A debt due or accruing may include future obligations; thus, the existence of such a debt at the time of the garnishee application is crucial for granting the order.

[1] This is an appeal against the decision of the High Court dated 19 November 2012 in dismissing an appeal against the decision of the Senior Assistant Registrar dated 1 August 2012 in not allowing an application for a Garnishee Order Absolute by the Appellant and setting aside a Garnishee Order to show cause.

[2] On 18 June 2013 we heard the appeal and after due consideration by us, we allowed the appeal for reasons set out below.

Background Facts

[3] Summary Judgment was entered against the 2nd Respondent (who is the 1st Defendant in the High Court) for the sum of RM69,443,874.35 on 9 April 2010. The judgment debt related to a banking facility granted to the 2nd Respondent.

[4] The 2nd Respondent, 2nd and 3rd Defendants in the High Court had taken out a counterclaim against the Appellant. However this counterclaim was later withdrawn on 16 July 2010 pursuant to a settlement agreement reflected in a letter dated 15 July 2010. The settlement agreement, among other terms, provides as follows:

i. A stay of the execution of the summary judgment of RM69,443,874.35;

ii. The 2nd Respondent, 2nd and 3rd Defendant are to make installment payments to satisfy the judgment debt; and

iii. If the 2nd Respondent is successful in recovering monies in its suit against Majlis Amanah Rakyat in KL suit S7-22-108-2006 (KL suit) such recovered monies are to be paid to the Appellant.

[5] The 2nd Respondent and the Appellant had also on 3 December 2003 entered into a Deed of Assignment of Contract Proceeds dated 3 December 2003, in which the 2nd Respondent assigned absolutely all proceeds payable by Majlis Amanah Rakyat in respect of a project between the 2nd Respondent and Majlis Amanah Rakyat (Project). This project is the subject matter of the KL suit.

[6] On 9 February 2012, a consent order was entered in respect of the KL suit where it provides that a sum of RM7,000,000.00 is payable to the 2nd Respondent on or before 9 March 2012. On 7 March 2012 Majlis Amanah Rakyat sent the settlement cheque to the 1st Respondent as solicitors for the 2nd Respondent.

[7] On 2 March 2012, the Appellant took out an application for a Garnishee Order to show cause, which as stated above was dismissed by the Senior Assistant Registrar on 1 August 2012 and whose decision was later affirmed by the learned Judge on 19 November 2012.

[8] During the garnishee proceeding, the Appellant took out winding up proceeding against the 2nd Respondent and on 9 November 2012 the 2nd Respondent was wound up.

High Court Decision

[9] The learned Judge found that the only issue before him was that 'whether when the garnishment order nisi was made there existed any debt due and accruing due to the Judgment Debtor that could be garnished under Order 49 r 1 of the RHC'.

[10] The learned Judge then referred to the principles of garnishment expounded by Lim Beng Choon J in Kedah Kelang Papan Sdn. Bhd v. Hansol Sdn. Bhd. & Anor, [1988] 1 CLJ (Rep) 645 . The learned Judge also cited the case of Webb v. Stenton and Others [1883] 11 QBD 518 where Lindley LJ said this:

"I should say, apart from any authority, that a debt legal or equitable can be attached whether it be a debt owing or accruing; but it must be a debt, and a debt is a sum of money which is now payable or will become in the future by reason of a present obligation, debitum in presenti, solvendum in future. An accruing debt, therefore, is a debt not yet actually payable, but a debt which is represented by an existing obligation."

Thus it can be said that the learned Judge had accepted that an existing debt payable in the future is subject t