Service of garnishee orders must strictly adhere to prescribed rules; failure invalidates claims.

Introduction

[1] This is an appeal from the Magistrate's Court Kuala Lumpur which had dismissed the defendant's application to strike out the plaintiff 's claim under O 18 r 19(b) and (d) of the Rules of 2012 ("ROC 2012"). For convenience, the parties will be referred to as they were in the Court of first instance.

Background Facts

[2] The plaintiff, a legal firm of advocates and solicitors, had obtained judgment against one Choy Yoke Ying ("judgment debtor"). The judgment debtor ("JD") had two bank accounts with defendant bank at the Bangsar branch ("Bangsar branch"). On 3 January 2014,the plaintiff obtained a garnishee nisi order to show cause against the JD's Account No: 048000061441 in the Bangsar branch (and two other banks, ie OCBC Bank and CIMB Bank). On 8 January 2014, the plaintiff served the following documents by hand vide the plaintiff 's solicitor's letter dated 6 January 2014 to the garnishee's Bangsar branch as follows:

(a) Notice of application for garnishee proceeding;

(b) Garnishee nisi order dated 3 January 2014; and

(c) Affidavit in support of garnishee proceeding.

[3] The second and last paragraph of the said letter of service dated 6 January 2014 provided a warning notice to the garnishee's Bangsar branch as follows:

"By this service of the application hereof, you are to immediately freeze the account(s) of the judgment debtor abovenamed until final disposal of this proceeding failing which you are liable for all loss resulting thereto."

[4] On 9 January 2014, the defendant bank wrote to the plaintiff 's solicitor informing them that there is a sum of RM6,754.81 in the said account of the JD and they have no objection to the said sum to be garnished and would not attend Court on 15 January 2014.

[5] By a letter dated 8 January 2014 (it should read as 10 January 2014), the plaintiff 's solicitors informed the defendant bank to file an affidavit on the judgment debtor's bank statement as at 3 January 2014 (date of the garnishee nisi order) and to appear in Court on 15 January 2014. Meanwhile, the hearing to show cause was adjourned to 14 February 2014 to enable the defendant bank to file an affidavit.

[6] On 29 January 2014, the defendant bank through its General Manager at the bank's headquarters filed an affidavit in reply adducing the JD's bank statement in Account No: 04800061441 showing a credit balance of RM42,204.81.00 as of 31 December 2013 and two withdrawals of RM35,000.00 and RM450.00 on 9 January 2014, leaving a credit balance of RM6,754.81. On 14 February 2014, upon hearing the show cause proceeding, the Sessions Court made a garnishee order absolute for the sum of RM6,754.81.

[7] The plaintiff then filed the instant suit in the Magistrate's Court claiming from the defendant bank a sum of RM35,450.00 together with interest and costs being losses incurred by the plaintiff in the defendant bank wrongfully and/or unlawfully allowing the JD to withdraw the money in breach of the garnishee order to show cause on 8 January 2014. An application by the defendant bank to strike out the claim was dismissed on 29 October 2014. The defendant bank has now filed this appeal against that order.

The Appeal

[8] I do not think there is any dispute as to the plaintiff 's entitlement to bring proceedings against a bank for wrongfully releasing monies that had to be preserved pending disposal of the garnishee proceedings. Order 49 r 3(2) ROC 2012 provides that the order to show cause "shall bind in the hands of the garnishee as from the service of the order on him any debt specified in the order or so much thereof