated in the garnishee order, the form of garnishee order should provide for the judgment creditor to insert an address for service: and service by post and use of the document exchange system should be permitted. The form of affidavit which must be filed in the District Court when a judgment creditor applies for a summons against a garnishee should be amended to take account of the notice procedure.
23. Where a garnishee under a District Court or Local Court garnishee order believes that there was no debt due or accruing from the garnishee to the judgment debtor when the order was served, the garnishee should be able to serve on the judgment creditor an affidavit to that effect which summarises the factual basis of the garnishee’s claim. Under the District Court and Local Courts (Civil Claims) Rules the garnishee should be required to serve the affidavit at the address for service to be stated in the garnishee order and service by post and use of the document exchange system should be permitted. The form of affidavit to be filed in the District Court when a judgment creditor applies for a summons against a garnishee should be amended to take account of the procedure.
24. A garnishee who serves an affidavit should be relieved of all liability in respect of any disclosure of information in the affidavit if the disclosure was reasonable for the purposes of the affidavit.
25. Provision should be made in the District Court Act, 1973 and the Local Courts (Civil Claims) Act 1970 to permit a garnishee to deduct a prescribed amount for costs incurred in complying with the garnishee order. Where the prescribed amount is deducted, the garnishee’s liability to the judgment debtor should be discharged to the extent of the amount paid by the garnishee in compliance with the order plus the amount for costs If it is not considered appropriate to allow costs to all garnishees, then prescribed costs should be allowed in relation to garnishee orders attaching moneys in accounts.
26. Local Courts should be given power to order a party to proceedings for non-compliance with a garnishee order to pay an amount for or towards the reasonable professional costs incurred by the other party in connection with the proceedings irrespective of the amount in issue between the parties and the provision should be included in the section of the Local Courts (Civil Claims) Act, 1970 which deals with such proceedings.
27. A garnishee who is required to serve a notice regarding an attached debt which is due after the initial 21 day compliance period should not be entitled to deduct from the attached debt the amount prescribed for costs unless the notice has been served as required.
28. The power of a Local Court to order the payment of costs against a party to proceedings for non- compliance with a garnishee order should extend to ordering payment of an amount for or towards the reasonable expenses incurred by the other party in connection with the garnishee order. The new costs provision should also empower a Local Court to order payment by one party for or towards witnesses expenses incurred by the other party.
Incidental Matters
29. The District Court Act, 1973 and the Local Court (Civil Claims) Act 1970 should be amended to allow all garnishees the benefit of the provision which permits a garnishee who acts with reasonable diligence to give effect to the garnishee order but nevertheless pays to the judgment debtor or otherwise satisfies all or part of the attached debt to apply for an order that the attached debt is reduced to the extent of the payment or satisfaction.
30. A rule as to the particulars to be included in a garnishee order should be included in the Local Courts (Civil Claims) Rules in the same terms as Rule 3 of Part 33 of the District Court Rules.
31. The effect of a garnishment notice/garnishee order as to attachment should be uniform for the different levels of the court system. A judgment creditor should continue to have to satisfy the Court or Registrar that there is a debt due or accruing to the judgment debtor from the garnishee before leave to file and serve a garnishment notice is granted or before a garnishee order is made. A garnishment notice/garnishee order should operate to attach in the hands of the garnishee all debts due or accruing to the judgment debtor at the time the notice/order is served, whether or not any such debt was due or accruing when
(i) in the case of a Supreme Court garnishment notice, leave to file and serve the notice was granted; or
(ii) it. the case of a District Court or Local Court garnishee order, the order was made.
32. The District Court Act, 1973 and the Local Courts (Civil Claims) Act, 1970 should be amended so that a garnishee order only operates to attach debts due or accruing to the judgment debtor “to the extent of the amount specified in order.
33. Section 47(4) of the Local Courts (Civil Claims) Act. 1970 should be amended to make it clear that it is not merely those attached debts which are due when the order is served that are payable under a Local Court garnishee order. This should be done by substituting “debt attached” for “debt due”.
34. The provisions in the Supreme Court Rules, District Court Act, 1973 and Local Courts (Civil Claims) Act, 1970 under which the respective courts are granted jurisdiction to hear and determine issues in dispute when a garnishee contests a garnishment notice/garnishee order should be amended to make it clear that the court’s jurisdiction extends to disputes as to the time of payment of an attached debt.
35. The jurisdiction of Local Courts to hear and determine disputed garnishee orders should be restricted only to the extent that their jurisdiction to hear and determine any action to recover a debt is restricted and the restrictions on jurisdiction by reference to the amount of the debt and the type of debt alleged to be owing to the judgment debtor should be removed.
